STRATEGIC VACANCIES AND AND PERFORMANCE MANAGEMENT

19 MARCH 2010

CURRENT STRATEGIC VACANCIES

Transnet regards strategic management to be the Group Exco and the Divisional Executive teams.

The table below reflects the current vacancies on strategic management level and the period that the

position has been vacant:

Job TitleOperatin

g Division

Date from which vacancy exists

Status

Group Chief Executive Group 1 March 2009 In process of filling

Chief Operating Officer Group 1 April 2009Filling of vacancy placed on hold

General Manager: Strategic Supply Mngmnt

Group 1 June 2009 In process of filling

General Manager: RME TCP 19 August 2009Internal candidate appointed – 1 April 2010

Chief Financial Officer TCP 7 August 2009Internal candidate appointed – 1 October 2009

General Manager: Risk Management Group1 September 2009

In process of filling

Chief Operating Officer TPT30 September 2009

Internal promotion – 1 October 2009

General Manager – Reengineering and Strategy

TFR 1 October 2009 In process of filling

General Manager: Human Capital TRE 1 February 2010 Internally advertised

STRATEGIC MANAGEMENT – DEMOGRAPHICS

The table below depicts a summary of the appointments as per race and gender for the total period April 2006 to 2 February 2010.

Race Male Female Total% of

Appointments

African 15 17 32 45.7%

Indian 6 4 10 14.3%

White 15 7 22 31.4%

Coloured 5 1 6 8.6%

TOTAL 41 29 70 100%

The table below depicts a summary of the current demographics of the strategic management team (Group Exco and Divisional Exco teams) in terms of race and gender

Ethnic GroupFemale Male Total

No % No % No %

African 19 45.2% 23 55% 42 41%

Indian 4 19.0% 17 81% 21 21%

Coloured 2 33.3% 4 67% 6 6%

White 11 33.3% 22 67% 33 32%

Total 36 35.3% 66 64.7% 102  

Percentage 35.3%   64.7%      

PROCESS FOR FILLING OF STRATEGIC MANAGEMENT VACANCIES

The objective is to fill the vacant position with the most suitable candidate available,

therefore the possible candidates are sourced via the following channels (often in

parallel):

1. Internal adverts2. External Advertisement3. Nominations from Talent pools4. Nominations from Recruitment Agencies (Head hunting)

Recruitment and Selection Process Includes:• Short listing• Interviews• Psychometric Assessments• Reference Checks

• The filling of executive positions take up to an average of six months

TRANSNET’S RESPONSE TO SHAREHOLDER’S COMPACT OBJECTIVES

5

2010/11 Shareholder Compact Objectives

Focus Areas

Volume and Revenue Growth

Financial Value Creation

Operational efficiency

Infrastructure investment

Development objectives

SHEQ

Volumes Revenue Return on

investment

Strong balance sheet

Rail, Ports & Pipelines

Rail, Ports and Pipelines

Skills Development/ Other

Safety and Complianc

e

Transnet Corporate Plan targets 2010/11

Average 10.3% growth

Group: 13.8%(mainly

from volumes

)

•ROA from 6.5% to 7.4% (8.0% over 2y)

•Gearing: 45.3%•Cash Interest Cover: 3.2 times

Average 8.4% improvement

Group: R22.8bn(R93.4bn over

5 years)

HR Training: 3-4% of personnel cost

Reduce DIFR: 9%

Detailed plans/targets

•GFB: 15%– Domestic coal: 31%

– Manganese: 29%–Containers on Rail: 8%

•Export Iron Ore: 11%•Export Coal: 9%

•Maritime Containers: 5%

•Petroleum: 2%

•Operating expenses <62% of revenue (<60% over 2y)•EBITDA from R12.8bn to R15.1bn•EBITDA margin from 36.8% to 38.3%

Improvements•Wagon turnaround: 10%•Loco efficiency: 27%•Deviation from train schedule: 13%•GCM/h: 15%•STAT Durban: 6%•Production interruptions: 29%

Key projects:•Export coal (81mtpa)•110 Dual voltage locos•50EMD locos•Ore line (47mtpa/60mtpa)•Various Port and Terminal expansion projects (incl. CTCT/ DCT/RBay)•NMPP (8.7billion litres)

•Employment Equity >70%•CSDP•Procurement (BBBEE)•Branch lines•Africa strategy

•Reduce Cost of Losses by 34%•Environ- ment compliance audits•Reduce employee and public fatalities

Required Outcome: Improved customer service delivery and sufficient capacity to promote

economic growth

STRATEGY IMPLEMENTATION THROUGH ENTERPRISE PERFORMANCE MANAGEMENT

Long-term Planning

Budgets & Plans

- Review of strategic objectives- Market / competitor analysis- Capital planning - Top-down target setting - 10-year horizon - Focus on next 5 years - Quantum Leap Blueprint

- Monitoring and reporting performance- Assessing root cause and develop action plans- Adjusting business to external environment - Reporting to DPE/Board/Exco/ Commercial/Corridors- Weekly/Monthly Dynamic Reports- Exco workbook / Dashboards

Performance Tracking

Rewards & Recognition

- Reward employees for good - performance- Short-term incentive scheme- Long-term incentive scheme- Gain-share scheme- Strategic Performance Objectives (SPOs)

Enterprise Performance Management

- Allocating resources (people, finance) to achieve strategy - Bottom-up, driver based budgeting- Linking budgets to operational plans- Annual Corporate Plan (PFMA)

• Next step is to finalise SPOs and align incentive schemes to objectives

• Commence with implementation of corporate plans and initiatives

• Continuous monitoring , feedback and response to poor performance areas

PHASE 1: PLANNING FOR PERFORMANCE

MARCH-APRIL

What is the employee expected to do this year?Agree strategic objectivesAgree key performance areasSet performance standardsCompile the performance scorecardQuality assurance of scorecards

PHASE 4: REWARDING PERFORMANCE

APRIL - MAYWhat recognition will the employee get for outstanding performance?Quality assurance of assessment processAudit of financial resultsBusiness moderationIndividual moderationImplement rewardCommunicate rewardAudit of reward payments

PHASE 3: FINAL REVIEW AND ASSESSMENT

SEPTEMBER-OCTOBER (midyear)MARCH (end of year)How well has the employee done?Self assessmentManager assessment of employeeConsensus assessment of performanceRecord the assessment resultsDevelop individual learning plan (ILP)

PHASE 2: COACHING AND PERFORMANCE REVIEW

ONGOINGHow well is the employee doing throughout the year?Continuous feedback on performance objectivesReview key performance areasReview the training and development plan

The Performance Management process