STRATEGIC DIRECTION STRATEGIC DIRECTION LM200206041 - CSM.

STRATEGIC DIRECTION

STRATEGIC DIRECTION

LM200206041 - CSM

TRANSNET STRATEGY AND OBJECTIVES

VISIONTransnet is a transformed holding

company that enables its Businesses to be world class,

lead their competitors, facilitate competitive trade and positively

touch the lives of all South Africans

MISSIONA holding company with interests in various transport, logistics and

other related businesses, that focuses on value chain

management of goods, people and information

VALUES

• Respect the individual

• Manage operations in a manner that ensures the safety of all

• Support economic development and activity

• Encapsulate Business probity with a strong focus on ethical conduct

• Enhance the value of frugality

• Be customer obsessed

• Support innovativeness

VALUES

• Respect the individual

• Manage operations in a manner that ensures the safety of all

• Support economic development and activity

• Encapsulate Business probity with a strong focus on ethical conduct

• Enhance the value of frugality

• Be customer obsessed

• Support innovativeness

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BUSINESS FOCUS

• Market leadership in logistics solution provision

• Leveraging the property portfolio for maximum return

• Substantial market share in information technology and telecommunications provision

BUSINESS FOCUS

• Market leadership in logistics solution provision

• Leveraging the property portfolio for maximum return

• Substantial market share in information technology and telecommunications provision

STRATEGIC INTENT

• Manage and develop profitable, self sustaining businesses in a select range of portfolios

STRATEGIC INTENT

• Manage and develop profitable, self sustaining businesses in a select range of portfolios

STRATEGIC OBJECTIVES

• Increase financial value

• Ensure a high degree of safety standards

• Provide the Shareholder with appropriate dividends

• Develop and maintain an advanced business competence

• Enhance human capital development

STRATEGIC OBJECTIVES

• Increase financial value

• Ensure a high degree of safety standards

• Provide the Shareholder with appropriate dividends

• Develop and maintain an advanced business competence

• Enhance human capital development

• Financial

• Learning and Growth

• Customer

• Internal

• Financial

• Learning and Growth

• Customer

• Internal

BUSINESS ACTIONS AND PERFORMANCE TARGETS (BSC)

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STRATEGIC ACTIONS

• Prioritise funding capacity

• Gain Shareholder approval on business portfolios

• Formulate line of communication between Shareholder and company

• Gain sound capital to structure the business

• Continues transformation of businesses

STRATEGIC ACTIONS

• Prioritise funding capacity

• Gain Shareholder approval on business portfolios

• Formulate line of communication between Shareholder and company

• Gain sound capital to structure the business

• Continues transformation of businesses

CRITICAL SUCCESS FACTORS

Identify:

• Business portfolios that Transnet want to participate in

• Capital requirements and prioritisation

• Funding capacity and gaps

• Capacity gaps in business processes

• Potential investment partners

• Retention of restructuring proceeds

CRITICAL SUCCESS FACTORS

Identify:

• Business portfolios that Transnet want to participate in

• Capital requirements and prioritisation

• Funding capacity and gaps

• Capacity gaps in business processes

• Potential investment partners

• Retention of restructuring proceeds

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Shareholder ExpectationsShareholder Expectations

• Good Corporate Governance

• Restructuring support

• Infrastructure development

• Enhance Shareholder value

• Continues transformation

• Black Economic Empowerment

• Employment Equity

• Social and Economic development

• Good Corporate Governance

• Restructuring support

• Infrastructure development

• Enhance Shareholder value

• Continues transformation

• Black Economic Empowerment

• Employment Equity

• Social and Economic development

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TRANSNET OBJECTIVES, ACTIONS AND PERFORMANCE MEASUREMENTS (2002-2003)

STRATEGIC AND BUSINESS OBJECTIVES

BUSINESS ACTIONS PERFORMANCE MEASUREMENT: BALANCED

SCORECARD

Increase financial value of Transnet.

Provide the Shareholder with appropriate dividends.

Financial restructuring

Achieve positive Transnet value

Transform property portfolio

Repositioning of Businesses to become financially sound ringfenced entities.

Improve and strengthen Transnet’s balance sheet through debt restructuring initiatives.

Determine the financial requirements of the Business Units and the ability to fund those requirements.

Return on investment in Divisions / Subsidiaries > weighted average cost of capital.

Increased nett operating profit after tax.

Optimisation of the asset base, and protecting the physical, technological and intellectual assets of the group.

Focusing on cash management and to be self-financed.

Unlock value in existing property portfolio.

Identify Taxation planning opportunities.

Improve net operating profit compared to previous year.

Improve cash generated from operations.

Improve cash flow return on investment (CFROI) and to improve Transnet Value added.

Fund activities without deterioration in the budgeted gearing of the company.

Optimise capital investment. Reduce the cost of pure risk

to optimum benchmarked levels.

Property asset verification. Internal lease income from

property portfolio. External lease income from

property portfolio. Improve cash before

investments.

FINANCIAL OBJECTIVES

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BUSINESS ACTIONS PERFORMANCE MEASUREMENT: BALANCED

SCORECARD

Develop and maintain an advanced business competence.

Ensure a dynamic understanding of the business environment and drivers.

Increase customer confidence.

Grow and retain customer base.

Improve service delivery in terms of cost, equity and access.

Build trust relationships with customers, by being customer obsessed.

Restructure and transform Transnet effectively in order to efficiently and competitively meet the demands of domestic and international customers.

Ensure market and public acceptance.

Develop and implement Customer Image Index.

Develop and implement a Customer Satisfaction Index.

See Business Unit actions and performance targets for future details.

Public fatalities. ESAP rating. NOSA rating Safety Index. Image Index Customer satisfaction Index Disabling incidents Frequency

rate. Sustainability Market share

CUSTOMER OBJECTIVES

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BUSINESS ACTIONS PERFORMANCE MEASUREMENT:

BALANCED SCORECARD

Ensure a high degree of safety standards

Enhance and establish new structures and systems for the Holding Company.

Enhance information technology environment, which is a business enabler.

Develop and implement resilient, sustainable and effective business processes.

Enhance strategic decision-making

Improve the efficiency and effectiveness of the Business Units.

Entrench inter-Divisional market related support to benefit the Business Units and Transnet.

Reconfigure current management structure.

Configure structures of remaining services.

Ensure network availability/access to information.

Develop and implement on-line real-time information systems.

BEE spend Employee fatalities Improve Corporate

Governance Improve e-logistics and

e-commerce capabilities.

INTERNAL OBJECTIVES

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TRANSNET OBJECTIVES, ACTIONS AND PERFORMANCE MEASUREMENTS (2002-2003)STRATEGIC AND BUSINESS OBJECTIVES

BUSINESS ACTIONS PERFORMANCE MEASUREMENT:

BALANCED SCORECARD

Enhance human capital development through an effective training programme and business leadership.

Enhance appropriate competencies.

Develop compliance

Enhance a culture of excellence

Ensure leadership capacity for the top two levels of management (training and succession planning).

Review and develop human resources policies.

Develop logistics competency at Business Unit level.

Rationalise or develop new skills within the labour force and ensure their deployment throughout the company.

Continue to use the Balanced Scorecard as an effective performance management system from Board of Director’s level downwards.

Performance management implemented for all levels.

Training spend as % of operating cost. (7 categories)

Employment equity Containment and

management of HIV/AIDS Staff Turnover

LEARNING & GROWTH OBJECTIVES

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TRANSNET

Key Issues

Business Portfolio Management of Strategic Investments

Improved control + monitoring

Enable Business Units

Transnet Strategic Direction

Focus from Shareholder

Restructuring (NFA)

Transformation

M.U.PTurn Strategy

Incorporated under Companies Act

BOD appointed

Department of Government

Leadership requirements

Building portfolio management skills

Building independence and capacity

Lead business transformation and performance

Develop Business thinking

Follow prescribed pattern

Highly centralised functional structure

Group Financial control

Group Strategic control

Group Managerial control

Group Operational control

Decentra-lised profit centre divisions

Business Focus

Establishment of Divisional Boards

Corporatisation

Commercialisation

Development of infrastructure

Executive Directors

END STATE2007

Holding company

1996 New ExecutiveManagement

1990Transnet Ltd

related businesses

1993Independent Businesses

Units

1997Shared vision

1910SAR&H single business

TRANSNET MIGRATION PATH

1981South African

Transport Services (SATS)

1989 Legal

Succession Act

1991 M.U.P

1988 Deregulation

1987 230 000

employees

1910 52 595

employees

1998 Moving

South Africa

2001 PFMA

Shareholder compact

2001 86100

employees

1996 National

Transport Policy

1996 110 000

employees

1991 160 000

employees

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TRANSNET

SUBSIDIARIES

EMPLOYEE AND SOCIAL ENVIRONMENT

Transmed Fund

Transnet Foundation

Trust

Pension Fund

Human Resources

Transnet Housing

DIVISIONS

Arivia.kom (Pty) Ltd

32%

Protekon (Pty) Ltd 100%

S.A Airways (Pty) Ltd

95%

Air Chefs (Pty) Ltd

51%

V&A Waterfront (Pty) Ltd

100%

Viamax (Pty) Ltd

100%

Transure Ltd 100%

Marine Data Systems (Pty) Ltd 80%

Fleetcall (Pty) Ltd

50%

B2B Africa Holdings (Pty) Ltd 100%

Transwerk Perway (Pty) Ltd 35%

Transwerk Foundries (Pty) Ltd 100%

Southern African Airline Holdings (Pty) Ltd 100%

Autopax (Pty) Ltd

100%

Apron Services (Pty) Ltd

100%

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TRANSNET GROUP BEE SPEND

1079

2237

3542 3390

0

500

10001500

2000

2500

30003500

4000

ActualSpend

1999/2000

ActualSpend2000/01

ActualSpend2001/02

Budget2002/03

Rm

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TRANSNET FOUNDATIONCSI SPEND

14.99

39.37

51.5258.65

0

10

20

30

40

50

60

ActualSpend

1999/2000

ActualSpend2000/01

ActualSpend2001/02

Budget2002/03

Rm

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TRANSNET FOUNDATIONCSI SPEND PER PORTFOLIO (MARCH 2002)

1.1m

7.1m

3m

10.8m

10.1m

5.8m

13.4mEducation

Sports School

Phelophepa

Sport

Underutilised Assets

Arts & Culture

Special Projects

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Black Managers – Middle Management (109-610)

3336

41 44

05

1015

202530

354045

1999/2000 2000/2001 2001/2002 Target2002/2003

%

TRANSNET GROUPEMPLOYEMENT EQUITY

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Female Managers – Middle Management (109-610)

1719

2225

0

5

10

15

20

25

1999/2000 2000/2001 2001/2002 Target2002/2003

%


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Black Managers - Senior Management (104-106)

36

4451

55

0

10

20

30

40

50

60

1999/2000 2000/2001 2001/2002 Target2002/2003

%


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Female Managers - Senior Management (104-106)

17

23 23

30

0

5

10

15

20

25

30

1999/2000 2000/2001 2001/2002 Target2002/2003

%


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Black Managers – Executive Management (102-103)

49

61 65 70

0

10

20

30

40

50

60

70

1999/2000 2000/2001 2001/2002 Target2002/2003

%


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Female Managers – Executive Management (102-103)

15

19

1618

02468

101214161820

1999/2000 2000/2001 2001/2002 Target2002/2003

%


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18.2

28.3

38.3 37.5

0

5

10

15

20

25

30

35

40

1999/2000 2000/2001 2001/2002 Budget2002/2003

Rm

TRANSNET GROUPTRAINING SPEND

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Employees per Business Unit – April 2002

34151

56623847

84577111

17634938

0

5000

10000

15000

20000

25000

30000

35000

Spoornet PortAuthority

SAA Transwerk

TRANSNET GROUP

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STRATEGIC DIRECTION STRATEGIC DIRECTION LM200206041 - CSM.

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