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Petra Diamonds Limited Sustainability Report 201241COMMUNITYCommunityEnhancing our communities continuedAssessing and managing our impacts continuedIn Tanzania, the Williamson mine is implementing the Mwadui Community Development Programme ("MDP"), which focuses on three development areas: community development, community initiatives and community support. In Botswana, our exploration operations remain at an early stage but in FY 2012 we completed a Social and Environmental Strategic Risk Report related to the progression of exploration work on kimberlite KX36 and associated drilling programmes. Community engagementEffectively managing the expectations of all stakeholders is an increasingly important challenge for the Company, which can only be mitigated through open and transparent communication. We believe we have robust processes covering engagement in place across the Group, however we are in the process of developing a Group Stakeholder Engagement Policy, which we expect to roll out across our operations in FY 2013. This is in line with our strategy of developing Group-wide policies in order to codify best practice and drive improvements in our performance.We meet regularly with community representatives to communicate on issues such as community development, environmental impacts and closure plans as well as to discuss the programmes and projects we have already put in place. Our community engagement is guided by active and fully engaged Community Development Programmes which are in place at each operation. Engagement is managed by Community Liaison Officers as well as Community Development Co-ordinators. We employ two regional Community Development Co-ordinators who are responsible for, amongst other things, the successful roll-out of LED projects as committed to in our SLPs.Due to the size of the Finsch mine, this operation has an additional Community Liaison Officer. Furthermore, the Company has recently recruited a Group Social Compliance and Sustainability Practitioner who will manage and guide all operations' SLP commitments.We monitor the progress of our various CSI projects on a regular basis and in some cases have established steering committees consisting of Petra employees, members of the local community, municipality, and other service providers.The success of some of our CSI projects is subject to the local communities having the necessary skills to effectively implement and manage them. In order to mitigate this challenge the Company, where possible, trains the local community in the required skills to maximise the benefit that these projects provide.In South Africa, all community engagement processes and SLPs are compliant with legislative requirements. In Tanzania, the Williamson mine has a well-developed SEP, which clearly defines and provides a framework for how Company representatives are to engage with all stakeholders. Community grievance processes are incorporated into SLPs in South African operations as well as into Williamson's SEP. In Botswana, we currently have no formal community engagement programme in place, however we maintain active communications with authorities, individuals, NGOs and local communities as appropriate. Since acquiring our Botswana diamond exploration assets in 2005, we have operated in a fully transparent manner and proactively communicated our activities with the appropriate stakeholders. Group social spend summaryIn South Africa, Petra's operations are involved in LED projects as part of their SLPs. Additionally, our South African mines also provide further discretionary social expenditure on initiatives which may not be formally required as part of their SLPs.In Tanzania, Williamson contributes directly towards community development through the provision of social, commercial, industrial, medical and administrative infrastructure for the benefit of local communities.Petra's total discretionary and non-discretionary spending on CSI projects in FY 2012 was US$3,259,589, which represents approximately 1% of the Company's total revenue. Expenditure by countrySpend(US$)¹South Africa2,981,703Tanzania (Williamson)277,886Group total spend (US$)3,259,589Note:1. Exchange rate of US$1: R7.7685.Projects - South AfricaAll projects funded by Petra are rigorously assessed and reviewed in conjunction with local communities to ensure they are sustainable and in line with our key objectives of sustainable job creation; poverty alleviation; skills transfer; and enterprise development. Projects are generally undertaken in partnership with local communities, municipal authorities and NGOs and receive funding and technical advice from Petra.Projects currently supported by Petra include:$ a multi-stakeholder initiative to increase the literacy and numeracy levels in rural schools benefiting some 6,000 children; $ a joint project with the local municipality at the Finsch mine to improve poorly maintained electrical infrastructure following power outages that have caused significant negative effects on the local community; $ a partnership between our Cullinan mine and the Tshwane University of Technology to support the Vukuzenzele Project, an agricultural co-operative, by providing training and equipment in conjunction with The Department of Agriculture (see the case study on page 44 for further information on this project); $ sponsorship of a farming project in partnership with local authorities, the Department of Agriculture and other businesses to develop a sustainable vegetable farming operation in Boschkop near the Cullinan mine;$ the establishment of an independent brick plant and aggregate business to create much needed local employment and help diversify the local economy at the Koffiefontein mine (these projects are currently in feasibility stage); $ support for the establishment of a market garden in Magareng to create employment and tackle food security; $ the provision of food, shelter and educational programmes for street children in the town of Warrenton near our Sedibeng mine; and$ the development of a brickmaking business in partnership with other mining companies with regional operations and the local municipality near the Star mine.

Petra Diamonds Limited Sustainability Report 201242COMMUNITYCommunityEnhancing our communities continuedGroup social spend summary continuedA number of the Company's CSI projects are undertaken in partnership with local, Government and industry stakeholders. The success of these projects is dependent not just on ongoing support and funding from Petra, but also the continued commitment of these stakeholders.Projects - TanzaniaSince the mine's inception in 1940, Williamson has played a very important role in supporting its local communities. Funds are made available for community projects through three sub programmes: community development, community initiatives and community support.During FY 2012, projects supported by these three programmes included:$ numerous upgrades to local school facilities and buildings;$ technical support to the Tanzania Police (Shinyanga region) in improving their community policing; $ seed funding for various cultural heritage projects; $ continued contributions towards the Dar es Salaam University, Engineering Faculty graduate ceremonies; $ new equipment and upgrades to the Mwadui hospital, including the installation of a state-of-the-art X-ray machine and the purchase of a new ambulance;$ provision of infrastructure, logistics and manpower to run a mother and child health clinic as part of the Mwadui Reproductive Child Health project, a collaboration between the Mwadui hospital and Tanzanian Government;$ continued support for small businesses through the provision of free property within the Mwadui village; and $ a number of local road upgrades and agricultural improvement projects.In addition to these projects, one of the major community initiatives undertaken at the Williamson mine is the provision of water to the Mwadui township and neighbouring villages through the installation of controlled water access points. Williamson also owns and operates the Mwadui primary school which provides free English primary school education to 460 learners. The school is the only primary school in the region with formalised computer training and a computer centre.Generating economic benefitsTaxes and royalties make a significant contribution to the countries in which we operate. We support the principles of transparency and believe that publishing details of our tax payments to Governments can help improve community support for the activities of businesses such as ours. Although only one country where we operate is a member of the Extractive Industries Transparency Initiative (Tanzania), we are committed to complying with the initiative's requirements across all our operations. The Group paid a total of US$51.0 million in taxes and royalties in FY 2012.The multiplier effect of our mines means that whilst Petra directly employs 4,768 permanent employees and 807 contractors, a significantly larger number of people are dependent on our operations. In South Africa, it is estimated that the overall number of dependants on wages earned from the mine is more than 26,000 people. In Tanzania, it is estimated that the overall number of dependants on wages earned from the mine is more than 7,000 people. The Group spent US$110.4 million on wages in FY 2012.In addition to benefiting from stable employment, Petra's workforce enjoys relatively high standards of living. This is particularly the case at the Williamson mine in Tanzania, where conditions of employment include additional benefits such as the provision of housing and accommodation, free access to water, subsidised healthcare (extended to the families of employees), free primary school education for children, transport to the workplace and the provision of educational support through a dedicated fund. Value added statementFor the year ended 30 June 201230 June 2012US$ million30 June 2011US$ millionRevenue316.9220.6Paid to suppliers for material and services138.577.7Value added178.4142.9Income from investments8.84.9Wealth created187.2147.8Wealth distribution:Employees30 June 2012US$ million30 June 2011US$ millionGross salaries, wages and benefits 110.475.0Providers of capital7.84.5Finance cost7.84.5Dividends paid00GovernmentsTotal tax paid51.030.5Reinvested in the Group18.037.8Depreciation, amortisation and capital items178.8133.2Retained earnings(160.8)(95.4)187.2147.8Taxes and royalties:South AfricaFY 2012US$ millionFY 2011US$ millionPAYE18,302,480 9,424,475UIF1,042,440 779,938SDL1,018,117 638,155Diamond royalties1,437,915 858,995VAT23,766,014 16,765,954Total 45,566,966 28,467,517TanzaniaFY 2012US$ millionFY 2011US$ millionPAYE1,587,241 1,165,855SDL394,164 335,881Diamond royalties580,641 484,000VAT 2,889,272 2,867,167Total5,451,317 6,354,639BotswanaFY 2012US$ millionFY 2011US$ millionPAYE142,730 105,350Total 142,730 105,350The Company did make certain charitable donations during FY 2012, but not of a material financial size. The Company did not make any political donations during FY 2012.The Company received no financial assistance from Governments in FY 2012.