RD: ESG management is not a separate corporate activity, rather it is part and parcel of how we manage the business on a daily basis, as well as being central to a sustainable future for the Company. Our vision is to build a world-class diamond group and ESG management and performance is therefore central to this. It is also incredibly important that we live up to the emotional value placed upon our product, which represents love and joy and is used to celebrate life’s most special moments.

The Company has gone through considerable change in the last few years, including refreshed leadership both at Board and Senior Management level. This has given us the opportunity to revisit our Company culture and apply fresh thinking to both our assets and our way of operating. While there are commendable aspects of the existing Petra culture, including the ‘can-do’ attitude, this process nevertheless determined that change was necessary in order to realign the business with our values – read more about our cultural change initiatives on pages 38 to 39. Change is never an easy process, but our focus on leadership alignment, accountability, business improvement and ensuring the ethics of each part of our business, are necessary in order to build a sustainable foundation for the Company over the long-term.

When considering the Company’s impacts, alignment on the most material key performance indicators (“KPIs”) and then the accurate and consistent measurement of these KPIs across all operations is key. This is an area that has improved significantly, so that it is easier than ever before for Management to gain an accurate view of how we are performing at any given point in time. However, further work is required, notably in the recording and follow-through on stakeholder engagement, and this is an area receiving much focus currently.

PH: As Richard has noted, the Company’s leadership has seen significant changes over the last couple of years. Most recently at Board-level, Ms Deborah Gudgeon was appointed as an independent Non-Executive Director (“iNED”) and as the designate Chair of the Audit and Risk Committee, upon the departure of Mr Gordon Hamilton from the Board in November 2021. This important committee is involved in monitoring the material risks and opportunities for the business, alongside our HSE and SED Committees.

The Board appointed Ms Octavia Matloa, Chair of the Social, Ethics and Diversity (“SED”) Committee, as the designated iNED to engage with the workforce during FY 2021. The aim of the role is to help ensure the views and concerns of the workforce are brought to the Board and taken into account in the Board’s deliberations and decisions, helping the Board to understand if employees are aligned to, and able to respond to, the Company’s business priorities. A formal document outlining the key principles and parameters of the role has been approved by the Board.

Further to the successful completion of the Group’s financial restructuring (the “Restructuring”) in March 2021, three new non-independent Non-Executive Directors (“NEDs”) have been appointed to the Board, in accordance with the nomination rights awarded to equity-holders of a certain size in the Restructuring, being Mr Matthew Glowasky and Mr Johannes Bhatt (nominated by Monarch Master Funding 2 (Luxembourg) S.à.r.l. (“Monarch”)) and Ms Alexandra Watson (nominated by Franklin Templeton). Monarch has also nominated Mr Marius Kraemer to act as its Board Observer, also as permitted under the nomination rights.

Furthermore, the Company has formed an advisory Investment Committee, which was a prerequisite of the Restructuring, in order to monitor significant capital and other investments and recommend their adoption to the Board. Petra will therefore have enhanced oversight of its capital allocation plans, with the aim of optimising our asset base and maximising value for our stakeholders.

These changes have expanded and further diversified the Board and provide even greater alignment with stakeholders, as well as further strengthening our governance.

Below Board-level, there have been a number of changes to both the structure and make-up of our Senior Management team, as driven by the findings of our Organisational Design Review which is outlined on page 39. The finessing of our structure is ongoing, but the changes made to date have improved inter-Company communications, accountability and efficiency, though there is more work to be done.

The findings of the external investigation into the human rights abuse allegations at the Williamson mine in Tanzania have been very important in terms of providing learnings for the whole Group. While the investigation did not uncover any abuses carried out by Williamson Diamonds Limited (“WDL”- the operator of the Williamson mine) personnel, it did uncover failings in local Management’s response and in reporting and escalation of incidents to the Board. This should not happen again and new procedures have been implemented Group-wide to help prevent similar failings.

In June 2021, Petra appointed Mr Rupert Rowland-Clark as Group General Counsel and Company Secretary to oversee governance, compliance and ethics in the business, providing further oversight of PDL’s activities and operations.

RD: Workplace safety remains our overriding priority and is enshrined in our most important value: ‘Let’s do no harm’. Yes, performance was mixed. The number of injuries experienced during the Year reduced 7% from 45 to 42, but the number of lost-time injuries (“LTIs”) increased from 19 to 25, which led our lost time injury frequency rate (“LTIFR”) to increase from 0.29 in FY 2020 to 0.44 in FY 2021. An evaluation of the incidents has determined that the majority of these were of low severity and behavioural related, and our approach is therefore to use initiatives to drive a change in people’s mindsets and to foster greater awareness and attention on how to achieve an accident-free work environment.

We do believe that an underlying issue behind the deterioration in safety performance is the impact of COVID-19 on the emotional wellbeing of our workforce, as well as other interrelated matters such as increasing community hardships and rising cost inflation. This has been borne out by an increase in accidents and fatalities across the South African mining sector as a whole since the outbreak of the COVID-19 pandemic, as measured by the Minerals Council SA.

PH: The safety of our people remains an absolute priority for the Board and will remain a major focus during FY 2022.

We recognise that there is increased employee anxiety at this point in time. We have a counselling service available to our workforce, which saw a significant increase in uptake in FY 2021, though this was partially due to our drive to raise awareness of the service amongst employees.

RD: Developing and creating opportunities for our people remains key. I am proud that we have put an educational pipeline in place whereby talented and motivated employees can continue personal and professional development throughout their career with Petra. For some that might initially mean improving their literacy levels, for others it could be study leave to further their qualifications or to explore new areas, and for others it might mean gaining skills outside the workplace that improve quality of life and equip them for other roles in the future. We believe this leads to a happier and more engaged workforce, thereby enhancing productivity and encouraging staff retention.

However, in order to maintain and develop our skills-base, we need a steady stream of new recruits, preferably from our local communities. That is why improving maths and science standards is a key part of our strategy and we were once again very active in supporting education in our local schools during FY 2021.

PH: Environmental management is not only part of day-to-day mining operations but has also become an important strategic driver for the Company, both because stakeholders now expect companies to put a plan in place to manage their carbon emissions and because limiting global warming is undoubtedly the right thing for businesses to do. The first step, of course, is knowing your impact and it takes time to have the systems in place to accurately measure your carbon footprint. This is something I believe our team has achieved already to a high standard and our annual GHG emissions report is now independently verified, which allows for even greater confidence in our data.

Looking ahead, our Group Climate Change Adaptation Policy supports Petra in meeting international obligations and investor expectations by defining the Company’s process to identify its vulnerabilities, plans to reduce these vulnerabilities and maximise any potential opportunities, such as the positive implications of better energy efficiency. Good progress was made in FY 2021 with the initial implementation of this policy.

In terms of our environmental disclosure and reporting, I believe Petra continues to aim for excellence, having already reached an A- (‘leadership’ band) level of disclosure to CDP for the climate questionnaire and having met all the requirements of the Task Force on Climate-related Financial Disclosures (“TCFD”) for the first time this year. I think this demonstrates our commitment to environmental responsibility to all of our stakeholders. Our inaugural TCFD Report can be found in our 2021 Annual Report on pages 212 to 213.

Encouraging diversity also remains a strategic priority, given the benefits of avoiding ‘group-think’ via diverse teams that benefit from a variety of different backgrounds and skill-sets. We continued to make progress with gender diversity in FY 2021, with the percentage of women in the workforce increasing from 19% to 20%, and our employee development programmes once again focused on the advancement of women and historically disadvantaged South Africans (“HDSAs”).

PH: I would say that it has been the human rights abuse allegations in Tanzania, which have been deeply concerning and saddening for the Petra Board and I expect all our employees. While we cannot change the past, we can do everything possible to try and prevent issues like these arising in the future. This has required us to take an honest look at where there were failings, as identified by the findings of the external investigation commissioned by the Board Sub-Committee, the Tunajali Committee, and remedial actions have been put in place. Importantly, we are supporting the establishment of a non-judicial independent grievance mechanism (“IGM”) to investigate and resolve allegations of human rights breaches which we believe will be in the interest of all parties. The findings of the Tunajali Committee and the steps we have taken and are taking are set out on pages 21 and 22 of the 2021 ESG and  Sustainability Report. Our two other major challenges were the financial Restructuring and COVID-19.

RD: The allegations have highlighted how vital community relations and support are to long-term operations. While WDL has always had an active community development programme, clearly the mine needs to do more to foster relationships with its local stakeholders based on mutual trust. As part of the remedy provided for by PDL, funds in excess of £1 million have been placed into an escrow account to provide funding for various projects that will provide sustainable benefits, including through income-generating projects, to the communities around the mine.

The ongoing COVID-19 pandemic remains challenging and we have very sadly lost 14 colleagues as a result. Our sincere condolences go to the families and friends of the deceased and we will continue to offer support to those affected. Our focus now is to ensure the largest uptake of our vaccination programmes in South Africa and Tanzania amongst our workforce as possible in order to protect our people and to help control the spread of the virus.

PH: The fact remains that our diamonds are unique in terms of their billions of years old provenance, their authenticity, their outstanding beauty, their sustained value and how they are used to forge deeper human connections. The COVID-19 pandemic has only served to reinforce the value we place on our relationships and natural diamonds offer the perfect way to celebrate the people and moments that matter.

The diamond market’s strong performance over the Year, despite the ongoing restrictions and impacts on the high street, has demonstrated that our product remains highly desirable. Our work with the Natural Diamond Council (“NDC”), via generic marketing campaigns and educating consumers on the overall positive socio-economic impacts of the diamond mining sector, aims to ensure that diamonds remain relevant to future generations.

RD: I agree that the medium- to long-term outlook for our market and for our business remains positive. The completion of the Company’s Restructuring in FY 2021 demonstrated that we retain significant support from the investment market and has provided enhanced stability for the Company to deliver on its operational plans.

I believe that Petra has high-quality assets, a skilled and motivated workforce, a refreshed company culture, ongoing optimisation plans and support from our stakeholders. This, set against an improving diamond market, positions the Company well for the years to come.