PRESENTATION

1. PRESENTATION ON DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS OF THE NAMAKWALAND DIAMOND FUND TRUST 10 AUGUST 2011

2. MAIN MENU • Click on respective section to explore further Time line of interactions with Portfolio Committee on Mining, and related outcomes • Introduction & background • Summary of developments and progress regarding operations, governance and financials • Concluding comments

3. INTRODUCTION & BACKGROUND Vision & Mission • The overall purpose of existence of the NDFT has always been, and still is, to ‘improve the quality of life of the inhabitants in its beneficiary areas, by enhancing their social, cultural, and economic well-being’

4. INTRODUCTION & BACKGROUND • To this end, the NFDT has over the past 16 years added substantial value across a spectrum of individuals, groupings and projects, including: • Financial assistance in the form of bursaries to thousands of tertiary learners and secondary pupils; • Educational infrastructure and skills development projects; • Charitable contributions to thousands of beneficiaries, for aspects such as funeral assistance, rehabilitation, HIV treatment, old age homes, hospital care and orphanages (rendering financial assistance in terms of operational costs); • Support in times of disaster such as financial assistance to farmers during periods of drought; • Entrepreneurial opportunities and education in basic trades for instance.

5. INTRODUCTION & BACKGROUND • The radical impact of the cessation of royalty payments to the NDFT is evident – • The reality is simply this: That the original purpose and intent of the Founder – i.e. for the Trust to serve as a catalyst for need fulfilment among the previously disadvantaged rural communities of Namakwaland – would effectively be negated • Without its income stream, the Trust cannot support learners (and by implication the leaders of tomorrow); the elderly and destitute will not able to reckon on any support from the Trust, as would HIV sufferers, the disabled, the sickly and the impoverished • In the absence of royalties, ‘Achieving its vision’ and ‘living its mission’ would become impossible – and the Trust would be relegated systematically : From ‘change agent’ to ‘relic’ Back to main menu

6. INTERACTION WITH PORTFOLIO COMMITTEE ON MINING, AND RELATED OUTCOMES 7 Back to main menu

7. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS

8. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS • Click on respective section to explore further

9. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS • Click on respective section to explore further

10. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS • Click on respective section to explore further

11. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS • Click on respective section to explore further

12. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS • Click on respective section to explore further

13. SUMMARY OF DEVELOPMENTS AND PROGRESS REGARDING OPERATIONS, GOVERNANCE AND FINANCIALS Back to main menu

14. REGISTRATION OF HJ VISSER AS TRUSTEE Following the filing of required documentation, Mr HJ Visser was officially registered as a Trustee of the NDFT – Reference Master’s Certificate dated 14 February 2011 – and duly assumed duties on 1 March 2011. The Trust sadly noted the passing of Mr Visser during May 2011 and the Master has been informed accordingly. Back to sub menu menu

15. ANALYSIS OF PROCEDURES AND EFFECTIVENESS • As reported to the Portfolio Committee in February 2011, the legal advisors of the NDFT (Edward Nathan Sonnenbergs – ENS) had been requested to advise on the most appropriate modus operandi for investigating the processes and procedures in operation at the Trust • ENS submitted an outline – detailing 3 possible avenues for doing the analysis – on 12 April 2011 • At a Special Board Meeting of 15 April 2011, the NDFT passed resolutions for the analysis (as per the third method proposed) to be conducted and reported on by the Trust’s professional advisors LDP, ENS and Sterling; and for an advisor to be appointed in order to table particular recommendations based on the reports thus received • The analysis as mandated has commenced, and the first report is expected at the end of August 2011

16. ANALYSIS OF PROCEDURES AND EFFECTIVENESS

17. ANALYSIS OF PROCEDURES AND EFFECTIVENESS • Click on respective button to explore further

18. ANALYSIS OF PROCEDURES AND EFFECTIVENESS

19. ANALYSIS OF PROCEDURES AND EFFECTIVENESS

20. ANALYSIS OF PROCEDURES AND EFFECTIVENESS

21. ANALYSIS OF PROCEDURES AND EFFECTIVENESS

22. ANALYSIS OF PROCEDURES AND EFFECTIVENESS Back to sub menu

23. ANALYSIS OF TRUST DEED • Analysis of the Deed of Trust, with regard to – • Aims of the Trust • Prescribed procedures (pertaining to Trustees) • Compliance with Deed of Trust • Trustee meetings • Trustees’ duties • Assumption of Trustees • Termination of Trustee appointments • Recommended amendments • Trustees’ Code of Conduct • Financial Statements of the Trust • Expenses and remuneration of Trustees and Employees respectively • Trust Property Control Act • Income Tax Act • Legal opinions by ENS Back to sub menu menu

24. ANALYSIS OF DECISION MAKING PROCESSES • Analysis of decision making processes, with regard to – • The Operational Policy • The Human Resources Policy • Allocation of grants to beneficiaries • Frequency of meetings • Attendance of meetings • Duration of meetings • Implementation of decisions • Consequent and related expenditure • Minutes of Board and Committee meetings • Role of Executive Committee • Role of Sub Committees Back to sub menu menu 9/22/2014

25. INTERVIEWS WITH STAFF • Interviews with staff to – • Seek additional information and clarification, where required • Verify assumptions • Corroborate provisional findings • Check and cross-reference perceptions Back to sub menu menu

26. REMUNERATION ANALYSIS • Remuneration analysis to – • Benchmark and compare with similar institutions • Correlate internal and external equity of pay practices Back to sub menu menu

27. REPORTING • Final stage of the analysis involves – • A written report comprising findings, conclusions and recommendations • Presentation to and interaction of Trustees with professional advisors about recommended changes and optional plans for implementation Back to sub menu menu

28. INTRODUCTION OF COST SAVING MEASURES • It need to be noted that - • The NDFT did not waste any time in implementing cost savings measures, and in fact keeps a very close eye on all aspects related to financial expenditure; • However, the Trust is awaiting a written report from its professional advisors about recommended changes and optional plans for implementation; • Upon the receipt of the report - detailing findings, conclusions and recommendations - the NDFT would most definitely institute further cost saving measures, as and when required and upon taking appropriate advice.

29. INTRODUCTION OF COST SAVING MEASURES

30. INTRODUCTION OF COST SAVING MEASURES • Click on respective button to explore further

31. INTRODUCTION OF COST SAVING MEASURES • Click on respective button to explore further

32. INTRODUCTION OF COST SAVING MEASURES • Click on respective button to explore further

33. INTRODUCTION OF COST SAVING MEASURES • Click on respective button to explore further

34. INTRODUCTION OF COST SAVING MEASURES • Click on respective button to explore further

35. INTRODUCTION OF COST SAVING MEASURES Back to sub menu menu

36. CUT BACK ON TRUSTEE EXPENSES • Cut back on Trustee expenses effected in two areas - • Reduction in transport allowance from R7-20 to R5-00 (before tax) per/km as from 1 August 2011 • Reduction in attendance fees from R3334-00 to R1662-00 per day as from 1 January 2012 Back to sub menu menu

37. REDUCTION OF OPERATIONAL OVERHEADS • Reduction of operational overheads by - • Strict monitoring of telephone calls (and duration); limited calls to cell phones; elimination of unnecessary printing, photo copying etc. • Special consideration of tele-communications system which would facilitate drastic cost savings in the longer term • Weekly control of budget and closure of the feedback loop • The current admin budget of R10.5 million, compares well with the 2010 figure of R14.6 million. Back to sub menu menu

38. BUDGETARY REVISIONS • Over and above the introduction of strict budgetary control measures and pre-emptive variation reporting, elimination of the following line items have brought about bottom line savings (as per recent Board Resolutions) - • Elimination of social development allocation of R110000-00 • Savings on Management Fund of R73000-00 Back to sub menu menu

39. SELL OFF OF ASSETS • The recent sell-off of under-utilised vehicles will effect a longer term cost saving in terms of finance, running and maintenance costs Back to sub menu menu

40. TERMINATION OF VENDOR AGREEMENTS • The Trust has commenced with a reconsideration of all standing service agreements with a range of vendors, and in a number of instances - where feasible and practicable – negotiations are underway to facilitate cut backs and/or termination of service level agreements with selected vendors Back to sub menu menu

41. TRUSTEE TRAINING • During July 2011 a Training Workshop was held with the Board of Trustees and Staff Members, during which the following issues were discussed and clarified: • The implication of the Trust Deed on roles, responsibilities, rights and obligations of all stakeholders • The nature and scope of Trustees ‘discretion’ • Amendments to the Trust Deed and the impact of these on the Trust’s strategy and operations • Alignment of the Trust’s Operational Policy with the Trust Deed Back to sub menu menu

42. AREA VISITATIONS • In keeping with its annual communications roll-out to its beneficiary areas, NDFT representatives concluded public meetings with constituent representatives across Namakwaland. • These meetings were utilised to brief and update beneficiaries as to the current state of affairs related to the business of the Trust, and aspects such as changes to the Trust’s financial position (in view of the suspension of royalty payments), its interaction with the Portfolio Committee, and the impact this would have on the meeting of expectations, were tabled and discussed. • The respective communities were unanimous in their call upon the Trust to persist in its endeavours towards procuring royalties, so that poverty stricken families may be assisted and supported, as in the past; in this, the Trust was mandated to do everything in its power in order to facilitate the reinstatement of royalty payments.

43. AREA VISITATIONS • Meetings were held in the following areas:

44. CONCLUDING COMMENTS The the Board of Trustees and the staff of the NDFT are well aware of the serious implications brought about by the suspension of royalty payments and the fact that the usual operation of the Trust as a change agent has been severely curtailed. In response, all stakeholders are unanimous in their quest to lessen the dire consequences of this as far as possible, and staff as well as Trustees in particular have introduced preliminary cost saving measures. When the analysis of processes and procedures as outlined highlight further areas for improvement, these would be acted upon without hesitation, thereby also effecting cost savings. It stands to reason though, that cost savings and effectiveness improvement measures can only steady the ship – one which would inevitably succumb should royalties not be reinstated. The NDFT remains steadfast in its resolve to work towards this with every means at its disposal and acquit itself of the accountability it received in terms of the Deed of Trust in 1994 – i.e. to promote the advancement, empowerment and upliftment of the rural communities of Namakwaland. Back to main menu