Gem Diamonds Di Regulatory News (GEMD)

Thursday, 17 March 2022

Gem Diamonds Limited

Full Year 2021 Results

Gem Diamonds Limited (LSE: GEMD) ("Gem Diamonds", the "Company" or the "Group") announces its Full Year Results for the year ending 31 December 2021 (the "Period").

FINANCIAL RESULTS:

· Revenue of US$201.9 million (US$189.6 million in 2020)

· Underlying EBITDA from continuing operations of US$57.4 million (US$53.2 million in 2020)

· Profit for the year from continuing operations US$31.1 million (US$27.5 million in 2020)

· Attributable profit from continuing operations US$18.5 million (US$16.9 million in 16.9)

· Earnings per share from continuing operations 13.2 US cents (12.1 US cents in 2020)

· Cash on hand of US$31.1 million as at 31 December 2021 (US$23.5 million attributable to Gem Diamonds)

DIVIDEND

· Ordinary dividend of 2.7 US cents per share proposed by the Directors and subject to approval by the shareholders at the 2022 AGM

· The dividend will be paid on 21 June 2022 to shareholders who are on the register of members on the record date of 20 May 2022 (ex-div date 19 May 2022)

OPERATIONAL RESULTS:

Letšeng

· Carats recovered of 115 335 (100 780 carats in 2020)

· Waste tonnes mined of 18.7 million tonnes (15.6 million tonnes in 2020)

· Ore treated of 6.2 million tonnes (5.4 million tonnes in 2020)

· Average value of US$1 835 per carat achieved (US$1 908 in 2020)

· The highest dollar per carat achieved for a white rough diamond during the year was US$47 574 per carat

COVID-19

One of the Group's priorities in 2021 was to safeguard its employees, contractors and surrounding communities from COVID-19 and, in doing so, it was able to operate uninterrupted throughout the year. Almost 100% of the Group's workforce has now been fully vaccinated against COVID-19.

TCFD and Climate

The Group adopted the recommendations of the Task Force on Climate-related Financial Disclosures during the year and concluded Phase 1 of its three-year TCFD roadmap. The Group took a measured and science-based approach to conclude its Group-wide climate change scenario analysis and to develop a climate change strategy, and will continue to do so while setting targets, metrics and setting its decarbonisation strategy.

Commenting on the results today, Clifford Elphick, Chief Executive Officer of Gem Diamonds, said:

"Gem Diamonds has delivered positive operational and financial results notwithstanding the continued challenges brought about by the COVID-19 pandemic on the availability of skills, equipment, spares and other aspects of the supply chain. One of our priorities remains the safety of our employees, contractors and surrounding communities and we are pleased that we were able to assist the Lesotho Government in its fight against COVID-19 with a donation of 20 000 vaccines and a new 4x4 ambulance capable of reaching remote communities. To date, nearly 100% of the Group's workforce has been vaccinated.

The Group has continued with its climate change journey and we're pleased with the progress made in 2021. Our science-based approach will stand us in good stead over the coming years in managing the physical and transition risks. We are also continuing to explore the opportunities that climate change might bring to our operations.

The continuing recovery of the diamond market in 2021 was evidenced by the robust prices achieved for Letšeng's large, high-value diamonds and there was also a significant improvement in the prices achieved for smaller diamonds. This resulted in positive cash flows and allowed Gem Diamonds to end the year in a strong financial position.

We are pleased to announce that based on the results achieved in 2021, the Board has proposed the payment of an ordinary dividend of 2.7 US cents per share." 

The Company will host a live audio webcast presentation of the full year results today, 17 March 2022, at 9:30 GMT. This can be viewed on the Company's website: www.gemdiamonds.com

The page references in this announcement refer to the Annual Report and Accounts 2021, which can be found on the Company's website: www.gemdiamonds.com.

The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67

FOR FURTHER INFORMATION:

Gem Diamonds Limited

ir@gemdiamonds.com

Celicourt Communications

Mark Antelme / Felicity Winkles

Tel: +44 (0)20 8434 2643

ABOUT GEM DIAMONDS:

Gem Diamonds is a leading global diamond producer of high value diamonds. The Company owns 70% of the Letšeng mine in Lesotho. The Letšeng mine is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world.

CHAIRPERSON'S STATEMENT

The Board took measures in 2021 to enhance risk management, improve stakeholder relations and meet the board independence requirements of the UK Governance Code.

Dear shareholders,

On behalf of your Board of Directors, I am pleased to share the Gem Diamonds Annual Report and Accounts for 2021, which describes both the Group's performance during the past year and the progress we have made against our longer-term strategic objectives.

2021 was certainly not without its challenges, with a combination of the impact of renewed COVID-19 waves and restrictions, planned periods of mining in lower grade areas of the resource and extreme weather conditions. Pleasingly, notwithstanding these challenges, operational stability improved significantly towards the end of the year. We also saw the positive effect of several important safety interventions (including a 24-hour 'Stop for Safety' campaign in June 2021) returning the operation to its usual strong level of safety performance following a number of disappointing safety incidents in the first half of the year. In parallel, robust global demand for our large high-value diamonds resulted in a solid financial performance of EBITDA of US$57.4 million, an increase of 8% on 2020, and revenue of US$201.9 million.

CONTINUOUSLY IMPROVING OUR GOVERNANCE APPROACH

As stewards of the interests of all stakeholders of the Group, the Directors strive to continuously improve governance and oversight. Good governance is the bedrock upon which the Group's reputation rests and it underpins operational efficiency, the relationships we have with employees, local communities and governments, and the respect we have for and in which we are held by our shareholders and the wider market. Ultimately, good governance is a crucial element in the sustainability of our business and the preservation of value for all stakeholders.

The Board's priorities in 2021:

· Ensuring safe and stable operations during the COVID-19 pandemic.

· Enhancing risk management systems and processes.

· Overseeing the adoption of the TCFD recommendations and Group climate change strategy.

· Resolving certain shareholder concerns regarding the Board's independence.

· Overseeing the renewal of the Group's funding arrangements.

· Overseeing the pending sale of the Ghaghoo mine.

"Good governance is a crucial element in the sustainability of our business and the preservation of value for all stakeholders"

- Harry Kenyon-Slaney -

During the past year, we worked hard to further refine our risk management systems and processes. This has enabled us to improve the identification, quantification and mitigation of operational and wider environmental and societal risks, and to assess their potential impact against the risk tolerance levels we judge appropriate for the Group. Practical examples include the restructuring of our insurance cover to mitigate the substantial recent increase in insurance cost and further refinement of our tailings management systems to align them fully with the ICMM's GISTM. Effective risk management and ongoing stakeholder engagement ensure that the Board is kept appraised of issues as they emerge and evolve, and that new opportunities are brought to the Board's attention.

As part of our governance process, we continually review our approaches to combatting systemic challenges. This year we have again reassessed and refreshed our positions on human rights, modern slavery, corruption and climate change. I am pleased that all employees and contractors have reaffirmed their commitment to these statements.

ADDRESSING SAFETY AND CLIMATE CHANGE

We regard the safety and health of our workforce as our highest priority and, while we are not complacent and can always do better, our track record over recent years has been solid. It was therefore a concern to the Board that our safety performance deteriorated during the first six months of 2021, but management took swift action to turn the situation around. The Letšeng mine was shut down for a full day in a 'Stop for Safety' campaign to allow the workforce to be addressed. A new safety culture programme was launched to reinforce the message that production must happen safely or not at all. Pleasingly the second half of the year showed a sharp recovery. The AIFR for the full year was 0.93.

Letšeng is located in a remote and pristine region of the world and the Board has always been sensitive to the need to operate in an environmentally responsible manner. In 2021, the existential threat of climate change moved to the centre of the public's consciousness and is top of mind for political and business leaders. As a mining company that is necessarily a sizeable consumer of energy, we have commenced the process of both understanding our contribution to greenhouse gas emissions and what we can do to limit it. Climate change is now a topic of discussion at every Board meeting and is a top priority in our risk management system.

Gem Diamonds has adopted six priority goals from the 17 UN SDGs and our ongoing inclusion in the FTSE4Good index is an external validation that our positive ESG practices align with global standards and expectations. There were no major or significant environmental incidents reported at any of our operations during the year.

VALUING DIVERSITY, SKILLS AND EXPERIENCE

While ours is a small Board, appropriate for the size of the Group, we are committed to aligning with the requirements of the UK Corporate Governance Code. In May, Johnny Velloza (previously deputy CEO) stepped down from the Board to ensure that the Board meets the independence requirements of the Code. We are grateful to Johnny for his significant contribution and commitment over the last five years and we continue to benefit from his technical expertise as a strategic adviser.

We welcomed Rosalind Kainyah MBE to the Board. Rosalind has decades of experience in corporate and environmental law, government relations, political risk management and sustainability. Her experience in diamond mining includes an Executive Director position at the De Beers Group and she adds valuable ESG and leadership skills to the Board.

The Nominations Committee oversees board and senior management succession planning, and this important work ensures that the Group's leadership is appropriately sized, regularly refreshed, diverse and equipped with the necessary skills. We believe that the Board, as currently constituted, contains the right balance of critical thinking capabilities, skills and experience and that the complementary perspectives included ensure appropriate independent oversight of the Group.

We are proud of our track record of local appointments and promotions with a representation of nearly 98% Lesotho nationals at Letšeng and steadily improving gender diversity throughout the Group.

LISTENING TO OUR STAKEHOLDERS

As the operator and 70% owner of the Letšeng mine, we regard ourselves as guests of the people of Lesotho. We endeavour to always maintain constructive, open and honest dialogue with local communities and government partners. We consider their priorities and ensure that they in turn understand the nature of our business and Letšeng's significant contribution to the national economy.

Since joining the Board in July 2019, Mazvi Maharasoa has been the designated non-Executive Director for workforce engagement. She engages directly with employee representatives and provides the Board with an unfiltered view on issues that people wish to raise. This engagement process has broadened our understanding of various concerns and has enhanced the channels via which employees can communicate with management and see their issues being resolved. The Board values this process as it gives us reassurance that employee voices are heard at the top of the organisation and has helped to strengthen our relationships with them. These interactions have been particularly important while access to the mine has been restricted during the COVID-19 pandemic.

ENTRENCHING AN ETHICAL CULTURE

Gem Diamonds has always maintained a strong set of ethical principles that remain the firm foundation of everything we do. We insist on transparency and have no tolerance for fraud, theft, modern slavery, child labour or any other wrongdoing. The culture espoused by the Board and senior management is one of transparency, openness, a willingness to challenge and to change, and these principles promote high standards of ethical behaviour throughout the Group. To support these principles we maintain a rigorous system of internal controls, a comprehensive internal audit programme and an anonymous whistleblowing facility.

SUSTAINABLE RETURNS FOR OUR SHAREHOLDERS

In line with our dividend policy to pay a dividend to shareholders when the financial strength of the Group allows, we are pleased to propose that a dividend of 2.7 US cents per share be declared for the 2021 financial year.

ACKNOWLEDGING OUR STAKEHOLDERS' CONTRIBUTIONS

Operating a large mine high in the Maluti Mountains of Lesotho under the constraints of COVID-19-related travel and access restrictions once again provided a considerable test for everyone at Gem Diamonds during 2021. Management's ability to oversee the operation remotely for extended periods is a testament first and foremost to the ability and fortitude of our workforce, to the quality of the systems and culture in place at the mine and the strength of our relationships with local community leaders and with the Government of the Kingdom of Lesotho.

On behalf of the Board, I therefore want to thank everyone who has contributed to the Group's success this past year despite considerable disruption to their lives and those of their families. We thank our employees, contractors, our community partners, the Government of the Kingdom of Lesotho and our shareholders for their ongoing support. Finally, I wish to thank my fellow Directors for the dedication and commitment they showed and the valuable contributions they made during the year.

BEING CONFIDENT ABOUT THE FUTURE

While there are some signs that the COVID-19 pandemic may be starting to wane, there remains a risk of further resurgences. The success of our efforts to largely shield our people over the past two years has given us confidence that we have the systems and processes in place to deal with this risk, to keep our people safe and maintain the supply chain that our operations depend on.

2021 marked the end of the four-year period over which we delivered in excess of the target of US$100 million by achieving US$110.0 million in revenue, productivity and cost savings generated through the Business Transformation programme launched in 2017. In 2022, our goal is to build on the success of this effort by further improvement of our operational consistency through the focused implementation of a rigorous continuous improvement culture. In addition, we vigorously continue to exploit opportunities to optimise the mine plan and to reduce our waste profile, investigate future options to explore underground mining at Letšeng and progress several technological innovations in our processing plants.

The climate change scenario analysis that the Group undertook in 2021 provides a strong foundation to incorporate climate change-related risks and opportunity considerations into future business plans, strategies and feasibility studies.

Diamond prices have recovered steadily since the second half of 2020 due to an improving market outlook and declining supply. Prices increased further in 2021 and it is pleasing to note that this trend has continued into 2022. While predicting the frequency of the recovery of large diamonds is impossible in the short term, consistent delivery of plant throughput volumes is the best way to yield results over time.

Harry Kenyon-Slaney

Chairperson

16 March 2022

RISK MANAGEMENT

HOW WE APPROACH RISK

The Group's risk management framework, which is fully integrated within strategic and operational planning, aims to identify, manage and mitigate the risks and uncertainties to which the Group is exposed and combines top-down and bottom-up approaches with appropriate governance and oversight, as shown in the graphic below.

Risk management framework

The Board and its Committees oversee the most relevant and significant current and emerging risks facing the Group which include strategic, operational and external risks. These risks are actively monitored, managed and mitigated to the extent possible as their impact, individually or collectively, could affect the Group's ability to achieve its objectives.

While Gem Diamonds' risk management framework focuses on risk identification and mitigation, many factors that give rise to these risks also offer opportunities. The Group monitors existing and emerging opportunities and incorporates them into the strategy where they support the Group's vision.

The learnings from COVID-19 led to increased emphasis on identifying the possible implications of external macro risks and low-probability and high-consequence events to inform appropriate contingency plans. These risks are mitigated by building resilience and flexibility into our leadership and operational processes, and ensuring the Group is equipped to quickly quantify the size and scale of the emerging issue and adapt accordingly. Insurance cover plays an important role in risk mitigation, enabling the transfer of certain risk elements within the primary risk categories of the Group. While it does not eliminate the need for operational controls to manage and mitigate risk, it offsets the financial loss should the risk materialise.

Insurers have continued to decrease their exposure to the mining industry due to the risk perception created by the COVID-19 pandemic, as well as claims in the industry due to the looting experienced in South Africa in July 2021. As a result, the renewal of appropriate insurance has become challenging, leading to additional exclusions, reduced cover, increasing deductibles or excesses payable and increasing premiums. Reduced cover consequently directly impacts the Group's cash management risk. In response to these challenges, the Group has decided to adopt a new risk transfer strategy to address the substantial changes in the insurance market by developing a sustainable insurance solution for the Group in the medium to long term.

EMERGING RISKS

The Group risk framework includes an assessment of emerging risks which are indicators of future conditions from which new opportunities and threats can arise.

The Group's consideration of emerging risk includes those risks that:

• are likely to materialise or impact over a longer time frame than existing risks.

• do not have much reference from prior experience.

• are likely to be assessed and monitored against vulnerability, velocity and preparedness when determining likelihood and impact.

The current emerging risks and opportunities being monitored by the Group are:

• although the invasion of Russia into the Ukraine and consequential sanctions applied is a current event; the social, political and economic effect of this on commodity prices, supply chains and market conditions is unknown..

• lab-grown diamonds.

• generational shifts in consumer preferences - social influencers.

• the rate of advancement of digital technologies such as blockchain.

• future workforce (automation, skills for the future, etc).

• uncertainty around carbon tax.

VIABILITY STATEMENT

The Board has assessed the viability of the Group over a period significantly longer than 12 months from the approval of the financial statements in accordance with the UK Corporate Governance Code. The Board considers three years from the approval of the financial statements to be the most relevant period for consideration for this assessment, given the Group's current position and the potential impact of the principal risks documented on pages 37 to 44 on the Group's viability.

While the Group maintains a full business model, based predominantly on the life of mine plan for Letšeng, the Group's annual business and strategic planning process also uses a three-year time horizon. This process is led by the CEO and involves all relevant functions including operations, technology and innovation, sales and marketing, finance, treasury and risk. The Board participates in the annual review process through structured Board meetings and annual strategy review sessions. A three-year period provides sufficient and realistic visibility in the context of the industry and environment in which the Group operates, even though the life of mine, the mining lease tenure and available estimated reserves exceed three years.

The business and strategic plan reflects the Directors' best estimate of the Group's prospects. The Directors evaluated several additional scenarios to assess the potential impact on the Group by quantifying their financial impact and overlaying this on the detailed financial forecasts in the plan.

The Board's assessment of the Group's viability focused on the critical principal risks categorised within the strategic, external and operational risk types, together with the effectiveness of the potential mitigations that management reasonably believes would be available to the Group over this period.

REFINANCING OF GROUP FACILITIES

The refinancing of the Group's facilities which was completed in December 2021, significantly increased the Group's available facilities from US$67.6 million immediately before the refinancing to US$83.3 million thereafter, when fully unutilised. US$77.0 million of these facilities mature in December 2024, with the balance of US$6.3 million being a general banking facility with no set expiry date, but which is reviewed annually.

COVID-19

While there are promising signs that the impact of the COVID-19 pandemic may be dissipating, there remains a potential risk of further resurgences. The Group is confident in its ability to manage through any such resurgence given its experience and success to date, especially following the successful roll-out of vaccinations at Letšeng. The Group predominantly holds viewings for its rough tender sales in Antwerp, although viewings have been held in Tel Aviv and more recently in Dubai. Although international travel has been subject to changing levels of restrictions, the main diamond sales market in Antwerp has remained open. Diamond sales are concluded on Gem Diamonds' electronic tender platform which can be accessed from anywhere in the world. The Group is confident that it will be able to continue to hold tender viewings in Antwerp despite any potential COVID-19 travel restrictions.

CLIMATE CHANGE

The Board is cognisant of the risks presented by climate change and conscious of the need to minimise emissions. A Group-specific climate change scenario analysis has been conducted whereby the short- to medium- and longer-term physical and transitional risks were assessed. The short- to medium-term impacts fall within the viability period. The physical risks identified for Letšeng, such as drought, strong winds, extreme precipitation and cold, is similar to its current operating conditions. The operation is therefore well-geared to manage these conditions within its current and medium term operational activities, cost structure and business planning. Additional cash investment required in the event of these short- to medium-term physical risks materialising has been assessed as low with no material impact on the current operations and viability of the Group.

In terms of transitional risks, as users of grid-supplied and fossil fuel energy, the short-term focus is on improving energy efficiencies in our operational processes and reducing combustion-related fossil fuel use. Options are being assessed in the context of the size, nature and location of the Group's operations, the required investment and the expectations of our main stakeholders. Any material investment during the viability period is considered unlikely. Due to the uncertainty of the cost and timing of implementation of carbon-related taxes, the impact of such taxes on the Group's operations and cash flows has been excluded from the viability assessment and scenario stress testing. Management and the Board will continue to assess these impacts as the information becomes more certain.

STRESS TESTS

The scenarios tested considered the Group's revenue, EBITDA1, cash flows and other key financial ratios over the three-year period. The scenarios tested included the compounding effect of the factors below and were applied independently of each other.

1 Refer Note 4, Operating profit on page 179 for the definition of non-GAAP measures.

CONCLUSION

The Group's current net cash1 position of US$20.9 million as at 31 December 2021 and available facilities of US$74.3 million would enable it to withstand the impact of these scenarios over the three-year period. The revolving credit facilities which expire on 22 December 2024, has a 24-month extension period and the Group will follow all necessary processes to extend the facilities for this available period, as it has in the past. This position is supported by the cash-generating nature of the Group's core asset, Letšeng, and its flexibility in adjusting its operating plans within the normal course of business. Based on the robust assessment of the principal risks, prospects and viability of the Group, the Board confirms that it has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period ending 31 December 2024.

1 Net cash is calculated as cash and short-term deposits less drawn down bank facilities (excluding asset-based finance facility and insurance premium financing).

CHIEF EXECUTIVE'S REVIEW

We performed strongly in 2021 and operated in a safe and responsible manner to protect the wellbeing of our workforce.

Letšeng has a unique ore body with diamonds that are of the highest value of any kimberlite mine, and the most beautiful found anywhere in the world. Despite the many COVID-19-related challenges encountered during the year, the Group ended the year in a strong cash position (net cash of US$20.9 million) with the average price of Letšeng goods exceeding US$2 000 per carat in Q4. This robust pricing for Letšeng's large, high-quality diamonds has continued into 2022.

We aim to extract maximum value for our stakeholders by operating safely, responsibly and efficiently and exploring new technologies to reduce diamond damage during the diamond liberation process. Achieving the highest average prices of any kimberlite mine in the world requires an effective, transparent and competitive tender sales process which we boast in Antwerp and, more recently, in Dubai. In addition, the Group adheres to internationally recognised systems and processes which provide our clients and their customers the assurance that our diamonds are ethically mined.

EXTRACTING MAXIMUM VALUE FROM OUR OPERATIONS

The strategy during the second year of COVID-19 impact on our operations focused on driving the extraction of greater value from our assets.

The Group's Letšeng operation delivered a solid operating performance, despite the significant challenges presented by travel restrictions, supply chain constraints, extreme weather conditions and intermittent external power outages on site.

Tonnes treated increased 15% year on year as operations returned to normal after the COVID-19 shutdowns in 2020. Carats recovered increased 14% to 115 335 (2020: 100 780).

Six diamonds greater than 100 carats were recovered during the year, which is comparable to the 13-year average of eight, albeit lower than the 16 such diamonds recovered in 2020. Exceptional recoveries during the year included the two large high-quality Type IIa white diamonds of 367 and 245 carats which sold for US$26 160 per carat and US$40 139 per carat, respectively. Letšeng's operational performance is discussed in more detail on page 60.

The diamond market has recovered to levels not seen in some time and demand for the high-quality white diamonds produced at Letšeng is particularly strong. 21 diamonds sold for more than US$1 million each, generating revenue of US$64.5 million (2020: 34 diamonds contributing US$72.6 million). The average price achieved during the year decreased 4% to US$1 835 per carat (2020: US$1 908 per carat) from the sale of 109 697 carats (2020: 99 172). The decrease in the prices achieved compared to 2020 relates mainly to fewer large and exceptional diamond recoveries, and the overall quality of the diamonds recovered as a result of the areas of the resource mined during the year. The Group successfully hosted its first trial tender viewing in Dubai in September, making it easily accessible for important clients from the UAE, India and Israel to participate in the tender. The viewings were well-attended and contributed to the robust prices achieved. The Group will hold its next Dubai viewing in March 2022.

"We are committed to operating in an environmentally responsible way."

- Clifford Elphick -

Group revenue increased 6% to US$201.9 million (2020: US$189.6 million), which translates to underlying EBITDA1 of US$57.4 million and earnings per share of 10.5 US cents. Operational cash generated amounted to US$71.3 million resulting in a net cash2 position of US$20.9 million at the end of 2021. The Group-wide debt refinancing was successfully concluded during the year. An additional funder joined the lender group, bringing the total number of lenders to three. The Group's revolving credit facilities were increased from US$61.3 million to US$77.0 million, in dollar equivalent, and renewed for a three-year period.

Based on the positive financial performance of the Group in 2021, we are pleased to announce that the Board has proposed a dividend of 2.7 US cents per share. More information regarding the Group's financial results is included in the CFO review on page 52.

WORKING RESPONSIBLY AND MAINTAINING OUR SOCIAL LICENCE

Gem Diamonds aims to sustain a workplace safety culture founded on mutual care and collaboration across the workforce. We continue to roll out programmes to drive a behavioural, organisational and culture ethos of safe conduct in the workplace.

In the past year, there were no fatalities (2020: none), six LTIs (2020: 1), and we achieved an overall AIFR of 0.93.

We are committed to operating in an environmentally responsible way. Our tailings storage facility management process aligns with the ICMM's GISTM which ensures the responsible management and monitoring of the tailings storage and freshwater facilities with regular inspections by external experts.

We invest in our surrounding communities through our well- established CSI programme to improve educational outcomes, develop infrastructure and stimulate local enterprises to create self-sustaining employment independent of the mine. Implementing these programmes was a significant highlight in 2021 as we were able to successfully implement a number of 2020 projects delayed by the COVID-19 lockdowns, while also commencing with those projects planned for 2021. In addition, we were active in repairing roads, footbridges and other PAC infrastructure damaged by the extraordinary flooding in the Patiseng valley in the first quarter of the year.

We are particularly proud of the pipeline of in-country mining skills we have developed that will serve Letšeng, and Lesotho as a country, well into the future. We started operations with 250 people in 2006, more than half of whom were expatriates. There are now 1 591 people working at Letšeng, of whom 98% are Basotho. This is due to our significant investment in transferring of skills, sponsoring the studies of students in mining and business-related disciplines, and in coaching initiatives specific to our needs.

Responsible social and environmentally sourced diamonds are a consumer priority. We have adopted six of the UN SDGs and continue to support the GIA's use of blockchain technology to assure consumers of our diamonds' ethical footprint.

There were no major or significant stakeholder incidents reported during the year.

GEM DIAMONDS' CONTRIBUTION TO LESOTHO

• Jobs for 1 591 employees and contractors of which 98% are Basotho nationals.

• Local procurement US$158.7 million.

• Local procurement directly from PACs US$3.4 million.

• Local procurement from regional communities US$31.4 million.

• Investment in training to improve individual skills.

• 48 bursaries and scholarships for local students.

• Vaccine and ambulance donations.

1 Refer Note 4, Operating profit on page 179 for the definition of non-GAAP (Generally Accepted Accounting Principles) measures.

2 Net cash/(debt) is a non-GAAP measure and calculated as cash and short-term deposits less drawn down bank facilities (excluding the asset-based finance facility and insurance premium financing).

OPERATING THROUGH COVID-19

The challenge for our business over the last two years has been to keep our workforce safe, find ways to run efficiently and uninterrupted during COVID-19 and generate a return for our shareholders. We demonstrated our care and agility at the start of the pandemic by quickly establishing a testing laboratory, strict controls and protocols, giving confidence to employees, contractors, communities and the Government of the Kingdom of Lesotho that we were serious about keeping our people safe. The Group has incurred significant expenditure in implementing its COVID-19 protocols with the majority being spent at Letšeng, where an estimated LSL26.4 million (LSL17 375 per employee) was spent on COVID-19 management and prevention to date.

When vaccinations started in Lesotho in the second half of 2021, we acquired and donated 20 000 vaccines to the Lesotho Department of Health. As part of the national vaccination programme, we worked with the Department of Health to allow our workforce the opportunity to be vaccinated on site. We are proud to report that 99% of our workforce is fully vaccinated to date.

As a result of our early and proactive interventions, the mine operated continuously throughout 2021. However, travel restrictions made it challenging for Group management, contractors and certain technical skills to access the mine, and ongoing supply chain disruptions affected the timeous replenishment of essential spares and equipment. We remain alert to the effects of the pandemic on mental health and in response targeted wellness initiatives have been rolled out at the Johannesburg office and a full-time psychologist was appointed at Letšeng to support the workforce at the mine.

Focusing on climate change

We are cognisant of the risks presented by climate change and conscious of the need to minimise emissions and our environmental impact more broadly. Letšeng's physical location exposes the operation to extreme weather conditions including drought, strong wind, heavy rain, extreme cold and snow. The operation is well set up to manage these conditions and is experienced in sheltering and supporting our PACs when necessary.

We held climate change workshops and completed a Group-specific climate change scenario analysis to deepen our understanding of climate-related risks and its likely impacts on the Group. The TCFD framework is proving to be a useful tool to identify and assess climate change- related issues.

As users of grid and fossil fuel energy, our short-term focus is on improving energy efficiencies in our operating processes and reducing combustion-related fossil fuel use. We are assessing our options in the context of the size, nature and location of our operations, the required investment and the expectations of our main stakeholders.

The Group has appointed independent external subject matter experts to provide input into the climate change considerations that will inform governance, risk management and strategy decisions as well as climate change-related targets for the Group. Our approach to climate change is included on page 26.

PREPARING FOR THE FUTURE

The four-year BT target of US$100 million was exceeded by the end of the year with the achievement of US$110.0 million, and many of the embedded initiatives will continue to create value for the Group. We continue to foster a culture of continuous improvement to identify and execute value driving initiatives and look forward to realising the benefits thereof in the near future.

Our capital plans include funding for projects that will sustain growth and value creation. Advancing technologies to reduce diamond damage during processing is a focus and while the potential is clear, the slow pace of progress during the year was disappointing.

The current open pit mine plan for both Main and Satellite pipes extends to 2036. In preparing for the future, we are exploring the trade-off between the next cutback in Satellite pipe versus an earlier underground access to this ore body in a safe and efficient manner. To inform our decision in this regard, we deepened our knowledge of the resource body in 2021 through an extensive resource drilling programme and will continue this process into 2022.

OUTLOOK

The current strong diamond demand and the ongoing decrease in the number of diamond producers, suggests that the fundamentals are supportive for achieving higher diamond prices in the future. We will prioritise stable and consistent production while driving efficiencies and managing costs to maximise cash flows, sustain an appropriate capital return to shareholders and maintain our status as a responsible, safe and low-cost operation.

Russia's recent invasion of the Ukraine has created political turmoil and the impact on the global economy, and the diamond market in particular, is uncertain at this stage.

Our future success depends on ensuring access to the requisite technical expertise, which will require further investments in skills development and retention initiatives, as well as effective succession planning. We remain focused on safeguarding the health of employees and contractors against COVID-19 for as long as it persists. We will continue to support our PACs and assist the Government of the Kingdom of Lesotho in its efforts to manage the impact of the pandemic.

APPRECIATION

In closing, I thank the Board and our Chairperson for their leadership during the year. The management teams once again demonstrated their commitment to the Group, and I thank them for their exceptional efforts during another difficult year.

We thank our customers for their continued trust and patronage, and our shareholders for their support. I would like to acknowledge the Government of the Kingdom of Lesotho for allowing us to continue to operate in a safe and responsible manner through three COVID-19 waves during the year.

Clifford Elphick

Chief Executive Officer

16 March 2022

CHIEF FINANCIAL OFFICER'S REVIEW

Gem Diamonds generated positive cash flow and ended the year in a strong financial position, proposing a shareholder dividend for the second consecutive year.

• Underlying EBITDA from continuing operations increased 8% to US$57.4 million from US$53.2 million in 2020

• Earnings per share from continuing operations: 13.2 US cents

• Profit attributable to shareholders from continuing operations: US$18.5 million

• Group's attributable profit: US$14.8 million

• The Group ended the year in a net cash position of US$20.9 million (2020: US$34.6 million)

• Unutilised available facilities of US$74.3 million

"The successful refinancing of our facilities, which includes a sustainability-linked loan, further embeds our commitment to delivering the Group's ESG strategy."

- Michael Michael -

We generated another strong set of results and positive cash flows in 2021, against the backdrop of ongoing COVID-19 challenges. Our effective and early interventions in response to COVID-19 enabled operations to continuing uninterrupted throughout 2021, with an ongoing focus on protecting employees and contractors against infection whilst maximising production and continues to sell our diamonds at the highest obtainable market price.

Production throughput was constrained during the year with three waves of COVID-19 impacting the availability of equipment, spares, skills and supply chain management. This resulted in the Group resetting some of its full year production targets, although the strong performance in Q4 resulted in some of those metrics being exceeded. The diamond market showed significant recovery and we achieved US$1 835 per carat for the year.

We successfully concluded the Group-wide debt refinancing during the year by renewing our revolving credit facilities at an amount of US$77.0 million for a three-year period. US$32.3 million of this amount is a Sustainability Linked Loan (SLL) which links the margin and resultant interest rate on the loans to the Group's ESG performance, which is aligned to its sustainability strategy.

In further support of our commitment to sustainability and climate change-related matters, Phase 1 of our TCFD Adoption Strategy was concluded during the year by establishing the necessary foundations to support meaningful, science-based decision making. The TCFD-related workstreams completed during 2021 included:

• Establishing robust board and management governance structures;

• Strengthening the enterprise risk management processes to ensure the full ambit of climate risk are considered and managed;

• Concluding our climate change scenario analysis; and

• Identifying, assessing and plotting the impact of our physical and transition risks over the short-, medium- and long-term.

Underlying EBITDA2 from continuing operations increased to US$57.4 million, from US$53.2 million in 2020. Profit attributable to shareholders from continuing operations for the year was US$18.5 million, equating to earnings per share from continuing operations of 13.2 US cents on a weighted average number of shares in issue of 140.3 million.

The Group ended the year with a cash balance of US$31.1 million and drawn down facilities of US$10.2 million, resulting in a net cash position of US$20.9 million (2020: net cash of US$34.6 million) and unutilised facilities of US$74.3 million.

Summary of financial performance

Refer to the full annual financial statements starting on page 147.

1 Including waste stripping costs amortisation but excluding depreciation and mining asset amortisation.

2 Underlying EBITDA as defined in Note 4, Operating profit of the notes to the consolidated financial statements.

Revenue

Rough diamond revenue of US$201.3 million was generated at Letšeng, achieving an average price of US$1 835 per carat (2020: US$1 908 per carat). The Group sold 21 diamonds for more than US$1.0 million each, contributing US$64.5 million to revenue.

The Group's increased revenue was mainly driven by higher volumes through normalised production (following the COVID-19-related disruptions in 2020) and improved market conditions. The overall dollar per carat achieved was negatively impacted by a decrease in large diamond recoveries during the year when compared to 2020.

Letšeng entered into partnership arrangements during the year that allows them to share in the margin uplift on the sale of the resultant polished diamonds. In 2021, additional revenue of US$0.3 million (2020: US$0.6 million) was generated from these partnership arrangements.

1 Direct cash costs represent all operating costs, excluding royalties and selling costs.

2 Non-cash accounting charges include waste stripping amortised, inventory and ore stockpile adjustments, finance lease costs and exclude depreciation and mining asset amortisation.

Expenditure

OPERATING EXPENDITURE

Group cost of sales increased by 8% to US$113.0 million from US$104.7 million in 2020. In 2021, the Group incurred US$0.7 million to manage and maintain protocols to contain the spread of COVID-19 at its operations (2020: US$1.0 million). In 2020, an additional US$2.9 million standing charges were incurred during the shutdown and ramp-up periods at Letšeng. Total waste-stripping costs amortised increased by 8% to US$46.8 million compared to US$43.4 million in 2020.

Total operating costs in local currency decreased by 4% to LSL1 677.4 million compared to LSL1 740.8 million in 2020 which includes the impact of non-cash accounting charges.

The unit cost per tonne treated decreased 15% to LSL271.75 (2020: LSL320.20 per tonne treated) due to more consistent operational throughputs and an increase in tonnes treated compared to 2020.

• Direct cash costs (excluding waste) increased by 13% to LSL1 241.4 million in line with the increase of ore tonnes treated to 6.2 million, a 15% increase compared to 2020. Waste cash costs increased by 22% to LSL829.4 million which was also in line with the 20% increase in waste tonnes mined (18.7 million tonnes compared to 15.4 million tonnes in 2020). Direct cash costs per tonne treated of LSL185.59 which is similar to 2020. Waste cash cost per waste tonne mined increased marginally to LSL44.44 (2020: LSL43.70).

• Third plant operator costs reflect payments to the contractor which are calculated from revenue generated by the sales from diamonds recovered through the contractor plant. In 2021, the total cash costs in local currency increased by 12% in line with the increase in carats recovered and sold.

• Non-cash accounting charges: comprise waste amortisation, stockpile and diamond inventory movements and finance lease costs. The total impact of these charges in 2021 was LSL436.0 million compared to LSL645.6 million in 2020. The decrease is mainly driven by a build-up of ore stockpile to standard levels as mining activities normalised. An increase in diamond inventory on hand at year-end of about 3 500 carats driven by a higher grade mining mix post the last export of the year, also contributed to the decrease. Total waste amortisation charges decreased to LSL669.1 million (2020: LSL690.1 million), impacting the unit cost by LSL108.41 per tonne treated (2020: LSL131.56).

The diesel theft as discussed on page 115 had no material effect on operating costs or the unit cost per tonne treated.

US-DOLLAR REPORTED COSTS

Gem Diamonds' revenue is generated in US dollars, while the majority of operational expenses are incurred in the relevant local currency in the operational jurisdictions. Local currency rates for the Lesotho loti (LSL) (pegged to the South African rand) and Botswana pula (BWP) were stronger against the US dollar (compared to 2020), which increased the Group's US dollar-reported costs and decreased local currency cash flow generation. The fluctuation of the exchange rates are set out in the table below:

ROYALTIES AND MARKETING COSTS

In terms of Letšeng's mining lease, Gem Diamonds pays royalties to the Government of Lesotho on the value of rough diamonds sold. The Group's sales and marketing operation in Belgium incurs costs relating to diamond selling and marketing. Royalties and selling costs increased by 11% to US$21.9 million (2020: US$19.8 million) in line with the increase in revenue.

CORPORATE EXPENSES

The technical and administrative offices in South Africa and head office in the UK provide expertise in all areas of the business to realise maximum value from the Group's assets. Central costs are incurred in South African rand and British pounds respectively.

Baseline corporate costs were US$8.2 million, a 4% increase compared to US$7.9 million in 2020. The benefits from the corporate cost initiatives implemented through BT continue to be realised. During the year, US$0.7 million in costs were incurred on ad hoc projects (2020: US$0.1 million), an increase of US$0.6 million compared to 2020, when all ad hoc projects were suspended due to COVID-19. Current year costs were impacted by the stronger South African Rand and British Pound against the US dollar.

Total expenditure for the year relating to the adoption of TCFD and CCSA amounted to US$0.2 million.

Underlying EBITDA1 and attributable profit

Group underlying EBITDA1 from continuing operations increased by 8% to US$57.4 million (2020: US$53.2 million) as a result of the increase in revenue. Profit attributable to shareholders was US$14.8 million, which translates to 10.5 US cents per share based on a weighted average number of shares in issue of 140.3 million.

1 Underlying EBITDA as defined in Note 4, Operating profit of the notes to the consolidated financial statements.

Statement of financial position - selected indicators

CAPITAL EXPENDITURE

The Group's capital expenditure increased following the cash preservation focus in 2020. Letšeng's capital spend was incurred mainly on the completion of a single-occupancy accommodation block, the purchase and installation of an additional X-ray sorting machine, the replacement of an overland conveyor for one of the tailings storage facilities and expenditure on progressing the drilling work to develop our Resource and Reserve Statement. Total capital expenditure (excluding waste stripping) increased to US$4.0 million during the year (2020: US$1.6 million).

CASH AT HAND

Group cash generated from operating activities (before capital and waste investment of US$68.7 million) was US$71.3 million. At year end, cash on hand totalled US$31.1 million (2020: US$49.8 million), of which US$23.5 million is attributable to Gem Diamonds. All scheduled capital debt repayments during the year were made, totalling US$4.0 million. The overall result is a decrease in net cash of US$13.7 million year on year.

Letšeng declared and paid a dividend of LSL200.0 million (US$12.5 million) in 2021. Gem Diamonds paid a dividend to its shareholders of 2.5 US cents per share, totalling US$3.5 million after approval by the AGM in June 2021.

LOANS AND BORROWINGS

The Group-wide debt refinancing was successfully concluded on 23 December 2021. Letšeng's LSL500.0 million and Gem Diamonds' US$30.0 million revolving credit facilities (RCF), that were due to expire in December 2021, were refinanced for LSL750.0 million and US$30.0 million respectively, for an initial three-year period. The facilities were therefore increased from US$61.3 million to US$77.0 million, in dollar equivalent. Security for the facilities over Gem Diamonds' bank accounts and its shareholding in Letšeng was implemented after year-end.

The funding partners to the new facility agreement are Nedbank, Standard Bank and new to the Group, Firstrand Bank (through their respective operations). Nedbank's portion of the funding, totalling US$32.3 million, is a Sustainability-Linked Loan (SLL), which is an innovative structure that links the margin and resultant interest rate on the SLL to the Group's ESG performance. The margin on the SLL will decrease subject to the Group meeting certain carbon reduction and water conservation KPIs that are aligned with the Group's sustainability strategy.

The measurement dates for these KPIs are 31 December 2022 and 31 December 2023.

At year end, the Group had utilised facilities of US$10.2 million, resulting in a net cash position of US$20.9 million and available facilities of US$74.3 million, mainly comprising a net debt position of US$5.5 million (after US$9.0 million drawdown) at Gem Diamonds and a net cash position of US$24.2 million at Letšeng. Gem Diamonds ended the year with a US$9.0 million outstanding balance.

Letšeng made repayments of LSL56.9 million (US$3.8 million) on its project debt facility for the construction of the mining workshop complex. The outstanding balance of LSL19.0 million (US$1.2 million) will be repaid by September 2022.

The Group engages regularly with funders and credit providers to ensure continued access to funding and to manage cash flow requirements.

Summary of loan facilities as at 31 December 2021

1 At 31 December 2021 LIBOR was 0.08% and JIBAR was 3.89%.

2 Margin will decrease with 1.5% upon implementation of the security condition.

DISCONTINUED OPERATION

In line with the strategic objective to dispose of non-core assets, the Board and management remain committed to the sale of the Ghaghoo diamond mine in Botswana. Following the exclusivity agreement in the prior year, a binding share sale agreement was entered into for the sale of the mine in 2021. The agreement was subject to the fulfilment of certain suspensive conditions, including obtaining competition authority and regulatory approvals within Botswana. Prior to year end, the regulatory conditions were fulfilled and approvals were obtained from the Botswana Competition Authority. Although the transaction was not yet concluded by year end, management is pursuing to close it out as soon as possible.

The operation remains on care and maintenance and is classified as a discontinued operation and asset held for sale per IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Care and maintenance cash and non-cash costs amounted to US$3.7 million (2020: US$3.3 million) and have been recognised and disclosed separately in the Consolidated Statement of Profit or Loss. The increase in costs was mainly due to a non-cash impairment of redundant stock and spares during the year.

INSURANCE

Letšeng submitted a business interruption claim to its insurers for insured losses arising out of the 30-day COVID-19-related Government shutdown period in 2020 when the mine was required to be placed on care and maintenance. This claim has been rejected by the insurer and Letšeng has commenced the process to pursue it further.

Increased risk perception in the mining industry due to the COVID-19 pandemic and dam wall failures reported by other companies around the world have led to insurers decreasing their exposure to the industry. This has resulted in the renewal of appropriate insurance becoming challenging, leading to additional exclusions, reduced cover, increasing deductibles or excesses payable and increasing premiums. In response, the Group has implemented a new risk transfer strategy to address the substantial changes in the insurance market by developing a sustainable insurance solution for the Group in the medium to long term.

The Group assessed its potential maximum risk exposure and its history of insurance claims as a basis to transition its conventional approach to insurance cover to a more flexible model by retaining higher insurance excesses which resulted in an insurance premium saving. To mitigate the increased risk exposure of the higher deductibles in the unlikely event of an unexpected loss, the Group entered into a five-year Multi-aggregate Protection Insurance Policy.

SHARE-BASED PAYMENTS

The share-based payment charge for the year was US$0.4 million (2020: US$0.6 million). On 2 June 2021, shareholders approved the 2021 Remuneration Policy which included the introduction of a post-termination shareholding, an employee pension alignment plan as well as the new Gem Diamonds Incentive Plan (GDIP) for Executive Directors. No awards in line with the new GDIP or the existing Long-Term Incentive Plan (LTIP) were made in 2021.

Dividend

The Board is committed to sustaining shareholder value through the implementation of appropriate dividend policies and we aim to pay a dividend when the financial strength of the Group permits. The Board's proposed dividend in March 2021 of 2.5 US cents per share (US$3.5 million) was approved and paid to shareholders in June.

Based on the Group's financial performance during the year, the Board is proposing a dividend of 2.7 US cents per share (US$3.8 million). The dividend is subject to shareholder approval at the scheduled AGM on 8 June 2022.

TAXATION

The Group has applied all relevant principles in accordance with prevailing legislation in assessing its tax obligations. The Group's effective tax rate was 33.4%. Most of the Group's taxes are incurred in Lesotho, which has a corporate tax rate of 25%. The effective tax rate is above the Lesotho corporate tax rate mainly due to deferred tax assets not recognised on losses incurred in other operations and permanent differences which are non-deductible for tax purposes.

As disclosed in the prior year, an amended tax assessment was issued to Letšeng by the Lesotho Revenue Authority (LRA) in December 2019, contradicting the application of certain tax treatments in the current Lesotho Income Tax Act 1993. An objection to the amended tax assessment was lodged with the LRA in March 2020, which was supported by the opinion of senior counsel. The LRA subsequently lodged a court application for the review and setting aside of the applicable regulations to the Lesotho High Court pertaining to this matter, which Letšeng is opposing and a court date is expected to be set in June 2022.

On 7 February 2022 Letšeng received an application from the LRA to amend its original grounds for the court application. Letšeng's counsel continues to review the LRA's proposed amendment of its case and has opposed the new application by the LRA. Senior counsel advice has been obtained for the new circumstances. This advice still reflects good prospects of success. There has therefore been no change in the judgement applied and the accounting treatment for this matter (refer Note 1.2.28, Critical accounting estimates and judgments for further detail).

SENSITIVITIES

A range of external factors outside of the Group's control have an impact on its ability to create financial value. The Group has the necessary resilience, balance sheet strength and access to funds to adjust for shifts in these factors. The graph below illustrates the sensitivity of 2021's EBITDA to various factors that have the most significant impact on our ability to create value.

SENSITIVITY IMPACT OF 1% CHANGE (US$ MILLION)

OUTLOOK

The Group's focus remains on operational consistency and cost management to optimise cash flows, which together with appropriate funding facilities will enable it to meet its operational and capital requirements.

Michael Michael

Chief Financial Officer

16 March 2022

OPERATIONS REVIEW

2021 OVERVIEW

• Zero fatalities, successful 'Stop for Safety' campaign and focus on maturing operational safety culture.

• Exceeded BT four-year target, achieving US$110.0 million by 31 December 2021.

• 99% of workforce fully vaccinated to date.

• Improved, adapted, and implemented our COVID-19 protocols and procedures to protect the safety and wellbeing of our people while continuing operations through three COVID-19 waves in a safe and responsible manner.

• Recovered six diamonds greater than 100 carats, including a 367 carat and a 245 carat large high-quality Type IIa white diamonds.

• Sold 21 diamonds for over US$1.0 million each, generating revenue of US$64.5 million.

• Highest prices achieved:

• US$119 886 per carat for a 3.4 carat pink diamond.

• US$47 574 per carat for a 65 carat Type IIa white diamond.

• Average price of US$1 835 per carat achieved.

• Supported our PACs through COVID-19 and repaired flood-damaged infrastructure.

• Fifth consecutive annual ISO 14001 and 45001 certifications.

• Group-level climate change scenario analysis completed.

• Reduced waste costs by reducing haulage distances for Main pipe waste.

• Advanced the resource core drilling programme.

• Completed a preliminary conceptual underground study to evaluate for Satellite pipe.

• Completed designs for the replacement PCA.

• Successful trial of steeper slopes in Satellite pipe to significantly reduce waste and increase ore availability.

• New fines X-ray sorting machine to treat fine recovery tailings commissioned.

• Enhanced and optimised process control to stabilise plant feed conditions.

• Initial surface miner trials completed in Q2 and Q3.

PERFORMANCE

Safety

The Group's safety approach is founded on our commitment to zero harm and belief that all injuries are preventable. Letšeng recorded zero fatalities but six LTIs during 2021, resulting in an LTIFR of 0.24 (2020: 0.04) and an AIFR of 0.93 (2020: 0.76). An organisational safety culture initiative was implemented to advance the maturity of our operational safety practices and reduce the frequency of safety incidents experienced in H1, through focused interventions including a 24-hour 'Stop for Safety' campaign and critical control management.

The safety case study below, outlines the key 2021 safety interventions implemented to mature our safety culture at Letšeng and improve safety performance.

MATURING OUR ORGANISATIONAL SAFETY CULTURE

Our safety journey in 2021 reflects the Group's deep commitment to zero harm and the belief that all injuries are preventable.

During the first half of 2021, Letšeng recorded a series of safety incidents that led the leadership team taking to shut down operations for 24 hours for safety-focused engagements with the entire workforce.

The site-wide 'Stop for Safety' campaign was the first of its kind for the Group and Letšeng and was aimed at understanding the root causes of increased safety incidents, reaffirm the commitment to zero harm and to design a targeted strategy to address the identified root causes and other concerns raised by the workforce during the intensive engagements.

This campaign took place on 8 June. Group Executive Management and Letšeng's leadership teams, accompanied by our contractors' executive and operational management, engaged extensively with the workforce. An additional session for employees not on duty on the day was held the following week.

A comprehensive list of actions was put together to immediately address matters raised during these sessions, which spanned a range of topics, including:

• The continuing impacts of the COVID-19 pandemic.

• Fatigue management.

• Health and safety.

• Human resource management and leadership.

As part of the discussions, the workforce requested more regular employee engagement forums to discuss safety and other matters, and as such, monthly employee engagement sessions were established.

Following the 'Stop for Safety', we appointed external safety specialists to review our safety practices and identify opportunities for improvement. In support of this process, a safety perception survey was conducted in October to map the Group's current safety maturity level. The findings of the safety perception survey informed a safety-focused response plan to implement strategic programmes that aim to develop and mature safety practices and organisational culture at Letšeng.

The strategic safety programmes initiated in 2021 include:

• Critical control management.

• Incident investigation and management.

• Safety-focused leadership coaching.

• Just Culture Model development.

In addition to the above programmes, we are maturing from reacting to lagging indicators, which measure failures post- incident to leading indicators that measure performance and indicate whether safety and health controls are effective at managing safety risk, thus being more proactive in our safety strategy. This approach will be monitored and measured through a leading indicator safety committee that will meet monthly to conduct retrospective analysis of all the leading indicators to identify trends or potential red flags to allow a proactive response.

We recognise that with one operating mine, there is limited opportunity for cross-operational knowledge sharing and we have identified a need for external assistance to transfer knowledge, experience and expertise on safety-related matters. We have constituted a committee of experienced individuals, our 'Grey Hair Council', from a broad industry base with deep insight into industry leading safety practices. In 2021, this council provided valuable guidance and insights into actual safety incidents, which have been integrated into our safety response and management plans.

We remain committed to zero harm and continue to look for innovative ways to deepen our understanding of how we can keep ourselves and our teams safe.

Operations

1 Includes carats produced from the Letšeng plants, the Alluvial Ventures plant and the tailings treatment plant.

The Group's Letšeng operation continued operating safely and responsibly throughout the year notwithstanding the ongoing impact of COVID-19 on the availability of spares and equipment, limited access to skills and services due to travel restrictions and supply chain disruptions, and lost shifts due to required quarantining. Fatigue and mental health challenges placed significant strain on the management and the workforce.

Waste tonnes mined increased 20% to 18.7 million tonnes from 15.6 million tonnes in 2020 (2020 being impacted by the 30-day COVID-19 shutdown).

The trial to further steepen the west side of the Satellite pipe was safely and successfully managed during the year, with blasting and berm retention controls well entrenched. A similar slope steepening programme is planned for the final cutbacks in the Main pit. This will significantly reduce waste volumes and related costs, and expose more ore over the life of the Main pipe open pit.

Ore mined in 2021 of 6.3 million tonnes (2020: 5.6 million tonnes) was in line with the requirements of the plants and stockpile management.

Although a successful year overall, the Letšeng operations experienced many challenges during the year, including:

• intermittent Main pit closures due largely to extreme weather conditions and spillage caused by the split-shell mining method as one cutback is completed while the next starts.

• regional power grid instability and unplanned power cuts.

• a breakdown of the primary jaw crusher at the end of the third quarter.

• unscheduled and extended maintenance of critical plant equipment.

Ore treated during 2021 of 6.2 million tonnes (2020: 5.4 million tonnes) comprised 5.2 million tonnes treated by Letšeng's plants (2020: 4.5 million) and 1.0 million tonnes treated by Alluvial Ventures, the third-party processing contractor (2020: 0.9 million).

Of the total ore treated, 2.7 million was sourced from the Main pipe, 3.3 million from the Satellite pipe with 0.2 million tonnes treated from the Main pipe stockpiles.

During the year we reduced the PCA throughput to ensure the longevity of our current PCA while the construction of the replacement PCA commences in 2022 and for commissioning in 2023. The new PCA comprises a twin module design with a combined throughput of c.1 000 tonnes/hour.

Total carats recovered in 2021 increased 14% to 115 335 carats (2020: 100 780 carats). Carats recovered increased by 1% when compared to 2019, which was a more comparable year not impacted by COVID-19. The BT initiative to re-treat historic and current recovery tailings through the mobile X-ray transmission sorting machine recovered 1 098 carats in 2021 (2020:1 341 carats). An additional 213 carats were recovered by the new fines X-ray sorting machine that was installed and commissioned in H2 with expected full production in H1 2022.

Overall grade for 2021 was 1.85cpht which is aligned with 2020 and in line with the expected reserve grade. The contribution from Satellite pipe material accounted for 54% of all material treated during the year (2020: 52%).

Revised Mine Plan

Following the change in design of the Satellite pit, resulting in the successful implementation of steeper slopes in 2019, and further steepening and pit design optimisation over the last three years, more ore has been exposed. This has resulted in the availability of ore from the Satellite pipe extending late into 2025, compared to the 2019 plan where it was depleted in mid- 2023. This has allowed the commencement of the waste stripping related to the next cutback (Cut 6 West / C6W) of the Satellite pit to be delayed to 2024.

In 2021, a preliminary conceptual study of an early-access underground in the Satellite pit was completed. An underground feasibility study will be commissioned in 2022 to assess the viability of an earlier shift to underground mining of the Satellite pipe and to evaluate the trade-off between this and C6W. The trade-off analysis between C6W and underground mining of the Satellite pit will be completed in 2023.

Our long-term mine plan has been revised accordingly to commence waste stripping related to C6W in 2024, previously 2022. At this rate of waste stripping, Satellite ore from C6W will be available from 2029. Pending the outcome of the proposed underground feasibility study, Satellite C6W cutback may be replaced by the early commencement of underground mining with the intention of bringing forward access to Satellite ore post the completion of Satellite Cut 5 West in 2025.

The waste mining profile for the next two years has therefore been reduced to an estimated 11.0 million and 11.6 million tonnes respectively. At this rate of waste stripping, Satellite ore from C6W will be available from 2029.

Large diamond recoveries

In 2021 Letšeng recovered six diamonds greater than 100 carats and total diamonds recovered greater than 10 carats increased by 4% year on year, mostly in the 10 to 20 carat size category. Although recoveries throughout the categories are mostly in line with the 13-year averages, the lower number of diamonds in the large categories (60 to 100 carats and greater than 100 carats) can be primarily attributed to the areas of the resource that were mined in 2021 versus what was mined in 2020. 2020 was a record year for these two categories of larger diamonds. A total of 122 greater than 100 carat diamonds have been recovered at Letšeng since 2006.

Letšeng 60 - 100 and +100 carat diamonds

Mineral resources and reserves

A primary focus in 2021 was advancing the resource core drilling programme in the Main and Satellite pipes, using the new drill rig purchased at the end of 2020. As the new drilling crews and management systems were embedded, the number of shifts increased, and the drilling process accelerated. The main challenge facing demarcated drilling programme remains the competition with production activities for access to the drilling sites, which were all positioned in the pits. Although completion of the core drilling programme was a high priority, continued production activities remained paramount.

Resource drilling in the Satellite pipe progressed well and nine delineation drillholes were completed. The kimberlite contact of the Satellite pipe along the western wall deviated out slightly from the expected position at the current mining elevation and posed certain geotechnical risks. A series of 19 additional holes were drilled for geotechnical purposes at intervals along the length of the western wall to resolve the immediate risk to the mine design and pit wall stability. These drillholes detected an increase in the pipe margin, adding further ore to the resource base of Satellite pipe. Detailed petrography of the core is in progress and updated geological models are expected by mid-2022.

Resource drilling in the Main pipe proved more difficult, with ground conditions hampering drilling progress and resulting in several holes having to be abandoned and redrilled. Delays experienced related to excessive rainfall and the commencement of mining activities on the upper benches in the new cutback (Cut 4 East), creating unsafe working conditions for the drilling crews below and periodically restricting access to the drilling sites.

Two additional contractor drill rigs were brought to site to reduce the impact on the timeline for completion of the drilling programme and updating of the Resource and Reserve Statement. By year end, the objectives of the drilling programme in Satellite pipe had been met and only four of the 14 planned drillholes in Main pipe remained to be completed.

Diamond sales

Six rough diamond tender viewings were held in Antwerp and a first trial tender viewing was held in Dubai in September. Travel and other COVID-19-related restrictions had little impact on attendance at the tender viewings and demand remained strong throughout the year.

A total of 109 697 carats were sold in 2021 (2020: 99 172) and Letšeng generated rough diamond revenue of US$201.3 million (2020: US$189.2 million), at an average price of US$1 835 per carat (2020: US$1 908).

The Group supports the GIA's blockchain technology to inform and assure consumers about the ethical and socially supportive footprint of the diamonds being purchased. Blockchain technology can link the source of rough diamonds to the final polished diamonds, proving their authenticity, provenance and traceability, and supporting ethical sourcing and processing in the diamond value chain.

Capital projects

Although limited, capital was appropriately spent during 2021 in line with operational requirements. Certain capital was deferred into 2022 without putting the continuation of operations at risk. A number of key capital projects are planned for 2022, including the replacement of the PCA, the completion of the resource core drilling programme to inform Lesteng's Resource and Reserve Statement, the construction of the bioremediation plant, further evaluation of the underground development opportunities and expansion of the Patiseng coarse tailings storage facility. Details of overall costs and capital expenditure incurred at Letšeng during the year are included in the CFO review on pages 52 to 59.

Business Transformation

The Group's BT programme concluded at the end of 2021, exceeding the targeted US$100 million1 in revenue, productivity and cost savings (against the 2017 base) by achieving a total of US$110.0 million, as set out below. The programme identified 325 initiatives to create a step change in efficiency, productivity and cost management, and to position Gem Diamonds favourably in its peer group.

1 The target is stated net of implementation costs, consultant fees and an employee incentive plan that rewarded the successful delivery of initiatives contributing to the overall target.

BT programme annual cash saving (US$ million)

The targeted US$100 million comprised US$7.1 million in once-off savings and US$103.0 million in cumulative recurring annualised benefits over four primary workstreams - mining, processing, working capital and overheads, and corporate activities. The implemented initiatives are sustainably embedded in the operation and continue to deliver benefits in reduced costs and improved efficiencies that have been critical in maximising operational cash flows, which was crucial in the Group's ability to successfully absorb the external shock of the COVID-19 pandemic.

Continuous Improvement

The CI programme aims to implement behavioural strategies and meaningful KPIs to create effective visual management tools and problem solving at all levels. The CI methodology, supported by training and coaching, enables the Group to continuously improve efficiencies by unlocking the inherent capabilities of employees at all levels to implement best practices, build effective teams and drive incremental improvements. Although severely hampered by COVID-19 restrictions and constraints, CI was successfully implemented in Mining at Letšeng in 2020, with the roll-out to the Treatment and Services areas commencing in 2021. In 2022, the programme will focus on training and focused coaching to improve skills and experience at the supervisory level.

A key strategic objective for the Group is to continuously identify opportunities to unlock value within our business. During 2021, we focused on continuous improvement opportunities to reduce mining-related costs and improve resource use efficiencies. At Letšeng, waste hauling distance is a major driver of both current and future mining costs and fossil fuel combustion-related greenhouse gas emissions.

We identified an opportunity to reduce both mining costs and greenhouse gas emissions through shorter mining waste haulage distances of our waste from the Main pit. Following extensive collaboration between our environmental and mining teams, a new mine waste dumping plan was designed and implemented. The revised plan has reduced the haulage distance of waste from the Main pit by 30%, resulting in a significant long- term reduction of the associated operational costs and diesel consumption, and advancing our sustainability objectives to lower carbon emissions.

By working together to design innovative solutions, we are able to unlock shared value and drive Group goals with regards to maximising value, managing costs and reducing our environmental footprint.

Dam safety and integrity

Letšeng has three dams on site - (i) the Patiseng tailings storage facility, which is currently in use for the deposition of coarse tailings and fine tailings, (ii) the Old Tailings Storage Facility, which is sporadically used for fine tailings deposition, and (iii) the Mothusi Dam, which is the mine's freshwater supply resource. Letšeng's dams were constructed using the 'centre line and downstream tipping' method1, which is a safer method of construction than the 'upstream' construction methods used in most recent dam failures reported in the mining industry.

We have aligned our tailings dam failures in the mining industry have shown the severe adverse impact these can have on human lives and the natural environment. Tailings dam integrity is consequently an ongoing area of significant focus for mining companies and investors.

The Group has aligned its tailings storage facility management code of practice to that of the ICMM's GISTM and established appropriate governance structures at both operational and Group levels to provide oversight and assurance of continued safe and responsible management of our tailings storage facilities. The relevant details of Letšeng's tailings storage facilities are available in our voluntary disclosure as part of the Investor Mining and Tailings Safety initiative set up by the Church of England, which can be found under the Company's name at http://tailing.grida.no/. Further information is available on page 78.

1 A discussion of the construction and applicability of the various types of tailings facilities is available on the International Council of Mining and Metals website at www.icmm.com/en-gb/environment/tailings.

Preventing diamond damage

The large high-value Type II diamonds in Letšeng's orebody are more susceptible to damage through the mining and treatment processes. Diamond damage negatively impacts the value and in turn the sales prices realised for these diamonds. Reducing damage to these diamonds provides an important opportunity to significantly enhance revenue.

Our main focus in this regard has been on identifying, validating and testing technologies from various industries that show potential to identify diamonds within kimberlite at an early stage and liberate these using non-mechanical means. In 2019, the Group's wholly owned subsidiary, Gem Diamonds Innovation Solutions, constructed and commissioned a pilot plant at Letšeng to test this technology under operating conditions. Progress on the detection components of this pilot plant has been limited to the development of the detection and ejection algorithms and further development is required to enhance this technology. The materials handling component of the pilot plant now forms part of Letšeng's new fines XRT system that was commissioned in H2 of 2021.

Sale of Ghaghoo

A binding share sale agreement was entered into for the sale of the Ghaghoo diamond mine in Botswana to Okwa Diamonds Pty Ltd, an entity owned by Vast Resources PLC (Vast) and Botswana Diamonds PLC (BOD). The agreement is subject to the fulfilment of certain suspensive conditions including obtaining the competition authority and regulatory approvals within Botswana. Regulatory conditions have been fulfilled and written approvals have been obtained from the Botswana Competition Authority and, in December 2021, the Ministry of Mineral Resources, Green Technology and Energy Security of Botswana. However, the completion date for the transaction has been extended by two months to 31 March 2022 to allow BOD to secure an alternative financing partner to replace Vast.

OUR PLANS FOR 2022

A pre-evaluation of the feasibility of an earlier shift to underground operation will start early in 2022 and the replacement of the PCA will commence in the first half of the year. The contract with Alluvial Ventures, which runs the third processing plant, expired at the end of 2021 and has been extended to 30 June 2022. We are currently evaluating several options for a replacement 1.0 to 1.2 million tonne per annum XRT plant. Work continues to steepen slopes to optimise the mining plan for Main pipe and we will begin planning for the tailings extension at Patiseng. A number of other projects are planned to optimise mining efficiencies, improve production, decrease costs and reduce emissions in line with our commitment to decarbonisation.

FINANCIAL STATEMENTS

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the Group financial statements in accordance with International Financial Reporting Standards (IFRS). Having taken advice from the Audit Committee, the Board considers this report and financial statements taken as a whole, are fair, balanced and understandable and that they provide the information necessary for shareholders to assess the Group's performance, business model and strategy.

The Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that the Group faces.

PREPARATION OF THE FINANCIAL STATEMENTS

The Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group, and of their profit or loss for that period. In preparing the Group financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with IFRS;

· state whether applicable IFRS have been followed, subject to any material departures disclosed and explained in the Group financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

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

The Directors confirm that the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position at year end, cash flow and profit or loss for the year then ended of the Group and the undertakings included in the consolidation taken as a whole. In addition, suitable accounting policies have been selected and applied consistently.

Information, including accounting policies, has been presented in a manner that provides relevant, reliable, comparable and understandable information, and additional disclosures have been provided when compliance with the specific requirements in IFRS have been insufficient to enable users to understand the financial impact of particular transactions, other events and conditions on the Group's financial position, cash flow and financial performance. Where necessary, the Directors have made judgements and estimates that are considered reasonable and prudent.

The Directors of the Company have elected to comply with the Companies Act, 2006, in particular the requirements of Schedule

8 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2013 of the United Kingdom pertaining to Directors' remuneration which would otherwise only apply to companies incorporated in the UK.

Michael Michael

Chief Financial Officer

16 March 2022

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Gem Diamonds Limited

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Opinion

We have audited the consolidated financial statements of Gem Diamonds Limited and its subsidiaries (the Group) set out on pages 152 to 211, which comprise the consolidated statement of financial position as at 31 December 2021, and the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2021, and of its consolidated financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Independent Regulatory Board for Auditors' Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements of the Group and in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits of the Group and in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor's opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's Responsibilities for the Audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

Other Information

Management is responsible for the other information. The other information comprises the information included in the 224-page document titled 'Gem Diamonds Annual Report and Accounts 2021'. The other information does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identity during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Ernst & Young Inc.

Director - Philippus Dawid Grobbelaar

Registered Auditor

Chartered Accountant (SA)

16 March 2022

102 Rivonia Road, Sandton, Private Bag X14, Sandton, 2146

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 31 DECEMBER 2021

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

Approved by the Board of Directors on 16 March 2022 and signed on its behalf by:

C Elphick M Michael

Director Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

1 Other reserves relate to Foreign currency translation reserves and Share based equity reserves. Refer Note 16, Issued capital and reserves for further detail.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

1 These amounts were presented on a net basis in the prior year and have been disaggregated and presented separately in the current year. This reclassification had no impact on the financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021