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Annual Report and Accounts 2011

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Directors' Report

The Directors present their report together with the audited financial statements of the Group for the year ended 30 June 2011.

Principal activities

Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. The Company has a well-diversified portfolio, with controlling interests in eight producing mines: seven in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star) and one in Tanzania (Williamson). In addition, Petra has an exploration operation in Botswana.

Business review

A detailed review of the Group's operational and financial performance for the year and events subsequent to the year end is set out in this Annual Report in the Overview, the Business Review (which includes a section on Key Performance Indicators) and note 29 to the financial statements.

Results and dividends

The Group's net profit after tax for the year amounted to US$59.2 million (2010: US$70.2 million). The Directors do not recommend the payment of a dividend for the year (2010: US$nil).

Board of Directors and their interests

The interests of the Directors and their families in the issued share capital of the Company (other than in respect of options to acquire ordinary shares which are detailed in the Directors' Remuneration Report and note 21 to the financial statements) were as follows:

Number of
share at
30 June 2011
Number of
share at
30 June 2010
Adonis Pouroulis1,2 9,564,650 9,564,650
Johan Dippenaar 640,000 640,000
David Abery2 1,979,649 1,979,649
Jim Davidson 640,000 640,000
Charles Segall2 1,380,122 1,380,122
Dr Patrick Bartlett3 Nil Nil
Gordon Hamilton3 Nil Nil
Dr Omar Kamal Nil Nil

Notes:

1. 7,735,000 ordinary shares in the Company are held by a trust of which Mr Pouroulis is a beneficiary.

2. 5,037,421 ordinary shares in the Company are held by a trust of which Mr Pouroulis, Mr Abery and the estate of Mr Segall are beneficiaries
(Mr Segall passed away in July 2011, post-year end).

3. Dr Bartlett and Mr Hamilton were appointed post-year end on 28 November 2011.

Other than noted above with regards to the passing of Mr Segall, there were no changes in Directors' share interests between the year end and the date of this report.

Share capital

Details of changes to share capital during the year can be found in note 21 to the financial statements.

Substantial shareholdings

At 31 October 2011 the interests as indicated in the table below in the ordinary shares of the Company represented more than 3% of the issued share capital (other than interests set out above in the Board of Directors' interests).

Significant shareholders (insofar as the Company is aware) Number
of ordinary
shares
Percentage of
issued share
capital
Al Rajhi Holdings W.L.L. 66,525,600 13.3%
Saad Investments Company Limited/Awal Bank 60,844,185 12.2%
JP Morgan Asset Management U.K. Limited 43,231,516 8.6%
Capital Group International, Inc 36,691,116 7.3%
Scottish Widows Investment Partnership 32,216,384 6.4%
BlackRock Investment (UK) Limited 20,994,369 4.2%
T. Rowe Price 20,471,750 4.1%
M&G Investments 18,086,225 3.6%
Kames Capital 16,439,120 3.3%
Ignis Investment Services Limited 14,915,549 3.0%
Directors 14,204,421 2.8%

Employees

The Group's employment policies have been developed to ensure that the Group attracts and retains the required calibre of management and staff by creating an environment that rewards achievement, enthusiasm and team spirit. Effective communication and consultation is key to this and the Group endeavours to ensure the appropriate level of employee involvement and communication.

The Group is committed to the principle and achievement of equal opportunities in employment irrespective of sex, religion, race or marital status. Full consideration is given to applications from disabled persons who apply for employment where the requirements of the position can be adequately filled by a disabled person, having regard to their particular abilities and aptitude.

Creditors' payment policy

It is the Group's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the Group and its suppliers, provided that all terms and conditions have been complied with.

Financial instruments

The Group makes use of financial instruments in its operations as described in note 26 of the financial statements.

Going concern

Following a review of the Group's financial position, the Directors have concluded that sufficient financial resources will be available to meet the Group's current and foreseeable working capital requirements. On this basis, they consider it appropriate to prepare the financial statements on a going concern basis.

Directors' responsibilities

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Bermuda governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions.

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with the Bermuda Companies Act 1981. The Directors are also required to prepare financial statements for the Group in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and the rules of the London Stock Exchange for companies trading securities on AIM. The Directors have chosen to prepare financial statements for the Group in accordance with IFRS, as adopted by the European Union.

In preparing these financial statements, the Directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgements and accounting estimates that are reasonable and prudent;
  • state whether they have been prepared in accordance with IFRS, as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company. They are also responsible for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The Directors are responsible for ensuring the Annual Report and financial statements are made publically available on the Company's website. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Auditors

As far as each of the Directors is aware, at the time this report was approved:

  • there is no relevant available information of which the auditors are unaware; and
  • they have taken all steps that ought to have been taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

In accordance with Section 89 of the Bermuda Companies Act, a resolution to confirm the appointment of BDO LLP as auditors of the Company is to be proposed at the Annual General Meeting to be held in January 2012.

By order of the Board

David Abery

Director

28 November 2011

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