1. Vendor Held Stock – VHS Presentation to: SACAFMA General Meeting on: 19 September 2003 Presenter:Andre Steynberg Materials Controller

2. Vendor Held Stock Standard System Feature Automated Transactions No work arounds

3. Vendor Held Stock Commodity: Hydraulic Pipes/Fittings Contracted Supplier Problems:  Variety of items  Inconsistent demand patterns No of stock items Transaction volumes Reducing risks Service levels

4. Vendor Held Stock Purest definition: Routing of demands for specific goods/items directly to supplier warehouse on warehouse requisitions rather than to the mine warehouse

5. Vendor Held Stock Purest definition – Transaction flow Goedehoop (mine) Supplier (town) W/Reqn *Goods Invoice Payment * Delivery lead time ** Double handling Supplier accounts Supplier warehouse Mine accounts Mine warehouse ** Goods End user

6. Vendor Held Stock Our definition: Routing of demands for specific items directly to an on site supplier warehouse on warehouse requisitions…

7. Vendor Held Stock Our definition – Transaction flow Goedehoop (mine) Supplier (town) *Goods Invoice Payment * No lead time & no double handling On site supplier warehouse Copy of W/Reqn Supplier accounts Mine accounts Mine warehouse W/Reqn

8. Vendor Held Stock Procedure – How to get going Mine Supplier Provide building (warehouse) Sub warehouse – Vendor specific Contract – items/goods Create item codes – Flag: VHS Network printer Contract – services (staff) Stock on-site warehouse Staff as required (24 hours/day)

9. Vendor Held Stock Simplified Process W/Req Create Print P/Slip Action Issue item (signature) P/Slip *P/Slip P/Slip File (monthly) Composite invoice 4 X Monthly composite invoice + p/slips (copies) @ Contract price System report listing * @ contract price Match invoice Payment P/Slip ACQUIT - Costing@ standard price = contract price File (monthly) EE Goedehoop AccountsW/houseEnd user Vendor On site w/houseTown premises

10. Vendor Held Stock Accounting Entries: When acquiting warehouse requisition DT Cost CT Vendor suspense account Individual transactions

11. Vendor Held Stock Accounting Entries: At time of payment DT Vendor suspense account CT Cash/Bank One monthly total

12. Vendor Held Stock Key benefits: MineSupplier  END USERS Availability – place of work - 24 hours - budget control, approval procedures etc.  WAREHOUSE Zero stockholding No redundancy risks No capital lay out No re-ordering process No receiving process No stacking/binning No physical control  ACCOUNTS PAYABLE One only: monthly invoice monthly invoice/ receipt matching Less: Document capturing Statement recon. Transactions  WAREHOUSE Minimal paper work Back up stock Minimal transport cost  ACCOUNTS One invoice per month Statement transactions P/Slip (mine) = POD * Less paper costs * Less printing costs  GENERAL Long term business relationship (partnering) ?? Mine

13. End of presentation Any questions??