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MOZAMBIQUE

HUMAN CAPITAL

COMPENSATION

1. Overview

Grindrod recognises that its success is dependent upon the commitment and capability of its employees. This Policy, in conjunction with the Performance Management and Benefits Policies, aims to attract, develop and retain employees through ensuring compensation and rewards are allocated based on performance through a fair and equitable process.

2. Compensation Strategy, Model and Principles

The compensation strategy and structure drives organisational performance through people and must therefore adhere to the following principles:

2.1 Unfair Discrimination: Compensation policy and practices adhere to fair practices and only distinguish on the grounds of performance, scarcity of skills and market forces that may influence different geographic regions.

2.2 Equity refers to similar pay for similar work responsibilities or duties. Internal Equity refers to paying employees fairly and consistently according to their role and individual value relative to internal peers. External Equity refers to examining strategy and compensation practices against external trends, both national and international, so as to ensure pay is competitive relative to external peers and within bounds of affordability and sustainability.

2.3 Transparency: Compensation management is implemented with appropriate levels of visibility, good faith and confidentiality where required.

2.4 Affordability and Sustainability: The compensation costs must take into account current Grindrod and Divisional performance, competitiveness and the inflation rate.

3. Compensation Components

3.1 The compensation package, set out in an employee’s letter of appointment and employment contract, is finalised in accordance with defined TASK© Grade guidelines and internal salary benchmarks, following negotiations between the employee and Grindrod.

3.2 Once a remuneration package has been successfully negotiated between the employee and Grindrod, this package remains unchanged until annual salary reviews are conducted in March of the following year or unless the employee is promoted or the position undergoes job evaluation due to significant changes in the scope and nature of the job.

4. Total Cost of Employment (TCOE) Approach

4.1 Grindrod’s remuneration method of payment is TCOE inclusive of thirteenth (13th) cheque.

4.2 TCOE will accrue to the employee at the rate of one-twelfth (1 / 12th) of the package amount per calendar month or part thereof, of completed service.

4.3 The TCOE package amount is inclusive of compulsory benefits.

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5. Pay Date

5.1 Salaries are paid monthly in arrears, by no later than twenty-fifth (25th) of the month by electronic funds transfer into the employee defined bank account.

5.2 Should the twenty-fifth (25th) day of a month fall on a weekend or public holiday, the salary will be paid on the last working day prior to twenty-fifth (25th) of the month.

5.3 In the event of termination, the employee’s salary will be increased by any monies owing to the employee by Grindrod and / or decreased by any monies owed by the employee to Grindrod.

6. Contributions and Deductions

6.1 TCOE package

• The cash component is the resultant amount after deducting the compulsory and elective company contributions from total package

6.2 Cell phone and Telephone

• Any employee exceeding their allocated allowance will have the excess deducted from their monthly earnings unless authorised by relevant manager or executive

6.3 Group Vehicles

• Traffic fines, excess from insurance claims and / or repairs shall be deducted from the employee’s earnings in the event of a confirmed finding of negligence.

6.4 Administration Orders

• Maintenance and garnishees shall be deducted from an employee’s salary and shall be subject to a fee.

6.5 Compulsory Deductions

• INSS All employees are required to contribute to the INSS at a rate as specified and updated within the Labour Law no 23 / 2007 of August 1 and applicable social security legislation and regulations

• IRPS Deducted from employee’s monthly earnings and paid to the tax authorities (URTI) in accordance with legislation

• Any other amount as per agreed indebtedness to Grindrod.

7. Variable Pay

7.1 Annual Increases

• An employee must be employed with Grindrod for six (6) months or more in order to qualify. The relevant Divisional Chief Executive or duly appointed designate may motivate otherwise, based on performance and other factors

• Grindrod’s Board of Directors reviews and approves salary increase scales, taking into consideration Grindrod’s performance and market conditions

• Annual wage negotiations with relevant Bargaining Forums shall be coordinated by the Human Resources Department

• Increases impacting upon bargaining unit employees shall be determined based on applicable rates of inflation at the commencement of negotiations, market movements and affordability. These increases will be effected on the TCOE and / or basic salary for the respective employees

• Any increase above one hundred thousand rand (R100, 000) per annum must be approved by Grindrod’s CEO.

7.2 Interim Increases

• An interim salary increase must be motivated based on exceptional performance, merit or significant substantiation

• Any increase above the maximum for the salary grade must be approved by the relevant Divisional Chief Executive.

COMPENSATIONHUMAN CAPITAL

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COMPENSATIONHUMAN CAPITAL

7.3 Incentive Scheme

• Grindrod’s incentive scheme is self-funding and as such is based on achievement of Grindrod’s financial performance. The scheme also uses information from the performance management process to determine pay-out

• The scheme is applicable to TASK© Grades fourteen (14) and above.

7.4 Injury on Duty

• Paid in accordance with the Labour Law, other applicable legislation, and the provisions of any Workmen’s Compensation Insurance Policy in force from time to time.

7.5 Allowances

• An employee may be reimbursed for using their private vehicle on Grindrod business if such travel takes place outside of a stipulated radius.

7.6 Night Shift

• Allowance will be paid in line with the Labour Law and prevailing agreements.

7.7 Acting Capacity

• A suitably qualified employee may be appointed into a position in an acting capacity. Grindrod views such an opportunity as beneficial especially for individuals from designated groups to gain experience

• An employee may not be appointed in an acting capacity to a position which is higher than two grades above their current post and must meet all minimum requirements of the job (please refer to the Talent Management Policy). The position must be advertised and filled permanently within the 3 month period where possible

• An employee who performs functions on a substitute basis for a period of forty five days or more shall be entitled to the remuneration attributable to the category that corresponds to those functions throughout the period of performance, unless the employee has already been earning higher remuneration , in which case he or she shall be entitled to an increase agreed between the parties

• Accumulation of leadership functions occurs when an employee performs more than one function for a period of forty five days or more, where substitution is not possible or where another employee cannot be assigned to the job. In this case, the employee’s remuneration shall be supplemented by at least twenty-five per cent of the remuneration attributable to the functions while he or she is performing them.

• The acting appointment must be authorised by the relevant Divisional Chief Executive and / or relevant designate.

7.8 Professional Association Fees

• This is applicable to permanent employees of Grindrod

• Grindrod encourages the registration of an employee with necessary associations up to a maximum of three (3), where such registrations are necessary for the performance of their Grindrod responsibilities. The requirement to register with (an) association’s must be stipulated in writing to the employee

• Grindrod may at its discretion consider funding professional fee subscriptions, including joining fees, on an employee’s behalf when registration is mandatory for practicing the said profession or the qualification is regulated by professional association.

7.9 Salary Advances on Leave

• A salary advance is at the discretion of management

• Salary advances will only be granted where an employee is proceeding on leave. An approved leave application must be submitted together with the advance request

• The advance provided is set at a maximum of forty five percent (45%) of the value of leave days available, after tax

• An advance will only be provided if there are no existing monies owed by the employee to Grindrod and there are no maintenance orders in effect

• The advance will be deducted from the following month’s salary.

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COMPENSATIONHUMAN CAPITAL

8. Job Evaluation

8.1 In order to ensure fairness and equity in establishing the relative value of a position for determining compensation, a job evaluation system has been implemented and consistently applied across all jobs.

8.2 Posts shall be evaluated according to the TASK© Evaluation System.

8.3 The job description will be the reference point in conducting the evaluation. This shall be supplemented by inputs from the responsible Manager and, where necessary, the job incumbent.

8.4 After the evaluation of a job, re-evaluation will be considered only if there is a significant change in job content.

9. Compensation Survey

9.1 Grindrod shall subscribe to necessary market surveys available.

9.2 Pay bands will be reviewed each financial year for necessary adjustments.

10. Salary Structure

10.1 A pay band or compensation package scale is determined for all Grindrod job grades.

10.2 The salary structure scale has a minimum and maximum package.

10.3 An employee is not to be paid above the maximum of their salary scale without approval by the relevant Chief Executive Officer which is issued only in exceptional circumstances and, depending upon grade, may require vetting by the Grindrod Limited Chief Executive Officer.

10.4 The package scales are adjusted annually in accordance with changes in the market and synchronised with the annual salary review.

11. Offers of Employment

In determining the remuneration on offers of employment, consideration shall be given to the appointee’s current and expected earnings, internal benchmarks, earnings of existing staff at the same grade and input from relevant divisional management.

12. Employee Relocation

Please refer to Relocation Policy.

13. Retrenchments and Terminations

Please refer to the Retrenchment and Termination Policies.

14. Grindrod Remuneration Committee

14.1 Shall ensure good governance of the remuneration strategy.

14.2 Shall approve the incentive scheme pay-out.

14.3 Shall review the compensation strategy and positioning of scales relative to the market annually.