INTEGRATED ANNUAL REPORT 2011 for the Year Ended 31 December BUSINESS PROPOSITION

INTEGRATED ANNUAL REPORT 2011 for the year ended 31 December BUSINESS PROPOSITION

GROUP

VISION STRATEGIC POSITIONING The Grindrod group’s vision is to create Listed in South Africa, with its head offi ce sustainable returns and long-term value in Durban, Grindrod is a global business for shareholders. with representation in 27 countries. Its South African origins uniquely position BUSINESS OVERVIEW the group to service African trade fl ows. Grindrod’s business involves the The group focuses on the movement movement of cargo by road, rail, sea of drybulk and bulk liquid commodities, and air, through integrated logistics containerised cargo and vehicles. services utilising specialised assets As commodity and shipping markets and infrastructure, including vehicles, are cyclical, the different cargo types locomotives, ships, ports, terminals, offer diversifi cation of revenue and risk warehouses and depots. mitigation. In pursuing its strategy of becoming a fully integrated freight and logistics service provider, Grindrod continues to invest in assets and opportunities with high barriers to entry. The group’s ability to offer a full end- to-end service is a key competitive advantage which results in improved returns from its asset base and service offerings provided by the four operating divisions of the group. ABOUT THIS REPORT

The 2011 integrated annual report covers the Grindrod group’s fi nancial and non-fi nancial performance for the year ended 31 December 2011. Integrated reporting aims to incorporate everything from strategy through to risk management; from fi nancial reporting Flap for cover to social and environmental reporting. It aspires to meet the needs of a wider group of stakeholders.

Information describing the various operating activities has been provided on the basis of creating an understanding of the group’s business activities among its key stakeholders, shareholders, investors and investment analysts, employees, trade unions, regulators including the JSE Limited, customers, suppliers, service providers, governments and communities.

In compiling the report, Grindrod considered: • The Companies Act, No 71 of 2008 (“the Companies Act”), as amended; • The JSE Listings Requirements; • The King Report on Governance for South Africa 2009 (“King III”); • Global Reporting Initiative (“GRI”) framework and guidelines for sustainability reporting; and • International Financial Reporting Standards and the adoption of new accounting standards in 2011.

This icon will indicate where information will be available on the company’s website.

For convenience, additional information on the integrated annual report is available on the website, www.grindrod.co.za where indicated. CONTENTS

Overview Business proposition Inside front cover Geographic profi le 4 Grindrod history 5 Group highlights 6 Operating environment 8 Stakeholder engagement 10 Directorate 12

Commentaries Chairman’s report 16 Chief executive offi cer’s report 18 Financial director’s report 20 Group fi nancial review 24 Flap for cover Divisional reviews Freight Services 28 Trading 36 Shipping 40 Financial Services 46

Sustainability Group sustainability 51 Risk management 53 Corporate governance 61 Audit committee report 68 Remuneration report 70 Assurance statement 77 Integrated human capital 78 Social and economic development 83 Environmental and climate change performance 85

Abridged annual fi nancial statements Directors’ responsibility for fi nancial reporting 96 Preparer of annual fi nancial statements 96 Independent auditor’s report 97 Condensed consolidated statement of fi nancial position 98 Condensed consolidated income statement 99 Consolidated statement of comprehensive income 100 Condensed statement of cash fl ows 101 Consolidated statement of changes in equity 102 Segmental analysis 104 Consolidated notes 105

Shareholders’ information Share analysis of ordinary shareholders 107 Share analysis of cumulative, non-redeemable, non-participating, non-convertible preference shares 108 Share performance 109 Notice of meeting 110 Form of proxy attached Corporate information 129 Terms and expressions 130 BUSINESS PROPOSITION and customers. fi nanceandinvoicediscountingsolutionsinsupportofgroupoperations Asset managementandinvestmentbankingcomplementedbytrade FINANCIAL SERVICES customers invarioussectors. by moderninformationtechnologysystems,providingfreightsolutionsto A shipoperatingdivision,staffedbyexperiencedpersonnelandsupported differentsectorsandports. carriers,suitableforservicing and drybulk A relativelymodern,lowcostfl eetofownedandlong-termcharteredtankers SHIPPING fuels aroundtheworldthroughcompletesupplychainmanagement. Sourcing andmarketingagriculturalmineralcommoditiesmarine TRADING ships agencyandotherlogisticalsupportservices. import/export, alongwithdomesticdistribution,clearingandforwarding, Links thesouthernAfricaninlandeconomichubregionstoportsfor Logistics supported byrail,roadandseafreightoperations. Strategically positionedbulkstorageandhandlingcapacityinkeyports Ports andTerminals FREIGHT SERVICES ASSETS ANDSERVICE OFFERINGS (continued)

1 Grindrod Limited Integrated Annual Report 2011 2 Grindrod Limited Integrated Annual Report 2011 collective market knowledge and evolving industry trends. collective marketknowledgeandevolvingindustry ability tocreatevalue.Fundingisdeployeddivisionsmoststrategicallypositioned,basedonthegroup’s Grindrod hasastrongtrackrecordofeffectivelymanagingthekeyparametersthatcontributetogroup’s Strategy execution links listedbelow. containerised andvehiclecommodities.Inaddition,thegrouphasspecialisedofferingsalongsupplychain Grindrod offersend-to-endcommoditysupplychainsolutionsintheglobalmovementofliquidbulk,drybulk, Commodity supplychain BUSINESS PROPOSITION 3. 2. • • 1. Capacity/strategic partners Cargoes handled

Vehicles cargo Containerised Drybulk cargo cargo Liquid bulk • • • • Margins other stakeholders,iscritical. services, strategicsupplychainprojects, long-termcontractsandroute knowledge.Deliveryofservices,such asrailby Key factorscontributingtoachievingutilisationincludelong-standing customerrelationships, point-to-pointintegrated Utilisation

Long-term take-or-pay agreements onkeyfacilitiesandother contractualarrangementsprovide stabilitytoearnings. The integrationofthebusinesses asexplainedabovefurtherenhancesmargins. shipping cycle. Margins are enhancedthrough investmentinareas where capacitydemand ishighandatthecorrect pointinthe Shipping ratescontinuetobe higher thanthespotmarketthrough focus on poolmanagementandcosts. are high,ensuringincreased profi focused inareas where anticipateddemandexceedscurrent availablecapacityandinparticular, where barrierstoentry The group’s ongoinginvestmentisinstrategicallypositionedportand terminal andrailcapacity. Theseinvestmentsare balance sheetensures fl traderoutesinvestments makethegroupAfricanandinternational itsstrong animportantplayerinsouthern create valueandenhance itsabilitytointegrateservicesanddiversifyoptimallywithincore markets.These The group hasmadetimely investmentsincapacitystrategicareas andwithstrategicpartners,designedto Invoice discounting Trade fi nance Invoice discounting Trade fi nance Agricultural commodities Industrial rawmaterials aiefesRoadtankers Marine fuels omdt on foii Commoditydestination Commodity pointoforigin rcrmn alRa Ports Rail/Road Procurement exibility tocontinuemakeselectivecapacityinvestments. tability andthe abilitytooffer customers afullyintegratedpoint-to-pointservice. Road transportation transportation Road andrail Rail corridormanagement Rail locomotives Road transportation (continued) Ships agency Stevedoring Clearing andforwarding Port management Ships agency Stevedoring Clearing andforwarding Ships agency Clearing andforwarding Stevedoring Port management Ships agency Clearing andforwarding Car terminal Warehousing Container depot Container leasing Warehousing Terminals Tank terminals Storage Terminals/ ships feeder Southern Africa Drybulk ships Drybulk Bunker tankerships Tanker ships Shipping aia rjc xcto • Capitalproject execution PortsandTerminals • Revenueinlogisticsbusiness • Volumes handledthrough Operating margins • Highstandardofgovernance,integrityandprofessionalism. • Strongcustomer, supplierandbankingrelationships. • Identifyandrespondtoinvestmentopportunities. • Operationalfl exibility, resultinginquickdecisionmakingtoexecutestrategy. • Wealth ofqualifi offerings. cationsandexperiencewithintheservice • Management strengths cycleandresultant margins corporate activity The fullannualfi nancialstatementsare availableonthegroup’s website. information, bothofwhichare available onthegroup’s website,www.grindrod.co.za. Detailed informationtoassistinvestorsisprovided inthegroup’s results presentation andsupplemental The operationalreviews ofeachdivisionprovide detailedfi nancialandnon-fi nancialinformation. Guidance toinvestors ot fia cnmc • South Africaneconomic

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3 Grindrod Limited Integrated Annual Report 2011 4 Grindrod Limited Integrated Annual Report 2011 Mauritius Malawi Democratic RepublicofCongo Botswana Angola FFREIGHT SERVICES Worldwide offi GEOGRAPHIC PROFILE Singapore Japan Isle ofMan Denmark Canada SSHIPPING R H E I P I G P H I N T ces/representation G

S United Kingdom The Netherlands Spain South Africa E R V Sierra Leone South Africa Namibia Mozambique I C E S Argentina Australia Ecuador China Brazil Mozambique South Africa Scandinavia Singapore FFINANCIAL SSERVICES I TTRADING Peru N E R A R A N V United Kingdom D I C South Korea C South Africa Zimbabwe I I N E A U.S.A. G S L is wellpoisedtotakeadvantage ofinfrastructuralandotheropportunities. the recent group involvementoftheVitol asajointventure (“Vitol”) partner, freight logisticsbusinessandtogetherwithRemgro’s strategic insightand The group respected haspositioneditselfasaninternationally shippingand advantage tothegroup. The abilitytooffer fullend-to-endsupplychainservicesisakeycompetitive businesses andtransformationintoanintegratedlogisticsservice provider. projects Africaandfurtherdiversifythegroup’s insouthern portfolio of The capitalraisedwillsupportthegroup’s strategicdevelopment of capital Remgro Limited(“Remgro”), reinforcing Grindrod’s strong fi nancialposition. In 2011Grindrod entered intoaR2billionequityraisingtransactionwith businesses, wasnowstandingthebusinessingoodstead. shipping contracts,cargocoveranddiversifi cationintofreight andtrading group intheshippingmarkets. Thelong-term waspositionedforadownturn plummeted. AlthoughGrindrod hadnotexpectedafi nancialcrisis,the In 2008thefi nancialcrisisrippledthrough theworldandshippingmarkets watching liquidityandprotecting clientrelationships. They focusedonconsolidation,preserving thebalancesheet,managingrisk, started topositionthebusinessprotectandbalancesheet. theearnings inshippingmarketsand The Grindrod executive teamexpectedadownturn achieved analltimehighprofi tofR2,2billion in2008. 120 timesinlessthan10years.From alosspositionin1999,thegroup By 2008,Grindrod Limited hadgrown itsmarketcapitalisationontheJSEby following MurrayGrindrod’s retirement after21yearsaschairman. was appointedashissuccessor. IvanClarkwasappointedchairman In 2007IvanClarkretired andthecurrent chiefexecutiveoffi cerAlanOlivier, years 2002to2008. and positionedthegroup totakeadvantageoftheshippingboomin Restis Group. Astrategyof purchasing shipsinadepressed marketfollowed wereShipping andtheshares inUnicorn successfullypurchased from the It wastimefornewdirection andfocus.Thegroup acquired IslandView capitalisation wasR100million. reported alossofR66million. Theshare pricewas20centsandmarket Following theAsiancrisisin1999,shippingmarketsplungedandgroup Grindrod prepared forthecyclicalityofshippingmarkets South Africaandworldwide. of theshippingindustry, buthasgrown intoahighlyrespected businessin From smallbeginnings,theGrindrod group hasnotonlysurvivedthecycles clearing andforwarding agencyinthegrowing portofDurban. In 1910,CaptainJohnGrindrod establishedGrindrod &Companyasa facilitate theprocess. transport; ports,terminalsandlogisticstohandlegoodsagents Since commerce began,there havebeen goodstotrade;shipsusedfor providersservice today aan integratedlogistics ffrom smallbeginningsto GRINDROD HISTORY r e n o r

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t o company York City, shipping asthetoplistedinternational Grindrod awarded MarineMoneyAward inNew 2004/5 AwardsTimes 10 yearsintheSundayTimes/Business Grindrod namedthetoplistedcompanyover 2009/10 Remgro Limited R2 billionequityraisingtransactionwith 2011 Times/Business Times Top Times Times/Business 100companies Grindrod awarded thetopspotinSunday 2004/5

5 Grindrod Limited Integrated Annual Report 2011 6 Grindrod Limited Integrated Annual Report 2011 Review of2011keyfocusareas Economic GROUP HIGHLIGHTS Non-fi E • • • • • • • • • Shippingratesdeclined • • • Improve benefi ts/synergiesfromintegrationofbusinesses Roll outcapitalexpenditureprogrammeinportandterminalinfrastructure Ensure adequatefundingandliquidity designated groups training, ofwhich84%wasonemployeesfrom R9,8 million(2010:R9,5million)spendonemployee attended byemployeesduringtheyear A totalof6473(2010:2711)traininginterventions of 3,animprovement ontheaverageof4in2010 Achievement ofanaverageB-BBEEContributorLevel 96,2% ofwhichare from designatedgroups throughoutThe initiationof242learnerships thegroup, diverse operations 6 089employeesdeliveringvaluegloballyinthegroup’s n (2010: R780million) Net profi tdown32%toR531million sectors ofthebusiness Volumes handledincreasedacrossmost (2010: R29391million) Revenue up22%toR35885million nancialhighlights v i r o n m e n t a l • • • • • S • Decreaseinnetdebt:equityratioto10% • • • normalised electricity consumption emissions effi ciency, and64%improvement in improvement inship-basedgreenhouse gas(“GHG”) including reductions insolidwastetolandfi ll,15% Progress withmeeting group eco-effi ciency targets, development 90%complete ISO 14001Environmental ManagementSystems Strategy andImplementationPlan Freight ServicesadoptedanewClimateChange one barrel ofoil)forthesixthconsecutiveyear Shipping achievedzero signifi cantoilspills(more than SRI assessment “Best Practice”environmental performancein2011JSE shareholder Introduction ofRemgroasamajor R9 311million 56% increaseinnetassetvalueto (2010: R1722million) Capital expenditureofR1166million o c i a l In progress In progress Achieved Financial andoperatinghighlights • Strong growth inrailoperations • Terminal volumes up36% • • • • • T F • • • • • demand Improved logisticsvolumesresulting from strong market (2010: 11,2million)tonnes Maputo achievedvolumesof11,8million Accounted for60%(2010:34%)ofthegroup’s earnings (2010: R262million) Attributable incomeincreased by21%toR318million Revenue ofR2905million(2010:390million) average falling by 44% average fallingby44% remainedEarnings positivedespitetheBalticIndexannual for theyear Average perdayoutperformedaveragespotrates earnings Accounted for1%(2010:46%)ofthegroup’s earnings (2010: R362million) Attributable incomedecreased by98%toR7million Revenue ofR3597million(2010:R4010million) r i n a d a n i n c g i a l F S • • • • • • • • • • • • RevenueofR194million(2010:R193million) • competitive market Satisfactory performancebyagriculturalbusinessina Good results byindustrial commodities business per tonne Marine fuelsimprovement involumeandmargin Operating marginpertonneofUS$3,33(2010:US$3,14) in 2011 Accounted for27%(2010:15%)ofthegroup’s earnings (2010: R120million) Attributable incomeincreased by20%toR144million Revenue ofR29189million(2010:R22796million) product offerings Continued diversifi cationofBank’s streams earning and R6 122million Assets undermanagement increased by33%to Bank depositsincreased by44%toR2911million Accounted for11%(2010:6%)ofthegroup’s earnings (2010: R45million) Attributable incomeincreased by30%toR58million r h e i p i g p h i n t g

7 Grindrod Limited Integrated Annual Report 2011 8 Grindrod Limited Integrated Annual Report 2011 OPERATING ENVIRONMENT shipping earnings. sector,whilst theoversupplyofships,particularlyindrybulk willcontinuetoimpact andTradingwill provideopportunitiesforgrowthintheFreightServices businesses, The positiveyetvolatileglobalcommoditydemandisexpectedtocontinue,which • • Growth ofownedandlong-termchartered fl eetfrom 35,0to38,5ships • Commissioningofadditionalchrome ore recovery plant • • • • • ConcludedMaputocoalterminalexpansion to6milliontonnes • EExpansion RiskofslowdowninChina • Lackofinfrastructure tosupportdemandforAfricancommodities • Growing demandforAfrica’s resources • Oversupplyofdrycargoshippingcapacity • European impactonglobaleconomy • Limitedgrowth inoildemand • • BBusiness environment of R837million Authorised andcontractedcapital commitments,includingjointventures, Realignmentandexpansionof theFarEastParcel Service concluded subsequenttoyear-end Joint venture togrow withVitoI thesub-Saharancoaltradingbusiness, partnership withDubaiPortsWorld Establishment ofintermodalcontainerdevelopmentinport Maputoin ofafurther24contractedin2012 Operational fl eetof31locomotivesatyear-end withthemanufacture completed Pre-feasibility toexpandMaputo coalterminalby20milliontonnes Continued growth indemandforgeneralbulkproducts (iron ore andcoal) x u p s a i n n e s s i o s n

n v i r o n m e n t and FinancialServicesdivisionscomplement producer tocustomer, maximisingreturns each otheracross thesupplychain,from The Freight Services,Trading, Shipping the completecommoditysupplychain. strategic infrastructure assets,logistics for shareholders through investmentin created byGrindrod’s investmentinto Creating shareholder Long-term shareholder valueis through growing the and commoditymarkets. Value creation business value

• • • • • • • Executionofstrategicprojects drivinggrowth andsustainability • Growing demandforAfricancommodities • OOutlook Interest marginsexpectedtoremain underpressure • Globalcredit concerns • Continuingpiracythreat • Excessofdrybulksupplycapacity • Lowlevelofcontractedprofi t • Credit andcounterpartyrisk • Volatility ofRand/USDollarexchangerate • Lowcontainervolumesandfreight rates • Commoditydemandandcommoditypricerisk • Industrialactionandlabourmarketvolatility • Availability ofrailresources • CChallenges to impactthebankingindustry Global fi nancial crisisandincreased regulations are expectedtocontinue industry inthelongerterm Current lackofshippingfi nancingwillcurtailshipbuildingandbenefi tthe Downward pressure onshipnewbuildingpriceswillpresent opportunities Tanker marketshowingsignsofimprovement the drycargoshippingsector As newbuildingtonnagecontinuestodeliver, itwillcontinuetoimpact mismatch Increased tradefl owsduetogeographicalsupplyanddemand Outlook forglobalcommoditydemandremains positiveinthelong-term h u a t l l o l e o n k g

e s Revenue Global segmentanalysis Net assets Capital expenditure 52% 27% 24% 40% 1% 1% 1% 3% 9% 37% 27% 76% Africa Singapore/Asia/Far East United Kingdom/Europe/Isle ofMan South America Middle East USA/Bermuda Africa Singapore/Asia/Far East United Kingdom/Europe/Isle ofMan South America Africa Singapore/Asia/Far East

9 Grindrod Limited Integrated Annual Report 2011 10 Grindrod Limited Integrated Annual Report 2011 Grindrod endeavourstokeepthepublicandallinterested • Apress conference intheportofMaputofollowedbyatour • Media Grindrod communicateswithmininghouses,producers • One-on-one meetingsbothlocallyandinternationally, at • • Participation inrelevant conferences, exhibitionsand Employeeinductionprogrammes are heldatleastonce • The group’s• website,intranet,brochures, newsletters, Newbusinessoropportunitiestoprovide an integrated • Collectivemeetingswithpartnersandkeycustomersare • Various divisionscollaborateandmeetwithexistingor • Customers andemployees follows: Grindrod’s stakeholderengagementcanbesummarisedas practices. Overandabovethefocusoninvestorrelations, long-term strategicdirection andwithafocusonsustainable with arangeofstakeholdergroups, particularlyinrelation to to buildingandmaintainingopen,sustainablerelationships within whichitscompaniesoperate.Grindrod iscommitted positively infl uencing policyanddirection inthesocieties responding totheneedsofkeystakeholdersbutalso engagement element,bothintermsoflisteningand sustainability has,asakeyfoundation,strong stakeholder Grindrod’s integratedapproach tolong-termbusiness STAKEHOLDER ENGAGEMENT arranged tofacilitatethis. interviews withtheGrindrod CEOandotherexecutives are announcements, press conferences, editorialsand through broadcast, digitalandprintmedia.Press parties up-to-datewithanydevelopmentsinGrindrod of theportforrepresentatives ofthemediawasorganised. that maybeencountered. dynamics aswellproduction issuesandlogistichurdles commodity pricing,current demand,supplyandeconomic being assessedandreacted toinrespect offl uctuationsin and industryonadailybasistoensure relevant marketsare expectations ofkeycustomers. operational leveltoensure thatthegroup meetsspecifi c and trends. exposure andkeeps thegroup abreast ofindustryissues trade fairs,bothlocallyandinternationally, givesGrindrod a year. services andnewdevelopmentswithinthegroup. videos andpresentations assist incommunicatinggroup customer expectations. allow shared andabetterunderstandingof learning marketing bi-annualregional forums.Theseforumsalso service offering forcustomers are identifi edatcross- customer inputtothegroup’s services. held regularly, bothinSouthAfricaandabroad togain offering. potential customerstopresent anintegratedservice Grindrod isamemberoftheSouthAfricanAssociation • Beinginthetransportandmaritimesector, Grindrod has • Interaction withtheportauthoritiesisimperativeand • Grindrod hasestablishedaverygoodworkingrelationship • Grindrod participatedintheMaputoportconference. • Grindrod participatedinarrangingatourofMaputoport • organisationsnon-governmental departments/ Government SouthAfricannationalclimatechange policyengagement • MaritimeOrganisation(“IMO”);and International • professional sustainability, health,safetyandenvironmental • theglobalCarbonDisclosure Project (“CDP”); • JSE’s SRIIndex withGrindrod hostingthe Durban briefi ng • localcommunitiesandenvironmental non-governmental • to contributethepublicpolicydebate,including: this area soastostayabreast withbestpractices,aswell Grindrod engageswith arangeofspecialiststakeholdersin sustainability Climate changeandenvironmental integrated humancapitalreport onpage78. at industryandcompanylevels,whichare outlinedinthe Grindrod participates isvariouscollectivebargainingforums, Employee organisations/unions Representatives from thepress are invitedtoinvestor • Association. of ShipownersandtheSouthAfrican and theSouthAfricanMaritimeAuthority. established arelationship with theDepartmentofTransport Africa. Grindrod isrepresented ineverymajorportsouthern Rail) andMozambique(CFM). with therailauthoritiesofSouthAfrica(Transnet Freight port’s developmentfrom theconcessiondate. stakeholders theportmasterplanandprogress of the The objectiveoftheconference wastocommunicate and hisministers. and thecoalterminalforPrimeMinisterofMozambique Initiative (“NBI”). through activeparticipationintheNationalBusiness and climatechangeadvisors,consultantsauditors; sessions fortheJSESRIin2011; for newdevelopments; form partofallenvironmental impactassessments(“EIAs”) organisations duringpublicparticipationprocesses that client functions. feedback presentations, theannualgeneralmeetingand queries are dealtwithonanongoingbasisthroughout are arrangedwithinstitutionalinvestorsandallanalyst shareholders. Inadditiontothis,one-on-onemeetings announcements andresults presentations toanalysts and press releases, stockexchangenewsservice (“SENS”) institutional investorsthrough themediumofformal group regularly communicateswithshareholders and Grindrod valuesinvestorandshareholder interest. The Investor relations Closed period Institutional investorluncheon,Johannesburg Institutional investorbreakfast, CapeTown Grindrod ordinary shares Circular toshareholders regarding subscriptionfor capital raisingtransaction Live dial-inpresentation announcingRemgro/Grindrod Interim dividendpaid Dec Nov Interim dividenddeclared Oct Sep 30 June2011 Aug Interim results announcement forthehalfyearto Jul Jun Annual generalmeeting May April Mar Publication ofannualreport Feb Jan Johannesburg institutionalinvestorone-on-onemeetings Singapore institutional investorroad show London institutionalinvestorroad show Results presentation foranalysts,Durban Results presentation foranalysts,CapeTown Results presentation foranalysts,Johannesburg Final dividendpaid Final dividenddeclared 31 December2010 Results announcementfortheyearended Investor relations All relevant investor information isavailableonwww.grindrod.co.za investorinformation All relevant during 2011: Below isanoutlineofformalinvestorrelations activities group andprovide formalreports. There are anumberofinstitutionalanalysts that trackthe notifi cationwhennewitemsare loadedtothewebsite. shareholders, investorsandanalyststoregister toreceive the courseofyear. Thewebsiteoffers afacilityfor 11 Grindrod Limited Integrated Annual Report 2011 12 Grindrod Limited Integrated Annual Report 2011 DIRECTORATE –

NON-EXECUTIVE 1 2 4 3 9 8 7 6 5 MR Faku(45) 4. AppointedDecember2000 Independentnon-executivedirector PrTech Eng (CivilEngineering) H Adams(59) 3. Memberoftheremuneration/nominationcommittee Chairmanoftheauditcommittee AppointedAugust1986 Leadindependentdirector CA(SA) IM Groves (66) 2. AppointedJune1993 Non-executive CA(SA) chairman IAJ Clark(68) 1. Memberofthesocialandethicscommittee AppointedDecember2009 Non-executive director management, leisure, gamingandproperty developments. has diversifi edbusinessinterests inengineering,project Project Managers.Hassen isaconsultingengineerand Casino, NadesonConsultingEngineersandProman (Pty)Limited,TableInternational BayHotel,GrandWest Chairman ofGrandParadeInvestmentsLimited,SunWest director oflistedcompanies. in theshippingindustryandrole asanon-executive group from 1986to1999andhasmanyyears’experience Value Group Limited.Mikewasmanagingdirector ofthe Non-executive director ofGrindrod BankLimited and Member oftheremuneration/nominationcommittee of WMGrindrod in2007. the group. Hewasappointedchairmanontheretirement to 2006,thereafter hewasappointeddeputychairmanof He servedasthegroup’s chiefexecutiveoffi cerfrom 1999 fi nancialandexecutivepositionsintheShippingdivision. employed bythegroup in1977andheldvarioussenior non-executive director ofBSiSteelLimited.Ivanwas chairman ofChemicalSpecialitiesLimitedanda Chairman ofGrindrod BankLimited,non-executive companies. (Pty) Limitedandadirector ofvariousCalulogroup of non-executive director ofGrindrod (SouthAfrica) and World Petroleum Congress (SouthAfrica).Heisa Industry Association,AfricanMineralsandEnergyForum has servedontheboards oftheSouthAfricanPetroleum extensive experienceintheSouthAfricanoilindustryand in Grindrod (SouthAfrica)(Pty)Limited.Mkhuselihas Investments (Pty)Limited.Calulohasa15%equityinterest Group executivechairman andfounderofCalulo BA (Law) Memberoftheauditcommittee AppointedDecember2009 Independentnon-executivedirector BComm; MJ Hankinson(62) 6. CA(SA) Memberoftheauditcommittee AppointedJuly2008 Independentnon-executivedirector Advocate;BALLB;MCom;CA(SA);FCIS WD Geach(57) 5. AppointedOctober2011 non-executivedirector Alternate BAcc(Hons),MPhil(Oxon);CA(SA) JJ Durand(45) 9. Independentnon-executivedirector BSc(MechanicalEngineering);MBA SDM Zungu(44) 8. AppointedOctober2011 BComm(Hons);CA(SA) Non-executive director (57) MH Visser 7. social andethicscommittee Chairman oftheremuneration/nominationcommitteeand Tyres (Pty)LimitedandRomatexLimited. International Sugar Limited.MikeisaformerchiefexecutiveofDunlop Holdings (Pty)Limited.Non-executivedirector ofIllovo Chairman oftheSPAR Group LimitedandBrandcorp Institute ofProfessional Accountants. was atechnicalcommitteememberoftheSouthAfrican South AfricanInstituteofChartered AccountantsKZNand Services. Hepreviously servedonthetaxcommitteeofThe BusinessLawandFinancial Corporate Governance, areas ofspecialisationare FinancialAccounting,Taxation, professor andFellowoftheUniversityKwaZulu-Natal.His an AdvocateoftheHighCourtSouthAfricaandasenior Non-executive director ofGrindrod BankLimited.Walter is Holdings Limited. Limited, SabidoInvestments(Pty) LimitedandDiscovery Holdings(Pty) Capevin InvestmentsLimited, Kagiso Tiso number ofcompanies,including RainbowChickenLimited, offi cerof VenFin Limitedandcurrently adirector ofa Chief investmentoffi cerofRemgro, formerchiefexecutive Forum inhiscapacityasYoung GlobalLeader. control issues.HeisalsoamemberoftheWorld Economic sub-committee aimedatdealingwithownershipand Economic Empowermentandisthechairpersonof serves onthePresidential AdvisoryCouncilonBlack Gold LimitedandUraniumOneAfricaLimited.Sandile Investments (Pty)Limitedandprevious director ofAfl ease ExecutivechairmanandfoundingmemberofZungu Appointed December2009 Limited andUnileverSouthAfricaHoldings(Pty)Limited. PG Group Limited,RMBHoldings Limited,RMIHoldings Limited,MMIHoldingsPGSI International of DistellGroup Limited, FirstRandLimited,Mediclinic of RainbowChickenLimitedandnon-executivedirector Chiefexecutiveoffi cerofRemgro, non-executivechairman 13 Grindrod Limited Integrated Annual Report 2011 14 Grindrod Limited Integrated Annual Report 2011 EXECUTIVE 3 2 1 4 5 6 7 AppointedOctober2002 Chiefexecutiveoffi Marine DA Rennie(51) Captain 3. AppointedNovember2006 Chiefexecutiveoffi BComm;MA(Oxon) (47) DA Polkinghorne 2. AppointedMay1999 Chiefexecutiveoffi CA(SA) AK Olivier(51) 1. with thegroup. and freight logisticsexperience.Hehas33yearsservice Dave wasemployedin1978andhasdiverseport,terminal Development CompanyandGrindrod MauritiusLimitada. Grindrod Calulo(Pty)Limited.ChairmanofMaputoPort Ocean AfricaContainerLines(Pty)LimitedandOilTanking associates, includingGrindrod (SouthAfrica)(Pty)Limited, Director subsidiariesand ofmajorlocaland international service withthegroup. private equityandcorporatefi nance. Hehas12years has extensiveexperienceincommercial property fi nance, of corporateandinvestmentbankingand,inparticular, for more than20years. Hehashadexposure toallareas David hasbeeninvolvedinthefi nancialservicessector charitable trustswhichrequire assetmanagementinput. risk andremuneration committees andtrusteeoftwolarge various outsidecompanieswhere heisinvolvedintheaudit, director ofalltheFinancial Services companies.Director of Managing director ofGrindrod BankLimitedandexecutive 25 yearsservicewiththegroup. Assurance Association(Bermuda)Limited.Hehas chairman ofTheUnitedKingdomMutualSteamship Ocean AfricaContainerLines(Pty)Limitedandisdeputy Bank Limited,Grindrod (SouthAfrica)(Pty)Limitedand subsidiary companiesandassociates,includingGrindrod in 1995.Alanisadirector oflocalandinternational Shipping his appointmentaschiefexecutiveofUnicorn and heldseniortreasury andfi nancialpositionsbefore Alan wasemployedin1986theShippingdivision cer –PortsandTerminals cer –FinancialServices cer Memberofthesocialandethicscommittee AppointedMarch 2011 Group fi CA(SA) AG Waller (49) 5. AppointedAugust2003 Chiefexecutiveoffi AF Stewart(47) 4. AppointedtotheexecutivecommitteeJune2011 NDip(FinanceandBusinessManagement) HJ Gray(42) 7. AppointedNovember2011 Chiefexecutiveoffi MR Wade (52) 6. number ofSouthAfricanlistedcompanies. for 15yearsduringwhichtimehewasresponsible fora Andrew waspreviously apartnerofDeloitte&Touche appointed group fi nancialdirector on1March 2011. Andrew joinedthegroup on1January2011andwas 11 yearsservicewiththegroup. McIlmurray followinghisretirement inJuly2011.Tony has responsibility oftheTrading divisionfrom Brendan he helduntilFebruary2011.Tony tookovertheexecutive appointment asgroup fi nancialdirector in2003,aposition appointed asgroup fi nancialmanagerin2002,priortohis 2000 asfi Shippingandwas nancialmanagerofUnicorn companies withinthegroup. Tony wasemployedin Director subsidiary ofmajorlocalandinternational CA(SA) 15 years’freight forwarding experience. and Röhlig-Grindrod (Pty)Limited.Hyltonhasover associates, includingGrindrod (SouthAfrica)(Pty)Limited Director ofmajorlocalsubsidiarycompaniesand Chief executiveoffi He hasthree yearsservice withthegroup. was amemberoftheoriginalBalticExchangefor10years. London, Johannesburg,NewYork andSingapore. Martyn and hasworkedforshipowners,operatorsbrokers in shippingexperience Martyn has34years’international Director subsidiarycompanies. ofmajorinternational nancial director cer –Trading cer –Logistics cer –Shipping 15 Grindrod Limited Integrated Annual Report 2011 CHAIRMAN’S REPORT

Planned investment in capacity expansion

In addressing the equity and funding requirements for the major infrastructure projects on the recommendation of the board, shareholders approved the raising of R2 billion additional equity.

Performance and strategy results. These infrastructure investments have high barriers to Grindrod Limited Integrated Annual Report 2011 Grindrod entry and long-term contracts have been secured with key In a year of opportunity and challenge Grindrod has continued 16 customers. Given the scale of the projects, Vitol, the world’s to advance port, terminal and rail infrastructure projects in largest independent energy trader, has been introduced as Africa in order to further develop its strategy of becoming an a 35% shareholder of Maputo coal terminal in the current integrated freight and logistics service provider. year. The transaction is subject to regulatory approval. Vitol’s In addressing the equity and funding requirements for the industry standing in energy related activities and their good major infrastructure projects and on the recommendation of entrepreneurial skills will add value to the Grindrod group in the board, shareholders approved the raising of R2 billion the future. additional equity. A major part of the capital is earmarked for The capital projects will impact on return on equity over the expansion of coal terminal capacity at Maputo port. the short-term, however, over the longer term will provide This heralds an exciting development for the group with momentum to the vision of sustainable value creation for Remgro becoming a major shareholder of Grindrod Limited. shareholders. Remgro is considered a strong and supportive partner with Results strategic insights, global technical competence, signifi cant fi nancial resources and a capacity to effi ciently raise capital. The integration strategy has seen increased contributions from the Freight Services, Trading and Financial Services divisions, The association should lead to further synergies between the although group earnings to 31 December 2011 were down two groups who share the same values and cultural fi t. by 32% on the previous year due to poor shipping markets. The planned investment in capacity expansion has been timely, Compared to many of its peers in the shipping industry, given the increased demand for commodities out of limited Grindrod has done well not to incur losses in its Shipping southern African port and logistical capacity and will further division in markets which have remained extremely weak for reduce the impact of the cyclical shipping activity on group some time. the Companies Act. climate change managementandotherlegal requirements of development, corporatecitizenship, environmental and important oversightfunctionin termsofsocialandeconomic level socialandethicscommittee whichwillprovide an I ampleasedtoreport theformationofanewboard- carbon disclosure project forthesecondyearrunning. The group alsovoluntarilyparticipatedintheinternational for environmental performance. Investment (“SRI”)Indexandreceived a“BestPractice”result was onceagainadmittedtotheJSE’s SociallyResponsible change policy. ItisalsoencouragingtonotethatGrindrod and targetscontainedinthegroup’s environmental andclimate progress wasmadeduringtheyearinachievingobjectives appropriate resourcingWith andsystemsinplace,good effi cient transporttechnologies. shipping overotherformsoftransportandinvestinginenergy in carbontrading,marketingtheenvironmental benefi tsof Conversely, opportunitieswillbepursuedsuchasparticipation transport operationsare all beingconsidered bymanagement. limits andphysicalextreme weatherimpactsonourglobal change agreements, the imposition ofstricterairpollution carbon taxes,unforeseen ramifi climate cationsofinternational market place.Climatechangerelated risks,includingpossible change response needsto beinstepwitharapidlychanging Grindrod recognises thatitsenvironmental andclimate Sustainable development key skillsare retained andattracted. remuneration policiesare robust andcompetitivetoensure group progresses itsdeclared growth strategy, itiscriticalthat structures havingbeenput inplacewithinthegroup. Asthe talent andskillsrelative to theoperations,withmore formal aspirations, theboard hastakenfurtherinterest indeveloping quality peoplewithastrong valuesystem.Inregard tocareer and soundjudgement.Grindrod hasattractedandretained has required skilfulassessmentofmarketsandopportunities employee withintheGrindrod group duringaperiod which The board isproud oftheefforts ofmanagementandeach Our people to earlier. share issuerelated totheraisingofadditionalequity referred the year(2010:3,5times).Thecoverisimpactedbynew announced. Thisrepresents adividendcoverof3,8times for A fi naldividendof12centsperordinary share hasbeen economies andmarketsimprove. appropriate time,positions thegroup forgrowth whenworld in Maputoandtheexpansionofourshippingfl eetatthe partners, theinvestmentinportsandterminals,particularly shipping world.Theintroduction of strategicshareholders and The group continuestopositionitselfforbettertimesinthe growth inotherbusinesses,particularlyportsandterminals. predicted toremain weakforsometime,weexpect good economies ismore challenging.Whileshippingmarketsare growth incommoditydemand,recovery intheadvanced China, Indiaandotheremergingeconomiesunderpins While thecontinuingindustrialisationandurbanisationin Outlook 28 February2012 Durban Chairman IAJ Clark challenges ofademandingyear. employees whohaveresponded sowillinglyandablytothe group chiefexecutiveoffi cer, hismanagementteamandall Finally, IwishtopaytributeandthankAlanOlivieras well asMartynWade asanexecutivedirector. representatives, as andJannieDurand(alternate) ThysVisser to welcomethenewdirectors whoincludetheRemgro played inthegrowth andhistoryofthegroup. Ialsowish I wishtorecord mysincere appreciation for thepartthey directors on30June2011and31August2011,respectively. Laurence Stuart-Hilland John Jonesretired asexecutive various committees. for theircontributionstotheboard aswellservingonthe I wishtherefore toacknowledgeandthankboard members as leadindependentdirector duringtheyear. appropriate succession planning.MikeGroves wasappointed been carefully considered andfurtherfocuswillbegivento required skillsandexperienceofnon-executivedirectors has encourages strong debate intheboardroom. Inthisregard the quality board ofdirectors withaculture oftransparency that It hasalwaysbeentheobjectiveofgroup tomaintainahigh The board 17 Grindrod Limited Integrated Annual Report 2011 CHIEF EXECUTIVE OFFICER’S REPORT

Creating sustainable business growth

Grindrod’s strategy of providing services throughout the complete commodity supply chain was reaffi rmed as the right strategy for the group.

Introduction Although the shipping markets continue to underperform, the group has retained its advantage of a low cost fl eet 2011 has been an important year for Grindrod. Over the past and is positioning itself for potential strategic acquisition Grindrod Limited Integrated Annual Report 2011 Grindrod number of years the group has been able to fund its growth opportunities. 18 into logistics and ports and terminals infrastructure by utilising the profi ts from the Shipping division. With the decline in The proportion of earnings from the group’s Freight Services, shipping markets resulting from an oversupply of new ships Trading and Financial Services divisions continues to grow and demonstrates the success of the diversifi cation strategy. worldwide, a review of the group’s funding requirements was necessary to enable us to take advantage of signifi cant In order to sustain the business and enable it to respond strategic opportunities as they arose. This led to a re- to further opportunities, thereby enhancing value for evaluation of Grindrod’s strategy in respect of key investment shareholders, the group needed to build on its core strengths, projects, equity and funding sources. strategic assets, strong customer and strategic partner relationships. Grindrod accordingly elected to explore Group strategy suitable funding sources and partnerships to ensure timeous Grindrod’s strategy of providing services throughout the delivery and completion of key infrastructure projects and complete commodity supply chain was reaffi rmed as the right to provide capacity for others. The board’s decision was that shareholders would be better served by executing on a strategy for the group. This involves the movement of drybulk, number of the infrastructural projects, in particular the Maputo bulk liquid, containerised and vehicle cargoes through its coal terminal expansion, as opposed to disposing of these global chain of Trading, Logistics, Ports and Terminals as well projects at an early stage in their development. as the Shipping businesses. The decision to seek approval from shareholders to raise To realise this integrated strategy, the group deemed it R2 billion in equity required careful consideration in respect essential to continue to advance its ports, terminals and rail of the opportunities and their likely outcomes. Shareholders’ infrastructure projects in Africa. Other opportunities across the approval of the need to raise equity endorsed the group’s various business sectors continue to be evaluated, but given strategy. The format of the capital raising enabled the group to the current environment, have not been pursued. receive funds at a premium to the market, while the introduction improvement inthetankermarketare evident. suppressed through 2012,although somesignsof The oversupplyofshipsis expectedtokeepmarkets conditions andincreased volumesinthesecondhalfof2011. growth ontheprioryear, benefi tingfrom improved market industrial actioninthetransport business,achievedearnings Logistics, despiteaslowerthan expectedturnaroundand improved immenselyin2011. effi cienciesandfocusinginvestmentspending,raildelivery (“CFM”) andthestaff intheFreight Servicesdivision.Bydriving of ourcustomers,Transnet, MozambiqueRailCompany continues toimprove. Thisistheresult oftheconcertedefforts Maputo andRichards Bay, haveincreased andutilisation The volumesthrough thegroup’s terminals,inparticular to thefacilitiesinneartermare beingassessed. toaddfurthercapacity coal terminal,evaluationofalternatives Whilst planningforthelargephasefourproject attheMaputo key strategicassetswillbenefi tshareholders inthelong term. group. Managementremains confi dentthattheinvestmentsin coal terminal,hasrealised somevaluefrom thisassetforthe The introduction asastrategicpartnerintheMaputo ofVitol, pressure onthegroup’s abilitytoachievehighlevelsofreturn. into cash-generatingassets.Duringthisperiodthere willbe New infrastructure investments willtaketimetodevelop the group. for Africancommoditieshaspresented keychallengesfor capacity andthelackofinfrastructure tosupportthedemand accompanied bytheoversupplyofdrycargoshipping The protracted delayinthe recovery ofglobaleconomies, Key challenges in theShippingdivision. market, resultingofR7million(2010:R362million) inearnings results. Thisstrong performancewasoffset byapoorshipping well during2011,withincreased of22%over2010 earnings Services, Trading andFinancialServicesdivisionsperformed were 32%downfortheyear (2010:R780million).TheFreight economic environment, thegroup’s ofR531million earnings In ayearofincreasingly volatilemarketsandadiffi cult Performance the expansionofterminal. for shareholders andenhanceGrindrod’s abilitytoexecuteon venture withthem.Thepartnershipisexpectedtocreate value to theMaputocoalterminalandestablishatradingjoint The board alsodecidedtointroduce asastrategicpartner Vitol business experienceacross manysectors. of Remgro asastrategiclong-terminvestorprovides yearsof operating reviews. Evidence ofprogress isdemonstratedinthedivisional and sustainabilitypracticesintothebusinessstrategy. The group iscommitted tointegratinggovernance positioned toexecuteonitsstrategy. projects andarecapitalised balancesheet,thegroup iswell supplier andbankingrelationships, agoodpipelineofcapital dedicated people,valuablestrategicassets,strong customer, astaff complementofoversixthousandskilledand With developingnewstrategicopportunities. • buildingportandterminalinfrastructure assets;and • • improving effi maximisingutilisationofexistinginfrastructure; ciencies; • Key focusareas forthegroup are: assets undermanagementtoR6,2billion. The Bankperformedwell,growing depositstoR2,9billionand 28 February2012 Durban Chief ExecutiveOffi cer AK Olivier support duringthepastyear. non-executive directors oftheboard fortheiradviceand I amalsogratefultothechairman,IvanClarkand opportunity thatthegreatest effort isrequired. for theircontributionandhard work.Itisinthesetimesof I wouldliketothankmyexecutiveandallouremployees with thegroup. Particularly noteworthyisthatJohnachieved43years’service the successofgroup andIwishthemwellforthefuture. John Joneson31August2011.Allcontributedenormouslyto and Laurence Stuart-Hillretired on30June2011and year afterlongservicewiththegroup. Brendan McIlmurray Some membersoftheexecutiveteamretired duringthe Terminals. Trading division. DaveRennieisnowfocusedonPortsand Hylton GrayfortheLogisticsdivisionandTony Stewartforthe Martyn Wade assumedresponsibility fortheShippingdivision, In 2011therestructure oftheexecutiveteamwascompleted. the business. to uncoveropportunitiesforthegroup togrow anddevelop with soundworkethic.Theirentrepreneurial spiritcontinues The group continuestoattract andretain talentedpeople Management andemployees 19 Grindrod Limited Integrated Annual Report 2011 FINANCIAL DIRECTOR’S REPORT

Appropriate allocation of equity

Group revenue increased by 22% up to R35,9 billion from R29,4 billion mainly due to growth in volumes in the Trading division and increased capacity and utilisation, in Ports and Terminals, in the Freight Services division.

Financial strategy With the funding section of the plan having been successfully Grindrod Limited Integrated Annual Report 2011 Grindrod executed in the year, the focus for the new year moves to: 20 The group’s strategy of becoming an integrated freight and • appropriate allocation of equity and loan funding to new logistics service provider has over the past number of years projects to maximise long-term shareholder value; largely been facilitated by the cash generated from the • careful consideration of the currency needs; Shipping division. • alignment of the investments with shareholder endorsed At the beginning of the year it was forecast, that as a result strategy; and of the excessive levels of ship newbuildings delivering into the • monitoring group returns and gearing levels. market in 2010 and in the year under review, Shipping profi ts were expected to further decline. Whilst profi ts from the other Group earnings divisions were expected to rise, planned development at the Group revenue increased by 22% up to R35,9 billion from Maputo coal terminal interrupted earnings. In addition, the R29,4 billion mainly due to growth in volumes in the Trading growth of the Trading division was forecast to absorb cash division and increased capacity and utilisation in Ports and and the turnaround by the road transportation division took Terminals within the Freight Services division. longer than initially anticipated. This translated into improved earnings before interest, taxation, In light of these events, the strategic fi nancial focus for the depreciation and amortisation (EBITDA) for these divisions. year under review was to: The low charter hire rates and reduced ship operating profi ts • appropriately fi nance the group’s assets; in the Shipping division, resulted in a 15% decrease in group • provide the analysis for the board to reconfi rm the strategy; EBITDA to R1,0 billion (2010: R1,2 billion). • present the funding requirements of the prioritised growth Operating profi t reduced to R643 million, impacted by opportunities; higher depreciation and amortisation costs, as a result of • motivate the appropriate method of funding; and the increased investment in ships and infrastructure assets. • execute on the agreed plan. Operating margins excluding the Trading business, were 7,3% non-current liabilitiesheldforsale. Oncompletionofthe entities havebeen transferred to non-current assetsand under negotiation,alltheassets andliabilitiesofthese January 2012andthesaleof50% ofCockettMarinecurrently thesaleof35%Maputocoalterminal in With share issue. equivalents increased from R1,1billiontoR3,0afterthe to R1,6billion(2010:R1,4billion)whilstcashand fl eet.Thegrowth in Trading increased short-termborrowings arose through theraisingoffi nanceonthegroup’s shipping Increased long-termdebtofR2,2billion(2010:R1,3billion) ratio to9,6%(2010:30,7%). The immediateimpactisthereduction inthenetdebt:equity R584 million. currency translationreserve, andretained incomeof over theyearwhichcontributedR905milliontoforeign raising, thestrengthening oftheRand/USDollarexchangerate R9,2 billion.Thiswasaresult oftheR2billionequity Shareholders’ equityincreased from R5,9billionto Statement offi (2010: R780million). of R531millionwas32%downovertheprioryear The group profi tattributabletoordinary shareholders port ofMaputo. as aresult ofimproved inRöhlig-Grindrod earnings andthe of R118million(2010:R109million)increased by8%,largely The group’s share ofincomefrom jointventures andassociates in Shippingoperatingprofi ts. increased to23%(2010:12%) primarilyduetothedecrease R49 million(2010:R51million).Thegroup’s effective taxrate and cashequivalentswithnetinterest decreasing by4%to in 2011,wasoffset byinterest onincreased earned cash The interest onhigherlong-term andshort-termborrowings margins ofR24,22pertonne(US$3,33). compared to10,9% in2010.TheTrading divisionachieved Attributable income(Rm) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2011 Attributableincomebydivision(Rm) Services Freight 318 165 rdn hpigFinancial Shipping Trading 240 144 531 546 780 851 873 7 1 008 nancial position nancial 1 195 Services 58 ru Total Group 4 2 158 531 Return onordinaryReturn shareholders’ funds(%) investment injointventures. proposed sales,these businesses willbedisclosedin Net debtanalysis(Rm) the statementof fi nancialposition. in recoverables oncancelledshipsofR381 millionrefl ected in the SANFUshipyards andawaitarbitration.Thishasresulted to 38,5ships.Two handysizebulkcarrierswere cancelledwith During theyear, theshippingfl eetincreased from 35,0ships Logistics road fl eet. new locomotivesandthereplacement ofaportion the newbuilding programme, theexpansionofterminalcapacity, Capital expenditure wasdirected towards thegroup’s ship to jointventures. The capitalcommitmentstableincludesR365millionrelating at Coegacurrently beingdeveloped. infrastructure anddevelopmentofabulkliquidstoragefacility of terminalcapacityinMaputoandRichards Bay, railway committed. Thecommitmentsexcludetheplannedexpansion has beenapproved, ofwhichR365millionhasalready been locomotives andships.Capitalexpenditure ofR837million of terminalcapacityandthecontinuedprocurement of Future capitalcommitments are tobeutilisedfortheexpansion Capital expenditure borrowings. capital commitmentsthrough itscashresources andbank The group isconfi dentthatithasadequatefundingforall 31 December2011. from R1,8billionat31December 2010toR890millionat for theshare issue,decreased thenetdebtposition above outfl owscombinedwiththeR2billionproceeds of R1,2billionanddividendspaidR260million.The in 2010.Cashoutfl owsincludedcapitalexpenditure changes, decreased toR1,1billionfrom R1,3billion Cash generatedfrom operations before workingcapital Borrowings, cashfl 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 (1 835) 00Cash 2010 7,8 operations generated 6 (1264) 1 069 from 15,4 15,9 26,7 movements Working capital 42,4 50,2 3 (311) 633 50,8 ow andliquidity receivables Short-term advanced 57,2 dividend/ 74,6 taxation/ Interest/ 75,7 forex/ other (1 166) expenditure Capital 1 984 hr su 2011 Share issue (890) 21 Grindrod Limited Integrated Annual Report 2011 22 Grindrod Limited Integrated Annual Report 2011 interest rate exposure washedged. Theremaining Rand As at31December 2011,only6%ofthegroup’s USDollar Interest rateexposures enforced tomitigateforeign exchangerisks. Dollars. Appropriate board approved policies continuetobe 60% ofthegroup’s netassetswere denominatedinUS currency assetsandrelated liabilities.At31December2011, The group continuestoexpandoffshore, increasing itsforeign Foreign currency exposures 9 6 planning. subsequenttoyear-end,terminal toVitol, waspartofthis risks are addressed. Thesaleof35%theMaputocoal 12 ratios. Careful planningwillcontinuetoensure theassociated 8 impact thenetdebt:equityratioanddebt:EBITDA terminal infrastructuralassetsandshipnewbuildingswill The group’s plannedinvestmentintolong-termportand 15 conditions change. 10 continue toberegularly reviewed andamendedasmarket substantially exceedbenchmarks.TheWACC benchmarks projects are generallyonlyapproved iftheprojected returns The WACC benchmarkisrisk weightedandcapitalexpenditure USD/Euro ZAR Weighted averagecostofcapitalhurdle rates 2010 levelsandare setoutinthefollowingtable: market outlook.Theprojected hurdle ratesremain inlinewith to ensure theyrefl ectedcurrent marketconditionsandthe cost ofcapital(WACC) calculation andproject hurdle rates During theyear, thegroup reviewed itsweightedaverage fl eet. a signifi cantportionoftheautomotiveanddrybulktransport four milliontonnestosixandthereplacement of completion oftheexpansionMaputocoalterminalfrom Capital expenditure inFreight Serviceswasdirected atthe FINANCIAL DIRECTOR’SREPORT Group Financial Services Shipping Rmlin 2011 Trading Freight Services (R million) The tableincludescapitalcommitmentsofR365millionrelatingtojointventures. Ports andTerminals Logistics aia xedtr aia xedtr prvdSplitasfollows: Capitalexpenditure approved Capital expenditure High risk % Medium risk 1 166 866 287 128 159 11 1 1 % 0221 2014 2013 2012 69 7 4 3 42365 289 472 4 837 45 293 4 468 – 174 513 42 659 – 251 129 384 32 2 – 0 4833 468 501 – 129 372 Low risk 2 2 2 28 – 28 3 2 23 1 – 1 12 – 12 – – 12 1113– 3 1 1 13 ––––– – – – – % misstatements of fi nancial results. that controls are adequateto address theriskofmaterial fi nancial reporting risksandtoprovide additionalassurance been furtherdevelopedto improve theidentifi cationof fiDuring 2011,theinternal nancialcontrol frameworkhas • • • • • • Principle features of the group’s fi internal nancialcontrols are: control. another importantaspectofinternal risks. Thesafeguarding and prevention ofmisuseassetsis of fi nancial results andare intendedtomanageallsignifi cant reasonable assuranceagainst materiallosses,misstatement control systemsareThe internal designedtoprovide and timely. ensure thatfi nancialinformation reported isaccurate, relevant These fi nanceteams,withthesupportof nancialsystems, fi the operationsthrough theanalysis andreporting ofresults. manage thefi nancialdepartmentswhichmonitorand support Key fi nancialpersonnelare employedacross thegroup to Financial controls andriskmanagement management. level. Thesituationwillcontinuetobecloselymonitored by of increasing interest ratesandachievethegroup targetcover low ratesatanappropriate timetolimitexposure totherisk the lowinterest rate cycle.Thegroup willlooktolockinthe open positionhasenabledthegroup totakeadvantageof interest rateswapexpired on31December 2011andthe independent oversight by the internal auditdivision. independent oversightbytheinternal technical training;and a fi nanceteamwiththeappropriate levelofskilland information technologysystems; fiinternal nancialcontrols supportedbythegroup’s predetermined objectives; which enablesperformancetobemonitored against a systemoffi nancialplanning,budgetingand reporting practice standards are achieved; policies, procedures andguidelinestoensure thatbest reporting lines,responsibilities andlevelsofauthority; an organisationalstructure comprisingclearlydefi ned (continued) commitments Total contracted Approved not contracted Approved and previously included asseparatelineitems onthestatement same basisas investments inassociates.Account balances consolidated are nowaccountedforanddisclosedon the joint venture entitieswhichwere previously proportionately The majorchangeasaresult oftheearlyadoptionis that the 2011fi nancialyear. therefore madethedecision toearlyadoptthesestandards for a signifi cantimpactonthegroup in2012.Managementhas be effective during2012,thesenewstandards wouldhave and JointVentures. Giventhesignifi canttransactions thatwill and IAS28(asrevised in2011)InvestmentsAssociates IAS 27(asrevised in2011)SeparateFinancialStatements Arrangements, IFRS12Disclosure ofInterests inOtherEntities, IFRS 10ConsolidatedFinancialStatements,11Joint During theyeargroup electedtoearlyadopt circulars andrestatements whichare describedbelow. new orrevised accountingstandards, interpretations and ended 31December2010exceptfortheadoptionof with thoseoftheannualfi nancialstatementsfor theyear fi nancialstatementsare intermsofIFRSandare consistent computation usedinthepreparation oftheconsolidated The accountingpoliciesadoptedandmethodsof board ofdirectors on28February2012. These annualfi nancial statementswere approved bythe disclosure requirements oftheJSEListingsRequirements. the SouthAfricanCompaniesAct,No71of2008and The annualfi nancialstatementscomplywithSchedule4of issued bytheAccountingPracticesBoard oritssuccessor. the group at31December 2011andtheAC500standards Accounting Standards board (“IASB”)inissueandeffective for (“IFRS”) anditsinterpretations adoptedbytheInternational FinancialReportingStandardsaccordance withInternational The annualfi nancialstatementshavebeenprepared in Accounting policies management report onpages53to60. management oftheserisksare dealtwithintherisk The risksidentifi edassignifi canttothe group andthe sectiononpage64. corporate governance auditapproach hasbeendealtwithinthe The internal 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Shareholders’ funds(Rm) 521 609 834 1 937 2 825 3 378 5 738 5 857 6 713 9 216 Trading profi 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 268 335 t (EBITDA)(Rm) 678 1 006 1 047 1 183 1 279 1 435 1 583 policies sectionintheannualfi nancialstatements. policies/key sources, are dealtwithindetailtheaccounting Critical judgementsinapplyingthegroup’s accounting detail onnewstandards andinterpretations notyetadopted. Refer tonote1oftheannualfi nancialstatementsforfurther the group’s disclosures. party. Theadoption ofthisstandard hasnomaterialeffect on in thecurrent yearwhich modifi esthedefi nitionofa related The group adoptedIAS24 (revised) RelatedPartyTransactions fi statements. nancial comparatives hasbeendetailedinnote2oftheannual been appliedretrospectively. Theeffect ofchangestothe Amendments tothesestandards asnotedabovehave companies’ profi taftertaxation. consolidated anddisclosedintheshare ofjointventure statement, profi taftertaxattributabletojointventures is the investmentinjointventure line.Similarly, intheincome of fi nancialpositionare nowdisclosedasanetamounton 28 February2012 Durban Group FinancialDirector AG Waller was announcedinthepress on18January2012. Grindrod).trading businesses(65%Vitol/35% Thistransaction a partnershiptocombinetheirrespective sub-Saharancoal andGrindrodUS$67,7 million.Inaddition,Vitol entered into a 35%interest inMaputocoalterminalforaconsiderationof from 1January2012whereby acquired Vitol from Grindrod Grindrod entered andVitol intoanagreement witheffect Post balancesheetevents included inthisintegratedannualreport. Condensed consolidatedfi nancialstatementshavebeen Abridged fi the GrindrodLimited website,www.grindrod.co.za. The fullsetofannual fi 3 026 nancials 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Return onnetassets(%) Return availableon nancial statementsandnotesare 7,1 11,5 13,8 14,7 19,9 26,8 28,4 35,9 37,1 37,7 23 Grindrod Limited Integrated Annual Report 2011 24 Grindrod Limited Integrated Annual Report 2011 Revenue (Rm) Other liabilities Interest-bearing loans Total equity Reserves andaccumulatedprofi t Current assets Deferred taxation Recoverables oncancelledships Derivative fi nancialassets Investments Intangible assets Net current assets/(liabilities) Total equityandliabilities Derivative fi nancialliabilities Deferred taxationliabilities Non-controlling interests oftheparent Equity attributabletoowners Share capitalandpremium Total assets negotiablesecurities Liquid assetsandshort-term customers Loans andadvancestobank Investment property * Restated vehiclesandequipment Ships, property, terminals, at 31December GROUP FINANCIALREVIEW OF FINANCIALPOSITION GROUP STATEMENT 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Total assets(Rm) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 1 927 2 139 2 974 1 904 2 094 2 645 7 449 7 4 978 12 507 7 270 17 947 9 928 12 631 13 891 13 984 27 692 29 391 33 737 20430 20430 10743 4973 6602 4374 9310 9216 7164 2052 2074 1115 5268 35 885 20 430 2011 125 381 190 548 Rm 19 94 89 22 – 1 9 261 1 8 2 7 7 4 9 1904 2093 2645 4978 7270 9928 13984 12631 13891 1904 2093 2645 4978 7270 9928 13984 12631 13891 117 161 241 69 43 31 (1) (265) 9 (211) 409 301 543 959 453 775 856 679 524 1397 974 2491 616 2582 521 1691 1534 4101 842 1147 609 1829 5189 440 1944 2306 4346 834 2823 525 1964 4459 3439 2246 1937 – 826 6775 485 3328 2825 5836 3378 1439 773 5971 – 6713 2310 821 5738 3179 5857 6700 310 2410 – 5689 3474 265 5791 4628 201 – 6874 5423 178 5538 506 337 1093 966 961 307 1050 1536 367 1483 2069 1710 367 2337 3047 1138 4541 3923 4564 2010 17 2 9 3 4 2 12 3 2 7 4 8 20 7 24 33 (2) – – 19 61 7 22 – 62 37 117 98 – 69 114 70 16 – 138 37 174 159 50 229 159 251 139 162 351 104 521 129 713 831 649 mR mR mR mR Rm Rm Rm Rm Rm Rm Rm Rm Rm 1 8 7 4 2 8 0 7 – 76 50 83 12 81 49 84 37 8 181 498 16 515 199 13 49 66 1 12 11 9 1 1 5 – 50 – 1 21 92 141 102 1 – 29 – – – – – – – 239 – – –––––––– * 0920 0720 0520 032002 2003 2004 2005 2006 2007 2008 2009 (excluding dualpurposeassets)(Rm) Cash availablefrom operations Operating margin(excludingtrading)(%) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 28 70 151 400 568 654 913 7,3 1 239 9,6 10,9 12,2 1 904 14,5 20,2 21,8 24,2 25,9 27,8 4 076 Net fi nance(raised)/repaid Cash invested Cash availableforinvestment otheritems equipment,investmentsand property, terminals,vehiclesand Proceeds ondisposalofships, Cash retained from operations Distribution/dividends paid innon-tradingitems Ordinary shareholders’ interest Preference dividends preference dividends Profi tfortheyearbefore Non-controlling interests Profi taftertaxation Taxation Profi tbefore taxation companies’profi taftertaxation Share ofassociateandjointventure Net interest paid Non-trading items interest andtaxation Operating profi tbefore net Depreciation andamortisation (EBITDA) depreciation andamortisation beforeEarnings interest, taxation, Headline earnings Headline earnings ownersoftheparent Profi tattributableto andjointventure companies’profi t Profi tbefore share ofassociate Cash availablefrom operations GROUP CASHFLOW Revenue STATEMENT GROUP INCOME 35885 1006 (392) (343) (160) (230) (175) (363) 2011 111 471 531 584 597 772 118 654 643 (49) (60) (53) (13) (49) Rm 70 60 2 9 762 3 3 797 1 0 4 7 2 2139 1927 2 974 7449 12507 17947 33737 27692 29391 113 145 306 153 129 107 68 35 268 335 678 1047 1279 1583 3026 1435 1183 00 0920 0720 0520 032002 2003 2004 2005 2006 2007 2008 2009 2010* (6) 57 ( 7) 188 ( 8) 174 (8) 38 (237) (348) (581) (28) (1704) (1084) (30) (1828) (2175) (61) (587) (201) (366) (104) (331) (604) (461) (300) (19) (5) (48) (65) (76) (16) (243) (62) (188) (55) (114) (76) (122) (154) (218) (241) (292) (295) 37 (9) 3 12 15 (5) 7 24 (160) 254 47 77 (650) 602 135 – 628 (182) 1054 121 1219 1638 28 1646 (597) 507 3813 151 317 1038 (10) 168 568 550 683 240 1239 1573 654 3472 165 547 (61) 1904 240 849 4076 613 165 546 1006 400 1191 240 851 913 19 2322 166 546 1008 857 32 1195 240 866 767 2158 185 547 53 1072 873 1272 245 865 780 89 2249 166 595 1067 942 128 1285 213 930 839 2269 63 542 1143 954 206 1301 841 66 845 2512 280 1015 1142 76 602 1238 959 2446 925 109 1066 1125 850 1365 2785 1143 888 (3 (6 14 () 2 () –3 – – 1 – (2) – (2) (4) (15) (64) 164 (16) (77) (13) (91) (37) (69) (67) (59) (62) (87) (71) (131) (175) (91) (51) mR mR mR mR Rm Rm Rm Rm Rm Rm Rm Rm Rm 7 1 31 7 6 6 11 41 77 481 121 16 669 73 341 51 70 (3) – 2 3 (39) 4 (164) 14 13 () 1) 2) 1) 1 (1) – (1) 1 5 (13) (20) (12) (6) 25 Grindrod Limited Integrated Annual Report 2011 26 urn ai iiu 1,0 3,0 (times) (times) 3,0 (times) – subsidiaries Number ofemployees EMPLOYEES Current ratio–minimum Interest cover–minimum Debt servicecover Net debttoEBITDA–maximum sesprepoe (R000) (R000) –jointventures 75,0 Assets peremployee (%) Profi t peremployee (%) interests –maximum (%) Net interest-bearing debt tototalshareholders’ Total liabilitiestototalshareholders’ interests LEVERAGE ANDLIQUIDITY Effective rateoftaxation (cents) (000’s) pershare Earnings pershare are whichearnings based Weighted averagenumberofordinary shares on Number ofordinary shares inissueless treasury shares (000’s) ORDINARY SHAREPERFORMANCE euno riaysaeodr’fns–mnmm ()15,0 (%) (cents) onordinaryReturn shareholders’ funds–minimum (%) (times) (times) (times) (times) (cents) (cents) EBITDA pershare EBITDA dividend/distributioncover Dividend yield Dividend/distribution cover Dividend/distribution pershare EV/EBITDA ratio Price/earnings pershare Headline earnings euno e ses ()12,0 (%) (cents) onnetassets Return Net worthpershare atbookvalue Grindrod (%) Limited Integrated Annual (%) Report 2011Operating marginexcludingbulkproduct trading Operating margin PROFITABILITY * Restated at 31December GROUP FINANCIALREVIEW Objectives (continued) 589536 78234 4014 4438 1223 111,0 210,3 1454 14,2 48,5 22,7 2011 29,5 13,6 12,6 99,6 (0,5) 115 1,9 0,9 9,6 7,8 5,8 2,1 3,8 7,1 7,3 1,8 4451 4228 4360 452934 453640 452278 454591 4583 4423 4022 455459 450252 454203 455803 489 389 399 3955 3 999 3829 4849 177 196 517 263,1 511,7 189,6 167,7 262 301 323 2138 3 233 3 041 2652 263,9 475,7 193,0 171,6 202 373 654 349,7 665,4 317,3 260,2 117 112 130 590 1340 1122 1147 1, 27 1, 10,5 14,9 12,7 17,8 3, , 48 28,5 (4,8) 4,4 30,7 7, 58 7, 152,0 1,2 73,3 9,7 75,8 16,5 70,6 11,9 1, 59 5, 50,8 50,2 15,9 15,4 2007 2008 2009 2010* 1, , , 8,9 78,0 136,0 3,2 60,0 9,2 54,0 11,0 1, 38 3, 26,8 35,9 13,8 11,5 1, 22 2, 21,8 27,8 12,2 10,9 19 20 49 257 499 210 149 72 68 61 1375 651 648 782 28 32 27 5,2 2,7 3,2 2,8 13 15 16 1,2 1,6 0,6 1,5 (0,1) 1,3 0,2 1,6 79 56 29 3,6 2,9 5,6 7,9 48 53 49 4,5 3,3 3,4 4,9 8,9 3,5 5,3 3,4 3,2 4,8 2,8 3,2 30 41 83 8,0 8,3 4,1 3,0 4579 4840 4020 4770 480862 477710 472483 450220 480685 458490 454610 455719 461626 449179 157 102 163 156 145 te laiiis n itrs-ern db (neetbaig on including loans (interest-bearing debt interest-bearing and liabilities Other 184,5 125,6 156,3 130,2 115,7 165 145 125 131 137 Total assetsdividedbythenumberofemployees,including50% ofthejoint 1 377 835 1 321 965 889 1 255 1139 1 445 1 180 1 516 1 645 2248 2322 1448 3695 EBITDA divided by the weighted average number of shares on which earnings 55,8 72,0 150,6 228,4 280,7 dividedbyweightedaveragenumberofshares Headlineearnings inissue 35,0 50,2 Profi 34,4 tattributabletoordinary shareholders dividedbyweightedaverage 121,4 50,2 185,3 121,3 220,8 185,7 221,2 1 , 07 97 42 56 Operating profi Free cash fl5,6 tbefore interest andtaxation,includingnon-tradingitems owdividedbyshort-termandlong-termdebt repayments and 2,7 4,2 1,7 9,7 Interest-bearing loans including Bank deposits after netting off bank balances, 2,6 106,6 10,7 61,0 3,7 15,9 53,3 11,0 33,0 19,7 Profi tattributabletoordinary shareholders’ expressed asapercentage of 26,7 42,4 Operatingprofi tbefore interest andtaxation,excluding Trading, expressed as 9,6 75,7 Operatingprofi 14,7 tbefore interest andtaxation,includingnon-tradingitems 74,6 19,9 14,5 57,2 37,7 20,2 37,1 24,2 28,4 25,9 Total ordinary dividend/distributiondeclared relating tothefi Share pershare. priceatendofyearunderreview nancialyear. dividedbyearnings 8,0 4,1 12,0 4,7 35,0 6,5 52,0 7,0 2002 66,0 11,7 2003 2004 2005 2006 29 27 29 10 10 Total revenue dividedbythenumberofemployees, including50%ofthejoint 120 150 259 247 229 Total equitylesspreference share equitydividedbythetotalnumberof 110 127 183 314 461 12 13 09 10 06 Current assetsdividedbycurrent liabilitiesexcluding current portionoflong- 0,6 1,0 Interest bearingloansdividedbyEBITDA. 2,1 0,9 1,1 1,3 0,7 1,2 0,6 0,4 10,4 1,8 8,1 7,0 Operatingprofi tbefore interest andtaxation,expressed asapercentage of 9,6 6,6 14,5 to relating declared dividend/distribution ordinary (total by divided EBITDA 20,2 7,1 Dividendpershare dividedbytheshare priceattheendofyearunder pershare dividedbydividend/distribution pershare. Earnings 12,4 5,7 4,2 6,0 Total equityplusinterest-bearing loansdividedbyEBITDA. 5,5 9,0 5,0 4,2 4,3 4,3 4,4 3,4 4,4 2,7 4,0 3,5 4,3 3,3 2,6 3,4 3,6 shareholders’ fundsplusminority interest). negotiable) expressed aspercentage oftotalshareholders’ funds(ordinary and includedininventory, banksadvancesandliquidassetsshort-term in fi nancialassets,non-current assetsheldforsaleasdisclosedseparately Bank depositsafternettingoff bankbalances,cashondepositincluded divided bynetinterest paid. interest paid. shareholders’ funds. assets andshort-termnegotiablesexpressed asapercentage oftotal cash ondepositincludedinfi nancialassets,banksadvancesandliquid average ordinary shareholders’ funds. borrowings. liabilities, excludingshort-termborrowings andcurrent portionoflong-term percentage ofaveragetotalassets excludingdeferred taxation,lesscurrent and share ofassociateandjoint venture companies’profi t,expressed asa a percentage ofrevenue excludingTrading revenue. venture employees. venture employees. term borrowings. revenue. ordinary shares inissuelesstreasury shares. per share are based. treasury shares) the fi nancialyearmultipliedbythenumberofordinary shares inissueless review. during theyearunderreview. number ofshares inissueduringtheyearunderreview. 27 Grindrod Limited Integrated Annual Report 2011 28 Grindrod Limited Integrated Annual Report 2011 DIVISIONAL REVIEWS:FREIGHTSERVICES F Key fi agn(%) (%) (%) Number ofemployees onnetassets Return onordinary shareholders’Return equity Debt:equity ratio Margin Attributable income R318 nnilrto 2011 nancialratios R E

million I G H 14,25

Drybulk terminalcapacity T

0,18:1 4 956 13,9 16,2 13,2 S

million tonnes E 0,33:1 5 229 2010 12,1 14,6 10,1 R V group attributableincome attributable income Contribution togroup 60% 2011 contributionto 2011 contributionto I group revenue C Group Freight Services E 8% 60% S deliver superiorservicetocustomersfrom pittoportoncorridorswhere itoperates. The Freight Servicesdivisionoffers anintegratedlogistics servicesolutiontoitscustomersandaims businesses. Freight Servicescomprisesthegroup’s investmentinPortsand Terminals infrastructure andLogistics Luanda Walvis Bay ot n emnl Logistics Ports andTerminals Luderitz Bay Saldanha Town Cape Freight Servicesoperations areAfrica primarilylocatedinsouthern Seafreight Terminals Ports Rail Postmasburg Kathu Mossel Bay Kimberley Ulco Sannieshof Klerksdorp Gabarone Bloemfontein Kroonstad Rail operationsinAfrica Johannesburg Elizabeth Port Bethlehem Britz Sasolburg Lesotho Pretoria London East Harrismith Witbank Polokwane Ladysmith Secunda Pietermaritzburg Nelspruit Road transportation Matsapha Ships agencies Durban Ohrigstad Clearing and Intermodal forwarding Komatiepoort Richards Bay Nacala Maputo and/or Railoperations and/or ShipsAgencies Logistics and/orTerminals Road transportation Seafreight 29 Grindrod Limited Integrated Annual Report 2011 30 Grindrod Limited Integrated Annual Report 2011 were disruptedbya combinationofindustrialactioninthe of theupgradeterminalexpansion. Logisticsoperations coal terminaloperationsinMaputo duringthecommissioning expansion. Growth wasachieveddespitedisruptionsto the quarter of2011followingthecommissioningphasethree 480 000tonnesshippedonaveragepermonthinthelast coal terminalthroughput wasup101%on2010,with demand intheLogisticsbusinesssector. TheMaputo terminal utilisation,raileffi cienciesandimproved market The improved were earnings achievedthrough increased R22 millionfrom thedisposalofperishablecargobusiness. to R318million(2010:R262million)whichincludesaprofi tof (2010:34%).Attributableincomeincreasedearnings by21% Freight contributed60%tothegroup’s Servicesearnings segmental analysisintheannualfi nancialstatements. For thedetailedstatutoryincomestatement,refer tothe OPERATIONAL REVIEW Improve theBEEstatusofSouthAfricanoperation • RationaliseandattainfullcapacityutilisationforLogistics • Leveragegrowth opportunitiesforinfrastructure investment • Expandstrategicassetsandsupplychaincapabilities • Alignsupplychainstrategywithcommoditydemandto • KEY STRATEGIC OBJECTIVES DIVISIONAL REVIEWS:FREIGHTSERVICES Total equityandliabilities Attributable income Share ofassociateand Other liabilities Operating income Net debt Equity EBITDA Total assets Revenue Current assets Non-current assets/ Income statement Statement offi nancial position profi t joint venture companies’ investments businesses on theAfricancontinent maximise throughput 2 905 3 404 2 340 3 404 2 654 2011 2011 750 318 382 572 Rm 645 Rm 71 19 9 22 2 390 3 278 3 15 2 030 3 278 9 (6) 2 495 00Growth 2010 00Growth 2010 6 21 262 0 33 105 4 58 242 1 36 419 7 12 575 7 (38) 673 8 (4) 784 m% Rm m% Rm volatilityoftheRand/USDollarexchangerate. • lowshippingcontainervolumesandfreight rates;and • restricted availabilityofrailresources toservicedrybulk • The divisioncontinuestofacethefollowingchallenges: completionofthenewDurbanwarehouse facility. • establishmentofanIntermodalcontainerdepotintheport • jointinitiativeswithTransnet tofurtherimprove theMaputo • considerableimprovement incoalrailservice; • locomotivemanufacturingandleasingcontractssecured in • • conclusion ofbulkliquidterminaljoint venture with increase intheMaputocarterminalvolumesandRichards • Maputocoalterminalvolumesup101% at3,9million • portofMaputoachievingvolumes of11,8milliontonnes; • completion ofthedredging oftheportMaputoentrance • investmentinMaputo coal conclusionofa35%Vitol • completionofapre-feasibility studytoexpandtheMaputo • conclusion oftheMaputocoalterminalexpansionto • division delivered onanumberofstrategic objectives: Despite thechallengesexperienced,Freight Services half of2011. refi neryshortagesintheliquidbulkbusinessesduring fi rst due toplantshutdownsfollowingthetsunamiinJapanand road transportsectors,areduction incarcarrying volumes the expansionofMaputocoal terminalcapacity. after thecontractionincargovolumes andthecompletionof operations followinganumber ofyearsunderinvestment was utilisedinthereplacement offl eetinthe road transport (2010: R353million).Themajorityofthecapitalexpenditure of R34million,amountedtoR321millionfortheyear Capital expenditure, includingjointventure capitalexpenditure Capital expenditure andcommitments Maputo; terminal volumesinRichards Bayandthecarterminalin of MaputowithDubaiPortsWorld; and increase dedicatedrolling stocktoservicethesecorridors; for theroute-to-market requirements ofjuniorminersandto and Richards Bayrailfreight corridors’effi ciencies,tocater Sierra LeoneandMozambique; (“OTGC”); Oiltanking andCalulocalledGrindrod Calulo Bay coalvolumesin2011compared totheprevious year; tonnes (2010:1,8milliontonnes); channel toadepthof11metres; terminal inJanuary2012; feasibility inprogress; 10 milliontonnesterminalcompleted,withbankable conversion oftheexisting6milliontonnesterminalintoa coal terminalcapacityby20milliontonneswiththe 6 milliontonnes;

(continued) sustainability report onpages51to52): for theyearinclude(withfurtherdetailsprovided inthegroup Key environmental, (“ESG”)highlights socialandgovernance activeparticipationintheGrindrod group environmental • theinclusionofsocial(includinghealthandsafety) • • the introduction ofimproved sustainability personal director tobusinessunitlevelandisevidencedby: systems andoperations.Thisisoccurringfrom executive sustainability policies,practicesandreporting intobusiness In linewithKingIII,Freight Serviceshasstartedtointegrate SUSTAINABILITY proposed development. tonnes andfi nalisingthefeasibilitystudyforphase4 Maputo coalterminalfrom 6million tonnesto7,3million capital expenditure ofR330millionfortheexpansion R964 millionisplannedtobespentin2012withthemajor for 2012,ofwhichR45millioniscommitted.Afurther Capital expenditure ofR384millionhasbeenapproved investment ofapproximately US$800million. stockyard andrailwayinfrastructure. Phasefourrequires an 120 hectares, theconstructionoftwoadditionalberths,a project involveslandreclamation resulting inafootprintof feasibility stagecompletedinthesecondhalfof2011.The tonnes ofmagnetiteisprogressing asplanned,withthepre- create capacityfor20milliontonnesofcoaland10 Phase fouroftheMaputocoalterminalexpansionproject to Bay terminal,bringingcapacityupto3,2milliontonnes. terminal. AfurthercoalstockpilewasaddedtotheRichards has beeninvestedintherefurbishment andexpansionofthe tonnages subsequentlyachieved.To date,US$70million completed attheendoffi rsthalfof2011,with record The phasethree expansionofMaputocoalterminalwas and climatechangecommittee. the division’s CEO;and environmental andclimatechangecommittee,chaired by meetings andtheactivefunctioningofdivisional environmental itemsindivisionalexecutivedirectors’ manager’s bonusschemes; offi cer, seniordivisionalmanagersandbusinessunit performance criteriaintheFreight Serviceschiefexecutive provisions toremain abreast ofclimatechangelegislation • research anddevelopment planstokeepupdatewith • implementationofplansforenergyeffi ciencyprogrammes • • provision fornecessarytrainingandawareness and identifi cationofareas forimprovement ofenergyeffi• ciency procedures formonitoringsources ofGHGemissions • • the adoptionbyallbusinessesoffi vedivisional implementationofmonitoringanddivisionaldatacollation • 38,2%increase inoccupationalhealthandsafety(“H&S”) • defi• nitionof responsibilities forcarbonmanagementat achieved. Theplanincludes: implementation planoutlineshowtheseobjectivesare tobe 2011. Thestrategyconsistsofninecore objectives andthe Implementation Planwasfi nalisedandadoptedduring The Freight Services Climate ChangeStrategyand division duringtheyear. Regretfully there wasonework-related fatalitywithinthe requirements. development, soastobeprepared foranyforthcoming carbon footprint,and; sequestration optionstofurtherreduce Freight Services’ fuelsand new andemergingtechnologies,alternative control; within eachbusinessunitwhere Grindrod hasoperational carbon management; establishment ofeffective channels ofcommunicationfor in vehicles,buildings,plantandmachinery; immediate redress; objectives andtargetsidentifyinganomaliesfor on amonthlybasis,trackingprogress towards defi ned appropriate levelsandfunctionswithinthedivision; and wastewatermanagementairpollution. soil andgroundwater contamination,waterconsumption and GHGemissions,wastemanagement,prevention of environmental standards coveringenergymanagement systems formonthlyH&Sandenvironmental reporting; and achieved (76%in2010); during theyear, withanaveragecompliancelevelof87% audit reviews coveringkeybusinessunitswere completed Series (“OHSAS”)1800atallbusinessunits.Safetyrisk adoption ofOccupationalHealthandSafetyAssessment development ofnewhighriskH&Sstandards andthe spend aimedatimproving performanceinthisarea. The 31 Grindrod Limited Integrated Annual Report 2011 32 Grindrod Limited Integrated Annual Report 2011 investment. plan andforsub-concessionaires to undertakeadditional 2010 provided atime-lineforimplementingtheportmaster in 2011.TheMaputoportconcession extensionconcludedin from workingonemilliontonnesin1992to11,8 Over thepasttwodecadesportofMaputohasprogressed Islands, India,theMiddleEastandAsia. east coast,tothecountriesofEastAfrica,IndianOcean positioned fortradeandshipmentofcommoditiesupthe being handledattheMaputocoalterminal.Itisstrategically and motorvehicles,withcoalmagnetitecurrently for theexportandimportofbulkcargo,grain,containers in SouthAfrica.Theportissegmentedintodifferent terminals to theimportantindustrialhubsofGautengandMpumalanga Africa. Geographically, theportofMaputoisclosest The Maputocorridorisanessentialgatewaytosouthern in Mozambiqueuntil2042. has theconcessiontodevelopandoperateportofMaputo partners holding24,7%,49%and1,6%,respectively. MPDC Dubai PortsWorld,ofMozambiqueandlocal theGovernment Company (“MPDC”),remains at a24,7%shareholding, with The group’s investmentintheMaputoPortDevelopment Ports Ports andTerminals OPERATIONAL OVERVIEW DIVISIONAL REVIEWS:FREIGHTSERVICES income ofapproximately R117million. Terminals attributableincomeincludedonce-off contractual in ports,terminals,railandseafreight. The2010Portsand Ports andTerminals comprisesthegroup’s investments Margins (%) Attributable income Share ofassociateandjointventure companies’profi t Operating income EBITDA Revenue Income Statement Liquid bulk(m Drybulk (tonnes) Terminals Automotive (numberofvehicles) 3 ) Utilisation in 9 462164 168 333 35 147 2011 existing facilities.Previous expansionplansofanadditional further initiativesplannedtoincrease coalexportsthrough the marginally to3,8milliontonnes in2011(62%utilisation),with per annum.Volumes handledthrough thefacilitiesincreased infrastructure, haveacombinedcapacityof6,1milliontonnes are connectedbyconveyorbelttoTransnet PortTerminals The operations,whichare spread overfoursites,three ofwhich Richards Baycoalterminal annum isplannedfor2012. expansion ofcapacitythisterminalto1,5milliontonnesper strong commoditydemandandimproved railservice.The showed strong growth involumes2011onthebackof coal product, withacapacityof900000tonnesperannum The separatesizedcoalterminal,forthehandlingofaspecifi c interest intheMaputocoalterminal. enteredVitol intoanagreement whereby acquired Vitol a35% As referred tointhefi nancialdirector’s report, Grindrod and completed in2013byafurther1,3milliontonnes. to increase coalcapacityattheterminalduring2012,tobe four isprogressing. Theboard hasapproved expenditure terminal wascompletedin2011andtheplanningofphase The phasethree expansionoftheMaputocoalandmagnetite Maputo coalandmagnetiteterminal mining houses. current andprospective customers,whoincludethemajor Terminals strivetooffer acompetitiveroute tomarketfor Terminals Utilisation in 1 7 4200014850000 14250000 6 917577 7 4 4 0 340000 340000 171 340 8285 0 52000 52000 18 298 2010 2011 212 263 337 870 Rm 30 42

(continued) capacity Current 00Growth 2010 2920 219 3 (10) 14 29 237 296 674 m% Rm 8(51) 33 78 Planned capacity 2012 (2010: 114675m vegetable oilseason.Terminal volumesare now ontrack. 340 000m the terminalshavingatotalannual throughput capacityof of Durban(molasses)andCapeTown (vegetable oils)with Liquid bulkterminaloperationsare conductedintheports Tank terminals to theavailabilityofrailresources ontheMaputocorridor. terminal capacityplannedin2011hasbeendelayed,subject to 167000vehiclescomplementtheSouthAfricancar transhipment market.Theexpansionofterminalcapacity manufactured inGauteng,theterminalmainlyservices ports fortheimportandexportofvehiclesdeliveringto,or ideally situatedasacomplementaryporttotheSouthAfrican handled in2011(2010:18298).Althoughtheterminalis capacity of52000vehicleswith35147being with HöeghAutoliners(30%),hasanannualthroughput The Maputocarterminal,ownedandoperatedinpartnership Maputo carterminal with 2010. of 550000tonnesperannum,withtradingin2011line The terminalhandlesdrybulkcommoditiesandhasacapacity Walvis Bayterminal customer, followingthecustomer’s acquisitionbyathird party. annum. Volumes declinedin2011withintheexitofafertiliser cargo and30000twentyfootequivalentunits(“TEU”)per cargo andhascapacitytohandle700000tonnesofdrybulk cargo, baggedcargoaswellotherbulkandbreak bulk The terminalhandlesfertiliser, containers,steel,project Maydon Wharfterminal(Durban) tonnes perannumintotalisplannedtocommence2012. expansion ofthecoalexportcapacitybyupto10million term expansionplans.Thepre-feasibility studyforthefurther 500 000tonnesofcapacityhasbeenreplaced withlonger- (tonnes millions) Drybulk terminalcapacityandutilisation Coal Maputo Sized Walvis Bay Durban Richards Bay terminal Maputo coal aaiy21 tlsto 01Utilisation2010 Utilisation2011 Capacity 2011 0,3 0,3 3 0,5 . Terminal volumesdeclinedto69583m 0,6 0,6 0,7 0,7 0,9 0,9 3 ) mainlyduetoadelayedstart inthe 1,9 3,5 3,8 3,9 6,0 6,1 3

petrochemical industryonconcessionfrom Transnet. in theportofCoegatocaterrequirements ofthe bidder statustodevelopandoperateanewtankterminal throughout SouthAfrica.OTGChasbeenawarded preferred OTGC isfocusedonthedevelopmentofliquidbulkterminals handled through thefacility. also provide road basedtransportationofthecommodities terminal facilities,theoperationstradeinmolassesand high fl ashpointbulkliquidcargoes.Inadditiontothetank Durban terminalbeingmodifi edtocaterforthehandlingof capacity inbothoperations.Thiswouldalsoresult inthe Investigations are beingconductedtoexpandterminal contracted tobebuiltin2012. opportunities, withanadditional 24newbuildlocomotives existing base,public-private-partnerships andconcession The businessiswellplacedtofurtherexpandthrough its has refurbished initsownproduction facilityinPretoria. the balancebeingexistinglocomotivesthatRRLGrindrod are newlocomotivesthatRRLGrindrod hasconstructed,with Africa. Themajorityofthelocomotivesemployedinfl eet in SierraLeone,Mozambique,RepublicofCongoandSouth and leasedlocomotivesasat31December2011,deployed The businesshasexpandedrapidlywithafl eetof34owned operations. rehabilitation andmaintenance, locomotiveleasingandrail are provided, includinglocomotiveandwagonconstruction, Investments (Pty)Limited.Afullspectrumofrailservices (Pty) Limited,inpartnershipwithitsBEEpartnerSolethu RRL Grindrod (Pty)LimitedandRRLGrindrod Locomotives operations through the50%heldjointventure companies bulk infrastructure investments.Grindrod conductsitsrail Effective railoperationsare keytomaximisingutilisationof Rail Durban Town Cape (m Liquid bulkterminalcapacityandutilisation 3 thousands) aaiy21 tlsto 01Utilisation2010 Utilisation2011 Capacity 2011 57 70 80 99 115 260 33 Grindrod Limited Integrated Annual Report 2011 34 Grindrod Limited Integrated Annual Report 2011 The fl eetisactiveintheentireAfricanDevelopment southern units inusetoserveboththeagricultural andminingsectors. The drybulkfl eethasbothsidetippingand bottom discharge major vehiclemanufacturers. Durban carterminalonbehalfofTransnet PortTerminals and a vehiclestevedoringanddrivingservicefunctionwithinthe options throughout Africa. Thedivisionalsoprovides southern logistics are undertakenbyroad carriers,rail,orself-drive customer serviceandabilitytomeetdeadlines.Autocarrier motor vehicledeliveryindustryforriskmanagement,reliability, vehicle trackingsystem.Thecompanyishighlyratedinthe is theelectronic interfacewithcustomers,whichincludesa car manufacturers andotherimporters.Integraltothisservice logistical servicestoasubstantialnumberofSouthAfrican Africa, providingof motorvehiclesinsouthern distributionand The road transportationoperations are aprominent transporter Road transportation Logistics be restructured andrepositioned. Safmarine/Maersk group, resulting inthebusiness having to bythe in 2011,drivenlargebychangingshippingpatterns region. ThebusinessmodelofOACLcameunderpressure African operates acontainershippingserviceinthesouthern with Safmarine.OACLisaccountedforasanassociate. Africa ContainerLines(Pty)Limited(“OACL”),inpartnership Seafreight comprisesthegroup’s 49%investmentinOcean Seafreight Rail SafetyRegulatorandisISO9001:2008accredited. The companyisaregistered permitholderwiththe National DIVISIONAL REVIEWS:FREIGHTSERVICES throughout Africa. southern in particularwiththeircustomerandharbourintelligence support fordevelopingtheotherbusinesseswithingroup, operations. Thelogisticsbusinessisintegralinproviding forwarding, shipsagencyandothercustomerservice in transportation,warehousing, intermodal,clearingand The Logisticsdivisioncomprisesthegroup’s investments Margins (%) Attributable income Share ofassociateand Operating income EBITDA Revenue Income statement profi t joint venture companies’ 2 035 2011 106 119 6,0 235 Rm 29 1 19 1 716 00Growth 2010 1391 123 m% Rm 1,0 410 23 5327 – 25 27 Vanguard Rigging(Pty)Limited. joint venture heavyliftlogisticsandengineeringcapabilities, The road transportationoperations alsoincludethegroup’s secondarydistributionoffuelfrom terminalsanddepotsto • primary distributionoffuelfrom refi• neriesandimport runningofdepotsonbehalfoilcompanies; • optimisationstudiesforandwithcustomers; • transportationofliquidpetroleum gas; • depots andinclude: The servicesoffered are from awelldistributednetworkof Africanregion.services tovariousoilmajorsinthesouthern The liquidbulkfl eetprovides primaryandsecondarydistribution made upof8,12and34tonneTautliners. of baggedagriculturalproducts, withitsspecialisedfl eet serviced. Thedivisionalsooffers regional distributionservices Countries (“SADEC”)region, withallthemaincorridorsbeing new developmentinMaputoscheduled for2012. consolidation andexpansionof itsexistingoperations,witha margins remain tight.Intermodalcontinuestoinvestin the prior yearfollowinganincrease inminingvolumesalthough The Intermodaloperation’s performanceimproved onthe Intermodal performance. customers tooptimiseplanningandreview ofthesupplychain The systemalsoprovides managementinformationfor ensure consistencyandaccuracyintrackingstatusreporting. documentation process ateachcriticalpointinthepathto Compuclear/Nutrack, monitorstheshippingand The company’s marketleadinginformationsystem, inexcessofR3billion. turnover with acustomerbaseofmore than1600regular clientsand Africa’s topthree freight forwarders andlogisticsproviders, by sea,airoroverland.Röhlig-Grindrod isamongSouth forwarding servicesforimportandexportcargoesmoving total managementcontrol overtheirworldwideclearingand throughout SouthAfrica.Röhlig-Grindrod offers customers is complementedbytheGrindrod networkandpresence continents through theprincipalmemberRöhlig &Co,and The companyisrepresented inalltradingcentres across fi ve in late2008and2009. continued growth inthebusiness sincethemarketretraction Thecompanyexperienced with Röhlig&CoInternationale. Grindrod’s 50%heldinvestmentinRöhlig-Grindrod, together Clearing andForwarding operationsare conductedthrough Clearing andForwarding customers. and toneighbouringcountries; facilities toterminals,depotsandlargecustomers,locally

(continued) customers toensure forward andbackward integration. Key accountmanagersare positionedintheoffi cesoftheir resources includingateamof700dedicatedemployees. of 500000m merger ofacomplementarynationalinfrastructure inexcess Greater supplychaineffi cienciesare nowoffered through the containersalesandleasing. • comprehensive emptyandfullcontainerdepotservices; • fullservicecountrywideandoverborder transportationof • complexwarehousing anddistributionsolutionsincluding • containerised cargocomprising: Grindrod Intermodalprovides acompletesolutionfor containerised cargobyroad andrail; cross-dock andbondedwarehousing; 2 , assetsoverthevalueofR150millionand • Voigt Shipping. MitchellCottsMaritime;and • King&Sons–non-liner; • King&Sons–liner; • EyethuShipsAgencies; • operate underthefollowingbrands: markets, particularlyincontainershipping.Thebusinesses combination ofthestrong Rand/USDollarandweakshipping Operations were negativelyimpactedduringtheyearbya including shipshusbandryalongtheSouthAfricancoast. shipment ofbulkandbreak bulkcargo(liquidanddry) market withafulleconomicalandeffi cientserviceinthe Ships Agenciesprovides boththelocalandinternational Ships Agencies 35 Grindrod Limited Integrated Annual Report 2011 36 Grindrod Limited Integrated Annual Report 2011 DIVISIONAL REVIEWS:TRADING T Key fi euno e ses(%) (%) (%) Number ofemployees onnetassets Return onordinaryReturn shareholders’ equity R Debt:equity ratio Operating marginpertonne(includingJVs) Operating margin Attributable income R144 nancial ratios R A

million D I N Tonnes traded 7,5 G

million 1,31:1 24,22 2011 16,3 495 6,3 0,5 0,95:1 23,07 2010 19,6 369 9,7 0,7 income Contribution togroup 27% group attributableincome 2011 contributiontogroup 2011 contributionto revenue Group Trading 81% 27% through utilising thevariousofferings andkeyassetsofthegroup togetherwithinvestment inkeysupplychains. This singleentitywilldevelopits businessthrough thecontinuedprovision ofintegrated,valueaddingsolutions toitscusto The drybulktradingbusinesses, AtlasandOreport are beingrebranded andwilloperateunderthesinglebrand,Grindrod Trading has atargetmarketthatincludes intermediaryandend-usersofagriculturalcommodities,industrial rawmaterialsandmarinef commodities andgeographical locationsallowthedivisiontodevelopsynergiesfurtherenhance customerservice.Thedivisio customers andsupplierswith aneffi cientcosteffective one-stop service.Complementarybusinesspracticesacross various A keysuccessfactoristheabilitytoleverageshipping,port, terminalandlogisticsoperationsoftheGrindrod group, provid that includesorigination,procurement, marketing,shipping,logisticsmanagement,riskmanagementandfi nancingactivities. The Trading divisionpridesitselfindevelopinglastingcustomerandsupplier relationships, providing anenhancedserviceoff coal andmarinefuelsaround the worldthrough completesupplychainmanagement. globally tradedcommodities.Thisincludessourcing andmarketingagriculturalcommodities,industrial rawmaterials, The Trading divisionaimstoprovide valueaddedsolutionstoproducers andconsumersofafocusedrange commodities Agricultural Atlas Oil seedproducts Oil seeds Grains Global tradingoperations raw materials Industrial Oreport Marine fuels Industrial rawmaterials Agricultural commodities Stainless steel/ steel products Chrome Coal Marine fuels Cockett Marine fueloiland lubricants mers ering uel. ing n . 37 Grindrod Limited Integrated Annual Report 2011 38 Grindrod Limited Integrated Annual Report 2011 • • • commissioningofanadditional chrome ore recovery plant; • • • • Trading highlightsfortheyearinclude: US$3,33 from US$3,14in2011. margin pertonne,includingjointventures, increased to increased commoditypricesandproduct mix.Operating has seenasignifi cantincrease in revenue, primarilydueto 1,7% increase involumesovertheperiod.TheTrading division in 2010to7,5millionmetrictonnes2011,representing a Trading tonnage increased from 7,4millionmetrictonnes segmental analysisintheannualfi nancialstatements. For thedetailedstatutoryincomestatement,refer tothe OPERATIONAL REVIEW Fully developexistingbusinessesinlinewithmarket • Investmentinsupplychainprojects • Utilisationofgroup assets,servicesandresources • Ensure long-termsustainabilityofbusiness • Improve operatingmarginpertonne • Provide integrated,valueaddingsolutionstoproducers • KEY STRATEGIC OBJECTIVES DIVISIONAL REVIEWS:TRADING Total equityandliabilities Other liabilities Net debt Equity Attributable income Share ofassociateand Total assets Operating income Current assets EBITDA investments Non-current assets/ Revenue position Income statement Statement offi nancial profi t joint venture companies’ business concluded subsequenttoyear-end. togrowpartnership with Vitol the sub-Saharancoaltrading marine fuel;and contracted tankstoragetosupport physicalsupplyof marine fuelsimprovement involumeandmarginpertonne; supply inSouthAfrica; crop fi nanceprogramme tooriginateagricultural commodity acquisition ofmillingoperationsinSouthAfrica; grain silosinBeira,Mozambique; conclusion ofajointventure transactionforconstructing demand andtargetopportunitiesforgrowth and customers 29 189 3 025 1 499 1 146 3 025 2 585 2011 2011 144 155 166 Rm 380 440 Rm 33 27628 22 796 2 757 6 (72) 1 364 2 757 1 17 2 211 00Growth 2010 00Growth 2010 2 20 120 6 (6) 165 7 (4) 173 7 121 678 1 60 715 4 (20) 546 m% Rm m% Rm 2585 1 are mitigatedasdescribedbelow: Trading continuestofacethefollowingchallenges/riskswhich and growth. operational effi ciencyandensure sustainability, profi tability centralising logisticsandbackoffi cefunctions,tomaximise operations underasingleinformationtechnologyplatformand operate asasingleentity. Thiswillincludeconsolidatingall Grindrod Trading, theAtlasandOreport businesseswillalso In additiontorebranding some oftheoperationalbrandsto a newcorporateandmanagementstructure inthedivision. One ofthekeyinitiativesinearly2012willbetoputplace awareness andresponsibility amongemployees. and theTrading divisioncontinuestopromote environmental Environmental andclimatechangeissuesremain akeyfocus team spiritandafavourableworkingenvironment. integral partofthebusinessthatstrivestodevelopapositive Talent management,career developmentandtrainingforman stability duringmarketvolatility. Lasting customerandsupplierrelationships helptoensure and compliancepractices. key serviceproviders and through strong riskmanagement operational riskswhichare minimised through partneringwith Involvement inthephysicalsupplyofcommoditiesgivesriseto Operational risk maintenance ofkeybankingrelationships. fl owandworkingcapitalmonitoringforecasting and working capitalfacilities.Thisismitigatedbyconstantcash Rising andvolatilecommoditypricescanputpressure on Liquidity risk credit assessmentsofcounterpartiesmitigatesthisexposure. Credit policies,combinedwithcredit insuranceand diligent Credit/counterparty risk frameworks. and qualifi ed resources operatingunderstrictcompliance price movements.Thisismitigatedthrough hedging,research events canexposethetradingbusinessestolargecommodity Constant pricevolatilityimpactedbyfundamentalsandmacro Market risk feasibility ofparticipating incarbontrading. eco-effi ciency measures andbegantoinvestigate the and climatechangecommittee, implementedoffi ce-based actively participatedintheGrindrod group environmental executive offi cer’s bonusscheme.Duringtheyeardivision performance criteriahavebeen includedintheTrading chief executive meetingsandimproved sustainability personal risks andbusinessopportunitiesare discussedatdivisional and practicesintocore businessfunctioning.Sustainability The divisionmadeinroads intointegratingsustainabilitypolicies SUSTAINABILITY

(continued) ore miningcompanies,withtheprincipalobjectiveofsecuring or incollaborationwithplatinumgroup metalsand/orchrome develops andoperateschrome recovery plantsonbehalfof Chromtech isajointventure operationwhichdesigns, Chromtech inparticular, hasbecomeamajorprofi tcontributor. strengthened thestrategicbaseofcompanyand operations intheindustrialrawmaterialssectorhavefurther In addition,investmentsinbothupstream anddownstream products, chrome andcoal. Oreport’s product portfolioincludes stainlesssteel,steel payment. through todeliverythefi nalpurchaser andcollectionof complete managedsolutionfrom thematerials’pointoforigin distribution ofindustrialrawmaterials.Oreport provides a in theworldwideprocurement, physicalmovementand Oreport marketingorganisationspecialising isaninternational Industrial rawmaterials sourcing anddistributioncapability. brokers across theglobefurthersupportsAtlaswithworldwide commodity. Long-standingrelationships withcommodity hedging, logisticsandriskmanagementrelated toeach Atlas isresponsible formanaging themarketing,sourcing, to create valueforallstakeholders. maximise control overthesupplychain,optimiselogisticsand Atlas hasmadestrategicinvestmentsinkeysupplychainsto Africa, SouthEastAsiaandtheWest CoastofSouthAmerica. its customersinSouthAfrica,sub-SaharanNorth around theglobeandmanages thesupplychainactivityto predominantly grains,soyabeanmealandoilseedsfrom security inpriceanddeliverytoitscustomers.Atlassources trading businesssourcing qualityproduct globallywith Margin/mt Atlas Trading andShippingisabulkagriculturalcommodities Agricultural commodities OPERATIONAL OVERVIEW Volume traded(mmt) 2011 2010 7,37 7,50 terminal operations. Africa andissupportedbyGrindrod’s interest instrategiccoal origination, logisticsandmarketingofcoalinsub-Saharan inajointventure,Management withVitol, willfocuson mining process. chrome concentratefrom theby-products oftheplatinum and operationofchrome recovery plantsfortherecovery of intellectual capitalinthedesign,development,construction Chromtech hasbecomeapremium supplierofengineering The concentrateiscurrently exportedtoChinaand ferrochrome and/orotherchrome-related products. reliable sources ofconcentrateforexportorconversion into sale intheTrading balancesheet. assets andliabilitiesofCockettMarineare shownasheldfor introduction ofa50%strategicpartnerintothebusiness.The To furtherexpandthisbusiness,Grindrod negotiatedthe quality risks. minimising theexposure to fuelvolume,delivery, priceand of scalewithhigheravailabilityproducts andserviceswhile Cockett provides broad marketaccess,meaningfuleconomies highly fragmentedbunkermarket. from itsconsiderablepurchasing powerandknowledgeofa fuels perannum.Clientsare therefore abletodirectly benefi t Cockett suppliesapproximately fi vemilliontonnesofmarine trading teamwithdedicatedin-housetechnicalsupport. fuel sectorsupportedbyahighlyexperiencedandmotivated locations. Cocketthasanexcellentreputation inthemarine developing anetworkofphysicalsupplyoperationsinstrategic global servicetoitsclients.Inaddition,Cockettiscurrently networkofoffideveloped aninternational cestodelivera and physicalmarinefuelsuppliersintheworld.Cocketthas has grown tobeoneof the largestvalueaddedresellers The CockettMarineOilgroup was establishedin1979and Marine fuels 2011 2010 US$3,14 US$3,33 R23,07 R24,22 39 Grindrod Limited Integrated Annual Report 2011 40 Grindrod Limited Integrated Annual Report 2011 DIVISIONAL REVIEWS:SHIPPING S agn(%) (%) onordinaryReturn shareholders’ equity Debt:equity ratio Margin Key fi euno e ses(%) Average numberofshipsoperated Number ofemployees onnetassets Return Ship operating Long-term charter Owned Attributable income attributable income Contribution togroup 1% R7 nancial ratios H

million I P P I N G 0,45:1 2011 2011 442 0,2 0,8 1,1 66 30 20 16 0,31:1 2010 2010 15,4 10,3 ships operated Average numberof 66 497 9,8 69 35 24 10 group attributableincome 2011 Contributionto 2011 Contributionto group revenue Group Shipping 1% 10% bunker tankers,handymaxbulkcarriersandtheParcel Service. Both brandsare supported byshipoperatingactivitieswhichincludesshorter-term operationofproducts tankers, bulk carriers. Shipping(“IVS”)operatesownedandlong-termchartercapesize,panamax,handymaxhandysize Island View Drybulk tankers; and Shippingoperatesownedandlong-termcharteredUnicorn medium-rangeandsmallproducts tankersandchemical Tankers The Shippingdivisionoperatesundertwokeybrandsinsectorsofthemarket: products Small Owned andlong-term chartered Medium- products range Tankers Chemical Products tankers Ship operating activities Global fl tankers Bunker eetloadingandunloadingareas Handysize Drybulk Tankers Owned andlong-term Handymax chartered Panamax Drybulk Capesize Ship operating Service activities Parcel Handymax 41 Grindrod Limited Integrated Annual Report 2011 42

rf rmondad ad-Hny aa eim Growth Chemical Small range Medium- Capesize max max Pana- size Handy- Handy- Grindrodlong-term chartered ships Profi tfrom ownedand Limited Integrated Annual Report 2011 segmental analysisintheannualfi nancialstatements. For thedetailedstatutoryincomestatement,refer tothe Financial performancebycargotypeissummarisedbelow: OPERATIONAL REVIEW • • • • • • KEY STRATEGIC OBJECTIVES DIVISIONAL REVIEWS:SHIPPING Drybulk (Rmillion) Tankers (R million) Total –Rand Total –US$ million Foreign exchangelosses Funding costs/taxation Overheads Impairments Shipbuilding costs Attributable income Profi tfrom shipsales Share ofassociateand activities Profi tfrom shipoperating (US$ million) Operating income rf U$mlin 9–1 4 (3)(1) (4) 2 11 – 19 Profi t(US$million) EBITDA vrg al ot(S)9701 0 0 6401 0 23014300 12300 16000 26400 9200 13000 9700 Average dailycost(US$) Revenue vrg al eeu U$ 3001 0 4002 0 46096013300 9600 14600 27900 24000 13400 13000 Average dailyrevenue (US$) Income Statement Average numberofowned/ profi t joint venture companies’ ogtr hree hp 5811203269274,0 2,7 6,9 3,2 2,0 1,1 15,8 long-term chartered ships operating capability Continue todevelopandstrengthen theglobalship handysize bulkcarriers Long-term chartersofJapanesebuilthandymaxand effi cientnewbuildinghandysizebulkcarriers Purchase ofwell-pricedpredominantly Japanesebuilt fuel based onresults Rationalise operationofshipsinthevariousshippingpools levels Long-term chartersofMRproducts tankersatattractive range (“MR”)products tankers Purchase ofwell-pricedfueleffi cientnewbuildingmedium 3 597 2011 188 Rm 14 30 7 1 (10) 4 010 00Growth 2010 6 (98) 362 9 (92) 392 9 (62) 497 m% Rm ukcrir Tankers Bulk carriers 366 3 • • • • • • Highlights fortheyearinclude: Total equityandliabilities Other liabilities Net debt Equity Total assets Current assets Non-current assets/ position Statement offi nancial investments rates fortheyear. achievedoutperformedaveragespotmarket daily earnings barge businesses;and good performanceoftheSouthAfricantankerandbunker into anestablishedandrecognised industryplayer; continued developmentoftheHandymaxoperatingdivision Far Eastviaanewjointventure; realignment andexpansion oftheParcel Servicetothe drybulk andtankeroperations; from theUnitedKingdom to Singapore toconsolidatethe completion ofrelocation ofUnicorn’s operationsoffi ce markets ofthelast20years; and dryduringoneofthemostvolatilechallenging contractual performancebyallcounterpartiesbothinwet

(continued) 5 005 1 487 3 281 5 005 4 382 2011 13 200 15 100 237 623 Rm (141) 35,7 148 (24) (15) 15 24 (1) 7 1 2 – – 3 986 16 2 827 3 986 2 28 3 428 280(3) 12 800 750(14) 17 500 00Growth 2010 8 (18) 288 7 71 871 5 12 558 m% Rm 415 34,1 Total 2011 1 (64) 416 6 (98) 362 5)(161) (54) 2)(11) (27) 9(98) 49 9(48) 29 0(60) 60 6 83 (6) 9 122 (9) 1 100 (1) (100) 3 –– 2010 oa % Total achievinga 15% improvement inship-based GHGemissions • Convention strictcompliance withMARPOL(International • doublingofoccupationalH&Sspendaimedat driving • during theyearincluded: Other sustainabilityperformancehighlightswithinthedivision and climatechangecommittee. is alsoanactivememberoftheGrindrod group environmental to group levelisnowdone through oneseniormanager, who into businessoperationsandstrategy. Standardised reporting sustainability-related risksandopportunitiesare incorporated management andreporting and toimproving theway during theyearintermsofstreamlining SHEmonitoring, good peopleatalllevels.Thedivisionmadesignifi cantinroads aspect ofthisisthetraining,managementandretention of and hasanenviableperformancerecord inthisarea. Akey safety, healthandenvironmental (“SHE”)managementsystems The Shippingdivisionhasalwaysmaintainedworld-class SUSTAINABILITY carrier sectors. specifi callyintheMRtanker, handysizeandhandymax bulk Management willcontinuallymonitortheseopportunities long-term charteropportunitiesare expectedtomaterialise. the tankeranddrybulksectors,anumberofacquisitions small, duetothecurrent diffi cultmarketconditionsinboth While thenetincrease inthefl eetin2011hasbeen relatively (weighted byrevenue) ofvessels already undercontractfor2013. in 2012willlockUS$20millionofoperatingprofi t,with13% Forward contractson45% (weightedbyrevenue) ofvessels 3,5 overthe31December2010fl eet. and long-termchartered fl eetof38,5ships,anetincrease of At 31December2011,theShippingdivisionhadanowned effi cienciesandgoodpoolperformances. rates fortheyearthrough forward contractcover, operational Average achievedwere dailyearnings aboveaveragespot per 1000nautical mile(NM)were alsosurpassed; Air pollution(SOx andNOx)emissionsimprovement targets effi ciency year-on-year (5% improvement targetsurpassed). year; record ofzero signifi cantoilspillsforthe sixthconsecutive which facilitatedthedivision achievingtheremarkable on-board managementsystemsandongoingtraining, for thePrevention ofPollutionfrom Ships)through certifi ed the year; cases (fourin2010)andtwolosttimeincidentsfor its outstandingrecord reporting three medical treatment further improvements inthisarea. The divisionmaintained aeiePnmxSpaa Handysize Supramax Chemical tankers Smalltankers Panamax MR tankers Capesize 4,5 7 01(oa 85 2010(total35,0) 2011 (total38,5) 4 3 17 2 1 Fleet 7,5 2,5 4 3 2 15 1 • chemical tanker earnings remained chemicaltankerearnings poor, however, there • long-term chartercontractsatattractiveratesontwo • smallproductswere tankerearnings alsoaffected by • oversupply: weighing heavilyonoildemandalliedtocontinuingfl eet sovereign debtworriesandasluggishAmericaneconomy The tankerbusinesshadadiffi cult year, withEuropean performance. continues tobeoneoflong-standingreputation forbluechip names inthetankerindustry. Unicorn’s competitiveadvantage Scorpio, HanGangandStoltpools,allrecognisable bluechip rates. Tankers are currently employedintheNavig8,Dorado, which operateonamixofcontractcoverandspotmarket the fl Shippingemployssomeofitsshipsinpools eet.Unicorn Contract coverisderivedfrom time chartering-outaportionof fi nancialstandingandtheimportanceplacedon relationships. long-standing duetoGrindrod’s reputation, serviceoffering, and variousblue-chipcustomers.Mostcustomersare The division’s customerbaseconsistsofoilmajors, traders pools inwhichitparticipates. along withmaintaininganactiveandvisiblepresence inthe highqualityand specialised tonnage division suppliesmodern, African offi ceprovides marineandtechnicalservices.The ShippingoperatesfromUnicorn Singapore andtheSouth Attributable loss Share ofassociateand Operating income EBITDA Revenue theemploymentofkeystaff around theworldhasresulted • duringtheyeartankeranddrybulkdivisionswere • adatacentre hasrecently beeninstalledintheSingapore • amarinemanagementsystem,Bassnet,isintheprocess of • Tankers OPERATIONAL OVERVIEW (loss)/profi t joint venture companies’ are couldimprove. encouraging signsthatearnings rates; and where were theearnings impacted duetosoftmarket fi rstquarterof2011andthesevesselswere placedinpools owned medium-rangetankers terminatedattheendof ongoing highmaintenanceissues; as retention mechanismsforkeypersonnel. team. Longandshort-termincentiveschemesare inplace in thestrengthening ofadynamic,highlyexperienced Shipping division;and and Durban,allowsformore effi cientmanagementofthe together withtheconsolidatedoperationsinSingapore restructured toreport tooneshippingexecutive,which with theDurbanoffi ces; offi cewhichimproved effi cienciesandcommunications department; will assistinimproving theoperatingstandards ofthis safety, crew managementandprocurement modulesand being installed.Thisencompassesplannedmaintenance, 1 023 2011 (141) (149) Rm (47) (1) 3 (10) 1 132 00Growth 2010 2 (129) 125 m% Rm 5)(161) (54) 8(493) 38 (200) 1 43 Grindrod Limited Integrated Annual Report 2011 44 Grindrod Limited Integrated Annual Report 2011 ml* 0 5 10250 9750 14750 9000 14250 5285 Small** Medium-range* shipping ofcargoesworldwide. focus ofIVSistoremain areliable andtrustedpartnerinthe party tonnageandalmostfour decadesofexperience,the Mozambique. Through fl acombinationofmodern eet,third United Kingdom,SouthAfrica,Japan,theNetherlandsand IVS isheadquartered inSingapore withoffi cesinCanada,the improved earnings. participation inseveralpoolswhichisexpectedtoresult in Management isintheprocess ofrationalisingthedivision’s long-termcharterrates. without committingtolowearning andensuringtheflmaximising earnings eet is fullyemployed The keychallengesfacingmanagementcontinuetobeoneof supply. large order booksare delivered anddemandcatchesupwith market isexpectedtoimprove into2013asthelastof demand, whichwillresult inlow rates.However, thetanker as European sovereign debtworriescontinuetodampen Tanker willfaceanotherdiffi divisionearnings cultyearin2012 arbitration. against thecostofvessels.Boththesecancellationsawait exchange contractentered intoin2009whichwasahedge in thewrite-off ofowners’costsandexpensingaforeign resultingimpact onthesecondhalfof2011earnings, The cancellationofthesetwosmalltankershadanegative were cancelled. cancelled vessels,afurthertwo16500dwtproducts tankers terms withaChineseshipyard, inadditiontothree previously term fi nancearrangement.Duetoadisputeoncontractual 46 700dwtMRproducts tanker previously heldunderalong- products tankerinajointventure andexercised anoptionona 16 500dwt(small)products tankers anda52600dwtMR During theyeartankerdivisiontookdeliveryoftwo attractive bymanagement. contracted forfuture long-termcharteratlevelsconsidered Two newbuildingMRfueleffi cientproducts tankerswere size poolisexpectedtobebenefi in2012. cialtoearnings decision tomoveanumberofvesselsintolargerdeadweight fromattractive rates,earnings thespotmarketwere poor. The While aportionofthesmalltankerfl eetwascontractedoutat (Meaningful smalltankeraveragespotratesarenotavailable) (Meaningful chemicaltankerratesarenotavailable) Managementassessmentfor“Small” ** Limited Source:ClarksonsResearchServices * Tanker charterratesatthedateofpreparing thisreport were asfollows: DIVISIONAL REVIEWS:SHIPPING U$prdy U$prdy (US$ perday) (US$ perday) (US$ perday) ptrtsrts rates rates Spot rates tm hre timecharter timecharter ahighlevelofcontractcover andtheintroduction ofspot/ • thepanamax shipscontinuedtogenerateprofi• tsunder • handysize shipsgenerated goodprofi tsduetoa of tonnageinthemarketandongoingpiracydeviationcosts: The drybulkbusinessperformedwelldespiteanoversupply options atanopportunetime. during thecharterperiod,whichallowsfl exibilitytoexercise to acquire thevesselsatfavourablepre-determined prices to 10years.Mostofthelong-termchartersincluderight The fl eetismade upofownedandlong-termcharters mix ofcontractcoversandspotmarket. are employedintheIVS/Lauritzen poolwhichoperatesona contracts ofaffreightment. Mostofitshandysizebulkcarriers of itsfl eet,selling forward freight agreements andenteringinto Contract coverisderivedfrom time chartering-outaportion handysize, handymax,panamaxandcapesizebulkcarriers. close relationships withits customersandfocusesmainlyon prides itselfonitsservice,reputation, fi nancialstandingandits established reliable partner abletooffer aqualityservice.IVS to becounterpartieswhoare looking forafi rstclass,long- strong forward opportunities.Thetargetmarketcontinues a carrierofchoicefornumbermajorgrainhouseswith IVS isfi rmlyestablishedasaglobaloperatorandhasbecome Attributable income Share ofassociate Operating income EBITDA Revenue Drybulk companies’ profi t and jointventure n-erThree-year One-year year inthissector. market operatingintothecape fl eetensured aprofi table their fi xedincomecharters; and operation; by theIVS/LauritzenPoolalliedtoeffi cient,lowcost fl eet combination ofabovemarketcoverandgoodperformance

(continued) (US$ perday) 2 574 2011 148 179 235 Rm 15 Average spotrates 7 587 2011 7 (11) 2 878 00Growth 2010 1 (64) 416 (50) (37) 354 372 m% Rm (US$ perday) 650 2 7 213 2010 operation ofhandymaxbulkcarriersandtheParcel Service. products Calulobunkertankers,short-term tankers,Unicorn Calulo Ship operatingactivitiesconsistprimarilyofUnicorn page 44. in theTankers segmentonpage43andthe drybulksegmenton (%) The shipoperatingactivityfi gures intheabovetableare included Gross margin Gross profi t Revenue Ship operatingactivities the handysizesectorwillbelimited. handysize vessels,isalsoatrecord levelsandfl eetgrowth in On thepositiveside,scrappingofoldships,inparticular months forthedrycargomarket. sometime in2013,thereby presenting achallenging12to18 17000 This willcontinuetoskewthesupply/demandequationuntil 11875 lower freight ratescaused byalargeoversupplyoftonnage. 9500 The keychallengefacingthedrybulkdivisionispotentially 15250 term charters,a32400dwthandysizebulkcarrier. 11500 carrier, andexercised apurchase optionononeofitslong- 8750 bulk carrierinajointventure anda61000dwthandymaxbulk 4708 32 500dwthandysizebulkcarriers,a28000 8212 During theyeardrybulkdivisiontookdeliveryoftwo 8184 are startingtomaterialise which managementare assessing. of interesting potentiallylucrativeacquisitionopportunities dry cargoshippingmarketisnowoccurringandanumber The longanticipatedmajorcorrection intheinternational not achievable. quarter of2011,contractingadditionalprofi tablecoverwas cover. therapiddrop infreight With ratesthrough thefourth The drycargoownedfl eethasa reasonable levelofforward Limited Source: ClarksonsResearchServices Capesize Panamax Handysize Drybulk ratesatthedateofpreparing thisreport were asfollows: 2 796 2011 113 Rm 4 7 18 2 371 00Growth 2010 8 (40) 188 m% Rm (50) 8 U$prdy (S e a)(US$ perday) (US$perday) (US$ perday) ptrtsrtsrates rates Spot rates iecatrtimecharter time charter • Unicorn CaluloBunkerServices(Pty)Limited,which Unicorn • CaluloShippingServices(Pty)Limited,which Unicorn • of twocompanies: an empowered SouthAfricanpetrochemical group, consists jointventureThe Unicorn withCaluloServices(Pty)Limited, expected toimprove overthe2011profi ts. intheParcelEarnings ServiceandHandymaxdivisionsare controlled, increasing. further withboththenumberofcargoescarriedandships of theyear. TheHandymaxoperatingbusinessesdeveloped affected byongoingpiracyissuesparticularlyinthefi rsthalf were steadyintheParcel Service,marginswere adversely and bunkertankerbusinessesperformedwell.Whilevolumes Ship operatingactivitieshadasatisfactoryyear. Thetanker requirements. used from timetoifthe positioningandcostingmeetthe a short-termbasiswiththedivisions’long-termfl eetbeing Handymax operatingdivisions,vesselsare chartered-in on In order toservicethecontracts intheParcel Serviceand of long-termrelationships withbluechipcounterparties. Pacifi c andIndianOceantrade routes through thedevelopment The Handymaxoperatingdivisionconcentratesmainlyon 30 years. number ofclientshavingbeencontractpartnersforover world’s largestmining andchemicalcompanies,witha ship loads,hasacustomerbasewhichincludesthe of bulkparcels from different customersintosingle The Parcel Service,whichcombinesalargevariety n-erThree-year One-year agreements. majors eitherviacontractsofaffreightment ortimecharter ports onamixoflongandshort-termcontractstooil operates sophisticatedbunkertankersintheSouthAfrican majors; and and operateschartered-in product tankersforthelocaloil focuses ontankershippingtheSouthAfricancoast group’s presentation onthewebsitewww.grindrod.co.za. results A fl eet overview and contract cover information are includedinthe are andcontractcoverinformation eet overview (US$ perday) Average spotrates 15 639 14 000 10 552 2011 (US$ perday) 33 298 25 041 16 428 2010 45 Grindrod Limited Integrated Annual Report 2011 46 Grindrod Limited Integrated Annual Report 2011 DIVISIONAL REVIEWS:FINANCIALSERVICES F Key fi aia dqayrto(%) (%) Number ofemployees Capital adequacyratio onordinary shareholders’Return equity Attributable income group income Contribution to 11% R58 nancial ratios I N million A N C I A deposits Increase in 44% L 2011 12,8 13,7 108

S 2010 E 13,3 14,9 88 R V group attributableincome 2011 Contributionto 2011 Contributionto group revenue I Group Financial Services C 1% E 11% S The FinancialServicesdivisioniscomprisedofGrindrod BankandGrindrod AssetManagement. retail offerings, astheyservethedistribution channelsforfi nancialproducts. organisations andinstitutions. Agrowing numberofintermediaries interactwiththeCollectiveInvestmentScheme (“CIS”)and Johannesburg. Thetargetmarket includessmalltomedium-sizecorporates,highnet worth individuals,non-governmental Grindrod’s FinancialServicesoperations are solelySouth Africanbasedwithrepresentative offi cesinDurban,Cape Town and broking business,Grindrod Securities. main areas ofactivity:PrivateClients,InstitutionalFund Management,CollectiveInvestmentsandthenewlyestablished stock The investmentmanagementactivitiesofFinancialServices are housedinGrindrod AssetManagement,which comprisesfour Bank. Establishedin1994,theBankisacompetitivenichebank withaparticularlystrong reputation inproperty fi nance. Grindrod BankisanAuthorisedFinancialServicesandCredit Provider (“NCRCP25”),regulated bytheSouthAfricanReserve Management Asset Private Clients Management Investments Institutional Securities Collective Fund Cape Town Finance Corporate JSE Sponsor Mergers and acquisitions Designated Advisors Alt X

Durbanville Offi akn rauyRetail Treasury Banking Corporate cesinSouthAfrica Discounting Solutions Property Finance Invoice Trade Johannesburg Pretoria deposits Bank Distribution andmarketingcentres Representative offi ces Durban Card-based payments 47 Grindrod Limited Integrated Annual Report 2011 48 Grindrod Limited Integrated Annual Report 2011 infrastructure to provide clientswitha personalised service. extending themarketing reach oftheBankand creating the Deposit growth of44%toR2,9billion,wasachievedthrough activities, advisoryfeesandgrowth inassetmanagementfees. year-on-year, largelyduetostrong feeincomefrom lending Financial Servicesattributable incomeincreased 30% OPERATIONAL REVIEW Create newcollectiveinvestmentschemefunds • Expandthedirect transactcard technologyoffering • Focusoneffi cientandgrowing bankinginterest income • ExpandtheInvestmentBankingoperation • Grow theAssetManagementbusiness • Maintainafocused,secure lendingbook • Grow thestablefundingbase • KEY STRATEGIC OBJECTIVES investment banking,assetmanagementandretail offerings. generates anaboveaveragereturn oncapital,through focused credit ratingandstatuswhichattractsstablefunding, The Bank’s objectiveistobeanindependentbankwitha Revenue contributionsfrom divisions(%) DIVISIONAL REVIEWS:FINANCIALSERVICES segmental analysisintheannualfi nancialstatements. For thedetailedstatutoryincomestatement,refer tothe Total equity andliabilities Other liabilities Bank deposits Equity Attributable income Operating income EBITDA Revenue Income statement liquidassets Bank loans,advancesand investments Non-current assets/ position Statement offi nancial Total assets Net cashincludingdebt Current assets 16,4 19,9 2,2 11,0 15,3 31,3 0,4 3,5 Corporate Finance Retail Asset Management Property Solutions Corporate Banking Treasury General Bank Net interest income 3 706 2 911 3 706 2 078 1 350 2011 2011 701 113 164 Rm 194 Rm 93 58 80 82 2 519 1 44 2 016 2 519 3 13 1 839 00Growth 2010 00Growth 2010 0 (10) 104 9 76 399 1 120 615 9 1 193 m% Rm m% Rm 282 62 530 (10) (10) 45 89 90 5360 3 Asset Management toexpanditsCISoffering withoutthe Having anin-house CISmanagementcompany nowenables market thatwillbenefi tfrom theexistingserviceofferings. broadening thereach of thebusinesstoanewsection access toawiderrangeof products andservices,whilst diversifi cationtothe fi nancialservices offering, allowingclients CIS managementcompany. Grindrod Securitiesadds Limited asaFinancialServicesBoard (“FSB”)approved and theregistration ofGrindrod CollectiveInvestments(Pty) establish Grindrod Securities, anewstockbroking service, Additional highlightsfortheyearincludedecisionto for future effi cienciesasthebusinessexpands. and expansionintonewbusinessareas, thisiscreating abase in peopleandinfrastructure toensure regulatory compliance achieved. Albeitabovethe50%targetduetoinvestments were wellmaintainedwithacosttoincomeratioof57%being Despite thegrowth intheBankandAssetManagement,costs without compromising onthequalityofunderlyingsecurity. take advantageofappropriately pricedfi nanceopportunities available bythelargerbanks,continuestoallowBank resultant restrictions andhighermarginsoncredit beingmade the lendingbusiness,continuingfi nancialcrisiswiththe nounduepressureyears. With ongrowing marketshare in for increased specifi cimpairmentchargesoverthepastfew approach hasenabledtheBanktoavoidrequirement sound underlyingsecurityandserviceabilityofloans.This on goodcredit management, emphasisingtheneedfor advances continuetobemanagedwithastrong focus Whilst usinginnovationtostructure suitablesolutions, environment. qualities are attractivetothe Bank’s customersinaninfl exible to partnerclientsandcustomisesolutions.Thesecombined and quickturnaround onservicedelivery, withawillingness reputation inthemarket for accessibletopmanagement The FinancialServicesdivisioncontinuestoentrench its under managementincreased 33%toR6,1billion. opportunities across otherdivisionsofthebusiness.Assets in holisticfi oftenleadto nancialneedsofclients,whichinturn through genuineinteractionswiththeclientbase,engaging driver forbuildingsustainedandgrowing relationships is access toinformationanddirect servicesforclients.Akey centres inPretoria andDurbanville,hasprovided further An investmentinadditionaldistributionandmarketing

(continued) group’s environmental footprint(asmeasured byGHG While thedivision contributeslessthan1% to theGrindrod sustainable incomegrowth. through impressive customer serviceandultimatelyachieving effi ciencies, improved andsustainedclient relationships These initiativesare aimedatconsistentlyimproving Level 4in2012. the division’s valuesandhelped itachieveitsBEEtargetof investment inintellectualdiversityanddevelopmentiscore to and positionGrindrod Bankasanemployerofchoice.This performance measurement employedtoupholdtheseideals service withinGrindrod’s FinancialServicesdivision,with on nurturingaculture ofexcellenceandoutstandingclient A great dealofenergyandresources hasbeenfocused SUSTAINABILITY warehousing requirements mayarise. companies ingrowth phases andProperty Financewhere Invoice Discounting,CorporateFinanceadvisoryservicesto to group customersin the areas ofTrade Financeand Grindrod businessunits inproviding anend-to-endservice interaction, there isstrong potentialtopartnerwithother be amarketingdriver. aparticularreference With togroup of certainGrindrod business unitsandthiswillcontinueto Inroads are beingmadeintoservicingthefi nancialneeds uncertainty andvolatility. means itiswellplacedtoattractnewinvestorsintimesof on capitalstabilityandgeneratingincomereturnsforinvestors investment offerings from AssetManagement,withafocus to preserve interest margin.Thegenerallyconservative risk ofbaddebts,theBankisprepared tosacrifi cegrowth By continuingtofocusonfewer, wellsecured loanswithalow regulatory changesemanatingfrom theimplementationof • anuncertaininvestorenvironment; and • continuedpressure onthedomesticbankingsector; • continuedglobalcredit concerns; • interest marginsare expectedtoremain underpressure; • the macro fi nancialsector: The followingchallengescontinuetopresent themselvesin objectives. These are positivemilestonesinthecontextofitsstrategic rating andgrown itslevelsofassetsundermanagement. In addition,theBankhasmaintaineditsInvestmentGrade the Treasury division. market rateshavecontributedtorecord highdeposit levelsfor and growing depositbase.Consistentlycompetitivemoney The Bankremains wellfunded,strongly supportedby astable range from twofundstosevenduring2012. is envisagedthatAssetManagementwillexpanditsproduct restrictions ofoperatingunderawhitelabelserviceprovider. It Basel 3,particularlyrelating toliquiditymanagement. the lendingbusiness. prevailing environment. Goodcredit remainsof acornerstone and experiencednobaddebts, whichwasexceptionalinthe feesinexcessofbudget Corporate Bankingonceagain earned preserved. the pricingofloansatappropriate levelstoensure marginis continue tobeafeature of2012,thedivisionisfocusing on margincontractionlikelyto income wasachieved.With Despite pressure ondepositratesthebudgetednetinterest under Basel3. Bank tomeettheregulatory liquidityobjectivesproposed but allowsforcertaintyinlendinggrowth andwillpositionthe term fundingwillimpactnegativelyonthenetinterest margin lines from establishedbankingpartners.Secured andlonger- will looktorenew andincrease theexistingsecured funding of R2,5billion.Inorder tofundthe2012growth, management The year-end depositsclosedatR2,9billionagainstabudget business andreferrals. best interest. Thishas resulted intheproliferation ofrepeat business, clientsare assured oftheBankactingintheirmutual net margins.Duetotherelationship-based nature ofthe activities inallassetclassesbutparticularlythosewithhigher case-by-case basis.Thestrategyistoincrease thelending established team.Dealsare evaluatedandtailored ona with goodqualitycustomersapproaching anowwell- Corporate lendingcontinuestoconcludenotabletransactions, market. largely through relationship buildingandrecognition inthe growing theTrade FinanceandInvoiceDiscountingoperations, sector, however, signifi cantstrideshavebeenachievedin A keyfocusremains onthe commercial andindustrialproperty invoice discounting. lending, specialisedproperty solutions,tradefi nanceand range offl exible fi nancialpackages.Theseincludecorporate commercial andindustrial property sectorsandoffers a The specialistlendingdivisionfocusesprimarilyonthe Corporate Banking OPERATIONAL REVIEW risk screening inallcredit applicationssubmittedforapproval. requirement intermsoftheBank’s lendingandenvironmental has alsoamendeditscredit policytoincludereference tothis Grindrod’s socialandenvironmental policies.Grindrod Bank providing loanstoborrowers whichare notcompliantwith of theEquatorPrinciple,committingdivisiontonot More signifi cantly, thedivisionhasadoptedprovisions change committee. participates intheGrindrod group environmental andclimate effi ciencies,are wellunderway. Thedivisionalsoactively improve offi ceeco-effiemissions) itstilltakesthisarea seriouslyandefforts to ciency, i.e.energy, water, waste 49 Grindrod Limited Integrated Annual Report 2011 50 Grindrod Limited Integrated Annual Report 2011 of 36%. the Grindrod InvestmentsTrust whichsawassetgrowth include substantialpreference share assetsmanagedthrough Other assets,offered inconjunctionwiththeCISfunds, investors whoalready havemoniesinforeign jurisdictions. Fund. ThisfundaimstoattractSouthAfricanandother existing RanddenominatedGrindrod GlobalProperty Income Property Fund,aUSDollar denominated“mirror” fundtothe Global Property IncomeFund andtheGrindrod International the Grindrod Diversifi edPreference Share Fund,theGrindrod The InvestmentProducts division managesthree CISfunds: Collective Investments 31 December2011. over theperiodsinceitwaslaunchedandfor12monthsto R243 million.Ithasbeenthetopperformingfundinitscategory 2011, assetsundermanagementinthisfundstoodat was launchedon1August2010andasat31December terms ofNedgroup’s “bestofbreed” approach. Thefund listed property collective investment scheme(unittrust)in Asset ManagementmanagesNedgroup’s SouthAfrican Institutional FundManagement achieved 3,4%againstanAllShare Indextotalreturnof2,6%. their variousbenchmarks.Assetsundermanagement performance ofitsmanagedportfoliosonceagainbeating Private Clientsexceededitsbudgetfortheyearwith Private Clients Asset Management division willbeakeyfocusfor2012. The expansionoftheproperty privateequityactivitiesofthe targets tobeachieved. and outstandingservicelevels,whichshouldenablethe2012 pipeline ofbusinessexists,cementedbyrecognised expertise to secure newmezzaninelendingopportunities.Astrong from exitfeesandasaconsequence,thedivisionwillneed repaid duringthecourseof2012,withresultant income It isanticipatedthatanumberofmezzanineloanswillbe and iswellpositionedfor2012. This divisionsubstantiallyexceededitsfeetargetfortheyear Property Solutions DIVISIONAL REVIEWS:FINANCIALSERVICES and roll outofsignifi canttransactions. income streams isexpected in2012,withtheimplementation both monthlyandonacard volumebasis.Realisationofthese established withstrong partners,ensuringsteadyfeeincome, the establishedSouthAfricanbanks.Agreements havebeen This nichemodelfi llsagapinthemarket,notwell-servicedby consumers. provideintermediaries, whointurn packagedsolutionsto card-based paymentsolutionstoFSB-registered fi nancial MasterCard andBankServAfrica),theretail division offers itsinclusionintheNationalPaymentsSystem(PASA,With Retail comprise 58%ofthedepositbook. importantly, asignifi cantgrowth intermdepositswhichnow via deposits.2012sawsubstantialdepositgrowth and,more products, however, itsprimarypurposeistofundtheBank Treasury supportsavarietyoftheBank’s functionsand Treasury and feegenerationinexcessofbudget. The yearendedwith13sponsor/designatedadvisorclients needs inthesmalltomid-capmarket. proactive research intospecifi ccompanies’strategicbusiness credibility andreputation oftheBankitself,orfrom theteam’s life cycle.Newbusinesstendstobegeneratedthrough the coming from insightsinto client businessneedsthrough their landscape. Trust isdevelopedovertime,withnewbusiness This businessrelies onpartnering clientsthrough thelisted border acquisitionanddisposal opportunities. of specialiststoadvisemid-marketcompaniesoncross- representative usingthisglobalnetwork ofM&AInternational, signifi African cantlyandcontinuestoactasthesolesouthern The CorporateFinancedivisiongrew itsclientbase Corporate Finance (“LISP”) channelstoendorsetheseCISfunds. relying ontheindustrylinkedinvestmentserviceprovider service theIndependentFinancialAdvisormarketwhilst team ofconsultantshasbeenestablishedtopro-actively support thedistributionofnewproduct range,aspecialist the additionofnewproducts duringthecourseof2012.To The divisionintendstocontinueitspositivegrowth trend with

(continued) GROUP SUSTAINABILITY 2011 distribution range ofindicatorcategories). Performance Indicators(across theprescribed has reported fullyonmore than20Core disclosures foreachIndicatorCategory, and criteria, hasprovided managementapproach disclosure onalltheGRIprofi ledisclosure This meansthatGrindrod hasprovided full Guidelines havebeenadoptedfortheyear. terms oftheextenttowhichGRI’s G3.1 self-declared BlevelofGRIapplicationin sustainability reporting in2005withacurrent Initiative (“GRI”)frameworkandguidelinesfor Grindrod adoptedtheGlobalReporting Grindrod’s AdoptionoftheGRI 14% 22% 8% of wealth website (sustainabilitypages)atwww.grindrod.co.za Grindrod’s GRIContentIndexcanbefoundonthecompany’s Accumulated profi t Depreciation Providers ofloancapital Providers ofshare capital Taxation onincome Employees’ remuneration andservicebenefi ts 2% 6% 47% 2010 distribution 11% of wealth 28% 6% 10% 5% 40% therevision oftheperformancebonusschemesforalltop • theformationofanewsocialandethicscommitteeat • factors intocore businessfunctioningwere achievedby: Specifi cprogress towards greater integrationofsustainability including impactsoncommunitiesandtheenvironment. and coversallgroup companyactivitiesaround theworld, performance forthefi nancialyearended31December2011 representation ofGrindrod’s ESGpolicies,practicesand This sustainabilityreview provides abalancedandreasonable this standard. aspects ofgoodcorporatesocialresponsibility asoutlinedby management andsubsequentreporting, thesevencore by thediagramabove.Grindrod covers,intermsofits Responsibility Standard ISO26000framework,asshown Social King III,isbestdepictedbytheinternational This approach, which isinlinewithGrindrod’s adoptionof inextricably linkedtolong-termshareholder value. aspects ofitsbusiness,inthefi rmbeliefthattheseaspectsare environmental, (“ESG”)or“non-fi socialandgovernance nancial” integrated andstakeholder-driven approach to managingthe In thelastfewyears,Grindrod hasmovedtowards amore holistic, performance criteria. executives toincludegreater emphasisofsustainability report annuallytoshareholders; and strategic oversightfunction.The committeeisrequired to group level,whichhasabroadandSHE social,governance Consumer Issues 6,7 Community Involvement and Development Fair Operating Practices 6,8 6,6 ORGANISATION Holistic approach Interdependence Organisational Governance 6,2 The Environment Human Rights 6,3 6,5 Labour Issues 6,4 51 Grindrod Limited Integrated Annual Report 2011 52 Grindrod Limited Integrated Annual Report 2011 goodprogress withmeetinggroup environmental policy • steppedupefforts todriveimprovements inhealthand • goodprogress withreaching broad–based blackeconomic • (with more detailinthesectionsthatfollow): Other sustainabilityperformancehighlightsfortheyearinclude GROUP SUSTAINABILITY result forenvironmental reporting; and this yearwasGrindrod’s achievementofa“BestPractice” Grindrod hasbeenpart ofthisindexsince2005.Notable to theJSESociallyResponsibleInvestment(“SRI”)Index. eco-effi ciencytargets.Grindrod wasonceagainadmitted year, andmeetingorprogress towards meetinggroup zero signifi cantoilspilltargetforthesixthconsecutive objectives. HighlightsincludedShippingachievingtheir and safetyinvestmentincreased by49%; safety performance.Year-on-year totaloccupationalhealth formal independentassessment; also ashiftwithinthegroup from self-assessmenttowards 1 to8,withbeingthemostdesirablescore). There was went from 4to3(theratingscaleisbasedonarangeof year theaverageB-BBEEassessmentwithingroup empowerment (B-BBEE)objectivesandtargets.Year-on-

(continued) reporting. accuracy andcompletenessofsustainabilitymonitoring fi ndingswillbeactedontodrivefurtherimprovements inthe process wascompletedbyDeloitte(seepage77).Detailed sustainability reporting. Anexpandedlimitedassurance verifi cationagencytoprovide stakeholderassurancearound Grindrod onceagainmadeuseoftheservicesanindependent • governance highlights: – – appointmentofaleadindependentdirector; – annual report awards. across allindustriesintheChartered Secretaries/JSE Grindrod alsoawarded runnerupinthemid-cap category &Youngof theErnst surveyofannualreports and 2010 annualreport recognised intheexcellentcategory report; and corporate governance in termsofKingIIIwiththeexceptionsnoted implementation offurtherbestpracticerequirements the followingyear. Theboard andmanagementreviews and process andapproves thegroup riskmanagementplanfor which focusesonthereview ofthegroup riskmanagement meetings, aseparateannualmeetingoftheboard isheld In additiontothequarterlyassessmentsofriskatboard identifi ed,calculated,monitored andmanaged. ofriskandensuringthatrisksare adequately governance Grindrod’s board retains ultimateresponsibility forthe interventions bymanagement. prioritised andrankedinriskregisters tofocusresponses and at allsubsidiaryandjointventure companies.Risksare to-day activitiesofthegroup. Riskreviews are facilitated process ofriskmanagement andintegratingitintotheday- the board fordesigning, implementingandmonitoringthe Executive andoperationalmanagementare accountableto the group’s activities. evolve, commensuratewiththedevelopmentandgrowth of process whichrequires continuousimprovement inorder to the board recognises thatriskmanagementisanongoing While Grindrod has aneffective riskmanagementprocess, in 2012. management process isto beprovided toGrindrod’s board objective assuranceontheeffectiveness oftherisk ISO 31000standard forriskmanagement.Independent, The riskmanagementprocesses followedare based onthe management process asrecommended byKingIII. guidelines anddetailsoftheassurancereview oftherisk the standards andmethodologyused,riskmanagement management structure, theriskmanagementframework, The group riskmanagementpolicysetsoutGrindrod’s risk in SouthAfricaisafundamentalprinciple. compliance withtheKingIIICodeonCorporateGovernance maximise shareholder wealth.Inallriskmanagementactivities, while takingfulladvantageofthehighestreturnspossibleto of business,whichshouldbeaslowreasonably practical, The aimistoestablishtheacceptablelevelofriskineacharea managing uncertainty, representing bothriskandopportunity. business environment. Grindrod adoptsaholistic approach to competitive advantagewhileadaptingtochangesinthe management iscentraltomaintainingandimproving a Grindrod’s riskphilosophyrecognises thateffective risk RISK MANAGEMENT to particularrisksonanongoingbasis. assesses levelsofrisktoleranceand/orappetitespecifi c • • • • • tolerance levels: The board hasformalisedandapproved the followingrisk Risk tolerancelevels at costswellbelowmarketpremiums. A substantialportionofriskisself-insured through captives cover onassetsisbaseduponcurrent replacement values. business interruptionandotheroperationalrisk.Insurance unplanned losstoassets,exposure toliabilities,fi delity, insurance coveristakenoutonrisksassociatedwith commodities andpositionsare off-set; and commodities, bothlongandshort,butinpractice because itassumestheworstcasescenarioforall US$4,3 million.Theeconomicexposure istheoretical case pricefl uctuationoverathree-day periodare limitedto net openpositionlimitspercommoditytimestheworst in respect ofthetrading of agriculturalcommoditiesthe equity atyearendmustbelessthan3:1; than 40%ofshippingopeningequityanddebt are thattheaggregate ofthreemustbeless yearearnings lows forthree consecutive years.Thecurrent benchmarks fl owshouldcharterratesinallsectorsbeattheirhistorical the shippingriskmodelmeasures theeffect ongroup cash policies; the group’s foreign currency riskandinterest raterisk to foreign currencies andinterest ratesare monitored by through counterpartylimits setoutinthispolicy. Exposures Interbank Offered Rate).Bankcredit riskismanaged to STeFI (Short-Term FixedInterest) orLIBOR(London banks inthemoneymarket,includingbutnotlimited measured intermsoflendingratesachievedbymajor The risktolerancelevelsforsurpluscashinvestmentsare investments policytosafeguard cashandliquidassets. surplus group fundsare investedintermsofasurplus a premium overGrindrod’s costofcapital; fact thatnotallriskscanbeforeseen. Therefore theycarry actual costofcapitalisnotknownwithcertaintyandthe shareholder value,accesstocapital,recognition thatthe WACC andtakeintoconsiderationtheneedtoretain investment hurdle ratesare setinaccordance withthe

53 Grindrod Limited Integrated Annual Report 2011 54 Grindrod Limited Integrated Annual Report 2011 actions whichare setoutbelow. The board isoftheopinionthatnofurthermitigatingactionsare required tomanagetheseresidual risksotherthanthemitig range, measures theresidual riskasacombination ofthelikelihoodandimpacteachrisk. in placetomitigatetherisks.Theratingisanaggregation oftheindividualrankingbyeachmemberboard. Theevaluat The risksconsidered tobesignifi canttothegroup are setoutintheheatmapbelow. Theevaluationtakesintoaccountallco statusofthegroup.could jeopardise thegoingconcern There were noundue,unexpectedorunusualriskstaken duringtheperiodunderreview andthere are nocurrent exposures that Overview ofkeyrisks RISK MANAGEMENT

Impact 1 3 4 5 2 a criticalrisk. residual riskisalowrisk,mediumtohighor rating (IXL=R)whichdetermineswhetherthe are thenmultipliedtogiveeachresidual riska scales of1–5.Thelikelihoodandimpactscores taking intoaccounttheexistingcontrols, on All risksare ratedintermsof impactandlikelihood, Residual risks vlainrneMatrixevaluation 1 –6 Evaluation range 3–2 Critical Medium–high 23 –25 7 –22 1 8 6 5 2 Likelihood 7 4 2 3 Low 4 1 3 (continued) 5 • Industrial action • Liquidity Demandforcommodities • • Piracy World shippingmarkets • • Legal compliance • • Fraud • Exchange/interest rate Off-hire orlossofaship • Financialclaimsfrom contractualexposures • Non-compliancewithloancovenants • Lossorbreakdown ofkeyassets • ITsystemsfailure • Lossofkeystaff • • Ship newbuildings • Strategy Exposure tocommoditypricefl uctuations • • Funding • Counterparty/credit • Inadequate infrastructure safety Environmental, climatechangeandhealth ntrols 5 4 3 2 1 6 8 7 ating ion Piracy Mitigation markets World shipping CategoryImpact infrastructure Inadequate Risk prtoa ikRestrictedavailabilityofrail Operational risk prtoa ikAtog Gido’ main Grindrod’s Although Operational risk Thecurrent lowshipping Market risk terminal volumes. resources toservicedrybulk and higherinsurancecosts. piracy, extrabunkercosts sea toavoidareas prone to in termsofextradaysat signifi cantcosttoGrindrod areas, there isnonethelessa through highriskpiracy trading routes are not adverse impactonearnings. volatile andmayhavean market isoneofthemost terminal andrailsectorsinthelong-term. Promote public-privatepartnershipsintheport, considerable improvement inthisregard in2011. co-ordination andimprove effi ciencies.There was (Mozambique PortsandRailways)tomanagerail Management, Transnet Freight RailandCFM Joint operatingcentre staffed byGrindrod Corridor covers. and lossofhire (damage)andadditionalwarrisk Insurance includingkidnapandransom,lossofhire providers onacasebybasis. guards from reputable orrecommended service The useofcitadelsor“strong rooms” andarmed registration schemes. the participationinvoluntaryreporting andvessel andtheprevention ofboardingearly warning and employing passiveanti-piracymeasures suchas industry bestpracticesandIMOguidelineson recommendedThe adoptionofinternationally recommended corridor.internationally convoy orunderthegroup transitschemealongthe and/or transitingtheGulfofAdenundernaval the listedareas whentransiting theIndianOcean Avoiding highriskareas and/orremaining outside the benchmarks. Annual review oftheriskmodel’s assumptionsand to charterandspotmarketsupdatedquarterly. Use ofriskmodeltomeasure long-termexposure Service. Realignment andexpansionoftheFarEastParcel Consolidation ofdrybulkandtankeroperations. Participation inshippingpools. (Parcel Service). Matrix basedcontractsofaffreightment/options hedges. Use offorward freight agreements andbunker base. markets, diversifi cationofriskandasolidcontract Careful timingoffi xed chartersandentryinto markets. Continual assessmentbymanagementofshipping 55 Grindrod Limited Integrated Annual Report 2011 56 Grindrod Limited Integrated Annual Report 2011 RISK MANAGEMENT Counterparty/credit Industrial action Mitigation Liquidity CategoryImpact commodities Demand for Risk aktr s Financiallossesmay Market risk risk Organisational Bankingliquidityriskrefers Financial risk Althoughastrong market Market risk (continued) group. meet theirobligationstothe debtors becomeunableto arise shouldcounterparties/ sectors. action intheroad transport be disruptedbyindustrial Logistics operationsmay working capitalfacilities. prices canputpressure on and volatilecommodity liquidity riskisthatrising For theTrading division,the borrowers. the needsofdepositorsand or cashequivalentstomeet not besuffi cientcashand/ to asituationwhere there will revenues. in reduced volumesand commodities, thiswillresult be areduced demandin the riskisthatshouldthere second halfoftheyear, all terminalsduringthe volumes handledthrough resulted inincreased demand forcommodities additional 1,57%capital. requirements andtothisendtheBankholdsan which are notentirely covered byPillarIcapital nature ofitsbook,itdoesrunconcentrationrisks Due tothesizeofGrindrod Bankandthenon-retail Substantial exposures require board approval. Operating withinsetfi nanciallimits. Selective useofcredit guaranteeinsurance. Debtors are reviewed monthlybymanagement. process withregular managementreview. controls includeathoroughInternal credit approval charters. to assesstheirabilityperformoncontractsand Regular monitoringofallcounterpartiesinorder investigated. Charter andcontractcounterpartiesare thoroughly A counterpartyriskmanagementpolicyisinplace. capital report. Further detailissetoutintheintegratedhuman culture ofopencommunication withinthegroup. industrial relations procedures andencouraginga Following theappropriate humanresources and relationships. and forecasting andmaintenance ofkeybanking constant cashfl owandworkingcapitalmonitoring The Trading division mitigatesitsliquidityriskby and notinvestedwithadurationmismatch. excess overthethreshold isheldasliquidassets regard tolargedepositorsandensures thatthe Grindrod Bankexercises conservatism with agreements andthroughput guarantees. This riskismanagedthrough “takeorpay” Loss ofkeystaff Ship newbuildings Strategy fl commodity price Mitigation Exposure to CategoryImpact Funding Risk uctuations iaca ikIaeut fnig for funding Inadequate Financial risk risk Organisational Riskoffi nanciallossif Operational risk on impact Adverse Strategic risk Theagriculturaltrading Market risk single project. or fi nancialexposure toa expansion projects and/ in anybusiness. cause signifi cantdisruption The lossofkeystaff can newbuilding contract. legal disputesrelating tothe specifi cationortheriskof not delivered totechnical delivered orisdelayed or a vesselonorder isnot industry changes. lack ofresponsiveness to mentation ofdecisions,or decisions, improper imple- from incorrect business orcapitalarising earnings prices. fl uctuationsincommodity business isexposedto level ofrisk. cost ofcapital,whilemaintaininganacceptable group’s fundingisatlevelsthatresult inaneffi cient its expansionprogramme andtoensure thatthe analysis inorder tofacilitateadequatefundingfor The group hasadetailedfundingplanandliquidity coal terminalin2012. Introduction ofastrategicpartnerintheMaputo infrastructural opportunitiesandprojects. R2 billionraisedinequity2011todevelop opportunities andsuccessionplanning. a progressive workenvironment, career growth remuneration packagesandlong-termincentives, The retention ofkeystaff byoffering competitive completed andthefi nalinstalmentpaid. Warranties foroneyearoncetheshiphasbeen may expire before contractsexpire; and refund guarantees.Inaddition,refund guarantees and there maybediffi cultiesinlegallyenforcing the that banksmaynothonourtherefund guarantees Refund guarantees,althoughthere are countryrisks versus cost; The selectionofshipbuilders,consideringquality The useofexperiencedandthird partyexpertise; followed foranyacquisitionsorprojects. ensures thatalldue diligenceprocesses are fully Adherence tothegroup investmentpolicywhich framework andboard review. Operating withinsetfi nancial limits,approval legal advisors. including fi nanciers,insurers, agents,brokers and Using anestablishedsupportingexpertisebase executive andmanagementteam. Combined “through the cycle”experiencewithinits about themarketsgroup operatesin. Understanding andobtainingadequateinformation US$4,3 million. the theoretical economic exposure islimitedto The cappingoftonnespercommoditytoensure market. and monthlycommentaryonstrategy, positionand daily tradepositionreports, weeklymark-to-market A commoditypositiontradingpolicywhichincludes 57 Grindrod Limited Integrated Annual Report 2011 58 Grindrod Limited Integrated Annual Report 2011 RISK MANAGEMENT a ship Off-hire orlossof exposures from contractual Financial claims with loancovenants Non-compliance of keyassets Loss orbreakdown Mitigation CategoryImpact IT systemsfailure Risk prtoa ikSubstantialoff-hire orthe Operational risk indemnity and Liability Operational risk loan with Non-compliance Financial risk Thelossorbreakdown of Operational risk risk Organisational (continued) the lossofrevenue. loss ofashipwouldresult in actual ortotalconstructive in fi nancialloss. give risetoclaimsresulting clauses incontractscan loan beingcalledup. fi nancialpenaltiesorthe covenants canleadto fi loss. nancial an inabilitytooperateand a keyassetcouldresult in operate andfi nancialloss could result inaninabilityto and anITsystemsfailure Grindrod are ITdependant Most businesseswithin options andnewbuildingsunderconstruction. ships oncharterforwhichthegroup holdspurchase Having insuranceinplacetocoverthevalueof values. Insuring ownedshipsinexcessofreplacement as aresult ofsignifi cantoff-hire orlossofaship. the exposure toloss ofcharterincomeorrevenue charterparty agreements to pro-actively manage The useofcompetentbrokers andstandard standards. Compliance withhighmaintenanceandsafety arises. Insurance coverisinplacetheeventthataclaim negligence. for damagesinrespect of claimsandthird party controls areInternal inplacetominimiseclaims current loansare withinloancovenantratios. Continual review ofloancovenants toensure that high maintenancestandards are upheld. parts forequipmentare held instorageandthat Management alsoensures thatstrategicspare extended tobusinessinterruptioncover. Where necessary, suchinsurancehasbeen cover isheldforallkeyassets. Management ensures thatadequateinsurance and strategy. The ITsteeringcommitteemonitorsgovernance of legacysystemsthroughout thegroup. three tofi veyears,thusavoidingtheaccumulation The targetedtechnologyrefresh cycleisbetween effi cienciesand remain globallycompetitive. technology toensure thatbusinessunitsimprove The group investsinappropriate computer fully backedup,outsourced virtualprivatenetwork. network communicationsplatformisservicedbya disaster recovery plan,whilethegroup’s widearea Centralised ITsystemsare backedupwitha health andsafety climate changeand Environmental, Mitigation Fraud CategoryImpact rate Exchange/interest Risk iaca ikTe adU Dollar Rand/US The Financial risk prtoa ikEvrnetl potential – Environmental Operational risk Fraudcanresult infi nancial Financial risk results. impacts onthegroup’s exchange ratesignifi cantly on page90). and opportunitiesoutlined (see climatechangerisks effects ofclimatechange aimed atreducing the the regulatory environment pliance withchangesin Climate change–com- consequences. and otherfienvironmental remediation nancial statutory liabilityfor loss, fi nesandpenalties, impacts includereputational reputation andgoodwill. loss anddamagetobrand and onanongoingbasisbymanagement. and interest rateexposure quarterlyby theboard A detailedreview ofthegroup’s foreign exchange policy. A board approved group exchangeandinterest rate denominated businesses. operating cashfl owsgeneratedbyUSDollar- It isnotthegroup’s policytohedgeUSDollar for theyear. and toreport onperformance againstthesetargets environmental objectives withachievabletargets Subsidiary companiesare required toformulatekey health, safety, securityandenvironmental reports. environmental policy through bi-annualquality, The board monitors compliancewiththe group-wide environmental policy. subsidiaries are guided by theboard approved All environmental management efforts withingroup US$1 billionpervesselincident. policies andoilpollutionhascoverageofupto Environmental cover isinsured underP&I the riskofoilpollution. high-specifiof modern, cationshipsgreatly reduces The applicationofhighsafetystandards anduse confi dentialwhistle-blowinghotlineservice. Grindrod Anonymous,the subscribes toTip-offs and feedback. and thefraudresponse plan ensure formalreporting The group fraudandcorruptionprevention policy reviewed andupdated. The fraudriskmanagementstrategyiscontinuously auditprocess. management andinternal reviewed andassessedthrough thegroup’s risk controls areFraud riskfactorsandinternal regularly 59 Grindrod Limited Integrated Annual Report 2011 60 Grindrod Limited Integrated Annual Report 2011 RISK MANAGEMENT Legal compliance Mitigation CategoryImpact (continued) health andsafety climate changeand Environmental, Risk ea ikNncmlac wt re- with Non-compliance Legal risk HealthandSafety–failure Operational risk (continued) consequences. liability andotherfi nancial and penalties,statutory result inreputational loss and businessrulescan levant laws,regulations and reputational loss. damage totheenvironment contractors, thepublic, result inharmtoemployees, of safetymanagementcan to maintainthehighlevels regular audit. basisbyinternal A detailedtaxcompliancereview iscarriedoutona compliance withallrelevant taxlegislation. regularly reviewed toensure thegroup isin Tax legislationanditsnumerous changesare changes inlegislation. operating companiesabreast ofanysignifi cant trade associationsandclassifi cationsocietieskeep Service providers such as auditors,attorneys, performance report on pages85to91. Refer theenvironmental andclimatechange action takeninallcases. investigations conductedandappropriate remedial and dealtwithinthemostseriouslight,full All seriousincidentsare reported totheboard terms ofSHEperformanceonanongoingbasis. Major contractorse.g.shipyards, are audited in performance areas. with andthisformspartoftheirpersonalkey ensure thatalllegalrequirements are complied Senior employeesinthegroup are required to systems andsitelevelhealthsafetycommittees. environment andquality(“SHEQ”)management of ship-basedorsite-levelintegratedsafety, health, Occupational healthandsafetyismanagedinterms environmental andclimatechangecommittee. Climate changeriskismanagedthrough thegroup . Thegroupauditmanagerdoesnotreport internal solely 5. Elementsofacombinedassurancemodelhavebeen 4. Thecompanybelievesthatdirectors shouldnotearn 3. Thecompanydoesnothaveaseparateriskmanagement 2. Thechairmanoftheboard isnotanindependent 1. included onpages66and67oftheintegratedannualreport. complied withKingIII.Inaddition,aIIIreference tableis items outlinedbelow, theboard confi rmsthatthegroup has For the2011fi nancialyear, withtheexceptionofthose has beengiventonon-bindingrules,codesandstandards. they havecompliedwithallapplicablelawsandconsideration assurances totheauditcommitteebi-annually, confi rming was updatedin2011.Alldivisionsare required toprovide lawsimpactinggroupof localandinternational operations companies andemployeesare obligedtocomply. Areview requirements,business governance withwhichallgroup regularly updatedinlinewithchangeslegislationand the Grindrod group hasacomprehensive setofpolicies, In establishinganeffectiveframework, corporategovernance business ineverycountryitconductsbusiness. and alllegislation,regulations andbestpracticesrelevant toits committed tocomplyingwiththeJSEListingsRequirements frameworkandthegroup is for thesuccessofanygovernance applies highethicalstandards whichare considered essential Grindrod’s framework.Grindrod owncorporategovernance for SouthAfrica2009(“KingIII”)formsthebackboneof andKingCodeofGovernance the KingReportonGovernance recommended in The principlesofgoodcorporategovernance Introduction CORPORATE GOVERNANCE the chairmanof theauditcommittee. administratively tothefi nancialdirector, butfunctionally to to theauditcommitteeasrequired byKingIII.Hereports during 2012. to addmore structure andformalitytothisprocess developed, butrequires furtherattention.Itisplanned meetings. have arecord ofhighattendanceatboard andcommittee confi nesofaformalmeeting.Inaddition,thedirectors committee meetings,oftengreater valuethanwithinthe add valuetothegroup outsideoftheformalboard and attendance feesinadditiontoabasefee.Directors out onpages53to60oftheintegratedannualreport. with thefullboard. Afullreport onriskmanagementisset knowledge, theresponsibility isconsidered bestplaced committee. Duetoboard memberexperienceand independent director bytheboard on17August2011. lack ofindependence.MrIMGroves wasappointedlead his experienceandbusinessskillsfaroutweighperceived not considered independent. Theboard isoftheviewthat awarded duringhis term aschiefexecutiveoffi cer, heis shareholding andunexercised share options,whichwere non-executive chairmanin2007andduetohis non-executive director. MrIAJClarkwasappointed non-executive directors. subsidiaries andGrindrod BankLimitedincludeindependent management. Theboards ofmajoroffshore operating subsidiaries compriseexecutivedirectors andsenior The boards ofdirectors ofmajorlocalandoffshore operating trainingcoursesispaidbythecompany.appropriate external each divisionalexecutiveandsitevisits.Thecostofattending directors, whichincludesan inductionbook,consultationwith approval. Aninduction programme isinplacefornew suitable candidatestobeproposed toshareholders for the remuneration/nomination committeeassistsinidentifying Board membersare appointedthrough aformalprocess and responsibility, accountability, andtransparency. fairness responsible leadershipbasedontheethicalvaluesof withinthegroup andprovidesgovernance effective and The board isthefocalpointandcustodianofcorporate Board ofdirectors • Messrs MH Visser and JJ Durand (alternate) represent andJJDurand(alternate) MessrsMHVisser the • Mr MRFakurepresents theinterests oftheB-BBEEpartner • not considered independentforthefollowingreasons: were andJJDurand(alternate) Messrs MRFaku,MHVisser directors. IM Groves andSDMZunguare independentnon-executive concluded thatMessrsHAdams,WDGeach,MJHankinson, independence ofGrindrod’s non-executivedirectors and The remuneration/nomination committeereviewed the annual report. experience are detailedonpages13and15oftheintegrated Directors’ detailsandtheirdiversityofskillscommercial three non-executivedirectors andsixexecutive-directors. board comprisesfi veindependent non-executivedirectors, Messrs MHVisser, andMRWade. JJDurand(alternate) The of MessrsLRStuart-HillandJGJonestheappointment During theyearchangestoboard includedtheretirement meeting aftertheannualgeneralmeeting. distinct andtheboard annuallyelectsachairmanatthenext The roles ofchairmanand group chiefexecutiveoffi cerare rotation Composition, independence,performanceand . Anindependentassuranceonethicsperformancehas 7. frameworkandprocesses were TheITgovernance 6. interests ofRemgro, amajor shareholder inGrindrod. company; and of Grindrod (SouthAfrica)(Pty)Limited,amajorsubsidiary established toaddress thismatter. not yetbeenformallyimplemented.Aprocess willbe integrated annualreport). implemented (refer totheITreport onpage64of the frameworkisintheprocessgovernance ofbeing King III,however, divisionalcompliancewiththeIT enhanced in2011toensure furtheralignmentwith 61 Grindrod Limited Integrated Annual Report 2011 62 Grindrod Limited Integrated Annual Report 2011 of thegroup. strategy session annuallytodeterminethestrategic direction held inNovember. Theexecutive attendaspecialtwo-day the group businessplanfortheensuingyearatitsmeeting inseparable andannuallyreviews thestrategyandfi nalises fact thatstrategy, risk,performance andsustainabilityare committee ofthecompany. The board appreciates the is mappedbytheboard inconsultationwiththe executive As akeyperformancearea oftheboard, thegroup’s strategy director’s report onpage22. fiinternal nancialcontrols are covered inthegroup fi nancial misstatement andloss.Theprinciplefeatures ofthegroup’s designed toprovide reasonable assuranceagainstmaterial controloperational control systemsare systems.Theinternal The board isresponsible forthegroup’s fi internal nancialand determiningthepolicyandmodelsappliedtoensure the • monitoringkeyriskandperformanceareas ofthegroup • reviewing performanceofthevariousboard committees • monitoringtheimplementationofbusinessplanby • giving direction onallstrategicmattersandannually • defi nitionoflevelsmateriality,• reserving specifi cpowers compliancewithallrelevant laws,regulations andcodesof • following: leadership ofthegroup, the board takesresponsibility forthe In assumingultimateresponsibility foreffective control and website. charter framework.Theisavailableonthegroup’s board isrequired toannuallyreview itsoperationsagainstthe responsibilities oftheboard are setoutinthecharterand The board’s role isregulated inaformalboard charter. The Responsibilities andcharter 70th birthday. directors retire attheannualgeneralmeetingfollowingtheir depending ontheircontracts,whilstnon-executive directors retire from theboard at60or63yearsofage directors mayoffer themselvesforre-election. Executive directors retire byrotation from theboard. Theseretiring at eachannualgeneralmeetingleastone-third of In termsofthecompany’s MemorandumofIncorporation, chairman annuallyinrespect ofthenon-executivedirectors. Individual performanceevaluationsare conductedbythe CORPORATE GOVERNANCE – ensures there isappropriate successionplanningat communications;and andinternal external – executiveandgeneralremuneration; – director selection,orientationandevaluation; – controls; riskmanagementandinternal – integrity of: and and identifyingnon-fi nancialissues relevant tothegroup; established toassistinthedischargeofitsduties; management; approves thegroup businessplan; framework; management intermsofagroup limitsofauthority to itselfanddelegatingothermattersexecutive business practice; senior managementlevel.

(continued) assetandliability. • credit risk;and • • investment banking; riskandcapitalmanagement; • • directors’ affairs; • remuneration; auditandcompliance; • Bank hasitsownboard committeeswhichinclude: with SouthAfricanReserveBankrequirements, Grindrod andincompliance For thepurposesofsoundgovernance are availableonthegroup’s website. clearly defi nedtermsof reference approved bytheboard and its responsibilities. Eachcommittee actswithintheambitof andassistingtheboard indischarging corporate governance These committeesplayanimportantrole inenhancinggood In addition,thegroup hasanexecutivecommittee. chairmen ofthesecommitteesare appointedbytheboard. was establishedinNovember2011.Membersandthe social andethicscommittee.Thecommittee The board hasaremuneration/nomination committee anda 25 May2011. Act forthefi rsttimeattheannualgeneralmeetingheldon The auditcommitteewasappointedintermsoftheCompanies Committees eight directors. Board attendanceisset out onpage63. the board isexpected.Thequorumforboard meetingsis Meetings are plannedwellinadvanceandfullattendanceof group’s strategyandtoassessvariouscapitalraisingoptions. which includedaspeciallyconvenedmeetingtoreview the The Grindrod Limitedboard metfi vetimesduringtheyear, Board meetings The report of theauditcommitteeissetout onpages68to69. is setoutonpage 63. auditors withoutmanagementpresent. Committeeattendance andexternal continued thepracticeofmeeting withinternal The committeemetthree timesduringtheyearandhave reference andinterms ofsection94(7)theCompaniesAct. committee fulfi lsits responsibility inlinewith aspecifi ctermsof the integratedreport andverifi cationprocedures. Theaudit and isalsoresponsible foroverseeingtheimplementationof auditprocesses and internal and overseeingtheexternal plan, recommendingauditor theappointmentofexternal controls andfi nancial results, approving audit theinternal The committeeperformstherole ofreviewing internal recommendations madebythecommittee. Mr IMGroves reports totheboard ontheactivitiesand auditorsattendallmeetingsbyinvitation. andinternal external offi cer, group fi nancialdirector and representatives from the non-executive directors. The chairman,group chiefexecutive WD GeachandMJHankinson,allofwhomare independent The auditcommitteecomprisesMessrsIMGroves (chairman), Audit committee between business units,group companiesandtheboard. and actsasa medium ofcommunicationand co-ordination of thebusinessgroup, monitorsbusinessperformance guiding andmanagingtheexecution oftheoveralldirection The executivecommitteeassists thechiefexecutiveoffi cerin during 2011.Committeeattendance issetoutonpage63. strategic planningmeetingwith keyoperationalmanagement Research. Theexecutivecommitteealsoheldatwo-day meeting andapresentation bytheInstituteforFutures which includedastrategicsession,successionplanning The executivecommitteeheldsevenmeetingsduringtheyear, alignmentofgroup initiatives. • formulationofthegroup’s strategyandpolicy; • • fi riskand nancial,strategic,operational,governance, directed bythegroup limitsofauthorityframework,including: to thegroup’s managementtotheexecutivecommitteeas The board hasdelegated awiderangeofmattersrelating Mr HJGrayandthecompanysecretary. The executivecommitteecomprisesthedirectors, Executive committee employment practices,asprescribed bytheCompaniesAct. and publicsafety, consumerrelationships andlabour development, goodcorporatecitizenship,environment, health the group’s activitieswithregard tosocialandeconomic sustainability mattersandisresponsible formonitoring The role ofthecommitteeis toassistthegroup withoverseeing CAS RobertsonandAGWaller. comprises MessrsMRFaku,MJHankinson(chairman), The committeewasappointedinNovember2011and Social andethicscommittee attendance issetoutonpage63. The committeemetthree timesduringtheyear. Committee policy). annual generalmeeting(refer page70fortheremuneration for thefi rsttimeforanon-bindingadvisoryvoteatthe2012 The group’s remuneration policywillbeputtoshareholders independence ofallnon-executivedirectors. non-executive directors andconsiderstheperformance making recommendations totheboard onallfeespayable to In additiontotheabove,committeeisresponsible for performance-based incentives. planning andapproval ofthetermsanyschemeproviding the leadershiprequirements ofthegroup andsuccession composition oftheboard anditscommittees,evaluationof strategy forthegroup, thereview ofthestructure, sizeand and approval ofabroad remuneration philosophyand The committeeisresponsible for, interalia,theassessment whom are non-executivedirectors. MJ Hankinson(chairman),IAJClarkandIMGroves, allof The remuneration/nomination committeecomprisesMessrs Remuneration/nomination committee functional issues; indirectly inGrindrod securities. sensitive inside informationonthegroup may dealdirectly or No director oremployeewhoisprivyandhasaccessto price Share dealings secretary. have fullaccesstomanagement andthecompany requirements are well defi nedandnon-executivedirectors adequately dischargetheirresponsibilities. Information documents andproperty, whichenablesdirectors to has unrestricted accesstoallgroup information,records, The board issuppliedwithallrelevant informationand the JSEListingsRequirements. he isalsoresponsible forcomplianceintermsoftherulesand include thosestipulatedintheCompaniesActandKingIII the adviceandservicesofcompanysecretary. Hisduties be fi tandproper fortheposition.Alldirectors haveaccessto in accordance withapplicable legislationwhoisconsidered to The board isassistedbyasuitably qualifi edcompanysecretary Company secretary 31 December2011wasasfollows: Board andcommitteemeetingattendancefortheyearended GWle / 7/7 7/7 2/7 7/7 7/7 7/7 7/7 4/5 3/7 5/7 3/7 1/5 2/5 5/5 5/5 AG Waller MR Wade + 5/5 LR StuartHill* 5/5 AF Stewart 2/5 DA Rennie DA Polkinghorne 3/3 3/3 AK Olivier 4/5 JB McIImurray* 3/3 3/3 1/5 JG Jones~ 3/3 3/3 HJ Gray^ 5/5 4/5 Executive directors 5/5 4/5 SDM Zungu 4/5 Δ MH Visser 5/5 MJ Hankinson IM Groves WD Geach MR Faku H Adams IAJ Clark directors Non-executive Appointed16November2011 + Appointed31October2011 Δ Retired31August2011 ~ Appointed1June2011 ^ Retired30June2011 * Directors/members or Audit Board Remune- Nomi- nation ration/ Executive 63 Grindrod Limited Integrated Annual Report 2011 64 Grindrod Limited Integrated Annual Report 2011 improve risk basedalignmentinorder toprovide assurance • auditisto: Going forward, thestrategicfocusofinternal implementation ofsystems. • reviewing thereliability andintegrityofsignifi cant • fi nancial, co-developingandevaluatingfi• nancialandoperational focus on: Considerable strideswere madein2011byincreasing approach. adequate coveragebyfollowingamethodicalrisk-basedaudit the auditcommittee.Allbusinesseswithingroup receive are prepared, together withmanagementandapproved by Systematic andthoroughauditcoverageplans annualinternal review process isinplaceandongoing. Auditors. Aformalisedqualityimprovement planandaquality standards required bytheSouthAfricanInstituteofInternal AuditPracticeandthemethodology Internal International auditactivitiesareAll internal performedincompliancewith locations andinformation. within thegroup, including management,personnel,activities, committee andhasfree and unrestricted accesstoallareas organisational functions,reports directly totheaudit auditfunctionisindependentofallother The internal responsibilities. approved charterwhichdescribes itspurpose,authorityand auditismandatedbyandfunctionsintermsofan Internal committee indischargingitsresponsibilities. auditfunctiontoassistthe strategically alignedinternal The group acknowledges the importanceofanindependent audit Internal stakeholders. Afullreport issetoutonpages10and11. The group’s websiteisalsousedasacommunicationtoolfor regularly meetswithmajor institutionalinvestorsandanalysts. employees andotherstakeholders.Inaddition,management vision through regular presentations toinvestors,analysts, The group communicatesitsstrategy, performanceand Relations withstakeholders Deutsche Bankactedasleadindependentsponsor. when thespecifi cshare issuetransactionwasconcludedand sponsor are engaged.Anexampleofthisoccurred in2011 of majorcorporateactions,theservicesanindependent compliance withtheJSEListingsRequirements. Inthecase Grindrod BankLimitedactsasthecompany’s sponsorin Corporate sponsor theperioddeclared asaprohibited periodintermsofthe • anyperiodwhentheyare aware ofanynegotiationsor • theperiodfrom theendofinterimandannualreporting • directly orindirectly intheshares ofthecompanyduring: Directors andallgroup employeesare notpermittedtodeal CORPORATE GOVERNANCE strategic goals; on keyrisksthat mayprevent oreffect therealisation of managerial andoperationalinformation; and controls frameworks; JSE ListingsRequirements. details whichmayaffect theshare price;or results; or periods totheannouncementofinterimandannual

(continued) multi-year contracts. legal compliance andassessmentofrisks associated with All contractsforserviceandsupplies are scrutinisedtoensure one day. than onehourwithmaximum datalosslimitedtolessthan facility, recovery timetofulloperationcanbeachievedinless In theeventofadisasterormajor outageatthecore computing are nowreplicated every24hoursonastandbyITsystem. new recovery methodforITsystems,whereby thesystems element ofIToperationsandthegroup hasimplementeda Business continuityanddisasterrecovery plansare akey applications andcontrol environment. on signifi cantsystemscoveringareas suchasITsecurity, audit performannualreviewsand assessments.External categories andperformdetailedreviews basedonfi ndings Group auditannuallyappraiseITrisk riskandinternal contingency plans. lower likelihoodofrisksoccurringare largelymanagedwith on majorriskssuchasdataloss,whilstthoseareas with managed appropriately. Riskavoidancetacticsare practised IT risksare assessedfor bothlikelihoodandimpact policy framework. are managedandmaintained withinthedefi nedcorporateIT each ofthegroup’s operatingdivisionstoensure thatITassets IT charter. supportedbyseniormembersof The CIOisinturn to thegroup chiefinformation offi cer(“CIO”)bymeansofan the board hasdelegated theresponsibility forITgovernance The group iscommittedto fullcompliancewithKingIIIand • IT risk. policiesdefi internal ning applicationanduseofIT resources; • legalrequirements suchastheElectronic Communications • • IT standards; within adefi nedframeworkthattakesintoaccount,interalia: Divisional ITisresponsible forensuringthatITismanaged • an ITsteeringcommittee,represented bysenior • IT infrastructure (networks,communications,etc.)is • each divisionmanagesitsownuniquebusiness IT isimplementedinGrindrod, basedonthefollowingmodel: Information technology(IT)governance improve collaborationwithmanagement,otherinternal • assistmanagementinfurtherdevelopingandembedding • and Protection ofPersonalInformation Act; Communications Actandthesoontobeenacted Information Act,theRegulationofInterception of and Transactions Act,thePromotion ofAccessto implementation. management ofeachdivision,overseesITstrategyandits delivered asashared service;and applications; development ofameaningfulcombinedassurancemodel. duplication ofeffort. Thepurposeisfurtheraimedatthe to ensure optimalcoverageofthekeyrisksandminimal assurance providers andthecompany’s auditor external the riskofmaterialmisstatementsfi nancial results; and reporting risksandensure controls are adequatetoaddress fithe internal nancialcontrol frameworkstoidentify fi nancial that thegroup’s intellectualcapabilityissustained. expected results. System life-cycles are monitored toensure Implementation ofprojects are carefully managedtoproduce steering committeehavingreviewed fullproject information. All newproject initiativesare approved inprinciplebytheIT applications. applications are preferred toin-housedevelopmentforcritical maximum returnoncapitalexpenditure. Packagedsoftware IT assetsare effectively managedandutilisedto achieve encouragingtheuseofmobilityandvideoconferencing • runningcore systemsonvirtualcomputers toreduce • is obligedtoadhere tothecodeof ethics. companies with whichtheydeal.EveryGrindrod stakeholder customers andotherstakeholders oftheintegritygroup act asaguideinday-to-day decisions andtohelpassure November 2011andisdesigned toraiseethicalawareness, The Grindrod codeofethicswasupdatedanddistributed in Ethics during 2012. business continuityplanswhichwillbeevaluatedandtested All divisionsandbusinessunitshavecompletedrevised the recovery plans. Development ofarecovery planframeworkandformalising Business continuityplandevelopment Development ofincidentmanagementresponse plans; and Incident managementplanning these strategiestoidentifythepreferred strategy; organisation, before conductingacostbenefi tanalysison Identifying thevariousrecovery strategiesavailabletothe Develop continuitystrategies were identifi ed; Identifi cationand review oftheimpactforvariousrisksthat Business impactanalysis BCM; Identifi cation,creation and review ofrisksinthecontext Risk assessment the operation; including commitmentofseniormanagementtoBCMwithin BCM policydevelopment,documentationandapplication, Commitment The followingareas havebeenaddressed: across thegroup are currently beingenhanced. Existing businesscontinuitymanagement(“BCM”)practises Business continuitymanagement bestlifecycleresult from purchase todisposal: • including: Green ITispractisedbyGrindrod through severalinitiatives, throughout thegroup toreduce employeetravel. energy requirements forpowerandcooling; and – purchasing hardware from companiesthatutilise recycling printercartridgeswithcertifi ed“green” recycle – process; best environmental practiceduringthemanufacturing companies; and nosignifi• cant fi nesornon-monetarysanctionsfornon- no legalactionsagainstGrindrod foranti-competitive • no signifi• cantincidentsofcorruptionatmanagement no materialtransgressions ofGrindrod’s• ethicspolicy During 2011,there were: Website: E-mail: Telephone: Free post: reporting canbesubmitted totheGrindrod ethicsline: employees orotherpartiestoreport unethicalbehaviour. Such provides anindependent andconfi dentialmethodfor Anonymous®serviceisinplaceand A DeloitteTip-offs E-mail: Telephone: Postal address: ethics offi cer. the custodianofGrindrod codeofethics,theGrindrod Employees orotherscanreport unethicalorriskybehaviourto Ethics SAdirectly ontelephone+27123422799. member. Ifanypersonhasqueries,theycancontact of SouthAfrica,whichthecompanyisanorganisational The group’s codeofethicsisendorsedbytheEthicsInstitute ownership ofactionstaken. and accountability, whichrequires employeestotakefull delivery tocustomers,beingfairinthewaywetreat people integrity, actingwithprofessionalism inthegroup’s service company assetsandtheenvironment, operatingwith procedures. Thegroup’s core valuesincluderespect for employees thegroup’s values,standards andcompliance element oftheinductionprocess istocommunicatenew to beparamountinachievingthisobjective.Animportant customers andconsidersahighstandard ofethicalbehaviour The group iscommittedtoproviding excellentservices to improved. appropriate sanctionsandwhere necessary, controls were unsubstantiated,however, perpetratorsreceived employee behaviours.Amajorportionofthesereports of assets,unauthorisedexpenditure andunacceptable Incidents reported were procurement irregularities, misuse 29 incidentswere reported hotline. bytheTip-offs terms ofthislegislation duringtheyear. the group’s website. There were nospecifi c requests madein manual wasupdatedinNovember 2011andisavailableon of AccesstoInformationAct(“PAIA”) of2000.Grindrod’s PAIA Grindrod hascompliedwiththerequirements ofthe Promotion Access toinformation compliance withlawsandregulations. behaviour, anti-trustandmonopolypractices; enforcement authorities; disciplinary procedures or, inmore seriouscases,tolaw are and,where investigatedinternally relevant, referred to level. Whenincidentsofcorruptionare identifi ed,these reported totheGrindrod ethicsoffi cer; www.tip-offs.com [email protected] 0800 213118or+275715329 Umhlanga Rocks,4320,SouthAfrica Anonymous,Freepostc/o Tip-offs DN298, [email protected] +27 313659116 PO Box1,Durban,4000 65 Grindrod Limited Integrated Annual Report 2011 66 Grindrod Limited Integrated Annual Report 2011 # ✓ Key King IIIreference table CORPORATE GOVERNANCE ✗ ▲ Reports totheboard andshareholders onhowithasdischargeditsduties auditprocess Oversees theexternal Integral totheriskmanagementprocess # audit. Refertopage68 Oversees internal Satisfi esitselfoftheexpertise, resources andexperienceofthecompany’s fi nancefunction A combinedassurancemodelisbeingdevelopedtoimprove effi ciencyinassuranceactivities.Referto page61 Oversees integratedreporting Chaired byanindependentnon-executivedirector Suitably skilledandexperiencedindependent,non-executivedirectors # Effective andindependent Audit Committee The company’s remuneration policyisapproved byitsshareholders Remuneration ofdirectors andcertainseniorexecutivesisdisclosed Directors andexecutivesare remunerated fairlyandresponsibly. Refertopage70 frameworkbetweenthegroupAn agreed anditssubsidiaryboards governance Appointment ofwell-structured committeesandanoversightofkeyfunctions.Refertopage61 Regular performanceevaluationoftheboard, itscommitteesandtheindividualdirectors The board isassisted byacompetent,suitablyqualifi edandexperiencedcompanysecretary Formal inductionandongoingtrainingofdirectors isconducted Directors are appointedthrough aformalprocess The board comprises abalanceofpower, withamajorityofnon-executiveindependentdirectors Framework forthedelegationofauthorityhasbeenestablished The chairmanoftheboard isnotanindependentnon-executivedirector. Refertopage61 Directors actinthebestinterest ofthecompany Strategy, risk,performanceandsustainabilityare inseparable The board isthefocalpointforandcustodianofcorporategovernance Board anddirectors Assurance statementonethicsinintegratedreport. Refertopage77 Effective managementoncompany’s ethics Responsible corporatecitizen Effective leadershipbasedonanethicalfoundation Ethical leadershipandcorporatecitizenship

Compliant Non-compliant Under review Partially compliant

(continued) ▲ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✗ Sustainability reporting anddisclosure isindependentlyassured Sustainability reporting anddisclosure isintegratedwiththe company’s fi nancial reporting The board ensures theintegrityofcompany’s integratedreport Integrated reporting anddisclosure Disputes are resolved effectively andtimeously Transparent andeffective communicationwithstakeholders Equitable treatment ofshareholders There isanappropriate balancebetweenitsvariousstakeholdergroupings Management proactively dealswithstakeholderrelationships Appreciate thatstakeholders’perceptions affect acompany’s reputation stakeholderrelationships Governing auditisstrategicallypositioned toachieveitsobjectives Internal Written assessmentofthe effectiveness ofthecompany’s control systemofinternal andriskmanagement Effective audit risk-basedinternal audit Internal The board hasdelegated tomanagementtheimplementationofaneffective complianceframeworkandprocesses Compliance riskformsanintegralpartofthecompany’s riskmanagementprocess The board anddirectors haveaworkingunderstandingoftherelevance andimplicationsofnon-compliance The board ensures thatthecompanycomplieswithapplicablelaws # Compliance withlaws,codes,rulesandstandards The riskcommitteeandauditshouldassisttheboard incarryingoutitsITresponsibilities. IT assetsare managed effectively IT isanintegralpartofthecompany’s riskmanagement The board monitors and evaluatessignifi cant ITinvestmentsandexpenditure framework. Refertopage64 Management isresponsible fortheimplementationofanITgovernance IT isalignedwiththeperformanceandsustainabilityobjectivesofcompany The board isresponsible forITgovernance ofinformationtechnology The governance Suffi cientriskdisclosure tostakeholders The board receives assuranceontheeffectiveness oftheriskmanagementprocess Management implementsappropriate riskresponses Frameworks andmethodologiesare implementedtoincrease theprobability ofanticipatingunpredictable risks The board ensures thatriskassessments andmonitoringisperformedonacontinualbasis The board delegatestheriskmanagementplanto The riskcommitteeassiststheboard incarryingoutitsriskresponsibilities. Refertopage62 The board ofriskandsettinglevelstolerance isresponsible forthegovernance ofrisk The governance ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✗ 67 Grindrod Limited Integrated Annual Report 2011 68 Grindrod Limited Integrated Annual Report 2011 received nocomplaintsrelating totheaccountingpractices • approved allnon-auditservicecontracts withDeloitte& • believesthattheappointmentofDeloitte&Touche complies • determinedDeloitte&Touche’s termsofengagement; • determined thefeespaidtoDeloitte&Touche asdisclosed • nominatedforappointmentasauditor, Deloitte&Touche • year, theauditcommittee: In theexecutionofitsstatutorydutiesduringpastfi nancial Statutory duties Attendance atthesemeetingsisrefl ected onpage63. The auditcommitteeheldthree meetingsduringtheyear. Meetings secretary tothecommittee. audit committeechairman.Thecompanysecretary servesas directly tothecommitteeand hasunrestricted accesstothe auditmanagerreportscommittee. Theriskandinternal auditorshaveunrestrictedand external accesstotheaudit also attendtheauditcommitteemeetings.Theinternal and representatives auditors fromandinternal theexternal The chairman,chiefexecutive,group fi nancialdirector At 31December2011,theauditcommitteecomprised: meeting. directors appointedbyshareholders attheannual general The committeeconsistsofthree independentnon-executive Composition fi nancialyearended31December2011. Companies ActandtheJSEListingsRequirements forthe committee ispleasedtopresent theirreport interms ofthe practices intermsoftheCompaniesActandKingIII.The The committeehasreviewed itscorporategovernance with thesetermsofreference. executed itsdutiesduringthepastfi nancialyearinaccordance that havebeenapproved bytheboard ofdirectors andhas The auditcommitteehasadoptedformaltermsofreference Terms ofreference AUDIT COMMITTEEREPORT JHnisnBom AS)May2010 BComm,CA(SA) MJ Hankinson MGoe AS)February1998 Appointed BALLB,MCom, CA(SA) Qualifi cations WD Geach IM Groves Name the companyand anyotherrelated matters; of itsfi nancialstatements,theinternal fi nancialcontrols of auditofthecompany,and internal thecontentorauditing Touche; King III; with therelevant provisions oftheCompaniesActand in thenotestointegratedannualreport; Ms REbrahimastheresponsible partner; who, inouropinion,isindependentofthecompanyand CA(SA), FCIS June 2009 statements. a soundbasisforthepreparation ofthereliable fi nancial effective fi andthattheinternal nancialcontrols donotform controls andmanagementaresystems ofinternal not the committeethatcausedittobelievecompany’s the results oftheaudit,nothing hascometotheattentionof auditoron management anddiscussionswiththeexternal and consideringinformationexplanationsprovided by the group’s controls systemofinternal andriskmanagement Based ontheresults of the formaldocumentedreview of reviewed policiesandprocedures• forpreventing and reviewed signifi• audit cantissuesraisedbytheinternal reviewed theeffectiveness ofthecompany’s systemof • • evaluated theindependence,effectiveness and reviewed andrecommendedauditcharterfor theinternal • The committeehas: Delegated duties therobustness andperceptiveness ofDeloitte&Touche • Deloitte&Touche’s fulfi• lmentoftheagreed audit planand reviewed: To assesstheeffectiveness auditors,we oftheexternal the overallextentofnon-audit servicesprovided by • areport from Deloitte&Touche describingtheirpolicy to • thearrangementsforday-to-daymanagementofaudit • auditstaff changesinkeyexternal Deloitte&Touche’s • the year. To fulfi lthis responsibility, we reviewed: Touche andissatisfi edthattheywere independentthroughout The committeehasconsidered theindependenceofDeloitte& audit External regulatory andotherresponsibilities. The auditcommitteehascompliedwithallapplicablelegal, Regulatory compliance concurredpremise withtheadoptionofgoingconcern • madesubmissionstotheboard onmattersconcerning • detecting fraud. process; and audit; auditandexternal management, internal fiinternal nancialcontrol including receiving assurancefrom compliance withitsmandate; auditfunction/departmentand performance oftheinternal approval; judgments. in theirhandlingofthekey accountingandaudit variations from theplan;and Deloitte &Touche. identify, report andmanageanyconfl ictsofinterest; and relationship; audit plan; in thepreparation ofthefi nancialstatements. and reporting; and company’s accountingpolicies,fi nancialcontrols, records theinterimresults forthesixmonthsended30June2011; • disclosed whichfortheyearincluded: by theboard such fi nancialinformationthatispublicly The committeehasreviewed andrecommended foradoption Financial statements that theaccountingpracticesare effective. Based ontheprocesses and assuranceobtained,webelieve experienceofthedivisionalchieffi• nancialoffi cersand expertiseandadequacyofresources withinthefi• nance We are satisfi edwiththe: his responsibilities inhisposition asrequired bytheJSE. possesses theappropriate expertiseandexperiencetomeet We believethatMrAGWaller, thegroup fi nancialdirector, Finance function designated auditorare accredited bytheJSE. company. Thecommitteeconfi rmsthattheauditorand 2012 willbehersecondyearasdesignatedauditorofthe In termsoftherotation requirements oftheCompaniesAct, with MsREbrahimasthedesignatedpartner. general meeting,Deloitte&Touche auditors, astheexternal outlined above,wehavenominated,forapproval attheannual Based onoursatisfactionwiththeresults oftheactivities • recommendations madebyDeloitte&Touche and thelevelsoferrors identifi edduringtheaudit;and • keyaccountingandauditjudgements; • majorissuesthatarose duringtheauditandtheirresolution; • Deloitte&Touche’s overallworkplanfortheyear; • theareas ofresponsibility, associateddutiesandscopeof • reviewed: regard auditprocess,With tothe oversightoftheexternal we fi managers. nancial function; and adequacy ofmanagement’s response. management’s responses toissuesraisedandthe the audit; • reviewing theworkingcapitalpacksprepared by • the auditedannualresults fortheyearended the pro-forma effects• includedintheannouncement the pro-forma effects includedinthecircular toshareholders • 28 March 2012 Durban Chairman IM Groves On behalfoftheauditcommittee. annual fi nancialstatementsbytheboard. The auditcommitteerecommended theadoptionof for approval totheboard. 28 March 2012,recommended theintegratedannualreport The committee,viaaround robin resolution dated FinancialReportingStandards. International using appropriate accounting policies,whichconformto results. Theannualfi nancialstatementshavebeenprepared the informationisreliable andconsistentwiththefi nancial assuranceprovider’sthe external report andissatisfi edthat committee members.Thehasalsoconsidered with operationalandotherinformationknowntoaudit the integratedannualreport andhasassesseditsconsistency also considered the sustainabilityinformationasdisclosedin the yearended31December2011.Theauditcommitteehas incorporating theabridgedannualfi nancialstatements,for The auditcommitteeconsidered theintegratedannualreport, Integrated annualreport liquidity testsrequired intermsoftheCompanies Act. statement atreporting datesaswellthesolvencyand management tosupporttheboard’s goingconcern 31 December2011;and and Grindrod. regarding thejointventure tobeentered intobetweenVitol Grindrod shares; relating tothesubscriptionbyRemgro forthepurchase of 69 Grindrod Limited Integrated Annual Report 2011 70 Grindrod Limited Integrated Annual Report 2011 of theboard toensure thealignmentofremuneration with Member Member The remuneration/nomination committeeistaskedonbehalf Role oftheremuneration/nomination committee IM Groves Chairman IAJ Clark MJ Hankinson follows: The membersofthecommitteeduringyearwere as independent non-executivedirector. exclusively ofnon-executivedirectors andischaired byan The remuneration/nomination committeeiscomposed committee Composition oftheremuneration/nomination otherkeyseniormanagement are onthree months’notice • • members oftheexecutivehavenoticeperiods thegroup chiefexecutiveoffi• cerisona12-monthnotice operations: The followingnoticeperiodsare toensure continuityof Employment contracts Remuneration governance remuneration practiceswith theadventofnewcode. with KingIIIandthere were nomaterialchangestothe Grindrod’s policy, philosophyandpracticesdonotconfl ict committee andisdetailedintheintegratedannualreport. policy iscarefully considered bytheremuneration/nomination rationale andbasisforthegroup’s executiveremuneration policy attheforthcomingannualgeneralmeeting.The to provide non-bindingapproval forthegroup’s remuneration In linewithKingIII,theboard intendstorequest shareholders targets through shortandlong-termincentives. is linkedtoperformanceandachievementofsustainability structured toensure asignifi cantportionoftheirpackage The executiveandkeymanagers’remuneration istherefore performance objectives. add signifi cantvalueasmeasured through achievementof average remuneration isawarded tothoseemployees who contribution tothegroup’s performance.Asaprinciple,above global remuneration benchmarks,proportionate with the competitive, takingcognisanceoftheappropriate localand implementation thereof ismaintainedtoensure rewards are excellent talent.Oversightoftheremuneration policyand Grindrod’s objectiveistoattract,retain andmotivate to thecontinuedsustainabilityandgrowth ofthegroup. The board continuestoembracetheimportanceofpeople Remuneration philosophyandpolicy REMUNERATION REPORT periods. with thebalanceofmanagementonthirty-daynotice six months; period; include large South African and international companies. include largeSouthAfricanandinternational relevant globalgradesand/or selectcomparatorgroup, which of remuneration are benchmarkedatthemedianof updated responsibilities and performance.Thecurrent levels The committeeconsiderstheexecutives’levelofexperience, and approved bythe remuneration/nomination committee. The executives’remuneration packagesare reviewed annually salary/wage account. sales volumes,profi ts,numberofemployees,assetsand of responsibility are takenintoconsiderationwhichincludes for thispurpose.Anumberoffactorsindeterminingthelevel independent compensationconsultantsusedbyGrindrod remuneration. PECorporate Services(Pty)Limitedare global gradingmethodologywhenbenchmarkingexecutive bonus schemes.Grindrod utilisesthe“Towers Watson” portion whichincorporatesshortandlong-termincentive comprises guaranteedtotalcosttocompanyandvariable Remuneration ofexecutivesandkeyseniormanagers Structure oftheremuneration tenure aschiefexecutiveoffi cer. Mr IAJClarkcontinuestohold optionsgrantedduringhis incentive bonusplanorshare optionschemes, however, Non-executive directors donotparticipateinthegroup’s listed companies. levels andreference ismadetothefeespaidbycomparable market surveysare utilisedtodeterminetheremuneration by theshareholders attheannualgeneralmeeting.Various board forconsiderationandthefeesare approved inadvance basis. Therecommendations are submittedtotheGrindrod by theremuneration/nomination committeeonanannual The leveloffeespaidtonon-executivedirectors isreviewed Non-executive directors’ remuneration necessary, from shareholders. general meetingandisavailabletoaddress anyqueries,if The remuneration committeechairmanattendstheannual review andrecommend totheboard, theleveloffeesfor • adherence toapplicablelegislation;and • approve thegroup policyonremuneration ofexecutives • determinetheperformancemanagementcriteriaforboth • establishandagree onthetotalremuneration packagefor • The committee’s keyobjectivesinclude: Companies ActandupdatedtotakeaccountofKingIII. by theboard andencompasstheprovisions of the new Terms ofReference thatare reviewed annually, approved realising shareholder value.Thecommitteeoperates under the non-executivedirectors. and seniormanagement; their responsibilities; the executiveandnon-executivedirectors incarryingout executive directors andkeyseniormanagement; 2011 fi nancialyear-end, wasasfollows: The remuneration paid/payabletoexecutiveandnon-executivedirectors andprescribed offi cers’ofthecompany relating tothe Directors’/prescribed offi u-oa – 2 6 9 773 1 7 43236 15473 27763 5994 21769 – – Sub-total AG Waller 2011 MR Wade LR Stuart-Hill(retired 30June2011) AF Stewart DA Rennie DA Polkinghorne JG Jones(retired 31August2011) HJ Gray(appointed1June2011) AK Olivier prescribed offi Executive directors/ * Includessettlementofaprofi** tshareagreementwhichwasentered intowhenacquiringIslandViewShipping IncludesfeespaidbyGrindrod BankLimited. * Includesaccommodationcostsin SingaporeofR786600aspartthe employmentcontract. # DGah 16 5 – 3 234 158 158 – – – 218 153 440 234 158 535 – – – 158 158 – – – – 218 153 – 440 – – 535 – – – 47 158 5116 47 – 58 5637 – – – – – 2213 9796 2400 – 3344 4009 176 158 2903 3237 4337 – 60 – 1055 1760 187 158 901 50 816 5459 2289 2249 206 158 153 2002 2359 81 524 2421 438 388 819 – – Total emoluments – 10543 77 1765 Sub-total 1861 4640 – – WD Geach* – – 2359 – – SD Zungu – 45595 RA Norton(retired 19May2010) 102 MR Faku 10 543 15 473 – MJ Hankinson – – 8595 IM Groves* – 30122 H Adams 6096 1948 IAJ Clark* Non-executive directors 513 – 21769 Sub-total 513 LR Stuart-Hill 1744 AF Stewart – DA Rennie 1744 DA Polkinghorne TJT McClure (retired 31July2010)** JG Jones AK Olivier Executive directors 2010 Total emoluments Sub-total WD Geach* SD Zungu MR Faku MJ Hankinson 31 October2011) (appointed MH Visser IM Groves* H Adams IAJ Clark* Non-executive directors # cers cers’ emoluments cers’ 154 46 – 4 204 – 2054 – 45864 13656 2054 32 208 94 13015 – 17 233 436 436 1524 1524 Directors’ 29 17 – 36 – 356 180 180 – – 290 – – 356 519 180 180 180 622 – – – – 290 – – – – – 519 180 – 622 – – 51 117 – 51 – – – 239 110 180 – 180 180 229 – 57 239 180 514 3 – 3 32 – 32 – – – 32 – 366 77 443 204 6487 2024 4463 787 3676 – – – 260 47 317 153 4740 1593 3147 467 2680 – – – 133 87 220 – 2230 – 3971 6005 3860 1274 2733 2592 2230 1449 2697 3034 750 3413 857 2411 887 1400 10176 792 1983 1373 4391 397 1634 1810 376 – 2621 5785 264 – 2014 – 1167 1607 – – 1370 – – 4618 – – – – – – – – 1 3 1 2 0141 5 43810 13 656 30154 12921 17233 – – R000 fees Committee – 9 7 7 9 5 365 1891 3474 878 2596 – R000 fees remuneration Basic R000 Retirement and other benefi medical R000 ts package R000 Total Bonus R000 71 R000 Grindrod Limited Integrated Annual Report 2011 Total 72 Grindrod Limited Integrated Annual Report 2011 results andthere isprovision foradiscretionary element. based onpre-agreed keyperformanceobjectives,fi nancial Bonuses paidtoseniormanagementwithindivisionsare Other seniormanagement out below: The bonuspaymentsrelated to2011performancesare set discretionary portion. key performanceobjectivesandthere isprovision fora bonus isdeterminedbygroup anddivisionalfi nancial results, at 100%ofGuaranteedTotal CostofEmployment.The Grindrod’s short-termincentivesforexecutivesare capped Executives Short-term incentive Incentive schemes as follows: As required byKingIIItheremuneration paidtothenextthree highestpaidemployeesfortheyearended31December2011are REMUNERATION REPORT mlye32632 3731 3731 Total Employee 3 Employee 2 Employee 1 The abovearealloffshorebasedemployeesandremunerationhasbeenconvertedtoRandsattheaverageexchangerate. vrg 57% 50% 50% 40% 75% 50% 75% 61% Percentage payout Average AG Waller MR Wade AF Stewart DA Rennie DA Polkinghorne HJ Gray AK Olivier Name (continued) objectives. are basedonprofi tgeneratedandpersonalperformance least 17,5%.There isno cap onindividualallocationswhich allocated toabonuspool,subjectreturnonequityofat incentive scheme,where upto22,5%ofprofi tbefore taxis The Trading divisionhasadeferred profi tsharing instances beashigh100%. the FinancialServicesdivision,thismaximumcaninsome 50% oftheirtotalannualguaranteedremuneration. Within short-termincentivesofuptoamaximum generally earn Other seniormanagementexcludingFinancialServices,can of theschemeforaconsiderationR2615000. 400 000ordinary shares were allottedduringtheyearinterms November 2015. 1 251centsperordinary share andatvaryingdatesbefore dates theoptionswere grantedandvaryfrom 239centsto options are exercisable atthemarketpricesrulingon option intermsoftheschemeat31December2011.The share capitalexcluding treasury shares) remain under and 3300000shares (equivalent to0,6%oftheissued The share optionscheme isclosedtoadditionalparticipants optionscheme Share Long-term incentives remune- 10 094 ration Basic R000 Bonus 7 16568 3926 5999 6 474 6643 1 294 2 268 2 912 R000 Total 2011 14 965 2 226 6 150 6 589 2010 Total 5 0 0 0 5 0 1950000 400000 2350000 Limited. granting ofoptionsforapproval bytheboard ofGrindrod The remuneration/nomination committeerecommends the bonus. price. Theparticipantsreceive theamountdueasacash shares onthedateuponwhichanoptionvestsandgrant difference betweentheweightedaveragepriceofGrindrod days. Thecashsettlementamountofanoptionisequaltothe the averageofclosingpriceprevious seventrading is determinedonthesamebasisassettlementprice,i.e. In termsoftherulesscheme,grantpriceanoption have anexpirydatebeyondthevestingdate. anniversaries oftherelevant grantdates.Theoptionsdonot third oftheoptionsveston eachofthethird, fourthandfi fth new schemeare cashsettled ratherthanequitysettled.One- scheme, theimportantdifference isthatoptionsunderthe the newschemeare modelled onthoseoftheshare option the aforementioned share optionscheme.Whilsttherulesof in 2007forexecutivesandkeyseniormanagers,placeof The group share pricelinkedoptionschemewasintroduced pricelinkedoptionscheme Share A summaryofoptionsexercised duringtheyearandthosestilltobeexercised are asfollows: 0 0 5 31.0223.11.2015 23.11.2012 1251 26.11.2013 23.11.2015 100000 26.11.2010 23.11.2012 239 1251 23.11.2015 – 100000 23.11.2008 1251 150000 26.11.2013 100000 23.11.2015 26.11.2009 150000 23.11.2012 – 239 1251 380 200000 500000 150000 – – 150000 AF Stewart 300000 100000 400000 DA Rennie 100000 AK Olivier IAJ Clark Director Options at 01.01.11 0 0 10001212.120 23.11.2015 23.11.2008 1251 100000 – 500 000 0 0 10001212.120 23.11.2015 23.11.2009 1251 100000 – 400 000 exercised the year Options during as follows: senior management,stilltovestasat31December2011,is A summaryofoptionsgrantedtoexecutivedirectors and the scheme. on hisretirement on31 August2011,intermsoftherules vested in2011.Inaddition,R54 783waspaidtoMrJGJones Bonus paymentsofR35867were madeonoptionswhich net aftertaxprofi tofthatdivision. operating divisionofthegroup maynotexceed10%ofthe Bonus paymentsmadeunderthisschemeinanyone 01342001633 1395 2822 1430 3402000 2350 3116000 2400 62000 2542000 1625 905068 330672 403335 2011 2010 2009 2008 2008 2007 2007 Date optiongranted Options at 31.12.11 0 0 5 31.0223.11.2015 23.11.2015 23.11.2012 23.11.2015 23.11.2011 1251 23.11.2015 23.11.2010 1251 23.11.2009 1251 1251 100 000 100 000 100 000 100 000 0 0 5 31.0123.11.2015 23.11.2015 23.11.2011 23.11.2015 23.11.2010 1251 23.11.2009 1251 1251 23.11.2015 100 000 23.11.2015 23.11.2011 100 000 26.11.2013 23.11.2010 100 000 1251 26.11.2010 1251 239 100 000 100 000 200 000 Option price (et)VsigdtsExpirydates Vesting dates (cents) 10 761075 Number of otos Price(cents) options 73 Grindrod Limited Integrated Annual Report 2011 74 Grindrod Limited Integrated Annual Report 2011 The detailofawards grantedtoexecutivesasat31December2011isfollows: REMUNERATION REPORT 76 400 1 01.03.2016 633 FSeat5240 660 3 16501.03.2011 1625 1633 16600 582400 AF Stewart ARni 5 0 5 0 3 2 01.03.2011 1625 1633 51600 34 1 657400 700 01.03.2016 633 DA Rennie APligon 3 0 5 0 3 2 01.03.2011 1625 1633 51600 233400 227 1 DA Polkinghorne 700 01.03.2016 633 KOiir17470 8 0 3 2 01.03.2011 1625 dates (cents) 1633 31.12.2011 (cents) 283300 year year 1764700 01.01.2011 AK Olivier Director pin rne etdVsigpriceat Vesting vested granted Options tdrn h uigtepieOtosa rn aeVesting grantdate Optionsat price duringthe duringthe at 63 1 700 01.03.2016 633 2 0 7 0 16301.03.2014 1633 76300 229 000 9 0 36016301.03.2014 1633 63600 191 000 0 0 46016301.03.2014 1633 34600 104 000 8 0 2 0 3 01.03.2014 1633 227600 683 000 pin pin Option Options Options (continued) 130 3 23001.03.2011 2350 1633 31 300 80016323001.03.2011 2350 1633 28 000 33016323001.03.2011 2350 1633 43 300 20016323001.03.2011 2350 1633 62 000 2 0 3 01.03.2015 1633 01.03.2015 1395 01.03.2014 227 700 1395 01.03.2013 1395 01.03.2014 229 400 1430 01.03.2013 229 300 1430 01.03.2012 229 300 1430 108 000 108 000 01.03.2012 108 000 1625 283 400 630 3 01.03.2015 1633 01.03.2015 1395 01.03.2014 76 300 1395 01.03.2013 1395 01.03.2014 83 700 1430 01.03.2013 83 700 1430 01.03.2012 83 600 1430 01.03.2013 68 000 2350 01.03.2012 68 000 2350 01.03.2012 68 000 1625 31 400 31 300 16 800 37016301.03.2015 1633 01.03.2015 1395 01.03.2014 63 700 1395 01.03.2013 1395 01.03.2014 88 000 1430 01.03.2013 88 000 1430 01.03.2012 88 000 1430 01.03.2013 68 800 2350 01.03.2012 68 600 2350 01.03.2012 68 600 1625 28 000 28 000 51 800 34023001.03.2013 2350 01.03.2012 2350 01.03.2012 1625 43 400 43 300 51 800 20023001.03.2013 2350 01.03.2012 2350 62 000 62 000 31 December2011,isasfollows: A summaryofoptionsgrantedtoexecutivesandseniormanagementtheFinancialServicesdivision,stillvest asat on acombinednetassetvalueofGrindrod Bankandrelated fi nancialservicesentitiesasopposedtotheGrindrod listedprice. the sameprincipleasGrindrod Limitedshare pricelinkedoptionscheme,withtheexceptionofshare pricebeingbased A share pricelinkedscheme wasintroduced in2009forGrindrod Bankexecutives andkeyemployees.Theschemeoperateson pricelinkedoptionscheme Grindrod BankLimitedshare 98 The fairvalueatcommencementdateoftheoptionsawarded on1March 2011wasR2,74pershare. 121 000 1 700 01.03.2016 1 633 01.03.2016 633 A bonuspaymentofR328380wasmadeintermstherules ofthescheme. Services division. Bonus paymentsunderthisschemeinanyyearare restricted toamaximumof6%thenetaftertaxprofi t of theFinancial 2011 2010 2009 Date optiongranted RWd 7 0 3 0 163 2 01.03.2011 2822 dates (cents) 1633 31.12.2011 (cents) 31000 year year 571000 01.01.2011 MR Wade Director GWle 9 0 9 0 16301.03.2014 1633 98000 294000 AG Waller 0 0 18600 9 0 5076200 598700 1866000 3 808900 pin rne etdVsigpriceat Vesting Vested granted Options tdrn h uigtepieOtosa rn aeVesting grantdate Optionsat price duringthe duringthe at 6 0 1160 3 01.03.2014 1633 121600 365 000 pin pin Option Options Options Number of 9 0 604 499 466 6 172000 2 996000 1 144000 2 032000 2 0 16301.03.2015 1633 121 700 3 0 13501.03.2015 1395 01.03.2014 1395 01.03.2013 1395 132 700 132 700 132 600 otos Price(cents) options 670 3 01.03.2014 1430 01.03.2013 1430 01.03.2012 1430 01.03.2013 26 700 2822 01.03.2012 26 700 2822 26 600 31 000 31 000 800 3 01.03.2015 1633 98 000 75 Grindrod Limited Integrated Annual Report 2011 76 Grindrod Limited Integrated Annual Report 2011 93 01.03.2016 604 400 The ordinary andpreference shareholdings were unchangedat28February 2012. There were nonon-benefi cialindirect shareholdings at31December2011in respect ofpreference shares heldbythedirectors. Ordinary shares At 31December2011,thedirectors heldinterests inthecompanyasfollows: Directors’ interests inthecompany features are setoutinthenoticeofannualgeneralmeetingforconsiderationbyshareholders. A forfeitableshare planscheme hasbeendevelopedtocaterforad-hocretention forexecutivesandkeypersonnel.Thesalient plan Forfeitable share The detailofawards grantedtoanexecutiveasat31December2011isfollows: REMUNERATION REPORT Preference shares There were nonon-benefi cialindirect shareholdings at31December2010in respect ofordinary shares heldbythedirectors. LR Stuart-Hill(retired 30June2011) AF Stewart DA Rennie AK Olivier MJ Hankinson IM Groves IAJ Clark Director ietr0.121 er3.221 cns dates (cents) 31.12.2011 year 01.01.2011 Director LR Stuart-Hill DA Rennie JG Jones(retired 31August2011) IM Groves IAJ Clark Director DA Polkinghorne 9 0 2000 976000 280000 696 000 9 0 19004601.03.2012 466 149000 696 000 pin rne Option granted Options (continued) tdrn h pin tpieVesting price Optionsat duringthe at 8 0 9 0 0 01.03.2014 604 93300 280 000 Options 013178000 10 123147 Benefi Benefi 3 5 – 1 634250 9 4 – 1 298947 6 0 – 5 969900 220 931 205 931 indirect 6 5 – – 462 050 750 000 nietindirect indirect 15 000 0 8000 8 000 2011 012011 2011 cial ca Non-benefi cial 4 0 6 01.03.2014 01.03.2013 466 466 149 000 149 000 3004901.03.2015 01.03.2014 499 01.03.2013 499 499 83 000 83 000 83 000 3306401.03.2015 604 93 300 – – – –– eeica Non-benefi cial Benefi cial 5 3 14000 – 254 731 205 931 nietindirect indirect 380– – 4000 13 800 20 000 15 000 002010 2010 cial 10000 – 10 048647 1 634250 1 298947 5 719900 Benefi cial 632 050 750 000 indirect 8 500 5 000 2010 reviewing thesystemsandprocedures tocapture, collate, • gaininganunderstandingofGrindrod’s systemsthrough • Key procedures weconductedincluded: validated bycorporateheadoffi ceandincludedinthe report. within ourassurancescopewascollected,collatedand compilation processes, tracinghowdataforeachindicator Our workwasplannedtomirror Grindrod’s owngroup level appropriate evidenceonwhichwebaseourconclusion. explanations weconsidered necessarytoprovide suffi cient performed ourworktoobtainalltheinformationand team ofsustainabilityassurancespecialistsplannedand Considering theriskofmaterialerror, ourmulti-disciplinary Key procedures defi nitionsandbasisof reporting. The evaluationcriteriausedforourassuranceare theGrindrod assurance engagement. assurance andissubstantiallylessinscopethanareasonable the areas onwhichweprovide assurance.Thisprovides less the processes andsystems usedtocompileinformationin achieve limitedassuranceISAE3000requires thatwereview Reviews ofHistoricalFinancialInformation(“ISAE3000”).To applicable toAssuranceEngagementsOtherThanAuditsor Standardaccordance onAssurance withthe International We conductedourlimited assuranceengagementin Assurance process andstandard signifi• cant fi nesandnon-monetarysanctionsfornon- signifi• cant fi nesandnon-monetarysanctionsfornon- • fatalities; the absenceof: We alsoconfi rmedmanagement’s representation regarding injuryfrequency rate. • totaldirect andindirect GHGemissions;and • indirect energyconsumption; • direct energyconsumption; • matter: for theyearended31December2011onfollowingsubject Grindrod engagedustoperformlimitedassuranceprocedures Scope ofourwork 31 December2011(“theReport”). in theirIntegratedAnnualReportfortheyearended to Grindrod ontheirsustainabilityindicatordisclosure Independent assurancestatementbyDeloitte&Touche ASSURANCE STATEMENT assured performancedataincludedinthereport. aggregate, validateandprocess source dataforthe systems atcorporateheadoffi ceandsitelevel; interview withmanagementresponsible forreporting compliance withlawsandregulations. compliance withenvironmental lawsandregulations; and Chief OperatingOffi cer data. and executionofsystemstocollectrequired sustainability integrated annualreport 2011, includingtheimplementation The directors are responsible forthepreparation ofthe Responsibilities ofdirectors independent assuranceprovider Responsibilities ofdirectors and sustainability performanceindicatorsare notfairlypresented. our attentionwhichcausesustobelievethattheselected examination oftheevidenceobtained,nothinghascometo theexceptionofmattersnotedabove,basedonour With Freight Servicesdivision. consumption, GHGemissionsandinjuryfrequency rateatthe accuracy andcompletenessofthedirect andindirect energy indicator specifi cpolicies,we noteddeviations relating tothe Although progress hasbeenmadewiththeimplementation of and procedures relating totheindicatorsunderreview. We notedayearonimprovement inthereporting systems Conclusion National Executive: Green Point,CapeTown, 8005. 1st Floor, TheSquare, CapeQuarter, 27SomersetRoad, 28 February2012 Cape Town, SouthAfrica Director, Deloitte &Touche Nina leRiche the conclusionswehaveformed. anyone otherthanGrindrod forourwork,thisreport, orfor purpose. Thus,wedonotacceptorassumeresponsibility to state totheminalimitedassurancereport andfornoother might statetothecompanythosemattersweare required to engagement letter. Ourworkhasbeenundertakensothatwe This report ismadesolely to Grindrod inaccordance withour 31 December2011. conclusion ontheperformancedataforyearended Our responsibility isto express ourlimitedassurance Deloitte’s responsibilities Advisory CR Beukman L Bam A fulllistofpartnersisavailable onrequest. MJ Comber Corporate Finance , NBKader Deputy ChairmanoftheBoard. Finance Tax &LegalServices GGGelink , GMPinnock , TJBrown , JKMazzocco Chief Executive Chairman oftheBoard Audit , LGeeringh Human Resources , DLKennedy , AESwiegers Consulting Risk , , , 77 Grindrod Limited Integrated Annual Report 2011 78 Grindrod Limited Integrated Annual Report 2011 development, performanceimprovement andreward succession andintegrationwithhumanacquisition,skills Business managementhasaccountabilityformanaging grow thepoolofleadership. subsequently triggered thelaunchofintegratedinitiativesto and executivepositions.Informationfrom thisassessment need forskilleddesignatedemployeesinseniormanagement leadership pipeline,scarce technicalorspecialistskillsandthe and skillswaslaunchedtosupportidentifythecurrent within thebusinesses.Anassessmentoftalentavailability The group continuestogrow anddevelopleadersatalllevels Talent development established agenciestosource great talent. pool ofcandidates,thegroup hasforgedrelationships with Where there isbusinessurgencyorinadequatedepthinthe through recruitment agencies. and simultaneouslyreducing thecostofsourcing employees critical technicalskillsthrough expandingtalentdatabases tool, hasresulted insignifi cantbenefi tsincludingsourcing The adoptionandimplementationofanon-linee-recruitment Talent acquisition engagement andsustainabilitypriorities. committees andforumscaneffectively manageemployee policies andprocedures inorder thatthevariousestablished To facilitatetheseendeavours,thegroup hasrevised its that thealignmentandimplementationissuccessful. management andexecutiveperformancemeasures toensure and employmentequityare integratedintodivisional,senior relevant legislation.Sustainabilitytargets,includingB-BBEE implementing bestpracticeinitiativesandcomplyingwithall strategies whichare drivenbythebusinessstrategy, whilst A holisticapproach isintegraltoallhumanresource retain andimprove theperformanceofitspeople. The group continuestosustainpastendeavoursattract, position toaddmeaningful,reciprocal value. viable environment withinwhichthegroup and staff are ina work-life experience.Thisapproach facilitatesadynamicand employee growth, developmentandbalancethroughout the creating valueinthegroup, whilstsimultaneouslysupporting The group continuestomaximiseemployeeengagementin INTEGRATED HUMAN CAPITAL oa on etrs994 6 71223 6089 852 4014 57 234 24 153 629 162 1 466 1269 45 456 768 3957 959 2939 59 Total Grindrod group Total associated companies Total jointventures Total subsidiaries Group relationship Permanent staff (RSA citizens) Permanent staff (non-RSA citizens) in thesetwostrategicgeographicalareas. rest ofAfricaandAsia,clearly indicatingthegroup’s expansion There isanoticeable increase inthegroup’s presence inthe includes subsidiary, jointventure andassociatedcompanies. distribution ofthegroup human resources complement,which The tablebelowrefl ectsabreakdown ofthegeographic businesses andundergoingrestructuring initiatives. primarily duetothegroup exitingcertainFreight Services 6 089attheendofDecember2011.Thereduction was worldwide decreased from 6286at31December2010to The numberofgroup employees (permanentandtemporary) Staff complements growth. defi nelearning required toimprove productivity andcareer achievement ofgoals,address areas fordevelopment and discussions are heldwithemployeesannuallytorecognise managers undergoingtrainingduring2011.Performance incorporated theprocess intotheiroperations,with458 within thesubsidiarycompaniesandbusinesseshave performance andgrowth ofitspeople.Seniormanagement group hasrevised androlled outaprocess forimproving the In achievingtargetsandmeetingsustainabilitypriorities,the Employee performance based businessesandoperations: relationship, permanent/temporaryandSouthAfrican/offshore The tablebelowrefl ectsstaff complementsbybusiness statistics). development spend(refer theskillsdevelopmentsectionfor taken upbystaff andunderpinnedgrowth intraining and processes. Further, technicalandsoftskillsprogrammes were Total Australasia South America North America Europe Asia Rest ofAfrica South Africa Country Contract staff (RSA citizens) 6 089 1 203 4 619 2011 185 15 64 Contract staff 1 2 (non-RSA citizens) 8 3 6 286 9 5 055 00%Change 2010 4 283 245 2 (23) 926 2(20) 12 7(75) 47 (50) 1 (100) – Grand total discipline. performance challengesand administeringprogressive platforms, managingemployeeissues,addressing by divisionbasedHRexpertsinbuildingcommunication management are continuouslytrainedandsupported In supportingongoingrelations, supervisorandmiddle respective bargainingcouncils: The followingtableindicatesthemembershipsof order tobargainwithinthat particularunit. a representation threshold of50%withinthebargainingunitin organised labour, eachunionorcombinationthereof requires In termsoftherecognition agreements betweenGrindrod and was 38,5%(34%in2010)linewithgeneralindustrytrends. Unionisation levelswithintheSouthAfricanbasedcompanies council. of employees(35%)fallundertheauspicesabargaining consultations whichare conducted in-house,afairproportion Whilst mostemployeerelated mattersare concludedthrough to supportthebusiness. engaging withstaff andshop stewards inidentifyingsolutions minimise retrenchments andtheaftereffects oflowmorale,by number ofrestructuring initiatives.Leadershipwasableto Continued efforts tostreamline businessesresulted inalimited and sales. and drivingopportunitiesforcross serviceintegration innovationthroughdevelopment andinternal identifying dedicated platformshavebeencreated toenhancebusiness particularly togeographicallydispersedstaff. Further wide publicationsproviding channelsofengagement, forums andare supportedbytheintranetandgroup employment equity, skillsdevelopmentandbargaining Communication forumshavebeenestablished,i.e. during theyear. employees toachievebothcorporateandpersonalobjectives of acollaborativeandconsultativeapproach inguiding Leadership supportsthegroup culture andimplementation Employee relations Motor FerryIndustryBargaining Syndicate ofMaputocoalterminal Members Abbreviation Metal andEngineeringIndustry National BargainingCouncilfor Bargaining council mlye C 83 546 MCT 397 MEIBCSA MFIBCSA Council ofSouthAfrica 606 employees NBCRFI Africa Bargaining CouncilofSouth the RoadFreight Industry in theselectionofpreferred serviceproviders. There hasalsobeenincreased focusonB-BBEEscorecards them grow andestablishthemselvesinacompetitivemarket. to offer assistancetofl edglingbusinessesinaneffort tohelp initiatives in2012,where thegroup willexplore opportunities organisation. Enterprisedevelopmentwillbeoneofthekey Grindrod encouragesB-BBEEefforts outsideitsown achieved thisdistinction. the highratingof1where companiesanddivisionshave below thetargetratingof4,whilesimultaneouslymaintaining standing, particularlywhere companiesanddivisionsfall In 2012focuswillbeonimproving thegroup’s B-BBEE within theGrindrod group. body toassistwiththeverifi cationofeachthecompanies The group retains theservicesofAQRate,asanindependent companies’ movetowards supportingB-BBEEimperatives. towards formalassessment, apositivesignofthevarious thegroup thereWithin hasbeenashiftfrom self-assessment 1 to8,withbeingthemostdesirablescore. level 4to3.Theratingscaleisbasedonarangeof signifi cantimprovement inthe average B-BBEElevelsfrom Over theperiodDecember2010to2011there hasbeena previously disadvantagedindividuals. aimedatdevelopingandempowering of 242learnerships group. Intermsofthis,the group hasseentheimplementation it isnecessarytobuildonthestrengths ofeachindividualinthe economic mainstream. For suchastrategytobesustainable, matter, aimed atbringingallsectorsofthepopulationinto initiative asabusinessimperativeratherthancompliance and objectivesasdefi nedinlegislationand recognises this The group continuestoactivelysupporttheB-BBEEprinciples economy. going effort tocontributemeaningfullytheSouthAfrican the group continuestorefi neitsB-BBEEinitiativesinanon- Grindrod (SouthAfrica)(Pty)Limitedhavebeenachievedand Services IndustrySub-sector. Thetargetsoriginallysetfor stringent Transport SectorGenericScorecard: Maritimeand signifi cantconsideringthatthegroups were ratedonthemore scorecards asawhole.Thisachievement ismadeallthemore made progress notonlyintheownershipelementbut ontheir Africa) (Pty)LimitedandGrindrod ShipsAgenciesinparticular principle totheFreight Servicesdivision.Grindrod (South past year. Theeffect ofthiswasrefl ectedviathe fl owthrough Limited withtheownershipelementhavingbeenverifi edinthe Transformation continuestoplayanimportantrole inGrindrod B-BBEE andemploymentequity 79 Grindrod Limited Integrated Annual Report 2011 80 Grindrod Limited Integrated Annual Report 2011 to berealised inskillsdevelopment,particularlyblack andfemaledesignatedstaff. 87%(2010:83%)composedofdesignated employees.Thegrouptheir skills.Oftheselearners, isworkingonfurtherimprovements A totalof6473(2010:2711) training interventionswere attendedbyemployees,criticaltogrowing thebusinessanddevelopi development attrainingcentres serviceproviders. andthrough external The group offers aportfoliooftraininganddevelopmentinterventionsincludingon-the-job-training,classroom andprofessiona development andonthejobcoachingwasR9,8million(2010:R9,5million). skills astheengineofproductivity andtopositionthegroup forgrowth. Training spend,bothonformaltraining,professiona Amidst theuncertaineconomicconditions,board andexecutivesrecognised andrecommitted todevelopingandretaining Skills development Demographic profi (2010: 88%)and,inparticular, blackrepresentation stoodat73%(2010:88%). The SouthAfricanbasedoperations’overallcompositionofthedesignatedgroups asapercentage oftheworkforce stoodat82% designated groups inlinewiththeavailableemploymentopportunities,eventhoughscarcity ofindustryskillsremains achalle equity forums,includingthegroup humancapitalcommittee.Thegroup willcontinuetoattract,retain anddeveloptalentfrom All group companiesare implementingtheemployment equitypolicy. Thisbusinessimperativeismonitored byemployment Employment equity INTEGRATED HUMAN CAPITAL 2011 Male Female Foreign Female Male White Indian Coloured African nationals Indian Top Coloured management African Occupational levels 2011 oa 7 697, 40,63 57,3 71,1 24,3 53,4 58,5 86,9 46,2 11,4 32,4 47 65,3 67,3 81,8 6473 53,1 61,7 79,3 70,5 83,3 82,7 100 673 66,2 87 93,4 87,7 1234 2585 100 79,3 1031 171 435 17 327 Total Workplace effectiveness Continual professional development Shipping Adult basiceducationandtraining Regulatory Mobile hoist/driver Management andsupport Computer Skills programme Course mngmn 42–15 1 – 2 14 1 6 management Senior mngmn 61 5343 65 30 4 3 55 15 16 management Middle kle 7 1 4 15 4 237 148 54 91 240 111 772 Skilled eisild739 1 55 382 63 51 95 113 96 763 Semi-skilled es kle 1 455 – 1 2 59 5 14 218 Least skilled oa 7 3 2 5 1 4 8 3 4 164129 6 51 24 640 10 3432 10 389 243 78 111 23 250 17 427 158 237 1775 contract Temporary/ Total rn oa 3 5 6 2 2 5 413 253 121 328 460 254 1933 Grand total ecnae4, , 007126558,9 5,5 2,6 7,1 10,0 5,5 41,8 Percentage ecnae4, , , , , , , 831, , , 100 0,1 5025 0,5 5 11,1 23 88,3 558 7,6 4439 5,7 383 3,5 284 6,4 178 8,3 321 7,4 418 49,4 373 2482 Percentage 2010 Total le forSouthAfricanbasedcompanies –––––1– attendees Total (continued) Designated % 1 653 1 263 3 762 81,4 188 299 330 29 – designated 73110,2 1,1 17,3 designated 4 – 4 147 3 03 20 333 5 1 – 159 9 17 51 799 % Black 1–– – 11 53– 3 75 152 5 71 319 1 Total White White designated aeMl eaeTotal Female Male male % Female 2 009 1 341 4 619 107 339 322 490 100 nge. 11 the ng l l of employeewellness. professional serviceproviders hasalso assistedintheaspect index. Thepresence ofon-siteclinicsstaffed byexternal conducted, includingglucose, blood pressure andbodymass Wellness dayshavebeenheldwhere arangeoftestswere relationships. tool whichaimstowards improving thequalityofworkplace “Life Management”servicesandtheimportantmanagement offers awiderangeofservicesincludingcounselling,practical assisting withprofessional counsellinginterventions.TheEWP addition toenhancingtheproductivity oftheemployeeby services tobothmitigatepotentialbehaviourriskfactors,in engagement rateof26%in2011.TheEWPhasprovided managers anddependentsofemployees,withanoverall the programme isbeingwellaccessedbyGrindrod employees, has beenwellreceived andtheutilisationthereof indicatesthat The introduction ofanemployeewellnessprogramme (“EWP”) organisational objectives. the deliveryofhighqualityservicesandachievement Maintaining thewellbeingofemployeesistherefore criticalto absenteeism, staff turnover, lowmoraleandescalatedcosts. can negativelyimpacttheentire workenvironment, resulting in into impaired work performance. Unchecked,theseissues employees’ personalandoccupationalissuesoftentranslate where stress hasbecomearoutine partofdoingbusiness, In ahighlycompetitiveandrapidlychangingworkenvironment, Employee wellness year underreview. There were noincidentsofhumanrightsviolationsduringthe There isnochildlabourand forced labourwithinthegroup. enshrined incompanypolicyandemploymentcontracts. rights throughout itsoperations. Basichumanrightsare Grindrod continues to upholdandrespect employeehuman Human rights R345 000andadeckcadetatR215000. in skillswiththecostoftraininganengineeringcadetat their fi rstlicence.Theprogramme isasignifi cantinvestment with a100%successratefrom recruitment tocadetsobtaining three female.Thetrainingprogramme isextremely successful training 24cadets(2010:23),ofwhich12were blackand academy continuestheheritagestartedin1970through in producing designatedandfemaleoffi cers.Thecadet Grindrod’s CadetTraining Programme is anindustryleader auxiliary crew forcruiselinersandyachtsmen. categoriesofoffilocal andinternational cers,ratings,cadets, the trainingschool.Thisnumberincluded,amongstothers, 2011, 2029(2010:1678)seafarers completedcoursesat shippingorganisations.During Authorities andinternational recognisedinternationally trainingtoindividuals,Port African MaritimeSafetyAuthority(“SAMSA”)accredited, skills through Unicorn’s Training Schoolwhichoffers South Grindrod continuestodevelopthepipelineofmaritime numerous initiativesbeing continued in2012. This shallremain anarea offocuswithintheworkplacewith training/awareness andtesting. campaigns andtestingduringtheyearongoingcounselling, National AIDSBannerthon,Dayawareness contribution tocorporatefundraisinginitiativessuchasthe were implementedin2011.Theseincludedcontinued HIV/AIDS related initiativesamountingtoR1,3millionspend education andawareness. managers tosupportstaff appropriately and promotes discrimination, enshrinesvoluntarydisclosure, empowers and leadingpractice.Thepolicyprotects employeesfrom which isinformedbytheSouthAfricannationalframework Employees continuetobeguidedbythegroup HIV/AIDSpolicy spread andimpactoftheHIV/AIDSpandemic. actively encouragingemployeestoknowtheirstatus,curbthe committed incontinuouslyraisingawareness, educatingand As aresponsible corporatecitizen,thegroup remains HIV/AIDS ensure thatcontractorsandvisitorsalsocomplywithall • consultwithemployeesonhealthandsafetyissues; • provide, operateandmaintainbuildings, plant,equipment • activelyrespond toandinvestigateallincidents andensure • complywithallstatutoryobligations,includingtheprovision • establishcleartargetsandobjectivesonanannual basisto • implementriskmanagementsystemswhichare relevant • Grindrod undertakesto: Safety policystatement incidents, withinaculture ofcontinualimprovement. compliance withapplicablelegislationatargetofzero and safetyobjectivestargetsremain simple,through full affected bytheoperations withinthegroup. Grindrod’s health protect thehealthandsafety ofitsemployeesoranyperson(s) Grindrod recognises itsmoralandlegalresponsibility to Occupational healthandsafety systems. Senior managementinthegroup are obligatedto safety, healthandenvironment andqualitymanagement managed intermsofsite-level andship-basedintegrated group’s safetyefforts. Occupationalhealthandsafetyis Shipping andFreight Servicesaccountforthebulkof the safety standards. the group’s partnerstoachievecomparablehealthand site healthandsafetyrequirements, aswellworkwith health; and systemsthatare safeandwithoutrisktoemployees care; injured employeesare giventhebestpossiblemedical training; of adequatesupervision,informationinstructionand improve healthandsafety intheworkplace; safety performance; as identify, promote andcontinuouslyimprove healthand and suitablefortheorganisation’s riskexposure, aswell 81 Grindrod Limited Integrated Annual Report 2011 82 Grindrod Limited Integrated Annual Report 2011 safety measures. Although fatalitieswere reduced toone fortheyear, thisisstillonetoomany. Regrettably thenumberofmedicaltreatment cases continuedtoincrease despiteconsiderableadditionalinvestmentinimproving Freight Services for theyear. The divisiononceagainmaintaineditsexcellentrecord, reporting onlythree medicaltreatment casesandtwolosttimeinciden Shipping Total occupational,healthandsafetyinvestmentduring2011wasR19,6million(2010:R13,1million),anincrease of48,9%. taken inallcases. incidents are reported totheboard anddealtwithinthemostseriouslight,fullinvestigationsconductedremedial a ensure thatlegalrequirements are compliedwithasthisalsoformspartoftheirannualperformanceassessment.Allserious INTEGRATED HUMAN CAPITAL elhadsft pn (Rand) Lost timeinjuryfrequency rate(permillionmanhours) Fatalities Lost timeincidents Medical treatment cases Health andsafetyspend Key performanceindicators elhadsft pn (Rand) Lost timeinjuryfrequency rate(permillionmanhours) Fatalities Lost timeincidents Medical treatment cases Health andsafetyspend Key performanceindicators 15 181666 4 380000 (continued) 2011 2011 5,53 1,21 74 85 1 2 3 – 10495436743282453 4366734 11 034955 0 8 2 7 5576817 2325071 2 100989 0020 2008 2009 2010 0020 2008 2009 2010 ,370 Notreported 7,03 5,83 , 0,9 – 0,8 25 29 79 52 24 72 68 253 1–1 423 ––– ctions ts

construction oftoiletsatAmaotiIIISchool intheAmaoti • adonationofcontainer classroom tothePinetown Rotary • newkitchenandclassroom repair project atMbasela • During theyearfollowingcapitalprojects were completed: Focus areas communicationofthegroup’s corporatesocialprogrammes • involvement intrainingandmotivationalsessionsatschools • allowingemployeestimeduringnormalworkinghoursto • number ofwaysincluding: initiatives. Employeeengagementwasencouragedina involving abroader base of employeesinthegroup’s SED Over thepastyeargroup hasprogressed intermsof Employee engagement overseeing thegroup’s SEDinitiatives. responsible forgroup sustainabilitymatters,including non-executive director involvement. Thecommitteeis A socialandethicscommitteehasbeenappointedwith process.institutions tostrengthen thegovernance several relationships have beendevelopedwitheducational simply providing once-off donationsorgrants.Inthisregard therefore require more interventionbymanagementthan creating programmes whichhaveasustainableimpactand focus oneducation.There hasbeenmore attentionto The board directive forSEDspendisthatitcontinuesto and 10%tobusinessdevelopment. and skillsdevelopment,20%tocommunitywelfare needs The SEDspendisallocatedapproximately 70%toeducation the upliftmentofdisadvantagedcommunities. demonstrates thecommitmentofgroup tocontribute 2010). Thisincreased spendinachallengingeconomicperiod, economic developmentprogrammes in2011(R2,5million The group spentR4,1milliononcorporatesocialand sustainable position. institutions intheareas ofcompanyoperations,tocreate a and inmanyinstances,workingthesamecommunities development programmes (“SED”)withafocusoneducation The group continuedtoexpanditssocialandeconomic lives theytouch.” of theenormousdifferenceourhumblesteffortsmakein the focusofinvestmenttoday, butalsoquitesimply, because only becausefutureopportunityandprosperitydependson which itoperatesandadutytothatsociety’s betterment.Not “Any successfulbusinesshasarelationshipwiththesocietyin Introduction SOCIAL ANDECONOMICDEVELOPMENT township north of Durban;and Club foruseintheKwaNdengezi (Marianhill)area; Trust; Primary SchoolatInandainpartnership withProject Build at employeeinductionevents. where thegroup isinvolved;and be involvedinvariouscommunityprogrammes; Alan Olivier, groupchiefexecutiveoffi cer. supportofPondoPedal, whichprovides assistanceto • fi• nancialsupportofteenageorphanchildren underthe supportofvariouseducationalinstitutionswhichincluded • supportofREADeducationtrust; • bursariestochildren ofemployeeswithaleaningtowards • • renovation ofasciencelaboratory, consumerstudy provision ofschool bursariestoblackscholarsattending • Other educationalinitiativesincluded: Community, welfare andhealth processing invoicesandoffering credit termsinrespect of • providing trailersandinsurance; • sourcing transportbusinessontheirbehalf; • means of: Grindrod Intermodalsupportsthesesub-contractorsby programme country-wide. Thedriversowntheirtrucksand Currently there are approximately 160driversonthis is anowner-driver/sub-contractor managedprogramme. development isintheroad transportationdivisionwhere there An exampleofthegroup’s commitmenttosmallbusiness Business development capital report. instance ofemployeesisdealtwithintheintegratedhuman various HIV/AIDSprogrammes. Thesocialimpactinthe Included inthisbudgethasbeenfi nancialsponsorshipof outer Durbanarea. cost housingproject facilitated byHabitatforHumanityinthe During theyeargroup employees againparticipatedinthelow responded tovariousemergency requests. The group supportsanumber ofvariouscharitiesandalso at employment creation, educationandschools development. diverse rangeof sustainabledevelopmentprogrammes aimed the NBI.Thelatterorganisation appliesitsresources tofunda Commerce &Industry(SACCI)andhasanassociation with Grindrod isamemberoftheSouthAfricanChamber of 10 rental agreements inplace. opportunity ofowningtheirown business.To datethere are growth ofthefl eetandproviding individualswiththe with sub-contractorsare entered intofacilitatingthe whereby trucksare sourced andrental agreements Grindrod Intermodalhasalsoembarkedonaproject underprivileged schoolsintheTranskei. supervision ofICare; and Youth Development; Tshuletsa Academy(Pre-learnerships)andYoungsters Browns’ School,StFrancisCollege,ThomasMore Trust, the NokuphilaSchoolfordisadvantagedchildren, The the previously disadvantaged; various highschoolsinKwaZulu-Natal; School Foundation. High SchoolinUmlaziundertheauspicesofAdopt-a- laboratory andpurchase ofequipmentfortheKingShaka their dieselrequirements. 83 Grindrod Limited Integrated Annual Report 2011 84 Grindrod Limited Integrated Annual Report 2011 closermonitoring andguidancetobusinessunitsensure • furthercommunicationofSEDprogrammes toensure • In 2012focuswillbeplacedinthefollowingareas: Future focus the province. partnership aimedatacceleratingeconomicdevelopmentin KwaZulu-Natal Growth Coalition, whichisapublic-private Grindrod continuestoco-sponsorandparticipateinthe SOCIAL ANDECONOMICDEVELOPMENT strategy andtargetedspend; alignment andspendwithinthekeyfocusareas oftheSED strategy; stakeholders’understandingofthegroup’sexternal Science laboratory attheKingShakaHighSchoolinUmlazi, Science laboratory adopted byGrindrod. developingaclearSEDpolicywhichwillbeplacedonthe • continue toworkindisadvantaged schoolswiththe • expandtheprogrammes intootherAfricancountrieswithin • sustainandgrow theengagementandinvolvementof • by making sandwiches for the learners at Addington Primary School by makingsandwichesforthelearnersatAddingtonPrimary Grindrod staffparticipatedinNelsonMandela’s birthdaycelebration company website. and pupilshavetofunction; objective ofimproving thefacilitieswithinwhichteachers which thegroup operates, an examplebeingMozambique; employees inSEDprogrammes; (continued) in Durban. • A 15%improvement inship-basedGHGemissions Areduction inabsoluteyear-on-year tonnageof waste • Shipping achievedzero signifi cantoilspills(more thanone • • Achieved “BestPractice”result forenvironmental Performance secondindependentlimitedassuranceauditbyDeloitte, • adoptionoftheFreight ServicesdivisionalClimateChange • • implementation oftheISO14001Environmental These include: Systems andplans AppointmentofanewseniorlevelHSEmanagerwithinthe • Appointmentofanewsocialandethicscommitteeby • Thegroup environmental andclimatechange committee • Governance over whichthecompanyhasoperationalcontrol. The policyappliestoallgroupsubsidiariesaroundtheworld improving integratedperformanceinthisareaofthebusiness. and measurableauditableobjectivestargetsfor adopted bytheboardin2010.Itcontainsguidingprinciples Grindrod’s EnvironmentalandClimateChangePolicywas People workingwithaplantodriveperformance 2011 Highlights ENVIRONMENTAL AND CLIMATE CHANGEPERFORMANCE (5% improvement targetsurpassed). operational sites improved signifi cantly(64%)year-on-year electricity usageforcomparable SouthAfricanland-based 1 000nauticalmile(NM)were alsosurpassed.Normalised SOx andNOxemissions improvement targets per effi ciency year-on-year (5% improvement targetsurpassed). recycling ofallgeneralsolidwaste(6,6%achieved). sent tolandfi llandprogress towards 2015targetof10% barrel ofoil)forthesixthconsecutiveyear. performance inthe2011JSESRIassessment. programme for2012. recommendations are beingincorporatedintothework statement issetoutonpage77.Theauditor’s detailed for allfourdivisionswithinthegroup. Thelimitedassurance broadened thisyeartoinclude allscope1and2emissions footprint; and improvements inunderstanding andreducing itscarbon Strategy andImplementationPlan,aimedatdriving footprint (byemissions); two divisionscontribute96%ofthegroup’s environmental designated businessescertifi edbytheendof2012.These divisions isnow90%completeandontracktohaveall Management SystemintheShippingandFreight Services Shipping division. climate changemanagement. the board responsible foroverseeingenvironmental and Chief ExecutiveOffi cer. functioned well.Bothmeetingswere attendedbythegroup Grindrod group Environmental andClimateChangePolicy which co-ordinates group-wide implementation ofthe www.grindrod.co.za. A copyofthepolicycanbefoundoncompanywebsite,

impactsonnaturalhabitats/eco-systemsandbiodiversity • thepotentialforaccidentaloilandfuelspillsbyshipsatsea • water consumptionandthedisposalofwaste-water,• GHGemissions from theuseofelectricityinbuildingsand • inclusions andexclusions. methodology, includingtheobjective andauditablecriteriafor subsequently auditedbyDeloitte, oftheapplicationthis During theyearGrindrod completedacomprehensive review, the Group Environmental andClimateChangePolicy. progress withmeetingthequantifi edobjectivesandtargetsof defi GHGProtocol, nedbytheinternational soastotrack its organisationalboundaryforreporting environmental, as two yearsadoptedtheoperationalcontrol approach insetting key performanceindicators(“KPI”),Grindrod hasforthelast carbon emissions,andbyimplicationallotherenvironmental In settingitsorganisationalboundaryforreporting GHGor the worldthatfallwithindefi nedorganisationalboundary. management response encompassesallitsoperationsaround Grindrod’s environmental footprint isglobalandits GHGemissionsfrom thecombustionofnon-renewable • are centred around: provider, materialenvironmental andclimatechangeimpacts As adiversifi edglobaltransport,logisticsand nancialservices fi the environmentareinseparable.” business senseandthatthebestinterestsof believes thatsustainablebusinesspracticemakesgood prevent pollutionthroughoutGrindrod’s operations.Grindrod eco-effi ciency, reduce wasteandclimatechangeimpacts company’s naturalresources,maximise policytoconserve potentially impactontheenvironmentanditistherefore “Grindrod acknowledgesthatitsvariousoperationsimpactor being measured,managedandreported The group’s environmentalimpactsandhowthisis Grindrod’s globalfootprint new Maputocoalterminalexpansion. related constructionandoperation ofinfrastructure e.g.the eco-systems; and land, andtheresultant impacts onmarineandterrestrial and byourgrowing fl eetofvehiclesandlocomotiveson water needs; board desalinationplants provide more than90%ofships’ ason- operations. Shipbasedwateruseisoflessconcern particularly inland-basedvehicleandequipmentcleaning offi ces(7%ofcarbonfootprint); carbon footprint; environmental impact comprising90%ofGrindrod’s global engines. Thisisbyfarthegroup’s singlebiggestoperational petroleum-based fuels inships,vehiclesandlocomotive can befoundonthe company’s website,www.grindrod.co.za. A detaileddescription ofGrindrod’s application ofthismethodology Alan Olivier, ChiefExecutiveOffi cer 85 Grindrod Limited Integrated Annual Report 2011 86 Grindrod Limited Integrated Annual Report 2011 awareness. as wellformalised on-siteoron-shipEMS trainingand correspondence, committeemeetingnotesandminutes, levels ofthegroup intheformofintelligencebriefsand email Ongoing environmental trainingandawareness occursatall social andethicscommittee. there willbemore rigorous reporting anddisclosure tothenew environmental managementwithinthegroup. Lookingforward The board isupdatedonaquarterlybasisprogress with monthly reporting andclosermanagementscrutinyofKPIs. of monitoringandreporting systemstofacilitateimproved Services divisionsmadeprogress withthedevelopment During theyearinreview, boththeShippingandFreight systems (“EMSs”); typically aspartoftheISO14001environmental management environmental keyperformanceindicatorsanddrivechange, designated atsite,businessandshipleveltomonitor Executives andpersonnelatthe“coalface”havebeen change managementare wellorganisedandclearlydefi ned. Key roles andresponsibilities forenvironmental andclimate throughout theorganisation. a cultureofeco-effi ciencyandecologicalresponsibility employees, supportingpeopleinkeyrolesanddeveloping environmental awarenessandresponsibilityamong people. Grindrodhasastatedpolicydirectiveofpromoting change responseisonlyasgoodthecommitmentofits Grindrod recognisesthatitsenvironmentalandclimate right thing. Grindrod peoplesupportedandrewardedtodothe Structure andstaffi bestpracticeviaanannualbenchmarkingofpeergroup • theJSE’s SRIIndexenvironmental reporting requirements; • theglobalCarbonDisclosure Project; • theGRIenvironmental indicatorguidelines(includingthe • guided by: Measurement andreporting ofenvironmental KPIsare not require anymaterialrestatement ofKPIsfor2010. the aboveoperationalcontrol methodology. Thereview did precautionary orconservativeapproach toitsapplication of Grindrod nowsubscribes,thecompanyhasadopteda In linewithPrinciple7oftheUNGlobalCompact,towhich operating policies”. does nothave“fullauthoritytointroduce andimplementits entities where, regardless ofequityshareholding, Grindrod does haveoperationalcontrol overand0%ofemissionsfor Grindrod hasdisclosed100%ofemissionsfrom entitiesit In linewiththeGHGProtocol’s defi nitionofoperationalcontrol, (continued) ENVIRONMENTAL AND CLIMATE CHANGEPERFORMANCE companies intheglobalshippingandtransportindustries. and industry); pilot sectorsupplementforthelogisticsandtransportation ng suffi cientmeasured datapointswere available. were queried.Data extrapolationswere madeonlywhere against comparable2010dataandanysignifi cantvariances Accuracy wasimproved bycheckingreported datafor2011 >95%offuelandelectricitydatawasmeasured and • data from 100%ofshipsoverwhichGrindrod• has closeto 100%ofallland-basedsitesanysignifi• cance and completelyon100%ofitsglobaloperationalfootprint: Grindrod movedclosertoitsobjectiveofreporting accurately reporting protocol. environmental dataonamonthlybasisintermsofnew HSE ReportingPortalandcompaniesstartedreporting Freight Servicescontinuestodevelopadivision-wideintranet division SHEQmanager. KPIs onamonthlybasistonewlyappointedShipping All shipscontrolledbyGrindrodnowreportenvironmental Improving measurement andreporting targets. environmental andclimatechangeobjectives ofprogressmadein2011withachieving Overview Environmental performance and approval conditions.Thecompany’s plannedcoalport full withenvironmental impactassessment (“EIA”)regulations All newland-baseddevelopments are required to complyin regulations andby-laws. that detailcompliancerequirements withrelevant acts, review oflegalcomplianceandincluderelevant legalregisters systems (refer tothesectiononpage89)require ongoing Land andship-basedISO14001environmental management lowsulphurfuelrequirements fordesignated shipping • MARPOL,bothwithrespect tosolidandliquidwaste • with: terms ofIMOlegislationandwere onceagainfullycompliant of Complianceissuedbytherelevant maritimeauthoritiesin All vesselsoperatedbytheShippingdivisionholdDocuments to whichthecompanysubscribes. applicable environmental andindustryregulatory requirements Grindrod hasanestablished policy, where feasibleexceeding operated induringtheyearreview. sanctionsinanyjurisdictionthatthecompany non-monetary There werenomaterialincidentsofnon-complianceorfi nesor Complying withthelaw environmental andclimatechangestrategyresponse. Stakeholder engagementisanimportantelementofGrindrod’s auditable. operational control are included;and landlords; sites inSouthAfricawhere datawasnotavailablefrom remain atsomesmallglobal offi cesitesandIntermodal (greater than10employees) report data.Afewomissions areas (e.g.partsoftheEU). Annex VIthatdealswithairpollutionfrom ships;and solidwasteand oilsare separatedonboard and • ships’wastewater(galleywastewater, domestic/toiletand • In strictcompliancewithMARPOL: agrowing numberofshipsunderGrindrod’s control, carry • • ballast managementplansthatcomplywithIMO continuednon-useofTributyltin (“TBT”)orleadcontaining • apolicyofnottransportinganyhazardous waste; • These include: “Zero materialpollutionof theWorld’s marineeco-systems”. negative impactsonmarinebiodiversityintermsofitspolicy and managementsystemstoprevent marinepollutionand The Shippingdivisioncontinuedtomaintainmeasures than onebarrelofoil)forthesixthconsecutiveyear. Shipping achievedarecordofzerosignifi cantoilspills(more Protecting marinebiodiversity SHEQauditsonahalfyearlybasis. conduct stringentinternal bodies. Technical superintendentswithinthegroup also major oilcustomers,underwriters,certifi cationandother All shipsare subjecttoregular SHEQauditsbythecompany’s division bytheendof2012. which thecompanyhasoperationalcontrol, withintheShipping sites withintheFreight Servicesdivisionandonallshipsover formalised EMSsbasedonISO14001atallmajorland-based Progress wasmadewithmeetingtheobjective of having UnicornShippingmaintainedtheISO14001certifi• cation fi hasdesignatedas veofthe24sitesthatFreightServices • coverage): the groupis80%(intermsofenvironmentalfootprint level environmentalmanagementsystems(“EMS”)within The estimatedcoveragebyformalisedbusiness,shiporsite- Managing systematically country andlocalenvironmental planningprovisions. terminal developmentinMozambiquewillcomplyfullwithall metals isnotincinerated on-board; where possibleincinerated,waste that maycontainheavy are underway; bilge water)isdischargeddirectly intotheseawhilevessels audited. Ship notationandare subjecttoadditionalscrutinywhen (i.e. Berg,Breede, Kowie,KeiandUmgeni)nowhaveClean “RiverClass” vessels arrangements onboard. AllUnicorn an environmental approach toinstalledequipmentand emissions andseadischarges.Thisnotationalsorequires stipulating howtocontrol andlimitoperationalair of environmental impactcontrol andincluderequirements the “CleanShip”classnotation,indicatingahigherlevel organisms betweeneco-systems);and impacts related toballastwater (spreading invasivemarine requirements onallshipstominimisethepotential anti-fouling paint; ISO 14001certifi cationstatus. IVSbulkcarriersmaintainedtheir crewing services. received in2010,coveringallshipsandshore-based the remainderwillbecertifi cationreadybymid-2012;and requiring formalEMSsarenowcertifi edtoISO14001,and on-board navigationandsafetyequipmentthatisthebest • shipsthatare notdoublehulledhavecargotanksdivided • garbagelogs(forsolidwaste)andsafedisposalreceipts • biodegradablewaste(foodetc.)isdisposedofat • as opposedtoanyon-board operationalchanges. and anincrease inshipsfallingwithin thereporting boundary, compared to2010were asaresult ofmore completereporting environmental footprint –Shipping”)reported fortheyear in accordance with MARPOL(refer thetable“Detailed and processed effl uent(sewage)disposedofatsea The higherabsolutevolumesofuntreated effl uent(domestic) 100%ofproducts andchemicaltankershavedouble • impacts: constructed shipsandeffective navigationsystemstoavoid Collision riskismitigatedbyensuringtheuseofrobustly aspillofapproximately 5000litres ofengineoiloccurred • eightfuelspills causedbydrivererrors inoperating delivery • imposed from authorities: remediation actionwastakenandnofi nesorsanctionswere within theFreight Servicesdivision.Inallcasesappropriate The followingenvironmental pollutionincidentsoccurred risk auditsofsites. training andawareness andthecompletionofenvironmental the maintenanceofrigorous managementsystems,ongoing “Zero materialpollution ofterrestrial eco-systems”through Grindrod continuedtostrive towards itsongoinggoalof consumption andwastewatermanagement;airpollution. prevention ofsoilandgroundwatercontamination,water energy managementandGHGemissions;wastemanagement; units arerequiredtocomplywith.Thesestandardscover standards describingtheminimumrequirementsthatbusiness fiFreight Services nalisedandapproved fi veenvironmental Minimising biodiversityimpactsonland available. areas; and into sectionsandbundcontainmentisfi ttedonalldeck and longevity; designed tominimisecorrosion andtopromote robustness hull constructionsand/orare constructedwithmaterials maintained. for anysolidwastelandedatcertifi edlandfi llsites are sea awayfrom portsorcoastalareas; and disposed ofitas hazardous waste; A contractedcompany removed thecontaminated soiland although itimpactedonGrindrod-operated property. The neighbouringfacilitywas responsible forthespill, a truckattheMaputocoalterminal facilityinMozambique. on bare ground duringtransfer ofoilfrom thequayside to action taken; In allcasesspillswere containedandappropriate remedial total volumeoffuellostbytheincidentswas5517litres. within theFuelogiccontrolled businessesin2011.The lines (e.g.openingincorrect lines,oroverfi lling)occurred 87 Grindrod Limited Integrated Annual Report 2011 88 Grindrod Limited Integrated Annual Report 2011 afewbusinesses installedwater-saving showerheadsin • re-use of waterfordustsuppression attheWalvis Bay • developmentofanewwashbay attheRRLPretoria West • constructionof waterreservoirs attheNavitrade facilityin • Stand-out initiativesthatdidorwillsavewaterinclude: at somesites. to washmachinery, conveyorbelts,containersandvehicles Freight Servicesdivisionwhichuseslargeamountsofwater (94% in2010)–ofthiswaterfootprintwasgeneratedbythe of improved reporting thanoperationalsavings.Most–89% improvement). However, thisreduction wasmore asaresult per fulltimeequivalent(“FTE”)compared to48in2010(a60% Normalised waterconsumptionfortheyearwas30kilolitres signifi cantlylowerthanthe199315kilolitres in2010. Total group waterusagefor2011was180824kilolitres, the group by10% theendof2012. normalised waterconsumptionandwastewatereffl uentwithin being imperative.Grindrod’s objectivein2010wastoreduce Africa,adryregionin Southern withwaterconservation The majorityofGrindrod’s land-basedoperationsare based Conserving water of anaccredited training programme. drivers, contractmanagement,andsupervisorystaff, aspart the exercise. Drivertraining atFuelogicisprovided annuallyto response. Thesurrounding communitywasalsoinvolvedin provider, emergencyresponse processes, includingspill aswellemergencyservice tanker andtestedinternal, Fuelogic. The2011mockemergencyinvolvedalargefuel Incident simulationeventsare nowundertakenannuallyby the Richards Bayterminalreceived anunusuallydry • a routine inspectionbytheprovincial Departmentfor • (continued) ENVIRONMENTAL AND CLIMATE CHANGEPERFORMANCE staff ablutions. terminal commencedattheend of2011;and facility, whichreuses water; suppression; Richards Baytocapture stormwaterrun-off foruseindust belts. cargo willbemovedviaroad transportratherthanconveyor for moisture content,andwhere itislessthat 1%,the waste. Infuture, allsulphurfrom thissource willbechecked product wasremoved anddisposedofashazardous road transporttothewarehouse. Thearea wascleaned, of conveyorbeltsceasedandtheproduct wasmovedby sulphur dust.Whentheproblem becameapparent, use the receiving warehouse beingcovered inathinlayerof shipment ofcrudesulphurresulting inthearea surrounding has subsequentlybeenputinplace;and tank toallowforparticlessettle,priordischarge.This that allrun-off from stockpilesbedivertedtoasediment the adjacentwetland.TheDepartmentissuedarequirement stockpile posedacontaminationrisktogroundwater and Richards Bayterminalfoundthatrun-off from acoal Environmental Affairs andRuralDevelopmentat the

board operationalchanges. falling withinthereporting boundary, asopposedtoanyon- year compared to2010 isasaresult ofanincrease inships “Detailed environmental footprint–Shipping”)reported forthe The highervolumesofship-generatedwaste(seetable during theyearinreview. No materialdisposalsofend-of-lifeshipsorvehiclesoccurred Africa. Thisisaproject thatwillreceive attentionin2012. be recycled in2011because ofthelackfacilitiesinSouth Approximately 278 tonnes ofscrapvehicletyres couldnot 7 564tonnesgeneratedin2010. reported in2011was7471 tonnes,marginallylowerthanthe Total solidandliquid(hazardous andnon-hazardous) waste rate inthisyear. metal were recycled in2010contributingtothehighrecycling 20%. However, afewlargeone-off consignmentsofscrap recycled (10%targetby2012), downfrom theprevious years’ Recycling efforts resulted in6,6%ofgeneralsolidwastebeing general solidwasteproduced bytheendof2012. operations onlandfi llwithatargetof recycling 10%ofall Grindrod’s policyobjectiveistoreduce theimpactsofits Reducing waste NOx emissions),totalGHGemissions (tonnesCO ships. Correspondingly, totalairpollution(tonnesSOxand to businessexpansionandtheinclusionofnewlyacquired and electricityconsumptionincreased marginally, largelydue on pages92to95.Total fuelusage(both onlandandbyships) and normalisedeffi ciencyissummarisedin the KPIdatatables Year-on-year performanceintermsofenergyusage,emissions greenhouse gasemissions Energy effi wastewater atsea. treatment plants,whichalsominimisedischargeofeffl uent/ per day),andnon-water-based vacuum-operatedsewerage 20 kilolitres perday(onlyapproximately 8kilolitres isrequired desalination systemstogeneratesuffi cientfresh waterupto Most shipsunderGrindrod’s control haveon-board boundary, asopposedtoanyon-board operationalchanges. result ofanincrease inshipsfallingwithinthereporting “Detailed environmental footprint–Shipping”)wasasa board wheninport)for2011compared to2010 (seetable higher waterusagereported byShipping(watertakenon- Grindrod Shipping’s waterfootprintismuchlower. The 2 190kilolitres ofwater. pipes during2011,whichresulted inalossofapproximately Two Freight Servicesfacilitiesexperiencedburstwater 0,12 in2010). intensity (MJoules perRandrevenue) (0,13, compared to remained steady(10,1compared to9,8in2010)asdidenergy However, GHGemissionsintensity(gCO total energyusage(GJoules)also increased year-on-year. ciency, reducing airpollutionand 2 -e perRandrevenue) 2 -e) and EU waters. fuel oilinanumber ofshippingjurisdictions, notablysome legislation andtheresulting marketavailabilityoflowersulphur is startingtobenefi tfrom theintroduction ofcleanair vehicles inSouthAfrica.Similarly, the Shipping division reductions inSOxandNOxemissionsfrom land-based Greater marketavailabilityofcleanerfuelswilllikely drive globally in2011waslowsulphurfueloil(“LSFO”). 10% (upfrom8%in2010)ofallmarinefuelcombusted the targetofa5%improvement. 7,82 to6,89year-on-year (a13,4%improvement) –exceeding 50,7% improvement) andNOXper1000NMdropped from SOx per1000NMdropped from 4,69to3,11year-on-year (a larger poolofvesselsfallingintothereporting scope.However, Total ship-basedSOxandNOxemissions rose asaresult ofthe forward. refi nedtoallowvehicleclassandfueltypecomparisonsgoing table below).AswithGHGemissionsthismeasure hasbeen remained static(seeFreight ServicesKPIdatasummary and NOxemissions(tonnes)per1000kilometre travelled For land-basedmobilevehicleemissionsyear-on-year SOx miles) travelledby5%–2015(from the2010baseline). and ship-basedSOxNOxemissionsperNM(nautical based SOxandNOxemissionsperkilometre travelledby5%, the aboveGHGemissionseffi ciencytargets)of reducing land- air pollution.Thecompanyhassetcorresponding targets(to does nothaveanysignifi cantstationary/site-basedsources of and are usedastheKPIfor airpollutionbyGrindrod. Grindrod the twokeypollutantsresulting fromoffossilfuels theburning Sulphur oxide(SOx)andnitrogen oxide(NOx)emissionsare vehicle classandfueltypecomparisonsyear-on-year. summary table).Thismeasure hasbeenrefi nedtoallow remained relatively unchanged(refer Freight Servicesdata table below).However, land-basedvehicleemissionseffi ciency emissions effi ciencyyear-on-year (seeShippingKPIsummary in 2011withasignifi cant(15%)improvement inships’GHG the nextfi veyears(i.e.by2015).The fi rsttargetwasachieved tonne NM)anditstransportfl eet(CO front-end loadersandforkliftstheresulting CO vehicles, locomotivesandsite-basedequipmentsuchas Mobile combustionofpetroleum-based fuelsinships, normalised GHGemissionsfrom bothitsships(CO Using 2010asthebaseline,Grindrod hasresolved toreduce land-basedvehiclefuelandemissionseffi ciency remained • shippingexceededtargetsof5%improvements inship- • emissions andairpollutionlevels.Duringtheyear: These efforts gohandinwithreducing normalised GHG for andimplementfuel(energy)savingseffi ciencies. operations withinGrindrod andstaff are incentivisedtolook Fuel isamajorcostitemforbothmarineandland-based and airpollutionfootprint(86%in2010). comprised 88%ofGrindrod’s totalenergy, GHGemissions relatively unchangedyear-on-year. based GHG,SOxandNOxemissionseffi ciency;and 2 -e perkm)by5%over 2 emissions, 2 -e per fi tting dedicated low-sulphurfueloiltankstovessels(three • • fi ttingvesselswithpowermanagement systemsthat • fi ttingdiesel tunesystemstooptimisemainengine IntermodalandBayStevedores havestartedtoutiliseafuel • Grindrod LogisticsAutomotiveisphasingoutolder, less • RegularmaintenanceandservicingofFuelogicfl eetvehicles • Regulatingdriverspeedandrouting toreduce consumption • Freight Services: beyond. reduction measures, mostofwhichwillbefeltin2012 and to implementenergyeffi ciency, airemissionsandpollution The twokeydivisionssteppedupefforts duringtheyear section. Electricity effi ciency initiativesare discussed inthenext optimisingvessels’mainenginesforthemosteffi cientfuel • these devicesandtrialsare continuing: improvement infueleffi ciency. Newbuildsare being fi ttedwith drag. Encouraginglytheseshipshaveshowna2%–3% propeller, controls thefl owbehindthepropeller and reduces Cap Fins(“PBCF”),adevicethatwhenfi ttedtotheships’ Three trialshipshavebeenfi ttedwithPropeller Boss Shipping: describes howtheseobjectivesare tobemet. consists ofninecore objectives andtheimplementationplan Environmental andClimate ChangePolicy. Thestrategy and howtheyplantoachievecompliancetheGroup’s which describesthisdivision’s approach toclimatechange divisional ClimateChangeStrategyandImplementationPlan, This yearFreight Services alsofi nalisedandapproved their ships fi ttedtodate). order tosaveenergy, fuelandproduce feweremissions;and automatically matchtheelectrical outputtothedemandin (two shipsfi ttedtodate); performance andreduce fuelconsumptionandemissions consumption at85%maximumcontinuousrating; for 101machinesand100trucksduring2012. which thesystemisapplied.Intermodalhasaroll-out plan NOx andSOxemissionsforeachmachinevehicleto 6% reduction infuelconsumption and20%reduction in emissions. IntermodalandBayStevedores isexpectinga resulting inmore effi cientuseaswelllowerparticulate fi ltrationsystem,which removes contaminantsfrom fuel, 40 000kilometres, implying lessimpacttotheenvironment. Furthermore, the newtrucksonlyrequire servicingevery new truckfueleffi ciencyis40,5litres per100kilometres. effi ciencywas48,5litres per100kilometres, whereas effi cienttrucks(10were replaced in2011).Oldtruckfuel reduce unnecessaryexhaustemissions. whichever comesfi rst)tooptimiseengineeffi ciencyand (vehicles are servicedeverysixweeks,or15000kilometres, GHG emissions. driver behaviour, andthereduction infuelconsumptionand companies seeclearcorrelations betweenaddressing idling, harshaccelerationevents,andspeeding.These in-house satellitetracking,whichreports ondriverbehaviour, and maximisefueleffi ciency. GLAandFuelogichave 89 Grindrod Limited Integrated Annual Report 2011 90 Grindrod Limited Integrated Annual Report 2011 to phaseout ineffi cient petrolvehicles anddieselburning Over thenext10to20yearsFreight Servicestherefore plans come more from technologicalandmarketchanges. reductions inGHGemissionsrelated totransportactivitieswill outlined inthesectionsabove), webelievethatlonger-term focus ondrivingoperationaleffi ciencieswherever wecan(as While theshorttomedium-termobjectivesandtargets 20% by2030from the2010baseline. normalised land-basedandship-basedGHGemissionsby Grindrod’s long-termcarbonreductions strategyistoreduce Grindrod’s long-termcarbon reductions strategy of allnewleaseagreements. environmental managementrequirements formacomponent Infl uenceisalsoextendedtotenantsasmuchpossibleand the developmentandrenovation ofitsbuildings. South Africa,andappliesenvironmental designprinciplesto The companyisamemberoftheGreen BuildingCouncilof more eco-effi cient. Signifi cantprogress wasmadewithmakingDurbanbuildings green designprinciples. business, completedthisyearinDurban,includedarangeof Notably, thenewwarehousing andoffi cesfortheIntermodal retrofi tsimplementedintheyear. result ofarangemanagement measures andbuilding – surpassingtheabovetarget.Thisimprovement wasasa from 2,58kWh/man-hour in2010to1,57kWh/man-hour land-based operationalsitesimproved signifi cantly(by64%) normalised electricityusageforcomparableSouthAfrican 2011 (refer tothesummary KPItableonpage92).However, Total electricityconsumptionrose slightly(0,9%)from 2010to base year. reduce normalisedusage by 5%2015,with2010asthe footprint, thecompanyhassetobjectivesandtargetsto emissions onlycomprises7%ofGrindrod’s totalcarbon Even thoughelectricityusageanditsassociatedGHG Greener buildings (continued) ENVIRONMENTAL AND CLIMATE CHANGEPERFORMANCE Eco-design featuresatBluffRoadwarehousing running costs. incur additionalunforeseen capitalexpenditure andhigher stricter SOxemissionlimits).Further changesgloballycould jurisdictional tighteningofair pollution limits(e.g.theEU’s Shipping hasstartedexperiencing theimpactsrelated to Air pollutionlimits transport fl eet. costs, particularlyfortheSouthAfrican-basedFreight Services taxes which,whenintroduced wouldimpactoperational hasproposed further carbon The SouthAfricanGovernment Carbon taxes assets and/orlossofbusiness. result ininfl atedinsurancepremiums, result inpotentiallossof induced globalclimatechangecoulddisruptoperations, events thatscientistssaywilloccurasadirect result ofhuman- adverse seaconditions,tsunamisandotherextreme weather An increase inseverityand frequency oftropical cyclones, Physical environmentalimpactsontransportoperations business innewandunforeseen ways.Thesecouldinclude: related risks,overwhichit haslittlecontrol, mayimpactthe However, Grindrod acknowledgesthatfuture climatechange convention, nationallegislationorcommonlaw. resultant environmental liabilitiesimposedbyinternational covers accidentsorcollisionsresulting inoilpollutionand is maintainedseparatelyforeachship,andcomprehensively Global Protection andIndemnity ClubcoverofUS$1billion covering environmental aspectsofalloperationsandassets. risks. Grindrod also carriescomprehensive riskinsurance are workingtogethertoreduce immediateclimatechange The managementefforts covered inthepreceding sections Climate changerisksandopportunities designs. fuels(e.g.LPGandLNG)super-effialternative cientship sails, available. Thesemightincludetheuseofmodern and newenginetechnologiesaswhentheybecome will favournewshipbuildsthatincorporateinnovativedesign technologies becomeavailable.Likewise,Grindrod Shipping (includinghybrid)engine as andwhennewalternative most eco-effi cientwayofdoingso(onaCO particularly overlongerdistancesaround theglobe,is The transportingofmaterialsandproducts byships, Marketing thecarbonbenefi related totradingcarbon. The Trading divisionhasstartedinvestigatingopportunities Participating incarbontrading These include: that havebeenidentifi edandbeingpursuedbyGrindrod. Conversely, there are climatechangerelated opportunities the group’s transportbusiness. business riskstoGrindrod, giventhefuel-intensivenature of primary responsibility forachievingthese,thenthiscouldpose emissions reduction targetsandthesecountriespasson assets are registered, committoaggressive countrycarbon If SouthAfricaandothercountrieswhere thegroup’s agreements International ts ofshipping 2 -e pertonne to seizeopportunitiesinthechangingglobaltransportmarket. Grindrod’s fuel-effi young,modern, cient fl eetiswellpositioned distance measure compared tolandandairtransport options). the otherdivisionsisincorporatedintogrouptotals. 99% ofwasteand95%waterconsumption).Datafor environmental footprint(96%oftotalGHGemissions, two divisionstogethercomprise95+%ofGrindrod’s divisions.The for theShippingandFreightServices the tablesandgraphs,followedbydetailedsummaries performance trendsoverthreeyearsarepresentedin Key environmentalindicatorsforthegroupwith likely dominatethecompany’s interest inthisarea. initial trialswithfuelsavingspropellers mentionedabove)will area. Innovationsinshipandvehiclefueleffi ciency(likethe Compact, Grindrod willbegintobecomemore activeinthis In linewithitsadoptionofPrinciple9theUNGlobal Developing environmentallyfriendlytechnologies 91 Grindrod Limited Integrated Annual Report 2011 92 Grindrod Limited Integrated Annual Report 2011 (continued) ENVIRONMENTAL AND CLIMATE CHANGEPERFORMANCE

Domestic offi ceusedischargedtomunicipalsewer (% contribution) Land-based waterutilisation(kilolitres) Scope 1and2GHGemissions(tonnesCO Air pollution-NOxemitted(tonnes) Air pollution-SOxemitted(tonnes) Land-based heavyoil(kilolitres) LPG (tonnes) Land-based petrol (kilolitres) Land-based diesel(kilolitres) Electricity effi ciency(kWhperman-hour)atoperational Total electricityusage(kWh) Energy, fuelandairemissions: Total land-basednon-hazardous solidwasterecycled MARPOL Category1-6waste–disposedofatseaor Solid andliquidwaste–tolandfi ll Total solidandliquidwastegenerated Solid andliquidwaste(tonnes) Other Dust suppression – to atmosphere orstormwater Washing vehiclesandequipment–dischargedto Washing vehiclesandequipmentdischargedto Domestic/offi ceuse–nottomunicipalsewer Water usage Water andwastewater(kilolitres) Key performanceindicators NR –notrecorded/reported Consolidated Grindrod group footprint trends overthree years Environmental KPI ** 2010 solid wasterecyclingfi gureshavebeenrestatedas646tonnes ofusedtyreswerenotrecycledasreported. Seebreakdownonthefollowingpage. * Note: 2009fi guresarenotdirectlycomparable asanequityshareapproachwasusedinthisyear. GHG emissionsIntensity(gCO Total GHGemissionsincludingScope3(tonnesCO Energy intensity(MJperRandrevenue) Total energyusageScope1and2(GJ) sites incinerated atseainaccordance withMARPOL system ground/storm water municipal sewer (e.g. soakaway) 2 -e perRandrevenue) 2 -e) * 2 -e) * 70,4 of1068(6,6%) 70 995(41,7%) 29 584(17,4%) 44 673(26,2%) 12 392(7,3%) 12 670(7,4%) 23 699498 4 761335 180 824 364 764 374 925 30 795 0 (0%) 6 378 2 370 6 912 7 471 2011 1,57 10,1 0,13 552 435 38 0 8 f308(57)*NR 481 of3058(15,7%)** 816(46)– – 28 146(14,6%) 75 994(39,5%) 049(06)– – 20 409(10,6%) 61 152(31,8%) 6 34)– 6 464(3,4%) 2 8 2 16248260 23483422 8 01)– 183 (0,1%) 5 5 NR 3 454654 9 1 195555 199 315 8 3 355345 280 731 9 4 363394 294 446 79920063 27 909 1 41 234 3 618 2 778 7050 7156 5 971 7 564 002009 2010 ,8NR 2,58 ,2NR 0,12 3 250 533 , NR 1,8 , 12,1 9,8 110 71 6NR 16 cp n te uttl10161 Totals Scope 3andothersubtotal cp uttl340438 24326 and other Scope 3 Purchased electricity Scope 2 Scope 1Subtotal Notes: cp Combustionoffuelinships Scope 1 2. 2009 fi1. guresarenotdirectlycomparableasanequityshareapproachwasusedinthisyear. All fi gures inmetrictonnesCO Three-year trendsbyGHGprotocolscopeanddivision Grindrod group GHGemissions NR –notrecorded/reported conversion factorsforland-basedfuelcombustion. 2009 Scope1emissionsfromshipsandvehicleshavebeenrestated,usingthe IMOconversionfactorsforshipsemissions,andth metric tonnesofCO Waste senttolandfi ll gases HCFCs andothernon-Kyoto Business travel–carrental Business airtravel out tothird parties Purchased electricity–rented HFC Refrigerantgases and boilers) equipment(generators burning Combustion instationaryfuel- equipment andlocomotives operated vehicles,mobile Company ownedand/or control where companyhasoperational (gCO GHG emissionsintensity Percentage Contribution 2 -e perRandrevenue) 2 -e 2 -e 231 078 374 925 11 810 97 223 7 503 1 899 10,07 2011 140 585 327 34 ru oas2011Divisionalanalysis Group totals 6 6 341382 261 561 0 0 75048 105 307 4 7 265 969 145 879 9 4 363394 294 446 3758049 13 715 91013963 19 170 7 NR 6 375 2 NR 6 323 8 331 9 787 002009 2010 ,5NR 9,75 8 NR 289 1 NR 712 8 34 589 6NR 16 evcsSipn Trading Shipping Services 0 2 2 1 9 2 7893 228716 103 827 3 7 2 8 2 5339 8627 229486 131 473 Freight 089333134 323 20 869 7163 11 31 35 97 156 0 6 013 20 769 6 701 7 7 1 2203 411 770 6 777 4 5465 6 345 455, , 18,8 0,3 54,7 44,5 526, , 1,4 2,3 61,1 35,2 2 1 326 664 76 2 1 7862 223 216 1231 e moreaccuratecalorifi cvalue 8 1510 389 Financial Services Group and 585 93 Grindrod Limited Integrated Annual Report 2011 94 Grindrod Limited Integrated Annual Report 2011 NR –notrecorded/reported Detailed environmental footprint-Shipping Grindrod’s carbonfootprintScope1and2(%) (continued) ENVIRONMENTAL AND CLIMATE CHANGEPERFORMANCE (gCO (gCO (asperIMOguidelines) Diesel usageinland-basedvehicles(kilolitres) Low SulphurFuelOil(LSFO)consumed(tonnes) Intermediate FuelOilconsumed(tonnes) Heavy SulphurFuelOil(HSFO)consumed(tonnes) Marine DieselOil(MDO)consumed(tonnes) Total electricityusage(kWh) Energy, fuelandairemissions: incineratedatseainaccordance withMARPOL MARPOL category1-6waste–disposedofatseaor MARPOL category1-6waste–tolicensedlandfi llsites Total solidwaste Solid waste(tonnes) Land-based (offi ce)waterandwastewaterisnegligible Treated effl uent–disposedofatseainaccordance with Untreated effl uent(domestic)–disposedofatseain Water usagenotincludingwatergeneratedon-board atsea Water andwastewater(kilolitres) Key performanceindicators Petrol usageinland-basedvehicles(kilolitres) Average per-ship CO NOx (tonnes)per1000NM SOx (tonnes)per1000NM Air pollution–NOxemitted(tonnes) Air pollution–SOxemitted(tonnes) Range per-ship CO is reportedaspartofgroupfi gures. MARPOL accordance withMARPOL 27 2 -e pertonne-NM) 7 2 Other sources Electricity usage Land-based combustionofdieselandpetrol Combustion ofmarinefuelsinships 012010 2011 pertonne-NM) 3 63 2 emissionseffi ciency 2 emissionseffi ciency 38

(included ingroup total fi gures) 7 3 52 2,13 –34,76 34 Divisional carbonfootprint(%) 17 442 65 856 10 510 7 582 2 340 6 368 4 579 1 134 5 263 012010 2011 2011 6,89 3,11 9,08 Trading, FinancialServicesandGroup Freight Services Shipping 3 435 699 4,4 8,8 – 63 ,2–2,25,48–30,86 3,12 –27,52 125– 41 205 47 7 4799 1390 3 572 7 193 7 NR 3 778 7 3214 3 173 NR 6 967 4 214 1 649 5 41 3 352 04 9,09 10,44 002009 2010 ,2NR NR 7,82 4,69 5 269 155 2 296 226 , Aspartofgroup total 7,1 , Aspartofgroup total 8,7 110 71 2 61035 – 51 NR –notrecorded/reported Environmental footprint-Freight Services NOx (tonnes)per1000km SOx (tonnes)per1000km Air pollution–Total NOx(tonnes) Air pollution–Total SOx(tonnes) Washing vehiclesandequipmentdischargedto Domestic/offi ceuse–nottomunicipalsewer Domestic offi ceusedischargedtomunicipalsewer Where thiswaterwasutilised(andwhere itendedup): Water usage Water andwastewater(kilolitres) Key performanceindicators Washing vehiclesandequipment-dischargedto Dust suppression -toatmosphere orstormwater Other Total solidwaste(tonnes) Solid andliquidwaste: Total liquidwaste(kilolitres) Solid wastetolandfi ll(tonnes) Liquid wastetolandfi ll(kilolitres) Vehicle emissionseffi ciency(kgCO Total LPG(tonnes) Total land-basedpetrol (kilolitres) Total land-baseddiesel(kilolitres) Total electricityusage(kWh) Energy, fuelandairemissions Hazardous liquidwaste recycled (tonnes)(%oftotal) Non hazardous solidwaste recycled (tonnes) municipal sewer (e.g. soakaway) ground/storm water system (% oftotal) 2 perkm) 0,09 (petrol vehicles) 3,28 (petrol vehicles) 0,28 (petrol vehicles) 16,87 (dieseltrucks) 0,44 (dieseltrucks) 1,47 (dieseltrucks) 0,11 (dieselother) 4,01 (dieselother) 0,35 (dieselother) 64 of1029(6,2%) 53 of2930(2%) 61 111(38%) 44 673(28%) 29 584(18%) 12 670(8%) 12 392(8%) 20 261570 160 430 30 790 1 115 29,35 3 369 2 930 3 303 2 877 2011 530 38 – ,8(erlvhce)NR 0,08 (petrol vehicles) ,1(erlvhce)NR 3,21 (petrol vehicles) ,2(erlvhce)NR 0,22 (petrol vehicles) 16,60 (dieseltrucks) 0,44 (dieseltrucks) 1,45 (dieseltrucks) nlddi bv includedinabove included inabove nlddi bv includedinabove included inabove NR (dieselother) NR (dieselother) NR (dieselother) 798(7)NR 67 918(37%) 112(3)NR 61 152(33%) 816(5)NR 28 146(15%) 049(1)NR 20 409(11%) 1 2% 76 1 518(21%) 0531614869673 20 553196 8 01)NR 183 (0,1%) 6 4)NR 6 464(4%) 8 7 182589 184 272 79020062 27 900 84 20,26 28,41 1 6810 7 318 0 6734 5 800 002009 2010 ,9NR 1,79 0 NR 906 1 196 511 RNR NR 95 Grindrod Limited Integrated Annual Report 2011 96 Grindrod Limited Integrated Annual Report 2011 28 February2012 Group FinancialDirector A GWaller These abridgedannualfi nancialstatementshavebeenprepared underthesupervisionofAG Waller, CA(SA). PREPARER OFFINANCIALSTATEMENTS Chairman Chief IAJ The abridgedannualfi nancialstatementswere approved bytheboard ofdirectors andare signedontheirbehalfby: executive Clark derived from theconsolidated annualfi AK nancialstatementsandtheirunmodifi ed reportappearsonpage97. The group’s auditors,Deloitte&Touche independentexternal haveconfi rmedthattheabridgedannual fi nancialstatements are offiannual fi nancialstatementsare electronically availableonthegroup’s websiteatwww.grindrod.co.za. Olivier Reporting, The abridgedannualfi cer nancialstatements,whichhavebeenprepared usinginformation required byIAS34: indicate thatthegroup fortheforeseeable willnotremain future. agoingconcern The annualfi nancialstatementsare prepared basis.Nothinghascometotheattentionofdirectors onthegoingconcern to under review. ofthesecontrols,indicate thatanymaterialbreakdown procedures inthefuncTioning andsystemshasoccurred duringtheyear trained personnelwithanappropriate segregation ofauthorityandduties.Nothinghascometotheattentiondirectors t assets, andtoprevent anddetectmaterialmisstatementslosses.Thesystemsare implementedandmonitored bysuitably assurance astothereliability ofthefi nancialstatements,andtoadequatelysafeguard, verifyandmaintainaccountabilityfo The directors are alsoresponsible control. forthesystemsofinternal Theseare designedtoprovide reasonable, butnotabsol required bytheSouthAfricanCompaniesAct,2008. FinancialReportingStandards,International theAC500standards issuedbytheAccountingPracticesBoard andinthemanner of theannualfi nancialstatementsand related information.Theannual fi nancialstatementshavebeen prepared inaccordance wi The directors ofthecompanyare responsible forthemaintenanceofadequateaccountingrecords andthepreparation andintegri FINANCIAL REPORTING DIRECTORS’ RESPONSIBILITYFOR set outonpages98to105are anextractoftheauditedconsolidatedannualfi nancialstatements.Theseconsolidated Interim Financial ute, th ty o r advisory andlegalservices) advisory National executive:GGGelink 4051 La Lucia La LuciaRidgeOffi ceEstate Pencarrow Park 2 Pencarrow Crescent 28 February2012 Durban Partner Per REbrahim Deloitte &Touche Accounting PracticesBoard andtheinformationasrequired byIAS34–InterimFinancialReporting. the frameworkconceptsandmeasurement andrecognition requirements ofIFRS,theAC500standards asissuedbythe the yearended31December2011are consistent,inallmaterialrespects, withthosefi nancial statements,inaccordance with In ouropinion,theabridgedannualfi nancialstatementsderivedfrom auditedannual fi nancialstatementsofGrindrod Limitedf Opinion Statements. Standardconducted inaccordance withInternational onAuditing(ISA)810, Our responsibility istoexpress anopinionontheabridgedannualfi nancial statementsbasedonourprocedures, which were Auditor’s responsibility Standard (IAS)34– AC 500standards asissuedbytheAccountingPracticesBoard andtheinformationasrequired Accounting bytheInternational concepts andthemeasurements andrecognition requirements FinancialReportingStandards ofInternational (IFRS),andthe The directors are responsible forthepreparation oftheabridgedannualfi nancialstatementsinaccordance withtheframework Directors’ responsibility forthefi substitute forreading theauditedconsolidatedannualfi nancialstatementsofGrindrod Limited. and therequirements oftheCompaniesActSouth Africa.Readingtheabridgedannualfi nancialstatements,therefore, isnot The abridgedannualfi nancialstatementsdonotcontainallthedisclosures required FinancialReportingStand byInternational the dateofourreport onthosefi nancialstatements. fi nancialstatementsandtheabridgedannual fi nancialstatements,donot refl ectthe effectsofeventsthatoccurred subsequen audit opiniononthoseconsolidatedannualfi nancialstatementsinour report dated28February2012.Thoseconsolidatedannual consolidated annualfi nancialstatementsofGrindrod Limitedfortheyearended31December2011. We expressed anunmodifi ed statement ofchangesinequityfortheyearthenendedandrelated abridgedconsolidatednotes,are derivedfrom theaudited income statement,consolidatedstatementofcomprehensive income,condensedstatementofcashfl owsandconsolidated comprise thecondensedconsolidatedstatementoffi nancialpositionasat31December2011,thecondensedconsolidated The accompanyingabridgedannualfi nancialstatementssetoutonpages98to105and6869,71,7376which TO THESHAREHOLDERSOFGRINDRODLIMITED INDEPENDENT AUDITOR’SREPORT Member ofDeloitteTouche Tohmatsu Limited B-BBEE rating:Level2contributorintermsoftheChartered AccountancyProfession SectorCode CR Beukman (Finance) Interim FinancialReporting. , TJBrown , NBKader (Chiefexecutive) (Chairmanoftheboard) (Tax) , LGeeringh nancial statements nancial

, AESwiegers (Consulting) , MJComber (Chiefoperatingoffi cer) , LBam (Deputychairmanoftheboard) (Corporatefi nance Engagements to , GMPinnock ), JKMazzacco

Report on Summary Financial Report onSummary (Audit) . , DLKennedy (Human resources) (Risk ards t to or a ,

97 Grindrod Limited Integrated Annual Report 2011 98 Grindrod Limited Integrated Annual Report 2011 Duewithinoneyear Authorisedbydirectors andcontractedfor Capital commitments Capital expenditure FINANCIAL POSITION CONDENSED CONSOLIDATED STATEMENT OF Net debt:equityratio Net worthperordinary share –atbookvalue(cents) Total equityandliabilities Non-current liabilitiesassociatedwithassetsheldforsale Other liabilities Current interest-bearing borrowings Deposits from bankcustomers Non-current liabilities Other non-current liabilities Interest-bearing borrowings Provision forpost-retirement medicalaid Deferred taxation Total equity Non-controlling interests Shareholders’ equity Total assets Non-current assetsheldforsale Other current assets Bank balancesandcash Short-term loans Liquid assetsandshort-termnegotiablesecurities Loans andadvancestobankcustomers Total non-current assets Recoverables oncancelledships Other investmentsandderivativefi nancialassets Deferred taxation Investments injointventures Investments inassociates Intangible assets Investment property Ships, property, terminals,vehiclesandequipment Duethereafter Authorisedbydirectors notyetcontractedfor as at31December2011 31December 20430371 20430371 1166228 2416951 1206290 2147704 2910945 2437376 2226575 9311105 9216769 3467286 3525376 2979172 2073903 7422717 5267565 247016 472423 124796 771658 190259 380566 129478 719528 266081 547931 225407 199190 Audited 33669 52336 94336 89472 22096 47826 0,10:1 1454 R000 2011 31 December 13891430 13891430 1784914 1182245 2378491 2013420 2016137 1512667 1314553 5970715 5856861 3869555 1149857 1709796 6513039 4564226 843184 113854 162379 117349 519818 129365 801724 243915 648729 693294 149890 339061 31137 49628 92066 Audited 0,31:1 1122 R000 2010* – – – – Average exchangerate Closingexchangerate Openingexchangerate Exchange rates(R/US$) Non-controlling interests Ownersoftheparent Preference shareholders Ordinary shareholders Attributable to Profi tfortheyear Taxation Profi tbefore taxation Dividend cover Final Interim Share ofjointventure companies’profi taftertaxation iied e hr cns (46) (cents) Dividends pershare Share ofassociatecompanies’profi taftertaxation Diluted Profi tbefore share ofassociate andjointventure companies’ profi t Interest paid edieerig e hr (cents) Basic pershareHeadline earnings Interest received Diluted Non-trading items annsprsae (cents) Basic pershareEarnings prtn rf eoeitrs n aain(28) Operating profi tbefore interest andtaxation Depreciation andamortisation Diluted weighted average number of shares on which diluted earnings pershareDiluted weightedaveragenumberofshares onwhichdilutedearnings are based(000’s) Headline earnings Headline earnings Total taxationeffects ofadjustments annsbfr neet aain ercainadaotsto (15) beforeEarnings interest, taxation,depreciation andamortisation egtdaeaenme fsae nwiherig e hr r ae (000’s) Weighted averagenumberofsharespershare onwhichearnings are based Adjusted for: Revenue ubro hrsi su estesr hrs (000’s) * Number ofshares inissuelesstreasury shares Ordinary share performance Profi tattributabletoordinary shareholders Reconciliation ofheadlineearnings for theyearended31December2011 CONDENSED CONSOLIDATED INCOMESTATEMENT IAS 21FCTRAdjustmentonDisposalofInvestment IAS 16NetProfi tonSaleofPlantandEquipment IFRS 3NetProfi tonDisposalofInvestments IAS 16ReversalofImpairmentShips,PlantandEquipment IAS 38ImpairmentofOtherInvestment IAS 38ReversalofImpairmentIntangibleAssetinrespect ofCharters IAS 38ImpairmentofGoodwill Statements, IAS28(asrevisedin2011) InvestmentsinAssociatesandJointVentures andIFRS12DisclosureofInterests inOth Restated duetotheearlyadoptionof IFRS 10ConsolidatedFinancialStatements,11JointArrangements,IAS 27(asrevised Change (32) (20) (41) (41) (35) (35) 22 (54) % 31December er Entities. 35885258 1005537 (175363) (218647) (362979) 596724 584176 530905 596724 772087 114024 653772 169709 642558 479192 476362 478234 589536 530905 Audited (54543) (48180) (18067) 12548 53271 60152 (8922) in2011)SeparateFinancial 4291 110,8 111,0 5849 9168 5609 R000 2011 7,27 8,11 6,62 29,5 99,4 99,6 12,0 17,5 3,8 – – 31 December 29390576 1182649 (114189) (179038) (295314) 845075 838846 780252 845075 959264 849787 128042 887335 455912 762301 454591 455803 780252 (17951) (16856) (11104) (19989) 58594 69569 39908 13448 39165 Audited (1761) (2903) 6229 167,2 167,7 171,1 171,6 (4 503) R000 2010* 7,34 6,62 7,37 27,0 27,0 54,0 3,2 – 99 Grindrod Limited Integrated Annual Report 2011 100 Grindrod Limited Integrated Annual Report 2011 Non-controlling interests oa opeesv noefrteya 1658363 Ownersoftheparent Total comprehensive incomeattributableto: Total comprehensive incomefortheyear Reclassifi cationadjustmentsforamounts recognised inassets Reclassifi cationadjustmentsforamounts recognised inprofi t Recycledthrough profi t/lossduringtheyear Cash fl owhedges Realisationofforeign operationsdisposedofintheyear Exchangedifferences arisingduringtheyear Exchange differences ontranslatingforeign operations Other comprehensive income Profi COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF tfortheyear for theyearended31December2011 31December 1658363 1648400 159665 161735 901974 901974 596724 Audited (2070) 9963 R000 2011 – – 31 December (434822) (417966) 426869 419554 426869 108912 845075 (92356) (16856) 16616 Audited 7315 R000 2010 60 Cash andcashequivalentsatendoftheyear Difference arisingontranslation Cash andequivalentsatbeginningoftheyear Net increase/(decrease) incashandequivalents Net cashfl owsfrom fi nancingactivities Short-term interest-bearing debtraised Short-term interest-bearing debtissued Payment ofcapitalportionlong-terminterest-bearing debt Long-term interest-bearing debtraised Non-controlling interest investmentinsubsidiary Proceeds from disposaloftreasury shares Net proceeds from issueofordinary share capital Net cashfl owsgeneratedfrom/(utilised in)investingactivities Loans advancedtojointventure andassociatecompanies Disposal ofinvestmentinsubsidiary Intangible assetsacquired Proceeds from repayment ofshare capitalbyjointventure Proceeds from disposalofproperty, terminals,vehiclesandequipmentinvestments Acquisition ofproperty, terminals,vehiclesandequipmentinvestments Net cashfl owsutilisedinoperatingactivities Capital expenditure onshipsandlocomotives Net proceeds ondisposalofshipsandlocomotives Net cashfl ows(utilisedin)/generatedfrom operatingactivitiesbefore shipssalesandpurchases Net bankadvancestocustomersandothershort-termnegotiables Taxation paid Net dividendspaid Net interest paid Cash (utilisedin)/generatedfrom operations Working capitalchanges Operating profi tbefore workingcapitalchanges * for theyearended31December2011 CONDENSED STATEMENT OFCASHFLOWS IAS 28(asrevisedin2011)InvestmentsAssociatesandJointVentures andIFRS12DisclosureofInterestsinOtherEntities. Restated duetotheearlyadoptionofIFRS10ConsolidatedFinancialStatements,11JointArrangements,IAS27(asrevised in 2011) Separate Financial Statements in2011)SeparateFinancialStatements 31December (1002676) (1264377) 2901050 2008327 3004542 1548382 1983803 1069342 (613334) (220196) (708718) (320494) (842831) (159845) (230115) (125180) (195035) 903846 399326 262235 453489 (11123) (13249) (63004) Audited 80872 (2903) 1945 6461 R000 2011 – – – 31 December (1134740) 1454814 1015560 1104194 1316495 (521099) (183625) (439509) (377886) (605904) (639704) (299608) (508608) (300935) 481331 306135 489588 124053 903846 618395 (42360) (20161) (10471) (50996) 10000 67082 Audited (2650) 8257 6768 8693 R000 2010* – 101 Grindrod Limited Integrated Annual Report 2011 102 Grindrod Limited Integrated Annual Report 2011 oa opeesv noe– – 37947 – 2014415 2 1999997 – 12 – 3 Balance at31December2011 Preference dividendspaid Ordinary dividendspaid Total comprehensive income Other comprehensive income Profi tfortheyear Non-controlling interest acquired Treasury shares sold Share issueexpenses Share issue Share-based payments Share optionsexercised Balance at31December2010 Preference dividendspaid Ordinary dividendspaid Total comprehensive income Other comprehensive income Profi tfortheyear Non-controlling interest disposed Non-controlling interest acquired Treasury shares sold Share-based payments Share optionsexercised Balance at31December2009 for theyearended31December2011 CONSOLIDATED STATEMENT OFCHANGESINEQUITY Ordinary capital share 00R0 00R000 R000 R000 R000 9 2 2 7 37300 28671 2 35771 9 13209 2 9 share capital Preference premium (18810) 1945 2612 6769 8693 Share pensation reserve 1529 Equity com- 647 translation (6 6) 1276 61406 58681 1384 5970715 113854 5856861 6104046 (152706) – (160461) (3 0) 685 (1 9) 8 (418206) 426869 1086 7315 (419292) 419554 838846 16815 16815 – (436107) (436107) 7408 (878 699 64204 92679 9 3 9311105 94336 9216769 6432054 584176 6959 159665 159665 (18718) – 744098 904559 904559 2566 (6 2) 8 6 3 8 816 5836126 98146 5737980 5582864 (169521) 275646 currency reserve Foreign 00R0 00R0 00R0 R000 R000 R000 R000 R000 R000 R000 combination Business (18718) reserve Hedging reserve Accumulated (202897) (5 7) 2900 (1)(259183) (113) (259070) (259070) 584176 8886 8886 629 845075 6229 838846 838846 (53271) (854 (854 (58594) (58594) (58594) profi t 1648400 1064224 20000 2000 2000 ownersof the parent Interest of (202897) 584176 (321 (53271) (53271) (880 (18810) (18718) (18810) 195 1945 1945 262 2612 2612 679 6769 1529 8693 6769 1529 8693 67 647 647 ( 9)(1494) 10000 (1494) 10000 – – controlling interests (26277) 12548 (2585) (3204) 9963 Non- shareholders Interest ofall 1061639 1658363 (206101) 596724 (44995) 103 Grindrod Limited Integrated Annual Report 2011 104 Grindrod Limited Integrated Annual Report 2011 Group Financial Services Shipping Trading Freight Services Attributable incometoordinary shareholders Shipping Trading Freight Services Share ofjointventure companies’profi Freight Services Share ofassociatecompanies’profi Group Financial Services Shipping Trading Freight Services Operating profi Group Financial Services Shipping Trading Freight Services beforeEarnings interest, taxation,depreciation andamortisation Group Financial Services Shipping Trading Freight Services Revenue * for theyearended31December2011 SEGMENTAL ANALYSIS Other Entities. Separate FinancialStatements,IAS28(asrevisedin2011)Investments inAssociatesandJointVentures andIFRS12Disclosure Restated duetotheearlyadoptionofIFRS10ConsolidatedFinancial Statements,IFRS11JointArrangements,IAS27(asrevised tbefore interest andtaxation taftertaxation taftertaxation 31December 29189365 35 885258 1005537 3596835 2905067 530905 143989 317831 114024 642558 154510 382342 188144 165634 571559 193558 Audited 58398 14413 32973 66638 80462 29867 81512 (4623) (1312) 3886 6801 4291 4291 R000 2011 433 31 December 29390576 22795502 of Interestsin 1182649 4009869 2390348 780252 362220 120074 262080 887335 392208 164654 241806 497343 173152 419064 192531 44952 69569 65586 39908 39908 88997 90240 Audited in2011) (9074) 2755 1228 2850 2326 R000 2010* (330) Profi tondisposal Total Deferred taxation Goodwill andintangibleassetsdisposed Cash andbank Working capital Property, plantandequipment Netassetsdisposed The primaryreason forthedisposalwastorationaliseoperationsintermsofgroup’s long-termgoals. Reason fordisposal Grindrod PerishableCargoAgents Net assetsacquired andthegoodwill/intangibleassetsarising,are asfollows: From thedatesoftheiracquisition,acquired businessescontributedattributableprofi tofR5451000. Impact oftheacquisitionsonresults ofthegroup Grindrod’s positionandtoexpandGrindrod’s presence intonewmarketsandgeographicalareas intheTrading businesses. The primaryreason forthebusinessacquisitionswastoacquire outstandingnon-controlling interests intheTerminals division Reason foracquisitions Empangeni Milling(Pty)Limited Terminal DeCarvodaMatolaLimitada(Mozambique) Nelesco 681(Pty)Limited Spinnaker ShippingandLogistics(Pty)Limited The goodwillarisingontheacquisitionofthesebusinessesisattributabletoanticipatedprofi tabilityofthesebusinesse Contingent purchase consideration Goodwill andintangibleassetsarisingonacquisition Total Deferred taxation Business combinationreserve Long-term liabilities Non-controlling interests Cash andbank Working capital Intangible assets Property, plantandequipment Netassetsacquired Companydisposed During theyeargroup disposedofthefollowinginterest: Disposal ofsubsidiaries Companyacquired During theyeargroup acquired thefollowingadditionalinterests: Acquisition ofsubsidiaries BUSINESS COMBINATIONS for theyearended31December2011 CONSOLIDATED NOTES of business netet103 ac 01855 31March 2011 100 Investment emnl 1Dcme 0119263 31December2011 5 Terminals ag gns103 ue21 51750 30June2011 100 Cargo agents oitc 01Jnay21 458 1January2011 50 Logistics Nature iln 01Otbr21 3600 1October2011 80 Milling business Nature of Percentage

aqie Interest acquired acquired Percentage disposed disposed Interest s andsynergiesexpected. Acquirees’ carrying amount before consideration consideration toconsolidate combination at fairvalue Fairvalue Purchase Disposal (14976) (28923) 21493 24176 23694 17685 26277 22838 51750 22730 29020 10157 (2683) (2164) 1957 1000 5796 1717 4843 6507 R000 R000 R000 R000 482 105 Grindrod Limited Integrated Annual Report 2011 106 Grindrod Limited Integrated Annual Report 2011 Finance leaseliabilities * LEASES ANDSHIPCHARTERS At reporting date,theimpactofthisclaimwasuncertain. The group engagedwithlegalcounseltoinstituteaclaimagainstrelated partyforbreach oftheshareholders’ agreement. The totalcontingentliabilitiesincurred bythegroup arisingfrom interests injointventures isRnil(2010:R37044000). CONTINGENT ASSETS/LIABILITIES for theyearended31December2011 CONSOLIDATED NOTES Expenditure Income Operating leasesandshipcharters Financial StatementsIAS28(asrevisedin2011)InvestmentsAssociatesandJointVentures andIFRS12DisclosureofInteres Restated duetotheearlyadoptionofIFRS10ConsolidatedFinancialStatements,11JointArrangements,IAS27(asrevised (continued) 31December 7 027202 659412 Audited 56817 R000 2011 ts inOtherEntities. in 2011) Separate in2011)Separate 31 December 8528014 486556 909351 Audited R000 2010* eto h ol 19 ,2 4 5 0,68 1,81 4045752 14,85 90,44 10821085 1,02 0,43 88916857 16,22 541487888 21,37 139 97,84 0,05 6,05 59 17,37 97124905 0,13 127964075 13368 1,58 36224127 328894 Metropolitan AssetManagement 5,26 0,15 104021852 RMB AssetManagement 0,46 2,32 1,14 PSG AlphenAssetManagement 800652 0,55 3,74 AllianceBernstein 216 0,29 31507788 20 Dimensional FundAdvisors 63 0,45 0,12 Stanlib AssetManagement 14,26 317 6846711 Foord AssetManagement 75 22381898 Investec AssetManagement 1723901 0,26 Coronation FundManagers 0,40 2701214 17 Public InvestmentCorporation 1949 0,56 TOP 10FUNDMANAGERS 1,51 36 21,32 54 EmployeesPensionFund Government 76 75,45 Grindrod Investments(Pty)Limited(Grindrod Family) 206 Remgro Limited 127662895 MAJOR SHAREHOLDERS 0,01 451741924 99,94 Rest oftheWorld Rest ofEurope 1 69,76 United Kingdom United StatesofAmericaandCanada 13655 16,90 South Africa 8,25 GEOGRAPHICAL BREAKDOWN 0,38 417644756 4,71 0,49 101175520 Retirement funds 2,42 49417806 Public companies 2270723 28206509 Private companies 13,18 67 55,27 Other corporations 28,65 Nominees andtrusts 330 Mutual funds 1801 Medical schemes 7551 3914 Investment companies Insurance companies Individuals Endowment funds Close corporations Clearing houses Banks INVESTOR PROFILE Public shareholders Remgro Limited Treasury stock Directors Non-public shareholders 100 001shares andover 50001–100000shares 50000shares 10001– 10000shares 5000shares 5001– 1– SHAREHOLDER SPREAD Issuedshare capital at 31December2011 SHARE ANALYSIS OFORDINARY SHAREHOLDERS shareholders Number of 363100 9 1 1 100,00 598715314 100,00 13 663 100,00 598715314 100,00 13 663 14,44 86449457 76,49 100,00 10 451 598715314 100,00 100,00 13 663 598715314 100,00 13 663 7 ,88 3 5 14,34 85836652 1,28 175 3 02 61642 1,02 6136462 0,25 34 905 091735,17 30981773 0,51 69 ,14 4 0,01 45542 0,01 1,53 1,69 2 9179348 10131147 0,01 0,04 1 6 Percentage of shareholders 7 3 0 28,73 172 037701 7 2 3 46,47 21,32 278 223136 127 662895 1 6 6 2,32 2,54 2,94 3,91 13868165 5,60 15208251 7,26 17597342 23403779 33535543 43459981 10,30 61643384 Number of 53612 0,89 0,98 1,02 1,27 5356132 5892247 6134160 7582101 shares Percentage of shares 107 Grindrod Limited Integrated Annual Report 2011 108 Grindrod Limited Integrated Annual Report 2011 eto h ol 7 ,7 3 0,08 6039 99,37 0,27 0,03 7353693 2,51 0,04 7 99,33 1868 12,11 0,49 185390 2942 2519 0,12 0,04 896123 35892 25,09 0,12 0,13 0,08 1,05 3,90 1 9046 0,36 0,43 1856690 3 1,15 9967 2 77994 23,86 99 0,04 11 26865 0,16 85149 0,08 605 0,47 1 1,30 4 97,01 2 12 33 7179069 9,67 99,92 6,12 Rest oftheWorld Rest ofEurope 24,15 715272 2534 United Kingdom 16,48 452632 United StatesofAmericaandCanada 0,16 43,58 South Africa 1787434 0,24 GEOGRAPHICAL BREAKDOWN 1219778 3,63 3224884 4 6,43 Retirement funds 6 89,54 Public companies 92 Private companies 163 Other corporations 2271 Nominees andtrusts Mutual funds Medical aidschemes Investment companies Insurance companies Individuals Endowment funds Close corporations Banks INVESTOR PROFILE Public shareholders Directors Non-public shareholders 100 001shares andover 50001–100000shares 50000shares 10001– 10000shares 5000shares 5001– 1– SHAREHOLDER SPREAD at 31December2011 NON-PARTICIPATING, NON-CONVERTIBLE PREFERENCESHARES SHARE ANALYSIS OFCUMULATIVE, NON-REDEEMABLE, Grindrod ordinary share price and industrial Transportation index 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 2 600 2 800 3 000 200 400 600 800 0 0520 0720 0921 012012 2011 2010 2009 2008 2007 2006 2005 Grindrod share performance,ALSIIndex andIndustrialTransportation Index Ordinary shareprice Ordinary ALSI Index Industrial Transportation Index shareholders Number of 256 100 74000100,00 7400000 100,00 2536 49,70 3677774 69,05 1751 100,00 7400000 100,00 2536 3 0,074000100,00 7400000 100,00 2 536 100,00 7400000 100,00 2 536 1 05 3 5 7,23 535155 0,51 13 3 ,2 9 0,06 0,45 4092 33234 0,12 0,20 3 5 0,03 2087 0,04 1 ,820912,99 220931 0,08 2 Percentage of shareholders Number of shares Percentage of shares

0 9 500 19 000 28 500 38 000 47 500 57 000 66 500 76 000 85 500 95 000 ALSI Index ALSI 2011 2010 2009 2008 2007 2006 Market capitalisationofordinary shares (Rm) Value ofordinary shares traded(Rm) for theyearended31December2011 SHARE PERFORMANCE 2011 2010 2009 2008 2007 2006 nise(000) (cents) (000) (cents) (cents) (cents) – inissue Number ofshares Lowest Highest Year-end Opening Market pricepershare annsyed (%) (%) (%) (R000) (R000) Earnings yield Dividend yield PE ratio (000) Market capitalisation (000) (%) Value ofsharestraded percentageoftotalissuedshares Volume ofsharestradedasa (000) Number ofsharestraded Number oftransactionsrecorded – treasury 3 527 3 578 4 413 7 311 7 321 8 239 5 551 8 382 8 811 8 1 719280 153251 8 382014 3 577810 riayPreference Ordinary 8 3 7400 589 536 4 8 1616 240 887 9 1 7400 598 715 9731891 79 713 919 – (9 179) 5 9050 10400 1 250 9720 1 939 10375 1 400 1 895 4, 21,8 40,2 12,6 7 144 7 289 7,9 2,1 11 124 2011 1 0 6 5 3 3 1 0 2 0 4 0 11350725073050873700 314132 7310500 3527355 772500 193031 11123500 645000 7289001 156833 7320700 717800 7144093 104702 8238932 767750 5551232 90580 8 811408 4 413777 5 0 0 5 0 0 5 5 0 5 0 0 5 3 7500 453939 7500 455509 7400 450252 7400 454203 7400 455 802 6 8 0 6 8 0 7 7 0 7 5 0 7 8 7500 473386 7500 474956 7500 478476 7400 463382 7400 464 981 7 9 0 6 4 3 5 5 1 2 7 9 6 5 2818 267150 1898 329 078 1616 358554 1132 361749 901 279 898 riayPeeec riayPeeec riayPeeec riayPeeec riayPreference Ordinary Preference Ordinary Preference Ordinary Preference Ordinary Preference Ordinary 2982929 7 0 8621315 4 9 0092165 40099 1599 55642 1381 98692 1505 95473 2942 82 968 919 919 2 2)(0)(947 1 4)– (19447) – (19447) (100) (28224) – (9179) – (9 179) 5 0 1 0 4 0 4 0 0 10500 1000 11599 9502 10300 1570 11650 2578 2143 11000 1300 10 300 8600 2740 10959 2342 943 10900 1560 8600 2886 8600 10900 1530 9900 2300 1115 9700 1870 8600 9400 1778 10700 1530 1 350 10375 1 910 9700 1 895 1 778 1, , , , 11,7 8,9 37,6 3,2 56,4 25,3 69,3 21,5 9,2 74,9 15,3 78,1 11,1 12,2 60,2 28 34 89 33 2,6 8,6 3,3 11,3 31,1 8,9 10,9 3,4 9,6 2,8 0020 0820 2006 2007 2008 2009 2010 Volumes traded/totalissuedordinary shares (%) Volume ofordinary shares traded(million) 2011 2010 2009 2008 2007 2006 2011 2010 2009 2008 2007 2006 41 241 267 280 56 60 329 69 359 362 75 78 109 Grindrod Limited Integrated Annual Report 2011 110 Grindrod Limited Integrated Annual Report 2011 1.5 1.4 1.3 1.2 1.1 1. ORDINARY RESOLUTIONS Annual generalmeetingofthecompany 1. Meeting ofholderspreference shares following purposes: Durban, 4001at14:00onWednesday, 30May2012,forthe 1st Floor, QuadrantHouse,115Margaret MncadiAvenue, of shareholders ofthecompanywillbeheldinboardroom, immediately thereafter, theforty-fi fthannualgeneralmeeting preference shares ofGrindrod Limited(“thecompany”)and, Notice ishereby giventhatameetingoftheholders NOTICE OFMEETING executive director effective 16November2011. To confi rmthe appointment ofMrMR Wade asan Mr MRWade Ordinary resolution 5 –Confi 31 October2011. director effective to MrMHVisser an alternate To confi rmtheappointmentofMrJJDurand as Mr JJDurand Ordinary resolution 4–Confi executive director effective 31October2011. To confiVisser asanon- rmtheappointmentofMr MH Mr MHVisser Ordinary resolution 3–Confi individually. andSDM Zunguwillbemoved DA Polkinghorne election ofMessrsIAJClark,MRFaku,MJHankinson, Memorandum ofIncorporation.Motionsforthere- To re-elect retiring directors inaccordance withthe retiring byrotation Ordinary resolution 2–Re-electionofdirectors www.grindrod.co.za. for suchyearisavailableonthecompany’s website: annual fi nancialstatements andthe relevant reports integrated annualreport containingtheaudited which thisnoticeformspart.Thecomplete2011 are setoutonpages96 to105ofthedocument The abridgedannualfi nancialstatementsfor2011 and theauditors. including thereports ofthe auditcommittee,thedirectors statements fortheyearended31December2011, To receive, considerandapprove theauditedfi nancial statements Ordinary resolution 1–Approval ofannualfi hereby approved. resolution 1ofthecompany, below, ispassed),beand which isincludedasAppendix1(intheeventthatspecial of thecompanybynewMemorandumIncorporation of thereplacement oftheMemorandumIncorporation Memorandum ofIncorporationthecompany, byvirtue That thealterationofArticles3,8Aand30 30 oftheMemorandumIncorporation Special resolution 1–AlterationofArticles3,8Aand rmtheappointmentof rmtheappointmentof rmtheappointmentof nancial 2.3 2.2 2.1 2. SPECIAL RESOLUTIONS 1.9 1.8 1.7 1.6 the companyor arelated orinter-related company, as Act) company, orfor thepurchase ofanysecurities of “related” or“inter-related” (asdefi nedinsection2ofthe securities, issuedortobe bythecompanyora connection with,thesubscription ofanyoption,or or otherwisetoanyperson for thepurposeof,orin by wayofaloan,guarantee, theprovision ofsecurity Companies Act,No71of2008, asamended(“theAct”)) “fi nancialassistance”(asdefi nedinsection44(1) ofthe general approval, toauthorisethecompanyprovide That thedirectors ofthecompanybeauthorised,asa fi Special resolution 3–Generalauthoritytoprovide House, 115Margaret MncadiAvenue, Durban,4001. at theregistered offi ceofthecompany, beingQuadrant two weekspriortothedateofannualgeneralmeeting as Appendix2.TherulesoftheFSPwillbeavailablefor A summaryofthesalientfeatures oftheFSPisincluded be andishereby adopted. That theGrindrod Limited ForfeitableShare Plan(“FSP”) Plan Special resolution 2–Adoption ofForfeitableShare included asAppendix1. by thenewMemorandumofIncorporationwhichis Incorporation ofthecompanybeandishereby replaced holders ofpreference shares above,theMemorandumof That, subjecttothepassingofSpecialresolution 1ofthe of Incorporation Special resolution 1–Replacement ofMemorandum and confi rmed. the document,whichthisnoticeformspartof,beratifi ed year ended31December2011,assetoutonpage71of That theremuneration of the executivedirectors forthe directors’ remuneration Ordinary resolution 9–Ratifi times andonsuchtermsastheymaydetermine. who shallbeauthorisedtoissuetheseshares atsuch ordinary shares intotal,underthecontrol ofthedirectors, company’s share optionscheme,comprising2900000 capital ofthecompanyreserved forthepurposeof To continuetoplacetheunissuedordinary shares inthe shares reserved fortheshare optionscheme Ordinary resolution 8–Directors’ authoritytoissue offi ceuntilthenextannualgeneralmeeting. and MsREbrahimasdesignatedauditpartnertohold To re-appoint Deloitte&Touche asindependentauditors independent auditorsanddesignatedauditpartner Ordinary resolution 7–Re-appointment of of theauditcommittee. MJ Hankinsonasindependentnon-executivemembers To re-elect MessrsIMGroves, WDGeachand committee members Ordinary resolution 6–Re-electionofaudit nancial assistanceforsubscriptionofsecurities cation ofexecutive 2.4

2.5 theJSEListingsRequirements; and • theAct,inparticularsection45thereof; • • subjecttotherequirements of: (a) section 45(1)oftheAct): direct orindirect “fi nancialassistance”(asdefi nedin general approval, toauthorisethecompanyprovide That thedirectors ofthecompanybeauthorised,asa fi Special resolution 4–Generalauthoritytoprovide anyotherapplicablelawsthatmayexistfrom timeto • theJSEListingsRequirements; and • theAct,inparticularsection44thereof; • subject totherequirements of: required from timetoforthepurposesofFSP, (b) be approved: the year1July2012to30June2013,assetoutbelow, That thefeespayabletonon-executivedirectors for non-executive directors Special resolution 5–Approval offeespayableto nancial assistancetocertaincategoriesofpersons ebrna45000 75000 n/a n/a 52000 80000 45000 65000 65000 * 110000 Member 55000 Chairman 90000 committee * Social andethics 495000 Member 450000 Chairman Proposed nomination committee 209000 Remuneration/ Present Member 190000 Chairman Audit committee Non-executive director Chairman Board Present Payment offeescommencedon1March2012attheproposedlevel. time. required from timetotime;and/or section 2oftheAct)companyorcorporation,as to any“related” or“inter-related” (asdefi nedin from timetoforthepurposes oftheFSP; director, prescribed offi cerormember, as required any personrelated toanysuch company, corporation, member ofarelated orinter-related corporation,orto or ofarelated orinter-related company, ortoany to anydirector orprescribed offi cerofthecompany to time. any otherapplicablelawsthatmayexistfrom time RR an annualgeneralmeeting. Andtotransactanyotherbusinessthatmaybetransactedat Approval ofgroup remuneration policy 3.1 NON-BINDINGADVISORY VOTE 3. • • • • • • 2.6 hereby approved bywayofanon-bindingvote. the documentofwhichthisnoticeformspart,beandis That thegroup remuneration policy, setoutonpage70of of theJSEListingsRequirements beingthat: of section48read withsection46oftheActandinterms each (“ordinary shares”) issuedbythecompany, interms on behalfofthecompany, ordinary shares of0,002cents authorised, bywayofageneralapproval, torepurchase That thedirectors ofthecompanybeandare hereby to repurchase ordinary shares Special resolution 6–Renewalofgeneralauthority Requirements. as defi nedinparagraph3.67oftheJSEListings not repurchase shares duringaprohibited period Requirements, the company oritssubsidiarymay unless priornoticeisgivenintermsoftheJSEListings transaction wasagreed; and days immediatelypreceding thedayonwhich on theJSEasdeterminedoverfi vetrading which suchordinary shares are traded,respectively, 10% oftheweightedaveragemarketvalueat which suchordinary shares mayberepurchased is of thisgeneralapproval, themaximumpremium at issued bythecompanyare repurchased byitinterms in determiningthepriceatwhichordinary shares of thecompanythatclass; any onefi nancialyear, ofthenumberissuedshares the companymaynotexceed10%inaggregate, in granted andtheacquisitionofshares byasubsidiaryof share capitalofthat class,atthetimethatapproval is exceed, inaggregate, 20%ofthecompany’s issued ordinary shares inanyonefi nancialyearmaynot in termsofthisgeneralapproval, theacquisitionof Requirements; in accordance withsection5.79oftheJSEListings the company, containingfulldetailsofsuchacquisitions ordinary shares inissue,aggregate, repurchased by an announcementwillbepublishedforevery3%ofthe passing ofthisspecialresolution; it shallnotextendbeyond15monthsfrom thedateof company’s nextannualgeneralmeeting,provided that this generalauthorityshallonlybevaliduntilthe implemented ontheopenmarketofJSE; any suchrepurchase ofordinary shares shallbe 111 Grindrod Limited Integrated Annual Report 2011 112 Grindrod Limited Integrated Annual Report 2011 6. Proxies 5. Preference shareholders 4. Record date 3. Explanationofresolutions 2. 1.2 1.1 1. Voting RESOLUTIONS INFORMATION ANDEXPLANATION OF NOTICE OFMEETING shares incertifi cated formandwhosenameis refl ected A memberregistered assuch(eithertheholderof repurchase shares. the specialresolution relating toageneralauthority vote togetherwithordinary shareholders inrespect of shareholders are entitledtoattendthemeetingand to beheldonWednesday, 30May2012,preference to benotedthatinrespect oftheannualgeneralmeeting correspondence related toallshareholder meetings.Itis Preference shareholders are entitledtoreceive copiesof 107 106 is 25May2012. 23 96 to receive noticeof,participate inandvoteatthemeeting purpose ofdeterminingwhichshareholders are entitled The record datethathasbeensetbytheboard forthe 76 12 annual fi nancialstatements) Share capitalofthecompany (Refertonote19ofthe Major shareholders Litigation statement Responsibility statement Directors’ interest insecurities Material change Directors andmanagement report onthepagenumbers below: 11.26 canbefoundinthe2011integratedannual Information related toJSEListingsRequirement out intheExplanationScheduleattachedhereto. of theAct)inrespect oftheproposed resolutions isset Explanatory material(ascontemplatedinSection65(4)(b) least 50%ofthevotingrightsexercised ontheresolution. adoption ofeachordinary resolution isthesupport of at The percentage ofvotingrightsthatwillberequired forthe on theresolution. the supportofatleast75%votingrightsexercised the adoptionofeachspecialresolution tobeadoptedis The percentage ofvotingrightsthatwillberequired for (continued) number Page 2 April2012 Durban Company secretary CAS Robertson By order oftheboard Electronic participationbyshareholders 8. 7. Identifi vote onanymatterputtoaofshareholders. or represented byavalidproxy shallbeentitledtocasta expense. Onlypersonsphysicallypresent atthemeeting(s) of electronic participationwillbeattheshareholder’s prior tothemeeting(s).Accessmeeting(s)byway +27 313659116notlessthan5(fi ve)businessdays the companysecretary on [email protected] or participate inthemeeting(s)electronically shouldcontact in theannualgeneralmeeting.Shareholders wishingto in themeetingofholderspreference shares and Shareholders mayparticipate (butnotvote)electronically identifi cation. provide thepersonpresiding themeetingwithsatisfactory Section 63(1)oftheActrequires meetingparticipantsto broker concerned. entered intobetween theshareholder andCSDPor with theirvotinginstructionsintermsoftheagreements the meeting,theyshouldprovide theirCSDPorbroker do notwishtoattendbutberepresented at the annualgeneralmeeting.Shouldtheybeunable,or their CSDPorbroker forthe necessaryauthoritytoattend longer recorded intheirownnames,shouldarrange with shares inGrindrod Limitedsuchthattheir holdingsare no the meeting.Shareholders whohavedematerialisedtheir 2107) atleast48hoursbefore thecommencementof Johannesburg, 2001(POBox61051,Marshalltown, Services (Pty)Limited,Ground Floor, 70MarshallStreet, of theTransfer Secretaries, Computershare Investor Proxy formsshouldbeforwarded toreach theoffi ce A proxy neednotbeamemberofthecompany. to berepresented thereat. unable toattendtheannualgeneralmeeting,butwishes and, onapoll,voteinhis/hersteadshouldhe/shebe entitled toappointoneormore proxies toattend, speak refl ectedinasub-register maintainedbyaCSDP)is of shares indematerialisedformandwhosenameis in theregister ofcompanymembers,orastheholder cation 1.4 1.3 1.2 1.1 1. ORDINARY RESOLUTIONS Annual generalmeeting 1. Meeting ofholderspreference shares EXPLANATION SCHEDULE Resolution 6provides forthere-election ofMessrs committee members Ordinary resolution 6–Re-electionofaudit 16 November2011ofthecompany. Mr MRWade asan executivedirector effective effective 31October2011andtheappointmentof director Mr JJDurandasanalternate toMrMHVisser director effective 31October2011,theappointmentof asanon-executive appointment ofMrMHVisser The purposeoftheseresolutions istoconfi rmthe MR Wade appointments ofMessrsMHVisser, JJDurandand Ordinary resolutions 3,4and5–Confi recommends theirre-election toshareholders. the results ofthatassessment.Accordingly, theboard each oftheretiring candidatesandtheboard accepted has conductedanassessmentoftheperformance The remuneration/nomination committeeofthecompany pages 13and15ofthe2011integratedannualreport. The credentials ofthese directors are provided on and beingeligible,offer themselvesforre-election. andSDMZunguretireDA Polkinghorne byrotation Incorporation, MessrsIAJClark,MRFaku,MJHankinson, In accordance witharticle 59oftheMemorandum retiring byrotation Ordinary resolution 2–Re-electionofdirectors meeting. of thedirectors andtheauditors ofthecompanyto law topresent theauditcommittee report andthereports of meetingformspart.Thedirectors are alsorequired by available onthecompany’s website,ofwhichthisnotice 31 December2011tothemeeting,whichwasmade audited fi nancialstatementsfortheyearended The directors are required bylawtopresent thefull statements Ordinary resolution 1–Approval ofannualfi consistent withtheAct. Memorandum ofIncorporationthecompany, whichis 2008, asamended(“theAct”),willbereplaced bythenew company, whichpredates theCompaniesAct,No71of be thattheexistingMemorandumofIncorporation annual generalmeetingofthecompany, beingpassed,will The effect ofthisresolution andspecialresolution 1ofthe 8A and30. is required toaltertheprovisions ofArticles3, proxy atameetingofthepreference shareholders preference shares represented eitherinpersonorby of theholdersatleastthree-quarters ofthe of Incorporationthecompany, thepriorconsent In termsofarticle8A.2.1.3theexistingMemorandum 30 oftheMemorandumIncorporation Special resolution 1–AlterationofArticles3,8Aand r the rm nancial 2.2 2.1 2. SPECIAL RESOLUTIONS 1.7 1.6 1.5 appointments. strategic recruitment purposesatexecutive levelandkey FSP isintendedtobeusedonly foradhocretention or address this,thecompanyintendstoadoptanFSP. The SPLPS isnotadequatetoaddress retention. Inorder to over thepastfewyears,it has beennotedthatthe Due tothecompanyshare pricenothavingincreased price increases betweenthegrantdateandvestingdate. SPLPS willonlyrender valuetoparticipantsiftheshare Price LinkedPerformanceScheme(“SPLPS”).The Scheme (“SOS”),whichiswindingdownandaShare The companycurrently hasaclosedShare Option Plan (“FSP”) Special resolution 2–AdoptionofForfeitableShare Incorporation, whichisconsistentwiththeAct. predates theAct,withnewMemorandumof Memorandum ofIncorporationthecompany, which of thisresolution willbethesubstitutionofexisting consistency withtheprovisions oftheAct.Theeffect The reason forspecialresolution 1willbetoensure of Incorporation Special resolution 1–Replacement ofMemorandum Memorandum ofIncorporationthecompany. directors ofthecompany, inaccordance withtheexisting general meetingtoapprove theremuneration payableto The purposeofthisresolution isforthecompanyin directors’ remuneration Ordinary resolution 9–Ratifi of thecompany. provisions oftheexisting Memorandum ofIncorporation under thecontrol of thedirectors, pursuanttothe for thepurposesofcompany’s share optionscheme ordinary shares inthecapitalofcompanyreserved The effect ofthisresolution istoplacetheunissued shares reserved fortheshare optionscheme Ordinary resolution 8–Directors’ authoritytoissue as theindependentauditors. Ms REbrahimasdesignatedauditpartnerbeappointed audit committee,propose thatDeloitte&Touche and directors, havingacceptedtherecommendation ofthe in offi ceuntilthenextannualgeneralmeeting.The the shareholders appointauditorswhowillremain The Actrequires that,ateachannualgeneralmeeting, independent auditorsanddesignatedauditpartner Ordinary resolution 7–Re-appointment of the Act. and thattheymeettherequirements ofsection94(4) of to fulfi ltheirdutiesasmembersoftheauditcommittee has adequaterelevant fi nancialknowledgeandexperience of theauditcommitteeandconsidersthateachthem suitability andqualifi cationsofeachdirector asmembers The remuneration/nomination committeereviewed the shareholders electthemembersofanauditcommittee. The Actrequires that,ateachannualgeneralmeeting, the non-executive membersoftheauditcommittee. IM Groves, WDGeachandMJHankinsonas cation ofexecutive 113 Grindrod Limited Integrated Annual Report 2011 114 Grindrod Limited Integrated Annual Report 2011 (b) 2.4 2.3 NOTICE OFMEETING (a) authorising theboard toprovide fi nancialassistance: Act. Theeffect ofthisresolution willbeageneralapproval, compliance withtherequirements ofsection45the The reason forspecialresolution 4willbetoensure fi Special resolution 4–General authoritytoprovide and otherapplicablelaws. requirements oftheAct,JSEListingsRequirements of theFSP, foraperiodoftwoyears,subjecttothe company, asrequired from timetoforthepurposes any securitiesofthecompanyorarelated orinter-related related orinter-related company, orforthepurchase of securities, issuedortobebythecompanya connection with,thesubscriptionofanyoption,or or otherwisetoanypersonforthepurposeof,in by wayofaloan,guarantee,theprovision ofsecurity authorising theboard toprovide fi nancial assistance Act. Theeffect ofthisresolution willbeageneralapproval, compliance withtherequirements ofsection44the The reason forspecialresolution 3willbetoensure fi Special resolution 3–General authoritytoprovide Company Secretary, MrCASRobertson. Mncadi Avenue, Durban, 4001 byarrangementwiththe FSP canbeinspectedatQuadrantHouse,115Margaret implementation oftheFSP. Acopyoftherules ofthe The effect ofthisresolution wouldbetheadoption and the participantisfree todealintheshares. shares anditisonlyattheendofvestingperiodthat participant isnotrequired topayfortheacquisition of at anyonetimewillbelimitedto6millionshares. The limited to1millionandthetotalaward underthescheme which mayatanyonetimebeheldbyanindividualwill not causeanydilution.Thenumberofforfeitableshares the schemeinmarketandtherefore thescheme will treasury shares. Theintentionistoacquire theshares for market purchase ofshares, theissuingofshares orusing to allowforsettlementofforfeitableshares bywayofa shareholders. TherulesoftheFSPwillbedraftedfl exibly thus providing direct alignmentbetweenparticipants and benefi tfrom dividendsandhaveshareholder votingrights, forfeitable shares from theaward dateandwillimmediately Under theFSP, participantswillbecome ownersofthe nancial assistancetocertaincategoriesofpersons nancial assistanceforsubscriptionofsecurities Requirements andotherapplicable laws. the requirements oftheAct, JSEListings the FSP, for aperiodoftwoyears,subjectto as required from timetoforthepurposes of corporation, director, prescribed offi cerormember, or toanypersonrelated toanysuchcompany, member ofarelated orinter-related corporation, or ofarelated orinter-related company, ortoany to anydirector orprescribed offi cerofthecompany applicable laws;and/or the Act,JSEListingsRequirements andother period oftwoyears,subjecttotherequirements of corporation, asrequired from timetotime,fora to anyrelated orinter-related companyor (continued) Approval ofgroup remuneration policy 3.1 NON-BINDINGADVISORY VOTE: 3. • • • • 2.6 2.5 King III)andinline withsoundcorporategovernance. forSouthAfrica2009 (together King CodeofGovernance forSouthAfrica2009andthe Report onGovernance This isarecommended practiceintermsoftheKing repurchase approval, are oftheopinionthat: such repurchases maytakeplacepursuanttothegeneral shares whichmaybe repurchased andthepriceatwhich The directors, afterconsidering themaximumnumberof date ofthespecialresolution. any eventwillnotextendbeyond15monthsfrom the until thenextsucceedingannualgeneralmeeting,butin contemplated inspecialresolution 6willremain ineffect special resolution 6willrenew thatauthority. Theauthority 25 May2011willlapseatthisannualgeneralmeetingand resolution attheannual generalmeetingheldon its ownordinary shares whichwasrenewed byspecial that thegeneralapproval forthecompanytoacquire The reason forandtheeffect ofspecialresolution 6is to repurchase ordinary shares Special resolution 6–Renewalofgeneralauthority the committee. Mr MRFakuhasalsobeenappointedasamemberof the chairmanofsocialandethicscommitteethat It isrecorded thatMrMJHankinsonhasbeenappointed as shareholders withintheprevious twoyears. accordance withaspecialresolution approved bythe that theremuneration ofdirectors maybepaidonly in compliance withsection66(9)oftheActwhichrequires The reason forspecialresolution 5willbetoensure directors fortheirservicesasdirectors. The Actrequires shareholders toapprove thefeespaidto non-executive directors Special resolution 5–Approval offeespayable to general meeting. of 12monthsafterthedatenoticeannual business ofthecompanyandgroup fortheperiod the group willbeadequateforthepurposesof the workingcapitalavailabletocompanyand annual generalmeeting;and for aperiodof12monthsafterthedatenotice group willbeadequateforordinary businesspurposes the share capitalandreserves ofthecompanyand date ofthenoticeannualgeneralmeeting; after therepurchase foraperiodof12monthsafterthe consolidated liabilitiesofthecompanyandgroup Reporting Standards (“IFRS”),willbeinexcessofthe Financial fairly valuedinaccordance withInternational the consolidatedassetsofcompanyandgroup, general meeting; of 12monthsafterthedatenoticeannual debts intheordinary course ofbusinessforaperiod the companyandgroup willbeabletopayits (h) (g) (f) (e) (d) (c) (b) (a) hereto, unlessthecontext otherwise requires: In thisMemorandumofIncorporation,includingAnnexure “A” Defi Annexure “A” Article 7–Changeoflaws Article 6–Dividends Article 5–Directors andoffi cersofthecompany Article 4–Shareholders’ meetings Article 3–Shareholders Article 2–Securitiesofthecompany Article 1–Incorporationandnature ofthecompany Adoption ofmemorandumIncorporation Defi nitionsandinterpretation 1966/009846/06 Registration number: GRINDRODLIMITED Name ofcompany: MEMORANDUM OFINCORPORATION OFAPUBLICCOMPANY THE COMPANIES ACT, No71of2008 REPUBLIC OFSOUTHAFRICA Draft memorandumofincorporation Appendix 1 2005/022939/06; “JSE” means the JSELimited,Registration no. limited to,electronic mail; by electronic, opticalorsimilarmeansincluding,butnot being informationgenerated, sent, received orstored in avisibleformandfurther includes adatamessage auto-graphed, represented orproduced inany mode “in writing”or“written”meansandincludeswords printed, by,governed thisMemorandumofIncorporation; 1966/009846/06, thecompanythathasadoptedandis “the Company”meansGrindrod Limited,Registrationno. Republic ofSouthAfrica; Sunday oroffi ciallydesignatedpublicholidayinthe “Business Day”meansanydayotherthanaSaturday, regulation; is required tokeepintermsoftheActoranyotherpublic books, writing,records orotherinformationthatacompany “books ofaccount”meansanydocuments,accounts, as itmaybeconstitutedfrom timetotime; “the Board” meanstheboard ofdirectors oftheCompany, or tothepublicthatisacceptableJSE; publishing informationtotheshareholders oftheCompany “advertisement” meansanymethodofadvertisingor in force; as modifi edor re-enacted byanystatuteforthetimebeing the Actshallbeconstruedasareference tosuchprovision force relating tocompanies.Reference toanyprovision of a reference tothestatuteorstatutesfrom timetoin the Actisreplaced byany otherstatute,beconstruedas amended from timetotime. Reference totheActshall,if “the Act”meanstheCompaniesAct,No71of2008,as nitions andinterpretation Incorporation of the Company (being its “Memorandum of Incorporation of theCompany(beingits“Memorandum of Company on30 May2012.TheformerMemorandum of This MemorandumofIncorporation wasadoptedbythe Adoption ofmemorandum ofincorporation (r) (q) (p) (o) (n) (m) (l) (k) (j) (i) marked “A”formpartofthisMemorandum ofIncorporation. the provisions containedinthescheduleannexedhereto and words importingonegendershallincludetheothergender; this MemorandumofIncorporationasintheAct; words thatare defi nedintheActbearsame meaningin Incorporation; that are notaddressed intheActorthisMemorandumof oftheCompany inrespect to thegovernance ofmatters “Rules” meansanynecessaryorincidentalrulesrelating appointed inaccordance withtheAct; remuneration/nomination committee oftheBoard, “Remuneration/Nomination Committee”meansthe of Article3.1(1)hereof; address notifi edbyashareholder totheCompanyinterms an electronic mailaddress, faxnumber, physicalorpostal “registered address” inrelation toashareholder means business andactivitiesoftheCompany; management ofthewhole,orsignifi cant portion,ofthe in theexercise ofgeneral executivecontrol overand Company; orregularly participates toamaterialdegree signifi cantportion,ofthebusiness and activitiesofthe executive control overand managementofthewhole,or “prescribed offi cer”meansanyonewhoexercised general “person” includesajuristicpersonasdefi nedintheAct; particulars, dividendandinterest noticesandproxy forms; fi nancialstatements,quarterlyandinterim reports, listing “notice” includescirculars, abridgedandfullannual including theSchedulesannexedhereto; being theMemorandumofIncorporationCompany, “Memorandum ofIncorporation”meansthisdocument, 115 Grindrod Limited Integrated Annual Report 2011 116 Grindrod Limited Integrated Annual Report 2011 (2) (1) 1.3 [JSESch10:10.12] (2) (1) PowersoftheCompany 1.2 (c) theunalterableprovisions oftheAct;and (b) (a) (2) (1) 1.1 Incorporation COMPANY ARTICLE 1–INCORPORATION ANDNATURE OFTHE of theshareholders oftheCompany. Incorporation, inaccordance withtheAct,byspecialresolution its entirety andsimultaneouslyreplaced bythisMemorandum of the CompaniesAct61of1973,asamended)wasrepealed in Association” and“Articlesofadoptedinterms Appendix 1 implemented without thesanctionofaspecialresolution of the preference shares), suchamendment shallnotbe further securitiesrankinginpriority to,or shares (including,butnotlimitedto,thecreation of rights, limitationsorotherterms attachingtothepreference Incorporation relates tothevariationofanypreferences, If aproposed amendmenttothisMemorandumof par value.[JSESch10:10.5(d)] Company; andaconversionofshares from parvaluetono sub-division ofsecurities;achangethename of numbersecurities;theconsolidation class ofshares intooneormore otherclasses;theincrease attaching toanyclassofshares; theconversionofone of anypreferences, rights,limitationsorothershare terms limited to,thecreation ofanyclassshares; thevariation For theavoidanceofdoubt,amendmentincludes,butisnot or aspecialresolution oftheshareholders oftheCompany. Incorporation shallonlybeamendedbyanorder ofcourt item 2.2.2.13ofAnnexure “A” hereto, thisMemorandumof Subject totheAct,Articles1.3(2)and2.1(2)(c)below [s15, 16and17oftheAct] Memorandum ofIncorporationandRules and subjecttoArticle2.3(1)below. not havethepowertoclaimalienonanyofitssecurities those containedintheAct,savethatCompanyshall to anyrestrictions, limitations orqualifi cationsotherthan The purposesandpowersoftheCompanyare notsubject Incorporation otherthanthosecontainedintheAct. the amendmentofprovisions ofthisMemorandum restrictive conditionsnor to anyprohibitions regarding of Incorporation,theCompanyisnotsubjecttoany item 2.2.2.13ofAnnexure “A”tothisMemorandum Subject toArticles1.3(2)and2.1(2)(c)below by: governed The Companyisincorporatedinaccordance withand Republic ofSouthAfrica. The Companyisincorporatedasapubliccompanyinthe the provisions ofthisMemorandum ofIncorporation. out inthisMemorandumofIncorporation;and limitations, extensions,variationsorsubstitutionsset the alterableprovisions oftheAct,subjectto [s8and15oftheAct] (continued) [s15and19oftheAct] pari passu

with, with, (3) (2) (1) 2.2 Shares [JSESch10:10.9] (3) b therepurchase oftheCompany’s securities;and (c) (b) (a) (2) (1) 2.1 General ARTICLE 2–SECURITIESOFTHECOMPANY (4) (3) or othertermsare notspecifi edinthis Memorandumof are notissuedandwhichpreferences, rights limitations rights, limitationsorotherterms ofanyclassshares that but are notissued;andtodeterminethepreferences, classify anyunclassifi edshares thathavebeenauthorised shares thathavebeenauthorisedbutare notissued;to number ofauthorisedshares ofanyclass;toreclassify any The authorityoftheBoard toincrease ordecrease the [JSE Sch10:10.5(g)] which wouldauthorisesuchavariationisprohibited. or facts.Aproposal toshareholders ofanyresolution in responsefact toanyobjectivelyascertainableexternal with anyclassofshares oftheCompanyshallnotvary preferences, rights,limitationsorothertermsassociated Notwithstanding sections37(6)and37(7)oftheAct, such annexure. and othertermsassociatedwitheachclassassetoutin Incorporation, subjecttothepreferences, rights,limitations shares setoutinAnnexure “A”tothisMemorandumof maximum numberofordinary shares andpreference The Companyisauthorisedtoissuenomore thanthe for anysecuritiesoftheCompany. [JSESch10:10.14] agreeing tosubscribe,whether absolutelyorconditionally, to anypersoninconsiderationfortheirsubscribingor The Companyshallnotpaycommissionexceeding10% 2.1(2(c) aboveand item2.2.2.13ofAnnexure “A”hereto. Incorporation, is subjecttoArticles1.3(1), 1.3(2) and accordance withtheJSEListing Requirements: The followingcorporateactionsmaybetakenonlyin required bystatute.[JSESch10:10.2(a)] be fullypaidupandfreely transferable,unlessotherwise Company forwhichlistingontheJSEare soughtshall Notwithstanding section40(5)oftheAct,securities the Company. [JSESch10:10.4] The Board shallnothavetheauthoritytomakeRulesfor alteration toaregistered address ofeachshareholder. Memorandum ofIncorporationbydeliveringacopythe The Companyshallpublishanoticeofanyalterationthis writing. [JSESch10:10.5(e)and(f)] meeting ofsuchholdersorpassedbyshareholders in the holdersofsuchpreference shares passedataseparate rights attachingtoanyclassofshares. the alterationofshare capital, authorisedshares and securities grantedorissuedforcash; the issueofshares forcash and optionsconvertible [s36,49,51,52and53oftheAct] (2) [JSESch10:10.10] (1) 2.3 Debt instruments (7) (6) (5) (4) at adiscount,premium orotherwise. debenture stock, bondorothersecurities maybeissued to whomthesamemaybe issued.Anydebentures, from anyequitiesbetweentheCompanyandperson bonds orothersecuritiesmay bemadeassignablefree Secured orunsecured debentures, debenture stock, meetings andtheappointmentofdirectors, isprohibited. instruments, suchasattendingandvotingatshareholders The grantingofspecialprivilegestoholdersdebt [JSE Sch10:10.2(b)] as beinginorder before thelodgementofsuchnotice. the authorityandcertifi ed byanyoffi ceroftheCompany Company maygiveeffect toanyinstrumentssignedunder the lodgementofanoticerevocation ofauthority, the authority islodgedatthesametransferoffi ce.Evenafter until express noticeinwriting oftherevocation ofsuch The Companymayallowsuchauthoritytobeactedupon be deemedtocontinueandremain infullforce andeffect. between theCompanyandgrantorofsuchauthority, lodged atanyoftheCompany’s transferoffi ces, shall,as shares forthepurposeoftransferring shares, thatmaybe Any authoritytosignatransferdeed,grantedbyholderof approved from timetotime. transactions totallyelectronically orotherwiseasmaybeso such requirements, includingthepowertosettleallshare The Companyshallhavethepowertoconformwith authority controlling theissue andtransferofsecurities. be listedfrom timeto and/oranyotherregulatory stock exchangeonwhichtheshares oftheCompanymay with therequirements oftheJSE,anyotherrecognised shareconcerning transactionsshallbeinaccordance Company, the transferofsuchshares andallmatters The certifi catesorotherevidenceoftitleshares ofthe determine. dematerialised orcertifi catedform,astheBoard may Shares oftheCompanyare tobeissuedineither Company. [JSESch10:10.1] be offered, andtosubscribeto,additionalshares ofthe of theCompanyshallhaveanyotherpre-emptive rightto Requirements andapproval oftheJSE.Noshareholder any suchtransactionshallbesubjecttotheJSEListing shares astheBoard initsdiscretion thinksfi t,provided that shares and/ortograntoptionssubscribeforunissued the CompanymayauthoriseBoard toissueunissued assets. Notwithstandingtheabove,shareholders of shares are issuedforthepurposeofacquisition of rata inproportion totheirshareholdings, unless such equity shares, asnearlycircumstances permit pro before issue,befi rstoffered toalltheexistingholdersof forming partoftheoriginaloranyincreased capital)shall, Any equityshares forthetimebeingunissued(whether [s43oftheAct] (3) (2) (1) 3.2 (3) (2) (1) 3.1 Notices ARTICLE 3–SHAREHOLDERS of themeetingbefore thevoteisgiven. the registered address oftheCompany orbythechairman death, revocation ortransfershallhavebeenreceived at the voteisgiven,provided nointimationinwritingofthe representation; ortransfer oftheshare inrespect ofwhich (if applicable);revocation oftheproxy, powerorletterof be validnotwithstandingtheprevious deathoftheprincipal proxy, oraletterofrepresentation a power ofattorney shall A voteinaccordance withthetermsofaninstrument purpose ofattendingorvotingatthatmeeting. instrument, powerorlettershallbetreated asinvalidforthe power orletterpurportstoattendvote,failingwhichthe meeting atwhichthepersonnamedinsuchinstrument, less than48hoursbefore thetimeforholdingof be delivered totheregistered address ofthe Companynot special powerofattorney, orletterofrepresentation, shall is signed,oranotariallycertifi edcopythereof),general or a proxy (andthepowerofattorney, ifany, underwhichit rights atashareholders meeting. Anyinstrumentappointing the personnamedtherein may exercise theshareholder’s special powerofattorney, oraletterofrepresentation before a copyoftheinstrumentappointingproxy, generalor A shareholder (orhisagent) shalldelivertotheCompany shareholder intheCompany. proceeding oftheCompany, whetherornotheishimselfa of representation toattendandtakepartinanymeetingor shall beentitledtovoteifdulyauthorisedunderthatletter person tobetherepresentative ofsuchjuristicperson, such holderisappointedbyashareholder thatisajuristic The holderofaletterrepresentation intermsofwhich [s58 oftheAct] Proxies, andrepresentatives powersofattorney the fi rstdaythatsuchadvertisement ispublished. by advertisementshallbedeemedtohavebeenservedon suffi ciently givenifbyadvertisement.Anynotice provided forinthisMemorandum ofIncorporation,shallbe Company toshareholders, or anyofthem,andnotexpressly Requirements, anynotice required tobegivenbythe Subject totheprovisions oftheActandJSEListings Transactions Act25of2002,asamended). in section1oftheElectronic Communicationsand be anadvancedelectronic signature (ascontemplated be written,printed,partlywrittenandprintedormay The signature toanynoticegivenbytheCompanymay with atleastoneoftheabove.[JSESch10:10.18] any noticefrom theCompanyuntilheprovides theCompany shall bedeemedtohavewaivedhis meaning ofthisMemorandumIncorporation,andhe shall bedeemedtohisregistered address withinthe number, andaphysicalorpostaladdress, eachofwhich the Companyinwritingofanelectronic mailaddress, afax Each holderofregistered shares (orhisagent)shallnotify right tobe served with with 117 Grindrod Limited Integrated Annual Report 2011 118 Grindrod Limited Integrated Annual Report 2011 (d) (c) (b) (a) (2) (1) 4.2 (3) (2) (1) 4.1 General ARTICLE 4–SHAREHOLDERSMEETINGS 3.3 (4) Appendix 1 but notlimitedto– shareholder byanymethodpermittedtheActincluding, A noticeshallbegivenorservedbytheCompanyuponany elected toreceive suchdocuments.[JSESch10:10.11(e)] to eachpersonentitledvoteatsuchmeetingwhohas Notice ofeachshareholders meetingshallbedelivered Regulation 7] Notice ofshareholders meetings by meansofawrittenresolution. [JSESch10:10.11(c)] Requirements shallbeheld inpersonandshallnotbeheld meetings thatare calledfor intermsoftheJSEListings Act orthisMemorandumofIncorporation,allshareholder Notwithstanding anythingtothecontrarycontainedin be thechairman. willing totakethechair, shallchooseoneoftheirnumberto directors tobethechairman and,ifnodirector present be doing so,theshareholders present shallchooseoneofthe choose achairmanofthemeetingand,indefaulttheir the meetingorisunwillingtoact,otherdirectors may within 10minutesafterthetimeappointedforholding executive director, orifatanymeetingheisnotpresent is nochairmanoftheBoard orleadindependentnon- to takethechairateveryshareholders meeting.Ifthere independent non-executivedirector (ifany)shallbeentitled The chairmanoftheBoard or, inhisabsence,thelead determined bytheBoard. The dateandtimeofanyshareholders meetingshallbe JSE ListingRequirements. [JSESch10:10.15] The record dateforalltransactionsshallbeassetoutin the [s59 oftheAct] Record dateforexercise ofshareholder rights issued bytheBoard. electronic mail,according tosuchdirections asmaybe letters transmittedbyshareholders oftheCompanyby permit theacceptanceofsuchinstruments,powersor approved bytheBoard. TheBoard may, initsdiscretion, of attorney, orletterofrepresentation shallbeinanyform An instrumentappointingaproxy, generalorspecialpower that, simultaneously with or as soon as possible after that, simultaneously withorassoonpossible after shareholder hasconsentedthereto in writingand the noticeonCompany’s website;provided the subject toanyrequirements oftheJSE,byposting registered address; and thereto inwritingandhasspecifi ed anelectronic mail mail; provided thatsuchshareholder hasconsented subject toanyrequirements oftheJSE,byelectronic physical orpostalregistered address; delivery byregistered posttotheshareholder’s fax totheshareholder’s faxnumberregistered address; [s60and61oftheAct] (continued) [s62 of the Act; and [s62oftheAct;and

4.3 (7) (6) (5) (4) (3) (3) (2) (1) Quorum forshareholders meetings whom hederiveshistitletosuchshare. in theregister, shallhavebeengiventothepersonfrom which, previously tohisname andaddress beingentered shall beboundbyeverynoticeinrespect ofsuchshare means whatsoevershallbecomeentitledtoanyshare, Every personwho,byoperationoflaw, transferorother jointly interested withhimor herinanysuchshares. heirs, executorsoradministrators,andallpersons(ifany) suffi cientserviceofsuchnoticeordocumentonhisher under thisMemorandumofIncorporation,bedeemeda joint holderthereof andsuch serviceshall,forallpurposes until someotherpersonisregistered inhissteadasthe solely orjointlywithotherpersonsbysuchshareholder, served inrespect ofanyregistered shares, whetherheld has noticeofhisdecease,bedeemedtohavebeenduly was thendeceased,andwhetherornottheCompany Incorporation shall,notwithstandingthatsuchshareholder upon anyshareholder inpursuance ofthisMemorandum Any noticeordocumentgivenservedbytheCompany shares. so givenshallbesuffi cientnoticetoalltheholdersofsuch of suchpersonsisnamedfi rstonthe register andnotice which personsare jointlyentitled,begiventowhichever All noticesmay, withrespect toanyregistered shares to the offi cialnewsserviceoftheJSE.[JSESch10: 10.11(f)] Company. Suchnoticeshallalsobeannouncedthrough as noticeofthemeetingissenttoshareholders ofthe Manager (IssuerRegulations)oftheJSEatsametime Notice ofeachshareholders meetingshallbesenttothe at suchmeeting. any shareholder shallnotinvalidateanyresolution passed The accidentalomissiontogivenoticeofanymeeting present atthat meeting. by anauthorised representative shall bedeemedto defi nedintheActandispresent atashareholders meeting A shareholder oftheCompanywhichisajuristicpersonas at everymatterthatisconsidered atthemeeting. all theshareholders formingthequorummustbepresent Act, onceaquorumforthemeeting hasbeenestablished, Notwithstanding anythingtothecontrarycontainedin so present atsuchmeeting.[JSESch10:10.11(h)] be aquorumunlessthere are atleastthree shareholders at hand,asthecasemaybe;provided thatthere shallnot least onemattertobedecidedatthemeetingor voting rightsthatare entitledtobeexercised inrespect ofat proxy) toexercise, inaggregate, atleast25%ofallthe suffi cientpersonspresent atthemeeting(inpersonorby begin, andforanymattertobedecidedatthatmeeting,is The quorumrequirement forashareholders meetingto [s61 and64oftheAct] website. that theCompanyhaspostednoticeonits shareholder athiselectronic mailregistered address such postingofthenotice,Companynotifi esthe

(3) (2) (1) 4.6 Shareholders resolutions (4) (3) (2) (1) Votes ofshareholders 4.5 (2) (1) 4.4 the Company, savefor: Company isnot required foramatter to bedeterminedby A specialresolution adoptedbytheshareholders ofthe [JSE Sch10:10.11(a)] least 75%ofthevotingrightsexercised ontheresolution. of theCompany, itmustbesupportedbythe holdersofat For aspecialresolution tobeadoptedbytheshareholders the resolution. holders ofmore than50%ofthevotingrightsexercised on shareholders oftheCompany, itmustbesupportedbythe For anordinary resolution tobeadoptedbythe to voteinrespect thereof. the register inrespect ofsuchshares shallalonebeentitled the saidpersonssopresent whosenamestandsfi rst on present atanymeeting,personallyorbyproxy, thatoneof of suchjointholders,orexecutorsadministrators,be or byproxy, inrespect ofsuchshare. Ifmore thanone of suchpersonsmayvoteatanymeeting,eitherpersonally shareholder inwhosesole name anyshares stand,anyone or severalexecutorsadministratorsofadeceased Where there are jointregistered holdersofanyshare, such meetinginrespect thereof. the Board shallhavepreviously admittedhisrighttovoteat character inrespect ofwhich heproposes toact,unless person proposes tovote, he shallsatisfytheBoard ofthe meeting,asthecasemaybe)atwhich (or adjourned at least48hoursbefore the timeofholdingthemeeting he were theregistered holderoftheshares, provided that shareholder, mayvoteatanyshareholders meetingasif shares inconsequenceof thedeathorinsolvencyofa of ashareholder andany personbecomingentitledto The parent orguardian ofaminor, thecuratorbonis one voteforeveryshare held byhim. shareholder present orrepresented byproxy shallhave regard, refer toAnnexure “A”hereto), uponapollevery as tovotinguponwhichanyshares maybeissued(inthis Subject totheActandanyspecialtermsorrestrictions be deemedtoaresolution ofthemeeting. chairman ofthemeetingdirects. Theresult ofthepoll shall shall bedecidedonpolltakeninsuchmannerasthe A resolution puttothevoteofanyshareholders meeting took place. left unfi nishedatthemeetingfrom whichtheadjournment shareholders meetingoftheCompanyotherthanbusiness No businessshallbetransactedatanyadjourned place. themeetingfromadjourn timetoandfrom placeto consent ofthemeetingandifsodirected bythemeeting, The chairmanofashareholders meetingmay, withthe [s64 oftheAct] ofshareholdersAdjournment meetings [s20,65and164oftheAct]

(4) (3) (2) (1) 5.1 COMPANY ARTICLE 5–DIRECTORS ANDOFFICERSOFTHE (4) a thosematterssetoutintheAct;and (b) (a) resolution. The Board ortheRemuneration/Nomination shareholders meeting,butshallnotbe done bywritten the annualgeneralmeetingof Companyoratanyother The electionofdirectors oftheCompanyshalltakeplaceat directors. of director andmayremove from offi ceanyorallofthe rights mayatanytimeappoint anypersonstotheoffi ce Company’s securitieswhoare entitledtoexercise voting Subject totheprovisions oftheAct,holders calling shareholders meetings.[JSESch10:10.16(d)] be permittedtoactforthepurposeoffi llingvacanciesor the three monthperiod,theremaining directors shallonly done bytheBoard ortheCompany. Aftertheexpiryof or negatetheauthorityofBoard orinvalidateanything directors duringsuchthree monthperioddoesnotlimit failure bytheCompanytohaveminimumnumberof meeting forthepurposeoffi llingthevacancies.The the vacanciesonatemporarybasisorcallshareholders that thenumberofdirectors fallsbelowtheminimum,fi ll and inanyeventnotlaterthanthree monthsfrom thedate above, theremaining directors shallassoonpossible, If thenumberofdirectors falls belowtheminimumsetout [JSE Sch10:10.16(a)] increase ordecrease suchminimumnumberofdirectors. the shareholders oftheCompany mayfrom timeto Subject totheActandJSEListingRequirements, The Companyshallhavenotlessthaneightdirectors. [s66, 68,70and71oftheAct] Composition oftheBoard unless otherwiseagreed with theJSE.[JSESch10:10.3] of anactthatiscontrarytotheJSEListingsRequirements, event thatsucharesolution wouldleadtotheratifi cation of sections20(2)and20(6)theActisprohibited inthe The proposal toshareholders ofanyresolution interms rights shallapply. dissentingshareholders of theActgoverning appraisal the shareholders shallbedecidedon,theprovisions otherwise thaninaccordance withthelegalrightsof excluded altogetherorinpart;butcaseanydivision be givenpreferential orspecialrights,maybe of theCompany, andinparticular, anyclassmay in accordance withthelegalrightsofshareholders expedient, anysuchdivisionmaybeotherwisethan with thelikesanction,shallthinkfi tand,ifthought for thebenefi toftheshareholders astheliquidators, assets oftheCompanyintrusteesuponsuchtrusts and may, withthelikesanction,vestanypartof in specieanypartoftheassetsCompany a specialresolution, divideamongtheshareholders or otherwise,theliquidatorsmay, withthesanctionof if theCompanyshallbewoundup,whethervoluntarily

119 Grindrod Limited Integrated Annual Report 2011 120 Grindrod Limited Integrated Annual Report 2011 (10) (9) (8) (7) (6) (5) Appendix 1 the offi ceofdirector. Noperson notbeinga retiring non- A retiring non-executive director may bere-elected to non-executive directors. provided thatsuchrequirement shallapplyequally toall determined inaccordance withArticle5.1(8)above, non-executive directors shallretire earlierthan the date In theeventthatcharter oftheBoard requires it, lot. [JSESch10:10.16(g)] otherwise agreed amongstthemselves,bedeterminedby were electedonthesameday, thosetoretire shall,unless offi cesincetheirlastelection,butasbetweenpersonswho in eachyearshallbethosewhohavebeenlongest shall retire from offi ce.Thenon-executive directors to retire the numbernearest toonethird butnotlessthanonethird, for thetimebeingor, iftheirnumberisnotdivisiblebythree, written resolution), onethird ofthenon-executivedirectors shareholders meetingonanannualbasis(andnotby At eachannualgeneralmeetingoftheCompanyorother life directorships shallbepermitted. bytheiremploymentcontracts;provided governed thatno The periodsofserviceexecutivedirectors shallbe ceased tobeadirector. [JSESch10:10.16(b)] not, forthepurposeofthisArticle,bedeemedtohave Company andisre-elected atthesamemeetingheshall to doso.Ifadirector retires atageneralmeetingofthe directorthe alternate representing himshallhaveceased shall givenoticeinwritingtotheCompanysecretary that director whoappointedhim shallceasetobeadirector, or shallceasetoholdoffiand thealternate cewheneverthe director The appointmentofanalternate shallbecancelled, any portionofhisremunerationdirector. tosuchalternate the Companybeinstructedinwritingbydirector topay the director appointinghim andnottotheCompanyunless directoralternate shalllookforhisremuneration (ifany)to director andnotasagentof thedirector appointinghim.An and functionsofthedirector herepresents asifhewere a appointing him,shallexercise anddischargealltheduties directoralternate whilstactingintheplaceofdirector which approval shallnotbegivenbywrittenresolution. An confi rmedatthenextfollowingannualgeneralmeeting, and provided furtherthatanysuchappointmentshallbe directorsuch alternate shallbeapproved ofbytheBoard, another inhisplace,provided thattheappointmentof at hisdiscretion toremoveandappoint suchalternate director person toactasanalternate inhisplace,and Each director shallhavethepowertoappointanother [JSE Sch10:10.16(b)and(c)] which approval shallnotbegivenbywrittenresolution. annual generalmeetingorothershareholders meeting, subject toconfi rmationbytheshareholders atthenext on theBoard, orasanadditiontotheBoard, shall be Any appointmentbytheBoard ofadirector tofi llavacancy and (g)] past performanceandcontribution.[JSESch10:10.16(b) of directors orpotentialdirectors, takingintoaccount any Committee oftheBoard shallrecommend theeligibility (continued) (2) (1) AuthorityoftheBoard 5.2 e resigns orretires from offi (f) ce;or (e) (c) becomes lunatic or of unsound mind; becomeslunaticorofunsoundmind; (d) (c) (b) (a) (12) (11) and qualifi edtobeadirector. as ifeverysuch personhadbeendulyappointed, eligible were ineligibleordisqualifi edto act asadirector, bevalid persons actingasaforesaid orthattheyanyofthem was somedefectintheappointment ofsuchdirector or notwithstanding thatitisafterwards discovered thatthere of Board, orbyanypersonactingasadirector shall, All actsdoneatanymeetingoftheBoard orofacommittee Memorandum ofIncorporation. affairs oftheCompanyisnotlimitedorrestricted bythis of theBoard tomanageanddirect thebusinessand Subject toArticles1.3(4)and2.2(3)above,theauthority shall ipsofactobevacatedifhe: Subject totheprovisions of theAct,offi ceofadirector meeting. at suchadjourned places fi lledup,shallbedeemedtohavebeen re-elected vacating directors, orsuchofthemashavenothadtheir the placesofvacatingdirectors are notfi lledup,the is notapublicholiday, meeting andifatsuchadjourned day isapublicholiday, thenthenextsucceedingdaywhich day inthenextweek,atsametimeandplace,orifthat fi untilthesame lledup,themeetingshallstandadjourned to takeplace,theplacesofvacatingdirectors are not If atanymeetingwhichanelectionofdirectors ought to propose him.[JSESch10:10.16(h)] candidature foroffi ceortheintentionofsuchshareholder Company anoticeinwriting,dulysigned,signifyinghis before themeeting,leftatregistered offi ceofthe intending topropose himhas,atleast35businessdays at anyshareholders meetingunlessheorashareholder executive director maybeelectedtotheoffi ceofdirector ordinary shareholders. is removed from offi cebyanordinary resolution ofthe vacated; director, andtheBoard resolves thathisoffi cebe not represented atanysuchmeetingsbyanalternate without specialleaveofabsencefrom theBoard andis of theBoard, excepton the Company’s business, absents himselffrom three consecutivemeetings compounds withhiscreditors; becomes insolvent,suspendspaymentgenerallyor by reason ofanorder madeundertheAct; of theActorbecomesprohibited from beingadirector ceases tobeadirector byvirtue ofanytheprovisions [s66oftheAct] (3) (2) (1) 5.4 Directors’ Compensation (2) (1) 5.3 Board Meetings [JSE Sch10:10.16(f)] addition to,orin substitutionfor, anyotherremuneration. disinterested quorumofdirectors, whichmaybeeitherin to receive suchremuneration asisdeterminedbya the Company’s business,suchdirector shallbeentitled reside abroad, orshall bespecifi callyoccupiedabout any director isrequired toperformextraservices orto meetings oftheBoard orofcommitteesthereof. If and aboutthebusinessofCompany, andinattending expenses properly andnecessarilyincurred bythemin The directors shallbepaidalltheirtravellingandother a disinterested quorumofdirectors. [JSESch10:10.16(e)] such appointmentandremuneration shallbedeterminedby controlled by, oritselfasubsidiaryof,theCompany. Any Company; orasadirector oremployeeofacompany A director maybeemployedinanyothercapacitythe such contractsare concludedwiththeCompany. the contractsofemploymentexecutivedirectors before Committee. SuchCommitteeshallapprove thetermsof the recommendation of its Remuneration/Nomination the CompanyshallbedeterminedbyBoard upon executive directors fortheir servicesasemployeesof not bepaiddirectors fees. Theremuneration ofthe for theirservicesasemployeesoftheCompany, shall otherwise, theexecutivedirectors, whoare remunerated Unless theCompanybyspecialresolution determines resolution. [JSESch10:10.16(j)] it, unlessastatementtothecontraryiscontainedin on whichitwassignedbythelastdirector whosigned and shallbedeemedtohavebeenpassedonthedate Any suchresolution may consist ofseveraldocuments effective asifithadbeenpassed atameetingoftheBoard. resolution insertedintheminute book,shallbeasvalidand received noticeofthe matter tobedecided.Such communication, provided that eachdirector shallhave majority ofthedirectors, giveninperson,orbyelectronic Board mayinsteadbeadoptedbywrittenconsentofa A decisionthatcouldbevotedonatameetingofthe shall nothaveacastingvote.[JSESch10:10.16(i)] two directors are present atameeting,thenthechairman that if,atanytime,thequorumofdirectors istwoandonly chairman ofthemeetingshallhaveacastingvote,save one oftheirnumbertobechairmanthemeeting.The holding themeeting,directors present maychoose is present within10minutesafterthetimeappointedfor assume thechair. IfatanyBoard meetingneitherofthem meeting, theleadindependentnon-executivedirector shall the Company. IfthechairmanisnotavailableatanyBoard fi rstBoard meetingfollowingtheannualgeneralof lead independentnon-executivedirector, annually, atthe The directors shallelectachairmanoftheBoard and a [s73and74oftheAct] [s66oftheAct] comply withboth theActandrequirements oftheJSE. Incorporation; provided that,atalltimes, theCompanyshall notwithstanding therelevant provision ofthisMemorandum less onerous obligationshallbeapplicabletotheCompany obligation ontheCompanythan provided forherein, such time, theActorJSErequirements imposealessonerous Act andtherequirements oftheJSE.Ineventthat,atany drafted andadoptedwiththeintentionofcomplying The provisions ofthisMemorandumIncorporationhavebeen ARTICLE 7–CHANGEOFLAWS (7) (6) Nodividendshallbearinterest againsttheCompany. (5) (4) (3) (2) [JSESch10:10.11(g)and10.17(a)] (1) SHAREHOLDERS ARTICLE 6–DIVIDENDSANDPAYMENTS TO [JSE Sch10:10.8] accordance withtheJSEListingsRequirements. All paymentstosecuritiesholdersshallbemadein [JSE Sch10:10.17(c)] relevant shareholders, subjecttothelawsofprescription. the Companyindefi nitelyuntilitislawfullyclaimedbythe All moniesduetoshareholders shallbeheldintrustby shareholder. so determined,suchdividendswillbepaidtothe accumulated suppressed dividends exceedstheamount unclaimed dividendaccount.Onceanyshareholder’s but willbesuppressed and retained intheCompany’s unless otherwiserequested inwritingbytheshareholder, amount asisdeterminedbytheBoard willnotbepaid, owing totheshareholders amountingtolessthansuch The Board mayfrom timetodeterminethatdividends any debt. be duefrom timeto to theCompanyonaccountof shareholder allsuchclaims orsumsofmoneywhichmay The Board maydeductfrom thedividendspayabletoany known asthedividenddate.[JSESch10:10.17(b)] of thedividend,whicheverislater. Thisdateshallbe declaration ofthedividendordateconfi rmation registered assuchonadatesubsequenttothe of Each dividendshallbedeclared payabletoshareholders by theBoard, butasmallerdividendmaybesodeclared. by theshareholders oftheCompanythanisrecommended dividend; provided thatnolargerdividendshallbedeclared will satisfysuchtestimmediatelyafterpayingtheproposed the Actandhasreasonably concludedthattheCompany Board hasappliedthesolvencyandliquiditytestsetoutin Company shallbeentitledtodeclare dividendsafterthe requirements, theBoard ortheshareholders ofthe Subject totheprovisions oftheActandanyJSE [s46 oftheAct] 121 Grindrod Limited Integrated Annual Report 2011 122 Grindrod Limited Integrated Annual Report 2011 2.2.1.2.2 2.2.1.2.1 2.2.1.2 2.2.1.1 Forpurposesofthisitem2.2: 2.2.1 2.2 2.1 2 1.2.2 1.2.1.3 1.2.1.2 1.2.1.1 1.2.1 1.2 1.1 1 The Companyisauthorisedtoissuethefollowingshares: Authorised shares Annexure “A” Appendix 1 dividends; that preference share, theamount ofsucharrear any arrear dividendsremain unpaidinrespect of for anyportionofthatdividend periodduringwhich shares maybeissuedfrom timetotime;plus difference inthepremium atwhichthepreference preference share whichmayvarybecause of a notwithstanding theactualissuepriceof an amountofR100.00(onehundred Rand), being thesumof: preference dividendduringeachperiod, preference share for purposesofcalculationthe “deemed value”meansthedeemedvalueofeach is allottedandissued; share plusthepremium atwhichthepreference share preference share, being theparvalueofpreference “issue price”meanstheactualissuepriceofeach capital oftheCompany: preference shares of0.031centeachintheshare non-redeemable, non-participating, non-convertible The followingtermsshallattachtothecumulative, (twenty million). Maximum numberofpreference shares: 20000 “preference shares” by proxy. [JSESch10:10.5(a)and(b)] annual generalmeetingoftheCompanyinpersonor be entitledtovoteateveryshareholders meetingor in respect ofeachshare thatheorsheholdsandshall Every holderofanordinary share shallhaveonevote value uponthedissolutionofCompany; sharing inthedistributionofCompany’s residual shareholders; and participating inanydistributionofprofi ttothe shareholders oftheCompany; voting onanymattertobedecidedbyavoteof to, withregards to: shares inrespect ofallrightsincluding,butnotlimited share andranks Each ordinary share isidenticaltoeveryotherordinary Company: shares of0.002centeachintheshare capitalofthe The followingtermsshallattachtotheordinary (two billionsevenhundred andfi ftymillion). Maximum numberofordinary shares: 2750000 “ordinary shares” (continued) pari passu withtheotherordinary 2.2.1.3 2.2.1.4 2.2.1.5 2.2.1.6 ... 2.2.1.7 ... 2.2.1.8 ... 2.2.1.9 2.2.1.10 2.2.1.10 2.2.1.11 2.2.1.11 2.2.2 such dividendperiod,andremains unpaid; paid bytheexpiryof120thdayafter been declared pursuanttoitem2.2.2.15below, isnot the factthatfullamountthereof maynothave period which,foranyreason whatsoever, including any portionthereof) payableinrespect ofadividend “arrear dividend”meansanypreference dividend(or with item2.2.2.2below; the issuepriceandallarrear dividendsinaccordance the dateofreturntopreference shareholder of preceding thewinding-upofCompanyuptoand period from thepreference dividenddateimmediately tranche ofpreference shares issued,shallmeanthe that thefi rstdividendperiodin respect ofeach including thenextpreference dividenddate;provided following apreference dividenddateuntiland “dividend period”meanstheperiodfrom theday of 1962,asamended; “Income Tax Act”meanstheIncomeTax Act,No.58 of thecontentsthereof; be proved, whichcertifi cateshallbeprimafacieproof appointment, authorityand/ordesignationneednot of FirstRandBankLimited(oritssuccessor)whose its primeoverdraft rate,as certifi edbyanymanager FirstRand BankLimited(oritssuccessor)asbeing the yearisaleapyear)from timetoquotedby sixty fi ve)dayyear(irrespective ofwhetherornot in arrears, calculatedona 365(three hundred and interest (percent,perannum) compoundedmonthly “prime rate”meansthepubliclyquotedbasicrateof accordance withthisitem 2.2; participating preference dividendcalculatedin “preference dividend”meansacumulative,non- 30 Juneofeachyear; “preference dividenddate”means31Decemberand the preference shares; class ofshares notrankingpriortoor any paymentofdividendstoholdersother all preference dividendsandarrear dividendspriorto shareholders intermsofitem2.2.2.2belowtoreceive shall notdetractfrom therightsofpreference declared, bepayable;provided thatthisitem2.2.1.9 upon whichanypreference dividendpayablewill,if “preference dividendpaymentdate”meansthedate in item 2.2.2.4 below; and in item2.2.2.4below;and “preference dividendrate”meanstheratereferred to capital oftheCompany. preference shares of0.031centeachinthe share redeemable, non-participating,non-convertible “preference shares” meansthecumulative, non- and conditions, which attachtothepreference shares The followingare therights,privileges, restrictions pari passu with with 2.2.2.2 2.2.2.1 2.2.2.5.2 2.2.2.5.1 2.2.2.5 2.2.2.4 2.2.2.3 preference share andranks Each preference share isidenticaltoeveryother to theallotmentthereof. to beissuedwilldeterminedbythedirectors prior The issuepriceforeachtrancheofpreference shares Incorporation: contrary containedelsewhere inthisMemorandumof and shallapply, notwithstandinganythingtothe multiplication for eachdayofthedividendperiod; and aggregating alloftheamountscalculated bysuch basis inarrear, forthatdividendperiod; leap yearornot),whichshall be appliedonadaily 365-day year, irrespective ofwhethertheyearisa by thepreference dividend rate(determinedona multiplying thedeemedvalueof thatpreference share by: in respect ofeachdividendperiodshallbecalculated The preference dividendpayableperpreference share there are noarrear dividendsthatremain unpaid. shares willincrease to100%oftheprimerateuntil preference dividendrateinrespect ofallpreference are anyarrear dividendsthatremain unpaid,the notwithstanding anysuchdetermination,whilethere the preference sharesprovided concerned; that, directors atthetime Company offers toissue a percentage oftheprime ratedeterminedbythe issued, thepreference dividendratewillbeequalto In respect ofeachtranche ofpreference shares to or in theshare capitaloftheCompany notrankingprior distribution totheholdersofanyotherclassshares below, inprioritytoanypaymentofdividendsorother preference dividendcalculatedintermsofitem2.2.2.5 Company whichitdeterminestodistribute,the thereof therighttoreceive outoftheprofi tsofthe Each preference share shallconferupontheholder shares issued. shares issued,dividedby the numberofpreference received bytheCompany in respect ofallpreference to theaggregate ofthenominal valueandpremiums of thelastdividendperiod,plus(iii)anamountequal plus (ii)thepreference dividendpayableinrespect arrear dividendsinrespect ofthatpreference share, Company ofanamountequaltothesumof:(i)all right ofareturncapitalonthewinding-up preference share shallconferuponitsholderthe to or class ofshares oftheCompanythatdonotrankprior shall rankpriortotheordinary shares andanyother of capitalonthewinding-upCompany, and not limitedto,withregard todividendsandrepayment preference shares inrespect ofallrightsincluding,but pari passu pari passu withthepreference shares. withthepreference shares. Each pari passu with the other withtheother 2.2.2.5.3

2.2.2.6.1 Thepreference dividendsshall: 2.2.2.6 2.2.2.6.2 2.2.2.7 ... 2.2.2.8 2.2.2.9 2.2.2.9.1 2.2.2.9.2 2.2.2.10 2.2.2.10 2.2.2.5.2 aboveby10%(tenpercent). multiplying theaggregate amountreferred toinitem during that dividend period. during thatdividendperiod. in accordance withanyvariationsintheprimerate applicable duringanydividendperiodshallvary of theprimerate,preference dividendrate Because thepreference dividendrateisapercentage declared; if declared, accrueonthedatewhichtheyare dividend paymentdate. if declared, bepayablebynolaterthanthepreference to or in theshare capitaloftheCompanynotrankingprior preference topaymentsanyotherclassofshares of paymentthereof andbepaidbytheCompanyin Any arrear dividendshallaccumulateuntilthedate of theCompany. Company nor, onawinding-up,toanysurplusassets any furtherparticipationintheprofi tsorassetsofthe above, thepreference shares shallnotbeentitledto Save assetoutinitems2.2.2.2,2.2.2.3and2.2.2.7 meeting: following circumstances prevail atthedateof the preference shares, unlesseitherorbothofthe at anysuchmeeting,byvirtueoforinrespect of the Company, buttheyshallnotbeentitledtovote or byproxy, atanymeetingoftheshareholders of to receive noticeof,andtobe present, eitherinperson The holdersofthepreference shares shallbeentitled become anarrear dividend; or any preference dividendoranypartthereof has of itscapital.[JSESch10:10.5(e)and(h)] the winding-upofCompanyorforreduction thereof, including,butnotlimitedto,aresolution for preference shares ortheinterests oftheholders resolution directly affects therightsattachedto a resolution oftheCompany isproposed which of hispreference shares and,inrespect oftheother votes atthatmeeting inrespect ofone-quarter only shall beentitledtotheaforesaid proportion ofthetotal represented atthatmeeting, apreference shareholder votes exercisable byallshareholders present or the meetingexceed25%less onevoteofthetotal preference shareholders present orrepresented at meeting theaggregate votesexercisable byallthe by theCompany;provided thatifatashareholders amount ofthenominalvalueallshares issued preference shares held byhimbearstotheaggregate the aggregate amountofthenominalvalue proportion ofthetotalvotesinCompanywhich preference shareholder shallbeentitledtothat In thecircumstances setoutin2.2.2.9above,a pari passu withthepreference shares. 123 Grindrod Limited Integrated Annual Report 2011 124 Grindrod Limited Integrated Annual Report 2011 2.2.2.11 2.2.2.11 Appendix 1 2.2.2.12 2.2.2.12 apply, relating tomeetingsofordinary shareholders shall the provisions ofthisMemorandumIncorporation At ameetingoftheholderspreference shares, [JSESch10:10.5(c)] meeting concerned. one voteoftheaggregate votesexercisable atthe preference shareholders beingreduced to25%less in thetotalnumberofvotesexercisable byallthe three-quarters, suchlowerproportion aswillresult meetings shallapply, Incorporation relatingshareholders toadjourned present, theprovisions ofthisMemorandum ofsuchmeetingaquorumisnotso adjournment after-tax returnsofanypreference shareholder onits such amendmentmayresult inadecrease inthe the preference shares, then,notwithstandingthat in theCompanyincurringreduced costsinservicing such amendmentstotheIncomeTax Actdonotresult but forsuchamendmentstotheIncomeTax Act.If shares, whichcostsavings itwouldnothaveobtained incurs areduced costin servicingthepreference increase willbelimitedtothe extentthattheCompany above willbeincreased by theCompany. Such percentage oftheprimerate referred toinitem2.2.2.4 of theCompanyoranypreference shareholder, the not onlybecauseoftheparticularcircumstances uniformly applicabletoallcorporatetaxpayersand for theCompany, provided suchamendmentis preference dividendsbecomingadeductibleexpense shareholders andwhichresults inpaymentofthe dividends beingtaxableinthehandsofpreference Income Tax Actwhichresults inthepreference If there isanamendmentoramendmentstothe mutatis mutandis (continued) mutatis mutandis , provided thatifatany . 2.2.2.13 2.2.2.13 2.2.2.14 2.2.2.15 shall be borne andpaidbytheCompany.shall beborne preference shareholders. Thecostsofsuchauditors error, befi nalandbindingontheCompanyall and theirdecisionshall,intheabsenceofmanifest experts andnotasarbitratorsorquasi-arbitrators auditors indecidingonsuchincrease shallactas 2.2.2.12 and,ifso,theamountofincrease. The the preference dividendinaccordance withthisitem its auditorstoverifywhetheritisobligedincrease in item2.2.2.4above.TheCompanyshallrequire made tothepercentage ofprimeratecontemplated holding ofpreference shares, noamendmentshallbe of Incorporation. of thisitem2.2andArticle1.3(2)Memorandum shareholders shallberequired toaltertheprovisions in personorbyproxy atameetingofthepreference quarters ofthepreference shares represented either The priorconsentoftheholdersatleastthree- Articles 1.3(1),1.3(2)and2.1(2)(c)shallapply. of thepreference shares towhichtheprovisions of shall bedeemedtoconstituteamodifi cationofrights of thepreference shares onanystockexchange Any questionrelating tothe terminationofthelisting the proviso toitem2.2.2.4. in theapplicationofitem2.2.1.2.2,2.2.1.3and is calculatedintermsofitem2.2.2.5above,willresult the expiryofdividendperiodinrespect ofwhichit declared ornot)bytheexpiry ofthe120thdayafter Company topaythepreference dividend(whether declare anypreference dividend,butanyfailure bythe in thisitem2.2,theCompanyshallnotbeobligedto Notwithstanding anythingtothecontrarycontained 2. 1. Salient features oftheFSP participants andshareholders. [14.1(e)] voting rights,thusproviding direct alignmentbetween immediately benefi tfrom dividendsandhaveshareholder Forfeitable Shares from theSettlementDateandwill Under theFSP, participantswillbecomeownersofthe an ad-hocallocationundertheFSP. by asimilarnumberofoptionswhere theexecutivereceived to bemadeundertheSPLPSalthoughthesewillreduced retention orrecruitment issues.Annualawards willcontinue ad-hoc allocationsasandwhentheneedarisestoaddress executives orkeyemployees.TheFSPwillbeusedtomake competitive long-termincentiveawards whenattractingnew only. Thecompany isalsoexperiencingdiffi cultyinoffering annual awards undertheir existingplanssubjecttotenure implementing ashare plan toaddress retention ortomake risks. Anumberofcompanieshaveaddressed thisriskby South Africancompaniesare facingsimilarretention company. Due totherecentmany economicdownturn, needs tooffer executivesanincentivetostaywiththe company overthelong-termandtothisend certain projects underwaywhichare aimedatgrowing the a retention riskinthisarea. Inaddition,thecompany has Option Planandthecompanyistherefore experiencing few years,participantshaverealised littlevalueunderthe company’s share pricehasnotincreased overthepast Performance Scheme(“SPLPS”).Duetothefactthat operated inconjunctionwiththeShare PriceLinked The companyintendstointroduce aFSPwhichwillbe Introduction to whichthissummaryisannexed. are availableforinspectionasdetailedintheNoticeofMeeting terms containedintherulesofFSP. TherulesoftheFSP Terms capitalisedbelowbearthesamemeaningsasthose Forfeitable Share Plan(“FSP”) Summary ofthesalientfeatures ofthe Appendix 2 Condition”). Therationalebehind thegrantingofthese only besubjecttocontinued employment(“Vesting retention issuesorrecruitment requirements andwill Awards madeonanad-hoc basiswillbeusedtoaddress non-executive director ofthecompany. 14.1(a) or offi cewithanyemployercompany, butexcludingany include anypersonholdingpermanentsalariedemployment However, theremuneration committeecan,initsdiscretion, key employeeswillbeallowedtoparticipateintheFSP. of ForfeitableShares. Initiallytheexecutivesandother service oforattracttheservicesof,bymakinganaward which oftheirrespective employeestheywishtoretain the recommendations totheremuneration committeeasto ad-hoc basis,callupontheemployercompaniestomake The remuneration committeemay, atitsdiscretion, onan 10. 9. 8. 7. 6. issueofshares. (iii) useoftreasury shares; or (ii) bywayofamarketpurchase ofshares; (i) 5. 4. 3. award willlapse.[14.1(h)] of monthsintheVesting Period.Theremainder ofthe date ofterminationemployment overthetotalnumber number ofmonthsservedsince theaward date to the of terminationemployment. Thisportionwillrefl ectthe leavers andaportionoftheaward willvestonthedate sale oftheemployercompanywillbeclassifi edasgood retirement, retrenchment, ill-health,disability, injuryorthe Employees terminatingemploymentduetodeath, awards. will beclassifi edasbadleaversandwillforfeitallunvested performance orproven dishonestorfraudulentconduct or dismissalongrounds ofmisconduct,proven poor Employees terminatingemploymentduetoresignation settlement orvestingofanaward. [14.1(d)] The employeewillgivenoconsiderationforthemaking, calculating thecompanylimit. a result oftheforfeiture thereof, willbeexcludedin which are notsubsequently settledtoanemployeeas 1 millionshares. Shares allocatedundertheFSP, which maybeheldbyanindividualnotexceed 6 millionshares. Themaximum numberofshares one timebeallocatedundertheFSPshallnotexceed The maximumnumberofshares whichmayatany Agent onbehalfoftheemployee. awards, theForfeitable Shares willbeheldbyanEscrow In order tofacilitatetheadministration ofanyforfeiture of any particularaward. determined bytheremuneration committeeinadvanceof to shareholders, however, theexactmethodwillbe purchase ofshares whichwillnotcauseanydilution The companyintendstosettleawards bywayofamarket settlement inanyofthefollowingmanners: The rulesoftheFSPwillbefl exibleinorder toallowfor respectively, measured from theaward date. be over3,4and5yearsforeachthird oftheaward periods foreachaward. Initiallythevestingperiodwill The remuneration committeewillsetappropriate vesting [14.1(f)] and attractionrequirements andmarketbenchmarks. employee’s annualsalary, grade,performance,retention made toanemployeewillprimarilybebasedonthe The numberofForfeitableShares subjecttoanaward company. 14.1(f) awards istoaddress retention riskscurrently facedbythe 125 Grindrod Limited Integrated Annual Report 2011 126 Grindrod Limited Integrated Annual Report 2011 12. 11. Appendix 2 participate intheFSP. Theremuneration committeemay of shares, liquidationetc., participantsshallcontinueto capitalisation issue,subdivisionofshares, consolidation In theeventofavariationinshare capitalsuchasa [14.1(g) and14.3(a)] companies provided theparticipantsare noworse off. into awards inrespect ofshares inoneormore other adjustment tothenumberofawards orconvertawards In thiscasetheremuneration committeeshallmakesuch Award Letterrelating thereto are nolongerappropriate. remuneration committeedeterminesthatthetermsof terms oftheAward Letterrelating thereto unlessthe termination oftheFSP, continuetobe subjecttothe vest onthechangeofcontrol datewill,exceptonthe Vesting Period.Theportionoftheaward thatdoesnot of employmentoverthetotalnumbermonthsin served sincetheaward datetotheoftermination will vest.Thisportionrefl ectthenumberofmonths In theeventofachangecontrol, aportionoftheaward (continued) made. [14.3(b),(c),(d)and(e)] statements intheyearduringwhichadjustmentsare made willbereported inthe company’s annualfi nancial accordance withtherulesofFSP. Anyadjustments to theJSEwhetherthoseadjustmentswere calculatedin non-prejudicial basis.Theauditorsshallconfi rminwriting to thecompanyinwritingthattheseare calculatedona and bindingonallpersonsaffected thereby, shallconfi rm and notasarbitratorswhosedecisionshallbefi nal an adjustmentasnecessary, auditors,actingasexperts to awards. Where theremuneration committeeregards regarded asacircumstance thatrequires anyadjustment of shares oravendorconsiderationplacingwillnotbe shares asconsiderationforanacquisition,andtheissue the award immediatelybefore theevent.The issueof after theeventismateriallysameasfairvalueof to provide thatthefairvalueofaward immediately they were priortothehappeningofrelevant eventand action toplaceparticipantsinnoworseapositionthan make suchadjustmenttotheaward ortakesuchother FORM OFPROXY ubn 01 Johannesburg,2001 Computershare InvestorServices(Pty)Limited (POBox61051,Marshalltown,2107) Ground Floor, TRANSFERSECRETARIES 70MarshallStreet (PO Box1,Durban, 4000) Durban, 4001 115 Margaret MncadiAvenue Quadrant House REGISTERED OFFICE of of thechairmanofannualgeneralmeeting, 3. preference shares in the capitalofcompanyhereby appoint: oforfailinghim/her, 2. ordinary shares oforfailinghim/her, 1. being theregistered holder/sof of (ADDRESS) I/We (FULLNAMESINBLOCKLETTERS) Wednesday, 30May2012(“theannualgeneralmeeting”) the companytobeheldinBoardroom, 1st Floor, QuadrantHouse,115Margaret MncadiAvenue, Durban,4001at14:00on For useatthemeetingofholderspreference shares ofthecompanyandannualgeneralmeetingshareholders of This formofproxy isonlyforusebycertifi ISIN:ZAE000072328andZAE000071106) (“the company”) (Share code:GNDandGNDP (Registration number1966/009846/06) (Incorporated intheRepublicofSouthAfrica) GRINDROD LIMITED indti dyo 2012 dayof Signature/s Signed this meeting isentitledtoappointaproxy toattend,speakandvote inhisstead.Theproxy neednotbeamemberofthecompany. Unless otherwiseinstructed,myproxy mayvoteashe/shethinksfi t.Amemberentitledtoattendandvote attheabovementioned (Indicate instructionbymakingan“X”inthespaceprovided.) . Approval ofgroup remuneration policy Renewalofgeneralauthoritytorepurchase ordinary shares 3.1 Approval offeespayabletonon-executivedirectors 2.6 2.5 Generalauthoritytoprovide fi nancialassistancetocertaincategoriesof Generalauthoritytoprovide fi nancialassistanceforsubscriptionofsecurities 2.4 AdoptionofForfeitableShare Plan 2.3 ReplacementofMemorandumIncorporation 2.2 Ratifi cationofexecutivedirectors’ remuneration 2.1 Directors’ authoritytoissueshares reserved fortheshare optionscheme 1.9 Re-appointmentofindependentauditorsanddesignatedauditpartner 1.8 MrMJHankinson 1.7 MrWDGeach 1.6.3 MrIMGroves (Chairman) 1.6.2 Re-electionofauditcommitteemembers 1.6.1 Confi rmtheappointmentofMrMR Wade 1.6 Confi rmtheappointmentofMrJJDurand(asanalternate) 1.5 ConfiVisser rmtheappointmentofMrMH 1.4 MrSDMZungu 1.3 MrDAPolkinghorne 1.2.5 MrMJHankinson 1.2.4 MrMRFaku 1.2.3 MrIAJClark 1.2.2 Re-electionofdirectors retiring byrotation 1.2.1 Approval oftheannualfi nancialstatements 1.2 1.1 Resolutions AlterationofArticles3,8Aand30theMemorandumIncorporation Annual generalmeeting 1 Resolution Meeting ofholderspreference shares of the company and/or the annual general meeting and at any adjournment thereof, asfollows: of thecompanyand/orannualgeneralmeetingandatanyadjournment as my/ourproxy toattend,speakandvoteforme/usonmy/ourbehalfatthemeetingofholderspreference shares persons cated shareholders anddematerialisedshareholders withownnameregistration. nfvu fAantAbstain Against In favourof

127 Grindrod Limited Integrated Annual Report 2011 128 Grindrod Limited Integrated Annual Report 2011 5. 4. 3. 2. 1. NOTES than 14:00onMonday, 28May2012. 61051, Marshalltown,2107)tobereceived bynotlater Floor, 70 MarshallStreet, Johannesburg,2001(POBox Computershare InvestorServices(Pty)Limited,Ground the registered offi ceofthe Transfer Secretaries, Forms ofproxy mustbe lodgedat,orpostedto, previously recorded bythecompany. capacity mustbeattachedtothisformofproxy unless a personsigningthisformofproxy inarepresentative Documentary evidenceestablishingtheauthorityof must beinitialledbythesignatory/ies. Any deletion,alterationorcorrection tothisformofproxy follow. to actasproxy totheexclusion ofthosewhosenames is present attheannualgeneral meetingwillbeentitled whose nameappearsfi rstontheformofproxy andwho “the chairmanoftheannualgeneralmeeting”.Theperson choice inthespace/sprovided, withorwithoutdeleting proxies oftheshareholder’snames oftwoalternative A shareholder mayinsertthenameofaproxy or the to obtainaproxy toattendthemeeting. registered shareholder toissueinstructionsonvotingor are notalsoregistered shareholders shouldcontactthe the registered shareholder. Benefi cialshareholders who attend themeetingunlessaproxy isissuedtothemby a nominee,mustnotcompletetheformofproxy or in theirownnamebuttheofanother, e.g. Benefi cialshareholders whoseshares are not registered attend themeeting. name mustcompletetheformofproxy oralternatively their shares orwhoholddematerialisedshares in theirown shareholders ofthecompanywhohavenotdematerialised Only shareholders whoare recorded intheregister of 9. 8. 7. 6. appoint arepresentative forthemeeting. enable theCSDPsorbrokers tolodgeformsofproxy or brokers withtheirvotinginstructions insuffi cienttimeto to berepresented thereat, shouldprovide theirCSDPsor not wish,toattendtheannualgeneralmeeting,butwish general meeting.Suchshareholders whoare unable,ordo brokers forthenecessary authoritytoattendtheannual general meetingshouldarrangewiththeirCSDPsor shareholders whowishtoattendthecompany’s annual (CSDPs), are notcompanymembersasdefi ned.Such maintained byCentralSecuritiesDepositoryParticipants longer recorded intheirownnamesthesub-registers company shareholdings (suchthattheseholdingsare no Shareholders, whohaveeitherdematerialisedtheir demand orjoinindemandingapoll. A formofproxy shallbedeemedtoincludetherights received otherthaninaccordance withthesenotes. or acceptanyformofproxy whichiscompletedand/or The chairmanoftheannualgeneralmeetingmayreject hereof shouldsuchshareholder wishtodoso. thereat totheexclusionofanyproxy appointedinterms general meetingandspeakingvotinginperson not preclude theshareholder from attendingtheannual The completionandlodgingofthisformproxy will asml +27113705271/2 Facsimile Telephone+27 113705000 2107 Marshalltown PO Box61051 Postal address 2001 Johannesburg 70 MarshallStreet Computershare Investor Services(Pty)Limited TRANSFER SECRETARIES Deloitte &Touche GROUP AUDITORS [email protected] E-mail Investor relations www.grindrod.co.za [email protected] Website E-mail +27313052848 Facsimile +27313041451 Telephone 4000 Durban PO Box1 Postal address 4001 Durban 115 Margaret MncadiAvenue Quadrant House Registered offi CAS RobertsonFCIS Company secretary Registration number1966/009846/06 GRINDROD LIMITED CORPORATE INFORMATION ceandbusinessaddress asml +27114591872 Facsimile Telephone+27 114591860 2146 Sandton PO Box78011 Postal address 2196 Sandton Sandhurst 39 RivoniaRoad First Floor, Commerce Square Building3,NorthWing, Grindrod BankLimited SPONSORS DVB Group Merchant Bank(Asia) Mitsui &Co.FinancialServices(Asia) Millennium BIMMozambique The BankofTokyo-Mitsubishi UFJ Standard BankMozambique Standard BankMauritius Standard Chartered Bank Société Générale Royal BankofScotland Hong Kong&ShanghaiBankingCorporation ABN AMRO Rand Asia China ConstructionBank Crédit AgricoleCorporateandInvestmentBank BNP Paribas Barclays Bank ofAmericaMerrillLynch Foreign The Standard BankofSouthAfrica Nedbank Investec Bank FirstRand Bank ABSA Bank Local MAIN BANKERSTOTHEGROUP 129 Grindrod Limited Integrated Annual Report 2011 130 Grindrod Limited Integrated Annual Report 2011 vessel operatingcosts. the crew togetherwithallstores andbunkerspaysall shipowner provides onlytheshipwhilecharterer provides Charter foranagreed periodoftimeduringwhichthe BAREBOAT CHARTER trading routes andsettlementpricesforFFAs. a timecharterreturnandisusedtodeterminethevalueof 10 yearsofage.Thisindexisalsopublishedonthebasis is 52454dwt,with4x30mtcranesandgrabsmaximum of routes inrelation toastandard Tess 52typevessel.Thisvessel Exchange, whohavecollatedinformationonfi xtures foranumber The BSIispublishedeveryLondonworkingdaybytheBaltic BALTIC SUPRAMAXINDEX(BSI) the valueoftradingroutes andsettlementpricesforFFAs. on thebasisofatimecharterreturnandisusedtodetermine and maximumsevenyearsofage.Thisindexisalsopublished number ofroutes inrelation toastandard 74000dwtvessel Exchange, whohavecollatedinformationonfi xtures fora The BPIispublishedeveryLondonworkingdaybytheBaltic BALTIC PANAMAX INDEX(BPI) settlement pricesforFFAs. and isusedtodeterminethevalueoftradingroutes and index isalsopublishedonthebasisofatimecharterreturn vessel with30mtcranesandmaximum15yearsofage.The for anumberofroutes in relation toastandard 28000dwt Baltic Exchange,whohavecollatedinformationonfi xtures The BHSIispublishedeveryLondonworkingdaybythe BALTIC HANDYSIZE INDEX(BHSI) market indicator. panamax andcapesizevesselstocreate thisleadfreight Exchange, whocollateinformationforhandysize,supramax, The BDIispublishedeveryLondonworkingdaybytheBaltic BALTIC DRY INDEX(BDI) the valueoftradingroutes andsettlementpricesforFFAs. the basisofatimecharterreturn,andisusedtodetermine and maximum10yearsofage.Theindexisalsopublishedon number ofroutes inrelation toastandard 172000dwtvessel Exchange, whohavecollatedinformationonfi xtures fora The BCIispublishedeveryLondonworkingdaybytheBaltic BALTIC CAPESIZEINDEX(BCI) without cargoonboard. The periodoftimeduringwhichashipperformsvoyage BALLAST area. and discharginginaportsituatedwhatisusuallyloading loading inaportsituatedwhatisusuallydischargearea Routes whichare againstthestandard fl owoftraffi c,i.e. BACKHAUL TERMS ANDEXPRESSIONS Ship designedtocarrycontainerised cargo. CONTAINERSHIP handling, accountingandcorporate administration. vessel, employment,voyageexecution,insuranceandclaims includes shipfi nancing,saleandpurchase, charteringor that relate toobtainingeconomicvaluefrom thevessel,which Management ofthoseaspectsshipowningandoperation COMMERCIAL MANAGEMENT steel tanks,inisolatedcompartments(alsotermed“parcels”). numerous bulkliquidchemicalproducts, ofteninstainless A tanker, usuallynotlargerthan40000dwt,designedtocarry CHEMICAL TANKER the hire ofashipor the spaceinaship. the useofavessel,signedbybothpartiesortheiragents,for contract betweentheownerofavesselandcharterer for Document containingallthetermsandconditionsof CHARTERPARTY goods orotherpurposes. A person,fi rm orcompanyhiringavesselforthecarriageof CHARTERER or atimecharter(seeFreight forvoyagecharterrevenue). The revenuebyavesselpursuanttobareboat earned charter CHARTER-HIRE iron ore trades. Hope andistypicallyusedforlongvoyagesinthecoal Atlantic tothePacifi ortheCapeofGood cviaCapeHorn dwt which,duetoitssize,musttransitwhenloaded,the Drybulk carrierwithacapacityofabout130000to200 CAPESIZE BULKCARRIER A smalltankerusedtorefuel shipswithbunkers. BUNKER TANKER engines. inthevessel’sFuel, consistingoffueloilanddiesel,burned BUNKER(S) Ship designedtocarrydry, loosecargoesinbulk. BULK CARRIER Dry, loosecargo. BREAKBULK The greatest widthofavessel. BEAM Transfer ofcargobetweenashipandtheshore usingabarge. BARGING cargoes. or are notequippedwithgearforloadingordischarging transporting cargoestoports that mayhavedraftrestrictions limited quantitiesofmajorbulk cargoes.Itiswellsuitedfor type ofvesselcarriesprincipally minorbulkcargoesand commonly equippedwithcargo gearsuchascranes.This Drybulk carrierofabout10 000 to40dwtwhichis HANDYSIZE BULKCARRIER areas. cargoes from themainloadingareas tothemaindischarging Routes whichfollowthetypicalfl owofthetransportation of FRONT HAUL or acontractofaffreightment. The revenuebyavesselpursuanttovoyagecharter earned FREIGHT against adailymarketindexpublishedbytheBalticExchange. time charterratesforforward positions.Settlementisincash, to freight marketriskthrough thepurchase orsaleofspecifi ed A derivativeinstrumentthatisameansofhedgingexposure FORWARD FREIGHTAGREEMENT(FFA) The countrywhere thevesselisregistered. FLAG STATE submerged. maintenance and/orrepair ofpartsthatare normally The removal ofavessel from thewaterforinspection, DRYDOCKING vessel’s keel(i.e.thedepthofshipinwater). Vertical distancebetweenthewaterlineandbottomof DRAFT and inthiswayleakagemaybeavoided. increases thesafetyduring apossiblegrounding orcollision between thesetwocanbeupto2metres. Suchconstruction A shipwhichhasaninnerandouterhull.Thedistance DOUBLE HULL has beenexceededthrough nofaultoftheowner. when theagreed timeallowedforloadingorunloadingcargo An agreed amountpayabletotheshipownerbycharterer DEMURRAGE stores, spares, crew, etc,ataspecifi eddraft. tonnes) theshipcancarry, includingcargo,bunkers,water, capacity ofvessels,whichisthetotalweight(usuallyinmetric Deadweight tonnes,theunitofmeasurement ofweight DEADWEIGHT TONNE(DWT) months oryears)andnoparticularvesselisspecifi ed. over anagreed periodoftime(thiscouldbeoveranumber Similar toavoyagecharter, butcoverstwoormore shipments CONTRACT OFAFFREIGHTMENT(COA) pollution, cargodamage,crew injury orlossoflife,etc. shipowner orcharterer againstthird partyliabilitiessuchasoil Protection andindemnityinsurancecoveragetaken by a P&I A person/companywhotradesinshipsandcargo. OPERATOR the charter. under thetermsofitscharter, resulting inlossofincomeunder Period duringwhichavesselistemporarilyunabletooperate OFF-HIRE A vesselunderconstructionoronorder. NEWBUILDING materials andsalt. petcoke, bauxiteandalumina,cement,otherconstruction products, fertilisers,agricultural products, mineralsand Drybulk cargoessuchasforest products, iron andsteel MINOR BULK Prevention. Itispartofthe IMO. MarinePollution conventiongoverning The international MARPOL Drybulk cargoessuchasiron ore, coalandgrain. MAJOR BULK specifi ports. ed Operators whotradeshipsaccording toaschedulebetween LINER SHIPPINGOPERATIONS responsible forthecommercial operationofthejointservice. and commercial operation ofships.Apoolmanageris there isapoolingofresources forthepurposeoffl exible An organisedgroup ofshipownersand/orcharterers where JOINT SERVICES AGREEMENT Maritime Organisation. ships andforpollutionprevention adoptedbytheInternational managementcodeforthesafeoperationof The international ISM CODE Nations advisorybodyontransportbysea. United MaritimeOrganisation,theinternational International IMO bulk andminorcargoes. type ofvesselcarriesawidevarietycargoesincludingmajor commonly equippedwithcargogearsuchascranes.This Drybulk carriersofabout40000to60dwtwhichis HANDYMAX BULKCARRIER 131 Grindrod Limited Integrated Annual Report 2011 132 Grindrod Limited Integrated Annual Report 2011 reporting. newbuilding supervisionandrelated technicalandfi nancial environment protection, newbuildingplanapproval and regulations,international safetyandqualitymanagement, supplies ofstores andspares, compliancewithallapplicable provision ofcrew, routine maintenance, repairs, drydocking, that relate tothephysicaloperationofavessel,including Management ofthoseaspectsshipowningandoperation TECHNICAL MANAGEMENT not utilised. to paytheequivalentcostevenifcontactedcapacityis specifi ccapacityofanotherparty’s total availablecapacityor A contractualagreement in whichonepartyagrees toutilise TAKE-OR-PAY AGREEMENT variety ofcargoesincludingmajorbulkandminorcargoes. 60 000dwt,whichisusuallygrabfi ttedandcarriesawide Drybulk carrierwithinthehandymaxsectorofabout50000dwtto SUPRAMAX BULKCARRIER level. Freight rateforavoyageagreed onthebasisofcurrent market SPOT RATE single cargoorshort-termtrading. The marketforimmediatecharteringofavessel,usually SPOT MARKET on occasioninmultipletanks. A tankerdesignedtocarryrefi nedpetroleum products inbulk, PRODUCTS TANKER as oil,gasandcoal. petrochemicals whenderivedfrom hydrocarbon sources such Chemicals containingcarbon,oftenreferred to as PETROCHEMICALS Charter). chartered foraperiodoftime(seeTime The timechartermarketwhere aship(orspaceonship)is PERIOD MARKET petcoke andsalt. used totransportcertainminorbulkssuchasfertilisers,ores, primarily usedtotransportmajorbulks,althoughtheycanbe fully loaded,through thePanamaCanal.Panamaxvesselsare not exceeding32,2metres whichpermitsittotransit,when Drybulk carrierofabout60000to80dwtwithbeam PANAMAX BULKCARRIER TERMS ANDEXPRESSIONS (continued) during thecourseofavoyage. Bunker costs,portchargesandcanaldues(ortolls)incurred VOYAGE COSTS voyage costs. and isresponsible forpaying bothvesseloperatingcostsand of transportingcargofrom aloadporttodischarge Charter underwhichashipownerispaidfreight onthebasis VOYAGE CHARTER and othermiscellaneousrunningcosts. and lubricatingoils,vesselrepairs andsurveys,commissions These consistofcrew expenses, insurance,spare parts,stores VESSEL OPERATING COSTS ship. to determinethecontainercarryingcapacityofa The standard length ofacontainerandthemeasurement used TWENTY FOOTEQUIVALENT UNITORTEU vessel orvessels. A generictermreferring toanykindofocean-goingcargo TONNAGE as adailyrateoverthedurationofvoyage. Freight andcharter-hire lessvoyagecostsincurred expressed TIME CHARTER EQUIVALENT ORTCE ship. or duringthevoyageexceptwhere causedbyadefectofthe the riskoffi llingthevesselwithcargoandanydelaysatport charterer isresponsible forpayingthevoyage costs andbears the vesselandpayingoperatingcostswhile is paidonaperdaybasisandresponsible foroperating Charter foranagreed periodoftimewhere theshipowner TIME CHARTER Products tankers

Bunker tanker Cargoes shipped: marine bunker fuels

Small products tanker Cargoes shipped: petrol/diesel/bulk liquids

Chemical tanker Cargoes shipped: industrial chemicals/bulk liquids

Medium-range products tanker Cargoes shipped: petrol/diesel/vegetable oils

Drybulk carriers

Handysize bulk carrier Cargoes shipped: agricultural/general bulk products/steel/logs/fertilisers

Panamax bulk carrier Cargoes shipped: grain/coal/alumina

Capesize bulk carrier Cargoes shipped: iron ore/coal www.grindrod.co.za