Dear shareholders

I am pleased to provide you with the Barloworld Limited (Barloworld or the company) remuneration report for the year ended 30 September 2016.

We have considered the impact of the King IV Code on Corporate Governance on the remuneration policy and disclosure. For now, we have continued with our practice of setting out our report in two parts, with the first part setting out the company’s remuneration philosophy and policy, and the second part detailing the implementation of the policy in the 2016 financial year.

The group’s industry and geographic diversity has continued to provide resilience to the overall trading result in 2016. Equipment southern Africa was impacted by a fourth consecutive year of declining capital expenditure in the mining sector, however, our Russian equipment business produced an excellent result and Spain was profitable despite the uncertainty created by a second inconclusive general election result. Automotive achieved a record year in a challenged market environment and the recent acquisitions delivered in line with expectations. Operating profit in Logistics was robust as a result of new contract awards and expansion into the refrigerated transport segment. Cash generated from operations was very positive, contributing to significantly lower net debt levels and a strong balance sheet position for the group.

The company continues with the practice of fair and equitable remuneration and, following the freeze on executive salaries last year, ongoing sensitivity to the pay gap resulted in increases at the executive level effective 1 October 2016 being below average increases at lower levels of the organisation. As in the past, our hope is that this report evidences the company’s continued focus on responsible remuneration that is performance based and driven by sound governance principles.

We trust that we have provided clear and detailed explanations of the executive management team’s remuneration and that you find this to be a comprehensive overview. The committee will continue to maintain an open and constructive dialogue with investors and their representative bodies. We will engage in appropriate dialogue with our major shareholders on any material changes to the remuneration policy.

SB Pfeiffer
Chairman
Remuneration committee

18 November 2016