ppc ltd annual integrated report... · 2 ppc ltd our vision to grow ppc into a leading emerging-...

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Integrated annual report 2012

Contents

About this reportScope and boundary of report 1

Reporting approach 1

Group overview 2

Our profile 2

Our vision 2

Investment proposition 2

Salient features 2012 3

Operations and geography 4

Leadership 5

Approach to sustainable business 10

Stakeholder engagement 11

Material issues 14

Our strategy 18

CommentaryChairman’s report 22

Chief executive officer’s report 24

Chief financial officer’s report 28

Integrated review of 2012Summary of integrated performance 34

Value added statement 38

Mining charter scorecard 2012 39

Operations review 44

People review 48

Social review 60

Environmental review 66

Corporate governance review 76

Risk review 89

Remuneration review 92

Assurance statement 109

GRI index 110

summarised group annual financial statementsFull financials are available on our website www.ppc.co.za

Directors’ report 114

Report of the independent auditor on the summarised annual financial statements 118

Consolidated statement of financial position 119

Consolidated income statement 120

Consolidated statement of comprehensive income 121

Consolidated statement of changes in equity 122

Consolidated statement of cash flows 123

Segmental information 124

Notes to the summarised group annual financial statements 126

Seven-year review of the group’s results 128

AdministrationPPC in the stock market 140

Corporate information 141

Notice of annual general meeting 142

Form of proxy 149

Glossary of definitions and acronyms 152

Forward-looking statementsThis report including, without limitation, those statements concerning the demand outlook, PPC’s expansion projects and its capital resources and expenditure, contain certain forward-looking views. By their nature, forward-looking statements involve risk and uncertainty and although PPC believes the expectations reflected in such statements are reasonable, no assurance can be given that these expectations will prove correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment, other government action and business and operational risk management.

While PPC takes reasonable care to ensure the accuracy of information presented, we accept no responsibility for any damages – be they consequential, indirect, special or incidental, whether foreseeable or unforeseeable – based on claims arising out of misrepresentation or negligence in connection with a forward-looking statement. This document is not intended to contain any profit forecasts or profit estimates, and some information in this document may be unaudited.

InnovatIon

EmpowErEd to dElIvEr

page 20

page 32

EntErprIsE dEvElopmEnt

page 42

In October 2012, Pretoria Portland Cement Company Limited changed its name to PPC Ltd.

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� At the back of the report is the glossary of definitions and acronyms which are referred to throughout the report

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EconomIc EmpowErmEnt

page 112

contInUal modErnIsatIon

page 138

1Integrated annual report 2012

About this report

Scope and boundary of report

This integrated annual report covers PPC’s financial and non-financial performance between 1 October 2011 and 30 September 2012. It follows the integrated annual report published for the 2011 financial year. Details for obtaining copies of the integrated report from the PPC group company secretary appear on page 137. For further details on sustainability matters, please contact: Ms Tshilidzi Dlamini, PPC group manager, sustainability and environment, tel +27(11) 386 9122, fax +27(11) 386 9117, email [email protected].

The scope of this report covers all PPC’s manufacturing facilities (cement and lime), aggregate quarries and depots in South Africa, Botswana, Zimbabwe and Mozambique.

Our annual financial statements were prepared in accordance with international financial reporting standards (IFRS), requirements of the South African Companies Act, regulations of JSE Limited (JSE) and recommendations of King III.

In compiling this report, PPC has considered the latest Global Reporting Initiative sustainability reporting guidelines, known as GRI G3.1, as well as guidelines on corporate governance in South Africa set out in King III and the Listings Requirements of the JSE. The GRI classification for our report is application level C+, which is self-declared and requires the group to report on at least ten GRI indicators across economic, social and environmental performance. Certain indicators have been externally assured by Deloitte & Touche, whose report appears on page 109. The indicators published in this report reflect the extent to which we meet GRI reporting requirements. We have also included areas we believe will enhance understanding of our processes, achievements, challenges and progress for the year.

Online version available

Reporting approachThis is our third integrated annual report – a style of reporting that allows us to emphasise the fundamental link between our financial and non-financial performance (environmental, economic, social and governance issues), contextualise the risks and opportunities the group faces, and how these influence our business strategy.

The JSE requires listed companies to produce integrated annual reports, in line with the recommendations of King III. What, precisely, constitutes integrated reporting remains the subject of international debate, although we have noted the discussion papers from the International Integrated Reporting Committee. We have also been guided by accepted best practice in annual reporting and GRI G3.1 reporting guidelines.

This integrated annual report focuses on the most material sustainability issues that drive business strategy. These were identified after analysing stakeholder concerns, business risks and global trends, and how they impact our long-term business sustainability.

partnering in africa

ABOUT THIS REPORT

2 PPC Ltd

Our visionTo grow PPC into a leading emerging- market business.

PPC currently operates in emerging markets, where 70% of the world’s cement is produced.

These markets present higher growth in populations, GDP and cement demand, new opportunities, and deliver higher returns for producers of cement and related products.

Our profileIn 2012, PPC celebrated its 120th year – a formidable 12 decades of innovation as a leading cement producer in southern Africa. This milestone comes two years after PPC celebrated its 100th year listing on the JSE in 2010, becoming part of an extremely small and elite group of listed centenarians, not only in South Africa but worldwide.

Established as De Eerste Cement Fabrieken Beperkt in 1892, PPC has tracked the growth and development of South Africa, producing the cement used in many of the country’s iconic landmarks and construction projects, including the Union Buildings, Gariep Dam, Van Staden’s River Bridge, Gautrain, Medupi Power Station, the new Cape Town Stadium in Green Point and much of southern Africa’s infrastructure.

Since unbundling from Barloworld in 2007, PPC concluded R3,9 billion broad-based black economic empowerment transactions in 2008 and 2012, commissioned a R1,4 billion clinker plant in Dwaalboom and completed the R700 million mining facility at its Hercules plant.

The group is the leading supplier of cement in southern Africa through eight cement manufacturing facilities and three milling depots in South Africa, Botswana and Zimbabwe that can produce around eight million tonnes of cement products each year. PPC also produces aggregates, metallurgical-grade lime, burnt dolomite and limestone. Our Mooiplaas aggregates quarry in Gauteng has the largest production capacity in South Africa.

Our focus extends beyond our group to the broader industry. As a leader in this industry, PPC has actively invested in technology to reduce air emissions, minimise waste production, recycle and recover raw materials, enhance energy efficiency and conserve natural resources – while producing a reliable and affordable supply of building materials to support the economies of countries where we operate.

PPC is a truly African success story – a focused business that reflects the strengths of its people, products and services. As we expand into the rest of Africa, we will deploy our sustainable business model – one built to last and the brand of choice in our chosen marketplaces.

GROUP OVERVIEW

Investment proposition

Cash generative

Excellent dividend yield and history

Leading producer in southern Africa with best geographic spread

New capacity available

Strong financial position

Financial strength to explore expansion opportunities

Experienced management team


About this reportSALIENT FEATURES 2012

Team PPC delivered a good result by improving efficiencies and increasing normalised earnings by 11% despite another tough year. The company finalised a number of key strategic issues including conversion of mining rights in South Africa and our first new investment into sub-Saharan Africa.

Employees participate in 68% (R730 million) of the second BBBEE ownership transaction.

Invested R42,3 million or 5,7% of payroll in skills development.

People

Successful completion of the environmental authorisation process for new Riebeeck plant.

As part of our five-year energy-saving plan, integrated demand management projects realise energy savings of R2,8 million.

Environmental

Normalised earnings* per share increased by

11%

Annual dividends increased to 146 cents per share

12%

Cash earnings per share rose by

16%

Financials (R million) 2012 2011 2010

Revenue 7 346 6 826 6 807Operating profit* 1 866 1 710 2 115Property, plant and equipment 4 483 4 287 4 175Total assets 6 907 6 419 6 112Cash generated from operations 2 284 2 102 2 442

Ordinary share analysisHeadline earnings per share (cents)* 185 167 219Earnings per share (cents)* 185 166 213Dividends per share (cents) 146 130 175Number of employees 3 085 3 087 3 257

* Excludes BBBEE IFRS 2 charges.

R38 million of a planned R60 million over five years spent on approved local economic development projects.

88% of total procurement (R3,5 billion) spent with BBBEE suppliers.

Social

New CEO appointed. Ongoing improvement in integrated

reporting acknowledged. Governance aligned with new

Companies Act.

Corporate governance and risk

PPC has operations and strong brands in South Africa, Botswana, Zimbabwe and Mozambique. In addition to serving southern African markets, we export cement and lime to other African countries.

1. Jupiter

2. Hercules

3. Slurry

4. Dwaalboom

5. Riebeeck

6. De Hoek

7. Port Elizabeth

8. Colleen Bawn

9. Bulawayo

10. Lime Acres

11. Laezonia quarry

12. Mooiplaas quarry

13. Kgale quarry

14. Gaborone

15. Saldanha

16. Quarries of Botswana

17. George

18. Maputo

19. Habesha

● Cement plant ● Milling depot ● Aggregate quarry ● Lime plant● Sales depots● Project

Zimbabwe

Botswana

South Africa

• Richards Bay

Bulawayo •

Gaborone •

Mafikeng •

• Port ElizabethSaldanha •

Kimberley •

• Johannesburg

Cape Town •

• Durban

Mozambique

Ethiopia

14

9

15 56

10

7

24

1

16

16

16

3

13

8

1211

17 • George

18• Maputo

19• Addis Ababa

4 PPC Ltd

OPERATIONS AND GEOGRAPHY

Rest of Africa

Rm 2012 2011 2010

Revenue 1 560 1 193 1 202Employees 793 693 699

South Africa

Rm 2012 2011 2010

Revenue 5 786 5 633 5 605Employees 2 292 2 394 2 558


About this report

Overview PPC Cement not only has a proud and successful track record spanning 120 years, but can also lay claim to being the leading supplier of cement in South Africa, Botswana and Zimbabwe. Our unique combination of quality products and good geographic footprint allows us to meet most customer requirements in parts of these countries.

Cement product range

South AfricaPPC’s product range includes the premier specialist brand OPC in the 52.5N strength category, the market-leading 42.5N Surebuild general-purpose cement, and the new SureRoad brand for exclusive use in road construction.

ZimbabweSurebuild, Unicem, a trusted 32.5N multipurpose cement, and PMC are distributed from the Bulawayo factory while OPC from South Africa is also available on request.

BotswanaThe popular 32.5R Botcem product, manufactured at the Gaborone milling depot, is complemented by the OPC and Surebuild brands which are also available in Botswana.

MozambiquePPC’s 42.5N Surebuild is distributed as the Força brand and the 32.5N Obras product was introduced during 2012.

Cement

OverviewPPC Lime has grown from small operations in 1907 producing lime for the burgeoning gold mining industry into one of the largest lime producers in the southern hemisphere and the leading supplier of metallurgical-grade lime, burnt dolomite and related products in southern Africa.

Lime productsUnslaked lime, hydrated lime and limestone and burnt dolomite.

Lime

OverviewPPC Aggregates supplies quality construction aggregates to the civil construction sector and products for the chemical, metallurgical and agricultural industries. PPC has aggregate quarries in Gauteng (Mooiplaas and Laezonia) and in Botswana (Kgale, Selebi Phikwe and Francistown).

Aggregates

Aggregate productsConcrete stone, road stone, crusher sand, river sand, building sand, plaster sand, Magalies silica, natural base, sub-base, fill material, dolomite and agricultural lime.

6 PPC Ltd

Chief financial officerTryphosa, CA(SA), was appointed chief financial officer (CFO) of PPC in 2011. Prior to that, she was CEO of WIP International (a subsidiary of WIPHOLD focused on African expansion). Tryphosa also served as CFO of SAA, and prior to that, she was requested to join National Treasury, where she set up a business unit with financial oversight of state-owned entities. As chief director of this unit, she was instrumental in listing Telkom on the Johannesburg and New York stock exchanges. Her diverse professional development includes financial and strategic planning, corporate governance reform, industry analysis and corporate restructuring. She has served on a number of boards, and is currently on the Airports Company of SA and Land Bank of SA boards as a non-executive director.

Mmakeaya Magoro Tryphosa Ramano (41)

Executive director Organisational performance and transformationSello joined PPC in 2007 as group corporate social transformation manager and was appointed executive: transformation in 2008. He holds a BEd (Hons) from Avondale College and a BEd Studs (Hons) from the University of Newcastle, Australia. Over a ten-year career with Gold Fields, Sello held positions in human resources, corporate communications and was appointed group transformation manager prior to joining PPC.

Sello Godfrey Helepi (41)

Chief executive officer Paul is an engineer by profession (BEng, University of Pretoria) and his early career was spent in the steel industry. After joining PPC he spent 18 years in PPC’s lime, packaging and logistics divisions and was a member of the board from 1995 to 2001. He joined Barloworld in 2001 as CEO of its logistics division where he was involved with international expansion and served on boards in South Africa, Spain, the UAE, UK and USA. Paul rejoined PPC as CEO in 2009.

Paul Stuiver (55)

Executive directorBusiness development and international expansion Peter was a divisional director of PPC’s cement division from 1996 to 2001 and group financial director of the Barloworld Coatings group prior to rejoining PPC as chief financial officer in 2003. A chartered accountant by profession, he also holds BCom and BAcc degrees, and has extensive experience in all aspects of manufacturing, corporate finance and taxation. He now heads up the business development team responsible for furthering PPC’s African growth strategies.

Peter Esterhuysen (56)

Managing director, South Africa operationsSalim holds BSc, BB&A (Hons) and MBA (cum laude) degrees from the University of Stellenbosch and joined PPC in 2004. He was executive director responsible for organisational performance and transformation until 2009 when he was appointed managing director of PPC’s cement operations. In 2012, he was appointed to his current position and is responsible for all local operations, including cement, lime, aggregates and the recently acquired readymix business. Prior to joining PPC, he was a senior executive in the Tiger Brands group, responsible for organisational effectiveness after acquiring managerial experience in various technical and operational roles.

Salim Abdul Kader (42)

PPC understands that diversity, empowerment and development at every level can only be achieved through effective, transparent and accountable leadership.

Chairman (independent non-executive director) Bheki was appointed independent non-executive director and chairman of the PPC board in November 2008. He holds an MBA degree from the University of Western Michigan (USA) and is a founding chief executive of Business Unity South Africa, the most authoritative voice of business in South Africa.He has worked in a number of South African blue-chip companies including Ford Motor Company (human resources), SA Breweries (procurement, logistics and human resources), Tongaat Hulett Sugar (director: human resources), Transnet (director: human resources) and is currently chief executive of the Chamber of Mines.Bheki has also served in a number of significant national policy-formulating structures, such as the national anti-corruption forum, President’s working group with business and the national Africa peer review mechanism council.

Bheki Lindinkosi Sibiya (55)

Ketso Gordhan (51)

Chief executive officer designateEffective 1 January 2013, Ketso Gordhan will succeed Paul Stuiver as chief executive officer of PPC. Most recently, Ketso was with The Presidency for the government of South Africa, after almost ten years as head of private equity at FirstRand Financial Services Group, where he gained valuable experience of the manufacturing environment. Other successful roles in the public sector include the turnaround of the City of Johannesburg’s financial performance as city manager (1999 to 2000) and in-depth knowledge of the transportation sector gained as director general of that national department (1994 – 1999). Ketso holds a BA in political studies and sociology (University of KwaZulu-Natal), MPhil in development studies (University of Sussex, UK) and was a visiting fellow in finance at the University of Pennsylvania, Wharton, USA. Ketso is currently serving as a non-executive director at Life Healthcare.

LEADERSHIP – BOARD


About this report

Non-executive director Peter is executive chairman and founder of the Peu Group. After an early accounting career with Philips (SA), he started his own business management consultancy in 1984 and investment group Peu in 1996. Peter has a BCom degree (Unisa) and completed management programmes at Wits Business School and Wharton University (USA). He is chairman of Phumelela Gaming and Leisure, a director of Investec Limited, Investec plc and certain Peu subsidiaries. Peter has also held advisory positions in government and directorships in state-owned enterprises.

Mangalani Peter Malungani (54)

Independent non-executive directorTim, CA(SA), was a partner with Deloitte & Touche for 36 years, retiring in 2008. He led the Johannesburg audit practice and served on the executive as client service director as well as the board and remuneration committees. Tim was the lead/advisory partner for a number of multinational clients and headed the Deloitte & Touche World Cup 2010 initiative. He is a director of Liberty Group, Eqstra Holdings, Adcorp and Mpact, chairing the audit and actuarial committee of Liberty and the audit committees of Eqstra, Adcorp and Mpact. He is also a member of the risk committees of Liberty, Eqstra and Mpact.

Tim Dacre Aird Ross (68)

Independent non-exeutive director André holds BCom, LLB and PED-IMD qualifications. He is retired after a long career as a director and later CEO of a listed company and chairman of industrial groups in Botswana and Namibia. During his career he also had wide exposure to construction and mining-related industries. He served on numerous public bodies, including as chairman of Business South Africa and Business Unity South Africa, and as trustee of the Business Trust. He is a director of Business Leadership South Africa and a member of its executive.

André Jacobus Lamprecht (60)

Independent non-executive directorBridgette holds a BCompt (Hons) CTA degree, CA(SA) and CIMA certification and has completed several management development programmes. She is the CEO of Kutira Capital and a non-executive director of Sun International Limited, Nestlife Assurance Limited, Unisa School of Business Leadership and Kanhym Estates (Pty) Limited. She was an audit partner at KPMG for 10 years. She sits on the audit committees of various companies.

Bridgette Modise (45)Non-executive director Sydney was appointed to the board on 1 March 2012 as a representative of the PPC consortium of strategic black partners and as a member of the deal committee and remuneration committee of the board. He is a founder and director of Tamela Holdings (Pty) Limited and has over 14 years’ experience in investment banking. A chartered accountant, Sydney completed his articles at Ernst & Young in 1997 and is a member of the South African Institute of Chartered Accountants’ education and examinations committee. He was a member of the Securities Regulation Panel from 2004 to 2006.

Sydney Knox Mhlarhi (39)

Independent non-executive directorNtombi has BA (Law) and LLB degrees from National University of Lesotho and owns Nthake Consulting, a human resources consultancy specialising in human resources management and allied services. She has over 25 years’ experience in the human resources environment, gained as director of human resources at Independent Newspapers Holdings Limited, SABC and the Bevcan division of Nampak Limited. Ntombi is a non-executive director of African Bank Limited and Mpact Limited.

Nomalizo Beryl Langa-Royds (50)

Joe Shibambo (64)

Independent non-executive directorJoe (Dip Bus Econ, Dip Bus Admin, Dip Estate Agency) is managing director of Hlamalane Projects (Pty) Limited and has been in the construction industry for over 30 years. He has extensive knowledge and experience of construction management, project management, property development, rail construction and maintenance. Through his organisation, he also assists the youth to acquire basic management principles for the construction industry. Joe is a co-director of various other companies, and was one of the first independent residential developers and the first contractor to develop and build a shopping centre in Soweto.

Non-executive directorZibusiso holds a BCom degree (University of Natal) and a postgraduate diploma in property planning, development and management. She has completed management development programmes at the Wharton School of Business and University of Nevada, Reno. With 18 years’ property experience, Zibu has served as non-executive director of the Johannesburg Property Company and member of the Land Affairs Board. Currently, she is executive director of development for Tsogo Sun Gaming.

Zibusiso Janice Kganyago (46)

8 PPC Ltd

Chief audit executive* Phuti started as a trainee with a major audit firm, and spent four years in external audit management before taking on an executive finance role with a medium-sized printing company. He then moved into internal audit and covered two leading financial institutions before entering the forensic audit field. Phuti holds qualifications as a chartered accountant CA(SA), certified internal auditor (CIA), certified control self-assessor (CCSA), certificate in advanced banking law (cum laude) and is currently studying towards a master’s degree in international accounting.

Phuti Semenya (36)

Executive, secretarial and legal Jaco joined PPC in 2007 in his current position. He holds BA, LLB, LLM and MBA degrees and is an attorney of the High Court of South Africa. He started his career as an attorney but after a short stint as lecturer at a university was appointed as group legal advisor by Absa. He was responsible for corporate governance in the Absa Group prior to joining PPC. Jaco is the company secretary of PPC.

Jacobus Hendrik De La Rey Snyman (45)

Klaas Paulus Pieter Meijer (52)

Managing director, international operationsPepe is a mechanical engineer (BEng) and holds BB&A (Hons) and MBA degrees from the University of Stellenbosch. He previously held the positions of executive group services, executive cement operations and various other senior and general management roles across the cement and lime divisions since joining PPC in 1988. Prior to that, he worked in the gold mining industry, with the last appointment being as section engineer, and in the fishing/processing/frozen-food industry as group projects manager.

LEADERSHIP – GROUP EXECUTIVE COMMITTEE

Executive, strategy and corporate communications Kevin holds a degree in mechanical engineering and is a registered professional engineer. He joined PPC in 1991 as a plant engineer at PPC’s Riebeeck factory. Since then, he has gained extensive knowledge of PPC and the cement industry. He has held a number of positions at both manufacturing and corporate level including factory engineering manager, group logistics manager and executive of the group supply chain department.

Kevin Pieter Odendaal (45)

*Attends as observer only

Managing director, South Africa operationsSee page 6

Salim Abdul Kader (42)

Chief financial officerSee page 6

Mmakeaya Magoro Tryphosa Ramano (41)

Executive director, organisational performance and transformationSee page 6

Sello Godfrey Helepi (41)

Executive director, business development and international expansion See page 6

Peter Esterhuysen (56)

Chief executive officer See page 6

Paul Stuiver (55) Ketso Gordhan (51)

Chief executive officer designateSee page 6


About this report

Awards in 2012During the year, PPC was recognised at a number of levels – from its integrated reporting to its progress with transformation – reflecting a group concentrating on every aspect of its role in society and its responsibility to stakeholders.

Nkonki/Financial Mail award for integrated reporting

PPC won the industrial category and was ranked second overall for its 2011 integrated report out of over 100 listed companies. Importantly, the company’s overall score improved, placing it among very few top-rated companies for the quality of its integrated reporting.

PMR Diamond Arrow Award Fifth consecutive award for PPC Cement in this benchmark survey, and first for PPC Botswana. PMR’s annual national survey evaluates and measures customer service and satisfaction.

Black Business Quarterly (BBQ) 2012 awards

Nolwandle Mantashe, PPC’s executive for transformation and government relations, was named BBQ’s transformation champion of the year.

Kaap Agri 2012 PPC was rated supplier of the year for the first time, and won the category: hardware building materials for the second year.

10 PPC Ltd

APPROACH TO SUSTAINABLE BUSINESS

PPC understands that managing a sustainable business requires the balanced integration of

performance, corporate governance, social, economic and environmental factors into the strategy

and operation of the business. Equally, we understand that this is dynamic and requires an

ongoing review process.

To formulate our strategy and identify our material issues, PPC uses a wide range of criteria, processes and stakeholder engagements, summarised below:

Internal factors External factors

Group’s vision, mission, key values, policies, strategies, operational management systems, objectives and targets.

Challenges and emerging issues for the cement sector, for example global industry consolidation.

Expectations and concerns of stakeholders, including employees, customers, shareholders, governments, suppliers and communities.

Relevant laws, regulations and changes to legislation that affect PPC and its stakeholders – Companies Act, skills development, employment equity, waste management, air quality, and local by-laws.

Underlying risks to PPC as defined by internal integrated risk methodologies.

Changes involving sustainability issues, impacts, risks or opportunities (eg climate change, energy efficiency) identified through published global research and development.

Innovation, including product development and the manner in which PPC could potentially influence suppliers and customers in terms of sustainable development.

Advice received through external experts in the business strategy, risk and sustainability fields.


About this reportSTAKEHOLDER ENGAGEMENT

Non-governmental andcommunity organisations

CustomersSuppliers

Media

Banks, funders and insurance companies

shareholders and investment community

Employees

Trade unions

Academic institutions and professional organisations

Industry associations

National, provincialand local government, and

regulatory bodies

In terms of PPC’s inclusive process, we engage with all stakeholder groups. While interacting

with such diverse groups is challenging, we know that without their input we cannot run a truly

sustainable business. PPC uses many avenues to facilitate this engagement as listed below. One

of the most successful means has been through formal stakeholder forums at both corporate

and operational level.

12 PPC Ltd

Stakeholder Type of engagement Issues raised Action taken

EmployeesIn-house publications, intranet, roadshows, factory Invocoms and key leader meetings, individual perception monitor, performance and one-on-one meetings, factory safety and environmental meetings.

All PPC leaders drive various forums, from the CEO down

Employee benefits including salaries

Company performance

Safe working environment

Understanding transformation strategy and plans

Individual performance and development

Succession planning

Organisational climate Environmental awareness

Through the Kambuku philosophy, PPC has ongoing dialogue with all employees to address issues raised. The response is often via the same engagement process through which the issue was raised.

Trade unionsRegular meetings as per respective recognition agreements, key leader meetings with all employee representatives at each operation

Cost-of-living salary adjustments and other employee benefits

Negotiated annual salary adjustments.

Academic institutions and professional organisations

Meetings, conferences, site forums

Stack emissions and dust fallout Emission levels recorded in the integrated annual report.


Meetings

Conferences

Working groups

Publication of cement statistics Proposed CO2 tax

PPC provides environmental inputs on projects and legislation in various industry associations and other forums.

National, provincial and local government regulatory bodies

Meetings, conferences, working groups, factory inspections

Air quality and waste management

Financial provisioning for rehabilitation

Integrated water use licences and water quality

Social and labour plan implementation

Western Cape expansion plan

Mining charter scorecard

Environmental authorisation applications

Financial provisions are made for factory decommissioning and quarry rehabilitation (see annual financial statements).

Applications for licences have been submitted.

Social and labour plans already implemented.

Frequent government interaction during the current environmental impact assessment process.

All health and safety elements reviewed and complied with.

STAKEHOLDER ENGAGEMENT continued


About this report

Stakeholder Type of engagement Issues raised Action taken

CustomersCustomer visits

Factory visits

Industry conferences


Hospitality events

Independent customer satisfaction surveys

In-store visits and promotions

Technical support and education

Advertising

Price, service, product range, quality

Managing cement waste (used bags and spillage)

Empowerment status

PPC communicates price increases in writing in advance.

A technical marketing function evaluates quality and product range feedback.

Empowerment status certificate available to all stakeholders.

Appointed key account managers.

SuppliersSite visits (including suppliers’ suppliers)

Meetings

Supplier audits

Tender briefing sessions

Product development

Alignment to customer strategy

Environmental status of supply chain

Health and safety for contractors

Increased focus and capital approved for material handling where necessary.

Standard practice is for all contractors entering a site to receive safety induction training.

MediaPress releases

Interviews

Meetings

Industry outlook

Financial results

Carbon footprint

Products

People

PPC has a specific engagement plan and specific media interactions were held during the year.

Shareholders, investors, banks, funders and insurance companies

Annual and interim results

Website

Integrated annual reports

Investor roadshows

Meetings

Conferences

Cement demand and pricing outlook

Financial performance

Implementation of strategy

Competitor activity

Carbon footprint

CEO succession

Written reporting and responses given at the various engagements.

New CEO appointed.

Communities including non-governmental and community organisations

Public forums

Meetings

Internet

PPC Community Trust (community engagement forum meetings)

Operational environmental performance

Employment

Projects to support community upliftment submitted to trustees from beneficiary communities

See social and environmental reports.

Where possible employees are sourced from the communities in which we operate.

Trustees approve funding allocations and community projects for implementation.

14 PPC Ltd

Material issues Response strategy Status

Mar

kets

1 High exposure to South African economy

In 2012, 79% of PPC’s revenue was generated from its South African operations.

Increase revenue generated in other countries by expanding PPC’s footprint into developing/emerging market economies.

Initial focus is in sub-Saharan Africa to grow revenue earned outside South Africa to at least 40% by 2016.

27% stake secured in Habesha Cement, Ethiopia. Operations under construction; expected to come on stream in 2014.

PPC is currently engaged in four more projects which, if all successful, would add some three million tonnes of capacity or 35% to revenue by 2016.

2 Weak demand and overcapacity in South Africa, Botswana and Namibia

Existing overcapacity in South Africa, Namibia and Botswana puts pressure on selling prices in competitive markets.

Rationalise production capacity to improve utilisation and efficiency across all PPC sites.

Contain manufacturing costs. Increased focus on customer

needs, marketing and product enhancement.

Continue to evaluate and exploit all export opportunities.

Older less-efficient equipment remains on care and maintenance, pending changes in market demand.

Continue to ensure most efficient allocation of resources and strong customer focus.

Improvements at Transnet’s rail service have allowed us to maximise use of our most efficient kilns in Dwaalboom.

Upgrade of De Hoek kiln 6 completed in July 2012, ensuring that our largest production unit in the Western Cape now operates at competitive efficiency levels.

3 Imported cement into South Africa and Mozambique

Cement imports have steadily risen to around 6% of South African demand, despite fluctuations in the exchange rate.Imports into Mozambique have dampened prices.

Ensure PPC is competitive in cost, quality and customer service.

Lobbying industry bodies, government departments and customers to understand the threat of unstable supply, quality breaches and local manufacturing job losses.

Continuous focus on efficiency, quality and customer service.

Engaging with relevant industry bodies and supporting legal action to ensure fair application of quality standards has been unsuccessful.

Customer education on disadvantages of using imported product has had limited success.

MATERIAL ISSUES

Based on our approach to managing a sustainable business (page 10), stakeholder engagement and comprehensive risk assessments, we have identified the material issues our stakeholders need to consider. For convenience, each issue is identified by an icon and a number. Where a material issued is addressed in this report, it is cross referenced.

In 2012, PPC has successfully dealt with three material issues from the 2011 integrated annual report, namely meeting requirements for conversion of mineral rights, indigenisation of our Zimbabwe operations and CEO succession. These have thus been removed as material issues but are discussed elsewhere in the report.


About this report


Regu

lato

ry

4 Increasingly onerous regulatory environment in South Africa

The nature, complexity and increase of legislation is making manufacturing in SA uncompetitive.

Ensure an effective and appropriately skilled compliance function in place.

Allocate capital to ensure compliance.

Lobby industry and state bodies to ensure regulatory environment congruent with a competitive manufacturing industry.

PPC has a compliance function in place and group-wide compliance to legislation is monitored.

Western Cape modernisation programme progressing satisfactorily. Appropriate budgets in place to cater for upgrades at other sites.

Engaging with relevant industry and state bodies on: – Developing an appropriate carbon tax strategy

– Waste handling legislation – Air emission legislation.

Stra

tegi

c

5 Risks associated with acquisition, partnership and/or investment in a new country

Investments into the rest of Africa carry sovereign and operational risks.

Thoroughly assess each investment opportunity by ensuring the appropriate resources are in place, including industry and country experts, to ensure compliance with PPC’s risk appetite.

Consult with relevant government authorities.

Promote equity participation by local partners.

Use funding opportunities from development funding institutions as these projects have broad development implications and therefore fall within their mandates.

Apply lessons learnt from deals concluded.

Dedicated business development team under leadership of an experienced director in place.

A board deal committee assesses each opportunity.

Appropriate risk assessments per opportunity.

Polit

ical

6 Uncertainty on government policy direction

Clarity required to understand government’s stated intent of nationalising strategic assets.Implications of fluid empowerment criteria.

Improve relationships with government to better understand policy direction.

Lobby government through industry bodies.

The DMR has approved PPC’s current empowerment status.

The company will remain engaged with government to keep abreast of any policy developments.

7 Political or civil instability in Zimbabwe due to 2013 national elections

Any instability due to these elections will affect cement demand and may hamper production at PPC Zimbabwe.

Abide by all regulations of the government of the day and mitigate potential impact by implementing contingency plans.

Ongoing monitoring of situation and contingency plans in place.

16 PPC Ltd


Hum

an c

apit

al

8 Lack of critical skills

In all countries where PPC operates, there is competition for skills to operate a sustainable manufacturing business. This not only has the potential to affect business performance, but causes costs to spiral to keep remuneration and retention schemes market-related, especially with new entrants to the industry.

PPC continues to practise its Kambuku* people philosophy to empower, motivate and develop employees.

Fixed and performance-based remuneration and retention schemes to be market-related.

Develop existing employees at the accredited PPC Academies.

Maintain current succession planning.

Employee turnover has declined for 2012 to 14% in South Africa but risen to 10,7% in Botswana while it is 12,4% in Zimbabwe.

Internal individual perception monitor has increased to 87%.

PPC Academies continue to develop team members in leadership, sales and marketing, vocational training and bridging programmes.

9 Safety

The number of lost-time injuries remains unacceptable.

Safety remains the top priority for PPC. We continually strive to improve safety standards, develop a healthy work environment and a safety-aware workforce.

The group’s LTIFR reduced from 0,34 to 0,23 in 2012.

PPC Alive! project has added momentum to our safety efforts, resulting in fewer lost-time injuries.

Op

era

tio

na

l

10 High cost of manufacturing in SA and Zimbabwe making industry uncompetitive

Additional regulatory and compliance requirements increase the cost of doing business. The level of administered energy prices and labour costs make our products uncompetitive relative to Asian counterparts.

Ensure compliance with all applicable legislation.

Engage government on implications of current and proposed legislation and propose more efficient solutions.

Operate as efficiently as possible. Improve electrical and thermal

efficiency. Evaluate alternative forms of

energy supply.

Group-wide compliance to legislation is monitored.

PPC is a member of the ACMP, Manufacturing Circle and EIUG. These industry bodies actively engage authorities and affected parties.

Efficiency and environmental performance upgrade at De Hoek factory concluded in July 2012.

Environmental impact assessment for new Riebeeck plant in Western Cape approved.

PPC/Inowind Wind Farm project in Port Elizabeth granted preferred-bidder status.

Burning waste materials to replace coal remains delayed by authorities.

MATERIAL ISSUES continued

* See page 52.


About this report


Ope

rati

onal

11 Labour unrest in South Africa

Intense labour unrest in a number of industries in the latter half of 2012 has:

Reduced economic outlook for SA

Interrupted business execution

Brought uncertainty to existing legal wage agreements

Potential to spill into PPC’s workforce.

Respond to the dynamic economic environment in an agile and efficient manner.

Current business interruption plans in place.

Increased emphasis on the PPC Kambuku people philosophy.

Maintain PPC employees’ freedom of association with labour unions and ensure relevant agreements are in place between the company and recognised unions.

Contingency plans partially mitigated the impact of September transport strike.

Only one strike in the group of 12 days at our lime operations in November 2011.

Fundamental pillars of Kambuku: fast, open communication between management and employees and “a better life for all” remain in place throughout the group.

En

vir

on

me

nta

l

12 Carbon footprint

Due to the chemistry and energy requirements of the cement manufacturing process, significant quantities of carbon dioxide (CO2) are generated.

PPC has committed to reducing CO2 emissions, with significant progress over the past decade.

PPC will continue to improve energy and process efficiencies to reduce its CO2 emissions and carbon footprint.

Continued focus on energy management and implementation of a wide spectrum of energy efficient projects.

PPC is an active member of a number of industry and business technical and lobby groups regarding CO2 targets and potential legislation.

The potential implementation of a carbon tax will have financial implications for the cement and lime industry.

PPC also actively participates in industry/government consultative processes to ensure decision makers have a clear perspective on: – feasible CO2 reduction targets – how these should be implemented

– implications of any proposed CO2 tax

As part of the 2012 budget speech, national treasury released a price guideline for carbon tax that could impact PPC’s bottom line.

PPC is actively engaging to mitigate the potential impact through climate change committees.

18 PPC Ltd

OUR STRATEGY

Strategic priorities Status

Focus on core business

Remain focused on core business – manufacture and supply of cement, lime and aggregate products – in our current operating areas.

Expand geographic footprint

Exploit growth opportunities in other emerging markets that will enhance shareholder value by diversifying the geographic footprint of the group’s income.

Generate sustainable cash flow returns

Ensure cash flow returns that allow for sustainable investment in current and new markets.

Achieve global competitiveness

Ensure operating efficiencies, overhead costs and environmental performance are in line with regional and international benchmarks.

Develop globally competitive people

People are a key sustainable competitive advantage and PPC will continually prioritise the development of its people.

Practise sound corporate, social and environmental governance

We are committed to applying best practices in corporate governance and caring for the communities and environment in which we operate.

Achieving In progress

Our strategic priorities

Our aim is to grow into a leading emerging-market business, starting in sub-Saharan Africa. As we expand into the rest of Africa, it is crucial that we do not lose focus on the company’s performance and image in its historical markets. As such, two key strategies support our vision:

Enhance our industry-leadership position in southern Africa

Expand our operational footprint into other parts of sub-Saharan Africa

Enhance our industry-leadership position in southern AfricaInternally we refer to this as “keeping the home fires burning”. The successful execution of this strategy requires that we improve our sales, marketing, customer focus and overall value offering while retaining our focus on operational and logistical efficiencies and good corporate governance. Renewing or upgrading equipment, especially relating to environment or efficiency, is also an integral part of the business. Acquiring businesses with a good strategic fit complements this leg of our strategy.

Expand our operational footprint into other parts of sub-Saharan AfricaIn this strategy, internally referred to as our “rest of Africa” strategy, we have set ourselves an initial target to grow the revenue earned outside of South Africa from the current 20% to over 40%.

We will target countries with high potential for infrastructure development, low per-capita cement consumption and experiencing current cement shortages. We will avoid areas, especially on the east coast, which are susceptible to imports. As sub-Saharan Africa is a sizeable terrain, we have a plan to tackle this strategy in stages as shown on the next page.


About this report

Cement 20111

million tonnes

GDP growth2

%

Cement 20163

million tonnes

Current operating areas 13 3,6 164

Current focus areas 20 4,1 305

Future focus areas 32 7,0 625

Total 65 5,4 108

1. PPC research, Cemnet 2. Real GDP growth 2011– 2016 IMF, PPC calculations 3. PPC estimates4. Cement growth = 1 x GDP5. Cement growth = 2 x GDP

Expanding our operational footprint into other parts of sub-Saharan Africa

Tunisia

LibyaEgypt

Eritrea

Djibouti

Somalia

UgandaRwandaBurundi

MadagascarZimbabwe

MozambiqueBotswanaNamibia

Angola

DRC

Zambia Malawi

Tanzania

South Sudan

Ethiopia

Kenya

Congo

E Guinea

Cameroon Central ARNigeria

NigerMaliMauritania

Senegal

Gambia Guinea Burkina Faso

LiberiaGhanaSierra Leone

AlgeriaMorocco

WesternSahara

Chad Sudan

Swaziland

Lesotho

South Africa

20 PPC Ltd

Case studyPPC Women’s Forum

developing potential is key to our growth

empowered to deliver

Empowerment for our future

As part of Women’s Day celebrations, PPC hosted its first annual Women’s Forum conference in August 2012 under the theme ‘First me, then we, then the world’.

8


Commentary

Keynote speakers at the conference included Dr Mamphela Ramphele, founder of Citizens Movement for Social Change and chairperson of the Industrial Development Corporation, Monhla Hlahla. Each presenter shared a wealth of knowledge and expertise in their respective fields with topics ranging from self-leadership to self-awareness and financial wellness.

The aim of PPC’s Women’s Forum is to provide a platform for women in the workplace to voice issues that directly affect them, share ideas, inspire and learn. Supported by the PPC board of directors and championed by the chief financial officer, Tryphosa Ramano, the forum was launched in 2011 and is currently being piloted at the group’s head office in Sandton.

As part of PPC’s business strategy, the forum aims to be a change agent in PPC in attracting, nurturing and advancing female talent to effectively lead the company and encourage creativity and innovation. The career path for women at PPC has expanded and, over the last decade, the company has recorded a 67% increase in its female staff ratio and fourfold increase of women in

management roles. At present, PPC employs over 400 women and aims to achieve a 26% female demographic by 2016.

The difference between a good company and a great one is its people. At PPC, we recognise the importance of attracting the best in the country to maintain our position as the leading cement manufacturer in southern Africa. We believe that by providing the opportunities, resources and means, we enrich our female staff and assist them in reaching their full potential.

22 PPC Ltd

CHAIRMAN’S REPORT

Team PPC must be congratulated for achievements in a number of areas this past year, including a strong operating performance and the finalisation of important strategic issues.

PerformanceThe group increased normalised earnings by 11% and remains financially sound with a healthy balance sheet, strong cash generation and sufficient capacity for expansion. During the year the board declared total dividends of 146 cents per share (2011: 130 cents), translating to a dividend cover of 1,26 times, well within our stated dividend policy.

PPC’s revenue growth was achieved despite volumes coming under pressure in most divisions. The exception was in Zimbabwe, which showed strong sales volume growth for the fourth successive year. Revenue from countries outside South Africa rose to 21%, mainly on significant improvements in Zimbabwe.

Economic environmentDuring 2012, the South African economy struggled to gain momentum, with reduced growth in the third quarter of the calendar year. A further slowdown is expected in the fourth quarter due to a combination of a slowing global economy as well as labour disruptions in the mining and adjacent industries.

The South African construction industry continues to wait in readiness for our government’s announced R845 billion infrastructure programme. The national ratio of gross fixed capital formation to gross domestic product is currently at some 19%, whereas it should be above 25% to begin addressing some of our socio-economic and infrastructure backlogs.

The residential building market remains under pressure, largely due to the ratio of household debt to disposable income which is still elevated at levels above 70%. This high level of indebtedness has meant that despite the South African Reserve Bank’s efforts to lower interest rates to record lows, extension of new mortgage loans remains subdued.

We are closely watching developments in the unsecured lending market, as evidence suggests that around one quarter of all loans extended to date are being used for building and renovations. The growth of these loans is likely to be unsustainable.

The company is also concerned about the violent labour unrest that has gripped our nation. A lasting resolution must be found where labour, government and the private sector can enjoy mutually beneficial relations.

11

Team PPC’s achievements and

strong operating performance in

challenging markets reflect the

group-wide commitment to

realising strategic goals.

Revenue from outside South Africa

rose to

21%

Bheki Sibiya | Chairman

2


Commentary

Given the rather subdued outlook for the South African economy in the short to medium term, we remain excited about prospects elsewhere in sub-Saharan Africa. Most countries, including Ethiopia where we have made our investment into Habesha Cement Company, continue to record strong economic growth rates. PPC is well placed to assist these countries to achieve their infrastructural development ambitions.

Board Several new appointments and changes in responsibility were made to the board and its committees during the year.

Mr Jerry Vilakazi’s three-year term as a representative of the PPC consortium of strategic black partners ended on 1 March 2012. Mr Vilakazi made a valuable contribution to the board and company during his term.

Mr Sydney Mhlarhi was appointed as a non-executive director, representing the PPC consortium of strategic black partners on 1 March 2012. Mr Mhlarhi is a chartered accountant with over 14 years’ experience in investment banking. He was also appointed as a member of the deal committee and remuneration committee of the board.

Ms Bridgette Modise, who was appointed to the board and audit committee in December 2010, was appointed to the risk and compliance committee from 1 March 2012. Her 15 years’ auditing experience has further strengthened this committee.

Corporate governanceTo elevate the board’s corporate governance structures to be in line with global best practice, PPC appointed Phuti Semenya as chief audit executive in May 2012. Phuti is a chartered accountant with extensive experience in external, internal and forensic auditing.

The leniency agreement between PPC and the Competition Commission concluded during 2009 remains intact and we continue to cooperate fully with the commission.

TransformationI am pleased to announce that PPC’s second-phase broad-based black economic empowerment transaction of R1,1 billion was approved, ensuring that the company meets the Mineral and Petroleum Resources Development Act’s requirements and facilitating conversion of our old-order mining rights to new-order mining rights. Two-thirds of the shares were allocated to employees of PPC’s South African businesses, ensuring that our staff are well aligned with shareholders.

This transaction has also given the company the opportunity to align its corporate structure with our “rest of Africa” strategy, allowing for increased efficiencies and

improved risk management. In the year ahead we will create a separate South African entity as well as separate international operating entities. We also used this opportunity to rename the holding company from Pretoria Portland Cement Company Limited to PPC Ltd. We believe PPC is a strong brand in our country as well as across the African continent and that the name change will allow us to further harness the power of this admirable brand.

PPC has received an indigenisation certificate for its operations in Zimbabwe. The certificate acknowledges our compliance with both the spirit and letter of the Zimbabwean Indigenisation and Economic Empowerment Act.

ProspectsWe continue to anticipate an investment-led economic growth path for South Africa, propelled by government’s planned infrastructure programme. Stabilisation of the euro-zone nations is also critical to boost local economic growth, given the strong trade linkages that exist.

Our trading environment will remain tough and competitive, however, PPC’s strategies in the home territories and the rest of Africa position this formidable business well for the future.

It is a great pleasure to introduce Ketso Gordhan as the incoming chief executive officer of PPC Ltd. Ketso joined us on 1 November 2012 as CEO designate and will take over as CEO from 1 January 2013. I am confident he will guide PPC to even greater heights as we continue on our ambitious journey to become a leading emerging-market business.

I also extend my sincerest thanks to retiring CEO Paul Stuiver, who has headed PPC since May 2009 and took over at a challenging time; steering the organisation through the Competition Commission investigation and during tough, recessionary economic conditions. Paul hands over a strong, well-capitalised PPC on which Ketso can build to realise the company’s vision.

I would like to extend my sincere gratitude to my fellow board members as well as Team PPC for their combined efforts and commitment during this financial year. I also express my appreciation to our customers, shareholders and other stakeholders for their continued support.

Bheki SibiyaChairman 12 November 2012

1

24 PPC Ltd

CHIEF EXECUTIVE OFFICER’S REPORT

A challenging but rewarding yearDespite another year in a tough economic environment,

Team PPC delivered good results through improved

revenue and operating efficiencies. We also addressed a

number of key strategic issues during the year.

The key strategic issues include CEO succession,

conversion of our South African mineral rights and our

first new investment into sub-Saharan Africa. Post year

end, we announced that we had achieved an indigenisation

certificate for our operations in Zimbabwe. These three

issues were highlighted as some of the most significant

risks facing the company in last year’s report.

To focus on the underlying operational performance of

the company, one has to exclude the accounting treatment

of the black economic empowerment (BEE) transaction

concluded toward the end of the financial year, hence my

reference to “normalised earnings” below.

The highlight of our 2012 results was the good operating

performance by the cement and lime divisions. This

translated into group revenue increasing by 8% to

R7,35 billion, improvements in EBITDA and operating

margins with EBITDA rising by 8% to R2,33 billion,

normalised earnings increasing by 11% and overall

dividends for the year growing by 12%.

This was achieved in an environment characterised by

overcapacity, competitive pricing and rising energy costs

and should assure shareholders that PPC has reacted

appropriately to market dynamics and the prevailing

economic circumstances.

Our South African operations, which accounted for 79%

of group revenue, were also impacted by labour unrest in

the mining industry and a nationwide strike in the

transport industry in the final quarter of our financial year.

Although the PPC operations themselves did not

experience any recent labour unrest or strikes, they did

suffer the knock-on effects of these disruptions. We

estimate this reduced our overall earnings performance

for the year by some 2%.

In Botswana, our cement and aggregate operations were

affected by a slowdown in construction activity, mainly

as a result of reduced government spending on

infrastructure projects.

2/10

11

The highlight of our 2012 results was

the good operating performance.

This translated into group revenue

increasing by 8% to R7,35 billion,

EBITDA rising by 8% to R2,33 billion,

normalised earnings increasing

by 11%.

Dividends for the year

increased

12%

Paul Stuiver | Chief executive officer


Commentary

On a more positive note, we again enjoyed strong growth

in cement demand in Zimbabwe and for our lime products

in Zambia and Democratic Republic of Congo (DRC).

Progress on key objectivesLast year I highlighted a number of objectives for 2012,

including our strategies to keep the home fires burning in

southern Africa and to expand into the rest of Africa.

With regard to our “home fires”, we completed the

acquisition and integration of Quarries of Botswana and

announced our acquisition of Pronto Holdings, a

prominent ready-mix and fly ash supplier in central South

Africa during the year.

The PPC team must be congratulated for their efficiency

improvements and cost containment that resulted in

production costs for cement in South Africa rising by only

3%. This was despite a 22% increase in electricity prices

that now make up around 10% of our total costs. Similar

improvements were achieved in the lime division.

Key cost component increases for cement manufacturing in South Africa

% movement

Salaries (R) +4%

Depreciation (R) +5%

Coal (R/t) -2%

Electricity (R/t) +22%

Maintenance (R/t) -3%

Packaging (R/t) +1%

Other (R/t) +5%

Some key drivers in cost containment were improved rail

services from Transnet which allowed us to produce more

from our most efficient factory, Dwaalboom, the reduction

in employee numbers during 2011 and reconfiguring our

Port Elizabeth factory into a single-product facility.

We continued with many customer-focused initiatives

including further product enhancements and customised

solutions targeted at specific market segments. These

contributed to PPC retaining its premium quality/price

position and achieving an average 5% selling price

10

increase in the very competitive South African cement

market. Selling price increases in Zimbabwe were also in

line with local inflation.

The first phase of our Western Cape modernisation, a

R280 million upgrade at the De Hoek factory, was

completed within budget and has exceeded our

expectations since being recommissioned in July 2012.

We did not start the second phase of our Western Cape

modernisation, the replacement of two ageing cement

kilns at our Riebeeck factory, as environmental

authorisation for this phase was only received towards the

end of our financial year. The environmental authorisation

includes some new requirements that will be incorporated

into a redesign to be completed during 2013.

I am particularly pleased that the additional focus and

awareness generated by our PPC Alive! safety campaign

resulted in a 26% reduction of on-duty injuries and in our

injury frequency rate improving from 1,7 to 1,2 lost-time

injuries per million hours worked.

With regard to environmental emissions, the upgrade at

the De Hoek factory has resulted in a lower carbon

footprint and dust emissions. We also facilitated a project

to erect a 60MW wind farm on one of our properties. As

part of this project, PPC will in future source some 10% of

its electric power requirements from renewable energy.

The PPC Women’s Forum that was established in 2011

continued to further our ambition to attract, nurture and

advance female talent at PPC. Although we still have

room to improve, considerable progress has been made

with the racial and gender profile of PPC employees and

the PPC board.

Finally, and with regard to keeping our home fires burning,

it was significant that the main beneficiaries of our second

black economic empowerment transaction were our

South African employees who will share in 68% or

R730 million of the total transaction value of R1,1 billion.

Added to our first BEE transaction in 2008, our employees

now make up a significant shareholder component by

collectively owning more than 7% of the company.

10

9

12

8

26 PPC Ltd

Rest of Africa strategySub-Saharan Africa currently consumes some 70 million

tonnes of cement per annum or an average of 90kg

cement per person each year. This is below the global

average, even for emerging markets, with Brazil

consuming 300kg per person per annum, South Africa

200kg and India 180kg. Economies in sub-Saharan Africa

are projected to grow over 5% per annum, which implies

that cement demand in the region will grow by as much

as 40 million tonnes per annum during the next five years.

Although PPC, with a total current capacity of around

8 million tonnes of cement per annum, does not have the

capacity or resources to erect all 40 million tonnes of new

capacity required in sub-Saharan Africa during the next

five years, it is realistic to target our involvement in projects

totalling 3 to 4 million tonnes during the next five years. If

achieved, this would result in significant growth for PPC

and increase revenue generated outside South Africa

from the current 21% to around 40% of total revenue.

Unfortunately we were not successful in our bid for CINAT

in the DRC, highlighted in last year’s report.

Our 27% investment in Habesha Cement of Ethiopia

announced during the year has the potential to increase

PPC’s non-South African revenue by around 5% from

2015. Phase 1 of the Habesha project involves establishing

a new 1,4 million tonne per annum cement factory near

Addis Ababa, which should be completed towards the

end of 2014.

CHIEF EXECUTIVE OFFICER’S REPORT continued

The Habesha factory is being built in a way that will allow

a relatively quick doubling of capacity to 2,8 million

tonnes per annum in subsequent years. This would further

increase Habesha’s contribution to PPC’s non-South

African revenue. In addition, our involvement with

Habesha will also provide opportunities to increase our

shareholding in the company and to establish aggregate

and ready-mix operations in Ethiopia in due course.

In addition to the Habesha project, we have announced

that we are currently pursuing four other projects in sub-

Saharan Africa. Much of the time-consuming work

involved with understanding regional opportunities and

markets, confirming limestone reserves and identifying

suitable local partners has been completed during the

past two years and, therefore, we are confident we

will make considerable progress on these projects in the

year ahead.

1

Ethiopia and Habesha Cement Company at a glance

Ethiopia’s population is 85 million with an estimated cement demand of around nine million tons per annum. Ethiopia’s GDP is forecast to grow at approximately 7% per annum for the next five years. Project has commenced with commissing expected during 2014. Project cost is $130 million of which one third is equity and the remainder is debt financing from Development Bank

of Ethiopia. PPC has secured a 27% stake with an equity investment of $12 million. 53% of the company is owned by 16 000 local Ethiopians. Plans are in place to double capacity after first line is commissioned.


Commentary

OutlookSouth African industry cement sales volumes to June

2012 showed cement demand growing by 6,9%

compared to 2011. However, given the impact of labour

unrest in the mining and transport sectors, it is likely that

much lower numbers will be reported for the rest of 2012.

Other local developments and continued weakness in the

global economy suggest that economic growth will

remain subdued into 2013.

We expect cement demand in Zimbabwe to continue

growing and cement demand in Botswana to improve as

that government has now released some projects that will

begin in 2013.

We continue to monitor activities by new entrants to the

South African cement market. If their activities progress

according to their own announcements, they will not

impact during our 2013 financial year. This presents

further opportunity to enhance our leadership position in

the region.

Finally, we look forward to reporting on significant

progress with our “rest of Africa” strategy in 2013, which

will ensure significant growth over the next four to

five years.

11,12

Remarks as outgoing CEOAt the time of writing, I have spent six hectic weeks with

incoming CEO Ketso Gordhan visiting most of our

operations, some of our projects in the rest of Africa and

meeting with most of our major customers and

shareholders. During this time, Ketso has built great

rapport with PPC employees and developed a keen

understanding of our operations and strategic issues.

Ketso’s own blend of experience and insights will add

considerably to the PPC team and I am very confident that

he will lead PPC to greater heights.

I thank my PPC colleagues and our many stakeholders,

including customers, suppliers and investors, for their

contributions and support during my time as CEO.

With their continued commitment and support, PPC is

ready for whatever the future holds.

Paul Stuiver

Chief executive officer

12 November 2012

1,2

28 PPC Ltd

CHIEF FINANCIAL OFFICER’S REPORT

OverviewTeam PPC delivered a good financial performance despite another year of tough economic conditions. Headline earnings of R971 million, before the impact of the IFRS 2 charges on our two BBBEE transactions, were 11% higher than 2011.

Cash generation remains strong and the group was able to fund its capital requirements, dividend payments and acquisitions almost entirely from operating cash flows, with limited debt added during the year.

The group successfully completed its second BBBEE transaction, which facilitates conversion of its mining rights.

RevenuePPC’s overall cement volumes declined 3% from 2011 after lower sales in Botswana and reduced exports, partly offset by growing demand in Gauteng, Port Elizabeth and Zimbabwe.

The impact of the transport strike and heavy rains in the last quarter affected our South African cement sales volumes, which ended 1% below last year’s levels while cement selling prices rose 5% with slightly lower price increases realised in Botswana.

In Zimbabwe, improved selling prices and a weakening rand against the US dollar, together with volume growth, enabled revenue to increase by double digits in rand terms.

Following intense competition in our neighbouring countries, our cement exports into these countries have declined from the previous year. Competition in these markets derives from both local producers and imports from Asia.

Revenue from the rest of Africa increased to 21% of total revenue following the double digit growth achieved in Zimbabwe partly offset by the lower volumes in Botswana.

Team PPC delivered a good financial

performance, despite another year

of tough economic conditions.

Cash earnings per share up

16%

Tryphosa Ramano | Chief financial officer

Financial overviewChange

%2012

Rm2011

Rm2010

Rm

Revenue 8 7 346 6 826 6 807EBITDA* 8 2 327 2 146 2 483Operating profit* 9 1 866 1 710 2 115Earnings per share* 11 185 166 213Total dividend 12 146 130 175EBITDA margin (%)* 31,7 31,4 36,5Operating margin* 25,4 25,1 31,1

*Before impact of BEE IFRS 2 charges.

10


Commentary

Cost of sales and operating expensesThe group continues to focus on cost containment and operational efficiencies, with the combined effort from our operational teams restricting cost of sales growth to only 7% on the back of double-digit increases in certain input costs.

South African cement costs increased by only 3% on a rand/tonne basis. All major cost component increases were kept to low to mid single-digit increases, except electricity, which rose 22% on a rand/tonne basis. Benefits of the restructuring programme finalised in 2011 were evident with salaries only increasing 4%.

Zimbabwe cost of sales per tonne grew 4% in dollar terms following high cost increases, with diesel and electricity rising by some 40% and 25% respectively. Production problems in the beginning of the year resulted in a six-week interruption which required importing clinker from South Africa at higher transport costs.

Lime cost of sales increased by 5% due to real price increases in power and outbound logistics, partly offset by savings in coal costs and operational efficiencies. Aggregate’s cost of sales increased marginally above volume growth.

Administration and other operating expenses were 9% above 2011 at R671 million (2011: R616 million). The main drivers for the year-on-year increase were the higher IFRS 2 charge on the group’s long-term incentive schemes following the 25% appreciation in PPC’s share price over the year and the new forfeitable share plan awards made in the current year (in part, a catch-up for 2011 when no awards were made), R15 million transaction costs incurred to implement the second phase of our BBBEE transaction, combined with increased marketing spend and the full costs of running our Mozambique operations which were in effect for one month in 2011.

In 2011, PPC finalised a voluntary restructuring programme to reduce overheads. We believe the company has realised benefit from this programme, and if once-off items from 2012 are excluded, current-year overheads would be in line with costs recorded last year.

EBITDAThe group recorded an EBITDA of R2 327 million, 8% above 2011, with an EBITDA margin of 31,7% (2011: 31,4%).

EBITDA for the cement division rose 7% to R2 087 million (2011: R1 942 million) and the EBITDA margin was maintained at 33,4%, with Zimbabwe compensating for the impact of lower volumes in Botswana and export markets. Our lime operations’ EBITDA increased by 22% to R188 million (2011: R154 million), with the EBITDA margin strengthening to 22,5% (2011: 19,9%) on good cost control and a contractual pricing formula. Following lower volumes in Botswana, increased pricing pressures and the costs of integrating the newly acquired quarries in Botswana, our aggregates operations’ EBITDA was in line with 2011 at R56 million, but at a reduced margin of 18,7% (2011: 20,7%).

Net finance costsNet finance costs were R347 million (2011: R325 million), with the benefits of lower interest rates partly offset by reset funding rates on the preference shares of the BEE 1 transaction after the abolishment of STC from 1 April 2012. Interest of R6 million was capitalised to property, plant and equipment, mainly due to the upgrade of our kiln 6 at De Hoek.

TaxationThe effective taxation rate for 2012 was 39,7% (2011: 37,6%). The increase can be ascribed to the BEE IFRS 2 charges not being tax deductible and increased withholding taxes incurred on dividends received from Zimbabwe (2012: R31 million; 2011: R7 million), partly offset by no STC being recorded on the company’s interim dividend after the implementation of dividend tax from 1 April 2012.

Our long-term guidance on an effective group taxation rate is between 32% and 33%. This may change depending on potential acquisitions and the applicable ruling taxation rate in the various jurisdictions.

EarningsEarnings per share, before BEE IFRS 2 charges, were 185 cents (2011: 166 cents), reflecting an 11% improvement. Non-South African operations contributed 30 cents per share (2011: 32 cents per share) or 16% of group earnings.

Statement of financial position and cash flowChange

%2012

Rm2011

Rm2010

Rm

Property, plant and equipment 5 4 483 4 287 4 175Intangible assets 48 139 94 78Net working capital 2 807 794 636Net debt 2 3 337 3 286 3 281Cash generated from operations 9 2 284 2 102 2 442Investment in property, plant and equipment 26 609 483 613

30 PPC Ltd

Non-current assetsDuring the year, the group invested R609 million in property, plant and equipment (PPE) with the most significant item being the De Hoek kiln 6 upgrade project at R159 million. Depreciation charges were R439 million (2011: R417 million). With the acquisition of the quarries in Botswana, R26 million of the purchase consideration was attributable to PPE. Translation adjustments amounted to R12 million (2011: R81 million) after the rand weakened against both the US dollar and Botswana pula.

Capital expenditure on property, plant and equipment for 2013 is estimated to be between R550 million and R650 million.

Following the acquisition of the quarries in Botswana, and in terms of IFRS 3 Business Combinations, R22 million was recorded under intangible assets for mining rights and reserves, while R6 million was reflected as goodwill. The group invested R31 million (2011: R34 million) on ERP systems and software.

Net working capitalThe group’s net working capital at year end was R807 million (2011: R794 million). Inventory levels have increased, with year-on-year growth coming from lower September sales resulting in increased raw material and in-process stock, combined with the impact of the devaluation of the rand against the US dollar and Botswana pula for stock held at our foreign operations.

Accounts receivable were R820 million (2011: R901 million) after lower sales in September 2012 which had three fewer selling days than the prior September, combined with the impact of the transport strike at month end and declining sales in the latter part of September.

Management continues to focus on reducing working capital.

Cash flowThe group continues to generate strong cash flows and its cash conversion ratio remains high at 98% of EBITDA (2011: 98%). Operating cash flows before working capital

changes were R2 137 million, a 9% improvement on the R2 127 million in 2011.

Net cash flow from operating activities was 69% higher than last year at R945 million (2011: R559 million) as a result of increased operating cash flows and lower dividend payments, partly offset by increased investment in working capital.

The company was able to fund its normal operating cash flow requirements, capital investments and acquisitions as is evident from the graph shown below.

Capital structureNet debt at year end was R3 337 million (2011: R3 286 million), translating into a net debt to EBITDA ratio of 1,4 times (2011: 1,5 times), and EBITDA interest cover of 6,2 times (2011: 5,9 times).

No covenants were breached during the year under review.

Debt remains within the stated target range and the group had borrowing facilities of R4 221 million of which it had used 55% at year end. We continue to explore opportunities to optimally fund the current business and future acquisitions.

DividendsAfter taking capital requirements, the current and forecast trading position, cash flows and potential acquisitions into consideration, a full-year dividend of 146 cents per share has been declared, 12% above 2011. The 2012 dividend cover was 1,3 times, which is in line with 2011 and remains within the group’s target dividend cover range.

The dividend yield at year end remains healthy at 5,0% (2011: 5,6%).

The total dividend paid during the year was R706 million (2011: R876 million).

The group does not anticipate changing the targeted dividend cover range of 1,2 to 1,5 times cover.

CHIEF FINANCIAL OFFICER’S REPORT continued

Cash �ow

Operatingcash �ows

Workingcapital

Stated capital – FSP scheme

Subsidiaries and associates

Net �nancecosts

Taxationpaid

Net capexspend

Dividendspaid

2 500

2 000

1 500

1 000

500

0

R2 317m (R33m) (R90m)(R210m)

(R216m)

(R417m)

(R638)

(R706)


Commentary

AcquisitionsThe acquisition of three quarries in Botswana for a total of R52 million was finalised in October 2011. This makes PPC the leading supplier of aggregates in the Botswana market and extends our footprint throughout the country. Due to the slowdown in the Botswana economy before and post the acquisition of the quarries, this new business posted an operating loss of R4 million. We remain confident about the long-term potential of the business.

In June 2012, PPC concluded the first phase of its acquisition of Pronto Holdings (Pty) Limited, where 25% of the equity was purchased for R70 million and funded from internal cash generation. A further 25% of the equity will be purchased in May 2013 and the remaining 50% in 2014. The total consideration payable for the full 100% should not exceed R400 million. For the period under review, PPC’s share of Pronto’s earnings was R7 million.

Further to PPC’s strategy of expanding into Africa, the group concluded a 27% equity investment in Habesha Cement Share Company in Ethiopia for R102 million. Habesha is building a US$130 million cement plant with annual capacity of 1,4 million tonnes and plans to commission the plant in 2014.

The group is currently pursuing four further opportunities in other African countries. These are at different stages of investigation, with one opportunity at final due-diligence stage.

BEE transactionThe second phase of the company’s BEE transaction, valued at R1,1 billion, was approved by shareholders in September and meets the requirements of the mining charter’s 2014 equity ownership requirements. This will result in a further 6,5% black ownership in the group post the issue of 39,3 million new PPC shares, which were listed on JSE Limited on 1 October 2012.

The transaction, which will be facilitated by PPC through a notional vendor funding (NVF) mechanism, comprises three main components (the BEE vehicles) as noted below. The BEE vehicles will be restricted from disposing or encumbering their shares during the seven-year NVF period.

Percentage of PPC held post

BEE transaction

Strategic black partners 1,76%Employee share trust 4,42%Broad-based black women’s trust 0,32%

During the NVF period, the participants of the scheme will be entitled to 20% of the ordinary dividend declared by PPC, with the balance of 80% going towards the NVF structure. At the end of the NVF period, participants will be allocated the remaining shares after the NVF balance has been settled, and will become entitled to 100% of the dividends. We estimate the transaction will have a 1,3% dilution impact on earnings during the transaction period.

The total IFRS 2 charge on the transaction was calculated at R351 million, of which R112 million has been recognised in the 2012 financial year, with the balance being amortised over the NVF period.

PPC also cancelled 20 million treasury shares prior to implementing this phase of the BBBEE transaction. These shares were initially purchased by PPC to mitigate the potential dilution to shareholders during the first phase of our BEE transactions. In addition, the transaction will allow PPC to streamline its corporate structure by creating separate South African and international operating entities, aligning the company’s structure with its strategy to expand its footprint on the African continent.

At the same time the holding company, Pretoria Portland Cement Company Limited, has been renamed PPC Ltd with effect from October 2012.

Tryphosa RamanoChief financial officer12 November 2012

32 PPC Ltd

integrated review of 2012

meeting and anticipating market needs

innovation

1 http://www.dbsa.org/Research/Documents/DBSA%20State%20of%20SAs%20Economic%20Infrastructure%20Report%202012.pdf

2 http://www.nra.co.za/content/Annual_Report-Sanral2012~1.pdf3 http://www.info.gov.za/aboutsa/transport.htm4 http://www.csir.co.za/publications/pdfs/2.2_SS_BE_

transport&logistics_chap1.pdf5 www.concretetrends.co.za/magazines/vol16new/files

South Africa’s total road network spans some 154 000km of paved roads and 454 000km of gravel roads1. South African National Roads Agency Limited (Sanral) is responsible for the design, construction, management and maintenance of the country’s road network of over 16 000km, which is expected to grow to 35 000km2.

Government boosted transport infrastructure spending to R66 billion in the 2011/12 financial year and is expected to increase this to R80 billion by 2013/14. The investment is spread across the country, with urban and rural parts expected to benefit from development, and direct and indirect job creation3.

Historical underinvestment in South Africa’s roads is reflected in the age of the national road network; some 78% is older than the original 20-year design life. The huge backlog in road maintenance and rehabilitation is a major challenge and will increase the market for road-stabilisation cement products.

Case studyPCC Cement has long been committed to developing the highest quality and standards in the construction and related industries.

Sureroad


Integrated review of 2012

1 http://www.dbsa.org/Research/Documents/DBSA%20State%20of%20SAs%20Economic%20Infrastructure%20Report%202012.pdf

2 http://www.nra.co.za/content/Annual_Report-Sanral2012~1.pdf3 http://www.info.gov.za/aboutsa/transport.htm4 http://www.csir.co.za/publications/pdfs/2.2_SS_BE_

transport&logistics_chap1.pdf5 www.concretetrends.co.za/magazines/vol16new/files

The chemical stabilisation of soil with cement and lime has been widely used for over 40 years as a cost-effective option of improving materials to produce durable roads. A limited-scope research project was undertaken in 2004 by the CSIR (Council for Scientific and Industrial Research) to update the technical recommendations for highways (draft 13 of 1986). This report recommended using cement in the 32.5MPa strength class to stabilise road layers.

At the end of the review period, PPC launched its purpose-designed SureRoad product to meet CSIR recommendations for road construction after an extensive testing programme. SureRoad, a CEM II product, is manufactured by adding an extender or blend of extenders (fly ash, blast-furnace slag or limestone). The CEM II Portland-composite cements are ideal for constructing cement-stabilised substrate layers for roads. Our performance testing has shown excellent results with a range of soil types and different road classes.

Road construction with concrete

Historically, the cost of using concrete instead of conventional material like asphalt in road construction was prohibitive. Concrete is, however, far more durable, delivering roads with an expected lifespan of up to 40 years, compared to 25 years for conventional roads. With increasing oil and bitumen prices, concrete has also become a more competitive road-building material. The development of specialised, ultra-thin concrete technology is ideally suited for labour-based construction4.

A recent article in Concrete Trends concluded “Concrete is the ideal choice for environmentally sensitive and economically sustainable highways with excellent durability and design life. This long-term performance reduces frequent resurfacing and rehabilitation, and the consumption of valuable resources”5.

34 PPC Ltd

Summary of integrated performance

Section in 2011 we said we would progress target 2013

financialMaintain 1,2 to 1,5 times dividend cover.

Capital expenditure estimated to be between R700 and R800 million.

Gross debt: EBITDA <3.

Dividends declared in 2012 represent cover of 1,26 times.

Actual capital expenditure increased to R609 million

Gross debt: EBITDA = 1,4.

1,2 to 1,5 times dividend cover.

Capital expenditure estimated to be between R550 and R650 million.

Gross debt: EBITDA <3.

Ongoing improvement with further assurance on non-financial indicators.

One additional indicator assured this year and another underwent a readiness assessment.

To expand the scope of some existing assured indicators to other countries in which we operate.

Ongoing improvement in scope, particularly Botswana and Zimbabwe, as systems are integrated.

2012 reported includes some additional information on Zimbabwe and Mozambique.

Continue to improve disclosure on Zimbabwe.

Continue to improve stakeholder engagement using surveys, forums and database management tools and incorporate pertinent feedback into future strategies and initiatives.

Some improvement in formal stakeholder engagement systems during the year.

Ensure further progress on formal stakeholder engagement systems cover all key stakeholders.

Effective PPC environmental stakeholder forums functioning at all PPC cement, lime and aggregate sites, with at least quarterly stakeholder meetings.

Stakeholder engagements continue to support site-specific programmes. Frequency of these forums optimised to at least bi-annually. A group-wide stakeholder survey was used as another tool to reach our stakeholders. The quality of engagement with our government stakeholders is improving as a result of improved knowledge on cement production as well as our approach to communicating transparently.

Monitor and maintain forums.

Maintain enterprise risk management framework.

Rolled out across the organisation.

Embed risk management in the organisation.

Sustainability reporting

Stakeholder engagement

risk

2012 integrated performance scorecard




Further training and implementation on Companies Act.

Implementation requirements of Companies Act were completed and included adoption of a new memorandum of incorporation and conversion of par value to no-par value shares.

In 2013 our target is better compliance reports from unit compliance officers and to improve web-based support on compliance issues.

Ongoing training on Competition Act.

Compulsory, annual refresher training.

Continue reducing the gap between target and actual achievement.

The first five-year social and labour plans have been finalised and all mining charter requirements fulfilled.

New five-year social and labour plan engagements being submitted to DMR – due by June 2013.

Independently verified annual reports on implementation of social and labour plans submitted to DMR.

Readiness verification process by independent auditors completed this year on social and labour plans (page 109).

Full external assurance planned.

People development: maintain steady progress against mining charter targets.

Training increases to 5,7% of total payroll spend (leviable payroll). All PPC academies continued to function in 2012.

Maintain current people development performance.

Organisational and succession plan: further appointments in line with the three-year senior management plan formulated in 2009.

Successful appointment of new CEO.5% overall increase in employment equity. Female representation increased to 20% of workforce.

Increase black females and people with disabilities in employment. Increase black females in management and technical positions.

Over R9 million in corporate social investment planned for 2012.

PPC spent over R7,4 million on various creative projects which changed people’s lives and generated income.

Continue to ensure that all PPC’s CSI spend is in line with our REAL philosophy.

Continue projects in South Africa, Zimbabwe and Botswana.

In Botswana, we have engaged government to identify possible initiatives.

In Zimbabwe, work has begun on classrooms for a new secondary school at Fairbridge – Umguza Rural Council and construction will continue into 2013.

Continue projects in South Africa, Zimbabwe and Botswana.

compliance

mining charter

our people

communities

36 PPC Ltd


Of ten identified and DMR-approved social and labour plan projects, four more major projects planned to start in 2012.

Good progress made on two projects while an additional project in Dwaalboom is in the development phase; see page 62.

Five-year social and labour plans for all ten PPC sites will be submitted to DMR by June 2013 and new projects identified.

Ongoing development and mentoring of seven black-owned businesses that have benefited from PPC Ntsika Fund’s total investment of R56 million.

PPC Ntsika Fund has now invested R59 million in six black-owned businesses. PPC achieved 100% for enterprise development on DTI’s BBBEE scorecard.

Continue developing and mentoring viable black-owned businesses that have benefited from PPC Ntsika Fund’s investment.

Meet mining charter targets and DTI codes of good practice.

88% or R3,5 billion (2011: R3,2 billion), up from 79% in 2011. For 2012, we met mining charter targets, except for contributions by multinationals.

Ensure all targets are met in terms of DTI and DMR preferential procurement.Project team established to improve contributions by multinationals we do business with.

Zero fatalities,LTIFR = 0 (long-term target).LTIFR = <0,25 (2012).

Zero fatalities.2012 LTIFR = 0,23.

Zero fatalities,LTIFR = 0 (long-term target).LTIFR = <0,18.

Implement rejuvenated safety interventions.

Engagement and road map for PPC Alive! completed.

Roll out PPC Alive! throughout organisation.

Maintain ASPASA and OHSAS certifications.

Maintained. Maintain ASPASA and OHSAS certifications.

Aim to have 100% of PPC employees know their HIV status.

Everyone who wants to know his/her status currently does.

Continue to encourage employees to know their status. Maintain convenient and free access to confidential counselling and testing.

Sites to remain SANS 16001 certified.

Sites operate HIV/Aids management system conforming to SANS 16001 standard.

Sites to remain SANS 16001 certified.

Socio-economic development

enterprise development

preferential procurement

Safety and health

Summary of integrated performance continued

2012 integrated performance continued




Monitor and maintain implementation of green procurement policy.

A new supplier checklist has been adopted for collection of relevant information.

Revise green procurement policy and strategy.Improve supplier awareness through third-party audit programme.

Focus on group contracts to improve environmental performance throughout value chain.

Targeted specific service providers, eg waste management services and fuel suppliers.

Finalise group contract for waste management and fuel supply.

Implementation of efficiency programmes that contribute to planned savings. Energy management systems are being implemented across the group.

De Hoek was selected as a pilot operation and successfully implemented in 2012.

Energy management systems to be rolled out to all PPC cement and lime operations by December 2013.

Investigate carbon emission inventory systems to manage data and reporting.

Significant improvements made to our data collection and reporting systems.Initiated investigations into commercial systems to manage environmental data.

Monitor and maintain.

Continue with assurance on scope 1 and 2 CO

2 emissions.See sustainability reporting. Continue to improve.

Implement IT virtualisation project at Montague Gardens.

Group water reduction targets to be established.

Montague Gardens and Mooiplaas implementations completed.

Although we were unable to establish site-specific water targets, significant savings have been realised through improved monitoring systems.

Identify further sites for implementation.

Operations continue to improve water monitoring systems by improving the accuracy and resolution of consumption data.

Upgrades to reduce environmental impacts of PPC operations.

Refer to section on upgrade projects.

Support and monitor implementation of improvement projects to deliver environmental benefits for South African and international projects and operations.

environment

38 PPC Ltd

A measure of the wealth created by the group is the amount of value added to the cost of raw materials, products and services purchased. This statement shows the total wealth created and how it was distributed.

2012 2011 2010notes rm rm rm

Revenue 7 346 6 826 6 807 Paid to suppliers for materials and services 1, 4 (3 917) (3 696) (3 396)

Value added 3 429 3 130 3 411 BBBEE IFRS 2 charges (123) (11) (10)Exceptional items – (4) (32)Income from investments^ 37 43 47

total wealth created 3 343 3 158 3 416

wealth distribution:Salaries, wages and other benefits 2 1 084 972 916 providers of capital 1 083 1 229 1 447

Finance costs 377 353 385 Dividends 706 876 1 062

Ordinary dividends 702 871 1 056 Dividends paid to external BBBEE trusts by consolidated SPVs 4 5 6

government 3 463 382 518 reinvested in the group to maintain and develop operations 713 575 535

Depreciation and amortisation 461 436 368 Retained profit/(loss) 144 (6) 56 Deferred taxation 108 145 111

3 343 3 158 3 416

value added ratiosNumber of employees (30 September) 3 085 3 087 3 257 Revenue per employee (R000) 2 381 2 211 2 086 Wealth created per employee (R000) 1 084 1 016 1 028

2012 2011 2010rm rm rm

noteS1. paid to suppliers for materials and services

Transnet Freight Rail and Barloworld Logistics are the only suppliers of services exceeding 10% of total amounts paid.All contracts are paid in accordance with agreed terms.

2. Salaries, wages and other benefitsSalaries, wages, overtime payments, commissions, bonuses and allowances@ 935 839 794 Employer contributions~ 149 133 122

1 084 972 916

3. governmentTax – normal, CGT and STC 449 375 511 Rates and taxes paid to local authorities 4 2 4 Customs duties, import surcharges and excise taxes 6 2 1 Skills development levy 8 7 7 Cash grants and subsidies received from the government (4) (4) (5)

463 382 518

4. included in “paid to suppliers for materials and services” is:Donations and social labour plan expenditure 17 19 15 Dividends paid to BBBEE transaction beneficiaries 4 5 6

21 24 21

^ Includes interest received, dividend income and share of associate's retained profit.~ In respect of pension funds, retirement annuities, provident funds, medical aid and insurance.@ Includes restructuring costs of Rnil (2011: R31 million; 2010: Rnil).

Summary of integrated performance

Value added statementfor the year ended 30 September 2012



element discription measure compliance target 2014 progress

reportingReporting level of compliance with charter for calendar year

Documentary proof of receipt from DMR

Annual Employment equity and social and labour plans submitted

Minimum target for effective HDSA ownership

Meaningful economic participation

26% Second phase of PPC’s BBBEE transaction increases black ownership of South African operations to effective 26% in line with mining charter requirements. R23,2 million in dividends paid under 2008 BBBEE transaction

Full shareholder rights

26%

Conversion and upgrading of hostels to attain occupancy rate of one person per room

Percentage reduction of occupancy rate towards 2014 target

100% Company housing is provided at most remote locations. PPC also promotes home ownership by facilitating opportunities for employees to secure housing loans

Conversion and upgrading of hostels into family units

Percentage conversion of hostels into family accommodation

100% Only Lime Acres has a hostel, which is currently planned for upgrading

Procurement spend from BEE entity

Capital goods 40%

In 2012, 88% (R3,5 billion) of PPC’s discretionary spending was directed to BEE companies:

� 23%

Services 70% � 61%

Consumable goods 50% � 43%

Multinational suppliers’ contribution to social fund

Annual spend on procurement from multinational suppliers

0,5% of procurement value

For 2012, we met mining charter targets, except for contributions by multinationals. A project team has been established to implement this

Diversification of workplace to reflect the country’s demographics to attain competitiveness

Top management (board)

40% 60%

Senior management (exco)

40% 25%

Middle management 40% 53%

Junior management 40% 71%

Core skills 40% 85%

* Due to the nature of cement manufacture, PPC’s empowerment credentials are measured against both the Mining Charter scorecard and the DTI’s codes of good practice. PPC reports on both of these in this section.

ownership

Housing and living conditions

procurement and enterprise development

employment equity

Mining charter scorecard 2012*

40 PPC Ltd

Summary of integrated performance continued

element discription measure compliance target 2014 progress

Develop requisite skills, including support for South Africa-based R&D initiatives intended to develop solutions in exploration, mining, processing, technology efficiency (energy and water use in mining), beneficiation, environmental conservation and rehabilitation

HRD expenditure as percentage of total annual payroll (*excl mandatory skills development levy)

5% 4,9%* spent on skills development

100% of R&D expenditure directed at South Africa-based businesses

Conduct ethnographic community consultative and collaborative processes to delineate community-needs analysis

Implement approved community projects

Up-to-date project implementation

28 projects in 12 communities in six provinces at various stages of implementation – 14 handed over to communities. To date, R38 million of planned R60 million spent on approved projects

Improvement of industry’s environmental management

Implementation of approved EMPs

100% All plants have approved EMPs

Improvement of industry’s mine health and safety performance

Implementation of tripartite action plan on health and safety

100% At September 2012, five sites had completed training for safety representatives. All others are on track to complete this by December 2012

Use of South Africa-based research facilities for analysing samples across mining value chain

Percentage of samples in SA facilities

100% 100% of samples are processed in South African facilities

Contribution towards beneficiation (effective from 2012)

Added production volume contributory to local value addition beyond the baseline

Section 26 of MRPDA (percentage above baseline)

No detail on how to measure but raw limestone is beneficiated into cement and lime products in South AfricaAggregates are fully beneficiated in South Africa

Human resources development (see detailed table on page 41)

mine community development

Sustainable development and growth

Beneficiation

Mining charter scorecard 2012 continued



Human resource developmentReporting template

Year: 2012

A C I Wdescription measures category M F M F M F M F total

Develop requisite skills, including support for South Africa-based R&D initiatives intended to develop solutions in mining, processing and exploration technology efficiency (energy and water use in mining), beneficiation, environmental conservation and rehabilitation

HRD expenditure as percentage of total annual payroll (excluding mandatory skills development levy)

Learnerships and bursaries (of core and critical skills)

31 4 26 1 2 1 25 2 92

6 10 2 0 0 0 0 0 18

Artisans 16 6 10 3 0 0 7 0 42

ABET training (level I, II, III, IV and NQF 1) 241 25 15 7 0 1 4 3 296

Other training initiatives (school support and post-matric programmes)

� 28 on PPC bridging programme � 10 postgraduate students on graduate

development programme

Support for SA-based R&D initiatives

100% of R&D expenditure directed at SA-based companies

DTI BBBEE status*

PPC’s broad-based black economic empowerment status as at September 2012 was audited and verified by rating agency Empowerlogic in November 2012. In terms of the DTI codes of good practice, PPC is a level 2 BBBEE contributor with a procurement recognition level 2 (this enables our customers to claim back 156% of their spending with our group for their own preferential procurement points).

BBBee status – verified level 2

Element levels Equity ownership – level 1

Management composition – level 1

Employment equity – level 6

Skills development – level 3

Preferential procurement – level 2

Enterprise development – level 1

Socio-economic development – level 1

Black ownership 33,8% black ownership10,19% black women ownership

Value-adding vendor

Yes

BEE procurement recognition

156%

* Due to the nature of cement manufacture, PPC’s empowerment credentials are measured against both the Mining Charter scorecard and the DTI’s codes of good practice. PPC reports on both of these in this section.

42 PPC Ltd

the South African economy depends on building small businesses

Case studyResearch and development underpin continued innovation – a PPC hallmark.

The community of Soweto now has access to quality cement on its doorstep after the launch of the PPC Cement Express Outlet pilot project to ten local entrepreneurs.

The project, in partnership with Mobile Payment Corporation (MPC) and First National Bank (FNB), aims to empower entrepreneurs by offering them the opportunity to start their own cement outlets. These express outlets are mobile business solutions for small, micro and medium enterprises (SMMEs) that are cost effective and secure.

In terms of PPC’s corporate social investment (CSI) model, each beneficiary received a start-up package of a PPC-branded container; a pallet of 40 bags of Surebuild cement; a training programme on PPC cement products, training on supply chain management processes, and methods to sustain their businesses; as well as a toll-free number to ensure ordering and dispatch efficiencies. All ten beneficiaries liaise directly with PPC with no intermediary, which becomes a cost benefit to them.

enterprise development

ppc cement launches express outlets



After PPC identified a gap in the retail sector where emerging SMMEs were struggling to expand their businesses, we opted to empower people and address long-term social needs by starting cement supply outlets, giving emerging entrepreneurs the opportunity to participate in the formal economy. Playing an active role in contributing towards job creation and infrastructure development is core to the way we conduct business.

The business owners went through an intense screening process and were selected on several criteria: they needed to have an existing operating business, business acumen in operating an SMME, location and space. The partners are enthusiastic about this initiative as it supports the sustainable empowerment required in South Africa, at a time when unemployment is at its highest. We believe this initiative will provide the emerging market with first-world banking facilities and infrastructure to operate a small business optimally, in turn leading to job creation.

FNB will open a bank account in the name of the entrepreneur, which will be used to order and pay for stock via a mobile phone. The solution integrates directly into PPC systems and

provides the entrepreneur with an acknowledgement of the order and payment being made.

Since the launch of the first container units, there has been positive feedback from the pilot group and significant interest from potential PPC Express partners. By year end, the roll-out of PPC Express outlets had been extended to other areas of Gauteng and PPC is currently looking at launching outlets in the Western Cape and KwaZulu-Natal.

44 PPC Ltd

Cement2012 2011 %

Revenue (Rm) 6 246 5 814 7EBITDA (Rm) 2 087 1 942 7EBITDA margin (%) 33,4 33,4Operating profit (Rm) 1 682 1 551 8Operating margin (%) 26,9 26,7Assets (Rm) 6 153 5 768 6,6

South africademandAs illustrated below, we are experiencing the typical cyclical nature of the cement industry. Demand for locally manufactured cement for the nine months* from October 2011 to June 2012 has grown 6,9%. The primary driver for this increase has been buoyant demand through the retail channel which has offset disappointing demand from infrastructure projects and new middle to high-income residential housing.

However our view is that, for our 2012 financial year, local cement demand will probably have grown by low single digits due to a slowing local economy in the final quarter of the financial year. This weakness in the economy reflects deceleration in the global economy coupled with strike action in the latter part of the year. Heavy rains in September and October 2012 in a number of provinces would also have reduced demand for cement.

PPC’s South African cement sales declined by 1% for the financial year. Positive performances in Port Elizabeth, Gauteng and inland provinces was offset by weak demand

2

in the Western Cape. The final quarter of our financial year proved particularly challenging as labour unrest and heavy rains reduced sales. For the full financial year, our South African cement sales were down 1% (2011: -4%). The first encouraging signs of demand improving in the Western Cape were evident in the last quarter of the review period.

Imported cement, which is not subject to import duties and is excluded from national statistics, accounted for an estimated 6% of national demand. The bulk of imports continues to originate from Pakistan and enters through the port of Durban. Inland markets remain protected by virtue of transport distances and associated logistics costs.

In the 2012 national budget speech, the finance minister highlighted that over the medium-term expenditure period, R845 billion was approved and budgeted for infrastructure plans. Despite this, gross fixed capital formation as a proportion of GDP at 19% is still off the 23% reached in 2008 and well below the benchmark 25% level widely believed to accelerate per-capita incomes in developing nations. Although the deceleration in investments into residential buildings is slowing, household debt to disposable income remains high. It is therefore unlikely that the mortgage market will revive dramatically, given that record low interest rates have failed to materially boost demand for residential buildings.

Research indicates that growing demand in the retail sector is being driven by informal residential building. While South African households may well be wary of accessing new mortgages, an emerging trend highlights

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operationS review

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* Due to Competition Commission requirements issued in March 2012, all South African cement sales statistics can only be disseminated as a national, quarterly figure delayed by three months.



the use of unsecured lending for building and renovations purposes. Since 2008, new issues of unsecured loans have grown at a sizeable 35% per annum. At June 2012, the National Credit Regulator stated that R25,8 billion was extended to households as unsecured credit in that quarter alone. Around a quarter of this is said to be used for building and renovations purposes. It is, however, unlikely that growth in unsecured lending will continue at these elevated levels.

In South Africa, over 15 million people are social grant beneficiaries. Beyond consumptive expenditure and education costs, grant recipients spend a sizeable portion of their funds on upgrading their dwellings, primarily in rural and peri-urban areas. The February 2011 national budget reveals that over the medium term to 2014/15, expenditure on social grants will grow at 8%, which should outpace inflation and provide real growth. This growth in excess of inflation is likely to continue to support cement sales.

Given the unprotected strikes and labour unrest that affected the South African economy in the last few months of the review period, the outlook for economic growth has dimmed. This suggests demand for cement in 2013 is likely to be modest.

Selling pricesSelling prices in the South African market remained under pressure for the review period. This is primarily due to the low utilisation (around 75%) of local manufacturing capacity and, in KwaZulu-Natal, the impact of imported cement.

11

Despite this, our strategy to remain focused on premium products launched in 2011 allowed PPC to achieve a weighted average increase of 5% in selling prices.

customersRetailers remain the country’s largest customer segment, drawing more than 60% of all cement sold. Other customer segments include cement blenders, concrete product manufacturers, ready-mix concrete suppliers and construction companies. We have continued to focus on improving our customer service, building on last year’s initiatives. One of our key successes in this area has been the introduction of key account managers for our major retail customers.

productsOur decision to move both OPC and Surebuild up a strength class to 52.5 and 42.5MPa respectively has been successful as it allowed the PPC brand to stay out of the highly competitive 32.5MPa class (which has over 20 competing brands in Gauteng alone), while allowing our cement to be represented in this class through blenders and a retail private label. Using PPC’s enhanced products, customers benefit from using 15% less cement to make concrete of the same strength.

At the end of the review period, PPC launched a new product, SureRoad, specifically for road construction. SureRoad, a CEM II product, is manufactured by adding an extender or blend of extenders (fly ash, blast-furnace slag, limestone). The CEM II Portland-composite cements are ideal for constructing cement-stabilised substrate layers for roads. Our performance testing has shown excellent results with a range of soil types and different road classes.

customer segment description Key product

Retailers Hardware stores, general dealers, building material suppliers

Surebuild, Botcem, Unicem, Obras, PMC

Blenders Produces a general-purpose product mainly for the retail market by adding fly ash and/or slag to pure cement

OPC

Concrete product manufacturers

Manufacturers of roof tiles, concrete bricks, lintels, garden ornaments, etc

OPC

Ready-mix concrete suppliers

Concrete manufactured to meet a specific strength and delivered to site by truck

OPC

Contractors Civil or building contractors who buy cement directly from PPC. Usually medium and large contractors

Surebuild, OPC (concrete), SureRoad

46 PPC Ltd

operationS review continued

operationsDespite escalating input prices, we have contained the rand per ton increase in cost of production to 3% for our cement operations in South Africa and Botswana. The year-on-year increase includes real price increases in electricity and fuel, partly offset by savings in maintenance, refractories and salaries.

Key drivers in this cost containment included reconfiguring Port Elizabeth into a single-product facility in September 2011, and improved rail service from Transnet. The latter allowed us to produce more clinker with our efficient Dwaalboom kilns and transfer it for grinding at Hercules and Jupiter.

The recommissioning of De Hoek kiln 6 in July 2012 after a R280 million upgrade will further improve efficiencies and reduce costs at our Western Cape operations.

Plans to modernise the Riebeeck operation progressed during the year with PPC being awarded a positive record of decision for the environmental impact assessment.

Botswana marketCement demand in Botswana has been disappointing, with industry volumes declining by an estimated 10% due mainly to the slowdown in government infrastructure projects.

For the review period, PPC’s operations in Botswana recorded a decline in cement sales, due to declines in the construction sector marked by the end of several major infrastructure projects, including Jwaneng Cut 8, Moropule B and Dikgatlhong dam and aggressive competitor pricing in the retail market. The retail sector, however, remains the most dominant market segment in Botswana.

The Botswana government has released some sizeable projects which should start in the 2013 financial year – these include road and water infrastructure as well as housing projects.

ZimbabwemarketA third consecutive year of growth in cement demand was recorded by the industry. Sales volumes from our Zimbabwean operations continued their positive momentum into the 2012 financial year. Volume growth and achieved price increases lifted revenues by 20%, leading to enhanced operating and EBITDA margins. However, energy costs continue to rise; on a per-unit basis, diesel costs were up by 40% while electricity costs rose 25%.

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Retail demand remains the biggest cement market segment in Zimbabwe as consumers construct and expand their private households. The construction market is showing signs of increased activity with the construction of Tokwe Mukorsi dam and a road from Plumtree to Mutare. The dam will be second only to Kariba Dam in Zimbabwe while the Plumtree/Mutare road project consists of rehabilitating 820km and erecting nine new toll gates.

operationsIn the first half of the year, production was interrupted for six weeks after the failure of a transformer. This resulted in PPC Zimbabwe importing clinker from the South African operations, incurring high unplanned costs. Better performance was recorded in the second half, with only minor disruptions. A number of upgrades are under way to ensure that the Bulawayo and Colleen Bawn factories can operate at maximum capacity in anticipation of continued growth in demand for cement.

Key risks to the upside scenario include any unrest ahead of elections in 2013 and the risk of foreign investment into the country slowing or reversing due to the implementation of the government’s indigenisation programme.

mozambiqueAfter a ten-year product presence, PPC has made great progress in establishing a trading operation in Mozambique. The local sales office and warehouse in Maputo is now fully functional and resourced.

The trading environment in Mozambique has proved challenging due to aggressive competitor pricing, resulting in lower cement sales for the period. The influx of imported product has resulted in prices falling by over 30% over the last 18 months.

Again, an improved performance from Transnet in South Africa has reduced the cost of supplying product into Mozambique. Together with the introduction of a PPC-branded 32.5MPa cement, Obras, this has allowed us to maintain a successful presence.

At this stage, most of our sales are destined for the retail segment, primarily in southern Mozambique. We anticipate that sales to the construction sector will improve in the new financial year after the start of a number of major construction projects in the country.

exports from South africaSmall volumes of exports continued to other countries, including the south-eastern parts of the Democratic Republic of the Congo, Angola and Malawi.

7

3



Lime2012 2011 %

Revenue (Rm) 838 772 8,8EBITDA (Rm) 188 154 22,7EBITDA margin (%) 22,5 19,9Operating profit (Rm) 151 122 24,8Operating margin (%) 18,1 15,8Assets (Rm) 467 440 6,1

PPC Lime’s products are used in a number of key local industries such as steel and alloys, food manufacturing, gold, uranium and copper mining as well as water purification. The greatest use of lime is in steel manufacturing, where it serves as a flux to remove impurities. Lime used in the steel industry must meet exacting physical and chemical properties, which PPC Lime is able to manufacture.

Lime is also essential in producing non-ferrous metals. For example, lime is used to beneficiate copper ore, to make alumina and magnesia for use in aluminium and magnesium manufacture, to extract uranium, and to recover gold and silver.

PPC Lime’s performance improved markedly from the previous financial year. Although revenues grew by a similar amount, 8,8% versus 8,6% in 2011, operating profit showed strong growth of 24,8% after declining by 23,4% in the previous financial year. The EBITDA margin improved to 22,5% (2011: 19,9%) and the operating profit margin increased to 17,9% (2011: 15,8%).

Despite volumes coming under pressure, PPC Lime’s solid performance reflects an improved customer mix, contractual price increases, greater efficiencies and a reduction achieved with the contractual coal price. Both PPC Lime’s mining and plant operations performed well during the year, with kiln heat consumption improving by 4%. Volumes are unlikely to improve significantly in the new financial year as the steel industry is battling with operational issues as well as decreased demand locally and internationally for iron and steel. Labour unrest in this industry is a major concern; disruptions weaken an industry that is already grappling with subdued demand.

PPC Lime continues to export burnt product to Zambia and the Democratic Republic of the Congo, where it is used in the copper-processing industry. This region now accounts for about 10% of burnt product sales, with good growth potential.

2012 2011 %

Revenue (Rm) 299 271 10,3EBITDA (Rm) 56 56 0EBITDA margin (%) 18,7 20,7Operating profit (Rm) 37 43 (14,0)Operating margin (%) 12,3 15,9Assets (Rm) 285 210 1,0

Sales volumes for our South African operations rose as market conditions improved. Road construction projects and improved agricultural lime sales contributed to higher demand. Some key projects that we supplied include the R55 road construction work in the Centurion/Pretoria area and waste water works in the same vicinity. Although selling prices remained highly competitive, increased production assisted in diluting fixed costs and improving margins.

Variable costs per tonne were well controlled, ending only 3,8% up for the year. Laezonia has improved plant efficiency after issues affecting the primary crusher were resolved during the period. For 2013, volumes may come under pressure as there are only a few known infrastructure

projects planned within a competitive radius of our operations.

Our aggregates division in Botswana had a challenging year. Sales volumes at our Kgale quarry were 30% below the prior period due to lower demand and operational disruptions. Lower sales also reflect the completion of a number of road projects (Tlokweng, Molepolole and Boatle), major construction projects (Debswana Cut 8) and private developments in the city centre.

Plant utilisation was hampered by two serious breakdowns of the Kgale tertiary crusher, limiting the availability of concrete stone and sand products.

The integration of Quarries of Botswana is continuing smoothly. Sales of 232 000 tonnes were achieved; this was below our expectations and largely due to subdued government and private infrastructure investment, particularly in the Selebi Phikwe and Francistown regions.

Aggregates

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48 PPC Ltd

Safety and health Highlights Lowlights

� PPC Alive! initiative launched to entrench zero-harm culture in PPC

� Significant reduction in group LTIFR and LTIs – with 10 sites recording LTI-free year

� 14 LTIs in review period

creating a sustainable culture of safety in ppc

Safety has long been a top priority for PPC, a core value and not negotiable. Our abiding aim is to have everyone leave work at the end of the day in the same state as they arrived in the morning.

The difficulty with safety, however, is that it is a moving target – while we measure safety performance, there is never a point when we can say we have achieved the target. We believe safety is an ongoing process and we need to keep finding ways to ensure it stays top of mind. Safety has to be a way of life, not something we have to specifically “do”. We have set ourselves the target of achieving zero harm in PPC within the next four years.

Zero harm means zero incidents where people are hurt. It is not a monthly or annual target; it is a continuous goal and mindset. To achieve it, the concept of zero harm must become entrenched in the way we do business by building a PPC culture of zero harm.

In December 2011, following a review and assessment of our historical safety performance and extensive research to learn from others, we rolled out an initiative to move towards a zero-harm culture in PPC, known as . The name embodies growth, empowerment, vitality, sustainability, wellness and many other concepts that support our vision. It can be interpreted in different ways, and all are relevant when it comes to a holistic safety mindset. Over time, we would like the name to be synonymous not only with PPC’s culture of safety and world-class safety standards, but also with our broader standards of excellence in all that we do.

occupational safetyPPC recorded no fatalities in the review period (2011: one fatality). The group lost-time injury frequency rate (LTIFR) decreased from 0,34 in 2011 to 0,23 at 30 September 2012; its lowest level in several years. We recorded 14 lost-time injuries compared to 19 in the previous year. Our operations in Mozambique and the newly acquired Quarries of Botswana are now included in our reporting.

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peopLe review



During the period, PPC joined the Chamber of Mines with the dual purpose of obtaining information and adding value towards compliance with various elements of the mining charter. As a chamber member, PPC is now a signatory to the tripartite agreement between government, labour and the mining companies to significantly improve safety performance. The key objective of this agreement is that “Every mine worker returns home unharmed every day”. To achieve this milestone, several critical elements have been identified.

� Strengthening the industry’s culture of health and safety by implementing the culture transformation framework

� Enhancing awareness among our people by training health and safety representatives

� Lessons from pockets of excellence and research – adopting leading practices from the mining occupational safety and health (MOSH) learning hub and research findings from the Mine Health and Safety Council. Four adoption teams are driving these processes and, where applicable, PPC has representatives on these teams: – Falls of ground – Transportation and machinery – Noise – Dust.

All sites completed their mining charter scorecards and these were submitted to regional Department of Mineral Resources offices before the required date at end May 2012.

Service providers have been sourced to train safety representatives on our operating sites to the standard required (MQA accredited, minimum two weeks) by the tripartite agreement. In terms of the mining charter scorecard, PPC must train 4% or 112 team members by the end of December 2012. At financial year end, five sites had completed their training and all others are on track to complete this by December 2012.

We initiated a thorough review of our safety performance at the end of 2011 (see page 48), and the first phase of

this journey has been completed. The review process involved numerous activities including:

� Enlisting and educating company leadership at various levels – completed April 2012

� Assessing the PPC culture against the principles and conditions of organisations that sustainably have high reliability safety performance – completed April 2012

� Developing an enduring safety culture improvement strategy – PPC Alive! road map finalised

� Engaging all relevant stakeholders and implementing culture-based safety projects – each PPC site has its own site road map and training is under way.

While the findings of this review identified areas for improvement, which are being addressed, it also highlighted a strong culture of community and caring that drives a genuine concern for people’s safety in PPC. Notably, the mining charter now includes specific milestones that require organisations to review their ‘culture transformation’ and establish relevant leading practices – PPC was recognised by the Chamber of Mines for proactively addressing our safety culture.

Our journey towards a zero-harm culture has been named PPC Alive! Based on the findings of the assessment process, we have established four critical drivers that need to be addressed to sustainably achieve zero harm in the next four years:

� Mindful leadership � Enhanced strategic foresight in safety � Effective safety structures and governance � Improved individual and organisational competence

in safety.

Another significant aspect of our PPC Alive! journey towards zero harm was recognising that each site has its own characteristics and that a blanket approach could not resolve site issues. Accordingly, every PPC site has had site-specific feedback on its safety culture and has developed a site-specific road map to address local customs and behaviours. Key personnel at each site are undergoing training to assist with finalising these plans.

ppc group key safety indicators

target 2013

target 2012

actual 2012 2011 2010

Number of fatalities 0 0 0 1 0Fatality frequency rate per 200 000 hours worked 0 0 0,001 0,02 0Number of LTIs <11 <15 14 19 24LTIFR per 200 000 hours worked (12-month window*) <0,18 <0,252 0,233 0,34 0,40Days lost to LTIs <450 <500 553 898 1 000Significant administrative fines (number) 0 0 0 0 0

1 Fatality frequency reduced to zero in August 2012.2 Target derived from individual site targets based on hours worked and specific performance criteria.3 LTIFR includes one for Mozambique. Mozambique was not included in target setting as operation was only set up subsequent to the process.* A moving window of hours worked and lost-time injuries occurring.

50 PPC Ltd

Commendably, several sites and departments recorded zero LTIs in the review period: Montague Gardens, George, De Hoek, Riebeeck, Port Elizabeth, Jupiter, Sandton (including Group Laboratory Services), Sales and Marketing, Botswana and Bulawayo.

ppc group days off due to lost-time injuries october 2011 to September 2012

Males Females Total per region

South Africa 486 0 486Botswana 32 0 32Mozambique 4 0 4Zimbabwe 31 0 31

group totals 553 0 553

peopLe review continued

All manufacturing sites continued to be certified according to the OHSAS 18001 standard.

occupational healthUnder the mining charter scorecard, PPC reports on HIV/Aids and tuberculosis programmes, which are run by clinics at group factories.

tuberculosis (tB)Although TB is not common at PPC sites, it is treated as required according to national protocols for the disease. Two cases were diagnosed at Riebeeck and reported to the authorities during the year. One case at Lime Acres was investigated and reported to the DMR.

Hiv and aidsHIV and Aids are well managed in the group in accordance with SANS 16001:2007. We maintained our focus on access to antiretroviral medicines and other assistance to ensure continued employee wellness.

HIV/Aids awareness and treatment programmes are well established and prevalence levels are low in South Africa but higher at operations in Botswana (where the government provides treatment) and Zimbabwe (PPC provides counselling and antiretroviral drugs).

Clinics provide voluntary counselling and testing (VCT) as part of annual medical examinations if employees elect. Some sites arranged for VCT days as part of ongoing management of the disease. Slurry has engaged the services of an NGO to conduct VCT monthly. Generally, at all sites, current uptake is low as most PPC team members have undergone VCT a number of times in recent years; they know their status and therefore some do not attend further testing initiatives. Treatment support structures are in place for those living with HIV/Aids. In Botswana, these

initiatives are conducted by the state and treatment is also supplied by state clinics.

Various sites are involved with community initiatives on HIV and Aids. At Lime Acres, clinic sisters assist with ongoing training for home-based care givers and awareness programmes for truck drivers visiting the site. They have also helped set up vegetable gardens for healthy nutrition. In May 2012, PPC provided Aids education for children at the uMephi Daleview Foster Care Home in Despatch. All sites continue to train peer educators who work successfully in the factories and communities. Some employees at Group Laboratory Services and Jupiter continued the health and wellness peer educator training that started in 2010 to prepare them for obtaining competence certificates in unit standard: 11449. All these initiatives are part of the ongoing management of HIV/Aids in PPC factories and communities.

medical surveillancePPC’s workforce undergoes annual medical examinations; including audiometric screening, lung function and vision testing, and primary healthcare examinations.

No cases of silicosis were reported during the year.

Reporting requirements for noise-induced hearing loss (NIHL) have changed:

� If the hearing loss is between 5% and 10%, it is reported to the Department of Mineral Resources (DMR)

� If hearing loss is greater than 10%, it must be reported to the DMR and Workman’s Compensation Commissioner (WCC)

Six team members across our operations, with previously identified NIHL had this confirmed during their medical examinations and were reported to the applicable authorities.



All factory clinics have been audited. Results from the external audit at these clinics confirmed that occupational health infrastructure and the competency of occupational health personnel were of extremely high standard.

absenteeism rate per region (%)*

Region Female Male total2012 2011 2012 2011 2012 2011

Botswana 1,2 2,0 1,1 1,5 1,1 1,6South Africa 2,5 1,8 2,4 1,9 2,4 1,9

total 2,4 1,8 2,3 1,9 2,3 1,9

*We are developing measures for Zimbabwe.

complianceFor the review period, PPC received seven notices (2011: six) from the DMR on health and safety issues. Encouragingly, there has been a notable decrease in notices issued at our sites since February 2012. This reflects both the benefits of our proactive safety initiatives and an improvement in the relationship between PPC mines and the authorities. While there have been many visits, they have been more of an advisory nature.

Section 54 noticesThese notices require a mine to halt operations in the identified section or activity, and to formulate a plan of action acceptable to the regional chief inspector before operations may resume.

� December 2011 – Lime Acres: inspection of haul trucks and explosives-issuing procedure

� February 2012 – Dwaalboom: occupational hygienist’s certificate unavailable at time of visit

� September 2012 – Beestekraal: expired first aiders’ certificates and first aid boxes not checked

� September 2012 – Lime Acres: no written procedure in place for making a quarry workplace safe after examination; no written procedure in place in the event of lightning being detected.

Section 55 noticesThree notices were received. These require a mine to formulate a plan of action acceptable to the regional chief inspector to comply with an identified deviation.

These findings were cleared without significant interruption to operations and lessons were distributed throughout the business.

52 PPC Ltd

WorkforceHighlights

� Employees participate in the bulk of the second BBBEE ownership transaction (R730 million) � The 2012 PPC workplace skills plan approved by the Mining Qualifications Authority and all available grants recovered � PPC’s Women’s Forum consolidated on its launch in the previous year � Representation of women in the workforce improved from 18,5% in 2011 to 20% in 2012 � Improvement suggestions generated by our people resulted in cost savings of over R16 million for the year

Lowlights

� A strike at Lime Acres as a result of a wage dispute in November 2011

8


During PPC’s long history of success there has always been a hard-working, committed and dedicated team of employees. The review period was no different as our people’s determination continued to drive the company’s progress in creating a better life for all.

Kambuku way of lifeOur people are integral to maintaining the Kambuku philosophy. The word kambuku is derived from Tsonga and means great tusker, referring to an elephant bull, whose characteristics of tenacity and loyalty sum up PPC’s value-based management philosophy.

This PPC ‘way of life’ creates a healthy, rewarding and satisfying working environment – one in which everyone has the opportunity to contribute to our success, their own development, and to be recognised for excellence.

The Kambuku initiative with its focus on employee value creation was introduced 12 years ago. It has entrenched a high-performance culture across PPC based on employee engagement, growth and strong values, underpinning the way PPC does business. To maintain the passion and commitment of our people, it is important to continuously provide clear direction and realign our systems to current and future business challenges.

empowering peopleTo ensure sustainable business performance in a challenging environment, the Kambuku value-creation model is continually reviewed and strengthened.

Our Kambuku philosophy aims to establish a strong foundation to continuously grow and empower employees in support of PPC’s REAL (relevant, empowered, actualised and lasting) transformation philosophy.

As part of this transformation philosophy and approach, PPC proudly announced its second-phase BBBEE transaction that will result in an effective 26% black

ownership of PPC’s South African operations. This transaction will place a further 4,4% of the company’s ownership in the hands of South African employees.

A part of this transaction, the PPC Masakhane Employee Share Trust was created to allow all eligible employees to become shareholders of PPC.

creating lasting value for our peopleFor the past decade, Team PPC has embraced the processes and principles of Kambuku to develop a world-class operation, founded on passion, commitment, innovation and teamwork.

As part of this process, our organisational performance model sets the benchmark for internal standards, systems and processes that facilitate employee engagement and participation. The effectiveness of each element in the model is measured annually.

employee participation and engagement A fundamental principle of the Kambuku process is that positive results are easily achieved when all employees are engaged, empowered and accountable. Active involvement and communication therefore occur frequently across PPC through established systems and processes, including:

� Key leader summits: regular team meetings at plant or site level and throughout the company involve all appointed, elected and informal leaders. The aim is to inform employees about plant, site or corporate office performance, strategic initiatives, challenges and opportunities. Robust and constructive communication takes place in an environment of mutual trust and cooperation, and the outcomes of each summit are communicated clearly and promptly to shop-floor level. Through this process, we maintain a clear purpose and common vision and direction throughout the company.



� Invocoms: structured, team-based discussions take place daily for teams at shop-floor level, weekly at sectional supervisory level, and monthly at departmental level. There are some 365 active and effective Invocoms operating across all levels and all functions of PPC. Importantly, the group average for Invocom team forums has been maintained at a globally competitive 4,5 out of a standard of 5,0 and organisational benchmark standards at 3,3 out of 4,0.

Through these discussions, we communicate elements of PPC’s vision and objectives, evaluate team performance, analyse obstacles affecting performance, develop appropriate action plans, and ensure targets are achieved. Behavioural safety, educational topics and development are also discussed in Invocoms.

Plant- and site-level Invocoms are designed to spread communication both upwards and downwards through the company to:

� Facilitate transparent problem resolution and employee participation

� Regularly encourage teams to stretch outputs and targets by reviewing and assessing team performance

� Capture innovations and suggestions to enhance cost savings, process improvement, efficiency and safety

� Communicate positive recognition � Capture best practices on a centralised database � Manage the PPC climate through the adherence of

team members to the company code of conduct.

Saving costs through employee innovations and suggestions During this financial year, some 2 800 value-adding suggestions were generated via the Invocom structures. Of these, over 62% were accepted for implementation. This saved PPC over R16 million in 2012.

individual perception monitor – listening to our peopleFor 12 years, PPC’s annual Individual Perception Monitor survey has given our people the opportunity to express their views and rate the company on critical processes. This includes understanding PPC’s vision, employee benefits, leadership behaviour, remuneration, training, coaching and communication. Participation is both voluntary and confidential. During 2012, all survey questions were reviewed and updated to ensure alignment with specific strategies. Greater focus was placed on safety, health and environment, and customer, brand and products. Results are analysed by site and at group level to identify and address areas of concern and reinforce positive trends. Despite the challenging economic climate, we have improved our satisfaction rating across PPC from 86% in 2011 to 87%. Our target is to exceed 85%.

talent management review In support of our Kambuku talent management approach, we have implemented a new talent management review process. This increases our awareness of available talent and successors in the business and ensures our talent is

create energy Structure/HarneSS energy direct/focuS energy reLeaSe energy/reward

clear purposevision strategy

� Communication � Understood � Journey maps

co

nti

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ou

s p

erfo

rman

ce

imp

rove

men

t

inspiring climate � Fairness, order, rules of the game � Communication, information,

influence � Management style � Recognition � Code of conduct � Effective HR administration � Safety and environment � Transformation

Learning for growth � Career development � Skills development � Succession planning � NQF alignment

performance improvementorganisational/individual

� Role and function clarity � Accountability scorecards,

targets and action plans � Performance measurement � Performance review:

– Recognition – Action plans for under-performance

alignmentvalue drivers, structure job model

� Purpose � Scorecard � Competencies

tHe vitaL eLementS of a performing organiSation

invocom® � Communication � Reviewing progress � Stretching targets � Solving problems � Education

54 PPC Ltd


aligned to current and future business strategies and needs. The aim is to build leadership and a pipeline of specialist strengths and to anticipate rapidly changing market conditions. Leadership conversations form an integral part of the data collection and feedback process. A summary of high-potential individuals is presented at talent management review sessions to top, senior and middle management.

Succession planning forms an integral part of the talent management strategy by ensuring competent people are continuously available to assume key positions in the company. In line with this, succession-planning discussions are held biannually at group and site levels, and development plans include mentorship and coaching. The strategy is closely aligned to PPC’s employment equity targets, and places specific emphasis on key technical skills – an industry-wide challenge.

recognitionA critical part of our Kambuku process is recognising PPC team members who go beyond the call of duty. The pinnacle of our recognition programme is the annual PPC CEO Achiever Awards – a gala event for our identified top performers, PPC’s executive team and senior managers.

case study – top achiever in 2012

Delisa Moyo, a production foreman at our Colleen Bawn factory, was the PPC top achiever for 2012 because of his dedication, and understanding of how contributing to the bottom line helps every member of Team PPC.

Delisa literally thinks and lives the “cheaper, better, faster method” – even with new machinery like the recently commissioned clinker grate cooler where he saved the company a considerable amount by reducing the number of unplanned and costly stops from a massive 45 per month to only one.

workforce analysis: South africa*

African Coloured Indian White SA nationals Foreign nationals

Female Male total Female Male total Female Male total Female Male total Female Male total Female Malegrand total

Top management (CEO) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1

Senior management 2 4 6 1 1 2 1 1 2 0 11 11 4 17 21 0 0 21

Professional 22 15 37 0 21 21 4 17 21 21 88 109 47 141 188 1 3 192

Skilled workers 104 292 396 70 177 247 17 10 27 101 270 371 292 749 1 041 1 8 1 050

Semi-skilled 73 639 712 20 171 191 1 1 2 7 10 17 101 821 922 0 0 922

Learners 1 3 4 1 2 3 0 0 0 0 1 1 2 6 8 0 0 8

total permanent 202 953 1 155 92 372 464 23 29 52 129 380 509 446 1 734 2 180 2 12 2 194

Learners 6 15 21 2 13 15 0 0 0 0 6 6 8 34 42 0 0 42

Fixed-term contracts 10 27 37 6 9 15 1 0 1 0 2 2 17 38 55 0 1 56

total fixed-term contracts 16 42 58 8 22 30 1 0 1 0 8 8 25 72 97 0 1 98

grand total 218 995 1 213 100 394 494 24 29 53 129 388 517 471 1 806 2 277 2 13 2 292

* As defined by the Employment Equity Act.



Balanced workforce PPC’s total workforce for 2012 is 3 085 compared to 3 087 in 2011. Workforce numbers for South Africa reduced by 102 due to the moratorium on employment and voluntary retrenchment process at our PE plant. Workforce numbers for Botswana increased by 85 mainly due to the acquisition of Quarries of Botswana. Workforce numbers for Zimbabwe increased by eight after including attachment students who were not reported in the past. We also now have seven employees in Mozambique.

workforce analysis: Botswana

BW nationals

SA nationals

total Female Male Male

Professional 1 7 3 11Skilled workers 20 69 0 89Semi-skilled 12 91 0 103

total permanent 33 167 3 203

Fixed-term contractors 2 0 0 2

total ftc 2 0 0 2

grand total 35 167 3 205

workforce analysis: Zimbabwe

Female Male total

Senior management 0 1 1Professional 5 37 42Skilled workers 30 111 141Semi-skilled 4 210 214Unskilled 4 122 126Learners 6 37 43

total 49 518 567

Fixed-term contractors 5 9 14

grand total 54 527 581

workforce demographicsPPC’s workforce represents a well-balanced combination of generations. Young and upcoming talent represents over 20% of the workforce whereas the age group normally associated with greater career stability represents 56%. The risk of losing intellectual capital and institutional experience is also manageable with only 21% of our employees aged 50 and above.

employees for South africa and Botswana per gender, age group and race

Age groups

Female Male grandAfrican

%Coloured

%Indian

%White

%total

%African

%Coloured

%Indian

%White

%total

%total

%

30 to 50 years old 49,8 57,0 62,5 59,7 54,3 54,0 65,0 87,1 53,3 56,6 56,1Over 50 years old 5,5 6,0 4,2 27,1 11,0 26,0 10,2 3,2 36,3 24,5 21,8Under 30 years old 44,7 37,0 33,3 13,2 34,7 20,0 24,9 9,7 10,4 18,9 22,1

As indicated in previous reports, PPC is systematically increasing the range of data being externally assured in terms of GRI. PPC has not yet included Zimbabwe or Mozambique in its scope of externally assured data.

workforce turnoverThe annual turnover rate* for 2012 is 14% in South Africa, 10,7% in Botswana and 12,4% in Zimbabwe. The average length of service in PPC in South Africa is around 12 years with a number of employees holding 25, 30 and even 40-year awards.

We have recorded a pleasing decline in the labour turnover rate in South Africa compared to 2011. This reflects a number of factors such as the slowdown in the economy and its effect on labour supply and demand, the improvement in our value contribution to employees in the areas of learning and development, the implementation of a talent management review process and the announcement of our second BBBEE transaction. Due to operational requirements 46 employees took voluntary separation packages. This is included in the South African turnover number.

*Annual turnover rate calculated as per the GRI.

56 PPC Ltd


total turnover (1 october to 30 September against total workforce at year end)Region

Botswana South Africa total

Age groupFemale

%Male

%Total

%Female

%Male

%Total

%2012

%2011

%

30 – 50 years 9,5 11,1 10,9 10,6 11,3 11,2 11,1 12,1Over 50 years 14,3 6,8 7,8 12,2 16,7 16,2 15,4 17,5Under 30 years 0,0 22,2 16,0 18,3 19,0 18,8 18,7 24,4

total 8,6 11,2 10,7 13,5 14,1 14,0 13,7 16,1

permanent employee turnover (1 october to 30 September against permanent workforce at year end)Region


Age groupFemale

%Male

%Total

%Female

%Male

%Total

%2012

%2011

%

30 to 50 years 0,0 7,6 7,6 9,9 9,4 9,6 9,2 9,2Over 50 years 0,0 7,1 6,1 8,2 13,4 12,9 12,2 13.3Under 30 years 0,0 0,0 0,0 6,2 13,4 11,0 10,5 11,6

total 0,0 6,7 5,6 8,5 11,1 10,6 10,2 10,5

The turnover of permanent employees is less than total workforce turnover as the influence of fixed-term contractors is removed. Due to operational requirements 46 employees took voluntary separation packages. The South African turnover number excluding this is 8,4%.

new employee turnover (1 october to 30 September against total workforce at year end)*Region


Age groupFemale

%Male

%Total

%Female

%Male

%Total

%2012

%2011

%

30 to 50 years 4,8 5,6 5,4 0,0 0,8 0,6 1,1 2,0Over 50 years 14,3 2,3 3,9 2,0 1,4 1,4 1,7 2,6Under 30 years 0,0 5,6 4,0 6,5 3,0 4,2 4,2 10,4

Total 5,7 4,7 4,9 2,5 1,4 1,6 1,9 4,1

* Employees which left within one year of joining.

Labour relationsThe percentage of employees recognised as members of a trade union is 31% in South Africa, 64% in Botswana and 74% in Zimbabwe. PPC supports freedom of association and relevant agreements are in place between the company and various unions.

In November 2011 there was a strike at our Lime Acres operation, following a deadlock in the annual wage negotiation process. The strike lasted for 12 days and was called off when a wage agreement was reached between the company and the employees’ unions. PPC Lime’s contingency plans were effective and there was no disruption to customers.



people developmentThe principle of “learning for growth” and our Kambuku philosophy underpins the sustainability of PPC. We believe in enriching our team members by ensuring they have the right skills, knowledge and competencies to reach their full potential. Training programmes are designed to produce substantial benefits for both PPC and its employees.

average hours of training per categoryOn average, a PPC employee in South Africa spends 112,5 hours or 14 working days on training per annum.

Average training hours*

Top management (CEO)** 0,0Senior management 17,6Professional 58,2Skilled worker 87,4Semi-skilled 76,7Learner*** 1 548,6

Grand total 112,6

* Excludes average hours of training conducted via study assistance as per GRI reporting.** Current CEO was due for retirement in May 2012 therefore no training identified or scheduled for 2012.*** Includes eight permanent employees and 42 previously unemployed individuals on learnership contracts.

investment in training (rSa only) (rm)African Indian Coloured White total

Male Female Male Female Male Female

14,7 4,4 1,2 0,7 8,2 1,4 11,7 42,3

In 2012, PPC spent R42,3 million or 5,7% of its payroll (ie leviable amount) on skills development for employees (2011: R34,5 million or 5,0%). Around 76% of this was spent on previously disadvantaged employees. Through the PPC academies, we are sustaining skills and remaining globally competitive.

PPC sales and marketing academyThe PPC sales and marketing academy was launched in 2007. Since then, 28 students have joined the academy, and 18 have graduated with NQF level 4 qualifications in customer management. There are currently five students on the third level of this programme, who are expected to graduate in 2012.

PPC operations academy The PPC operations academy has turned out many successful graduates since its inception in 2007. We have a total of 40 learners currently in the programme.

The operations academy offers the further education and training certificate in carbonate materials manufacturing process on NQF level 4. PPC is the only cement manufacturing company offering this programme, which is accredited by the Mining Qualifications Authority (MQA) and registered with the South African Qualifications Authority (SAQA).

PPC mining academy To date 41 learners have joined the PPC mining academy, and we currently have 25 learners at various stages of completing the NQF level 3 qualification of rock-breaking: opencast quarrying qualification which is aligned with new explosives regulations. Ten qualified in the review period.

PPC bridging programme The accredited bridging skills programme was launched to help learners to obtain the relevant entry requirements for the academies’ programmes. To date, 155 learners have joined the programme.

PPC leadership academyThe PPC leadership academy’s second highly successful intake of 22 senior managers finished their final block in October 2012. The aim of this academy is to develop the ideal balance of leadership and management skills to produce globally competitive leaders who can meet our business requirements.

58 PPC Ltd

ppc academies

Programme

African Indian Coloured White

Current GraduatedM F M F M F M F total

Sales and marketing 10 2 2 0 4 1 4 5 28 5 18

Operations 37 3 0 0 26 0 22 0 88 40 30

Mining 16 1 0 0 12 1 11 0 41 25 10

Bridging skill programme 56 2 0 0 71 1 21 4 155 29 114

Leadership 5 2 4 3 4 0 18 2 38 22 13

Any discrepancies between the sum of current and graduated and total column reflect a change of role or employees who have left the company.

PPC technical skills academy (TSA) The PPC technical skills academy provides training and trade tests as a decentralised trade test centre and is fully accredited by Merseta (sector education and training authority for manufacturing, engineering and related services). TSA again retained its MQA accreditation and ISO 9001:2008 certification during the review period, and recently upgraded its facilities in various workshops to accommodate new requirements in training and trade testing learners.

Since 2002, TSA has successfully trained 174 engineering learners.

Programme


Current GraduatedM F M F M F M F

Electrical 5 4 0 0 1 1 2 0 13 66Fitter and turner 4 1 0 0 3 0 4 0 13 69Plater welder 3 1 0 0 4 0 0 0 8 24Diesel mechanic 4 0 0 0 2 1 1 0 8 15

total 16 6 0 0 10 2 7 0 42 174

graduate development programmeAs the PPC graduate development programme enters its fifth year, it has taken in 30 graduates and 12 have been successfully integrated into the business. In 2013, nine new graduates will enter the programme, eight of whom are African women in the chemical and mining engineering fields. This is in line with PPC’s focus on women in mining.

Significantly, in 2012, all the candidates enrolled were drawn from our Dinaledi programme – further proof that our development programmes are making a difference.


Current GraduatedM F M F M F M F total

Graduate development programme 12 12 0 0 2 1 2 2 30 11 12

Any discrepancies between the sum of current and graduated and total column reflect a change of role or employees who have left the company.

dinaledi bursary programme – future engineersAt a cost of R1,7 million, PPC is currently supporting 18 students completing various engineering disciplines from five universities (Johannesburg, Wits, Pretoria, Cape Town and Stellenbosch). Six students (all African females) will join the graduate development programme in 2013.

entrenching customer service During the year, PPC launched a major customer service training initiative, known as PPC School of Magic – building people, delivering customer value and creating magic. The intention is to develop people with relevant skills, build custodians of the PPC brand, and develop a culture across PPC that is customer focused. We understand that customer service depends on our people, so delivering customer value implicitly supports PPC’s sustainability and a better life for all our stakeholders.




Activities for the year included: � Five two-day customer relationship management programmes for middle and senior management spanning South

Africa, Botswana and Zimbabwe � A strategy programme focused on developing a value proposition for key customers in retail, concrete product

manufacturers (wet and dry), blenders and ready-mix.

In the year ahead, activities will focus on expanding customer relationship management programmes to our sites to embed the group strategy across the PPC team, and identifying additional skills development opportunities for our sales and marketing teams.

developing new role models

Busi Legodi was appointed general manager of Jupiter in 2012. Her appointment broke ground on several levels, underscoring PPC’s commitment to equal opportunity, empowerment and effective leadership development.

In her own words: “I’ve had a varied and eventful career since joining PPC at the end of 1995. My last job before joining the group was as an administration clerk for the Quality Management Institute. I then joined Hercules as a lab assistant, before being appointed as a technician at what was then GLS. I became a supervisor, then returned to Hercules as a chemist, and afterwards as quality assurance manager at Port Elizabeth.

“I developed a passion for the production environment; I enjoyed it and became production supervisor at Hercules before being promoted to production manager and handling packaging and logistics for a while in 2009.

“In all these years, the aspect that stood out for me was the support I got from colleagues, who encouraged and supported me, and inspired me to stretch myself.

“In my new role as general manager of Jupiter (the first black female operations GM in PPC), I don’t see this as the end of my journey, but just the start. I would like to give back the support I have received to my team members here at Jupiter. I am passionate about growth and development and I am already instilling those sentiments in the hearts and minds of my colleagues.

“If I were to give any advice to the women in PPC and across the world, it would be this: never forget who you are; stretch yourself, make the sacrifices you think are necessary to succeed; but not at the expense of a balanced life, or in a way that compromises the things you believe in. You are a woman, do not sacrifice yourself. Be true to yourself, and remember the unique strengths that you are blessed with as a woman.”

international empowerment initiatives

During the year PPC reinforced its commitment to equal opportunity and empowerment by becoming a signatory to the United Nations initiative Women’s Empowerment Principles – Equality Means Business, produced and disseminated by UN Women and the UN Global Compact.

We fully support the tenets of this campaign that equal treatment of men and women is not just the right thing to do – it is also good for business. By entrenching women’s empowerment as a key goal of our sustainability and corporate responsibility, we all benefit. The PPC Women’s Forum (see case study) is a good example of this commitment in practice.

As a signatory to the UN campaign, we encourage business leaders to join us and use the women’s empowerment principles as guidance for actions we can all take in the workplace, marketplace and community to empower women and benefit our companies and societies.

60 PPC Ltd

Empowered ownership Highlights

� Second phase of PPC’s BBBEE transaction increases black ownership of South African operations to effective 26% in line with mining charter requirements

� R9 million approved for PPC trust projects since inception

� R23,2 million in dividends paid under 2008 BBBEE transaction

� P64 500 paid to Botswana share scheme members � PPC’s level 2 BBBEE rating maintained

PPC is firmly committed to advancing black economic empowerment in South Africa, given the importance of meaningful mainstream economic participation by black people to meet the country’s socio-economic objectives.

After our R2,7 billion initial BBBEE transaction four years ago, we introduced the R1,1 billion second phase in the review period (see case study). Around 3,5 million black beneficiaries in broad-based shareholder groupings, including employees and communities, now hold an effective 26% of PPC’s South African operations. The group now meets the mining charter requirements for black ownership. See page 52 for further details.

SociaL review

During the period, we continued to engage with national and provincial government departments to align our broad-based socio-economic transformation objectives with those of government. Progress is guided by our REAL (relevant, empowering, actualised and lasting) transformation philosophy, the heart of all our social performance initiatives.

ppc external broad-based trusts To date, the trustees of our three external trusts – PPC Community Trust, PPC Construction Industry Associations Trust and PPC Education Trust – have approved more than R9 million for various projects, which are having a profound impact on the lives of their beneficiaries. As funding grows and loans are repaid to the bank, we expect this impact to become increasingly more significant. Since the launch of the PPC external trusts, trustees have implemented various projects across the different vehicles, summarised below.

ppc education trust (reg no it 1041/08)Launched in August 2009, this trust contributes to education and development in the cement manufacturing, mining, construction and related industries by funding education organisations or individuals involved in sectoral development, learnerships and education. There are currently six black learners completing apprenticeship training at PPC’s technical skills academy near Mafikeng. Five learners passed their trade tests earlier this year. The trustees also approved R1,35 million for extra lessons in mathematics and science for 249 pupils at eight high schools near PPC operations.

ppc community trust (reg no it 1035/08)The trust was launched in April 2010, and to date over R2,4 million has been approved by the trustees for projects in designated PPC communities. These include renovations and repairs to a primary school in Port Elizabeth, sinking a borehole for a community food garden in the Moses Kotane municipality, basic nursing skills training for ten unemployed women in the Western Cape, skills development training for 15 volunteer trauma counsellors and entrepreneurial training for ten community members in Riebeeck, Western Cape.



ppc construction industry associations trust (reg no it 1040/08)Launched in January 2009, this trust’s long-term objective is to deliver strategic projects that contribute to the socio-economic upliftment of disadvantaged individuals and communities across South Africa. In 2012, the trustees approved an additional R2 million (2011: R3,7 million) to seven beneficiary construction associations. At year end, R1 million had been spent on various projects aimed at capacitating the development of association members. Since 2009, over 2 500 members from different beneficiary associations have participated in accredited training programmes.

AssociationGrant in FY12 Activities

Khuthaza R400 000 � 143 trained in practical building skills � 65 trained in construction management � 202 trained on personal and professional development

National African Federation for the Building Industry

R400 000 � 40 trained on an enterprise development programme � 50 trained on a supplier development programme � 45 trained on solar installation and maintenance � 5 trained on business portfolio management

South African Women in Construction

R300 000 � 15 trained on costing and tendering skills

Mellon Housing R300 000 � Practical skills training and enterprise development

Habitat for Humanity R250 000 � Leadership training, coaching and mentoring

Johannesburg Construction Forum

R250 000 � 65 trained in project finance and financial management

Ikhwezi Welfare Organisation R600 000 � Training and new pottery machines � Renovations and replacement of wheelchairs

ppc internal staff truststhe ppc team Benefit trust (reg no it 1036/08)Launched in June 2009, the initial focus of this trust was financial literacy among shop-floor employees, following a needs analysis survey across the business. In 2012, the trust has focused on estate planning and the importance of having a will, with group workshops rolled out across the business.

ppc staff trusts Since launching our internal staff trusts, some 2 900 existing staff beneficiaries have collectively received R23,2 million in dividends. The Future PPC Team Trust, which deals with new staff members, is currently 56% allocated, with 421 041 shares passed on to beneficiaries. Since inception, 879 beneficiaries have joined this trust. This trust is now closed to new entrants and all shares will vest, together with the Current PPC Team Trust shares, in the beneficiaries’ names in December 2013. Some 330 400 unallocated shares in the Future PPC Team Trust have been allocated to current Black Managers Trust beneficiaries via a new trust, called the PPC Mkhulu Trust. The Black Managers Trust is currently 61% allocated, with 6,3 million shares passed on to beneficiaries. Dividends of R75 million were paid to the trust’s loan funders on behalf of beneficiaries, and 159 beneficiaries have joined this trust since its inception.

ppc Botswana share scheme PPC Botswana has contributed to our success for many years as an integral part of the PPC group. In keeping with the PPC Kambuku philosophy of Creating a better life for all and the Botswana operations’ It’s up to us slogan, we introduced a staff scheme (the Sesigo scheme) for permanent team members of PPC Botswana and Kgale Quarries in the prior year.

The Sesigo scheme allows team members to share in the profits and growth of PPC by receiving the same dividends as PPC shares listed on the JSE in South Africa. As Botswana’s requirements for localisation (or BEE) have not yet been defined, we could not award employees in Botswana shares in PPC Botswana (Pty) Limited in their own names. Until this legislation is finalised, Botswana employees will enjoy the same financial benefits as their South African colleagues. To date 106 employee beneficiaries on the scheme have received P64 500 in cash payments.

62 PPC Ltd

Highlights

� R38 million of a planned R60 million (over five years) spent on local economic development projects approved by the Department of Mineral Resources

� 88% of total procurement representing R3,5 billion spent with BBBEE suppliers

After applications to convert PPC’s old-order mineral rights were submitted to the Department of Mineral Resources (DMR) in 2008, five-year social and labour plans were submitted for approval early in 2009. These plans embody PPC’s commitment to accelerating its broad-based socio-economic transformation process. While mining licences move through the process of being converted, PPC continues to engage with the department and to implement SLPs.

In September 2012, following the second phase of our empowerment transaction (page 52), PPC received an approved report from DMR recommending that outstanding applications due to empowerment issues be finalised. Six of our ten mining rights have been converted.

All sites requiring social and labour plans in terms of the mining charter have current DMR approved plans in place.

In our ten social and labour plans submitted to the DMR, we committed to investing R60 million over five years on local economic development (LED) projects in our communities. This involves 28 projects in 12 communities, partnering with municipalities in six provinces across the country.

To date, PPC has spent over R38 million of the planned total, with 14 projects completed and handed over to communities. These social and labour plan projects are in addition to the group’s own corporate social investment (CSI) projects. PPC continues to engage with all its communities in identifying and implementing sustainable projects.

PPC’s current community investment areas are focused on infrastructure development, poverty alleviation and job-creation projects. The social and labour plan projects implemented during the year are summarised:

region: gauteng, ppc mooiplaasproject name: Skills centre incubator in tshwaneBeneficiaries: Community of Atteridgeville Launched: November 2011PPC invested R5,2 million in developing phase 1 of new construction training incubators in Atteridgeville, Tshwane. The construction phase has created 49 temporary jobs (see case study).

SociaL review continued

case study – new training incubators in tshwane

PPC has invested R5,2 million in developing two construction training incubators in the Tshwane (Pretoria) areas of Atteridgeville and Mamelodi.

The five-year project, which broke ground in November 2011, is aimed at improving the capacity of small-scale entrepreneurs through a customised and dedicated training and capacity-building programme to improve competitiveness in the construction industry. Stakeholders include the City of Tshwane, Development Bank of Southern Africa, and the Construction and Education Training Authority (CETA).

After PPC developed the business plan and conducted the project feasibility, a PPC project manager was assigned to provide expert skills and experience throughout the project. Qualified trainees from the programme will be placed at PPC and its associated companies to gain hands-on experience.

Through the training incubators, youth will have access to resources that allow them to fulfil their career ambitions and reach their highest potential. The training programme comprises three phases: tender processes, pre-construction and construction. Each phase contains in-depth sections dealing with statutory regulations, labour and staff compliance to site administration, and will be accredited by CETA.

The training incubators’ structures, previously underutilised council facilities, are anticipated to be 800m2 that each house 30 offices for contractors, conference room, classrooms, reception area and staff offices.

Business incubation has become one of the most viable mechanisms to develop previously disadvantaged small to medium enterprises in South Africa, and all stakeholders agree that it is important for government to include private-sector partnerships, as this will underpin success.

region: gauteng, ppc Laezoniaproject name: diepsloot waste buyback centre – phase 1Beneficiaries: Community of DiepslootLaunched: November 2012Diepsloot is a densely populated Gauteng community, compromising over 7 000 households in formal and informal settlements. PPC Laezonia’s quarry is some 6km from Diepsloot and sources labour mainly from that community. After the City of Johannesburg identified a serious shortage of waste management facilities in the Diepsloot community, a proposal to sustainably manage daily waste resulted in a buyback centre that would address an inherent need in the community to turn waste to wealth. PPC Cement invested R3 million towards design, construction and operational equipment for the centre, while regional authorities will be responsible for its management and operation through a sub-contractor. The construction project was completed in July 2012, creating 60 temporary jobs, and the official handover is scheduled for November 2012.

Socio-economic development



enterprise development The PPC Ntsika Fund (Pty) Limited was established in 2008 as a formal vehicle for financial support and active mentorship to black-owned enterprises. To date the Ntsika board has invested R59 million in seven black-owned businesses. Given the entrepreneurial nature of these initiatives, and the current economic environment, it is not unexpected that some of these initiatives are struggling. PPC is, however, focused on ensuring long-term success where possible through financial support and mentorship. The investment portfolio comprises:

Afripack (Pty) Limited Afripack manufactures and supplies flexible packaging solutions to the industrial and fast-moving consumer goods (FMCG) markets. To date, Ntsika has invested R41,8 million to expand the business base.

Metlakgola Construction & Development (Pty) Limited

The Ntsika board initially invested R2,1 million for the purchase and development of 23 plots into residential housing units in Soweto. Due to a number of legal and operational difficulties, only six stands were developed and only four were sold. Consequently, the Ntsika loan has been impaired by R1,3 million.

Rhulanani Concrete Mixers (Pty) Limited

Rhulanani is a ready-mix concrete business operating in Lephalale, Limpopo. Ntsika has invested R5,9 million to supplement the owners’ investment of R3,9 million. Due to a number of operational challenges, this project is under review by Ntsika.

Olegra Oil (Pty) Limited Ntsika invested R5,75 million into this business. Olegra collects used oil from surrounding mining operations and operates a filling station, fitment centre and guest house in Lime Acres village. Used oil is sold to PPC Lime as environmentally friendly fuel for its kilns. Loan repayments of R2,7 million have been made and the project is in line to repay its loan in full.

First Gas (Pty) Limited First Gas is currently distributing liquid petroleum (LP) gas, diesel and paraffin from a site in Edenvale, Gauteng. Ntsika has invested R2,9 million in this business. In 2011, First Gas was awarded a contract to distribute welding consumables in Gauteng but this was subsequently cancelled, affecting the company’s profitability.

Modise Woodworks and Projects cc Ntsika has invested R1,4 million in Modise which supplies cut-to-size laminated chipboard and accessories to the residential housing market in Soshanguve. The company is currently trading profitably and loan repayments were made in the review period.

Loerie Community Trading (Pty) Limited Loerie acquired the property of a rehabilitated lime quarry in Port Elizabeth, previously operated by PPC, and converted the buildings into a 100-bed residential facility. Ntsika has invested R2,4 million in this project to date.

preferential procurement The total measured spend for the year was R3,97 billion of which 88% or R3,5 billion (2011: R3,2 billion) was BEE-recognised spend in terms of the DTI Codes of Good Practice. This is a considerable improvement on last year’s performance and we are meeting the DTI target of 70%.

In terms of preferential spend against the mining charter, we met all targets, except for multinational contributions.

PPC % spend

Mining charter target 2014

%2013 target

%2012 target

%2012 actual

%2011 actual

%

Capital goods 40 30 20 23 24Services 70 60 50 61 47Consumable goods 50 40 25 43 58

64 PPC Ltd

corporate social responsibility PPC continues to invest in the communities in which it operates, with a special focus on initiatives benefiting women, youth and people with disabilities.

PPC’s social initiatives embrace the principles of corporate social responsibility and corporate social investment (CSI). National (BEE Act, codes of good practice and mining charter) and international (United Nations Millennium Development Goals) targets act as guidelines for social development in the PPC group. We strive to go beyond these targets by boosting grassroots innovation and social upliftment.

To ensure long-term sustainability, we believe in partnering with beneficiaries for three to five years. Being a good corporate citizen is not just about giving money; it is important that beneficiaries are helped to achieve financial independence and become productive members of society, which takes time. Job creation and skills development are vital in the context of high national unemployment and a number of our initiatives seek to address this issue (see chart).

During the year, PPC spent over R7,4 million (FY11: R9 million) on various socio-economic development projects in South Africa, Botswana and Zimbabwe.

group cSi focus areas 2012

Job creation Education Community training Infrastructure Welfare Arts and culture Other (HIV/AIDS, drug rehabilitation,sport)

4,4%51,4%

7,0%12,4%4,4%

12,9%7,5%

Projects we have supported for at least three years are beginning to bear fruit, a true reflection of the PPC REAL (relevant, empowering, actualised and lasting) philosophy. We highlight some of these long-running projects as well as new initiatives.

100% of PPC sites are covered by a formal social plan.

time for changeTime for Change beneficiaries are primarily young people from the streets and former sex workers who have been trained in baking and sewing skills to secure employment.

SociaL review continued

The two small businesses – baking and sewing – continue to make enough income to be self-supporting. Two ladies have opened their own mini bakeries; one in the inner city and the other in Fine Town. The sewing team continues to grow its customer base. They made pyjamas and linen for the Mafikeng paediatric ward in support of the Thandi Modise Trust, and PPC contributed R50 000 towards equipment for the ward. The six best performers from the sewing class each received a second-hand sewing machine as an incentive from the centre.

the Love of christ ministries (tLc) TLC is a home for abandoned babies that needed to become financially independent to ensure its survival. PPC’s investment in TLC’s poultry farming initiatives over the past three years is now producing good results. The combination of an anchor customer and competitive prices has resulted in this small business selling around 500 chickens each month. This provides revenue to cover some of TLC’s operating costs. The plan is to upgrade the facility in the next financial year, enabling TLC to double production and, thus, its annual income.

forest town School – rise BakeryAt this Johannesburg school for young people with special educational needs, the bakery continues to prosper with plans to expand by a further six training stations. Rise Bakery is currently supplying the Johannesburg Zoo with fresh goods each week.

PPC continues to support: � Khulumakahle FTHK – national deaf educational tour � Twilight Theatre Organisation – an upcoming theatre

production house in Alexandra � Field Band Foundation (Cullinan, Danielskuil,

Kimberley and Grahamstown) � Thandulwazi Maths and Science Academy � Habitat for Humanity – Youth Build in Orange Farm in

partnership with the University of Johannesburg � Alexander Clinic – invested in a customer care office � Uvuyo Trading – climate change diaries � Khula Community Development Project – vehicle for

the Eastern Cape initiative against trafficking and exploitation

� Afrika Tikkun – contribution of over 2 300 bags of cement

� De Hoek continues its programme on portable skills development for the community

� Lime Acres again invested in Rally to Read and supported schools in the area

� Children’s Eco Training School – 1 000 bags of cement towards construction of a school hall

� QuadPara Association – bursary fund and wheelchair fund for quadriplegics and paraplegics

� Hospice.



new projects � Career initiatives for grades 9 to 12 – 44 000 students

sponsored to attend My Future, My Career programme � PPC Career day – PPC staff hosted a career day for

over 500 students from Mamelodi � Breadbin interactive technology for Forest Town

School – children with disabilities now have an innovative digital platform for use as a knowledge repository

� Brick-making project – PPC provided a container and 500 bags of cement to support rural women of Gombani village in Mutale (Vhembe district municipality), Limpopo. This gave birth to the PPC cement express outlets (see case study below).

grassroots soccerThis project focuses on educating, inspiring and mobilising the youth and communities to stop the spread of HIV/Aids using soccer as a tool. Following the success of the PPC Zimbabwe grassroots soccer initiative, PPC South Africa is piloting a similar project at a school in Alexandra, Gauteng.

case study – building networks while building homes

PPC has partnered with the Ministry for Women, Children and People with Disabilities in a project to improve the lives of women in the village of Gombani, Mutale, in the Vhembe district municipality of Limpopo.

The ministry is on a drive to promote the use of alternative technologies to improve the lives of rural women. The first project was started last year in Gombani village, when a brickyard was established using hydraform technology. Women from the community use the bricks to build each other’s houses. Demand for the bricks has grown considerably and they are now sold through a co-operative.

The Department of Human Settlements has committed to develop 100 houses in the area in 2012. With contractors requiring cement to complete the project, PPC donated an initial load of 500 bags. In addition, we donated a container, which will be turned into a cement storage facility and small office. Because we expect the housing development to keep growing, it is important to ensure the project has reliable supplies of cement. PPC will continue to support the project as it expands to other provinces. We are also offering to train the women and give them technical support. Not only is it the right thing to do, but it also makes our company part of the solution to empower rural women.

case study – road project extended (social and labour plans)

Residents of the Sloya area in Danielskuil are receiving the benefit after another main road in the area has been upgraded and paved with quality bricks, as part of PPC Lime’s social and labour plan.

This is the third road in Danielskuil that PPC has upgraded – a 420m long road that connects dozens of houses and dwellings. The project involved upgrading the road and paving it with bricks and kerbs, allowing for proper drainage and stormwater flow. A local enterprise was contracted to do the work, creating temporary employment for 35 residents and permanent work for seven residents.

ppc BotswanaPPC Botswana’s cement and aggregates divisions partnered with the Lady Khama Charity Trust to raise funds for NGOs supported by the trust. PPC Botswana has also been involved with the King of the Hill Race and sponsors the PPC Botswana Youth Choir which toured the USA in 2012. The Botswana Sports Council has recognised PPC Botswana for its support in sporting activities.

ppc ZimbabweZimbabwe continued work on the Lady Rodwell maternity home in 2012, completing the water reticulation system, installing sanitaryware and a new geyser. The group also upgraded toilets for the primary school.

Some $50 000 was invested in constructing classrooms in a new secondary school at Fairbridge – Umguza Rural District.

Other initiatives included investing in: � Brick-making project at Ekuphumuleni Geriatric

Nursing Home � Cricket skills development for children aged 6 to 12 � The City Mayor’s Christmas Cheer Fund for the

underprivileged � National TB Day commemoration � Computers for the National Museum � Matabeleland education improvement project

66 PPC Ltd

Highlights

� Integrated demand management projects at Dwaalboom and Slurry were successfully implemented with a total saving of R2,8 million from March to September

� The Grassridge wind farm project was granted preferred-bidder status in round two of the Department of Energy’s renewable energy procurement programme. This project is linked with a 21MW private wind farm for PPC

� The Western Cape Department of Environmental Affairs and Development Planning issued PPC a positive environmental authorisation for the proposed upgrade of the Riebeeck facility

� Successful upgrade of the De Hoek facility, resulting in significant improvements to dust emission � Environmental authorisation granted to Hercules for Sonex milling circuit in August 2012

Lowlights

� PPC Riebeeck faced challenges in meeting permitted sulphur dioxide limits due to its plant technology and composition of the orebody. PPC completed extensive investigations and has approached the authorities to request an interim relaxation of limits pending the upgrade of this facility

� As Slurry kiln 7 dust emissions remain a challenge, we are discussing options with the authorities; an impact study was requested to determine the impact to sensitive receptors

� A number of environment and water use-related applications submitted to government are still not approved. We continue to engage with officials to ensure successful outcomes

� PPC Zimbabwe operations received fines for environmental non-compliances � Delays and legal battles between the South African Tyre Recycling Process Company and Recycling and Development

Initiative of South Africa on management plans for the waste tyre industry have delayed our plans to implement tyre co-processing

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environmentaL review

ppc environmental vision and policyFully supported by top management, PPC’s environmental vision is to minimise the impact of our environmental footprint by providing energy- and resource-efficient products that emanate from an organisation driven by sustainable development.

Long-term focus on environmental issuesWe aim to minimise the impact of PPC’s environmental footprint and create more positive outcomes in the long term. We recognise that the impacts of climate change, managing water resources and energy security are among the greatest challenges facing society. We are taking strategic steps to reduce our environmental footprint, with further steady progress in the review period.

energy policy progressIn October 2011, PPC committed to improve electrical efficiency by 10% and thermal efficiency by 5%, ultimately resulting in a 5% reduction in our specific carbon footprint by 2017. Coupled to this, we aim to source 10% of our electrical energy from renewable and/or alternative sources.

Accordingly, we are focusing on the following initiatives: � Group-wide energy management systems � Grassridge wind farm � Alternative fuels programmes � Technology upgrades to our production processes.

commitment to certified environmental management systems: systems approachAll our South African cement operations are certified ISO 14001 and our aggregates operations are accredited by the Aggregate and Sand Producer Association of South Africa (ASPASA). These systems are used to continually improve our process and set targets to ensure compliance to legislations and other requirements to which we subscribe. No major non-conformances were recorded for the year. Our aggregates operations systems are maintained through ASPASA About Face RSA 2012 with scores for 2012 as follows:PPC Mooiplaas 97,9% PPC Laezonia 95,9% Kgale 95,9%

To track and maintain environmental compliance, we have developed environmental legal registers that are linked to the environmental management system. These are audited every two years.



Key environmental issuesBased on stakeholder engagement, internal and external factors that affect the company as well as legal obligations, PPC has identified its material environmental issues for 2012 as being:

issue response strategy Status

co

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lian

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Challenging and changing environmental framework

PPC is committed to environmental legal compliance and ensures that all proposed legislation promotes sustainable business practices.

Mature environmental management systems at all sites. All cement operations in South Africa are ISO 14001 certified.Actively shape environmental legislation through industry lobbying and engagement between dedicated PPC experts and competent authorities.PPC continues to engage extensively on legislation with the potential to affect the business. Current engagements have focused on air quality legislation at national and local level, declared priority areas, contaminated land issues, waste issues including definitions and the national waste management strategy, etc.

op

erat

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Energy (electricity, coal, diesel)The cement industry requires significant thermal and electrical energy. The price, quality, sustainable supply and optimal use of both energy types are key to successful operation.

PPC has an energy committee directing projects to improve electrical and thermal efficiency and to evaluate alternative forms of thermal and electrical energy supply. These include burning waste materials instead of coal and purchasing wind-generated electricity.

PPC is replacing old technology at its Riebeeck plant in the Western Cape with modern energy-efficient and environmentally compliant equipment. The environmental impact assessment process has been completed with a positive record of decision issued by the provincial Department of Environmental Affairs and Development Planning in September 2012. The Grassridge project was granted preferred-bidder status in round two of the renewable energy procurement programme. This is PPC’s private wind farm, a project where 60MW will be generated into the renewable energy programme of the DoE and 21MW will be generated for the private use of PPC.

68 PPC Ltd

issue response strategy Status

envi

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Carbon footprintDue to the chemistry and energy requirements of the cement manufacturing process, significant quantities of carbon dioxide (CO2) are generated.

PPC has committed to reducing CO2 emissions, with significant progress over the past decade.

� PPC will continue to improve energy and process efficiencies to reduce its CO2 emissions and carbon footprint.

� Continued focus on energy management and implementation of a wide spectrum of energy efficient projects.

� PPC is an active member of a number of industry and business technical and lobby groups regarding CO2 targets and potential taxation.

The potential implementation of a carbon tax will have financial implications for the cement and lime industry.

� PPC will also actively participate in industry/government consultative processes to ensure decision makers have a clear perspective on: – feasible CO2 reduction targets – how these should be implemented

– implications of any proposed CO2 tax

As part of the 2012 budget speech, national treasury released a price guideline for carbon tax that could impact PPC’s bottom line.

PPC is actively engaging to mitigate the potential impact through various climate change committees.

Water managementEfficient and responsible use of scarce water resources

Implementing comprehensive water management programmes aligned to integrated water use licence commitments.

Water-use optimisation projects implemented at each site. A water management strategy is being developed to cover all operations as well as site-specific risks and opportunities.

Partner with industries and academics on joint solutions to water management.

PPC participates in the Industry Water Task Team.

Cleaner productionDrive cleaner production opportunities in our cement, lime and aggregate businesses

Substituting fossil fuel and natural resources with products from other industries, for example fly ash from the power sector.

The Association of Cementitious Material Producers (ACMP) is representing the cement industry in further negotiations with related parties, with particular focus on the removal of regulatory barriers. Following a presentation by the ACMP to the parliamentary portfolio committee, the DEA is reviewing international legislative frameworks.

environmentaL review continued



case study – energy

Grassridge Wind FarmPPC has been working with Innowind, a local wind energy developer owned by Electricité de France Energies Nouvelles (EDFEN), to establish a wind farm on the PPC Grassridge mine in the Eastern Cape. The wind farm is being developed as part of PPC’s strategy to purchase 10% of its electrical energy requirements from renewable sources.

Part of the development was submitted to the Department of Energy as a project for round two of the renewable energy procurement programme and was awarded preferred-bidder status.

The rest of the project will be developed exclusively for the use of PPC operations, transmitted through the Eskom network.

This project is currently in the final stages of development after the financial close in March 2012. The project will deliver a minimum of 50 000MWh renewable electrical energy to our operations in South Africa, equivalent to some 10% of our electrical energy requirements.

In addition, this is one of the first renewable energy projects being developed on an operating quarry, as part of the long-term rehabilitation plans of the mine.

energy management systemsIn 2011 PPC started developing energy management systems at all cement and lime operations to systematically improve the energy performance of each operation. We decided to develop these systems according to the ISO 50001 standard with the assistance of the national energy efficiency improvement programme of the Department of Energy and UNIDO. More information on this project is available at http://www.iee-sa.co.za/.

De Hoek was selected as a pilot project for PPC and the industrial energy efficiency project, together with operations from Toyota, SAB and ArcelorMittal. The implementation of the energy management system at De Hoek was completed in March 2012 – the first operation to successfully pass an internal audit of the system. The energy management system was developed with raw mill 5 as the focus and the operation was able to improve the energy performance of the mill by 25% initially and sustain a 20% improvement in energy performance over six months after implementation. De Hoek is now rolling the system out to other areas of the operation.

As part of implementing energy management at the operations, we are installing sub-metering at all operations

in PPC. Although there have been delays with the completion of the sub-metering, due to IT integration requirements, this project will be completed during the 2013 financial year.

PPC is now rolling this out to four more operations and plans to have energy management systems at all operations by the end of September 2013.

alternative fuels and resourcesRecent developments around competing tyre industry waste management plans have resulted in more disappointing delays to our planned co-processing of tyres at Hercules, Dwaalboom and De Hoek.

The South African Tyre Recycling Project (SATRP) had been driving this initiative until now, but suffered various delays due to legislative problems and poor governance. In the past two years, a new initiative from REDISA (Recycling and Development Initiative of South Africa) gained prominence and was recently approved by the Department of Environmental Affairs.

Litigation between the parties has delayed implementation of these plans. At present, PPC does not expect to implement co-processing of tyres in the next financial year as the REDISA plan will require a significantly longer period to gain momentum.

The positive environmental and economic effect of the processing of the industrial waste, carbonaceous spent pot liner, at our Dwaalboom plant will be increased as the Department of Economic Development, Environment and Tourism has now approved the processing of this in Kiln 2.

direct and indirect energy (Sa operations)Total direct energy consumption for 2012 is 20 572 terajoules compared to 22 331 terajoules in 2011, some 8% lower. Total indirect energy (electricity) consumption increased 2% from 2 174 terajoules in 2011 to 2 216 terajoules in 2012. The reduction in direct energy consumption is a result of prioritising the running of our most efficient plant, however the effects of our change in product strategy can be seen in the increase in specific indirect energy consumption.

change in specific direct energy consumption for Sa cement operations

2012%

2011%

2010

% change GJ/ton (per ton clinker) (5,93) (1,31) Base% change GJ/ton (per ton cement) (3,28) 0,71 Base

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change in specific indirect energy consumption for Sa cement operations

2012%

2011%

2010

% change GJ/ton (clinker) 10,85 3,22 Base% change GJ/ton (cement) 13,97 5,33 Base

carbon footprintPPC uses the World Business Council for Sustainable Development, Cement Sustainability Initiative’s CO2 emissions inventory protocol (version 2) to calculate our carbon footprint. PPC’s carbon footprint is based on both scope 1 (direct) and scope 2 (indirect) emissions.

PPC’s carbon footprint per tonne of cement, lime and dolomite has increased by 0,4%, reflecting an increase in indirect energy consumption. Although direct energy


consumption was decreased by optimising production planning, the impact of our product strategy is evident in an overall increase in carbon footprint per tonne of product.

Total scope 1 and scope 2 emissions for clinker, lime and dolomite for FY12 were 1 167kg CO2/tonne. This is flat on 2011 emission levels and 1,7% up on 2010 levels. PPC’s carbon footprint for cement decreased by 0,7% to 886kg CO2/tonne of cement produced. This decrease is significant in view of the higher clinker content in our products, however, our cement footprint remains 1,9% up on 2010 levels.

total direct indirect

Cement, lime and dolomite 5 031 440 4 437 330 594 110Aggregates 22 896 4 789 18 107Botswana 2 865 44 2 821Zimbabwe 498 494 424 445 74 049

total co2 emitted (in absolute tonnes) 2012 for ppc including aggregates, Zimbabwe and Botswana

South Africa Botswana ZimbabweCement, lime and dolomite Aggregates Cement Aggregates Cement

Total CO2e (tonne) 5 031 440 19 881 2 865 3 524 498 494

PPC has again participated in the Carbon Disclosure Project (CDP). This project collects climate data from top-performing organisations worldwide and makes this information available to investors to support responsible investment practices.

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CO2/tonne clinker, lime, dolomite CO2/tonne cement, lime, dolomite

Carbon footprint: PPC SA cement operations



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CO2/tonne clinker CO2/tonne cement

CO2e per tonne of clinker and cement

Calcination Direct Indirect

2010 2011 2012

Cement energy breakdown

50,0%

38,1%

11,9%

49,5%

38,1%

12,4%

50,2%

36,3%

13,5%

* Calcination is the process where very high temperatures are used during the clinker manufacturing process to dissociate CO2 from the limestone (Calcium Carbonate).

water resource management

PPC acknowledges that South Africa is a water-stressed country. Although the cement industry is not a water-intensive business, a number of water management programmes are in place including: awareness programmes, monitoring and water balances, stormwater management projects and water use licensing processes.

integrated water use licensing progressThe water use licensing process is complex, onerous and slow; to date PPC has not received all its integrated water use licences. We are liaising with the Department of Water Affairs’ national licensing offices to facilitate the process of PPC applications.

municipal water consumptionThe total volume of municipal water consumed by our South African operations for the past three years is shown below:

2012 2011 2010

737 553m3 623 994m3 630 119m3

Prioritisation of the use of kiln 2 at PPC Riebeeck and increased production and dust suppression requirements at PPC Dwaalboom have contributed around 88 000m3 to annual municipal consumption volumes.

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water management strategyWe continue to improve water monitoring systems through the accuracy and resolution of consumption data. Significant progress has been made throughout the South African operations, but we were unable to establish site-specific water targets. However, we believe improved understanding of these complex systems, established through improved monitoring systems, has resulted in significant savings at selected sites.

The focus for the new financial year is to consolidate the efforts of the South African operations into a group-wide strategy where we can focus on optimisation as well as savings based on site-specific risks and opportunities.

Stormwater management

case study: ppc riebeeck settling ponds

PPC Riebeeck received an integrated water use licence in mid-2011, which imposed more stringent discharge limits on this operation. As a result, PPC Riebeeck is establishing a system of settling dams to improve water quality. The design of the stormwater management system considered the receiving environment, with the main purpose of settling solid particles from the water and recycling clean water without affecting the amount of water currently being discharged. The system comprises three strategically placed dams to enable the settling of suspended solids and optimise water reuse.

case study: ppc dwaalboom

PPC Dwaalboom identified a potential source of pollution from uncontrolled stormwater run-off from the coal stockpiling area. The developed solution completely contains run-off water volume generated by the 1:50-year flood event in a pollution control dam constructed for the purpose. The project was completed during the review period at a cost of some R12 million.

air quality management

case study: finishing mill upgrade at Jupiter

As part of its air quality programme, Jupiter upgraded the finishing mill process dust collectors to ensure dust emission levels meet the minimum standards of less than 50mg/Nm3 at a cost of R2,7 million.

project cLear (concise Library of emission to air reports)Emissions from point sources are calculated using project CLEAR. (Information has been collated using project CLEAR since 2010 being the base year.) Emissions monitored through this project include particulate matter, sulphur dioxide (SO2) and nitrogen oxide (NOx) from kiln stacks. Using this project to monitor our air emission has generated wide benefits for PPC, informs our compliance and our future plant upgrades.

Some reasons for the increase (specifically dust) include: � Slurry kiln 7 – new calibration factor input in December,

increasing the kiln-specific emission factor by more than 50%.

� De Hoek kiln 5 – used more this year due to the De Hoek kiln 6 upgrade project, with a significantly higher emission factor.

fugitive emissionsPPC developed a customised fugitive emissions template for cement and lime operations approved by the authorities. The De Hoek fugitive emission management plan has been accepted by the authorities and commended for its comprehensiveness. A similar methodology has been implemented for other sites. Fugitive emissions are those emissions that do not come out of a particular point source. Action plans were developed to address areas of concern and will be submitted with our emission licences application.


point source emission levels in 2012Dust NOx SO2

Tonnes emitted pa 2012 2011 2010 2012 2011 2010 2012 2011 2010

Cement 922 583 435 9 589 8 434 7 685 891 871 692



waste managementPPC received waste licences for all its operations, but due to a significant number of administrative errors in the issued licences, we have been unable to fully implement the licences at a number of our operations. We are working closely with the Department of Environmental Affairs to resolve remaining issues and hope to obtain amended licences in the first half of the new financial year. Implementation of the licences has been supported by our robust and mature ISO 14001 systems.

Although the cement industry is not unduly waste intensive, PPC continues to focus on programmes that apply the waste hierarchy and reduce the amount of waste disposed to both municipal and onsite landfills. A significant portion of general waste generated by PPC’s SA operations, approximately one third, has been recycled or reused (see pie chart – General waste). At PPC De Hoek, separation-at-source programmes have been implemented in the staff village with great success, prolonging the life of the existing De Hoek landfill.

mine rehabilitationPPC recognises its responsibility for proactive land and resource stewardship. Most PPC mines are in environments ranging from wheat and game farming to peri-urban areas. The company owns surface rights to all areas where deposits are being mined and land not required for current operations is leased to farmers for agriculture. Rehabilitation is done concurrently with mining operations and rehabilitated land is leased in exchange for farming land required for ongoing mining.

Recycle 33%Disposal 67%

General waste

Recycle 18%Disposal 82%

Hazardous waste

ppc’s concurrent rehabilitation reconciliation as at September 2011*

Beestekraal

%Dwaalboom

%Grassridge

%Slurry

%Riebeeck

%De Hoek

%Laezonia

%Mooiplaas

%PPC

%

Rehabilitation at September 2011 80 86 100 99 99 94 92 88 96

*As the annual mining survey is conducted aerially at year end, rehabilitation data always lags by one year.

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case study – alien invasive eradication at Hercules

PPC Hercules completed its five-year alien eradication programme during the review period. In 1984, regulations were passed in terms of the Conservation of Agricultural Resources Act (CARA) (Act No 43 of 1983) under which about 50 species were declared weeds or invader plants. At Hercules, the plant area was subdivided into six parts, and the process divided into three phases:

� Phase 1 (2008 to 2009): included removing identified alien plants from areas 1, 2, 3, 5 and 6

� Phase 2 (2009 to 2010): rehabilitating areas 3 and 5 and planting indigenous species

� Phase 3 (2010 to 2011): removing invaders from area 4 and planting indigenous species in a portion of the area. The programme is maintained through environmental management systems.

upgrade projectsThe final Riebeeck kiln 3 application was submitted to the Western Cape Department of Environmental Affairs and Development Planning, with PPC receiving a positive environmental authorisation.

de Hoek kiln 6The DHK6 upgrade project has been successfully completed. This entailed installing a grate cooler and indirect firing system for kiln 6, coupled with an ESP-to-bag house conversion for the main stack.

The project has delivered major environmental benefits, including:

� Reduced dust emissions from the grate clinker cooler electrostatic precipitator, raw mill/kiln bag filter and coal mill bag filter. All stacks are sampled to verify dust emission levels, with results showing all stacks are well below new kiln minimum emission standards for 30mg/Nm3, as prescribed by the Department of Environmental Affairs

� Reduced noise levels for the grate clinker cooler compared to the previous satellite coolers

� Improved thermal efficiency from the indirect firing system.

The project was implemented at a cost of R280 million.

Slurry rail and road offloading tipplerPPC Slurry recently commissioned the upgrade of its rail and road offloading tippler to reduce generation of fugitive dust when a rail wagon is tipped upside down to offload its contents or a road truck is discharging cargo by tipping. The upgrade included partial enclosure of the tippler facility while allowing for direct tipping of road vehicles into the tippler facility. The facility was equipped with an atomising water dust suppression system to prevent fugitive dust emission and fall-out dust in the rail siding area. The upgrade cost R5,4 million and has significantly reduced dust emission. The project has also produced a number of improvements in operational efficiencies.




Slurry finishing mill 4PPC initiated the upgrade of Slurry’s finishing mill 4 in June 2011, which will have numerous environmental benefits. The project scope includes the following upgrades:

� Energy efficient motors (IE2) � Two high-efficiency separators (energy efficiency) � Replacing the existing electrostatic precipitator (ESP)

with a state-of-the-art bag filter with emission guarantees of below 30mg/Nm3.

The project will address both environmental improvements and plant reliability, at a cost of around R100 million and is scheduled for completion by end-March 2013.

Hercules road delivery of raw materialsThe PPC Hercules raw material stores were upgraded to allow for delivery by road and tipping of raw materials, including coal, slag and synthetic gypsum, directly into the store. The positive impacts associated with the project are:

� Improved materials handling � Reduced risk of stormwater and soil contamination � Reduced fugitive dust as a result of materials handling.

The project was implemented at a cost of R12,5 million.

Hercules Sonex filterPPC obtained an environmental authorisation to replace the Hercules Sonex finishing mill ESP with a bag filter. The project will be implemented by mid-December 2012 and guarantee dust emissions of less than 30mg/Nm3 at a cost of R9 million.

Lime acres LK6The PPC Lime Acres kiln 6 main filter is scheduled for upgrade mid-2013. The upgrade will be undertaken at a cost of R31 million and will guarantee emissions of below minimum emission standards of 30mg/Nm3.

Stakeholder engagementPPC continues to empower communities in which we operate with environmental management knowledge. Supported by regular environmental stakeholder meetings at all sites, our continued commitment to transparent and effective communication and awareness is showing definite benefits, for example:

� PPC Hercules has received considerable support from the community due to our response to issues raised during stakeholder forum meetings.

� At Jupiter, the environmental stakeholder forum has developed into a forum for all industries in the Heriotdale industrial area, creating a platform to collaborate on local environmental challenges.

� Engagement with the authorities has been extended by opening internal technology courses to representatives directly involved with PPC operations. This enhanced knowledge has assisted significantly during engagement.

Legal complianceThe Zimbabwe operations paid environmental fines equivalent to R34 600 for:

� Unlined landfill in contravention of statutes and polluting beyond allowed limits. PPC Zimbabwe has submitted a report with recommendations to the Environmental Management Agency (EMA) for approval. Budgeting has started for a project to address non-compliance in the next financial year

� Non-permitted emission points at PPC Zimbabwe. An application has been submitted to EMA to address these emission points. Further investigations are under way to address stack designs.

PPC Lime Acres was recently audited by the Green Scorpions, who recommended that PPC Lime Acres apply for a variation of its waste licence to ensure that all conditions are appropriate for the operation. A variation application has subsequently been submitted to authorities.

76 PPC Ltd

In this section of the report, we explain what PPC has achieved in implementing best practices and acknowledge that we are continually moving towards better governance practices.

Our corporate governance report focuses on the following key governance aspects:

� Ethical leadership: characterised by the values of responsibility, accountability, fairness and transparency and based on moral duties that find expression in the concept of ubuntu. Responsible leaders direct company strategies and operations to achieve sustainable economic, social and environmental performance.

� Sustainability: the primary moral and economic imperative of the modern business. It is the most important source of both opportunity and risk for businesses. Nature, society and business are interconnected in complex ways that should be understood by decision-makers. Most importantly, current incremental changes towards sustainability are not sufficient – we need a fundamental shift in the way companies and directors act and organise themselves.

Ethical leadershipThe following values are central to the way we do business at PPC and they form the basis on which site-specific codes of conduct have been developed:

� Integrity is non-negotiable: – We meet our commitments – We do what we say – We are honest and obey the law

� Great place to work: – We work in teams. Everyone has an important role and we want to create a non-discriminatory, safe and healthy work environment

– We respect the dignity of every individual we engage with

� Excellence in all we do: – We are professional and do things properly – We at PPC set the standard. We lead. We set challenging goals and are performance-driven

– We are flexible and agile and we seek to continuously improve. Yesterday’s stretch becomes today’s standard

� Legitimacy – We are seen by our stakeholders as caring and adding value. We are seen as long-term contributors and not short-term takers

– We care for the environment and the communities in which we operate

– We comply with OECD guidelines in the fight against corruption. We will not make ‘facilitation payments’ to individuals or parties related to them but we care for and contribute to the communities in which we operate

� Creating a better life for all stakeholders – Everyone’s contribution creates value. All stakeholders share in the value and success that we create

� Customer focused – Our customers are the reason for our existence and all our efforts are focused on building good relationships, understanding and meeting their needs.

Phuti Semenya, the chief audit executive, is responsible for reporting on the company’s ethics performance to the social and ethics committee of the board.

The company has provided an independent, confidential and safe system by which employees or other parties can report unethical or risky behaviour via PPC ethics lines, detailed below:

PPC Ethics Lines South AfricaDeloitte & Touche Tip-Offs AnonymousTelephone 0800 00 67 05Free fax 0800 00 77 88Address PPC Ethics LineFree post c/o Tip-Offs Anonymous Free Post DN298 Umhlanga Rocks 4320 South AfricaEmail [email protected] +27 31 508 6493

BotswanaDeloitte & ToucheTelephone 0800 60 06 44Facsimile 0800 00 77 88Email [email protected]

ZimbabweDeloitte & ToucheTelephone 0800 4100Facsimile +263 91 8240 921Address The Call CentreFree post PO Box HG 883 Highlands Harare ZimbabweEmail [email protected]

CorporatE GovErnanCE rEvIEw


Governance reviewIntegrated review of 2012

Sustainability and integrated reportingThe PPC board accepts that the future of the company is linked to three interdependent sub-systems – the natural environment, the social and political system and the global economy. For sustainability issues, the board is assisted by the social and ethics committee.

The board also accepts responsibility for the integrity of the company’s integrated report. As proposed in the King III code, the board has delegated the responsibility to evaluate sustainability disclosures to the audit committee. At its meeting on 7 November 2011, and based on the recommendation of the audit committee, the board confirmed the appointment of Deloitte & Touche as the external assurance provider for the sustainability report for the 2012 financial year.

The Global Reporting Index (GRI) G3.1 has been used as the basis for reporting and ten indicators for assurance were identified through the standard risk review process as material risks to PPC.

The external sustainability assurance report of Deloitte & Touche was tabled and reviewed by the audit committee meeting in November and was referred to the board for consideration at its November meeting (page 109).

The board’s statement on the company’s status as a going concern is included in the group financial statements.

Board of directorsThe PPC board is the focal point and custodian of corporate governance in the group. More detail on members of the board appears on pages 6 and 7. Board members are expected to act in the best interest of the company and the group company secretary maintains a register of directors’ interests as required by law.

In line with its annual meeting plan, the board meets at least six times a year and has adopted a board charter that includes a statement of governance principles that guide the activities of the board. This charter also details the roles of the chairman of the board and chief executive officer (CEO).

According to the charter, the roles and responsibilities of the board are to:

� Act as the focal point and custodian of corporate governance by conducting its relationship with management, shareholders and other stakeholders of the company according to sound corporate governance principles

� Appreciate that strategy, risk, performance and sustainability are inseparable and give effect to this by: – Contributing to and approving the strategy – Satisfying itself that the strategy and business plans do not give rise to risks that have not been thoroughly assessed by management

– Identifying key performance and risk areas – Ensuring the strategy will result in sustainable outcomes

– Considering sustainability as a business opportunity that guides strategy formulation

� Provide effective leadership on an ethical foundation � Ensure the company is, and is seen to be, a responsible

corporate citizen by considering the financial aspects of its business and the impact business operations have on the environment and society in which it operates

� Ensure the company’s ethics are managed effectively � Ensure the company has an effective and independent

audit committee � Be accountable for the governance of risk � Monitor information technology governance � Ensure the company complies with applicable laws

and considers adherence to non-binding rules and standards

� Ensure there is an effective risk-based internal audit � Appreciate that stakeholders’ perceptions affect the

company’s reputation � Ensure the integrity of the company’s integrated

report � Act in the best interests of the company by ensuring

that individual directors: – Adhere to legal standards of conduct – Are permitted to take independent advice related to their duties following an agreed procedure

– Disclose real or perceived conflicts to the board and deal with them accordingly

– Deal in securities only in accordance with the policy adopted by the board

� Initiate business-rescue proceedings as soon as the company is financially distressed

� Elect a chairman of the board who is an independent non-executive director

� Appoint and evaluate the performance of the CEO.

In fulfilling its duty, the full board annually selects a chairman at its meeting in February. The board also appoints the CEO from time to time.

The current chairman of the board is Bheki Sibiya. At its meeting in October 2012, the nominations committee confirmed his status as an independent non-executive director. The role of the chairman has been formalised in the board charter and requires that he should:

� Lead the board, not the company � Safeguard the integrity of corporate governance

processes and actions as determined collectively by the board

� Be the link between the board and management, particularly the CEO

� Be the main link between the board, shareholders and the public at large.

78 PPC Ltd

The duties of the chairman are viewed in the broadest terms. All the tasks of the chairman fall into one of the categories above. Other core functions of the chairman include:

� Actively participating in selecting board members and overseeing a formal succession plan for the board and executive directors

� Ensuring new directors are properly inducted and that board evaluations and director appraisals are carried out

� Formulating, in conjunction with the board, an annual work plan for the board against agreed objectives and goals

� Ensuring all directors play a full and constructive role in the affairs of the company and taking a lead role in removing non-performing or unsuitable directors from the board

� Ensuring all relevant information and facts are timeously placed before the board to enable the directors to reach an informed decision.

In line with best practice, the chairman’s ability to add value and his performance against what is expected of his role and function were assessed in the second half of this financial year.

The CEO and chief financial officer (CFO) are ex officio members of the board.

Ketso Gordhan has been appointed as the new CEO and will take on this responsibility from 1 January 2013. In the board charter, the board and the chairman recognise that the CEO leads the company and the management team, is responsible for day-to-day operations and is the principal spokesperson for the company, while the chairman leads the board. The framework for delegating authority is reviewed annually. The CEO provides regular reports during board meetings on progress in executing strategy against the formalised company scorecard.

The performance of the CEO and his management team is evaluated annually by the remuneration committee and the outcome of this evaluation is the basis for salary increases, bonus payments and participation in share incentive schemes.

The current CFO is Tryphosa Ramano and her experience and expertise are annually evaluated by the audit committee with the outcome reported to the board.

The ultimate authority and responsibility for the company resides collectively in the full board of directors and not any one individual.

A copy of the board charter can be obtained from the company secretary.

Board compositionThe nominations committee annually evaluates whether its size, diversity and demographics make the board effective. At year end, the board comprises a non-executive chairman, eight non-executive directors and five executive directors. At its meeting in October 2012, the nominations committee evaluated the independence of non-executive directors and concluded that the following directors are independent as defined in the King III code and the JSE Listings Requirements:

� Zibu Kganyago � André Lamprecht � Ntombi Langa-Royds � Bridgette Modise � Tim Ross � Joe Shibambo � Bheki Sibiya

Non-executive directorsExecutive directorsIndependent directors

09 10 11 12

8

6

4

2

0

Board composition

Executive directors 36%Non-executive directors 64%

CorporatE GovErnanCE rEvIEw continued



Non-executives

0807 09 10 11 12

10

8

6

4

2

0

The board has made notable progress on transformation and compliance with the code as reflected in the following graphs:

Black directors

0807 09 10 11 12

10

8

6

4

2

0

Women

0807 09 10 11 12

4

3

2

1

0

Black executives 60%White executives 40%

Black non-executive 78%White non-executive 22%

80 PPC Ltd

Group company secretaryThe group company secretary is Jaco Snyman and he provides the board as a whole and directors individually with guidance on discharging their responsibilities. He is a central source of information and advice to the board and within the company on matters of ethics and good governance. He also ensures the proceedings and affairs of the board, its committees, the company itself and,

André Lamprecht has been a member of the board since November 1997, but after rigorous review of his independence and performance by the nominations committee, it was concluded that he has maintained his independence.

Directors are appointed through a formal process and the nominations committee assists in identifying suitable candidates to be proposed to shareholders. This process is detailed in the company’s selection and appointment policy. The primary objective of the selection and appointment policy of the company is to provide a transparent framework and set standards for the selection and appointment of high calibre executive directors and non-executive directors with the capacity and ability to lead the company towards achieving sustainable value creation and long-term growth. The nominations committee has oversight over this policy.

A formal induction programme is established for new directors, and inexperienced directors are developed through training programmes. For continuing development, the company encourages directors to attend the professional development programmes of the Institute of Directors of South Africa.

While no limitations are imposed by the board charter, or otherwise, on the number of other appointments directors can have, approval must be obtained from the chairman prior to accepting additional commitments that may affect the time directors can devote to the group.

The board succession plan was reviewed by the nominations committee at its meeting on 15 October 2012.

At the annual general meeting in January 2013, at least one-third of non-executive directors will retire by rotation. We refer to the notice of the AGM on page 142.


attendance at scheduled meetings between 9 november 2011 and 12 november 2012

non-executives Board AGM Audit

Social and

ethics Nomco Remco

Risk and

compli-ance

Attend-ance

ZJ Kganyago Independent 5/5 1/1 3/3 9/9AJ Lamprecht Independent 5/5 1/1 4/4 2/2 12/12NB Langa-Royds Independent 5/5 1/1 4/4 2/2 4/4 16/16TDA Ross Independent 5/5 1/1 3/3 3/3 12/12J Shibambo Independent 4/5 1/1 4/4 2/2 4/4 3/3 18/19BL Sibiya Independent 5/5 1/1 2/2 8/8MP Malungani 4/5 1/1 2/4 7/10Bridget Modise Independent 5/5 1/1 3/3 3/3 12/12SJ Vilakazi* 1/2 1/1 1/2 3/5SK Mhlarhi** 3/3 3/3 6/6

Executive members

P Stuiver 5/5 1/1 3/3 3/4 1/2 3/4 3/3 19/22S Abdul Kader 5/5 1/1 1/3 3/4 2/3 12/16T Ramano 5/5 1/1 3/3 3/3 12/12P Esterhuysen 5/5 1/1 3/3 4/4 3/3 16/16S Helepi 5/5 1/1 4/4 1/1 2/3 13/14

* Retired from the board in March 2012. ** Joined the board in March 2012. • Mr Helepi was not invited to all the remuneration committee meetings.

where appropriate, owners of securities in the company are properly administered in accordance with pertinent laws. Details on his qualifications and experience appear on page 8 of this report.

The board has considered and satisfied itself on the competency, qualifications and experience of the company secretary.



The chief audit executive has submitted a report to the board on the effectiveness of controls and risk management, concluding that both were satisfactory. This report was tabled at the audit committee and board meetings in November 2012. He further confirmed that nothing has come to his attention to cause him to believe that PPC’s system of internal control is not generally effective to sufficiently mitigate key risks; also that he was not aware of anything that would cause him to believe that the controls over financial processes do not provide a sound basis for preparing reliable financial statements.

Compliance with King III and the principle of apply or explainWhile a substantial application of the principles of King III was achieved in the review period, the aspirational nature of the code will require the company to continually improve its governance practices.

Although good progress has been made with reviewing IT practices and governance during the year, some implementation concerns remain. In response, the board has requested management to establish an IT steering committee to assist with implementation of its IT governance framework.

As mentioned above, Peter Malungani has been appointed as the chairperson of the deal committee of the board. Although Peter is not an independent director as required by best practice, the board has appointed him based on his experience and skills and the fact that the committee would be convened on an ad hoc basis only.

André Lamprecht has been a member of the board since November 1997 and best practice suggests that any term beyond nine years should be subjected to rigorous review of independence. As stated above, the nominations committee annually reviews the independence of the board members and after rigorous review of his independence and performance, it was concluded that he has maintained his independence during the financial year.

DelegationThe board delegates certain functions to committees and management, without abdicating its own responsibilities. Delegation is formal and involves:

� Approved and documented terms of reference for each committee of the board

� Terms of reference are reviewed once a year � Committees are appropriately constituted with due

regard to the skills required � The board has a framework for delegating authority

to management.

He is responsible for compliance with the rules and listings requirements of the JSE Limited and the Zimbabwe Stock Exchange on which the company’s securities are listed and administers the statutory requirements of the company and its subsidiaries in South Africa.

The board has evaluated the company secretary’s performance as part of the annual board evaluation. More details on the results appear below but the results indicated that whilst the board was satisfied with the meeting administration, the role of the board in strategy should be given more focus. To align with best practice and with the Listings Requirements regarding the arm’s-length relationship between the company and the company secretary, his reporting line has been changed during the year and he now reports directly to the CEO.

The company secretary is satisfied that he is able to effectively perform the role as the gatekeeper of good governance in the company and to carry out this role and responsibilities as company secretary.

annual board evaluationThe annual board evaluation was completed in November 2012. The evaluation covered the appropriateness of the board structure, the effectiveness of the meeting management and the general performance of the board.

During the board evaluation the members generally emphasised the importance of strategy and time allocation for strategic issues on the agenda. As a result, a new process has been implemented to improve the group’s annual strategic planning process. This will further enhance participation by the board in strategy development. Strategy has also become a key feature on the board’s agenda and this enables the board to maintain oversight with regard to progress made with strategic issues.

In response to feedback received from a number of board members, the chairpersons of the board sub-committees will improve the level of feedback provided to the board.Generally the board members indicated their satisfaction with the board balance, the availability of board papers prior to meetings, the independence of the non-executives and the level of oversight regarding risk management.

Strategic planningAs a key performance area of the board, group strategy is mapped by the board in consultation with the executive committee of the company (Exco). The board appreciates the fact that strategy, risk, performance and sustainability are inseparable and annually reviews the strategy at its meeting in August/September.

Internal controlReporting in the company is structured so that key issues are escalated through the management team ultimately to the board if appropriate.

82 PPC Ltd

Board committeesThe board has five standing committees through which it operates. Committees play an important role in enhancing good corporate governance, improving internal controls and therefore the sustainable performance of the company. The current board committees and their chairpersons are:

� Audit committee – Tim Ross � Risk and compliance committee – Joe Shibambo � Nominations committee – Bheki Sibiya � Remuneration committee – Ntombi Langa-Royds � Social and ethics committee – Ntombi Langa-Royds.

The chairpersons of these committees are independent non-executive directors. The demographic breakdown is shown below:

Black 72%White 28%

Racial participation

Black 80%White 20%

Chairpersons – by race

Male 60%Female 40%

Chairpersons – by gender

The ad hoc deal committee established by the board has been appointed to assist in executing the company’s expansion strategy with Peter Malungani as the chairperson. Although Peter is not an independent director, the board has appointed him based on his experience and skills and the fact that the committee would be convened on an ad hoc basis only.

In the interest of free information flow and good oversight, full or summary minutes of all board committee meetings are included in document packs for board meetings. In addition, the chairpersons of the committees are required to present an annual report on their activities at the board meeting in November. Based on these reports and the minutes of the committees, their performance and conformance to terms of reference are annually evaluated by the board. At its meeting in November 2012, the board concluded that all committees had executed their responsibilities within the scope of their respective terms of reference in the 2012 financial year.

audit committeeThe current members of the audit committee are: Tim Ross (chairperson), Zibu Kganyago and Bridgette Modise. All members are independent non-executive directors in accordance with provisions of the code, the JSE listings requirements and the Companies Act 2008. The committee may obtain, at the company’s expense, independent professional advice on any matters covered by its terms of reference. The committee was in place throughout the current financial year, and the external auditors and head of internal audit have direct access to its chairperson.

Tim Ross has been chairperson of the committee since 2009. He was a partner with Deloitte for 36 years and retired in May 2008. Tim is a member of the South African Institute of Chartered Accountants.

Members of the executive team, including the CFO and CEO, attend committee meetings by invitation. Similarly, external and internal auditors attend committee meetings by invitation and have no voting rights. The chairperson reports to the board on the activities and recommendations made by the committee. The head of internal audit reports to the chairperson of the audit committee and to the CFO on day-to-day matters.

Terms of referenceThe audit committee has adopted formal terms of reference that have been approved by the board of directors, and has executed its duties over the past financial year in accordance with these terms of reference. Among other issues, the committee’s terms of reference include the following responsibilities:




Financial statementsThe committee reviews the annual financial statements, interim and preliminary announcements, accompanying reports to shareholders and any other announcements on the company’s results or other financial information to be made public, prior to submission and approval by the board.

Integrated reportingThe committee oversees integrated reporting, and in particular:

� Considers all factors and risks that may impact on the integrity of the integrated report, including factors that may predispose management to present a misleading picture, significant judgements and reporting decisions made, monitoring or enforcement actions by a regulatory body, any evidence that brings into question previously published information, forward-looking statements or information

� Reviews the annual financial statements and summarised integrated information

� Reviews the disclosure of sustainability issues in the integrated report to ensure this is reliable and does not conflict with the financial information

� Recommends to the board whether or not to engage an external assurance provider on material sustainability issues

� Recommends the integrated report for approval by the board

� Considers the frequency for issuing interim results � Considers whether the external auditor should

perform assurance procedures on the interim results � Reviews the content of the summarised information

to ensure it provides a balanced view � Engages the external auditors to provide assurance on

the summarised financial information � Prepares a report, to be included in the annual

financial statements for that financial year – Describing how the audit committee carried out its functions

– Stating whether the committee is satisfied that the auditor was independent of the company

– Commenting in any way it considers appropriate on the financial statements, accounting practices and the internal financial control of the company.

Internal auditThe committee is responsible for overseeing internal audit, in particular:

� The appointment, performance assessment and/or dismissal of the chief audit executive

� Reviewing the internal audit charter � The appointment, performance assessment and/or

dismissal of the outsourced/company’s internal audit service provider

� Approving the internal audit plan and any significant changes and satisfying itself that the audit plan effectively addresses critical risk areas of the business

� Ensuring the internal audit function is subject to an independent quality review, as the committee determines appropriate

� Reviewing internal audit’s compliance with its charter as approved by the audit committee and considering whether the internal audit function has the necessary resources, budget and standing within PPC to enable it to discharge its functions.

Risk managementThe committee is an integral component of the risk management process and, specifically, must oversee:

� Financial reporting risks � Internal financial controls � Fraud risks as these relate to financial reporting � IT governance and risks as these relate to financial

reporting.

External auditThe committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process. In this regard, the committee must:

� Nominate an independent external auditor for appointment by shareholders

� Determine fees to be paid and terms of engagement of the auditor

� Ensure the appointment of the auditor complies with the Companies Act and other relevant legislation

� Monitor and report on the independence of the external auditor in the annual financial statements

� Define a policy for non-audit services provided by the external auditor

� Pre-approve contracts for non-audit services to be rendered by the external auditor

� Ensure there is a process for the committee to be informed of any reportable irregularities (as identified in the Auditing Profession Act, 2005) identified and reported by the external auditor

� Review the quality and effectiveness of the external audit process.

Financial directorIn addition, the audit committee must annually consider and satisfy itself of the appropriateness of the expertise and experience of the financial director and must confirm to shareholders in its annual report that it has executed this responsibility.

Financial functionThe committee reviews the expertise, resources and experience of the company’s finance function, and discloses the results in its report to shareholders.

See report on page 84.

84 PPC Ltd


rEport to SharEhoLDErS on thE aCtIvItIES of thE auDIt CommIttEE for the year ended 30 September 2012

The audit committee is a committee of the board of directors and, in addition to specific statutory responsibilities to shareholders in terms of the Companies Act, it assists the board through advising and making submissions on financial reporting, oversight of the risk management process and internal financial controls, external and internal audit functions and statutory and regulatory compliance of the company.

terms of referenceThe audit committee has adopted formal terms of reference that were updated during the year and approved by the board. It has executed its duties during the past financial year in accordance with these terms of reference.

CompositionThe committee consists of three independent non-executive directors as required by law. At 30 September 2012, its members were:

Name Qualifications Period served

ZJ Kganyago BCom 4 yearsTDA Ross CA(SA) 4 yearsB Modise CA(SA) 2 years

The chief executive officer, finance director, chief audit executive, senior financial executives of the group and representatives from the external and internal auditors attend the committee meetings.

The internal and external auditors have unrestricted access to the audit committee.

meetingsThe audit committee held three scheduled meetings during the year, with attendance shown below:

Director May 2012 October 2012 November 2012

ZJ Kganyago √ √ √TDA Ross √ √ √B Modise √ √ √

An additional meeting was scheduled in November to review the integrated report and attended by all members.

Statutory dutiesIn executing its statutory duties during the 2012 financial year, the audit committee:

� Nominated Mr B Nyembe, from the audit firm Deloitte & Touche, for appointment. In the opinion of the committee, Mr Nyembe was independent of the company

� Determined Deloitte’s terms of engagement � Believes that the appointment of Deloitte complies with the relevant provisions of the Companies Act, JSE Listings

Requirements and King III � Developed and implemented a policy setting out the extent of any non-audit services the external auditors may or

may not provide to the company � Pre-approved all non-audit service contracts with Deloitte � Received no complaints on the accounting practices and internal audit of the company, content or auditing of its

financial statements, internal financial controls of the company, and any other related matters.

Delegated dutiesIn executing its delegated duties (as reflected in its terms of reference), the audit committee fulfilled all its obligations including:

Financial statements � The committee reviewed the annual financial statements, interim and preliminary announcements, accompanying

reports to shareholders and other announcements on the company’s 2012 results to the public.

Integrated reporting � Recommended that the board engage an external assurance provider on material sustainability issues � Reviewed the disclosure of sustainability issues in the integrated report to ensure it is reliable and does not conflict

with the financial information � Recommended the integrated report for approval by the board.



rEport to SharEhoLDErS on thE aCtIvItIES of thE auDIt CommIttEE continuedfor the year ended 30 September 2012

Internal audit � Took responsibility for the appointment and performance assessment of Mr Semenya, the chief audit executive � Was responsible for the appointment and performance assessment of the outsourced internal audit service provider � Approved the internal audit plan and changes to the plan and satisfied itself that the audit plan effectively addresses

the critical risk areas of the business � Reviewed internal audit’s compliance with its charter (which was updated during the year and approved by the

committee) and considered whether the internal audit function has the necessary resources, budget and standing within PPC to enable it to discharge its functions.

� Received written report on the effectiveness of controls and risk management.

Risk management � The committee is an integral component of the risk management process and specifically reviewed:

– Financial reporting risks – Internal financial controls – Fraud risks as these relate to financial reporting – IT governance.

External audit � Evaluated and reported on the independence of the external auditor � Reviewed the quality and effectiveness of the external audit process � Based on our satisfaction with the results of activities outlined above, we have recommended to the board that

Deloitte should be reappointed for 2013. Mr Nyembe from Deloitte was nominated as the registered auditor � Determined the fees to be paid and terms of engagement of the auditor � Ensured that the appointment of the auditor complies with the Companies Act and other relevant legislation.

Financial director � The committee has satisfied itself of the appropriateness of the expertise and experience of Ms Ramano, the financial

director, and confirms this to shareholders.

Financial function � The committee has reviewed the expertise, resources and experience of the company’s finance function, and confirms

its satisfaction to shareholders � In making these assessments, we have obtained feedback from both external and internal audit � Based on the processes and assurances obtained, we believe the accounting function is effective.

oversight of risk managementThe committee has:

� Received assurance that the process and procedures followed by the risk management and compliance committee are adequate to ensure that financial risks are identified and monitored.

Internal financial controls � Reviewed the effectiveness of the company’s system of internal financial controls, including receiving assurance from

management and internal audit � Reviewed material issues raised by the internal and external audit process � Based on the processes and assurances obtained, we believe significant internal financial controls are effective.

regulatory complianceThe audit committee has complied with all its responsibilities.

Integrated reportBased on processes and assurances obtained, we have recommended the integrated report to the board for approval.

On behalf of the audit committee

tim ross Chairman

86 PPC Ltd

risk and compliance committeeThe members of the risk and compliance committee are: Joe Shibambo (chairperson), Peter Esterhuysen, Tim Ross and Bridgette Modise who was appointed as the fourth member to the committee with effect from March 2012 and replaced Jerry Vilakazi. Bridgette is also a member of the audit committee and her membership of the risk committee contributes to her understanding of wider risk in the group.

Peter, an executive director, was appointed to the committee to align it with the best-practice recommendations of the code. All other members of the committee are non-executive directors. The committee may obtain, at the company’s expense, independent professional advice on any matters covered by its terms of reference.

Members of the executive team responsible for risk and compliance management, including the CEO, attend committee meetings by invitation. Similarly, external and internal auditors attend committee meetings by invitation but have no voting rights. The chairperson of the committee reports to the board on the activities and recommendations made by the committee and the latest minutes of committee meetings are included in board packs.

The committee has its own terms of reference approved by the board, to assist its members to understand their roles and enable them to add value in discharging their duties. The committee’s terms of reference are reviewed annually.

Terms of referenceThe committee’s terms of reference include the responsibility to:

� Oversee the development and annual review of a policy and plan for risk management to recommend for approval to the board

� Monitor implementation of the policy and plan for risk management taking place by means of risk management systems and processes

� Make recommendations to the board on the levels of risk tolerance and appetite, and monitor that risks are managed within these levels as approved by the board

� Approve the company’s compliance policy and oversee that the policy is disseminated through the company

� Oversee that the risk management plan is disseminated throughout the company and integrated in its day-to-day activities

� Ensure risk assessments are performed continuously � Ensure compliance management assessments are

continuously performed � Ensure frameworks and methodologies are

implemented to increase the possibility of anticipating unpredictable risks

� Ensure management considers and implements appropriate risk responses

� Ensure continuous risk monitoring by management takes place

� Liaise closely with the audit committee and other board committees to exchange information relevant to risk

� Express a formal opinion to the board on the effectiveness of the system and process of risk management

� Review reporting on risk management and compliance being included in the integrated report in terms of being timely, comprehensive and relevant.

A more detailed review on risk appears on page 89 while the report on compliance is on page 88.

Compliance with terms of referenceThe committee reported on its activities for the review period at the board meeting in November 2012. At this meeting, the board confirmed the committee had complied with its terms of reference.

nominations committeeThe members of the nominations committee are: Bheki Sibiya (chairperson), Ntombi Langa-Royds, André Lamprecht and Joe Shibambo. The committee was in place throughout the 2012 financial year. All members are independent non-executive directors as defined in the code. The committee may obtain, at the company’s expense, independent professional advice on any matters covered by its terms of reference.

The committee normally asks the CEO to attend its meetings, but he has no voting rights.

The committee has its own terms of reference, approved by the board and reviewed annually. The chairperson reports to the board on the activities and recommendations made by the committee and the latest minutes of committee meetings are included in board packs.

Terms of referenceThe committee performs all the functions necessary to fulfil its role as stated in its terms of reference including:

� Ensuring the establishment of a formal process for appointing directors, including: – Identifying suitable members of the board – Performing reference and background checks of candidates prior to nomination

– Formalising the appointment of directors through an agreement between the company and the director

� Overseeing the development of a formal induction programme for new directors

� Ensuring inexperienced directors are developed through a mentorship programme

� Overseeing the development and implementation of continuing professional development programmes for directors

� Ensuring directors receive regular briefings on changes in risks, laws and environment in which the company operates




� Considering the performance of directors and taking steps to remove directors who do not make an appropriate contribution

� Finding and recommending to the board a replacement for the CEO when that becomes necessary

� Ensuring formal succession plans for the board, CEO and senior management appointments are developed and implemented

� Providing input on senior management appointments as proposed by the CEO

� Approve a policy for the appointment of directors, and background and reference checks are performed before appointing directors.


remuneration committeeThe members of the remuneration committee are: Ntombi Langa-Royds (chairperson), Joe Shibambo and Sydney Mhlarhi. Sydney replaced Jerry Vilakazi as a member of the committee when Jerry retired from the board on 1 March 2012. All members are non-executive directors. PwC, appointed by the company, acted as remuneration advisors to the committee and provided detailed information on market trends and the competitive positioning of remuneration.

The committee normally asks the CEO to attend its meetings but he has no voting rights. He does not participate in discussions on his own remuneration, which is set by the committee.

Terms of referenceThe committee performs all functions necessary to fulfil the role stated in its terms of reference, including:

� Overseeing the establishment of a remuneration policy that will promote achieving strategic objectives and encourage individual performance

� Ensuring the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders once every year

� Reviewing the outcomes of implementing the remuneration policy against set objectives

� Ensuring the mix of fixed and variable pay, in cash, shares and other elements, meets the company’s needs and strategic objectives

� Satisfying itself on the accuracy of recorded performance measures that govern the vesting of incentives

� Ensuring all benefits, including retirement benefits and other financial arrangements, are justified and correctly valued

� Considering the results of the performance evaluation of the CEO and other executive directors, both as directors and as executives, in determining remuneration

� Selecting an appropriate comparative group when comparing remuneration levels

� Regularly reviewing incentive and retention schemes to ensure continued contribution to shareholder value and that these are administered in terms of the rules

� Considering the appropriateness of early vesting of share-based schemes at the end of employment

� Advising on the remuneration of non-executive directors

� Overseeing the preparation of the remuneration report to be included in the integrated report and recommendation to the board. In this regard the remuneration committee needs to determine whether the remuneration report: – is accurate, complete and transparent – provides a clear explanation of how the remuneration policy has been implemented

– provides sufficient forward-looking information for the shareholders to pass a special resolution in terms of section 66(9) of the Companies Act, 2008.

The remuneration report of the company appears on page 92 and shareholders will be requested to pass a non-binding advisory vote to indicate support for this policy at the annual general meeting.

Compliance with terms of referenceThe committee reported on its activities for the review period at the board meeting in November 2012. At this meeting the board confirmed the committee had complied with its terms of reference.

Social and ethics committeeThe members of the social and ethics committee are: Ntombi Langa-Royds (chairperson), Joe Shibambo, André Lamprecht and Peter Malungani. All members are non-executive directors.

The committee has its own terms of reference approved by the board and reviewed annually. The chairperson reports to the board on the activities and recommendations made by the committee and the latest minutes of committee meetings are included in board packs.

88 PPC Ltd

Terms of referenceIn line with its terms of reference, the committee’s objectives are to assist the board to monitor the company’s activities, considering any relevant legislation, other legal requirements or prevailing codes of best practice, on matters relating to:

� Social and economic development � Good corporate citizenship � The environment � Health and public safety � Consumer relationships � Labour and employment.


Deal committeeThe members of the deal committee are: Peter Malungani (chairperson), Peter Esterhuysen, André Lamprecht, Bheki Sibiya, Zibu Kganyago, Sydney Mhlarhi, Tryphosa Ramano and Paul Stuiver.

The committee is an ad hoc body and its terms of reference are to:

� Consider strategic options and recommendations presented by management on expansion opportunities

� Provide guidance, support and explore options that will facilitate progress in periods between board meetings.

Committee meetings are scheduled when required by progress on transactions.


Compliance report 2012

In addition to the work done on specific compliance projects this year, the focus has been placed on the role of business unit compliance officers (BUCOs) as a basis for entrenching the compliance framework. The list of BUCOs has been reviewed after the executive management of the relevant business units received training on the compliance framework and the roles and responsibilities of the BUCOs. In addition, the compliance manual was finalised to assist BUCOs in understanding their roles. The compliance policy is available on PPC’s intranet. In addition, a monthly compliance review is circulated to the BUCOs to advise on legislative changes. (This monthly report is also circulated to directors for information.)

The main compliance programmes for the year included: � The implementation of the new Companies Act, No 71 of 2008 (the new Act), which was signed into law in

April 2009 and came into effect in May 2011. The implementation programme consisted of two phases: with the first focused on training key business units in PPC. Training was delivered for the board, executive committee, business development team, finance team and the investor relations unit. The legal team attended a number of special training sessions. In the second phase, the required changes were implemented, including the par-value share conversion, implementation of a new memorandum of incorporation and appointment of the social and ethics committee of the board.

� The change to a dividend withholding tax which means that the tax cost will no longer be borne by the company declaring a dividend. The cost shifts to the shareholder but, in practice, the company will withhold 15% of the dividends it declares and pay this to the South African Revenue Service (SARS). A programme has been concluded to comply with this legislation.

� In terms of section 9 (1) of the Broad-Based Black Economic Empowerment Act, No 53 of 2003, the Minister of Trade and Industry is empowered by notice in Gazette to issue the codes of good practice for further interpretation and understanding of broad-based black economic empowerment. Management has updated the BEE targets to align with the new code requirements and to ensure we achieve our BEE target by 2016.

� The Minister of Finance included comments on a proposed carbon tax scheme in his 2011/2012 budget review in February. He proposed a carbon tax of R120 per ton of carbon dioxide on all direct carbon emissions from industrial sources, with the first 60% of direct emissions being exempt. The tax is proposed to increase by 10% per year until 2020, after which exemptions will reduce gradually. Management is kept informed of developments in this area.

During the period, PPC received some notices from the DMR on health and safety issues (see page 51). Environmental compliance is detailed on pages 67 and 75. All cement operations in South Africa are ISO 14001 certified.


Governance reviewIntegrated review of 2012rISK rEvIEw

PPC understands that the identification and management of risk is key to a sustainable business and the protection of all our stakeholders. This enables us to mitigate potential risks, and use the input of our stakeholders in developing opportunities for the company and implementing our strategies.

While the board remains accountable for the company’s risk profile, it has delegated oversight of risk management to the risk and compliance committee. The process of risk management in PPC is guided by our risk management policy, which is reviewed annually to ensure appropriateness. The updated policy approved by the CEO in October 2012 is shown below.

ppC rISK manaGEmEnt poLICY

Risk is inherent in most business activities. The PPC group will evaluate and manage risk through a structured and integrated risk management process that will consider the interest of all its stakeholders.

Risk management comprises the identification and evaluation of existing and potential risk associated with the company’s operations and strategy, followed by appropriate management responses such as tolerance (acceptance), mitigation, transfer, avoidance or termination or a combination of such responses.

The board is accountable to shareholders for the governance of risk and should ensure that the company’s strategic and business plans have properly considered and evaluated the associated risks. In fulfilling this obligation, the board approves and annually evaluates the implementation of this policy and the risk management plan of the company.

The board has delegated responsibility to evaluate the risk management progress, the effectiveness of risk management activities, key risks facing the company and appropriate responses to address key risks, to the risk and compliance committee of the board.

The board has delegated the responsibility to design, implement and monitor the risk management plan to management. Risk management is, however, a team effort and every employee will be responsible for managing risk in his/her working environment and should therefore assist to identify risk at all levels and in all functions of the business as required by the integrated risk management plan. Regular and formal risk analysis will provide the basis for risk identification and evaluation and the appropriate risk responses and treatment.

Management will ensure effective management of risk through continuous and regular measurement and report the company’s risk management performance to the risk and compliance committee. Control assurance will focus on continuously improving the underlying quality and sustainability of the company’s business activities.

The risk management process will cover the whole spectrum of the company’s activities including: safety and health, commercial, financial, human resources, technical, legal, regulatory, contractual, political, information, competitive, social, strategic, environmental, tax exposure and reputational risks.

90 PPC Ltd

PPC is committed to implementing and incorporating risk management throughout the organisation. This commitment includes ensuring that sound and effective systems of internal control and operations risk management are developed, implemented and periodically reviewed across the group.

The purpose of this commitment is to: � Preserve and enhance the management of assets and

earnings potential � Proactively anticipate and respond to changes in our

business environment � Protect and promote the health, safety and well-being

of our people and the communities in which we operate

� Develop positive relationships with all stakeholders so that their needs and concerns are appropriately addressed.

This is supported by an enterprise-wide risk management (EWRM) framework that details the approach to address and improve risk management in PPC.

The EWRM framework adopted by PPC is based on the ISO 31000:2009 standard for risk management. It consists of two cycles: a strategic process and a tactical process. The strategic process defines the iterative risk management process adopted by PPC and outlines the methodology to

identify, analyse, evaluate, treat and aggregate risk exposures and opportunities across the enterprise. The tactical process follows a plan, do, check, act cycle as recommended by ISO 31000. This process will drive risk management according to governance requirements, particularly King III.

risk tolerance and risk appetiteDuring the year further work was done on refining PPC’s risk tolerance and risk appetite.

risk toleranceAny occurrence or potential occurrence which had or may have, in the view of management, a +50% (probability) chance of resulting in an annual negative impact on cash of +5% of profit after tax (R50 million: 2012) or any occurrence which caused or may cause a fatality.

risk appetiteBest practice suggests that maximum value is attained when the company risk appetite and strategy are aligned. The business risk appetite must be considered when evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.

PPC’s approach is best defined by qualitative descriptions of the company’s risk appetite used in pursuing strategic objectives and commercial ventures.

rISK rEvIEw continued

risk appetite

Political instability – generally Limited appetite. Zero appetite when safety of employees is at risk

Entering countries where civil war is prevalent Zero appetite

Risk to the continued safety of employees and advisers

Zero appetite

Nationalisation risk Limited appetite. Zero appetite when valued at +50% (probability)

Potential loss of assets Limited appetite. Zero appetite when valued at +50% (probability)

Loss of licence to operate Limited appetite. Zero appetite when valued at +50% (probability)

Facilitation payments are an absolute requirement Zero appetite

Financial return from investments Minimum of a real weighted average cost of capital + 3% as an acceptable internal rate of return

Investment participation level Limited appetite for investments smaller than 20%

Product quality Zero appetite for products of substandard quality



risk assessmentPPC recognises the role of high-level business risk assessments in managing risk. These assessments were conducted for the group, cement, lime, aggregates, Zimbabwe and Botswana divisions. In addition, strategic business risk assessments were conducted for different new business development projects.

The top risks identified in these assessments are included in the material issues from page 14 to 17.

Business continuity managementPPC continues to use the internationally recognised British Standard 25999 for its business continuity management. The group continuously reviews divisional and site plans to create a more robust business continuity management system. Business continuity plans were reviewed at all sites in South Africa in 2012 and, where necessary, these plans have been improved.

In line with our stated intentions, our Zimbabwe team has been trained on the business continuity standard and has now developed its own business continuity and recovery plans.

During the year, routine disaster recovery exercises/simulations were successfully conducted at all operational sites.

PPC’s disaster recovery plan for the central IT facility in Sandton caters for both the Windows and SAP environments. Tests take place at disaster recovery sites three times a year to ensure continuity of critical operations in the event of a disaster.

To ensure business continuity across the group, disaster recovery network links, supplied by Telkom, are also in place.

Each factory site schedules disaster recovery exercises for their local IT environment biannually at Sandton in a controlled and supervised environment.

Information security managementIn 2011 the information technology (IT) department developed an IT governance framework aligned with the requirements of King III. In 2012 all IT-specific policies, procedures, governance framework and charter were reviewed by PPC’s IT management committee. A number of information security policies and procedures were found to be out of date and required streamlining.

All policies and procedures identified were updated and new standards developed. Following the necessary approval of these policies, procedures and standards, they were rolled out across the group.

PPC continues upgrading current information security processes and controls using ISO 27000:2005 information security management standard as reference.

InsuranceThe following risk management surveys were undertaken by PPC’s insurance brokers and underwriters during the year:

� Updated maximum probable loss calculations and surveys were conducted at Dwaalboom and Slurry

� Underwriting surveys were carried out at all PPC operations

� Machinery breakdown surveys were conducted at most manufacturing and mining sites in South Africa and Botswana.

PPC’s insurance cover and associated premiums were reviewed in July 2012.

92 PPC Ltd

Dear shareholderWe are pleased to submit this remuneration review which summarises the role and activities of the remuneration committee, the remuneration philosophy and policy of the company and provide an overview of executive directors and non-executive directors’ remuneration. As in the past, the company has worked with its independent advisers to ensure that responsible and appropriate remuneration principles are adopted and implemented.

During the past year, when meeting with some of our largest shareholders, we raised the issue of executive remuneration. Taking into account their views and current best practices, the following remuneration areas were specifically noted for review:

� The introduction of a second financial performance condition for the short-term incentive scheme for 2013

� Benchmarking executive and non-executive directors’ remuneration against an appropriate peer group

� The overall improvement of this remuneration report from a corporate governance and disclosure perspective.

The past financial year presented many challenges. Retaining and motivating employees, while balancing the interests of shareholders, remains a difficult task. The company had a good financial year and while we did not reach the internal financial target, significant progress was made on a number of non-financial strategic objectives that will ensure the long-term sustainability of the company.

The remuneration committee is satisfied that the overall principles laid down by the King code of governance for South Africa (King III) and the Companies Act, 2008 (the Act) have been adhered to, unless specifically stated.

The current state of the global economy and recent events in South Africa all indicate another challenging year ahead. Team PPC will again have to pay special attention to how it balances the company’s need for financial performance with achieving its long-term strategic objectives. Our remuneration policy will have to take cognisance of this and will evolve to ensure we retain and attract the correct talent to ensure a sustainable company while keeping within best-practice guidelines and shareholders’ expectations.

ntombi Langa-roydsRemuneration committee chairperson

Summary of remuneration activities/decisions taken during the yearThe main issues considered and approved by the remuneration committee for 2012 were:

� Key priorities for the year including: – Engagement with shareholders on the company’s remuneration policy

– Executive and non-executive director remuneration benchmarking

– Review of the short-term incentive scheme (STIS) for implementation in 2013

� Annual salary increases for executive directors � Minor amendments to the committee’s terms of

reference � Minor amendments to the company’s remuneration

policy � STIS bonus payments for executive directors for 2012

and actual STIS targets for 2013 � Amendments to the STIS following its review

(discussed in more detail below) � The 2012 long-term incentive awards made under the

forfeitable share plan (FSP) � This remuneration report � Remuneration package for the incoming CEO.

remuneration philosophy and policyPPC’s key remuneration philosophies and policy include:

� Being designed to support key business strategies and creating a strong, performance-orientated environment. While aiming to attract, motivate and retain talented employees

� Setting remuneration levels for executive directors, taking cognisance of the remuneration policies and practices of comparable companies

� Fixed and variable components of remuneration comprising: – An annual total-cost-to-company (TCTC) package, which is reviewed annually during September

– A performance-related annual cash incentive bonus awarded under the STIS

– A long-term incentive awarded under the FSP � Gearing a significant portion of senior management

remuneration toward company performance ensuring strong alignment with shareholder interests

� Service contracts with directors and senior management that are aligned to the objectives of the remuneration policy

� The principle that non-executive directors do not receive remuneration or incentive awards related to share price or corporate performance, and that non-executive director fees are approved by shareholders each year in advance.

rEmunEratIon rEvIEw



overview of remunerationThe table below summarises the elements of the total remuneration package paid to executives in the 2012 financial year, as well as proposed changes for the 2013 financial year:

Element fixed/variable policy proposed changes for 2013

TCTC (includes salary, car allowance retirement, life insurance and medical aid contributions)

Fixed The company generally pays TCTC in the upper quartile of the market and is targeted to be competitive for comparable roles in companies of similar complexity and size, taking cognisance of the individual

No changes

Short-term incentive (STI)

Variable Short-term incentive payments aim to create a pay-for-performance culture by considering personal and company performance targets over a one-year period. The short term incentive scheme (STIS) is used to determine annual payments

Changes will be made to the: � Weighting between financial

and personal performance � Maximum earnings

potential to be aligned to TCTC

� Addition of a second financial metric.

Long-term incentive (LTI)

Variable To create direct alignment between the interests of shareholders and participants, and to act as a retention tool over a three-year period. There are two existing legacy incentive plans (LTIP and RSS) and one current plan (FSP) reported on in this review

The addition of a second financial metric to be considered

94 PPC Ltd

remuneration structureThe company uses the Peromnes grading system as follows:

� Grade 1: CEO � Grade 2: Executive directors � Grade 3: Prescribed officers and divisional executives � Grade 4: General managers � Grades 5 to 7: Heads of departments, professionals,

specialists

tCtC package/basic payGrade 1 to 7 employees are remunerated on a TCTC package structure. Other employees are remunerated on a basic-plus-benefits structure. The TCTC package is targeted to be competitive for comparable roles in companies of similar complexity and size. The company uses professional advisers such as PwC Remchannel to supply benchmark information to guide decisions on salary adjustments. Salaries are adjusted around the benchmarks depending on individual performance and experience, and are reviewed each year. The review considers changes in scope of roles performed by individuals, changes required to meet the principles of the remuneration policy and market competitiveness of salaries and benefits. Attention is paid to consistent job evaluation and grading of roles throughout the group, to ensure equity of reward, to facilitate transformation objectives and ensure mobility within the company.

% increase from 2011 to 2012

Executive directorsS Abdul Kader 4,8P Esterhuysen 5,0SG Helepi 6,4MMT Ramano*P Stuiver 5,0

prescribed officersPrescribed officer 1 15Prescribed officer 2 **Prescribed officer 3 9Prescribed officer 4 ***

* Joined PPC in August 2011 and did not receive an increase in October 2011

** Resigned 31 January 2012*** Appointed as prescribed officer on 1 August 2012

The average increase in TCTC packages for executive directors was 5,2% for 2012, and average 12% for prescribed officers. This compared to 6,5% paid to all employees for 2012.

Prescribed officers’ increase was above average as they were appointed to the role in late 2011 and reflects the greater responsibility and liability associated with the role in terms of the Companies Act.

For 2013, in aggregate, TCTC remuneration for the group increased by between 6,5% and 7%. In determining TCTC increases for executive directors, the remuneration committee considered average increases to the general staff population and conducted a benchmarking exercise. In selecting a comparator group, companies listed on the JSE were sized according to sector, EBITDA, total assets, turnover and number of employees. Companies that were close to PPC based on these factors and were of a similar market capitalisation were selected. Certain larger companies that are considered direct comparators were also added to this list. As a result of this exercise, salary increases for executive directors are expected to be 5,5% for Mr Stuiver, the outgoing CEO (as contractually agreed), and 6,5% for most other executive directors.

Salary and benefit adjustments for executive directors are reviewed and approved by the remuneration committee, while adjustments for all other employees are approved by the CEO.

BenefitsThe table below details benefits provided to employees and executive directors (as part of TCTC or over and above basic pay):

Benefit Detail

Retirement fund

Participation in the PPC Retirement Fund is compulsory for all permanent employees. The fund is an in-house defined contribution fund. The fund supplies risk cover for death and disability.

Medical aid All employees are required to belong to either a choice of company-sponsored external medical aids or to be a member of a spouse’s/life partner’s medical aid.

Group personal accident cover

All employees (permanent and fixed-term) are covered 24/7 for death, medical and disability expenses as a result of an accident.

Car allowance Employees who need to use their motor vehicle during the course of their duties can elect to allocate a portion of their TCTC as a car allowance.

rEmunEratIon rEvIEw continued



Short-term incentive scheme (StIS)Employees on grade 1 to 7 participate in the company’s STIS and levels below participate in a bonus pool. Currently, the maximum earnings potential for executive directors is 125% of base salary. However, following the company’s conversion to a TCTC structure, this percentage had to be reviewed. Consequently, for the 2013 financial year, the maximum earnings potential under the STIS for executive directors will be set at 100% of TCTC. Financial and personal performance is used to determine the bonus payment under the STIS. For executive directors, a weighting of 60% was applied to financial performance and 40% to personal performance.

2012 financial performance measureFinancial performance for the current year depended on achieving group EBITDA targets as follows, as approved by the remuneration committee:

EBItDa target

for 2012

% of maximum

earning potential

Stretch target r2 580 million 100Threshold target r2 365 million 0

Linear vesting is applied between the threshold and stretch targets.

The EBITDA threshold and stretch targets for the 2012 financial year represented 10% and 20% improvements on the actual EBITDA achieved for the 2011 financial year respectively.

EBITDA is considered appropriate as it is the best proxy to align employees with shareholders’ interest, namely share price and earnings.

2012 personal performance measureThe personal performance component depends on the executive’s performance against a balanced scorecard. Personal performance below 70% of the balanced scorecard will result in no bonus for this component. The company’s scorecard contained the following:

96 PPC Ltd


performance pillar Detail weighting%

People � Health and safety; zero fatalities and reduce the Lost Time Injury Frequency Rate (LTIFR) from 0,34 to less than 0,25

� Attraction of new talent and specific initiatives to develop and retain existing talent

� Improve employee satisfaction and morale as measured by the annual PPC employee survey

� Achieve employment equity and gender diversity targets � Achieve CSI objectives and targets

25

Customers � Successful bedding down of product and pricing strategies launched during August 2011

� Achieve market share targets for inland region, Zimbabwe and the retail sector

� Implement improved customer relationship processes � Develop and trial new offering for informal markets � Significantly improved market intelligence

30

Shareholders � Increase EBITDA in line with financial performance targets on page 95 � Rest of Africa strategy: six projects taken to conclusion and at least

two new projects introduced � Excellent corporate governance including zero adverse audit findings

and full legal compliance

25

Internal processes � Improved operational efficiency of kilns at Dwaalboom in South Africa and Colleen Bawn in Zimbabwe

� Successful upgrade of De Hoek kiln 6, within budget � Complete EIA process for new Riebeeck kiln � Go/no-go decision on at least one alternate energy project � Improved engagement with key government departments

20

This scorecard is cascaded through the organisation. The level of detail and weightings for each performance area is adjusted, to align with managers’ and employees’ specific areas of responsibility.

2012 STIS bonuses for executive directorsPPC’s actual EBITDA was R2 327 million, which is below the threshold target of R2 365 million and, as a result, executive directors will not receive a bonus payment for the financial component of the bonus formula. Each executive director received a performance rating on their personal scorecard. For completeness, executive directors’ bonuses linked to financial and personal performance for the 2012 financial year were calculated using the following inputs:

Executive directors

Name

Base#

salaryR000

Maximum %

Financial component

%

Financial achievement

%

Personal component

%

Personal achievement

%

Actual STISpayment

R000

2012 STIS compared to

2011 STIS%

S Abdul Kader 2 249 125 60 0 40 87 929 14P Esterhuysen 2 445 125 60 0 40 87 1 011 14SG Helepi 1 736 125 60 0 40 90 752 20MMT Ramano* 3 500 100 60 0 40 92 1 251P Stuiver 3 232 125 60 0 40 57 1 336 14

* Calculated on TCTC basis.# For 2012 remuneration was based on TCTC, but the STIS rules remained a multiple of base salary. A factor of 75% of TCTC was applied

to get to base salary.



prescribed officers

Name*

Base#

salaryR000

Maximum %

Financial component

%

Financial achievement

%

Personal component

%

Personal achievement

%

Actual STISpayment

R000

2012 STIS compared to

2011 STIS%

Prescribed officer 1 1 478 125 60 0 40 90 641 29Prescribed officer 3 1 194 125 60 0 40 83 462 15Prescribed officer 4 (appointed to Exco on 1 August 2012)

1 626 125 60 0 40 88 710

* Prescribed officer 2 resigned 31 January 2012.# For 2012 remuneration was based on TCTC, but the STIS rules remained a multiple of base salary. A factor of 70% of TCTC was

applied to get to base salary.

Until 2011, the company operated a cash-settled share appreciation right scheme, also known as the long-term incentive plan (LTIP) and a cash-settled restricted share scheme (RSS). During 2011, the company introduced a new long-term incentive plan, namely the forfeitable share plan (FSP) for employees other than executive directors and prescribed officers. The same plan was approved for executive directors and prescribed officers at the annual general meeting held in January 2012. The LTIP and RSS were discontinued at the same time.

Legacy plans (LtIp and rSS)With the exception of MMT Ramano, who continues to participate in the RSS in terms of her employment contract, no new awards have been made under the LTIP and RSS since 2011. All prior awards granted under the LTIP and RSS will continue until fruition.

A portion of RSS awards to executive directors were forfeited as the company’s financial performance did not meet the RSS performance criteria. See pages 103 to 105 for specific detail.

Amendments to STIS for 2013Following a review of the STIS by the remuneration committee in conjunction with external service providers, management and shareholders, the following main changes will be implemented to the STIS in the 2013 financial year:

� The maximum earnings potential will be revised to 100% of TCTC for all executive directors and 120% of TCTC for the CEO. These changes are proposed to align the CEO’s stretch earnings potential to the market

� To further encourage the pay-for-performance culture, a heavier weighting will be placed on financial performance. This weighting will be increased from 60% to 70% and 30% will be weighted towards personal performance

� After engaging with shareholders, we decided to introduce an additional financial performance metric to the existing EBITDA measure. This will be headline earnings per share (HEPS) and it will be equally weighted with EBITDA.

Long-term incentiveThe major design principles of the company’s long-term incentive are to:

� Attract, motivate and retain participants as part of a market-competitive package

� Reward participants for medium- to longer-term company performance

� Align participants with shareholders’ interests.

98 PPC Ltd

Current LtI plan (fSp)

purposeTo align employees with shareholders over the long term by making performance awards while acting as a retention tool by making retention awards.

Description of the plan

An FSP award is a free transfer of shares to a participant on the award date. However, the shares are subject to risk of forfeiture where company performance conditions are not met over a pre-determined performance period (typically over three financial years); and/or a participant ceases employment prior to the vesting date.

Prior to the vesting date, the participant has all shareholder rights in respect of the forfeitable shares, including dividend rights and voting rights.

As the company is faced with skills shortages and the risk of losing employees, a portion of each award will be subject to continued employment only (retention awards) and the remainder will be subject to continued employment and performance conditions (performance awards).

EligibilityPeromnes grades 1 to 5 are eligible for FSP awards, subject to approval by the remuneration committee. Selected employees in grade 6 will be considered for participation in the FSP by the CEO. Currently, due to contractual arrangements, the CEO is excluded from participation in the FSP.

mix between retention and performance awards

The level of seniority determines the mix between performance awards and retention awards as follows:

Position GradePerformance

award (%)Retentionaward (%)

CEO 1 75 25Executive directors and prescribed officers 2 75 25Executives 3 50 50General manager 4 40 60Head of department 5 30 70Professional staff 6 20 80

performance period and conditions

Performance conditions are measured over a three-year performance period.

Currently, the performance condition used to determine the extent to which the performance award vests is growth in headline earnings per share (HEPS). Performance condition targets for the 2012 award are:

TargetVesting

percentage Growth

Threshold 33,33 CPI + 3%On-target 66,67 CPI + 6%Stretch 100 CPI + 9%

In line with King III, linear vesting will occur between these targets.

The remuneration committee believes the performance condition is stretching, given the current economic environment.




vesting period Three years

DilutionThe FSP is not dilutive to shareholders as no shares can be issued under the FSP. The FSP can only be settled by a market purchase of shares.

Despite the fact that the FSP will not result in any shareholder dilution and that the LTIP and RSS are cash-settled plans, the company has adopted “quasi” dilution limits to ensure overall affordability to the company on the one hand and reasonable, but attractive, benefits to executives on the other. The aggregate maximum number of awards that may be made under the FSP, RSS and LTIP is restricted to 5% of issued shares as at 1 September 2011, totalling 29 308 518 shares (or quasi shares in the case of the LTIP and RSS).

Individual limitThe maximum number of unvested FSP, LTIP and RSS awards to be held by an individual may not exceed 0,5% of the issued share capital as at 1 September 2011, totalling 8 792 555 shares (or quasi shares in the case of the LTIP and RSS).

Early terminationThe rules of the FSP distinguish between so-called good leavers (death, retrenchment, as determined in accordance with the employer company’s policy, retirement, ill health, injury or disability, as determined to the satisfaction of the committee) and bad leavers (resignations or dismissals). Bad leavers will forfeit all unvested awards. Good leavers will receive a proportion of their unvested awards, pro-rated for service and performance to the date of termination of employment.

award policySubject to discretion of the remuneration committee, the FSP is used for annual long-term incentive awards. The annual FSP awards are based on multiples of the TCTC of the employee. The committee reviews these multiples regularly to ensure they are in line with market trends, and remain fair and motivating as longer-term rewards.

* For FSP awards see pages 103 to 105

BEE schemesIn terms of the company’s first BBBEE transaction, the following directors were granted shares, which are subject to vesting conditions and have restrictions on transferability. The transferability of shares granted to the executive directors lapses on 31 December 2016, while the transferability of shares granted to non-executive directors lapses on 31 December 2014. All shares vest in thirds after the fourth, fifth and sixth anniversary of the grant date.

2012 2011 2010

Executive directorsS Abdul Kader 184 389 184 389 184 389 SG Helepi 83 983 83 983 83 983 MMT Ramano* 335 249 – –

non-executive directorsZJ Kganyago 95 787 95 787 95 787 NB Langa-Royds 95 787 95 787 95 787 J Shibambo 95 787 95 787 95 787

prescribed officerPrescribed officer 2 (resigned 31 January 2012) – 192 935

890 982 748 668 555 733

* Awarded in terms of the trust deed of the PPC Black Managers Trust.

100 PPC Ltd

During the year all participants, including executive directors, of the Black Managers’ Trust were allocated additional shares, on an equal basis, as a result of there being unallocated shares in the Future PPC Team Trust. The additional shares allocated to executive directors are:

2012

S Abdul Kader 2 541 SG Helepi 2 541 MMT Ramano 2 541

7 623

The shares vest with the participants in December 2015 and are not subject to forfeiture if the participant leaves the employment of the company before the vesting date.

retention payments or severance lump sumsRetention payments (over and above FSP retention awards) or severance lump sums are only considered in exceptional circumstances. Where these payments have been made, they are detailed below the remuneration table where the payment is disclosed.

Employment contracts – executive directorsThe remuneration committee, subject to circumstances, will maintain the following policy for executive directors’ employment contracts:

� Fixed-term contracts should not exceed three years, with the exception of K Gordhan who has a five year contract. Contracts may provide for extension

� All agreements should contain a restraint-of-trade clause with a term of not less than a year � Contracts should not commit the company to pay on termination arising from the director’s failure � Balloon payments on termination are not seen as fair remuneration policy � If a director is dismissed because of a disciplinary procedure, a shorter notice period should apply without entitlement

for compensation for the shorter notice period � Contracts should not compensate directors for severance because of change of control.

appointment of executive and non-executive directorsBoth executive and non-executive directors are subject to election by shareholders at the first annual general meeting following their appointment and are then required to submit to retire in accordance with the board rotation plan.

The appointment of a non-executive director may be terminated without compensation if that director is not re-elected by shareholders or otherwise in accordance with the company’s MOI.

remuneration paid to executive directors and prescribed officers during 2012total emolumentsTotal emoluments to executive directors and prescribed officers for the year ended 30 September 2012 was as follows:

Executive directors

Fixed component of remuneration (TCTC)

Variable – annual (STI)

Variable – long term(LTI)

R000 Salary

Retirement and

medical contri-

butionsCar

allowancesIncentive

bonus

Gains on Restricted

Share Scheme

(RSS)

Dividends received

on FSP awards

Other benefits Total

S Abdul Kader 2 196 345 456 929 629 33 5 4 593 P Esterhuysen 2 537 399 324 1 011 718 – 3 008# 7 996SG Helepi 1 734 340 242 752 1 259 26 2 4 355MMT Ramano 2 460 800 240 1 251 – – 42 4 793 P Stuiver 3 206 803 300 1 336 – – 2 5 647

12 133 2 687 1 562 5 278 2 606 59 3 059 27 384

# In terms of the retention agreement entered into with Mr Esterhuysen in 2011, the amount owing to him for the 2012 financial year has been accrued in terms of the agreement, and has been escalated at the prime lending.




In terms of the South African Companies Act, three employees are deemed to be prescribed officers as their attendance at group executive meetings comprised regular participation to a material degree in the exercise of general executive control over and management of the whole, or a significant portion of the business and activities of the company.

prescribed officers

Fixed component of remuneration (TCTC)

Variable – annual (STI)

Variable – long term(LTI)

R000 Salary

Retirement and

medical contri-

butionsCar

allowancesIncentive

bonus

Gains on Restricted

Share Scheme

(RSS)

Dividends received

on FSP awards


Prescribed officer 1 1 749 258 104 641 2 007 14 8 4 781 Prescribed officer 2 (resigned 31 January 2012)

447 146 92 – – – 140^ 825

Prescribed officer 3 1 287 203 216 462 1 082 11 2 3 263 Prescribed officer 4 (appointed on 1 August 2012)

1 673 388 261 710 4 163 20 2 7 217

5 156 995 673 1 813 7 252 45 12 16 086

^ Includes leave payout on resignation.

Total emoluments to executive directors and prescribed officers for the year ended 30 September 2011 was as follows:

Executive directors

R000 Salary

Retirement and medical

contri-butions

Car allowances

Incentive bonus


S Abdul Kader 2 105 348 401 814 13 3 681RH Dent (retired 31 December 2010) 970 96 81 – 6 300* 7 447P Esterhuysen 2 406 374 324 885 5 237# 9 226SG Helepi 1 619 310 242 628 38 2 837MMT Ramano (appointed 1 August 2011) 406 138 39 – 1 250^ 1 833P Stuiver 2 966 838 300 1 170 2 5 276

10 472 2 104 1 387 3 497 12 840 30 300

* Includes a contractual settlement on retirement and a restraint-of-trade payment, which runs for 24 months from date of retirement, ending 31 December 2012.

# During 2011, Mr Esterhuysen entered into a three-year retention agreement, ending 2013, to retain his services to the company. An amount of R2 500 000 was paid to him on signing the agreement and a further amount of R2 735 000 accrued to him at the end of September 2011, which was subsequently paid in October 2011. Mr Esterhuysen will no longer participate in the restricted share scheme (refer to the remuneration report for further details on the scheme). The amounts payable to him during this retention period are estimated to reflect the amount he would have received if awards had been made in terms of the restricted share scheme.

^ In lieu of an incentive bonus for 2011 and a salary increase for the 2011/12 financial year, a sign-on bonus of R1 250 000 was paid in the first month of employment. This amount is earned proportionately during the first 12 months of employment with the company.

102 PPC Ltd

prescribed officers

R000 Salary

Retirement and

medical contri-

butionsCar

allowancesIncentive

bonusOther

benefits Total

Prescribed officer 1 1 384 259 137 495 61 2 336Prescribed officer 2 (joined 1 February 2011)

830 244 184 366 501^ 2 125

Prescribed officer 3 1 321 186 51 403 110 2 071

3 535 689 372 1 264 672 6 532

^ Includes a R500 000 sign-on bonus, which was paid in the first month of employment but is earned proportionately during the first 12 months of employment with the company.

Total emoluments to executive directors for the year ended 30 September 2010 were as follows:

Executive directors

R000 Salary

Retirement and medical

contributionsCar

allowancesIncentive

bonusOther

benefits Total

S Abdul Kader 1 984 351 300 756 13 3 404RH Dent 1 993 351 300 784 25 3 453P Esterhuysen 2 224 361 300 849 2 3 736SG Helepi (appointed 1 December 2009) 1 195 224 250 512 3 2 184P Stuiver 2 839 660 300 1 037 5 4 841

10 235 1 947 1 450 3 938 48 17 618

Gains on equity-settled share options exercised/ceded by directors

R000 2012 2011 2010

RH Dent (retired 31 December 2010) – – 179P Esterhuysen – – 272O Fenn (resigned 5 August 2009) – – 256JE Gomersall (resigned 30 June 2009) – 1 057 1 035P Stuiver – – 104

– 1 057 1 846

rEmunEratIon rEport continued



further details on long-term incentivesThe tables below deal with the company’s prior and current long-term incentive plans as at 30 September 2012:

Award date

Number allocated

in prior years

Number allocated in current

year

Number exercised/vested in

current year

Number forfeited

in current year

Closing number

Grant price

Price onexercise

date/vesting

price

Exercise/vesting

gain (R000)

Executive directors:S abdul KaderShare appreciation rights (LtIp)2007/08/08 150 000 – – 150 000 – 43,00 2008/09/17 90 000 – – – 90 000 31,80 2009/09/25 120 000 – – – 120 000 35,35

360 000 – – 150 000 210 000

restricted share scheme (rSS)2009/09/25 142 000 – 21 300 78 100 42 600 – 29,53 629

fSp – no performance conditions 2012/03/20 – 21 600 – – 21 600 –

fSp – with performance conditions 2012/03/20 – 80 900 – – 80 900 –

p EsterhuysenShare appreciation rights (LtIp)2007/08/08 160 000 – – 160 000 – 43,00 2008/09/17 105 000 – – 105 000 31,80 2009/09/25 120 000 – – 120 000 35,35

385 000 – – 160 000 225 000

restricted share scheme (rSS)2009/09/25 162 000 24 300 89 100 48 600 – 29,53 718

fSp – with performance conditions2012/09/20 – 88 000 – – 88 000 –

SG helepiShare appreciation rights (LtIp)2007/08/08 18 000 – – 18 000 – 43,00 2008/09/17 35 000 – – – 35 000 31,80 2009/09/25 36 000 – – – 36 000 35,35

89 000 – – 18 000 71 000

restricted share scheme (rSS)2008/11/17 21 000 – 21 000 – – – 26,22 551 2009/09/25 24 000 – 24 000 – – – 29,53 709

45 000 – 45 000 – –

fSp – no performance conditions2012/03/20 – 16 600 – – 16 600 –


104 PPC Ltd

Award date

Number allocated

in prior years


year


current year

Number forfeited

in current year

Closing number

Grant price

Price onexercise

date/vesting

price

Exercise/vesting

gain (R000)

mmt ramanorestricted share scheme (rSS)2011/08/01 150 000 – – – 150 000 – 2012/09/28 – 120 000 – – 120 000 –

150 000 120 000 – – 270 000

fSp – with performance conditions2012/09/20 – 96 800 – 96 800 –

prescribed officers:prescribed officer 1Share appreciation rights (LtIp)2007/08/08 70 000 – – 70 000 – 43,00 2008/09/17 50 000 – – – 50 000 31,80 2009/09/25 54 000 – – – 54 000 35,35

174 000 – – 70 000 104 000

restricted share scheme (rSS)2008/09/17 36 000 – 36 000 – – – 26,22 944 2009/09/25 36 000 – 36 000 – – – 29,53 1 063

72 000 – 72 000 – –



prescribed officer 2Share appreciation rights (LtIp)2007/08/08 25 000 – – 25 000 – 43,00 – – 2008/09/17 27 000 – – 27 000 31,80 – – 2009/09/25 23 000 – – 23 000 35,35 – –

75 000 – – 25 000 50 000

restricted share scheme(rSS)2008/09/17 21 000 – 21 000 – – – 26,22 551 2009/09/25 18 000 – 18 000 – – – 29,53 532

39 000 – 39 000 – –


fSp – with performance conditions2011/02/01 – 19 573 – 19 573 –




Award date

Number allocated

in prior years


year


current year

Number forfeited

in current year

Closing number

Grant price

Price onexercise

date/vesting

price

Exercise/vesting

gain (R000)

prescribed officer 4Share appreciation rights (LtIp)2007/08/08 85 000 – – 85 000 – 43,00 2008/09/17 60 000 – – – 60 000 31,80 2009/09/25 59 000 – – – 59 000 35,35

204 000 – – 85 000 119 000

restricted share scheme (rSS)2008/09/17 45 000 – 45 000 – – – 26,22 1 180 2009/09/25 101 000 – 101 000 – – – 29,53 2 983

146 000 – 146 000 – –



retired directors:rh Dent (retired 31 December 2010)Share appreciation rights (LtIp)2007/08/08 143 000 – – 143 000 – 43,00 – – 2008/09/17 90 000 – – 90 000 31,80 – – 2009/09/25 120 000 – – 120 000 35,35 – –

353 000 – – 143 000 210 000

JE Gomersall (retired 30 June 2009)Share appreciation rights (LtIp)2007/08/08 350 000 – – 350 000 – 43,00 – –

* In line with his employment contract, the CEO did not receive any FSP awards.** As participation in the FSP by executive directors and prescribed officers was only approved by shareholders in January 2012, no

awards were made to executive directors in 2011. To compensate for this fact, executive directors received an additional award in March 2012.

*** Mr Esterhuysen was party to a retention agreement concluded in 2010. Accordingly, the remuneration committee has determined that Mr Esterhuysen should not receive a retention award under the FSP.

**** According to Ms Ramano’s employment contract, an RSS award for the 2012 financial year was made and accordingly the remuneration committee also determined that Ms Ramano should not receive a retention award under the FSP.

106 PPC Ltd

non-executive directorsAs part of its mandate, the remuneration committee also advises the board on non-executive director fees. In this regard, the committee relies on benchmark studies done by its independent advisers based on a similar comparator group used for executive directors’ remuneration. As suggested by King III, board fees comprise both a base fee and an attendance fee which, in the view of the committee, is sufficient to attract board members with the appropriate level of skill and expertise.

Non-executive director fees as approved by the special general meeting of shareholders on 1 September 2011, valid for two years from the date of the special resolution, were as follows:

Non-executive directors’ fees were benchmarked in the current year against the same peer group as used for the executive directors’ benchmarks. Similar to executive directors, it is proposed that non-executive directors will receive an increase of 6,5% for the 2013 financial year.

Total emoluments to non-executive directors for the year ending 30 September 2012 was as follows:

non-executive directors

Committee

R000Board

fees Chairman

feesNomina-

tions Audit

Risk manage-

ment and

com-pliance

Remu-neration

Social and

ethics Special

meetings Deal Total

ZJ Kganyago 194 – – 67 – – – 48 – 309NB Langa-Royds 194 – 69 – – 137 152 191 – 743AJ Lamprecht 194 – 69 – – – 74 111 32 480MP Malungani 194 – – – – – 72 95 95 456SK Mhlarhi (appointed 1 March 2012) 97 – – – – 36 – 80 32 245B Modise 194 – – 83 34 – – 80 – 391TDA Ross 194 – – 166 62 – – 80 – 502J Shibambo 194 – 53 – 126 114 74 95 – 656BL Sibiya – 705 106 – – – – 286 – 1 097JS Vilakazi (resigned 29 February 2012) 88 – – – 31 26 – 32 – 177

1 543 705 297 316 253 313 372 1 098 159 5 056

Non-executive directors’ fees are benchmarked against similar-sized companies listed on the JSE Limited. The level of complexity of the underlying business is also taken into consideration when performing the benchmarking exercise. No non-executive directors’ fees exceeded this benchmark.





non-executive directorsCommittee

R000Board

fees Chairman

feesNomina-

tions Audit

Risk manage-

ment and

com-pliance

Remu-neration

Social and

ethics Special

meetings Deal Total

ZJ Kganyago 188 – – 75 – – – 30 30 323NB Langa-Royds 188 – 80 – – 152 135 30 – 585AJ Lamprecht 188 – 40 – – – 61 15 – 304MP Malungani 188 – – – – – 61 45 30 324B Modise (appointed 1 December 2010) 154 – – 66 – – – – – 220TDA Ross 188 – 43 180 70 – – 30 – 511J Shibambo 188 – 80 26 135 79 70 45 – 623BL Sibiya – 685 160 – – – – 90 15 950JS Vilakazi 188 – – – 58 79 – 15 – 340

1 470 685 403 347 263 310 327 300 75 4 180


non-executive directorsCommittee

R000Board

fees Chairman

feesNomina-

tions Audit

Risk manage-

ment and

com-pliance

Remu-neration

BEE and transfor-

mation

Special board

meetings Deal Total

ZJ Kganyago 162 – – 78 – – – 15 40 295NB Langa-Royds 162 – 69 – – 129 97 15 – 472AJ Lamprecht 162 – 49 – – – 49 15 20 295MP Malungani 162 – – – – – 49 15 40 266TDA Ross 162 – 10 151 49 – – 15 – 387J Shibambo 162 – 79 78 127 69 49 15 – 579BL Sibiya – 605 117 – – 20 – 15 40 797JS Vilakazi 162 – – – 49 59 – 15 – 285

1 134 605 324 307 225 277 244 120 140 3 376

108 PPC Ltd

Interests of directors and prescribed officers in share capitalThe aggregate beneficial holdings of directors of the company and their immediate families (none of which has a holding in excess of 1%) in the issued ordinary shares of the company are detailed below. There have been no material changes in these shareholdings since that date.

2012 2011 2010 Direct Indirect Direct Indirect Direct Indirect

Executive directorsRH Dent (retired 31 December 2010) – – – – 395 169 –P Esterhuysen – – 5 730 – 5 730 –P Stuiver 34 930 – 34 930 – 34 930 –non-executive directorSK Mhlarhi (appointed 1 March 2012) 5 000 – – – – –prescribed officerPrescribed officer 1 9 170 – 9 170 – – –Prescribed officer 4 741 – – – – –

40 671 – 40 660 – 435 829 –

A register detailing directors’ and officers’ interest in the company is available for inspection at the company’s registered office.

Directors’ loansDirectors have loans with the company, granted in terms of the Barloworld share option scheme in place prior to unbundling PPC from Barloworld. Balances outstanding at year end are:

P Esterhuysen – 2012: Rnil (2011: R0,1 million; 2010: R0,1 million)

The loans bear interest at a fixed rate, calculated using the ruling prescribed rate applicable when the loan is granted to the director, and have no predetermined terms of repayment.

Interest of directors in contractsThe directors have certified that they had no material interest in any transaction of any significance with the company or any of its subsidiaries.



Governance reviewIntegrated review of 2012aSSuranCE StatEmEnt

assurance statementIndependent assurance statement by Deloitte & Touche to PPC Ltd on their sustainability indicator disclosure and their self-declared Global Reporting Initiative G3.1 application level in their Integrated Report 2012 (“the Report”)

Scope of our workPPC Ltd engaged us to perform limited assurance procedures for the year ended 30 September 2012 on:

� Selected performance indicators to be published in the Report for the year ended 30 September 2012

� The self-declared Global Reporting Initiative G3.1 Guidelines (“GRI G3.1”) C+ application level.

The selected performance indicators are as follows: � Direct energy consumption by primary energy source � Indirect energy consumptions by primary source � Total direct and indirect greenhouse gas emissions

by weight (including Botswana) � Monetary value of significant fines and total number

of non-monetary sanctions for non-compliance with environmental laws and regulations (including Botswana and Zimbabwe)

� Total workforce by employee type, employment contract and region, broken down by gender (including Botswana)

� Total number and rate of new employee hires and employee turnover by age group, gender and region (including Botswana)

� Percentage of employees covered by collective bargaining agreements (including Botswana and Zimbabwe)

� Rates of injury, occupational diseases, lost days, absenteeism and total number of work-related fatalities, by region and by gender (including Botswana and Zimbabwe)

� Average hours of training per year per employee by gender and by employee category

� Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership and other indicators of diversity

� Percentage of operations with implemented local community engagement, impact assessments and development programmes (including Botswana and Zimbabwe)

� Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations (including Botswana and Zimbabwe)

� Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments (including Botswana and Zimbabwe).

assurance process and standardWe conducted our limited assurance engagement in accordance with the International Standard on Assurance Engagements 3000, applicable to Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (ISAE 3000). This standard requires that we plan and perform the procedures to obtain limited assurance that the selected performance indicators and the GRI G3.1 application level are presented fairly in accordance with the criteria set out in the Report. This provides less assurance and is substantially less in scope than a reasonable assurance engagement.

Key proceduresConsidering the risk of material error, our multi-disciplinary team of sustainability assurance specialists planned and performed our work to obtain all the information and explanations we considered necessary to provide sufficient appropriate evidence on which we base our conclusion. Our work was planned to mirror PPC Limited’s own group level compilation processes, tracing how data for each indicator within our assurance scope was collected, collated and validated by corporate head office and included in the Report.

our conclusionBased on our review conducted over the South African operations of PPC Limited, nothing has come to our attention that causes us to believe that the selected performance indicators listed above are not fairly presented.

Based on our review, including consideration of the Report, nothing has come to our attention that causes us to believe that management’s assertion that their sustainability reporting meets the requirements of the C+ application level of the Global Reporting Initiative G3.1 Guidelines is not fairly presented.

responsibilities of directors and independent assurance providerThe directors are responsible for the preparation of the Integrated Report 2011, including the implementation and execution of systems to collect required sustainability data. Deloitte’s responsibility is to express our limited assurance conclusion on the selected performance data and the GRI G3.1 application level for the year ended 30 September 2012.

This report is made solely to PPC Ltd in accordance with our engagement letter. Our work has been undertaken so that we might state to the company those matters we are required to state to them in a limited assurance report and for no other purpose. Thus, we do not accept or assume responsibility to anyone other than PPC Limited for our work, for this report, or for the conclusions we have formed.

Deloitte & Touche Registered Auditors per: nina le riche, DirectorCape Town, South Africa7 December 2012

1st Floor, The Square, Cape Quarter, 27 Somerset Road, Greenpoint, Cape Town, 8005

National Executive: LL Bam Chief Executive, AE Swiegers Chief Operating Officer, GM Pinnock Audit, DL Kennedy Risk Advisory, NB Kader Tax, TP Pillay Consulting, K Black Clients & Industries, JK Mazzocco Talent & Transformation, CR Beukman Finance, M Jordan Strategy, S Gwala Special Projects, TJ Brown Chairman of the Board, MJ Comber Deputy Chairman of the Board, Regional Leader: BGC Fannin.

A full list of partners is available on request.

110 PPC Ltd

Index to Global reportInG InItIatIve IndIcators*

PPC Ltd discloses performance voluntarily using guidelines from the Global Reporting Initiative (GRI). We have a self-declared C+ rating, which means we report fully on at least 10 indicators, spread across our economic, environment, human rights, labour, society, and product responsibility performance.

report application level c c+ b b+ a a+

Report on:1.12.1-2.103.1-3.8, 3.10-3.124.1-4.4, 4.14-4.15

rep

ort

ext

ern

ally

ass

ure

d

Report on all criteria listed for level C plus:1.23.9, 3.134.5-4.13, 4.16-4.17

rep

ort

ext

ern

ally

ass

ure

d

Same as required for level B

rep

ort

ext

ern

ally

ass

ure

d

Not requiredManagement approach disclosures for each indicator category

Management approach disclosures for each indicator category

Report on a minimum of 10 performance indicators, including at least one from each of: economic, social and environmental

Report on a minimum of 20 performance indicators at least one from each of: economic, environmental, human rights, labour, society, product responsibility

Report on each core G3 and sector supplement* indicator with due regard to the mate-riality principle by either:(a) reporting on the indica-

tor or(b) explaining the reason for

its omission

Source: GRI Sustainability Reporting Guidelines *Sector supplement in final version

G3 profile disclosures

G3 management approach

disclosures

G3 performance indicators and sector

supplement performance indicators

OUT

PUT

OUT

PUT

OUT

PUT

stan

dar

d d

iscl

osu

res

GrI G3 element reference in report page

strategy and profile

1. vision and analysis

1.1 CE statement 24

1.2 Description of key impacts, risks and opportunities

Material issues Safety and health, social and environment section highlights the most material issues

14, 48, 66

2. organisational profile

2.1 – 2.9 General organisational details Profile, approach to sustainability, corporate governance

2, 10, 76

2.10 Awards 9

3. report parameters

3.1 – 3.4 Report profile Scope of this report 1

3.5 – 3.11 Report scope and boundary Scope of this report 1

3.12 GRI content index Summary index on this page. Detailed index on website

110

3.13 Assurance Assurance report 109

*The full GRI G3.1 index is included in the online version of the report.



GrI G3 element reference in report page

strategy and profile continued

4. Governance, commitments and engagement

4.1 – 4.10 Governance issues Corporate governance 76

4.11 – 4.13 Commitments to external initiatives – –

4.14 – 4.17 Stakeholder engagement Stakeholder engagement 11

performance indicators

economic performance

EC1 – 4 Economic value generated and distributed Value added statement 38

EC2 – 4 Implications of climate change, defined benefit plan obligations, assistance from government

Material issues, environmental review 17, 68, note 33 of group financial statements

EC5 – 7 Market presence – including wage ratios, spending on locally-based suppliers, and local hiring

Remuneration and people review, mining charter scorecard

39, 63, 55, 92

EC8 Infrastructure investments for public benefit Social review 62 to 65

EC9 Indirect economic impacts Social review 62 to 65

safety and health performance

LA6 – 7 Rates of injury, occupational disease Safety and health review 48, 50

LA8 – 9 Health programmes Safety and health review 48 to 51

social performance

LA1 – 5 Workforce breakdown, turnover, labour relations

People review 55, 56

LA10 – 12 Training and education People review 57

LA13 – 14 Diversity and equal opportunity People review 52, 53

HR1 – 4 Human rights and non-discrimination Corporate governance review 76

HR5 – 9 Freedom of association, security practices, indigenous rights

People review and corporate governance review

56, 76

society

SO1 Community programmes and practices Social review 60

SO2 – 4 Corruption Corporate governance review 76

SO5 – 8 Public policy and anti-competitive behaviour Corporate governance review 76

PR1 – 9 Customer health and safety Corporate governance review 86

environmental performance

EN1 – 2 Materials use – –

EN3 Energy Direct consumption by primary source 69

EN4 Energy Indirect consumption by primary source 70

EN5 – 7 Energy Conservation and efficiency improvements 67, 68

EN8 – 10 Water Environmental review 68, 71

EN11 – 15 Biodiversity Environmental review 74

EN16 – 25 Emissions, effluents and waste Environmental review 73

EN26 – 27 Products and services Environmental review 73

EN28 Compliance Environmental review 67, 75

EN29 – 30 Transport – –

112 PPC Ltd

Financial statements

a solid foundation enables continuous growth

Case studySecond phase in economic empowerment

economic empowerment

In July 2012, PPC initiated the R1,1 billion second phase of its broad-based black economic empowerment (BBBEE) transaction by placing an additional 39,3 million ordinary shares or 6,5% of its increased share capital under black ownership. In addition to the first-phase BBBEE transaction for 15,3% in 2008, direct black ownership of the PPC group has increased to 20,8%. Given the 80:20 revenue split between the group’s South African and international businesses, the transaction results in an effective 26% black ownership of PPC’s South African operations, meeting the mining rights conversion requirements set out by the Department of Mineral Resources in terms of the mining charter.

Demonstrating our ongoing commitment to transformation and broad-based empowerment in the spirit of the mining charter in structuring this transaction, we focused on stakeholders closest to our business:

employees now own 7% of PPc



68% of the additional shares will be issued to the 2 400 employees of our South African businesses, who will now own around 7% of the PPC group. An employee trust has been established to hold these shares, and all permanent employees in South Africa will participate. Shares have been set aside for new employees joining the company over the next three years

27% of these shares will be issued to existing strategic black partners that also participated in the first-phase BBBEE initiative in 2008: Peu, Nozala, Portland Consortium and Palama Cement Consortium (formerly Capital Edge). These partners have contributed to the company on a number of fronts during the past four years

5% of these shares will be issued to a new trust, Bafati Investment Trust, to hold shares for black women groups near our operations, with a board of trustees comprising a majority of women.

During the seven-year term of the scheme, all participants will receive 20% of ordinary dividends, with the balance going towards the notional vendor facilitation structure. After seven years, participants will be entitled to full dividends and be able to trade their shares. However, participants will be entitled to exercise their voting rights over the new shares from the outset.

114 PPC Ltd

for the year ended 30 September 2012

Habesha Cement Share Company (Habesha)In July 2012, the group acquired a 27% equity stake in an Ethiopian public share company Habesha Cement Share Company (Habesha) for a purchase consideration of R102 million and the transaction is a significant step in PPC’s African expansion strategy. Habesha’s initial project is to build a US$130 million cement plant with an annual capacity of approximately 1,4 million tonnes. The project will be funded by a combination of equity and US$86 million debt funding from the Development Bank of Ethiopia.

Habesha raised an initial 53% of the project cost through equity investments by more than 16 000 local shareholders. This acquisition fulfils one of PPC’s key requirements which is to partner with local shareholders when investing in a new country.

Financial ResUltsProfit attributable to shareholders, before the impact of the IFRS 2 charges on the BEE transactions, of R969 million was 11% higher than 2011, with normalised earnings per share increasing by 11% from 166 cents per share recorded in 2011 to 185 cents per share. Cash earnings per share increased by 16% year-on-year.

For further information on the financial results, refer to the group annual financial statements.

stateD caPitalDuring the year the company, following special resolution approval from shareholders, increased its authorised share capital from 600 000 000 ordinary shares of 10 cents each to 700 000 000 ordinary shares of no par value and transferred the ordinary share capital and premium accounts to a stated capital account.

On 30 September 2012, the issued shares of the company were 566 029 971 of no par value (2011: 586 170 372 shares of 10 cents each; 2010: 586 170 372 shares of 10 cents each). The stated capital balance at 30 September 2012 was R1 181 million debit (share capital and premium 2011: R1 091 million debit; 2010: R1 091 million debit).

Details of shares authorised, issued and unissued at 30 September 2012 are given in note 9 to the group financial statements.

sHaRe RePURcHaseThe treasury shares owned by PPC Cement (Pty) Limited were repurchased by the company in September 2012 for R589 million and subsequently cancelled. The resultant securities transfer tax of R1,4 million has been debited against stated capital.

DiRectoRs’ RePoRt

The directors have pleasure in presenting their report on the annual financial statements of the company and of the group for the year ended 30 September 2012.

BUsiness actiVitiesPPC Ltd, its subsidiaries and associates, operate in Africa as manufacturers of cementitious, aggregate products and readymix, lime and limestone.

The principal activities of the company and its subsidiaries remain unchanged from the previous year.

A comprehensive review of operations is detailed in the attached integrated annual report.

sUBsiDiaRies anD associatessUBsiDiaRiesAs part of the group’s African expansion strategy, PPC acquired three aggregate quarries from Quarries of Botswana in October 2011. This acquisition makes PPC Aggregates the largest aggregate producer in Botswana and the quarries situated in Gaborone, Francistown and Selebi-Phikwe expand PPC’s existing portfolio in Botswana to meet the local market demand for aggregate, which is a complementary product to cement.

The transaction value amounted to R52 million, of which R42 million was paid during the 2012 financial year. The purchase consideration outstanding is payable in equal instalments on the first and second anniversaries of the transaction.

associatesPronto Holdings (Pty) Limited (Pronto)During June 2012, the company acquired a 25% stake in Pronto. Through this acquisition, PPC will become a supplier to the Gauteng markets for readymix concrete and fly ash. Fly ash is used as an extender in the manufacture of cement and concrete.

The purchase consideration is calculated as 5,6 times Pronto’s EBITDA less net debt. A first tranche of 25% amounting to approximately R70 million was paid at initiation of the transaction, with the second tranche of 25% and the remaining 50% to be paid on the first and second anniversaries of the transaction respectively. Although subsequent payments are planned to increase, the total purchase consideration is not expected to exceed R400 million.



FoRFeitaBle sHaRe Plan (FsP)In terms of the newly implemented long-term employee incentive scheme, 3 079 853 shares were purchased on the JSE Limited. The shares purchased for settlement to employees are treated as treasury shares on a group level while vesting conditions are in place. For further details of the scheme, refer to the remuneration review.

Bee 2 tRansactionIn terms of the company’s second BEE transaction, approved by shareholders in September 2012, 39,3 million new PPC shares were issued to participants of the transaction in October 2012 and facilitated through a Notional Vendor Funding (NVF) mechanism.

The participants of the transaction are the PPC Employees Share Trust, established for the benefit of all South African permanent employees, Strategic Black Partners and the Bafati Investment Trust.

In terms of IFRS, the shares issued to the participants will be treated as treasury shares during the NVF period, and these shareholders will be entitled to 20% of the dividend declared by PPC with the balance being utilised to reduce the NVF.

ReGisteR oF memBeRsThe register of members of the company is open for inspection to members and the public, during normal office hours, at the offices of the company’s transfer secretaries, Link Market Services South Africa (Pty) Limited, or at Corpserve (Private) Limited (Zimbabwe).

DiRectoRs’ inteRest in tHe issUeD sHaRes oF tHe GRoUPDetails of the beneficial holdings of directors of the company and their families in the ordinary shares of the company are given in the remuneration report.

Certain directors and non-executive directors have indirect shareholding in the company following the completion of the broad-based black economic empowerment transactions. Details thereof are provided in the remuneration report.

There has been no change in the directors’ interest since year end.

HolDinG anD sUBsiDiaRY comPaniesDetails relating to the beneficial shareholders owning more than 5% of the stated capital of the company appear in the “PPC in the stock market” section on page 140.

acQUisition BY tHe comPanY oF issUeD sHaResExcept for the share buy-back as discussed under “Share repurchase” above, the company did not exercise its authority to buy back shares in the current financial year.

sPecial ResolUtionsThe following special resolutions for PPC Ltd were passed during the year under review:

A special resolution granting authority for the company to provide at any time and from time to time during the period of two years commencing on 30 January 2012, direct or indirect financial assistance as contemplated in section 44 of the Companies Act to executive directors or prescribed officers participating in the company’s forfeitable share plan, was passed at the annual general meeting on 30 January 2012:

At a special general meeting held on 18 September 2012 the following special resolutions were passed:

Permit the company to repurchase treasury shares held by PPC Cement (Pty) Limited

Approve the conversion of par value shares to no par value shares and that the whole of the amounts of the ordinary share capital account and the share premium account of the company be transferred to the stated capital account of the company

Approve the increase of the authorised ordinary shares from 600 000 000 to 700 000 000 shares

Permit the company name change from Pretoria Portland Cement Company Limited to PPC Ltd

Approve the adoption of the new memorandum of incorporation

Permit the company to provide financial assistance to the Employee Share Trust and directors or prescribed officers of the company or of a related or inter-related company, that are or will be beneficiaries of the Employee Share Trust, for the purpose of enabling the trust to subscribe for the initial employee shares

Permit the company to provide financial assistance in relation to the BEE transaction, to the SBP vehicle, the PPC Bafati Investment Trust and persons referred to in terms of section 42(2) of the Companies Act

In line with the BEE transaction, permit the company to repurchase the Employee Share Trust, SBP vehicle and the PPC Bafati Investment Trust repurchase shares at the end date.

sPecial ResolUtions PasseD BY sUBsiDiaRY comPaniesNo special resolutions were passed by subsidiaries of the company.

116 PPC Ltd


DiViDenDscents per share

no Description Declaration date Record date Payment date 2012 2011 2010

218 Final 12 November 2012 11 January 2013 14 January 2013 108 95 130217 Interim 17 May 2012 8 June 2012 11 June 2012 38 35 45

PRoPeRtY, Plant anD eQUiPmentAt 30 September 2012, the group’s net investment in property, plant and equipment amounted to R4 483 million (2011: R4 287 million; 2010: R4 175 million), details of which are set out in note 1 to the group financial statements. Capital commitments at the year end amounted to R317 million (2011: R639 million; 2010: R493 million). There has been no change in the nature of the property, plant and equipment or to the policy relating to the use thereof during the year.

In terms of the Constitution of Zimbabwe, land with a value of R26 million (2011: R25 million; 2010: R22 million) is exposed to the risk of expropriation by the Zimbabwean government without compensation, however the land has been fully impaired.

Certain of the company’s properties are the subject of land claims. The company is in the process of discussion with the Land Claims Commissioner and awaiting the outcome of claims referred to the Land Claims Court. The claims are not expected to have a material impact on the company’s operations. Furthermore, some of the company’s properties have been illegally invaded and the company is following legal processes to resolve the invasion. This is not expected to have a material impact on the operations of the group.

BoRRoWinGsThe company’s borrowing powers are unlimited. At 30 September 2012, borrowings amounted to R3 585 million (2011: R3 510 million; 2010: R3 521 million), and remain within the board’s stated target debt levels. Excluding the consolidated debt of the BEE funding transaction, group debt is R2 345 million (2011: R2 327 million; 2010: R2 378 million). Further details can be found in note 11 to the group financial statements.

The borrowing powers of Portland Holdings Limited, a wholly-owned subsidiary company, incorporated in Zimbabwe, are limited by its articles of association to twice the amount of shareholders’ interest. At 30 September 2012 Portland Holdings Limited did not have any borrowings.

DiRectoRs’ RePoRt continued

eVents aFteR RePoRtinG DateThere are no events that occurred after reporting date that may have a significant impact on the group’s reported financial position at 30 September 2012.

Fol lowing a special resolution passed on 18 September 2012, the company changed its name from Pretoria Portland Cement Company Limited to PPC Ltd in October 2012.

In terms of the second BEE transaction, discussed under “Stated capital” above, the new PPC shares traded on the JSE Limited with effect from 1 October 2012.

GoinG conceRnThe directors consider that the company has adequate resources to continue operating for the foreseeable future and that it is therefore appropriate to adopt the going-concern basis in preparing the company’s financial statements. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements.

DiRectoRs The directors in office at the date of this report appear on pages 6 and 7.

At the annual general meeting held on 30 January 2012, J Shibambo, S Abdul Kader, ZJ Kganyago and NB Langa-Royds, were re-elected as directors of the company, and Ms MMT Ramano was elected as a director of the company.

The following directors are required to retire by rotation in terms of the memorandum of incorporation but, being eligible, offered themselves for re-election at that meeting and the nominations committee has recommended their re-election:

BL Sibiya (Independent non-executive director) MP Malungani (Independent non-executive director) TDA Ross (Independent non-executive director)



Following Messrs SK Mhlarhi and K Gordhan’s appointment as directors by the board during 2012, and in terms of the company’s memorandum of incorporation, the JSE listings requirements and the Companies Act, Messrs Mhlarhi and Gordhan are required to retire as directors, and both have offered themselves for re-election and the nominations committee has recommended their elections.

GRoUP comPanY secRetaRYThe group company secretary of PPC Ltd is Mr JHDLR Snyman. His business and postal address appear in the administration section on page 141.

aUDit committeeThe directors confirm that the audit committee has addressed specific responsibilities required in terms of section 94(7) of the South African Companies Act. Further details are contained within the audit committee report.

comPetition commissionIn terms of the conditional leniency agreement with the Competition Commission, PPC continues to cooperate with their investigation and from our perspective there have been no significant new developments.

aUDitoRsDeloitte & Touche were reappointed as auditors to the company at the annual general meeting held on 30 January 2012.

118 PPC Ltd


RePoRt oF tHe inDePenDent aUDitoR on tHe sUmmaRiseD annUal Financial statements

The accompanying summarised annual financial statements, which comprise the consolidated statement of financial position as at 30 September 2012, the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows; the directors’ emoluments (included in the remuneration report) for the year then ended, and summarised notes, are derived from the audited group annual financial statements of PPC Ltd for the year ended 30 September 2012. We expressed an unmodified audit opinion on those group annual financial statements in our report dated 13 November 2012. Those group annual financial statements, and the summarised annual financial statements, do not reflect the effects of events that occurred subsequent to the date of our report on those financial statements.

The summarised annual financial statements do not contain all the disclosures required by International Financial Reporting Standards (IFRS). Reading the summarised annual financial statements; therefore, is not a substitute for reading the audited group annual financial statements of PPC Ltd.

Directors’ responsibility for the summarised annual financial statementsThe directors are responsible for the preparation of the summarised annual financial statements in accordance with the framework concepts and the measurement and recognition requirements of IFRS, the AC 500 standards as issued by the Accounting Practices Board, the information as required by International Accounting Standard (IAS) 34 – Interim Financial Reporting and the requirements of the Companies Act of South Africa.

auditor’s responsibilityOur responsibility is to express an opinion on the summarised annual financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810 – Engagements to Report on Summary Financial Statements.

opinionIn our opinion, the summarised financial statements derived from the audited financial statements of PPC Ltd for the year ended 30 September 2012 are consistent, in all material respects, with those financial statements, in accordance with the framework concepts and the measurement and recognition requirements of IFRS, the AC 500 standards as issued by the Accounting Practices Board, the information as required by IAS 34: Interim Financial Reporting and the requirements of the Companies Act of South Africa.

other reports required by the companies actAs part of our audit of the financial statements for the year ended 30 September 2012, we have read the directors’ report, the certificate by the company secretary, the remuneration report, the audit committee report and for the purpose of identifying whether there are material inconsistencies between those reports and the audited financial statements.

These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Deloitte & touchePer B nyembePartner13 November 2012Buildings 1 and 2, Deloitte PlaceThe Woodlands Office Park Woodlands DriveSandton

national executive: LL Bam (Chief Executive), AE Swiegers (Chief Operating Officer), GM Pinnock (Audit), DL Kennedy (Risk Advisory), NB Kader (Tax), T Pillay (Consulting & Clients & Industries) , JK Mazzocco (Talent & Transformation), CR Beukman (Finance), M Jordan (Strategy), S Gwala (Special Projects) TJ Brown (Chairman of the Board), M J Comber (Deputy Chairman of the Board)

A full list of partners and directors is available on request

B-BBee rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code

Member of Deloitte Touche Tohmatsu Limited



at 30 September 2012

consoliDateD statement oF Financial Position

2012 2011 2010Rm Rm Rm

assetsnon-current assets 4 998 4 585 4 449

Property, plant and equipment 4 483 4 287 4 175 Goodwill 6 – –Intangible assets 133 94 78 Non-current financial assets 106 106 100 Long-term receivable – 9 20 Investments in associates 267 89 76 Deferred taxation asset 3 – –

current assets 1 909 1 834 1 663

Inventories 841 709 596 Trade and other receivables 820 901 827 Cash and cash equivalents 248 224 240

total assets 6 907 6 419 6 112

eQUitY anD liaBilitiescapital and reservesStated capital (1 181) (1 091) (1 091)Other reserves 282 125 32 Retained profit 2 075 1 921 1 917

total equity 1 176 955 858

non-current liabilities 4 008 3 837 3 591

Deferred taxation liabilities 859 740 568 Long-term borrowings 2 716 2 699 2 645 Provisions 320 297 270 Other non-current liabilities 113 101 108

current liabilities 1 723 1 627 1 663

Short-term borrowings 869 811 876 Taxation payable 42 10 76 Trade and other payables 812 806 711

total equity and liabilities 6 907 6 419 6 112

120 PPC Ltd


2012 2011 2010Rm Rm Rm

Revenue 7 346 6 826 6 807Cost of sales 4 809 4 500 4 067

Gross profit 2 537 2 326 2 740Administrative and other operating expenditure 671 616 625

Operating profit before item listed below 1 866 1 710 2 115BEE IFRS 2 charges 123 11 10

Operating profit 1 743 1 699 2 105Fair value (losses)/gains on financial instruments (3) 9 (20)Finance costs 374 362 366Investment income 30 28 39

Profit before exceptional items 1 396 1 374 1 758Exceptional items – (4) (32)Share of associates’ profit 7 15 8

Profit before taxation 1 403 1 385 1 734 Taxation 557 520 622

Net profit 846 865 1 112

Attributable to:Ordinary shareholders 768 785 1 010Other shareholders 78 80 102

846 865 1 112

Earnings per share (cents) – basic 161 164 211 – diluted 159 163 210

cONsOlidAtEd iNcOmE stAtEmENt




Unrealisedsurplus onreclassifi-

cationof plant

Foreigncurrency

translation

Available-for-sale

financialassets

Hedgingreserves

Retainedprofit

totalcompre-hensiveincome

Rm Rm Rm Rm Rm Rm

2012

Net profit – – – – 846 846 Other comprehensive income, net of taxation (4) 17 (2) 14 4 29

Exchange rate differences on translation of foreign operations – 17 – – – 17 Revaluation of investments – – (4) – – (4)Deferred taxation on revaluation – – 2 – – 2 Cash flow hedge recognised directly through equity – – – 14 – 14 Transfer to retained profit (4) – – – 4 –

total comprehensive income (4) 17 (2) 14 850 875

2011

Net profit – – – – 865 865 Other comprehensive income, net of taxation (4) 95 3 (1) 4 97

Exchange rate differences on translation of foreign operations – 95 – – – 95 Revaluation of investments – – 4 – – 4 Deferred taxation on revaluation – – (1) – – (1)Cash flow hedge recognised directly through equity – – – (1) – (1)Transfer to retained profit (4) – – – 4 –

total comprehensive income (4) 95 3 (1) 869 962

2010

Net profit – – – – 1 112 1 112 Other comprehensive loss, net of taxation (4) (48) (10) (56) 4 (114)

Exchange rate differences on translation of foreign operations – (48) 1 – – (47)Revaluation of investments – – (12) – – (12)Deferred taxation on revaluation – – 1 – – 1 Cash flow hedge recognised directly through equity – – – (56) – (56)Transfer to retained profit (4) – – – 4 –

total comprehensive income (4) (48) (10) (56) 1 116 998

cONsOlidAtEd stAtEmENt OF cOmPREHENsiVE iNcOmE

122 PPC Ltd


cONsOlidAtEd stAtEmENt OF cHANGEs iN EqUity

Other reserves

statedcapital

Un-realised surplus

onreclassifi-

cationof plant

Foreigncurrency

trans-lation

Available-for-sale

financialassets

Hedgingreserves

Equitycompen-

sationreserves

Retainedprofit

total equity

attribut-able toequity

holdersof

parentRm Rm Rm Rm Rm Rm Rm Rm

2012Opening balance at beginning of the year (1 091) 9 28 27 (57) 118 1 921 955

movement for the year (90) (4) 17 (2) 14 132 154 221

BEE IFRS 2 charges – – – – – 123 – 123FSP IFRS 2 charges – – – – – 19 – 19Transfer to retained profit – – – – – (10) 10 –Total comprehensive income – (4) 17 (2) 14 – 850 875 Treasury shares held in terms of the FSP share scheme (89) – – – – – – (89)Securities transfer tax on cancellation of treasury shares (1) – – – – – – (1)Dividends declared by funding SPVs to non-consolidated trusts – – – – – – (4) (4)Dividends declared to PPC shareholders – – – – – – (702) (702)

Balance at 30 september 2012 (1 181) 5 45 25 (43) 250 2 075 1 176

2011

Opening balance at beginning of the year (1 091) 13 (67) 24 (56) 118 1 917 858

movement for the year – (4) 95 3 (1) – 4 97

BEE IFRS 2 charges – – – – – 11 – 11 Transfer to retained profit – – – – – (11) 11 –Total comprehensive income – (4) 95 3 (1) – 869 962 Dividends declared by funding SPVs to non-consolidated trusts – – – – – – (5) (5)Dividends declared to PPC shareholders – – – – – – (871) (871)

Balance at 30 september 2011 (1 091) 9 28 27 (57) 118 1 921 955

2010

Opening balance at beginning of the year (1 088) 17 (19) 34 – 118 1 853 915

movement for the year (3) (4) (48) (10) (56) – 64 (57)

BEE IFRS 2 charges – – – – – 10 – 10 Treasury shares held by Porthold Trust (Private) Limited (3) – – – – – – (3)Transfer to retained profit – – – – – (10) 10 –Total comprehensive income – (4) (48) (10) (56) – 1 116 998 Dividends declared by funding SPVs to non-consolidated trusts – – – – – – (6) (6)Dividends declared to PPC shareholders – – – – – – (1 056) (1 056)

Balance at 30 september 2010 (1 091) 13 (67) 24 (56) 118 1 917 858




cONsOlidAtEd stAtEmENt OF cAsH FlOws

2012 2011 2010Rm Rm Rm

cAsH FlOws FROm OPERAtiNG ActiVitiEsProfit before exceptional items 1 396 1 374 1 758Adjustments for:

Depreciation 439 417 359Amortisation of intangible assets 22 19 9Loss/(profit) on disposal of plant and equipment 3 (1) (3)BEE IFRS 2 charges 123 11 10Dividends received (8) (8) (7)Interest received (22) (20) (32)Finance costs 374 362 366Loss on derivatives (cash-settled share-based payment) – 1 10Other non-cash flow items (10) (28) 16

Operating cash flows before movements in working capital 2 317 2 127 2 486Increase in inventories (129) (79) (69)Decrease/(increase) in trade and other receivables 81 (74) (8)Increase in trade and other payables and provisions 15 128 33

cash generated from operations 2 284 2 102 2 442Finance costs paid (248) (254) (261)Dividends received from investments and associate 10 8 7Interest received 22 20 32Taxation paid (417) (441) (531)

cash available from operations 1 651 1 435 1 689Dividends paid (706) (876) (1 062)

Net cash inflow from operating activities 945 559 627

cAsH FlOws FROm iNVEstiNG ActiVitiEsAcquisition in terms of business combination (42) – –Acquisition of property, plant and equipment (609) (483) (613)

To enhance existing operations (504) (391) (382)To expand operations (105) (92) (231)

Acquisition of intangible assets (31) (34) (45)Acquisition of equity stake in Pronto Holdings (Pty) Limited (70) – –Acquisition of equity stake in Habesha Cement Share Company (102) – –Shares purchased in terms of the FSP share incentive scheme (89) – –Security transfer tax on cancellation of treasury shares (1) – –Net proceeds received on disposal of property, plant and equipment 2 4 8 Movements in investments and loans (5) (2) (18)Acquisition of treasury shares held by consolidated subsidiary company – – (3)Receipt of instalment on long-term loan 9 11 8

Net cash outflow from investing activities (938) (504) (663)

Net cash inflow/(outflow) before financing activities 7 55 (36)

cAsH FlOws FROm FiNANciNG ActiVitiEsLong-term borrowings repaid (14) (14) (14)BEE funding transaction 2 13 (70)Net short-term borrowings raised/(repaid) 29 (70) 112

Net cash inflow/(outflow) from financing activities 17 (71) 28

Net increase/(decrease) in cash and cash equivalents 24 (16) (8)cash and cash equivalents at beginning of the year 224 240 248

cash and cash equivalents at end of the year 248 224 240

cash earnings per share (cents) 315 272 321

124 PPC Ltd


The group discloses its operating segments according to the business units which are regularly reviewed by the group executive committee. These comprise cement, lime, aggregates and other.

Group cement* lime Aggregates Other ^

2012 2011 2010 2012 2011 2010 2012 2011 2010 2012 2011 2010 2012 2011 2010Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

RevenueSouth Africa 5 823 5 664 5 611 4 867 4 692 4 677 727 772 711 229 200 223 – – –Other Africa 1 560 1 193 1 202 1 379 1 122 1 129 111‡ – – 70 71 73 – – –

7 383 6 857 6 813 6 246 5 814 5 806 838 772 711 299 271 296 – – –

Inter-segment revenue (37) (31) (6)

Total revenue 7 346 6 826 6 807

Operating profit before item listed below 1 866 1 710 2 115 1 682 1 551 1 902 151 122 159 37 43 61 (4) (6) (7)BEE IFRS 2 charges 123 11 10 122 10 9 1 1 1 – – – – – –

Operating profit 1 743 1 699 2 105 1 560 1 541 1 893 150 121 158 37 43 61 (4) (6) (7)Fair value (losses)/gains on financial instruments (3) 9 (20) (1) 9 (20) 1 – – (2) – – (1) – –Finance costs 374 362 366 232 241 250 2 3 3 4 1 1 136 117 112 Investment income 30 28 39 26 24 35 2 2 1 2 2 3 – – –

Profit before exceptional items 1 396 1 374 1 758 1 353 1 333 1 658 151 120 156 33 44 63 (141) (123) (119)Exceptional items – (4) (32) – (4) (32) – – – – – – – – –Share of associates’ profit 7 15 8 7 15 8 – – – – – – – – –

Profit before taxation 1 403 1 385 1 734 1 360 1 344 1 634 151 120 156 33 44 63 (141) (123) (119)Taxation 557 520 622 499 470 556 47 40 51 11 10 15 – – –

Net profit 846 865 1 112 861 874 1 078 104 80 105 22 34 48 (141) (123) (119)

Depreciation and amortisation 461 436 368 405 391 325 37 32 30 19 13 13 – – –

EBITDA~ 2 327 2 146 2 483 2 087 1 942 2 226 188 154 190 56 56 74 (4) (6) (7)Operating margin~ (%) 25,4 25,1 31,1 26,9 26,7 32,8 18,1 15,8 22,4 12,3 15,9 20,6 – – –EBITDA margin (%) 31,7 31,4 36,5 33,4 33,4 38,3 22,5 19,9 26,7 18,7 20,7 24,9 – – –

AssetsTotal assets 6 907 6 419 6 112 6 153 5 768 5 450 467 440 452 285 210 208 2 1 2

Non-current assets 4 998 4 585 4 449 4 541 4 185 4 058 280 275 265 177 125 126 – – –Current assets 1 909 1 834 1 663 1 612 1 583 1 392 187 165 187 108 85 82 2 1 2

Additions to property, plant and equipment 609 485 626 553 431 570 41 42 31 15 12 25 – – –Capital commitments 317 639 493 314 636 475 2 3 3 1 – 15 – – –liabilitiesTotal liabilities 5 731 5 464 5 254 4 084 3 958 3 771 138 140 171 148 87 100 1 361 1 279 1 212

Non-current liabilities 4 008 3 837 3 591 2 586 2 475 2 327 94 88 86 23 17 17 1 305 1 257 1 161 Current liabilities 1 723 1 627 1 663 1 498 1 483 1 444 44 52 85 125 70 83 56 22 51

^ “Other” comprises BEE trusts and trust funding SPVs.~ Excluding BEE IFRS 2 charges. * Including head office activities.‡ In 2012, the value of lime exports into other countries has been separately disclosed. The values for the prior years amount to

2011: R81 million and 2010: R59 million.

sEGmENtAl iNFORmAtiON



The group discloses its operating segments according to the business units which are regularly reviewed by the group executive committee. These comprise cement, lime, aggregates and other.

Group cement* lime Aggregates Other ^

2012 2011 2010 2012 2011 2010 2012 2011 2010 2012 2011 2010 2012 2011 2010Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

RevenueSouth Africa 5 823 5 664 5 611 4 867 4 692 4 677 727 772 711 229 200 223 – – –Other Africa 1 560 1 193 1 202 1 379 1 122 1 129 111‡ – – 70 71 73 – – –

7 383 6 857 6 813 6 246 5 814 5 806 838 772 711 299 271 296 – – –

Inter-segment revenue (37) (31) (6)

Total revenue 7 346 6 826 6 807

Operating profit before item listed below 1 866 1 710 2 115 1 682 1 551 1 902 151 122 159 37 43 61 (4) (6) (7)BEE IFRS 2 charges 123 11 10 122 10 9 1 1 1 – – – – – –

Operating profit 1 743 1 699 2 105 1 560 1 541 1 893 150 121 158 37 43 61 (4) (6) (7)Fair value (losses)/gains on financial instruments (3) 9 (20) (1) 9 (20) 1 – – (2) – – (1) – –Finance costs 374 362 366 232 241 250 2 3 3 4 1 1 136 117 112 Investment income 30 28 39 26 24 35 2 2 1 2 2 3 – – –

Profit before exceptional items 1 396 1 374 1 758 1 353 1 333 1 658 151 120 156 33 44 63 (141) (123) (119)Exceptional items – (4) (32) – (4) (32) – – – – – – – – –Share of associates’ profit 7 15 8 7 15 8 – – – – – – – – –

Profit before taxation 1 403 1 385 1 734 1 360 1 344 1 634 151 120 156 33 44 63 (141) (123) (119)Taxation 557 520 622 499 470 556 47 40 51 11 10 15 – – –

Net profit 846 865 1 112 861 874 1 078 104 80 105 22 34 48 (141) (123) (119)

Depreciation and amortisation 461 436 368 405 391 325 37 32 30 19 13 13 – – –

EBITDA~ 2 327 2 146 2 483 2 087 1 942 2 226 188 154 190 56 56 74 (4) (6) (7)Operating margin~ (%) 25,4 25,1 31,1 26,9 26,7 32,8 18,1 15,8 22,4 12,3 15,9 20,6 – – –EBITDA margin (%) 31,7 31,4 36,5 33,4 33,4 38,3 22,5 19,9 26,7 18,7 20,7 24,9 – – –

AssetsTotal assets 6 907 6 419 6 112 6 153 5 768 5 450 467 440 452 285 210 208 2 1 2

Non-current assets 4 998 4 585 4 449 4 541 4 185 4 058 280 275 265 177 125 126 – – –Current assets 1 909 1 834 1 663 1 612 1 583 1 392 187 165 187 108 85 82 2 1 2

Additions to property, plant and equipment 609 485 626 553 431 570 41 42 31 15 12 25 – – –Capital commitments 317 639 493 314 636 475 2 3 3 1 – 15 – – –liabilitiesTotal liabilities 5 731 5 464 5 254 4 084 3 958 3 771 138 140 171 148 87 100 1 361 1 279 1 212

Non-current liabilities 4 008 3 837 3 591 2 586 2 475 2 327 94 88 86 23 17 17 1 305 1 257 1 161 Current liabilities 1 723 1 627 1 663 1 498 1 483 1 444 44 52 85 125 70 83 56 22 51

^ “Other” comprises BEE trusts and trust funding SPVs.~ Excluding BEE IFRS 2 charges. * Including head office activities.‡ In 2012, the value of lime exports into other countries has been separately disclosed. The values for the prior years amount to

2011: R81 million and 2010: R59 million.

126 PPC Ltd


NOtEs tO tHE sUmmARisEd ANNUAl FiNANciAl stAtEmENts

1. BAsis OF PREPARAtiON These summarised annual financial statements have been prepared in accordance with the framework concepts and

the measurement and recognition requirements of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board, the AC 500 standards as issued by the Accounting Practices Board, the information as required by IAS 34: Interim Financial Reporting, the JSE Limited’s listing requirements and the requirements of the South African Companies Act, and was compiled under the supervision of the chief financial officer, MMT Ramano CA(SA).

The accounting policies and methods of computation used are consistent with those used in the preparation of the annual financial statements for the year ended 30 September 2012, and are the same as those used in the prior year except for revised accounting standards and interpretations that were adopted which did not have a material impact on the reported results.

For a better understanding of the group’s financial position, the results of its operations and cash flows for the year, these summarised financial statements should be read in conjunction with the group’s annual financial statements, from which these summarised financial statements were derived. A copy of the group annual financial statements can be found on the group’s website www.ppc.co.za.

The group annual financial statements were approved by the board on 12 November 2012.

2. AcqUisitiON OF EqUity iN AssOciAtEs Pronto Holdings (Pty) ltd During June 2012, PPC acquired a 25% stake in Pronto Holdings (Pty) Limited for R70 million. The purchase

consideration was determined using an EBITDA multiple less net debt. A second tranche for 25% will be paid on the first anniversary of the transaction and the remaining 50% at the conclusion of the second anniversary. See note 5.

Habesha cement share company During July 2012, PPC acquired a 27% equity stake in an Ethiopian public company Habesha Cement Share

Company for a purchase consideration of R102 million.

3. AcqUisitiON OF qUARRiEs iN BOtswANA In October 2011 all conditions precedent with regards to the transaction to acquire three aggregate quarries in

Botswana were met. The transaction value amounted to R52 million of which R42 million was paid during the 2012 financial year. The purchase consideration outstanding is payable in equal instalments on the first and second anniversaries of the transaction. The purchase price is allocated as follows:

2012Rm

Property, plant and equipment 26Intangible assets 28Current assets 5Long-term provisions and deferred taxation (7)

Total consideration 52Consideration paid during the year 42

Consideration payable 10

Impact of the transaction on the results for the year ended September 2012:Revenue 18Operating loss (4)Loss attributable to shareholder (8)Impact on EPS and HEPS (cents per share) (1)



4. stAtEd cAPitAl During the year the company, following special resolution approval from its shareholders, increased its authorised

share capital from 600 000 000 ordinary shares of 10 cents each to 700 000 000 ordinary shares of no par value and transferred the ordinary share capital account and share premium account to a stated capital account.

The treasury shares owned by PPC Cement (Pty) Limited were purchased by the company in September 2012 and subsequently cancelled. The resultant securities transfer tax of R1 million has been debited against stated capital.

In terms of the newly implemented long-term employee share incentive scheme, 3.1 million shares were purchased on the JSE Limited. The shares purchased for settlement to employees are treated as treasury shares on a group level while vesting conditions are in place.

In terms of the company’s second BEE transaction, approved by shareholders in September 2012, 39.3 million new PPC shares will be issued to participants of the transaction in October 2012 and facilitated through a Notional Vendor Funding (NVF) mechanism. See note 6.

In terms of IFRS, the shares issued to the participants will be treated as treasury shares during the NVF period, and these shareholders will be entitled to 20% of the dividend declared by PPC with the balance being utilised to reduce the NVF.

5. cOmmitmENts Capital and operating lease commitments amounted to R336 million (2011: R656 million; 2010: R518 million) for

the group as at the reporting date.

The second 25% tranche on acquisition of Pronto Holdings (Pty) Limited is payable over the next year with the remaining 50% payable in 2014. The total acquisition cost is not expected to exceed R400 million.

The company received environmental approval for the second phase of its Western Cape upgrade strategy. Detailed design continues and will incorporate the conditions included in the environmental authorisations.

6. EVENts AFtER REPORtiNG dAtE In terms of the second phase BEE transaction, 26.8 million shares were issued to the Employee Share Trust, 1.9 million

shares to Bafati Investment Trust and 10.6 million shares to the SBP Vehicle on 1 October 2012. These entities will be consolidated into the PPC group during the term of the transaction in accordance with IFRS.

128 PPC Ltd


2012 2011 2010 2009 2008 2007 2006Rm Rm Rm Rm Rm Rm Rm

cONsOlidAtEd stAtEmENts OF FiNANciAl POsitiONAssetsNon-current assets 4 998 4 585 4 449 4 195 3 196 2 546 1 817

Property, plant and equipment 4 483 4 287 4 175 3 941 2 813 2 178 1 414 Goodwill 6 – – – – – –Intangible assets 133 94 78 53 19 20 14Investment in non-consolidated subsidiary – – – – 260 260 290Other non-current financial assets and investments in associates 373 204 196 201 104 88 99Deferred taxation asset 3 – – – – – –

current assets 1 909 1 834 1 663 1 624 1 338 2 336 2 538

Inventories 841 709 596 557 363 337 223Trade and other receivables 820 901 827 819 751 696 605Short-term investment – – – – – 2 98Assets classified as held-for-sale – – – – – – 130Cash and cash equivalents 248 224 240 248 224 1 301 1 482

total assets 6 907 6 419 6 112 5 819 4 534 4 882 4 355

Equity and liabilitiescapital and reservesStated capital (1 181) (1 091) (1 091) (1 088) 115 868 868Reserves and retained profit 2 357 2 046 1 949 2 003 1 598 1 481 1 335

total equity 1 176 955 858 915 1 713 2 349 2 203

Non-current liabilities 4 008 3 837 3 591 3 366 511 340 364

Deferred taxation liabilities 859 740 568 469 299 156 174Long-term borrowings 2 716 2 699 2 645 2 628 55 68 83Other non-current liabilities 433 398 378 269 157 116 107

current liabilities 1 723 1 627 1 663 1 538 2 310 2 193 1 788

Short-term borrowings 869 811 876 764 1 619 1 366 983Taxation payable 42 10 76 96 61 236 212Trade and other payables 812 806 711 678 629 579 472Liabilities directly associated with assets classified as held-for-sale – – – – – – 112Provisions – – – – 1 12 9

total equity and liabilities 6 907 6 419 6 112 5 819 4 534 4 882 4 355

sEVEN-yEAR REViEw OF tHE GROUP’s REsUlts



2012 2011 2010 2009 2008 2007 2006Rm Rm Rm Rm Rm Rm Rm

cONsOlidAtEd iNcOmE stAtEmENtsRevenue 7 346 6 826 6 807 6 783 6 248 5 566 4 686 Cost of sales 4 809 4 500 4 067 3 897 3 547 3 069 2 520 Administrative and operating expenditure 671 616 625 468 378 323 305

Operating profit before items listed below 1 866 1 710 2 115 2 418 2 323 2 174 1 861 BEE IFRS 2 charges 123 11 10 490 – – – Take-on gain arising from consolidation of PPC Zimbabwe – – – 213 – – –

Operating profit 1 743 1 699 2 105 2 141 2 323 2 174 1 861 Fair value (losses)/gains on financial instruments (3) 9 (20) (6) 4 1 – Finance costs 374 362 366 357 157 84 52Investment income 30 28 39 65 84 82 67

Profit before exceptional items 1 396 1 374 1 758 1 843 2 254 2 173 1 876 Exceptional items – (4) (32) – 2 14 – Share of associates’ profit 7 15 8 7 10 7 –

Profit before taxation 1 403 1 385 1 734 1 850 2 266 2 194 1 876 Taxation 557 520 622 722 767 765 670

Net profit from continuing operations 846 865 1 112 1 128 1 499 1 429 1 206

discontinued operationsNet profit from discontinued operations – – – – – – 8

Net profit 846 865 1 112 1 128 1 499 1 429 1 214

Attributable to:Equity holders of parent 846 865 1 112 1 128 1 499 1 429 1 214

Ordinary shareholders 768 785 1 010 1 024 1 499 1 429 1 214 Other shareholders 78 80 102 104 – – –

846 865 1 112 1 128 1 499 1 429 1 214

Attributable net profit excluding exceptional items 846 869 1 144 1 128 1 497 1 415 1 214

cONdENsEd cONsOlidAtEd stAtEmENt OF cAsH FlOwsCash available from operations 1 651 1 435 1 689 1 728 1 644 1 460 1 437 Dividends paid (706) (876) (1 062) (1 195) (1 401) (1 207) (1 059)Equity-settled share incentive scheme refund/(payment) – – – – 2 (30) –

Net cash inflow from operating activities 945 559 627 533 245 223 378Net cash outflow from investing activities (938) (504) (663) (2 208) (1 562) (772) (242)Net cash inflow/(outflow) from financing activities 17 (71) 28 1 656 240 368 761

Net increase/(decrease) in cash and cash equivalents 24 (16) (8) (19) (1 077) (181) 897

130 PPC Ltd


2012 2011 2010 2009 2008 2007 2006

stAtisticsshare performanceWeighted average number of ordinary shares in issue during the year (000)

Time weighted number of ordinary shares in issue during the year 476 009 478 196 478 222 487 287 529 050 537 612 537 612

Earnings per share (cents) Net profit attributable to ordinary shareholders of PPC Ltd 161 164 211 210 283 266 226

Weighted average number of ordinary shares in issue during the year

Earnings per share before exceptional items, BEE IFRS 2 charges and take-on gain arising on consolidation of PPC Zimbabwe (cents)

Net profit attributable to ordinary shareholders of PPC Ltd adjusted for exceptional items net of taxation*

185 166 213 257 283 263 226Weighted average number of ordinary shares in issue during the year

Headline earnings per share (cents) Net profit attributable to ordinary shareholders of PPC Ltd adjusted for exceptional items net of taxation, amortisation of goodwill and capital profits or losses net of taxation 162 165 217 170 283 263 226


Headline earnings per share, before BEE IFRS 2 charges (cents)

Net profit attributable to ordinary shareholders of PPC Ltd adjusted for exceptional items, amortisation of goodwill and capital profits or losses net of taxation and excluding BEE IFRS 2 charges 185 167 219 257 283 263 226


Ordinary dividends per share (cents) Interim dividend per share paid and final dividend per share declared 146 130 175 200 225 205 143

Special dividend per share (cents) A non-recurring dividend that is exceptional in terms of either size or date declared – – – – – 61 77

Dividend cover (times) (excluding special dividends) Earnings per share before exceptional items* 1,3 1,3 1,3 1,3 1,3 1,3 1,6

Ordinary dividends per share

Net asset value per share (cents) Total equity, including investments at market value 224 182 163 174 331 437 410

Total number of shares in issue at year end

* Also excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.

sEVEN-yEAR REViEw OF tHE GROUP’s REsUlts continued



2012 2011 2010 2009 2008 2007 2006

stAtisticsshare performanceWeighted average number of ordinary shares in issue during the year (000)

Time weighted number of ordinary shares in issue during the year 476 009 478 196 478 222 487 287 529 050 537 612 537 612

Earnings per share (cents) Net profit attributable to ordinary shareholders of PPC Ltd 161 164 211 210 283 266 226


Earnings per share before exceptional items, BEE IFRS 2 charges and take-on gain arising on consolidation of PPC Zimbabwe (cents)

Net profit attributable to ordinary shareholders of PPC Ltd adjusted for exceptional items net of taxation*

185 166 213 257 283 263 226Weighted average number of ordinary shares in issue during the year

Headline earnings per share (cents) Net profit attributable to ordinary shareholders of PPC Ltd adjusted for exceptional items net of taxation, amortisation of goodwill and capital profits or losses net of taxation 162 165 217 170 283 263 226


Headline earnings per share, before BEE IFRS 2 charges (cents)

Net profit attributable to ordinary shareholders of PPC Ltd adjusted for exceptional items, amortisation of goodwill and capital profits or losses net of taxation and excluding BEE IFRS 2 charges 185 167 219 257 283 263 226


Ordinary dividends per share (cents) Interim dividend per share paid and final dividend per share declared 146 130 175 200 225 205 143

Special dividend per share (cents) A non-recurring dividend that is exceptional in terms of either size or date declared – – – – – 61 77

Dividend cover (times) (excluding special dividends) Earnings per share before exceptional items* 1,3 1,3 1,3 1,3 1,3 1,3 1,6

Ordinary dividends per share

Net asset value per share (cents) Total equity, including investments at market value 224 182 163 174 331 437 410

Total number of shares in issue at year end

* Also excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.

132 PPC Ltd


2012 2011 2010 2009 2008 2007 2006

stAtistics continuedProfitability and asset managementOperating margin (%) Operating profit (excluding BEE IFRS 2 charges and take-on

gain arising from consolidation of PPC Zimbabwe) 25,4 25,1 31,1 35,6 37,2 39,1 39,7

Revenue

EBITDA (Rm) Profit from continuing operations before exceptional items, adjusted for BEE IFRS 2 charges, take-on gain arising from consolidation of PPC Zimbabwe, investment income, finance costs, fair value adjustments, depreciation and amortisation 2 327 2 146 2 483 2 733 2 541 2 370 2 030

EBITDA margin (%) EBITDA 31,7 31,4 36,5 40,3 40,7 42,6 43,3

Revenue

Net asset turn (times) Revenue 1,3 1,3 1,4 1,6 1,6 1,4 1,4

Average net assets

Return on net assets (%) Profit before exceptional items adjusted for finance costs, associate income and amortisation of goodwill* 34,3 33,7 42,8 57,6 61,1 57,0 59,6

Average of net assets

Return on total assets (%) Profit before exceptional items adjusted for finance costs, associate income and amortisation of goodwill* 28,5 28,1 35,9 48,0 51,4 49,0 50,7

Average total assets

Return on total equity (%) Net profit attributable to shareholders of PPC Ltd 79,4 95,5 125,4 77,9 73,8 62,8 57,7

Average interest of shareholders of PPC Ltd

Return on total equity (excluding exceptional items) (%)

Net profit attributable to shareholders of PPC Ltd less exceptional items net of taxation 79,4 95,9 117,5 77,9 73,7 62,2 57,7


Effective rate of taxation (%) Taxation (excluding prior year taxation, secondary taxation on companies and taxation on exceptional items 33,3 30,7 29,8 29,3 28,0 28,3 28,9

Profit before taxation, excluding dividend income and exceptional items*

* Excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.




2012 2011 2010 2009 2008 2007 2006

stAtistics continuedProfitability and asset managementOperating margin (%) Operating profit (excluding BEE IFRS 2 charges and take-on

gain arising from consolidation of PPC Zimbabwe) 25,4 25,1 31,1 35,6 37,2 39,1 39,7

Revenue

EBITDA (Rm) Profit from continuing operations before exceptional items, adjusted for BEE IFRS 2 charges, take-on gain arising from consolidation of PPC Zimbabwe, investment income, finance costs, fair value adjustments, depreciation and amortisation 2 327 2 146 2 483 2 733 2 541 2 370 2 030

EBITDA margin (%) EBITDA 31,7 31,4 36,5 40,3 40,7 42,6 43,3

Revenue

Net asset turn (times) Revenue 1,3 1,3 1,4 1,6 1,6 1,4 1,4

Average net assets

Return on net assets (%) Profit before exceptional items adjusted for finance costs, associate income and amortisation of goodwill* 34,3 33,7 42,8 57,6 61,1 57,0 59,6

Average of net assets

Return on total assets (%) Profit before exceptional items adjusted for finance costs, associate income and amortisation of goodwill* 28,5 28,1 35,9 48,0 51,4 49,0 50,7

Average total assets

Return on total equity (%) Net profit attributable to shareholders of PPC Ltd 79,4 95,5 125,4 77,9 73,8 62,8 57,7


Return on total equity (excluding exceptional items) (%)

Net profit attributable to shareholders of PPC Ltd less exceptional items net of taxation 79,4 95,9 117,5 77,9 73,7 62,2 57,7


Effective rate of taxation (%) Taxation (excluding prior year taxation, secondary taxation on companies and taxation on exceptional items 33,3 30,7 29,8 29,3 28,0 28,3 28,9

Profit before taxation, excluding dividend income and exceptional items*

* Excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.

134 PPC Ltd


2012 2011 2010 2009 2008 2007 2006

stAtistics continuedliquidity and leverageTotal liabilities to total equity (%) Current and long-term liabilities, excluding deferred

taxation 414 495 546 485 147 101 90

Interest of shareholders of PPC Ltd

Total borrowings to total equity (%) Short-term and long-term borrowings 305 368 410 371 98 61 48


Current ratio (times) Current assets 1,1 1,1 1,0 1,1 0,6 1,1 1,4

Current liabilities

Quick ratio (times) Current assets, excluding inventories 0,6 0,7 0,6 0,7 0,4 0,9 1,3

Current liabilities

Interest cover (times) Profit before exceptional items, excluding finance costs* 5,1 4,8 5,6 6,6 12,0 24,6 37,4

Finance costs, including finance costs capitalised

EBITDA interest cover (times) EBITDA 6,2 5,9 6,6 7,3 12,6 25,9 39,5


Net debt to EBITDA ratio (times) Short-term and long-term borrowings, less cash and cash equivalents 1,4 1,5 1,3 1,2 0,6 0,1 (0,2)

EBITDA

Number of years to repay interest-bearing borrowings Total borrowings 2 2 2 2 1 1 1

Cash available from operations

Cash generated from operations (Rm) Cash generated from operations 2 284 2 102 2 442 2 602 2 546 2 191 2 023

Cash flow from operations to total liabilities (times) Cash available from operations 0,3 0,3 0,4 0,4 0,7 0,6 0,7

Total liabilities

Value added

Number of employees Number of persons employed full-time, part-time or on another basis during each of the pay periods of the preceding 12 months

3 085 3 087 3 257 3 234 3 164 3 097 3 025

Revenue per employee (R000)~ Revenue 2 381 2 211 2 086 2 560 2 461 2 262 1 955

Average number of employees

Wealth created per employee (R000)~ Wealth created 1 084 1 016 1 028 1 259 1 310 1 288 1 074


~ Includes employees of PPC Zimbabwe 2012, 2011, 2010 and 2009.* Excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.




2012 2011 2010 2009 2008 2007 2006

stAtistics continuedliquidity and leverageTotal liabilities to total equity (%) Current and long-term liabilities, excluding deferred

taxation 414 495 546 485 147 101 90


Total borrowings to total equity (%) Short-term and long-term borrowings 305 368 410 371 98 61 48


Current ratio (times) Current assets 1,1 1,1 1,0 1,1 0,6 1,1 1,4

Current liabilities

Quick ratio (times) Current assets, excluding inventories 0,6 0,7 0,6 0,7 0,4 0,9 1,3

Current liabilities

Interest cover (times) Profit before exceptional items, excluding finance costs* 5,1 4,8 5,6 6,6 12,0 24,6 37,4


EBITDA interest cover (times) EBITDA 6,2 5,9 6,6 7,3 12,6 25,9 39,5


Net debt to EBITDA ratio (times) Short-term and long-term borrowings, less cash and cash equivalents 1,4 1,5 1,3 1,2 0,6 0,1 (0,2)

EBITDA

Number of years to repay interest-bearing borrowings Total borrowings 2 2 2 2 1 1 1

Cash available from operations

Cash generated from operations (Rm) Cash generated from operations 2 284 2 102 2 442 2 602 2 546 2 191 2 023

Cash flow from operations to total liabilities (times) Cash available from operations 0,3 0,3 0,4 0,4 0,7 0,6 0,7

Total liabilities

Value added

Number of employees Number of persons employed full-time, part-time or on another basis during each of the pay periods of the preceding 12 months

3 085 3 087 3 257 3 234 3 164 3 097 3 025

Revenue per employee (R000)~ Revenue 2 381 2 211 2 086 2 560 2 461 2 262 1 955


Wealth created per employee (R000)~ Wealth created 1 084 1 016 1 028 1 259 1 310 1 288 1 074


~ Includes employees of PPC Zimbabwe 2012, 2011, 2010 and 2009.* Excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.

136 PPC Ltd


2012 2011 2010 2009 2008^ 2007^ 2006^

sHARE PERFORmANcE

JsE limited

Number of shares in issue (millions)~ Number of authorised shares that are sold to and held by the shareholders of PPC Ltd on the JSE Limited 551 571 571 561 510 510 510

Volume of shares traded (millions) Number of shares transacted during the year 305 305 498 560 606 302 127

Market price (cents)

High Highest prevailing price at which share was sold 3 359 3 510 3 560 3 650 5 199 5 300 4 498

Low Lowest prevailing price at which share was sold 2 258 2 302 2 878 2 313 2 590 3 360 2 770

At year end Prevailing price at which share was sold on 30 September 2 900 2 325 3 172 3 390 3 125 4 780 3 479

Value of shares traded (Rm) Number of shares transacted during the year times prevailing price 8 528 8 568 16 186 16 872 22 577 14 448 4 516

Volume of shares traded as a percentage of total issued shares (%)

Number of shares transacted during the year 50,3 53,4 87,2 99,9 118,8 59,2 24,9

Number of shares in issue

Number of transactions Number of exchanges of PPC Ltd shares between a buyer and a seller 159 076 183 178 178 142 251 222 216 815 108 130 47 543

FTSE/JSE All Share Industrial index Average prices of a selected number of shares listed on the JSE Limited 34 785 26 541 28 153 25 283 24 966 29 959 22 375

Zimbabwe stock Exchange

Number of shares in issue (millions) Number of authorised shares that are sold to and held by the shareholders of PPC Ltd on the Zimbabwe Stock Exchange 15 15 15 25

Market price at year end (cents) Prevailing price at which share was sold on 30 September 1 947 2 557 2 236 1 549

market capitalisation at 30 september (Rm)

JSE Limited Number of shares in issue listed on the JSE Limited times market price per share at year end 17 574 13 276 18 111 19 013 15 938 24 392 17 756

Zimbabwe Stock Exchange Number of shares in issue listed on the Zimbabwe Stock Exchange times market price per share at year end 292 389 340 392

17 867 13 665 18 451 19 405 15 938 24 392 17 756

Earnings yield (%) Earnings per share excluding exceptional items for the most recent 12 months* 6,4 7,2 6,5 7,8 9,1 5,6 6,5

Market price per share at year end#

Dividend yield (%) Total dividends paid out of current year’s earnings 5,0 5,6 6,3 6,0 7,2 5,6 6,3


Price-earnings ratio Market value per share at year end#

Earnings per share excluding exceptional items for the most recent 12 months*

15,7 14,0 16,3 12,9 11,0 18,0 15,4

~ Includes treasury shares.

* Excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.^ As data and exchange rates are not deemed meaningful, prior year’s information has not been disclosed for shares listed on the

Zimbabwe Stock Exchange.# Calculated using weighted market price of PPC shares listed on the JSE Limited and the Zimbabwe Stock Exchange.




2012 2011 2010 2009 2008^ 2007^ 2006^

sHARE PERFORmANcE

JsE limited

Number of shares in issue (millions)~ Number of authorised shares that are sold to and held by the shareholders of PPC Ltd on the JSE Limited 551 571 571 561 510 510 510

Volume of shares traded (millions) Number of shares transacted during the year 305 305 498 560 606 302 127

Market price (cents)

High Highest prevailing price at which share was sold 3 359 3 510 3 560 3 650 5 199 5 300 4 498

Low Lowest prevailing price at which share was sold 2 258 2 302 2 878 2 313 2 590 3 360 2 770

At year end Prevailing price at which share was sold on 30 September 2 900 2 325 3 172 3 390 3 125 4 780 3 479

Value of shares traded (Rm) Number of shares transacted during the year times prevailing price 8 528 8 568 16 186 16 872 22 577 14 448 4 516

Volume of shares traded as a percentage of total issued shares (%)

Number of shares transacted during the year 50,3 53,4 87,2 99,9 118,8 59,2 24,9

Number of shares in issue

Number of transactions Number of exchanges of PPC Ltd shares between a buyer and a seller 159 076 183 178 178 142 251 222 216 815 108 130 47 543

FTSE/JSE All Share Industrial index Average prices of a selected number of shares listed on the JSE Limited 34 785 26 541 28 153 25 283 24 966 29 959 22 375

Zimbabwe stock Exchange

Number of shares in issue (millions) Number of authorised shares that are sold to and held by the shareholders of PPC Ltd on the Zimbabwe Stock Exchange 15 15 15 25

Market price at year end (cents) Prevailing price at which share was sold on 30 September 1 947 2 557 2 236 1 549

market capitalisation at 30 september (Rm)

JSE Limited Number of shares in issue listed on the JSE Limited times market price per share at year end 17 574 13 276 18 111 19 013 15 938 24 392 17 756

Zimbabwe Stock Exchange Number of shares in issue listed on the Zimbabwe Stock Exchange times market price per share at year end 292 389 340 392

17 867 13 665 18 451 19 405 15 938 24 392 17 756

Earnings yield (%) Earnings per share excluding exceptional items for the most recent 12 months* 6,4 7,2 6,5 7,8 9,1 5,6 6,5


Dividend yield (%) Total dividends paid out of current year’s earnings 5,0 5,6 6,3 6,0 7,2 5,6 6,3


Price-earnings ratio Market value per share at year end#

Earnings per share excluding exceptional items for the most recent 12 months*

15,7 14,0 16,3 12,9 11,0 18,0 15,4

~ Includes treasury shares.

* Excludes the impact of BEE IFRS 2 charges and take-on gain arising from consolidation of PPC Zimbabwe.^ As data and exchange rates are not deemed meaningful, prior year’s information has not been disclosed for shares listed on the

Zimbabwe Stock Exchange.# Calculated using weighted market price of PPC shares listed on the JSE Limited and the Zimbabwe Stock Exchange.

138 PPC Ltd

ensuring technical excellence is maintained

continual modernisation

A R280 million project to upgrade kiln number 6 at De Hoek was successfully completed in 2012, setting a new benchmark in the group. This collective effort by PPC Projects, group risk, sub-contractors and De Hoek’s own team has delivered a world-class upgrade that puts De Hoek at the forefront of cement technology. The retrofit upgrade involved four main areas: the coal-milling circuit, clinker cooler and kiln/raw mill bag filter. Each of these now has the latest technology to deliver significant benefits for De Hoek and PPC:

� Reduced energy consumption, through modern equipment and better efficiencies. The clinker grate cooler and indirect firing system combination mean greater thermal efficiency, and reduced coal consumption

� Lower emissions – now well below the new standard. Reduced dust emissions from the clinker cooler filter, raw mill/kiln bag filter and coal mill bag filter mean a cleaner environment

Case studyDe Hoek plant upgrade

Modern kiln technology


Administration

� Reduced noise levels – new grate cooler will reduce noise levels compared to the previous satellite coolers

� Improved reliability – the new equipment has higher reliability and utilisation, resulting in reduced downtime for unplanned stops

� Improved output – the new equipment will increase efficiencies and therefore clinker production. The upgrade will extend the upgraded kiln line life by about 30 years to match the limestone reserve.

In addition to the technical and engineering expertise that went into the project, the teamwork involved was a major contributor to the success of the upgrade. The willingness to support colleagues was evident in inter-departmental cooperation, and excellent interaction between various PPC sites, including Colleen Bawn in Zimbabwe and Dwaalboom in Limpopo. Within the team at De Hoek, every department played a part to make sure the project ran well and customer service continued seamlessly.

Ultimately, installing modern-generation equipment enables PPC to produce higher-quality cement to meet our customer service targets.

140 PPC Ltd

Register date: 28 September 2012Issued share capital: 566 029 971 shares*

SHAREHOLDER SPREADNo of

shareholders % No of shares %

1 – 1 000 shares 9 347 50,4 4 186 386 0,71 001 – 10 000 shares 7 486 40,4 24 479 438 4,310 001 – 100 000 shares 1 371 7,4 38 727 287 6,9100 001 – 1 000 000 shares 269 1,4 86 803 074 15,31 000 001 shares and over 68 0,4 411 833 786 72,8

Total 18 541 100 566 029 971 100

DISTRIBUTION OF SHAREHOLDERS

Banks 176 0,9 161 797 462 28,6Brokers 45 0,2 7 840 497 1,4Close corporations 170 0,9 722 813 0,1Endowment funds 113 0,6 2 233 260 0,4Individuals 13 998 75,5 39 590 965 7,0Insurance companies 46 0,2 27 057 114 4,8Investment companies 46 0,2 7 181 498 1,3Medical aid schemes 11 0,1 417 698 0,1Mutual funds 249 1,3 80 995 436 14,3Nominees and trusts 2 963 16,0 30 323 155 5,4Other corporations 122 0,7 531 052 0,1Pension funds 233 1,3 112 076 812 19,8Private companies 342 1,8 94 193 444 16,6Public companies 27 0,2 1 068 765 0,2

Total 18 541 100,0 566 029 971 100,0

PUBLIC/NON-PUBLIC SHAREHOLDERS

Non-public shareholders 15 0,08 178 596 146 31,55 Directors' holdings 2 0,01 39 930 0,01 Broad-based black ownership 12 0,06 101 753 504 17,98 Strategic holdings (10% or more) 1 0,01 76 802 712 13,57 Public shareholders 18 526 99,92 387 433 825 68,45

Total 18 541 100,0 566 029 971 100,0

BENEFICIAL SHAREHOLDERS HOLDING 3% OR MORE No of shares %

Government Employees Pension Fund 76 802 712 13,6

PPC SBP Consortium Fundings SPV Pty Ltd 39 988 926 7,1

On 30 September 2011 issued share capital was 586 170 372. In terms of the second BEE deal 20 140 401 shares were cancelled.

PPC In the StoCk MaRket


AdministrationCoRPoRate InfoRMatIon

fInanCIal CalendaR

PPC ltd(Incorporated in the Republic of South Africa)Company registration number: 1892/000667/06

JSE code: PPCZSE code: PPC

JSE ISIN code: ZAE000170049

AuditorsDeloitte & ToucheDeloitte PlaceThe WoodlandsWoodlands DriveWoodmead, SandtonPrivate Bag X6Gallo Manor, 2052, South AfricaTelephone +27 11 806 5000Telefax +27 11 806 5111

transfer secretaries: South africaLink Market Services (Pty) Limited11 Diagonal StreetJohannesburg, South AfricaPO Box 4844Johannesburg, 2000, South AfricaTelephone +27 11 630 0815Telefax +27 866 743260Email [email protected]

Secretary and registered officeJHDLR Snyman180 Katherine Street, SandtonPO Box 787416Sandton, 2146, South AfricaTelephone +27 11 386 9000Telefax +27 11 386 9001Email [email protected]

transfer secretaries: ZimbabweCorpserve (Private) Limited2nd Floor, ZB CentreCorner First Street and Kwame Nkrumah AvenueHarare, ZimbabwePO Box 2208Harare, ZimbabweTelephone +263 4 758 193/751 559Telefax +263 4 752 629

Sponsor: South africaMerrill Lynch SA (Pty) Limited138 West StreetSandown, SandtonPO Box 651987Benmore, 2010, South AfricaTelephone +27 11 305 5555Telefax +27 11 305 5600

Sponsor: ZimbabweImara Edwards Securities (Private) LimitedBlock 2, Tendeseka Office ParkSamora Machel Avenue Harare, ZimbabwePO Box 1475Harare, ZimbabweTelephone +263 4 790 090Telefax +263 4 791 345

Financial year end 30 September

Annual general meeting 28 January 2013

Reports

Interim results for half-year to March Published May

Preliminary announcement of annual results Published November

Annual financial statements Published December

dividends

Interim Declared May

Paid June

Final Declared November

Paid January

142 PPC Ltd

PPC ltd Incorporated in the Republic of South Africa(Registration number: 1892/000667/06)JSE share code: PPCZSE share code: PPCISIN code: ZAE000170049(PPC) or (the company)

notICe IS heReBY GIVen to shareholders as at 28 December 2012, being the record date to receive the notice of annual general meeting (AGM), that the 119th AGM of the company will be held in the JSE 1 Room at the Radisson Blu Hotel in Sandton, cnr Rivonia Road and Daisy Street, on Monday, 28 January 2013 at 12:00 to consider the following business and, if deemed fit, to approve, with or without modification, the ordinary and special resolutions set out below.

ReCoRd dateThe board of directors of the company (board) has, in terms of section 59(1)(a) of the Companies Act, No 71 of 2008 (Act), set the record date for the purposes of determining which shareholders of the company are entitled to receive notice of AGM, as 18 January 2013, and has, in terms of section 59(1)(b) of the Act, set the record date, for purposes of determining which shareholders of the company are entitled to participate in and vote at AGM, as 18 January 2013. Accordingly, only shareholders who are registered in the register of members of the company on 14 December 2012 will be entitled to receive notice of AGM and only shareholders who are registered in the register of members of the company on 18 January 2013 will be entitled to participate in and vote at the AGM, therefore the last date to trade to be eligible to participate and vote at the AGM is 11 January 2013. The last date for lodging forms of proxy is 25 January 2013, by no later than 12:00.

Shareholders are reminded that: � A shareholder entitled to attend and vote at the AGM

is entitled to appoint a proxy (or more than one proxy) to attend, participate in and vote at the AGM in place of the shareholder, and shareholders are referred to the proxy form attached to this notice in this regard

� A proxy need not also be a shareholder of the company � In terms of section 63(1) of the Act, any person

attending or participating in a meeting of shareholders must present reasonably satisfactory identification and the person presiding at the shareholder meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as shareholder or as proxy for a shareholder) has been reasonably verified. Acceptable forms of verification include a green bar-coded identification document issued by the South African Department of Home Affairs, a driver’s licence or a valid passport

� This notice of meeting includes the attached proxy form

eleCtRonIC PaRtICIPatIon In the aGMShareholders or their proxies may participate in the AGM by way of a teleconference call provided that, if they wish to do so:

� They must contact the company secretary (by email at the address [email protected] by no later than 12:00 on 18 January 2013) to obtain a pin number and dial-in details for that teleconference call

� They will be required to provide reasonably satisfactory identification, by prior arrangement with the company secretary

� They will be billed separately by their own telephone service providers for their telephone call to participate in the AGM

PReSentatIon of annual fInanCIal StateMentSThe consolidated audited annual financial statements of the company and its subsidiaries, incorporating the reports of the auditors, audit committee and directors for the year ended 30 September 2012, as approved by the board on 12 November 2012, are hereby presented to shareholders as required in terms of section 30(3)(d) read with section 61(8)(1)(a) of the Act.

oRdInaRY BuSIneSSelection of directorsMr K Gordhan was appointed to the board as a director with effect from 1 November 2012 and in the office of chief executive officer (CEO) of the company with effect from 1 January 2013. In terms of the JSE listings requirements, article 25.8.1 of the memorandum of incorporation (MOI) and section 68(1) read with section 70(3)(b)(i) of the Act, Mr K Gordhan’s election as director must be confirmed at this AGM by a new election. A brief curriculum vitae for Mr Gordhan appears on page 6.

ordinary resolution number 1:“Resolved that in terms of the JSE listings requirements, article 25.8.1 of the MOI and section 68(1) read with section 70(3)(b)(i) of the Act, Mr K Gordhan be and is hereby elected to the board as director, in the position of CEO, with immediate effect.“

The percentage of voting rights required for ordinary resolution number 1 to be adopted: more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present at the AGM or represented by proxy and entitled to exercise voting rights on the resolution.

ordinary resolution number 2:Mr S Mhlarhi was appointed to the board as a non- executive director of the company with effect from 1 March 2012. In terms of the JSE listings requirements, article 25.8.1 of the MOI and section 68(1) read with section 70(3)(b)(i) of the Act, Mr S Mhlarhi’s election must be confirmed at this AGM by a new election. A brief curriculum vitae for Mr S Mhlarhi appears on page 7.

notICe of annual GeneRal MeetInG



Administration

“Resolved that, in terms of the JSE listings requirements, article 25.8.1 of the MOI and section 68(1) read with section 70(3)(b)(i) of the Act, Mr S Mhlarhi be and is hereby elected to the board as non-executive director with immediate effect.“


Re-election of directors retiring by rotationIn terms of article 25.6.1 of the MOI, one-third of the company’s non-executive directors are required to retire at every AGM. Mr BL Sibiya, Mr NP Malungani and Mr TDA Ross are accordingly required to retire by rotation at this AGM. A retiring director is however entitled to offer him/herself for re-election and each of Mr BL Sibiya, Mr NP Malungani and Mr TDA Ross have offered themselves for re-election. The board, through the nominations committee, has recommended the re-election of each of Mr BL Sibiya, Mr NP Malungani and Mr TDA Ross. A brief curriculum vitae of each of the directors standing for re-election appear on pages 6 and 7.

ordinary resolution number 3:“Resolved that Mr NP Malungani who is required to retire as a director of the company at this AGM in terms of article 25.6.1 of the MOI and who, being eligible, offers himself for re-election be and is hereby elected, in terms of section 68(1) of the Act and article 25.2 of the MOI, as a director of the company with immediate effect.”


ordinary resolution number 4:“Resolved that Mr TDA Ross, who is required to retire as a director of the company at this AGM in terms of article 25.6.1 of the MOI and who, being eligible, offers himself for re-election, be and is hereby elected, in terms of section 68(1) of the Act and article 25.2 of the MOI as a director of the company with immediate effect.”


ordinary resolution number 5: “Resolved that Mr BL Sibiya, who is required to retire as a director of the company at this AGM in terms of article 25.6.1 of the MOI and who, being eligible, offers himself

for re-election, be and is hereby elected, in terms of section 68(1) of the Act and article 25.2 of the MOI, as a director of the company with immediate effect.”


Reappointment of external auditorsIn terms of section 90(1) of the Act, the auditor of the company must be appointed at the AGM each year. To be appointed as auditor, the auditor must satisfy the requirements of section 90(2) of the Act and section 22 of the JSE listings requirements. The audit committee and the board (based on the findings of the audit committee) are satisfied that Deloitte & Touche Incorporated (Deloitte & Touche) meets the requirements of section 90(2) of the Act and section 22 of the JSE listings requirements.

Accordingly, the audit committee and the board have proposed the reappointment of Deloitte & Touche as independent auditors of the company for the year ending 30 September 2013 to hold office until the conclusion of the next AGM.

ordinary resolution number 6:“Resolved that Deloitte & Touche (on recommendation by the audit committee and the board) be and are hereby appointed as external independent auditors of the company to hold office until the conclusion of the next AGM of the company. Mr Nyembe (IRBA no 841323) from Deloitte & Touche will undertake the audit for the financial year ending 30 September 2012.”


authorisation for auditors’ remunerationThe directors propose to fix the remuneration payable to the external auditors for the audit conducted for the year ended 30 September 2012.

ordinary resolution number 7:“Resolved that the directors be and are hereby authorised to fix the remuneration of the external auditors, Deloitte & Touche, for the audit conducted for the year ended 30 September 2012.”


144 PPC Ltd

appointment of members of the audit committeeIn terms of section 94(2) of the Act, at each AGM, the company is required to elect an audit committee comprising at least three members, each of whom must satisfy the requirements set out in section 94(4) of the Act.

Mr TDA Ross, Ms ZJ Kganyago and Ms B Modise are the incumbent members of the audit committee and their term of office ends at the conclusion of this AGM. The nominations committee and the board are satisfied that each member meets the requirements of section 94(4) of the Act and that each member meets the minimum qualification requirements for a member of an audit committee and that they, together, have adequate relevant knowledge and experience to equip the audit committee to perform its functions. Each of Mr TDA Ross, Ms ZJ Kganyago and Ms B Modise are eligible for re-election and they have each agreed to stand for re-election. A brief curriculum vitae of each member appears on page 7.

ordinary resolution number 8:“Resolved that, subject to his election in terms of ordinary resolution number 4, Mr TDA Ross, who is an independent non-executive director of the company, be and is hereby elected as a member of the audit committee with immediate effect to hold office until the next AGM.”


ordinary resolution number 9:“Resolved that Ms ZJ Kganyago, who is an independent non-executive director of the company, be and is hereby elected as a member of the audit committee with immediate effect to hold office until the next AGM.”


ordinary resolution number 10:“Resolved that Ms B Modise, who is an independent non-executive director of the company, be and is hereby elected as a member of the audit committee with immediate effect to hold office until the next AGM.”


notICe of annual GeneRal MeetInG continued

non-binding approval of the remuneration policy King III requires the board (with the assistance of the remuneration committee) to put forward a policy of remuneration to the shareholders. The company’s remuneration policy (remuneration policy) is set out on pages 92 to 108 of the integrated annual report of which this notice forms part. In accordance with the recommendations of King III, the company should give the shareholders the right to express their views on the remuneration policy by casting an advisory vote in the manner set out below.

Resolution number 11:“Resolved that the company’s remuneration policy, be and is hereby approved, through a non-binding advisory vote, in accordance with the recommendations of King III.”


SPeCIal BuSIneSSSpecial resolution number 1 – to authorise inter company loansBackground in respect of special resolution number 1In terms of the Companies Act, No 61 of 1973, shareholders were not required to approve the advance of financial assistance (which includes the giving of a loan, guaranteeing of a loan or obligation and/or securing any debt or obligation) to a related or inter-related company (which includes a group company). In terms of section 45 of the Act, however, a company is now required to approve the giving of any financial assistance to a related or inter-related company by passing a special resolution in terms of section 45 of the Act and only after the board has applied the solvency and liquidity test.

The reason for special resolution number 1 is that the company does advance loans to subsidiaries and other related companies within the group. Given that these loans constitute financial assistance for purposes of the Act, the shareholders are required to pass special resolution number 1 to approve the company advancing such financial assistance. The effect of special resolution number 1 is that the company will be authorised to advance loans and provide security to companies within the group, subject to the company meeting the solvency and liquidity tests and subject further to the financial assistance falling within the category of assistance mentioned in sub-paragraph (c) of special resolution number 1 below.

“Resolved that, as a special resolution, in terms of section 45(3)(a)(ii) of the Act, the shareholders of the company hereby approve of the company providing,



Administration

Base fee/ Attendance

fee 2012

Additional meetings

2012

Base fee/ Attendance

fee 2013

Additional meetings

2013

Board Chair 769 560 31 800 819 581 33 867Each non-executive director 212 000 15 900 225 780 16 934

Audit committee Chair 199 492 31 800 212 459 33 867Each non-executive director 99 958 15 900 106 455 16 934

Remuneration committee Chair 151 792 31 800 161 658 33 867Each non-executive director 74 200 15 900 79 023 16 934

Risk and compliance committee Chair 151 792 31 800 161 658 33 867Each non-executive director 74 200 15 900 79 023 16 934

Social and ethics committee Chair 151 792 31 800 161 658 33 867Each non-executive director 74 200 15 900 79 023 16 934

Nominations committee Chair 106 000 31 800 112 890 33 867Each non-executive director 53 000 15 900 56 445 16 934

Percentage of voting rights required for special resolution number 2 to be adopted: at least 75% (seventy five percent) of the voting rights exercised on the resolution by shareholders present at the AGM or represented by proxy and entitled to exercise voting rights on the resolution.

at any time and from time to time during the period of 2 (two) years commencing on the date of the passing of this special resolution, any direct or indirect financial assistance as contemplated in section 45 of the Act to any company within the PPC group of companies, provided that – (a) the recipient or recipients of such financial assistance,

the form, nature and extent of such financial assistance and the terms and conditions under which such financial assistance is to be provided, are determined by the board from time to time;

(b) the board may not authorise the company to provide any financial assistance pursuant to this special resolution unless the board satisfies all the requirements of section 45 of the Act which it is required to meet in order to authorise the company to provide such financial assistance; and

(c) such financial assistance to a recipient thereof is, in the opinion of the board, required for the purpose of (i) meeting all or any of such recipient’s operating expenses (including capital expenditure), and/or (ii) funding the growth, expansion, reorganisation or restructuring of the businesses or operations of such recipient, and/or (iii) funding such recipient for any other purpose which in the opinion of the board is directly or indirectly in the interests of the company.”

Percentage of voting rights required for special resolution number 1 to be adopted: at least 75% (seventy five percent) of the voting rights exercised on the resolution by shareholders present at the AGM or represented by proxy and entitled to exercise voting rights on the resolution.

Shareholders are referred to the notice to shareholders in terms of section 45(5) of the Companies act set out in annexure “1” hereto

Special resolution number 2 – pre-approval of remuneration of the non-executive directorsBackground in respect of special resolution number 2In terms of section 66(8) read with section 66(9) of the Act, except to the extent that the Act provides otherwise, the company may pay remuneration to its directors for their service as directors and any such remuneration must be approved by special resolution of the shareholders within in the previous two years. The remuneration committee has determined the remuneration for non-executive directors and the board has accepted the recommendations of the remuneration committee.

The reason for special resolution number 2 is to authorise the company to pay remuneration to its non-executive directors.

Resolved, as a special resolution, that, in terms of sections 66(8) read with 66(9) of the Act, the company be and is hereby authorised to pay remuneration to non-executive directors for their services as non-executive directors for the period from the date of the passing of this special resolution to the conclusion of the next AGM, as follows:

146 PPC Ltd

Special resolution number 3 – general authority to repurchase ordinary sharesBackground in respect of special resolution number 3It terms of the JSE listings requirements, the MOI and section 48 of the Act, a company may repurchase some of its own shares and a subsidiary company may acquire shares in its holding company (both of which are referred to as a ‘repurchase’).

The reason for special resolution number 3 is to grant the company or any of its subsidiaries a general authority in terms of the Act and the JSE listings requirements to implement a repurchase. This authority will be valid until the earlier of the next AGM of the company or the variation or revocation of such general authority by special resolution by any subsequent meeting of the shareholders, provided that the general authority does not extend beyond 15 (fifteen) months from the date of the passing of this special resolution number 3. The passing of this special resolution will have the effect of authorising the company to undertake a repurchase.

“Resolved that, as a special resolution that, the board is hereby authorised by way of a renewable general authority, in terms of the provisions of the JSE listings requirements, the Act and otherwise as permitted in the MOI, to approve a repurchase by the company and any of its subsidiaries, upon such terms and conditions and in such amounts as the board may from time to time determine, but subject to the MOI, the provisions of the Act and the JSE listings requirements, when applicable, and provided that:

� Any such repurchase of ordinary shares will be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and/or any of its subsidiaries and the counterparty

� This general authority will only be valid until the company’s next AGM provided that it will not extend beyond 15 (fifteen) months from the date of passing this special resolution

� A press announcement will be published in accordance with, and giving such details as is required in terms of the JSE listings requirements, where the company or its subsidiaries has/have repurchased ordinary shares constituting, on a cumulative basis, 3% (three percent) of the initial number of shares (the number of that class of ordinary shares in issue at the time that the general authority from shareholders is granted) and in respect of every 3% (three percent) in the aggregate of the initial number of shares thereafter. This announcement will contain full details of such repurchases


� The general repurchase by the company and/or any subsidiary of the company of ordinary shares in the aggregate in any one financial year does not exceed 10% of the company’s issued ordinary share capital as at the beginning of the financial year, provided that the acquisition of shares as treasury stock by a subsidiary of the company will not be effected to the extent that in aggregate more than 10% of the number of issued shares in the company are held by or for the benefit of all the subsidiaries of the company taken together

� General repurchases by the company and/or any subsidiary of the company in terms of this authority may not be made at a price greater than 10% above the weighted average of the market value at which such ordinary shares are traded on the JSE, as determined over the 5 (five) business days immediately preceding the date of the repurchase of such ordinary shares by the company and/or any subsidiary of the company

� A resolution has been passed by the board of the company and/or any subsidiary of the company confirming that the board has authorised the repurchase, and that the company and/or its subsidiary/ies have satisfied the solvency and liquidity test contemplated in section 4 of the Act, and that since the application of the liquidity and solvency test there have been no material changes to the financial position of the company and its subsidiaries (group)

� The company may at any point only appoint one agent to effect any repurchase(s) on its behalf

� The company and/or any of its subsidiaries may not repurchase securities during a prohibited period, as defined in paragraph 3.67 of the JSE listings requirements, unless the company and/or any of its subsidiaries has a repurchase programme in place where the dates and quantities of securities to be traded during the relevant period are fixed (and not subject to any variation) and full details of the programme have been disclosed in an announcement over SENS (the Securities Exchange News Service) prior to the commencement of the prohibited period.”

The percentage of voting rights required for special resolution number 3 to be adopted: at least 75% (seventy five percent) of the voting rights exercised on the resolution by shareholders present at the AGM or represented by proxy and entitled to exercise voting rights on the resolution.



Administration

Additional information in respect of special resolution number 3The information required by the JSE listings requirements regarding this general authority appears in the integrated annual report, of which this notice of AGM forms part, as indicated below:

� Directors and management of the company: pages 6 to 8

� Major shareholders: page 136 � Details of stated capital are included in the directors’

report in the annual financial statements � Directors’ interest in stated capital: page 102

directors’ responsibility statementThe directors, whose names are given on pages 6 and 7 of the integrated annual report, collectively and individually accept full responsibility for the accuracy of the information given, in respect of this special resolution number 3, and certify that to the best of their knowledge and belief there are no facts that have been omitted that would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the annual report and notice of AGM contains all information required by the Act and the JSE listings requirements.

Material changesThere has been no material change in the financial or trading position of the company or any of its subsidiaries since 30 September 2012.

litigation statementThere are no legal or arbitration proceedings (including any pending or threatened legal or arbitration proceedings) against the company or its subsidiaries, of which the directors are aware, which may have, or have had in the last 12 months, a material effect on the financial position of the company or its subsidiaries.

In terms of the JSE listings requirements, the directors of the company hereby state that:

� The intention of the company and/or any of its subsidiaries is to utilise this authority only if at some future date the cash resources of the company exceed its requirements. In this regard, the directors will take into account, inter alia, an appropriate capitalisation structure for the company, the long-term cash needs of the company, and will ensure that any such utilisation is in the interest of shareholders

� The method by which the company and/or any of its subsidiaries intends to repurchase securities and the date on which such repurchase will take place, has not yet been determined

� After considering the effect of a maximum permitted repurchase of securities, the company and its subsidiaries are, as at the date of this notice convening the AGM of the company, able to fully comply with the JSE listings requirements. Nevertheless, at the time the contemplated repurchase is to take place, the directors of the company will ensure that:

� The company and the group will be able in the ordinary course of business to pay its debts for a period of 12 (twelve) months after the date of the notice of the AGM

� The assets of the company and the group will exceed the liabilities of the company and the group for a period of 12 (twelve) months after the date of the notice of the AGM. For this purpose, the assets and liabilities will be recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements

� The stated capital and reserves of the company and the group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the notice of the AGM

� The working capital of the company and the group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the notice of the AGM

� The board of directors has authorised the repurchase, the company and its subsidiary/ies have passed the solvency and liquidity test, and since the solvency and liquidity test was last performed, there have been no material changes to the financial position of the group

� The company will provide its sponsor and the JSE with all documentation as required in schedule 25 of the JSE listings requirements, and will not initiate any repurchase programme until the sponsor has signed off on the adequacy of its working capital, advised the JSE accordingly and the JSE has approved the documentation

to tRanSaCt SuCh otheR BuSIneSS aS MaY Be tRanSaCted at an aGM

PRoXY and VotInG PRoCeduReOn a show of hands, every shareholder present in person or by proxy, and if a member is a body corporate, its representatives, will have one vote and, on a poll, every shareholder present in person or by proxy and, if the person is a body corporate, its representative, will have one vote for every share held or represented by him/her.

Shareholders holding dematerialised shares, but not in their own name, must furnish their central securities depositary participant (CSDP) or broker with their instructions for voting at the AGM. If your CSDP or broker, as the case may be, does not obtain instructions from you, it will be obliged to act in accordance with your mandate furnished to it, or if the mandate is silent in this regard, complete the form of proxy enclosed.

Unless you advise your CSDP or broker, in terms of the agreement between you and your CSDP or broker, by the cut-off time stipulated therein, that you wish to attend the AGM or send a proxy to represent you at this AGM, your CSDP or broker will assume that you do not wish to attend the AGM or send a proxy.

148 PPC Ltd

If you wish to attend the AGM or send a proxy, you must request your CSDP or broker to issue the necessary letter of authority to you. Shareholders holding dematerialised shares, and who are unable to attend the AGM and wish to be represented at that AGM, must complete the form of proxy enclosed in accordance with the instructions and lodge it with or mail it to the transfer secretaries.

Forms of proxy (enclosed) must be dated and signed by the shareholder appointing a proxy and should be forwarded to reach the transfer secretaries, Link Market Services South Africa (Proprietary) Limited, 11 Diagonal Street, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000) and for Zimbabwean PPC shareholders, Corpserve (Private) Limited, 2nd Floor, ZB Centre, corner First Street and Kwame Nkrumah Avenue, Harare, Zimbabwe (PO Box 2208, Harare, Zimbabwe), by no later than 12:00 on 25 January 2013. Before a proxy exercises any rights of a shareholder at the AGM, such form of proxy must be so delivered.

In compliance with the provisions of section 58(8)(b)(i) of the Act, a summary of the rights of a shareholder to be represented by proxy is set out below.

An ordinary shareholder entitled to attend and vote at the AGM may appoint any individual (or two or more individuals) as a proxy or proxies to attend, participate in and vote at the AGM in the place of the shareholder. A proxy need not be a shareholder of the company.

A proxy appointment must be in writing, dated and signed by the shareholder appointing a proxy, and, subject to the rights of a shareholder to revoke such appointment (as set out below), remains valid only until the end of the AGM.

A proxy may delegate the proxy’s authority to act on behalf of a shareholder to another person, subject to any restrictions set out in the instrument appointing the proxy.

Irrespective of the form of instrument used to appoint the proxy, the appointment of a proxy is suspended at any time and to the extent that the shareholder who appointed such proxy chooses to act directly and in person in the exercise of any rights as a shareholder.

Unless the proxy appointment expressly provides otherwise, the appointment of a proxy is revocable by the shareholder in question cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to the company. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of (a) the date stated in the revocation instrument, if any; and (b) the date on which a copy of the revocation instrument is delivered to the company as required in the first sentence of this paragraph.


If the instrument appointing the proxy or proxies has been delivered to the company, as long as that appointment remains in effect, any notice that is required by the Act or the MOI to be delivered by the company to the shareholder, must be delivered by the company to (a) the shareholder, or (b) the proxy or proxies, if the shareholder has (i) directed the company to do so in writing; and (ii) paid any reasonable fee charged by the company for doing so.

Attention is also drawn to the explanatory notes regarding the proxy on the form of proxy.

The completion of a form of proxy does not preclude any shareholder attending the AGM.

Any shareholder having difficulties or queries on the above may contact the company secretary on +27 11 386 9000.

PRoof of IdentIfICatIon ReQuIRedIn terms of section 63(1) of the Act, any person (shareholder or proxy) who wishes to attend or participate in a shareholders meeting must present reasonably satisfactory identification at the meeting. A green bar-coded identification document issued by the South African Department of Home Affairs, a driver’s licence or a valid passport will be accepted as sufficient identification.

By order of the board

JhdlR SnymanCompany secretary7 November 2012Sandton



Administration

PPC ltdIncorporated in the Republic of South Africa(Registration number: 1892/000667/06)JSE share code: PPCZSE share code: PPCISIN code: ZAE000170049(PPC) or (the company)

only for use by registered holders of certificated ordinary shares in the company and the holders of dematerialised ordinary shares in the capital of the company in ‘own-name’ form, at the annual general meeting (aGM) to be held at 12:00 on Monday, 28 January 2013, in the JSe 1 Room at the Radisson Blu hotel in Sandton, cnr Rivonia Road and daisy Street.

Holders of ordinary shares in the company (whether certificated or dematerialised) through a nominee must not complete this form of proxy but should timeously inform that nominee, or, if applicable, their participant or stockbroker of their intention to attend the AGM and request such nominee, participant or stockbroker to issue them with the necessary letter of representation to attend or provide such nominee, participant or stockbroker with their voting instructions should they not wish to attend the AGM in person but wish to be represented by proxy at the meeting. Such ordinary shareholders must not return this form of proxy to the transfer secretaries.

I/We of

(Name and address in block letters)

being a member/s of the above company and holding ordinary shares

therein, hereby appoint

of or, failing him, the

chairman of the meeting as my/our proxy to attend, speak and vote for me/us and on my/our behalf or to abstain from voting at the AGM of the company to be held in the JSE 1 Room at the Radisson Blu Hotel in Sandton, cnr Rivonia Road and Daisy Street, on Monday, 28 January 2013, and at any postponement or adjournment of that meeting as follows:

In favour of Against Abstainordinary resolutions1 Election of K Gordhan as director, in the position of CEO, to the board2 Election of S Mhlarhi as a director to the board3 Re-election of P Malungani as a director to the board4 Re-election of T Ross as a director to the board5 Re-election of B Sibiya as a director to the board6 Appointment of Deloitte & Touche as external auditors of the company7 Authorise directors to fix remuneration of external auditors8 Appointment to audit committee – T Ross9 Appointment to audit committee – Z Kganyago10 Appointment to audit committee – B Modise11 Advisory vote on company’s remuneration policySpecial resolutions1 To authorise the provision of financial assistance 2 To approve the board fees3 Repurchase of own shares or acquisition of the company’s shares

by a subsidiary

Insert an X in the relevant spaces above according to how you wish your votes to be cast. However, if you wish to cast your votes in respect of a lesser number of ordinary shares than you own in the company, insert the number of ordinary shares held in respect of which you desire to vote (see note 2).

Signed at on 20

Signature/s

Assisted by (where applicable)

Each member is entitled to appoint a proxy (who need not be a member of the company) to attend, speak and vote in place of that member at the AGM.

Please read the notes to form of proxy below.

foRM of PRoXY

150 PPC Ltd

1. The form of proxy must only be used by shareholders who hold shares in certificated form or who are recorded on the sub-register in electronic form in ‘own name’.

2. All other beneficial owners who have dematerialised their shares through a CSDP or broker and wish to attend the AGM must provide the CSDP or broker with their voting instructions in terms of the relevant agreement entered into between them and the CSDP or broker.

3. A shareholder entitled to attend and vote at the AGM may insert the name of a proxy or the names of two or more alternate proxies of the shareholder’s choice in the space provided, with or without deleting “the chairperson of the AGM”. The person whose name stands first on the form of proxy and who is present at the AGM will be entitled to act as proxy to the exclusion of such proxy(ies) whose names follow.

4. A shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each ordinary share held. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate space provided. If an “X” has been inserted in one of the blocks to a particular resolution, it will indicate the voting of all the shares held by the shareholder concerned. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the AGM as he/she deems fit in respect of all the shareholder’s exercisable votes. A shareholder or the proxy is not obliged to use all the votes exercisable by the shareholder or by the proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or the proxy.

5. A vote given in terms of an instrument of proxy will be valid in relation to the AGM despite the death, insanity or other legal disability of the person granting it, or the revocation of the proxy, or the transfer of the shares in respect of which the proxy is given, unless notice on any of the noted matters has been received by the transfer secretaries not less than 48 hours before the start of the AGM.

6. If a shareholder does not indicate on this form that his/her proxy is to vote in favour of or against any resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the AGM be proposed, such proxy shall be entitled to vote as he/she thinks fit.

7. The chairperson of the AGM may reject or accept any form of proxy which is completed and/or received other than in compliance with Act, the MOI and these notes.

8. A shareholder’s authorisation to the proxy including the chairperson of the AGM, to vote on such shareholder’s behalf, will be deemed to include the authority to vote on procedural matters at the AGM.

9. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the AGM and speaking and voting in person to the exclusion of any proxy appointed in terms hereof.

10. Documentary evidence establishing the authority of a person signing the form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by the company’s transfer secretaries or is waived by the chairperson of the AGM.

11. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documents establishing his/her capacity are produced or have been registered by the transfer secretaries of the company.

12. Where there are joint holders of shares: � Any one holder may sign the form of proxy � The vote(s) of the senior shareholders (for that

purpose seniority will be determined by the order in which the names of shareholders appear in the company’s register of shareholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s)

13. Forms of proxy should be lodged with or mailed to transfer secretaries, Link Market Services South Africa (Proprietary) Limited, 11 Diagonal Street, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000) and for Zimbabwean PPC shareholders, Corpserve (Private) Limited, 2nd Floor, ZB Centre, corner First Street and Kwame Nkrumah Avenue, Harare, Zimbabwe (PO Box 2208, Harare, Zimbabwe) to be received by no later than 12:00 on 25 January 2013 (or 48 (forty-eight) hours before any adjournment of the AGM which date, if necessary, will be notified on SENS).

14. A deletion of any printed matter and the completion of any blank space need not be signed or initialled. Any alteration or correction must be signed and not merely initialled.

eXPlanatoRY noteS ReGaRdInG PRoXY


Administration

Notice is hereby given to shareholders of the company in terms of section 45(5) of the Companies Act of a resolution adopted by the board of directors of the company (board) authorising the company to provide such direct or indirect financial assistance as specified in special resolution number 1 on the basis that:(a) by the time that the notice of annual general meeting

is delivered to shareholders of the company, the board of directors of the company will have adopted a resolution (section 45 board resolution) authorising the company to provide, at any time and from time to time during the period of 2 (two) years commencing on the date on which the special resolution number 1 is adopted, any direct or indirect financial assistance as contemplated in section 45 of the Companies Act to any one or more related or inter-related companies or corporations of the company and/or to any one or more members of any such related or inter-related company or corporation and/or to any one or more persons related to any such company or corporation;

notICe to ShaReholdeRS In teRMS of SeCtIon 45(5) of the CoMPanIeS aCt In ReSPeCt of SPeCIal ReSolutIon nuMBeR 1

(b) the section 45 board resolution will be effective only if and to the extent that the special resolution number 1 is adopted by the shareholders of the company, and the provision of any such direct or indirect financial assistance by the company, pursuant to such resolution, will always be subject to the board being satisfied that (i) immediately after providing such financial assistance, the company will satisfy the solvency and liquidity test as referred to in section 45(3)(b)(i) of the Companies Act, and that (ii) the terms under which such financial assistance is to be given are fair and reasonable to the company as referred to in section 45(3)(b)(ii);

(c) in as much as the section 45 board resolution contemplates that such financial assistance will in the aggregate exceed one-tenth of one percent of the company’s net worth at the date of adoption of such resolution, the company hereby provides notice of the section 45 board resolution to shareholders of the company. Such notice will also be provided to any trade union representing any employees of the company.

anneXuRe 1

152 PPC Ltd

aBet Adult basic education and training

aCMP Association of Cementitious Material Producers

aSPaSa Aggregate and Sand Producers Association of South Africa

BBBee or Bee Broad-based black economic empowerment

CdP Carbon Disclosure Project

CGt Corporate gains tax

CSI Corporate social investment

dea Department of Environmental Affairs (South Africa)

dMR Department of Mineral Resources (South Africa)

doe Department of Energy (South Africa)

dtI Department of Trade and Industry (South Africa)

eBItda Earnings before interest, tax, depreciation and amortisation

eIa Environmental impact assessment

eIuG Energy-intensive users group

eMP Environmental management plan

fSP Forfeitable share plan

GRI Global Reporting Initiative

hdSa Historically disadvantaged South African

IfRS 2 International Financial Reporting Standards for share-based payment transactions

ISo International Standards Organisation

king III King Report on Governance for South Africa

led Local economic development (South Africa)

ltIfR Lost-time injury frequency rate

MoI Memorandum of incorporation

MPRda Mineral and Petroleum Resources Development Act (South Africa)

MQa Mining Qualifications Authority

nQf National Qualifications Framework

ohSaS Occupational health and safety assessment series

oPC Ordinary Portland cement (CEM I)

PMC Portland Masonry cement

SanS South African National Standards

SlP Social and labour plan (South Africa)

SMMe Small, medium and micro enterprise

StC Secondary tax on companies (South Africa)

StIS Short-term incentive scheme

tCtC Total cost to company

VCt Voluntary counselling and testing

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