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Annual Report and Accounts 2011

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Notes to the Annual Financial Statements
For the year ended 30 June 2011

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2. Segment information

Segment information is presented in respect of the Group's operating and geographical segments:

Mining – the extraction and sale of rough diamonds from mining operations in South Africa and Tanzania.

Exploration – exploration activities in Botswana. In the prior year, the Group exited from exploration activities in Sierra Leone as a result of the disposal of its interest in Basama Diamonds Ltd. The Group exited from exploration activities in Angola during FY 2009 and realised profits on disposal of HS Angolan assets in FY 2010.

Segments are based on the Group's management and internal reporting structure. Management reviews the Group's performance by reviewing the results of the mining activities in South Africa and Tanzania, reviewing the results of the exploration activities in Botswana and reviewing the corporate administration expenses in Jersey. Each segment derives, or aims to derive, its revenue from diamond mining and diamond sales, except for the corporate and administration cost centre.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment results are calculated after charging direct mining costs and depreciation. Unallocated items comprise mainly interest-earning assets and income, interest-bearing borrowings and expenses, and corporate assets and expenses. Segment capital expenditure is the total cost incurred during the Period to acquire or construct segment assets that are expected to be used for more than one period. Eliminations comprise transactions between Group companies that are cancelled on consolidation. The results are not materially affected by seasonal variations. Revenues are generated from tenders held in Johannesburg and Antwerp for external customers from various countries, the ultimate customers of which are not known to the Group.

The Group's non-current assets are located in South Africa US$472.5 million (30 June 2010: US$358.6 million), Tanzania US$79.9 million (30 June 2010: US$44.6 million) and Jersey US$0.5 million (30 June 2010: US$0.8 million).

South Africa – mining activities Tanzania –
mining
activities
Botswana
Operating segments
US$ million
Cullinan
2011
Koffiefontein
2011
Kimberley
Underground
2011
Fissures
2011
Williamson
2011
Exploration
2011
Corporate
administration
2011
Inter-segment
2011
Consolidated
2011
Revenue 140.2 30.8 18.2 21.8 9.5 0.1 220.6
Segment result 47.0 (1.2) (0.3) (5.4) (6.8) (1.5) 12.1 (3.8) 40.1
Other income/(expense) 1.9 0.5 (0.4) 0.4 0.3 2.7
Operating profit/(loss) 48.9 (0.7) (0.7) (5.0) (6.5) (1.5) 12.1 (3.8) 42.8
Reversal of impairment – Fissures 11.7 11.7
Impairment – Fissures (5.2) (5.2)
Financial income 42.5
Financial expense (27.4)
Income tax expense (5.2)
Non-controlling interest (5.9)
Profit attributable to equity
holders of the parent company
59.2
Segment assets 409.7 57.7 71.5 110.1 90.0 8.8 1,000.7 (782.0) 966.5
Segment liabilities 199.3 30.1 77.9 140.5 196.0 27.2 320.2 (723.7) 267.5
Share-based payments 0.2 0.2 0.1 0.1 1.3 1.9
Capital expenditure 33.9 11.0 13.0 16.2 36.6 0.2 110.9

Capital expenditure at the Helam Projects internal equipment manufacturing operation (a division within the Fissure operations) includes work-in-progress of US$11.0 million in respect of the manufacture of plant and equipment for other mines within the Group. Other income in respect of the Fissure mines includes US$21.2 million of revenue and US$21.4 million of costs in respect of Helam projects for the manufacture of plant and equipment for other mines within the Group. Segment assets and liabilities include inter-company receivables and payables which are eliminated on consolidation. Capital expenditure at Williamson includes US$35.8 million of cash costs capitalised in respect of the plant rebuild and expansion programme.

South Africa – mining activities Tanzania –
mining
activities
Angola
Botswana
Sierra Leone
Operating segments
US$ million
Cullinan
2010
Koffiefontein
2010
Kimberley
Underground
2010
Fissures
2010
Williamson
2010
Exploration
2010
Corporate
administration
2010
Inter-segment
2010
Consolidated
2010
Revenue 112.7 22.8 13.5 14.4 0.3 163.7
Segment result 24.2 0.2 (4.9) (5.4) (6.0) (1.9) 11.4 17.6
Other income 1.2 0.6 0.2 0.1 0.3 0.5 4.2 0.7 7.8
Operating profit/(loss) 25.4 0.8 (4.7) (5.3) (5.7) (1.4) 15.6 0.7 25.4
Fair value uplift on CIHL acquisition 31.0
Recycling of foreign exchange differences
on exploration projects
12.3
Financial income 27.6
Financial expense (27.3)
Income tax credit 1.2
Non-controlling interest (6.7)
Profit attributable to equity
holders of the parent company
63.5
Segment assets 320.4 65.6 47.5 83.6 48.9 7.2 601.4 (683.2) 491.4
Segment liabilities 177.4 40.9 54.4 112.4 144.3 37.9 213.6 (580.4) 200.5
Share-based payments 0.3 0.2 0.2 0.1 0.9 1.7
Capital expenditure 17.3 4.6 19.6 2.5 11.6 0.1 (5.9) 49.8

Capital expenditure at Kimberley Underground includes US$16.4 million of capital expenditure incurred prior to acquisition. Capital expenditure at Williamson includes US$7.8 million of feasibility costs capitalised. Other income in respect of the Fissure mines includes US$15.8 million of revenue and US$15.1 million of costs in respect of the manufacture of plant and equipment for other mines within the Group. Segment assets and liabilities include inter-company receivables and payables which are eliminated on consolidation.

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