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Integrated report

HOW TO READ OUR INTEGRATED REPORTOur integrated report provides extensive cross-references, using these icons:

Related information in this report

More information on www.ppc.co.za

Glossary on page 152

Who we areFor 123 years, PPC has tracked the growth and development of South Africa and Zimbabwe, producing cement for many iconic landmarks, including the Union Buildings, Gariep Dam and Van Staden’s River Bridge, Kariba Dam, the Gautrain, new Cape Town Stadium, Medupi power station and much of southern Africa’s infrastructure. Over the recent years PPC has extended its reach to play a role in infrastructure development in several African countries.

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, recover and recycle 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 for all stakeholders.

The following frameworks have been applied in preparing this report:

Framework

The framework of the International Integrated Reporting Council (IIRC) on accepted best practice in annual reporting.

In determining the content that would present a complete view, we followed the committee’s guiding principles: strategic focus and future orientation; connectivity of information; stakeholder relationships; materiality, conciseness, reliability and completeness; and consistency and comparability.

Guidelines of the Global Reporting Initiative on sustainability disclosure (GRI G3.1).

PPC will report against the latest guidelines (G4) in the new financial year.

International Financial Reporting Standards (IFRS)South African Companies Act JSE Limited (JSE) listings requirementsKing III recommendations.

Annual financial statements and summarised annual financial statements.

www.ppc.co.za

For details of our AGM please refer to our notice of AGM 2015

PPC Ltd Integrated report 2015 1

Exceeding the expectations of all our stakeholders on a sustainable basis.

Achieving this strategic aspiration requires fundamentally changing our corporate culture while excelling at the five pillars of our strategy:

STRATEGIC ASPIRATION

Provider of materials and

solutions

Doubling our business every

ten years

Innovation culture

Taking a strategic approach

World-class excellence in

all we do

VISION

A world-class provider of materials and solutions into the basic services sector, taking a strategic approach to more than doubling our business every ten years.

See page 32.

2015

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CONTENTS

2 PPC Ltd Integrated report 2015

Sustainability review

People review 90

Social review 102

Environmental review 112

Limited assurance report 119

Financial review

Independent auditors’ report 124

Summarised annual financial statements 125

Appendices

Mining charter scorecard 147

Human resource development and dti BBBEE status 149

PPC shareholder analysis 150

Financial calendar 151

Glossary 152

GRI 153

Corporate information IBC

Supplementary informationIn addition to this integrated report, please see supplementary

reports on our website:

2015 at a glance

Performance highlights 4

Performance review 5

6

profile of our business 8

10

Our footprint 11

Our business

Chairman’s report 14

Material issues 17

Business model 18

Stakeholder engagement 20

Leadership 22

Strategic and operational review

Chief executive officer’s report 28

PPC profit improvement programme 31

Our new strategy 32

Chief financial officer’s report 34

Value added statement 37

Seven-year financial review 38

Operations review 40

Governance review

Corporate governance review 52

Committee reports, including 64

64

Risk report to shareholders 66

Compliance report to shareholders 68

PPC remuneration report 70

Information technology 87


Report profileThis integrated report covers PPC’s financial and non-financial

performance between 1 October 2014 and 30 September 2015.

It follows a similar report produced for the financial year to

30 September 2014 and has been primarily compiled for providers of

capital, but will be of interest to all stakeholders.

This report should be read in conjunction with the supplemental

information and complete audited annual financial statements on

our website.

We welcome your feedback on our full suite of reports. This should

investor relations, tel +27 (11) 386 9339, fax +27 (11) 386 9058,

For further details on sustainability matters, please contact

environment, tel +27 (11) 386 9122, fax +27 (11) 386 9117, email

group company secretary are on the inside back cover.

Reporting principles and approachPPC’s integrated report clarifies the link between our financial and

non-financial performance (environmental, social and governance),

contextualises our risks and opportunities and summarises our

engagement with stakeholders. These were key inputs in refining

entails a number of new performance measures, year-on-year

progress is not always comparable but we report on our performance

against strategic objectives where possible.

Report boundary

and batching facilities (cement, lime, readymix and ash),

PPC has expansion projects under way.

We have also included an analysis of external factors that may have

a significant effect on PPC’s ability to create value (page 17).

Report scope and materialityThe scope of this report includes the most material financial and

comprehensive process that combines risk identification and

assessment with strategic objectives, stakeholder feedback, market

conditions and our own performance to prioritise issues that are

key to our sustainability now and in the near future. Where relevant,

we detail material issues at project or business unit level.

For the reporting period, our key material issues at group level

(page 17) were:

Negative movement of cement selling prices and sales volumes

Serious health and safety incidents at operations and during

PPC’s capitalsIn line with the IIRC framework, we have considered the resources

and relationships used and affected by PPC. These are referred to

collectively as the capitals and encompass financial, intellectual,

human, natural, manufactured, social and relationship. How we

interact with our external environment and these capitals underpins

our ability to create value over the short, medium and long term.

Please see our business model on page 18 for details.

Significant changes in the review period

officer and executive director and six new non-executive directors

effective January 2015. The PPC board also approved the change of

year-end from September to March.

Assurance

preparing its annual financial statements. These were audited by

(page 119).

Board approvalThe board acknowledges its responsibility to ensure the integrity of

the integrated report. Board members have applied their collective

mind to the preparation and presentation of this report and believe

it is presented in accordance with the IIRC framework.

sustainability disclosure to the audit committee, which recommended

that the board approve this report.

Bheki Sibiya Darryll Castle

Chairman Chief executive officer

ABOUT THIS REPORT

2015

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PERFORMANCEHIGHLIGHTS

FINANCIAL

PEOPLE

114% cashconversion ratio achieved

SOCIAL

87% of total procurement (R4,5 billion) spent with BBBEE suppliers

Revenue

R9,2 billion (2014: R9 billion) Slurry factory

granted authorisation by the

to construct a new kiln line which will improve environmental impact

44 housing transactions completed in the

PPC staff housing initiative to date

Over R58 millionin dividends paid to employees

Over

R2 billion spent on expansion projects in this year

Headline earnings per share

145 cents (2014: 179 cents)

ENVIRONMENT

10% reduction in absolute carbon emissions of finished cement

OPERATIONAL

600 000 tpaplant in Rwanda successfully commissioned in 2015

Profit improvement programme delivered

R212 millionfor 2015

result in 15% thermal heat replacement



Enhance our industry leadership in southern Africa

OBJECTIVE PROGRESS

Improve sales, marketing, customer focus and overall value proposition

Repositioned PPC Surebuild’s price premium to activate the inherent brand equity strength

and logistical efficiencies and good corporate governanceVariable delivered cost of sales per tonne declined 2% in the

increased by 2%

Review or upgrade equipment, especially in relation to environment or efficiency

To ensure increased reliability and improved energy efficiency, we

kiln 1

Ensure cash flow returns that support sustainable investment in current and new markets

Strong cash generation ability – R2,7 billion of cash generated from operations and achieved a cash conversion ratio of 114%

Expand our operational footprint into other parts of Africa

OBJECTIVE PROGRESS

by 2017

Target countries with high potential for infrastructure development, low per-capita cement consumption and current cement shortages

Successfully commissioned the 600 000 tonne per annum plant in Rwanda

50% complete

Improve sales, marketing, customer focus and overall value proposition

Repositioned PPC Surebuild’s price premium to activate the inherent brand equity strength

and logistical efficiencies and good corporate governanceVariable delivered cost of sales per tonne declined 2% in the

increased by 2%

Review or upgrade equipment, especially in relation to environment or efficiency

To ensure increased reliability and improved energy efficiency, we

kiln 1

Ensure cash flow returns that support sustainable investment in current and new markets

Strong cash generation ability – R2,7 billion of cash generated from operations and achieved a cash conversion ratio of 114%

by 2017

Target countries with high potential for infrastructure development, low per-capita cement consumption and current cement shortages

Successfully commissioned the 600 000 tonne per annum plant in Rwanda

50% complete

PERFORMANCE REVIEW

Here we summarise our progress against key strategic objectives in the review period. Our new strategy is detailed on page 32. Key targets related to the new strategy will be disclosed in our next integrated report.

2015

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KEY MILESTONES

1892PPC Ltd established

Cement Fabrieken Beperkt, in Hercules, Pretoria

1902Changed its name to The First Portland Cement Factory Limited

1908Name changed to Pretoria Portland Cement Company LimitedMaiden dividend starts a tradition unbroken for over a century

1910PPC listed on the JSE

1992Centenary – first 100 years

1994Nelson Mandela

black president

1996Surebuild brand launched

Botswana blending plant commissioned

2001

Holdings in

Entered aggregates market by acquiring Mooiplaas dolomite quarry


1916PPC Slurry produced its first cement

1921

built in Western Cape

1927Cement factory built in Port

1937PPC Jupiter started up in Germiston, just outside Johannesburg

1956Construction of PPC Riebeeck in the Western Cape

1977Entered lime industry by acquiring Northern Lime Company

1984PPC built and mothballed

in economic recession; recommissioned the plant in 1998

2008R3,9 billion broad-based black economic empowerment transactions

2010PPC cement used in multi-billion rand projects including Gautrain, soccer stadiums, Medupi

stationsPPC listed on JSE for 100 years

2012

stake in Habesha Cement, EthiopiaName changes to PPC Ltd

2013

Construction started on new cement plant

Cement

centenary

2014

ReadymixConstruction of mill in

2015New 600 000tpa plant commissioned in RwandaCommenced construction of Slurry kiln 9

2015

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A PROFILE OFOUR BUSINESS

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.

CREATING A BETTER LIFE FOR STAKEHOLDERS

Everyone’s contribution creates the value. All stakeholders share in the value and success we create.

PPC VALUES

LEGITIMACY

EXCELLENCE

CUSTOMERS

STAKEHOLDER VALUE

EMPLOYEE SATISFACTION

INTEGRITY

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.

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 to play and we want to maintain a non-discriminatory, safe and healthy work environment. We respect the dignity of every individual we engage with. We embrace transformation and diversity.

CUSTOMER-FOCUSED

Our customers are the reason for our existence and all our efforts are focused on good relationships, understanding and meeting their needs consistently.

PPC now supplies from nine cement factories, four milling plants, five blending facilities and nine readymix batching plants after acquiring Safika Cement and Pronto Readymix (including Ulula Ash) in 2014. PPC also produces aggregates, metallurgical-grade lime, burnt dolomite and limestone. Our Mooiplaas aggregates quarry in Gauteng has the largest aggregate production capacity in South Africa.

half a million tonnes of fly ash.


Managing our businessResponsibility and integrity underpin our approach to managing our business. Key developments during the year were focused on strengthening this approach.

ETHICS Founded in our corporate value that states integrity is non-negotiable, and supported by a code of conduct enforced across our operating territories.

RISK COMPLIANCERisk and compliance is monitored by a board committee.

The main objective of risk management at PPC is to ensure sustainable growth in all our businesses and promote a proactive approach in evaluating, resolving and reporting risks associated with our businesses.

GOVERNANCERobust governance standards are monitored by a strong and experienced board of directors.

REMUNERATIONTo ensure we create value for shareholders, including our own people, greater emphasis is now placed on reward for performance at senior levels, and the overall reward for semi-skilled employees is being increased.

SALIENT FEATURES IN 2015 Completed ethics training across the group.

Enhanced communication efforts and increased profile of anonymous tip offs line.

SALIENT FEATURES IN 2015 During the review period, a risk management software solution was implemented for the group. In December 2014, all site champions and risk managers were trained on the new system, with all risk registers loaded into the system by the end of February 2015.

Workshops were facilitated for all of the group functions and South African business to develop risk registers. These registers together with the PPC International register were then used by the Exco in a workshop to develop the PPC group risk register. This was considered by the board and the material issues are included in the integrated report.

SALIENT FEATURES IN 2015 Governance, risk and compliance standards further enhanced.

SALIENT FEATURES IN 2015 In complementing the performance culture across the business, the short-term incentive parameters have been reviewed and now include strategic non-financial elements that are strongly aligned with PPC’s expansion strategies and shareholders’ interests.

2015

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AWARDS

ZimbabweZimra (Zimbabwe Revenue Authority):

PPC won the first prize for Region 2

in VAT and income tax. We also won the

second prize in Pay as You Earn (PAYE)

Mail & Guardian top 200 young South Africans

CFO, was listed in the business and law category

Concrete Society of Southern Africa’s 2015 Fulton awards in the category innovation in concrete

Annual Business Day BASA awards, partnered by Hollard (South Africa’s most prestigious awards recognising business arts partnerships)

PPC public bench project

Steinbuild awards

EY excellence in integrated reporting 2014: excellent ranking

Most influential woman in business and governance

Nkonki Top 100 Integrated Reporting awards 2015

Standard Bank top women awards

relations) – young achiever of the year

business woman of the year

gender empowered company: engineering

Other awards PMR Africa diamond arrow award

of cement

Zimbabwe national annual

quality awards

From Zimbabwe National Chamber of Commerce we won the following:

Botswana

Trust for PPC’s contribution

South Africa PMR

supplier 2015

Standard Bank smarties award


OUR FOOTPRINT

SOUTH AFRICA

Population (m) 54,9

Urbanisation (%) 64,8

5 784

Cement consumption/capita (kg) 230

1,8

Retail cement price per )

96 – 130

Current national cement production capacity (mtpa)

17

RWANDA

Population (m) 11,4

Urbanisation (%) 15

743


7,1


230 – 270


0,7

ETHIOPIA

Population (m) 89,8


702


8,0


130 – 140


11

Source: International Monetary Fund

DEMOCRATIC REPUBLIC OF THE CONGO

Population (m) 81,7


478


7,2


225 – 260


0,4 (in use)

ZIMBABWE

Population (m) 13,4

Urbanisation (%) 29

1 037


2,5


180 – 270


1,8

BOTSWANA

Population (m) 2,1

Urbanisation (%) 62

6 150


3,3


100 – 160


0,6

ZIMBABWE

BOTSWANA

SOUTH AFRICA

ETHIOPIA

RWANDA

BURUNDI

MALAWI

MOZAMBIQUE

ZAMBIA


ETHIOPIA


BOTSWANA

ZIMBABWE

SOUTH AFRICA

RWANDA

Current operation Current operation and current project Current project and export market Export markets Current project

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W O R L D - C L A S S E X C E L L E N C E I N A L L T H AT W E D O

We will ensure a sustainable competitive advantage by committing to world-class standards in all that we doWe strive for technical excellence that will manifest itself in a cost leadership philosophyConstantly monitoring global best practices and solutionsConstantly measuring and monitoring our business

12 PPC Ltd

PPC Ltd 13

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Strategy

CHAIRMAN’SREPORT

Overview

Changes to the board and board issues

Against the backdrop of a turbulent world economy, increasing cement capacity and falling cement selling prices across the African continent, PPC is focused on disciplined cost management, innovation and the efficient delivery of large projects.

FINANCIAL

Final dividend of

33 cents

Bheki SibiyaChairman

14 PPC Ltd

PPC Ltd 15

2015

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South Africa

Macro-environmentAfrica

Macro-economic projections 2014 to 2018

2015estimate

1,5 1,2

Real GDP growth 1,5 GDP at current prices (R billion) 4 031

4,8

(4,1)

Source: Reserve Bank and National Treasury

Performance

16 PPC Ltd

CHAIRMAN’SREPORT CONTINUED

Remuneration

Compliance and regulatory

Approach to sustainable development

Dividends

Outlook

Appreciation

Bheki Sibiya

Chairman

PPC Ltd 17

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Evaluating our strategic objectives, stakeholder engagement and comprehensive risk assessments, we have identified the material issues our stakeholders need to consider.

MATERIAL ISSUES RESPONSE STRATEGY

Stra

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ic

Negative movement of cement selling prices and sales volumes

Stagnant SADC economy

A major investment not achieving expected business case returns

The negative impact of the collapse in the steel industry

Inability to access capital markets

Undervalued share price: Inherent value of PPC not reflected in current valuations

Dumping of cement in PPC markets

Op

erat

ion

al

Serious health and safety incidents

Loss of electricity supply to major operations

Stra

teg

ic

Negative movement of cementselling prices and sales volumes

Stagnant SADC economy

A major investment not achievingexpected business case returns

The negative impact of thecollapse in the steel industry

Inability to access capital markets

Undervalued share price: Inherentvalue of PPC not reflected incurrent valuations

Dumping of cement in PPC markets

Op

erat

ion

al

Serious health and safety incidents

Loss of electricity supply to majoroperations

MATERIAL ISSUES

18 PPC Ltd

BUSINESS MODEL

INPUTSFinancial capital

Human capital

Intellectual capital

Natural capital

Manufactured capital

Social capital

GOVERNANCE HUMAN RESOURCES LEGALINFORMATION TECHNOLOGY

BUSINESS ACTIVITIES AND PROCESSES

BUSINESS SUPPORT FUNCTIONS

STRATEGY DEVELOPMENT

PPC Ltd 19

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PROJECT MANAGEMENT

BUSINESS DEVELOPMENT

STAKEHOLDER RELATIONS

INTERNAL AND EXTERNAL COMMUNICATIONS

TECHNICAL SERVICES

FINANCE AND TAX

OUTPUTSCement revenue =Lime revenue =Aggregates and readymix revenue =

OUTCOMESFinancial capital

Human capital

Intellectual capital

Natural capital

Manufactured capital

Social capital

PROCUREMENT

MINING

MANUFACTURING

DISTRIBUTION

SALES

MARKETING

EXPLORATION

20 PPC Ltd

CUSTOMERS

WHY WE ENGAGE

WHO IS INCLUDED

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

COMMUNITIES AND NGOS

WHY WE ENGAGE

WHO IS INCLUDED

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

SHAREHOLDERS/INVESTORS

WHY WE ENGAGE

WHO IS INCLUDED

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

STAKEHOLDERENGAGEMENT

EMPLOYEES

WHY WE ENGAGE

WHO IS INCLUDED

Employees from:

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

PPC Ltd 21

2015

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MEDIA

WHY WE ENGAGE

WHO IS INCLUDED

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

GOVERNMENT AND REGULATORS

WHY WE ENGAGE

WHO IS INCLUDED

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

SUPPLIERS

WHY WE ENGAGE

WHO IS INCLUDED

HOW WE ENGAGE

ISSUES RAISED

ACTIONS

NEXT STEPS

Focus on:

INDUSTRY ASSOCIATIONS AND ACADEMIC INSTITUTIONS

WHY WE ENGAGE

WHO IS INCLUDED

Industry forums:

HOW WE ENGAGE

PPC supports or sponsors a number of universities:

ISSUES RAISED

ACTIONS

NEXT STEPS

Our board

LEADERSHIP

6 Sydney Knox Mhlarhi (42) Non-executive director Board committees: remuneration

and investment Appointed March 2012 BCom, BAcc (University of the

Witwatersrand), CA(SA)

7 Mangalani Peter Malungani (57) Non-executive director Board committees: social, ethics and

transformation, and investment (chair)

Appointed February 2009 BCom (Unisa), management

programmes (Wits Business School, Wharton University, USA)

3 Mmakeaya Magoro Tryphosa Ramano (44)

Chief financial officer Appointed August 2011 CA(SA)

4 Zibusiso Janice Kganyago (49) Independent non-executive director Board committees: alternate director

to the chairman Appointed October 2007 BCom (University of Natal),

management programmes (Wharton School of Business, Pennsylvania and University of Nevada, Reno)

5 Timothy Dacre Aird Ross (71) Independent non-executive director Board committees: audit (chair), risk

and compliance and investment Appointed July 2008

CA(SA)

1 Bheki Lindinkosi Sibiya (58) Chairman (independent non-

executive director) Board committees: remuneration,

nominations (chair) and investment Appointed November 2008

MBA (University of Western Michigan, USA)

2 Darryll John Castle (47) Chief executive officer Board committees: risk and

compliance Appointed January 2015 BSc (civil), BCom, MBA, CFA

22 PPC Ltd

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10 Nicky Goldin (45) Independent non-executive director Board committees: remuneration

and investment Appointed January 2015 BCom (hons) University of the

Witwatersrand, MBA (University of Illinois)

11 Timothy Leaf-Wright (62) Independent non-executive director Board committees: risk and

compliance, social, ethics and transformation, and investment

Appointed January 2015 Chartered Institute of Secretaries

(Natal Technikon)

8 Bridgette Modise (48) Independent non-executive director Board committees: risk and

compliance (chair) and audit Appointed December 2010 BCompt (hons), CTA, CA(SA), CIMA,

management development programmes

9 Todd Moyo (57) Independent non-executive director Board committee: audit and

nominations Appointed November 2013 BAcc (hons) (University of Zimbabwe), CA(Z), CA(SA), RPA(Z), MCSZ

12 Charles Naude (60) Independent non-executive director Board committees: remuneration

and risk and compliance Appointed January 2015 BSc (hons geology, chemistry)

(University of Pretoria), certificate production management (Wits Technikon), MBL (Unisa)

13 Peter Gill Nelson (61) Independent non-executive director Board committee: remuneration

(chair) and audit Appointed January 2015 BCom (Rhodes), BCompt (hons)

(Unisa), CA(SA)

14 Tito Mboweni (56) Independent non-executive director Board committees: social, ethics and

transformation (chair), and nomination

Appointed January 2015 BA (National University of Lesotho),

MA, development economics (University of East Anglia), Diploma in international business diplomacy (Georgetown University), CD(SA)

PPC Ltd 23

Group executive committee

LEADERSHIP CONTINUED

4 Jacobus Johannes Taljaard (57) Executive head: business development

(international) (joint) BEng (mech) (University of

Stellenbosch), GDE (minerals economy) (University of the Witwatersrand), MDP (Unisa School of Business Leadership)

5 Azola Cubekile Lowan (35) Executive: strategy and investor

relations MBusSci (UCT), CFA

6 Klaas Paulus Pieter Meijer (55)* Managing director, PPC International BEng (mech eng), BB&A (hons), MBA

(University of Stellenbosch)

* He leaves PPC effective 30 November 2015

7 Happy-Girl Nonhlanhla Buthelezi (42)

Executive head: business development (international) (joint)

BCom (University of Natal), MBA (UCT Graduate School of Business), diploma in tax (ICIE), postgraduate in management accounting (University of Natal)

1 Darryll John Castle (47) Chief executive officer See page 22.

2 Mmakeaya Magoro Tryphosa Ramano (44)

Chief financial officer See page 22.

3 Pieter Lasenius Booysen (53) Executive: technical BEng (mining) (University of Pretoria),

24 PPC Ltd

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10 Kgomotso Molefe (43) Chief information officer BSc computer science (hons)

University of the Witwatersrand

11 Tirelo Sibisi (47) Group human resources executive* BSocSci (hons) (North West

University), MBA (Henley Business School), advanced HR executive development programme (Michigan University)

* She resigned from PPC effective 15 December 2015

12 Rob Rein (39) Executive: sales and marketing BCom Accounting (University

of Pretoria)

13 Phuti Semenya (39) Chief audit executive* CA(SA), CIA, certified control

self-assessor (CCSA), certificate in advanced banking law (cum laude)

* Attends as observer only

8 Johannes Theodorus Claassen (56)

Managing director, PPC Cement RSA BEng (University of Stellenbosch), EDP

(Wits Business School)

9 Jacobus Hendrik De La Rey Snyman (48)

Executive: secretarial and legal, PPC company secretary

BA, LLB, LLM (University of Johannesburg), MBA (University of the North West)

PPC Ltd 25


P R O V I D E R O F M AT E R I A L S A N D S O L U T I O N S

In manufacturing cement we have the ingredients and intellectual property to provide products and solutions to a wider clientèle without taking the focus off our core cement making business

Cement is an intermediate physical product. We have IP and expertise relevant to our customers that differentiate us and enable us to offer solutions

Adjacent and transformational businesses related to our inputs, processes and products are important growth factors to ensure against changes in our industry


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Darryll CastleChief executive officer

CHIEF EXECUTIVEOFFICER’S REPORT

It has been a privilege to be part of an

organisation over the past nine months

with a rich heritage, history and diversity.

A company that has been a household

institution in South Africa for over a century

is now reinventing itself for the next

100 years.

A new business in the making since 2010,

PPC has focused on its two-pronged

strategy of “keeping the home fires

burning” and “expanding into the rest of

Africa”. We have made significant progress

with the latter and our target of generating

40% of revenue from the rest of the

continent by 2017 is within reach.

This new strategy is supported by five

pillars:

World-class excellence in all that we do

Provider of materials and solutions

Innovation culture


Doubling our business every ten years

To ensure we achieve these goals, PPC

embarked on a group-wide change

programme, #IGNITE. This programme will

ensure we develop and embed our new

strategy, that the appropriate leadership

and management practices are in place;

and that our profitability and performance

is improved.

The profit improvement programme delivered R212 million which led to our group EBITDA of R2,36 billion ending marginally above last year.

In June 2015, 70 of our most senior

managers interrogated whether our

strategy was still appropriate and, after

robust discussion and engagement, we

launched our new vision and strategy

internally on 1 October 2015.

We aim “to become a world-class provider

of materials and solutions into the basic

services sector, taking a strategic approach

to more than doubling our business every

ten years”. We will consider ourselves

successful if we can exceed the expectations

of all our stakeholders on a sustainable

basis. Embedded in this is a requirement

for our corporate culture to match our

ambitions.

Although still in its infancy, #IGNITE is

already yielding positive results. Our

strategy and plans are taking shape, with

our management practices and processes

improving. Our profit improvement

programme (PIP) has delivered an impressive

set of numbers, evidence that our initiatives

are gaining traction.

Satisfactory performance in a challenging climate in 2015Results for the 12 months to 30 September

2015 reflect disciplined cost management,

strong cash generation and a group-wide

strategic intent of transforming the

business to becoming a provider of

material solutions.

DarryChief



PPC’s revenue exceeded R9,2 billion, up

2,0% on last year, in a challenging

operating climate, where both pricing and

volumes were under pressure. A difficult

domestic market was offset by the

consolidation of our new businesses,

including Safika and Pronto. Due to

improved efficiencies, cost of sales

decreased by 7% in the second half. This,

coupled with more stringent cost

optimisation, resulted in PPC maintaining

an EBITDA of R2,36 billion for the reporting

period. Earnings for the year declined 17%,

notwithstanding a much-improved second-

half performance.

A highlight of 2015 was our excellent

cash generation of R2 716 million (2014:

R2 583 million), translating to a cash-

conversion rate of 114% (2014: 108%).

Cash conversion in tough economic times is

a key measure of the overall health of a

business and our high ratio reflects a

business with strong controls and a quality

debtors’ book.

Covenants

Discussions with our lenders have ensured

that our covenants are better aligned with

our expansion imperatives. Covenants

established in 2008, before PPC initiated its

expansion programme, limited debt to

EBITDA to 3,0 times. These needed to be

realigned to better match the nature of our

current business. Consequently, our funders

have agreed to exclude non-recourse

project finance from the definition of PPC’s

indebtedness and relax the debt to EBITDA

covenant from 3,0 to 3,3 times.

R400 million PIP

In March, we introduced our profit

improvement programme (PIP) to investors.

This initiative aims to generate up to

R400 million over the next three years,

focused on revenue optimisation, cost

efficiencies and strategic cost reductions. In

the six months to September 2015, PIP

delivered an impressive R212 million which

led to our group EBITDA of R2,36 billion

ending marginally above last year.

Highlights

FINANCIAL

Profit improvement programme delivered

R212 millionfor 2015

FINANCIAL

Cash conversion rate of

114%achieved

FINANCIAL

Significantly

improvedsecond half financial performance

OPERATIONAL

Rwandan project

deliveredwithin budget

OPERATIONAL

Plans for additionalcapacity in SouthAfrica under way

African projects progressing well:

Rwanda commissioned

In August 2015, we officially opened our

new 600 000tpa plant at CIMERWA in

Rwanda. This high-profile event was

presided over by the right honourable

prime minister of Rwanda, Mr Anastase

Murekezi. The US$170 million project was

concluded within the allocated budget and

is expected to receive the provisional

acceptance certificate shortly. Our new

plant is performing as planned with the

product being well received in the local

market and neighbouring countries.

Achieving this significant milestone is

evidence of PPC’s ability to deliver large

projects within budget.

DRC and Zimbabwe on track

Our projects in the Democratic Republic of

the Congo (DRC) and Zimbabwe are on

schedule and we expect both to be

commissioned towards the end of 2016.

The US$280 million DRC project is 55%

complete while the US$85 million

Zimbabwean expansion is 50% complete.

Ethiopia

Last year, we announced our plan to

increase our shareholding in Habesha

Cement of Ethiopia from 31% to 51%.

Given that further work was needed to

confirm the capital costs and timeframe,

we maintained our shareholding at 31%.

We can now confirm that the 1,4mtpa

plant in Ethiopia will be completed at a

capital cost of between US$170 million

and US$180 million and will be

commissioned in the second calendar

quarter of 2017. We believe this capital

cost is relatively low considering that, on

the continent, companies can expect to pay

US$300 million for a 1mtpa plant.

Operational performanceNew entrants in the South African cement

market will continue to apply pressure on

existing producers. We are focused on

strengthening the various attributes of our

value proposition to clients which include

consistently supplying quality cement,

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ensuring reliability of our deliveries and

backing this up with strong technical

support. Our sales force has significantly

improved its responsiveness to clients and

strategic marketing efforts, such as

acquiring the naming rights of the iconic

Newlands cricket stadium in Cape Town,

are beginning to bear fruit.

Import duties for cement originating from

Pakistan were implemented in May 2015,

varying from 14% to 77%. These duties

have reduced imports from that country

by 30% between September 2014 and

September 2015. The number of vessels

landing in South Africa with imported

cement has also declined. The cement

industry continues to engage with the

authorities to align dumping duties across

Pakistani producers.

Safety and sustainabilityRegrettably, we recorded a contractor

fatality at the Habesha project in Ethiopia

during the year. It is always a challenge to

instil our high safety standards where we

do not have management control, although

we do our utmost to influence the process

through board structures and engaging on-

site management. Sadly, we recorded a

fatality at our Slurry factory. We extend our

deepest condolences to the family and

friends affected by this incident.

The group’s remuneration policy now

includes non-financial measures, such as

safety, transformation and environmental

compliance in the scorecard, and we have

successfully aligned staff to our key

sustainability measures.

For 2015, we retained our level 2 rating

under the Department of Trade and

Industry’s broad-based black economic

empowerment (BBBEE) codes of good

practice. This certificate expires in

December 2015. From 2016, the revised

codes will apply and our level 2 rating

will translate to a level 7 rating. Executive

management has agreed on a roadmap to

achieve a more desirable BBBEE score in

future and will implement this in 2016.

CHIEF EXECUTIVEOFFICER’S REPORT CONTINUED

PPC is also investigating a solution to

unwind its 2008 BBBEE transaction during

2016. The solution will seek to restructure

those aspects of the balance sheet

associated with the transaction in an

optimal way, to meet PPC’s growth

aspirations and reduce refinance risk.

We are pleased that our Slurry factory was

granted authorisation by the Department

of Environmental Affairs to construct a

new kiln 9 project. This R1,5 billion to

R1,7 billion project will add 1mtpa cement

capacity to Slurry from 2018, preparing PPC

for growth in the domestic market.

Tangible progress with our alternative

thermal energy strategy has been made by

introducing tyre burning at our De Hoek

factory in the Western Cape. De Hoek kiln 6

is expected to have a coprocessing capacity

of about 8 000 tonnes of recycled tyres per

year, resulting in thermal heat replacement

of about 15%. The manual feed system was

completed at a cost of under R10 million.

The draft carbon tax bill was released for

comment in November 2015. Salient

features include the promulgation of the

Carbon Tax Act 2017, which will come into

operation on 1 January 2017. The proposed

headline carbon tax of R120 per tonne of

carbon dioxide equivalent (CO2e) has been

maintained, but some adjustments have

been made to allowances. Previously, we

estimated that the impact of carbon taxes

on PPC would be around R150 million.

With the latest draft bill, this value is now

expected to be just below R120 million.

An employee housing support scheme was

introduced in 2012 to assist over 300 PPC

employees to improve their living

conditions. To date, 471 South African

employees have enrolled in the programme

and are being assisted to become

homeowners. Forty-four employees have

moved into their new homes, upgraded an

existing home or are awaiting title deeds

before moving into their homes. We will

introduce a similar housing initiative for

our Zimbabwean operations in the 2016

financial year.

The PPC Women’s Forum, established in

2011, focuses on attracting, nurturing and

advancing female talent to lead PPC.

Against the forum’s 2016 objective of 30%

female representation across all levels at

PPC, this has increased to 23% in 2015.

The forum’s excellent work is reflected in

PPC receiving a number of awards in 2015

(page 10).

Looking ahead to 2016 PPC is under no illusion about the

challenging domestic market conditions

we expect to encounter in 2016. These

include a competitive landscape and

difficult economic climate. However, we

are better equipped to manage these

effectively. Our change management

programme is expected to deliver

additional financial and non-financial

benefits. We are also confident of

delivering our remaining projects on time

and within budget.

Continued emphasis on our cash conversion

ability and sustainable profit improvement

will position PPC well in coming years to

benefit from any substantial improvement

in domestic market conditions.

I thank my fellow board members, the

executive committee, and team PPC for

their continued focus and energy during

the year. I wish both Tirelo Sibisi and

Pepe Meijer all of the best as they move on

from PPC. Their hard work and contribution

is most appreciated. Our customers,

shareholders and other stakeholders remain

critical to our success and we are grateful

for their support.

Darryll Castle

Chief executive officer

17 November 2015


Stream 2: Cost efficiencies – key activities and deliverables

Optimise supply chain and logisticsImprove procurement processes and proceduresOptimise energy use and efficiency

Stream 3: Strategic cost reduction – key activities and deliverables

Identify and reduce head office costsOptimise operational fixed costs

PIP implementation – executive support is crucialGiven the challenging requirements and complexity of the task, the PIP team completed a detailed financial analysis of the business and identified key areas with the potential to deliver worthwhile and sustainable savings. Specific targets and key performance measures were then agreed with responsible executive management. A detailed schedule and plan set out immediate, medium-term and longer-term measures.

We noted early on that the success of PIP would require continuous monitoring against benchmarks and measurements. Monthly meetings and report-backs were therefore instituted to track progress, identify shortcomings and provide a platform to drive additional benefits.

Progress since inception – R212 million in savings in six monthsThe PIP has delivered R212 million in sustainable measurable savings in its first six months. These consisted of 18 initiatives which, combined, delivered pleasing results quickly – all aligned to our value propositions. We envisage that these initiatives will evolve over time, potentially realising additional savings.

Recognition and incentives To recognise contributions made by PPC employees to the programme, a monthly non-financial reward system has been instituted from the start while related KPIs are reflected in all employee performance scorecards, to ensure alignment between our employee and group targets.

PPC PROFITIMPROVEMENT PROGRAMME

As part of its change management programme, #IGNITE, PPC embarked on a programme to sustainably add value to shareholders by implementing innovative business initiatives.

These were formalised into a group-wide profit improvement programme (PIP) which aims to increase revenue, reduce costs and improve efficiencies.

A PIP team comprising PPC employees from various parts of the business was established to manage the process. While this concept is not unique to PPC, the decision to include employees as implementers has been helpful as the programme is seen not only as a profitability improvement plan but also a culture change tool.

PPC believes this is key to the sustainability of the programme.

PIP value propositionsThe programme is designed to:

Deliver short-term reliable resultsDrive cultural and behavioural change Support strategic positioning of businesses in the groupDeliver sustainable solutions for long-term value creation

PIP financial targets: deliver R400 million over a three-year period At PPC’s interim results, we communicated that PIP would deliver R400 million in sustainable savings over a three-year period.

The programme is divided into three major streams, including revenue optimisation of R130 million, cost efficiencies of R150 million and strategic cost reductions of R120 million.

Stream 1: Revenue optimisation – key activities and deliverables

Review pricing strategies using analyticsStrengthen channel management strategy by better leveraging our subsidiaries Regain sustainable market share

PROFIT IMPROVEMENT PROGRAMME CONSISTS OF 3 PILLARS

UP TO R400 MILLION IMPROVEMENT IN THREE YEARS

UP TO R120 MILLION Innovation Operating architecture Refine role of head office

Operational fixed costs

UP TO R150 MILLION Logistics optimisation Supply chain optimisation

Increase use of alternative energy

Raw material optimisation

UP TO R130 MILLION Pricing strategy Regain market share Geographic segmentation

Channel management

PROFIT IMPROVEMENT PROGRAMME

STRATEGIC COST REDUCTION

SC

COST EFFICIENCIES

REVENUE OPTIMISATION

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OUR NEW STRATEGY

OUR AMBITION Becoming a major player …

in Africa then globally

VISION

A world-class provider of materials and solutions into the basic services sector, taking a strategic approach to more than doubling our business every ten years.

OUR STRATEGIC INTENT

OUR PURPOSE

Why we exist

OUR LONG-TERM GOALS, MATERIAL ISSUES ANDSTRATEGY

LONG-TERM GOALS

For our people and communities, and therefore PPC

Energy – security of supply, cost

Water – quality and reliable supply

Waste – turning suitable waste into energy

Atmospheric greenhouse gases – minimising emissions

Labour force – equitable employment

Good health – through proactive healthcare

Safety – through constant attention

Education – developing the full potential of every stakeholder

MATERIAL ISSUES

expected business case returns

DC economy


MONITORCONTROLGROWENTER DEFEND

Our strategic aspiration

WORLD-CLASS EXCELLENCE IN ALL THAT WE DO

PROVIDER OF MATERIALS AND SOLUTIONS

INNOVATION CULTURE

TAKING A STRATEGIC APPROACH

DOUBLING OUR BUSINESS EVERY TEN YEARS

WORLD-CLASS EXCELLENCE IN ALL THAT WE DO We will ensure a sustainable competitive advantage by committing to world-class standards in all that we do

We strive for technical excellence that will manifest itself in a cost leadership philosophy

Constantly monitoring global best practices and solutions

Constantly measuring and monitoring our business

PROVIDER OF MATERIALS AND SOLUTIONS In manufacturing cement we have the ingredients and Intellectual property (IP) to provide products and solutions to a wider clientele without taking the focus off our core cement making business

Cement is an intermediate physical product. We have IP and expertise relevant to our customers that differentiate us and enable us to offer solutions

Adjacent and transformational businesses related to our inputs, processes and products are important growth vectors to ensure against changes in our industry

INNOVATION CULTURE We recognise that innovation is more than just ideas In order to harness the benefits of innovation ideas we will create an innovation process

We will create an innovation culture as the core driver of the business

TAKING A STRATEGIC APPROACH We will understand the drivers, risks and trends in each of our regions and businesses, especially in the longer term and act accordingly

Defensive strategies are as important as offensive strategies

DOUBLING OUR BUSINESS EVERY TEN YEARS Recognising that Africa presents a unique growth opportunity in our time we will ensure that we at least maintain our market share

We will have a deep understanding of the locations, owners and influencers of all relevant inputs, businesses and markets, and will leverage our position in order to maintain and extend our influence

Ultimately we will utilise our strength to become a major global cement player

OUR STRATEGY

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Tryphosa RamanoChief financial officer

CHIEF FINANCIALOFFICER’S REPORT

Overview In last year’s CFO’s report I noted that we were cautious about the level of economic activity in South Africa, which is now evident in our 2015 results where South African cement volumes recorded a decline of 1%. The strategy of securing the channel to market has benefited the group with strong performances achieved at Safika Cement and Pronto Readymix. The integration of these businesses continues with further synergies having been achieved during the year and our increased product offering has secured the group additional projects.

Revenue ended 2% higher than last year at R9 227 million (2014: R9 039 million) as revenue growth from Zimbabwe and Botswana together with the full year impact of Safika Cement and Pronto Readymix helped negate the decline in local cement revenue. Revenue from our rest of Africa portfolio showed year-on-year growth of 8%, ending the year at R2 624 million (2014: R2 432 million) and now comprises 28% of group revenue, in part favourably impacted by the devaluation of the rand against the US dollar and pula. The securing of new customers in the lime business helped the division record revenue growth

This organisational structure change will see the streamlining of our legal structure, simplifying our holding company from that of an operating and holding company into a traditional holding company and align the company structure with that of group strategy.

Offsetting the lower economic growth in South Africa and Zimbabwe has been a really strong team performance to be cost conscious and look for innovative ways to perform tasks and reduce unnecessary expenditure. Our PIP programme has been at the forefront of this initiative, with R212 million saved against our original budget, a remarkable performance considering that the programme was only launched during the latter part of the second quarter of this financial year.

Income statement2015 2014

Revenue (Rm) 9 227 9 039Revenue earned from the rest of Africa (%) 28 27EBITDA (Rm) 2 362 2 358Headline earnings per share (cents) 145 179Normalised headline earnings per share (cents) 149 175

of 7%, while aggregates’ revenue was flat on last year. On a like-for-like basis, group revenue would be 3% below last year at R8 320 million (2014: R8 561 million).

The increase in cost of sales marginally exceeded revenue growth, ending the year 3% above last year at R6 437 million (2014: R6 266 million). Our intensified cost focus has resulted in South African cement variable delivered cost of sales ending 2% below last year while fixed costs, in absolute terms, recorded growth of 2% over last year. Cost of sales within the group have been well controlled with lime and Botswana cost of sales per tonne ending lower than last year while Zimbabwe and aggregates recorded increases below internal inflationary increases.

Tryphosa TT RamanoerChief financial office



The expansions in the DRC, Rwanda and Zimbabwe are the key factors of finance costs increasing by 6% to R496 million (2014: R467 million). Interest and foreign exchange losses of R196 million (2014: R36 million) were capitalised to property, plant and equipment on the CIMERWA and DRC projects. Time value of money adjustments on the environmental provisions and put option liabilities amounted to R48 million (2014: R47 million).

Net exceptional items charged to the income statement of R81 million (2014: R110 million) comprises impairments against goodwill of R22 million recorded on the Pronto transaction and plant and equipment of R43 million as the Algeria expansion project is not expected to continue and doubt exists as to the future use of a limestone quarry in Zimbabwe. Impairments of R14 million was recorded on items on the old plant at CIMERWA that would not be used post-commissioning of the new plant.

The group’s effective tax rate was 36,6% (2014: 30,1%) with a total tax charge of R391 million (2014: R356 million), noting the prior year overprovision of current tax of R70 million.

Net profit attributable to PPC shareholders was R698 million (2014: R840 million) and the 17% decline against last year can be ascribed to the lower revenue and resultant profit from our South African cement operations, together with increased overheads and tax charge, partly offset by the full year impact from Safika Cement and Pronto Readymix and good cost control. Non-controlling shareholders shared in the net losses from the DRC and CIMERWA, which had a favourable impact on the profit attributable to PPC shareholders.

Administration and other operating expenditure increased by 10% to R1 130 million (2014: R1 030 million). A large portion of the higher expenditure can be ascribed to an increased bad debt provision of R40 million, originating from Zimbabwe, while in our lime business a key customer applied for business rescue. Bad debt provision as a percentage of revenue still remains within acceptable levels of below 1%. The further overhead increase follows the full year impact of the Pronto acquisition which was effective from 1 July 2014 and is inclusive of amortisation charges on fair value adjustments recorded in terms of IFRS 3 Business Combinations. Excluding the impact of the increased doubtful debt provision and the Pronto consolidation effect, administration and other operating expenditure would have recorded a 2% year-on-year decline.

The reduced revenue impact from Cement RSA has somewhat detracted from a strong cost management performance throughout the group, improved profitability at lime and benefits from our channel management strategy. EBITDA ended marginally up on last year at R2 362 million (2014: R2 358 million) with EBITDA margin ending at 25,6% (2014: 26,1%). The group once again looked at rightsizing some of its operations, with R8 million (2014: R16 million) of restructuring costs being incurred in South Africa, while non-core vacancies are generally not filled.

FINANCIAL

Revenue from our rest of Africa portfolio grew

8% to

R2,6 billion

The weighted average number of shares in issue remained materially the same as last year, with earnings per share following the same trend as noted in the net profit paragraph above and earnings per share and headline earnings per share ended the year 17% and 19% below last year respectively.

Statement of financial position

2015Rm

2014Rm

Property, plant and equipment 10 648 7 223Goodwill and other intangible assets 1 026 949Net working capital 831 1 086

Property, plant and equipment increased by a net R3 425 million to end the year at R10 648 million (2014: R7 223 million), with the increase following capital additions of R3 269 million (2014: R1 908 million) and translation adjustments of R1 002 million on the back of the 22% year-on-year devaluation in the rand against the US dollar. At year-end, property, plant and equipment of R6 443 million (2014: R3 196 million) related to our rest of Africa operations. In the prior year we noted that initial contribution of land and the mining rights from the Barnet Group into the DRC group of companies which was recorded in full under property, plant and equipment, needed to be split between the land and mining rights. The allocation was completed this year which resulted in R115 million being transferred to intangible assets.

Capital commitments at year-end amounted to R4 643 million (2014: R3 896 million), with the majority of the amount committed being linked to the DRC and Slurry kiln upgrades, with R2 758 million and R1 518 million anticipated to be incurred in the 2016 and 2017 financial years respectively (based on a September financial year-end).

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Except for the impairment of the goodwill at Pronto, the ongoing amortisation of other intangibles and transfer of mining rights from property, plant and equipment, there have not been any material movements in goodwill and other intangible assets. The balance, however, remains significant on a group level at R1 026 million (2014: R949 million).

During the year, the board approved the disposal of the company’s investments in Afripack and Ciments du Bourbon for a combined purchase price of R150 million. These transactions are anticipated to be completed by the first quarter of the 2016 calendar year. As a result of the decision to dispose, Afripack has been disclosed as a non-current asset held for sale.

Net working capital, excluding capital prepayments, put option liabilities and retentions of R831 million (2014: R1 086 million), was favourably impacted by the reduction in trade receivables and increase in trade payables and accruals, partly offset by an increase in inventories in part driven by the devaluation of the rand and stock build at CIMERWA.

Borrowings2015 2014

Total borrowings (Rm) 8 221 6 091Debt to EBITDA (%) 3,48 2,58

As noted earlier in this report, the group has invested significantly in new capital projects, with a resultant increase in borrowings. At year-end, 68%, 27% and 5% of long-term borrowings were denominated in rand, US dollar and Rwanda franc. In terms of the group’s risk management profile, 48% (2014: 70%) of long-term borrowings are linked to variable interest rates.

The company’s covenants, initially put in place in 2008 for our first BBBEE transaction, have been renegotiated, providing the group with additional headroom and now aligns with our growth strategy. Non-recourse project finance has been excluded from the definition of our indebtedness and

the group debt to EBITDA covenant has been relaxed from 3,0 times to 3,3 times.

In light of the position in our growth phase, Standard & Poor’s Ratings Services lowered its long-term South Africa national scale rating for PPC to zaA from zaA+, but affirmed the “zaA-2” short-term South Africa national scale rating on PPC.

In terms of the debt maturity profile, the company’s first bond of R650 million falls due for repayment in March 2016, while R2 958 million mainly relating to our first BBBEE transaction, before compulsory subscriptions owing to PPC and availability of the shares used as security, becomes due in our 2017 financial year. A new bond issuance is being planned for the later part of this calendar year while solutions are currently being explored to restructure the first BBBEE transaction, which will require shareholders’ approval, currently forecast for first quarter of the 2016 calendar year.

Cash flow2015 2014

Cash generated from operations before working capital movements (Rm) 2 416 2 472Net working capital movement (Rm) 300 111Cash generated from operations after working capital movements (Rm) 2 716 2 583Cash conversion ratio 1,14 1,10

The continued focus on working capital management has once again provided the group with a cash conversion ratio (being cash generated from operations over EBITDA) above one. Net working capital movements have been favourably impacted by the reduction in accounts receivable and converse increase in trade payables.

DividendsA final dividend of 33 cents per share has been declared, bringing the full year dividend to 57 cents per share (2014: 114 cents per share), achieving a divided cover of 2,3 times (2014: 1,5 times).

Looking aheadThis September year-end will be our last year-end at this time as the board has approved the change in the company’s year-end to March, effective from 2016. The March year-end is better aligned to the group’s expansion ambitions. With this in mind, we will focus on the change in the financial year-end to ensure the process is seamless for all our stakeholders. At the same time as our financial year-end change, the group will embark on a change in organisational structure.

This organisational structure change will see the streamlining of our legal structure, simplifying our holding company from that of an operating and holding company into a traditional holding company and align the company structure with that of group strategy.

As noted under borrowings, we will explore options to restructure our first BBBEE transaction. This restructure will reduce our borrowing position, providing further headroom against our funding commitments. In addition to the BBBEE restructure, the company will explore the merits of capital raising to further support the growth and expansion strategy.

It will remain a focus item for the team to deliver on our financial and operating targets for CIMERWA post the successful commissioning of the plant in 2015.

We will continue to explore opportunities to enhance our service offering and support the channel management strategy and are hopeful that a transaction will be announced in the next six months.

In conclusion, the next financial period will be a short year but the objectives set for this period will strengthen the group’s position and support the growth strategy.

MMT RamanoChief financial officer17 November 2015

CHIEF FINANCIALOFFICER’S REPORT CONTINUED


VALUE ADDEDSTATEMENT

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.

Notes2015

Rm2014

Rm

Revenue 9 227 9 039 Paid to suppliers for materials and services 1 5 508 (5 463)

Value added 3 719 3 576Empowerment transactions IFRS 2 charges (43) (38)Impairments (81) (110)Income from investments^ 12 77

Total wealth created 3 607 3 505

Wealth distribution:Salaries, wages and other benefits 2 1 325 1 183 Providers of capital 1 055 1 347 Finance costs (net of fair value adjustments on financial instruments) 496 467Dividends 559 880Governments 3 483 391Reinvested in the group to maintain and develop operations 744 584Depreciation and amortisation 702 615Retained profit/(loss) 102 (31)Deferred taxation (60) –

3 607 3 505

Value added ratios Number of employees (30 September) 3 372 3 377 Revenue per employee (R000) 2 736 2 677 Wealth created per employee (R000) 1 070 1 038

NOTES1 Paid to suppliers for materials and services

Barloworld Logistics is the only supplier of services exceeding 10% of total amounts paid.

2 Salaries, wages and other benefitsSalaries, wages, overtime payments, commissions, bonuses and allowances@ 1 140 1 009 Employer contributions (retirement funding, medical and insurance) 185 174

1 325 1 183

3 GovernmentsNormal taxation 439 336 Withholding taxation 12 20 Rates and taxes paid to local authorities 15 10 Customs duties, import surcharges and excise taxes 15 18 Skills development levy 6 10 Cash grants and subsidies received from the government (4) (3)

483 391

^ Includes interest received, dividend income and share of associate’s retained profit.@ Includes restructuring costs of R8 million (2014: R16 million), and share incentive schemes charges of R10 million (2014: R5 million).

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SEVEN-YEAR FINANCIAL REVIEWfor the year ended 30 September

2015

Total assets (Rm) 15 257

Net working capital (Rm)^ 831

Total equity (Rm) 3 164

Gross borrowings (Rm) 8 221

EBITDA interest cover (times) 4,56

Gross debt to EBITDA (times) 3,48

Number of years to repay interest-bearing borrowings 4,45

Revenue (Rm) 9 227

Normalised EBITDA* 2 424

EBITDA* margin (%) 26,27

Effective rate of taxation (%) 36,61

Normalised EPS (cents per share) 148

Normalised HEPS (cents per share) 149

Dividends per share (cents per share) 57

Dividend cover (times) 2,33

Cash generated from operations 2 716

Cash conversion ratio 1,14

Dividends paid (Rm) 559

Cash flow investment in property, plant and equipment and intangible assets 2 892

Investments in subsidiaries and equity accounted investments 108

Weighted average number of ordinary shares in issue during the year (000)^ 526 022

Market capitalisation 10 346

^ Net working capital is calculated as follows: inventory and trade and other receivables (comprising net trade receivables, other financial receivables and prepayments) less trade and other payables (comprising trade payables and accruals and other financial payables)

* Normalised EBITDA calculated by adjusting EBITDA for restructuring costs and corporate action


2014 2013 2012 2011 2010 2009

11 575 8 876 6 907 6 419 6 112 5 819

1 086 1 363 1 184 1 101 925 898

2 418 2 142 1 176 955 858 915

6 091 4 046 3 585 3 510 3 521 3 392

4,67 6,04 6,22 5,93 6,78 7,66

2,58 1,66 1,54 1,64 1,42 1,24

3,56 1,91 2,17 2,45 2,08 1,96

9 039 8 316 7 346 6 826 6 807 6 783

2 374 2 504 2 327 2 146 2 483 2 733

26,26 30,11 31,68 31,44 36,48 40,29

30,10 35,80 39,90 37,96 36,04 39,18

175 214 185 166 213 257

175 215 185 167 219 257

114 156 146 130 175 200

1,50 1,14 1,10 1,26 1,21 1,05

2 583 2 885 2 284 2 102 2 442 2 602

1,10 1,18 0,98 0,98 0,98 0,95

880 770 706 876 1 062 1 195

2 182 970 640 517 658 921

665 266 214 – – –

526 180 522 678 524 567 526 754 526 780 525 867

17 895 18 647 17 866 13 665 18 451 19 405

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OPERATIONS REVIEW

including Mall of Africa, Menlyn Maine, the new Sasol head office and Mutual Place, Old Mutual’s head office.

In the latter part of the reporting period, the coastal regions began to perform better on the back of reduced imports into Port Elizabeth and revised pricing in the Western Cape. Volumes in the Eastern Cape continued their upward trajectory in this financial year; however, those in the Western Cape were marginally negative for the full year. A number of wind farm projects were completed during the year; however, we continue to supply key projects like the expansion of the Cape Town International Convention Centre.

In May 2015, the International Trade Administration Commission recommended the implementation of anti-dumping duties of between 14% and 77% on cement imported from Pakistan. Since the imposition of dumping duties, imports from Pakistan have declined in KwaZulu-Natal and the Eastern Cape, but continue to

South Africa CementDemandDomestic cementitious volumes for the industry, including imported cement, rose 4,6% for the first nine months of calendar 2015. Over this period, PPC’s South African cement sales volumes, which now include Safika Cement, were marginally positive. However, for the full financial year to September 2015, PPC’s South African cement volumes were down 1,2%.

With increased competitor activity in the Gauteng and other inland provinces, PPC experienced cement volume declines in all of these regions. The Mpumalanga province was the hardest hit, where double-digit volume declines were experienced. The North West region, though also under pressure, showed some resilience. Within the Gauteng area, the construction and industrial segments showed a relatively better performance than the highly contested retail space. PPC continues to supply a number of high-profile projects

SOUTH AFRICA

2015 2014

SARest of Africa SA

Rest of Africa

Revenue (Rm) 6 603 2 624 6 607 2 432

Employees 2 472 900 2 202 815

CementPPC Cement has a successful track record spanning over 120 years as the leading supplier of cement in South Africa, Botswana, Zimbabwe and Rwanda. Our unique combination of quality products and good geographic footprint allows us to meet most customer requirements in parts of these countries.

Group cement2015 % 2014

Revenue (Rm) 7 506 (3) 7 710EBITDA* (Rm) 2 024 (5) 2 137EBITDA margin* (%) 26,9 27,7Operating profit* (Rm) 1 430 (10) 1 595Operating margin* (%) 19,1 20,7Assets (Rm) 13 863 36 10 182

* Excluding BBBEE IFRS 2 charges, Zimbabwe indigenisation costs and restructuring costs

PPC groupPPC’s revenue from South Africa remained at R6,6 billion while revenue from operations outside South Africa has risen by 8% to R2,6 billion. We successfully commissioned the 600 000tpa plant in Rwanda but the benefits of this will be reaped in 2016.

When looking at the cement division as a whole, revenue dropped 3% to R7,5 billion. Good cost control led to EBITDA falling 5% to R2,0 billion while the EBITDA margin reduced to 27%.

81% 11%9%

CementLimeAggregates and readymix

Revenue split 2015

South Africa72%

28%

BotswanaZimbabweMozambiqueDRCRwandaEthiopia


Selling pricesIncreased local competition has weighed on retail cement prices. Margins have come under pressure as rising input costs have not been offset by higher selling prices. During the year, we have repositioned PPC Surebuild’s price premium, thereby activating the inherent brand equity strength. The pricing environment does, however, remain highly volatile across the various regions. Average selling prices in the core South African business declined by 2%.

CustomersThe retail sector remains the largest channel for cement in South Africa. It is estimated that around 60% of the cement consumed in the country moves through the retail sector. Retailers draw their supply of cement from manufacturers, cement blenders and importers. The continued consolidation of the retail environment poses both challenges and opportunities for the industry. During the year PPC has continued to draw on the advantages of our strong brand, our key account managers, national footprint and the use of our recently acquired IDM brand.

As with the retail channel, the readymix concrete, construction and concrete product manufacturing channels are becoming increasingly competitive. PPC is continually having to use its range of products, consistency in quality and industry-leading delivery service to ensure we retain and grow our customer base. Our highly respected technical support team, a key for this sophisticated channel, has also helped us to differentiate our products. In certain segments within this channel we have introduced new pricing and value-adding strategies.

Operations Variable delivered cost of sales per tonne declined 2% while fixed costs increased by 2%. Cost savings were realised from coal, refractories, fuel and packaging, but offset by cost increases in power and maintenance.

To ensure increased reliability and improved energy efficiency of Dwaalboom kiln 1 (DK1), we invested R66 million to replace the grate cooler. Having resolved teething issues on the cooler, we have now observed record performance from DK1 in terms of reliability

grow in the Western Cape. The continued weakening of the rand is being offset by dramatic reductions in shipping rates. The local cement industry continues to engage with the authorities in order to align dumping duties across Pakistani producers.

IMPORTED CEMENT VOLUMES BY PORT ENTRY (TONNES)

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

Durban Port Elizabeth and East London Cape Town

500 000

200 000

0

100 000

300 000

400 000

Source: South African Revenue Service

Growth in real gross fixed capital formation lost further momentum, decelerating from an annualised rate of 1,8% in the first quarter of 2015 to 1,0% in the second quarter. The South African Reserve Bank’s September 2015 quarterly bulletin notes that the pace of increase in capital outlays by private business enterprises which comprises 60% of total investment slowed significantly which is in line with subdued business confidence levels. By contrast, capital investment by public corporations, which contracted in the first quarter of 2015, ticked higher in the second quarter, while growth in real fixed capital spending by general government maintained its momentum. Real capital outlays by Eskom and the Umgeni Water Board, in particular, increased firmly over the period, neutralising a contraction in such spending by public corporations in transport, manufacturing and mining subsectors. The bulk capital outlay by central and local government centred over energy, water, transport and education.

Q1 2014

Private business enterprises Public corporations General government Total

REAL GROSS FIXED CAPITAL FORMATION (%)

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015(20)

(10)

(5)

5

10

(15)

0

Source: South African Reserve Bank20

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OPERATIONS REVIEW CONTINUED

and heat consumption. We are also pleased to have commenced tyre burning as an alternative form of thermal energy at our De Hoek factory in the Western Cape. The manual feed system was completed at a cost of about R10 million in August 2015.

The 1mtpa Slurry kiln 9 project commenced during the second half of the reporting period. This six-stage pre-heater design with fourth generation clinker cooler technology will cost R1,5 billion to R1,7 billion and will be ramped up in 2018. This modern plant’s operating and control system will result in decreased production cost as well as ensure that dust emissions fall within legislative limits.

SafetyEleven lost time injuries were recorded across the South African sites, leading to a lost time injury frequency rate (LTIFR) of 0.26.

OutlookProjections for economic growth in South Africa have disappointed. Recently, the International Monetary Fund (IMF) has cut its growth forecast for 2015 to 1,4% from 2%. The IMF’s forecast for 2016 is even lower, at 1,3%. The Bureau for Economic Research forecasts that, for the period 2016 to 2020, cement demand growth will continue to outpace GDP. Over this period, an additional almost 2 million tonnes of cement will be required to meet forecast demand.

LimeOverviewPPC 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. It is the leading supplier of metallurgical-grade lime, burnt dolomite and related products in southern Africa.

Cement product rangeSouth 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 SureRoad brand for exclusive use in road construction.

With the recent acquisition of Safika Cement Holdings, 32,5N cement under three brands – IDM Best Build, Castle and the Spar Build-It house brand – has extended our product offering.

PPC Lime’s products are used in 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 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, it is used to beneficiate copper ore, make alumina and magnesia for use in aluminium and magnesium manufacture, extract uranium, and recover gold and silver.

2015 % 2014

Revenue (Rm) 871 7 817EBITDA* (Rm) 178 21 147EBITDA margin* (%) 20,4 18,0Operating profit* (Rm) 133 24 107Operating margin* (%) 15,3 13,1Assets (Rm) 495 (1) 502

* Excluding BBBEE IFRS 2 charges and restructuring costs

1 Jupiter 8 Laezonia quarry Cement plant2 Hercules 9 Mooiplaas quarry Milling depot3 Slurry 10 Saldanha Aggregate quarry 4 Dwaalboom 11 George Lime plant5 Riebeeck 12 Lime Acres Sales depots6 De Hoek 13 Montague Gardens

7 Port Elizabeth

1212

SOUTH AFRICA

7

South Africa Durban

Johannesburg8

9

1

23

4

Cape Town115

613

10

12


Review of 2015Lime revenue was 7% higher after burnt product sales increased by 7%, and higher prices were realised for value-added products. We successfully introduced milk-of-lime as a niche product with potential tangible benefits for customers that use a lime slurry in their production process.

The local steel industry is by far the largest consumer of lime in the South African market. PPC Lime’s sales volumes are directly tied to steel production, and current difficult conditions in the local industry have affected full-year results.

Cost of sales (rand per tonne) were flat year on year, reflecting savings on fuel, coal and maintenance, as well as the rightsizing exercise in 2014 that reduced total labour costs.

Capital expenditure of R45 million in 2015 focused on mobile equipment replacement, upgrades and kiln improvements.

OutlookThe South African iron and steel market is expected to remain under pressure in 2016, and burnt product sales are forecast to decrease slightly. The implementation of carbon tax has a potentially large impact on both PPC Lime’s customer base and the company itself, and our group continues to interact with the main stakeholders to achieve the right balance between reducing carbon emissions and ensuring South African industry remains competitive in the long term.

We will continue to focus on capitalising on growth and diversification opportunities, reducing fixed cost and optimising production operations in 2016.

Aggregates RSAOverviewPPC Aggregates supplies quality construction aggregates to the civil construction sector and products for the chemical, metallurgical and agricultural industries. PPC has two aggregate quarries in Gauteng (Mooiplaas and Laezonia). Aggregates and readymix* 2015 % 2014

Revenue (Rm) 1 042 81 576 EBITDA (Rm) 168 87 90 EBITDA margin (%) 16,1 15,7Operating profit (Rm) 105 84 57 Operating margin (%) 10,0 10,0

* Pronto was consolidated on 1 July 2014.

Review of 2015Sales volumes were 6% down on last year, mainly due to lower sales of concrete stone to the readymix concrete and concrete manufacturer segments. This was partially offset by supply to commercial and road construction projects. Significant volumes were supplied to the Mall of Africa development and the N14 road construction projects that started towards the end of the financial year.

Above-inflation increases for power, explosives, labour and certain maintenance spares were partially offset by cost-saving initiatives

and efficiency improvements. This resulted in cost of sales rising 9% compared to last year. Transport costs reduced by 12%, reflecting lower delivery volumes and shorter distances travelled.

OutlookThe outlook for 2016 is comparable with 2015 as some major projects will continue well into the new financial year. A potential replacement project for the Mall of Africa, which is nearing completion, has been identified. Increased competition in the base course (road construction) market may affect volume and pricing as well as the metallurgical dolomite market due to the decline in the steel industry.

Pronto Readymix ConcreteOverviewPronto (100% owned by PPC since July 2014) is a leading supplier of quality readymix concrete and mortars with ten batch plants in the greater Gauteng area supplying key commercial and industrial projects. Daily concrete orders are scheduled from each plant for efficient deliveries in 6 and 8-cubic metre trucks. It is the only company in Gauteng using truck-mounted conveyor belts designed to transport the concrete from the truck to the point of use where direct discharge is not possible at 60% of the cost of a concrete pump. Examples include suspended concrete floor slabs and retaining walls requiring up to 30m3 of concrete.

Review of 2015Sales volumes were flat on last year mainly due to the delay of the Steyn City Centre project and aggressive price cutting by competitors to existing customers to gain market share.

Outlook While the company was gearing up its plant and equipment and upgrading its fleet to expedite fast-track orders efficiently, the building industry slowed unexpectedly in the third quarter of 2015, hurt by labour concerns. With a muted outlook for economic growth in 2016, demand for new construction work is poor. While many projects are now ending, fewer new projects are coming on stream. This, together with new entrants into the readymix industry, will present challenges in both volumes and pricing. Larger projects, such as infrastructural developments, will be required to absorb excess capacity and restore pricing.

Ulula AshOverviewUlula supplies fly ash to the southern African market from its beneficiation plant at Eskom’s power station in Kriel, Mpumalanga. Producing both classified and unclassified fly ash, the plant is designed and operated to facilitate excellent turnaround times for tankers collecting loads. In recent years, Ulula Ash has penetrated various markets in supplying cement, concrete, readymix, civil, building, blenders, tile adhesives, mining and ash sand operations. Supported by good service, and a recently upgraded plant, volumes increased by 8%.

Review of 2015Volumes have increased by 8% for the year, supported by increased demand for fly ash as well as improved service levels by Ulula Ash staff.

Outlook The company’s key focus for 2016 is optimising production, securing customers in large civil construction projects and to continue its drive to expand the use of fly ash in new markets.

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CRUSHING LIMESTONE

RAW MATERIAL HOMOGENISATION

CEMENT PROCESS TECHNOLOGY

QUARRYING LIMESTONE

CEMENT STORAGE

COALMILLING

CEMENT MILL

PREBLENDING OF RAW MATERIALS

RAW MILL

BULK ROAD/BAGS

PREHEATING

CLINKER STORAGE

BULK RAIL

CEMENT DESPATCH BAGS

GYPSUM AND EXTENDERS

KILN

COOLINGCALCINATION – BURNING RAW MATERIAL TO CLINKER


BOTSWANA

Company overview PPC’s business structure in Botswana comprises the following wholly owned subsidiaries:

PPC Botswana Pty LimitedKgale Quarries Pty LimitedPPC Aggregate Quarries Botswana Pty Limited

PPC Botswana has a milling, packaging and dispatch operation in Gaborone, supporting a national distribution network, and the aggregates business operates two quarries in Gaborone and Francistown.

Review of 2015The political landscape in Botswana remains stable while the country has improved its position on the Global Competitiveness ranking, moving from 79 (2014) to 74 out of 144 countries.

The economy remains dependent on revenue generated by the diamond industry. Debswana has maintained rough diamond prices amid softening demand growth in key jewellery consumer markets and liquidity constraints in the diamond financing chain. This, together with the strong dollar and weak rand, has had a positive impact on the government’s accounts, with projected budget surpluses. In addition, the government’s pula fund continues to recover after the global economic recession, making funds more readily available for projects earmarked in the national development plan 10.

CementWe recorded strong volume growth during the year, mainly in the retail and industrial segments. The construction segment was fairly flat as new projects replaced those coming to an end. We have supplied key projects in the country including the Kasane Airport, the Zambezi Towers and West Gate Mall. The increase in cement capacity and competitiveness in the southern African region has affected pricing, particularly in the retail segment. Business strategies remained focused on operational efficiencies and cost competitiveness, with savings realised by sharing resources with our aggregates business. There is ongoing engagement with the government of Botswana to align our strategies to achieving broader national objectives.

Our cement operation completed a commendable record 1 580 injury-free days by the end of September 2015.

AggregatesThe aggregate trading environment remains tough. Our strategic response of consolidating our operations is bearing fruit, with improved volume and profitability from positioning our business as a major supplier of construction aggregates in the greater Gaborone and Francistown markets. In the final step of the consolidation process, the two legal entities will be combined in 2016.

The LTIFR for our aggregates operations was 0,49.

OutlookWe remain optimistic about growth in cement demand, driven by government infrastructure development, especially for water, electricity and roads. The caveat for the timely execution of these construction projects remains a continuous supply of electricity and water.

The national strategy office has been tasked to develop and implement a national monitoring and evaluation system for project execution that should assist with construction projects being completed on time and within budget.

While our cement operation remains well placed to participate in the expected growth in local demand, we anticipate increased volume and pricing pressure, particularly from the very competitive South African cement industry.

The aggregates industry is expected to remain very competitive, but we expect an improved performance from the restructured business and optimised support services. Participation by this business in construction activity will depend on our regional footprint relative to the location of these projects.

Cement product rangeBotswanaThe 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.

1 Gaborone

2 Kgale quarry

3 Francistown quarry

Milling depot

Aggregate quarry

Botswana

BOTSWANA

3

1

2

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Commendably, both our operations and the Harare mill project maintained their zero LTIFR status, with Colleen Bawn at 1 279 injury-free days, Bulawayo at 835 days and Harare at 335 days.

MozambiquePPC Mozambique SA is a wholly owned, locally registered business established in 2011. Our business was successfully relocated to Tete and is managed by the PPC Zimbabwe team, in line with our regional outlook.

The Tete economic environment has deteriorated significantly, in line with the international resources segment, specifically coal, and political sensitivities in central Mozambique. Our volume supplied to Tete decreased over the prior year, while we continue to supply into southern Mozambique through a distributor.

Our operation has maintained its zero LTIFR status for 1 383 days.

OutlookThe slowdown in Zimbabwe’s economic growth, caused by ongoing liquidity problems and high external debt levels, will continue in 2016 and challenge the objective to grow domestic sales. With increased competition in the region and Zimbabwe’s deflationary environment, the outlook for pricing remains muted. PPC will continue its strategy to defend and grow its domestic and export market by investing in marketing and sales initiatives and remaining customer-focused.

Production may be affected by the poor domestic and regional power supply outlook, but the company has maintained sound relations with the relevant power utilities and continues to benefit from a tariff structure that supports continued supply.

Commissioning of the Harare plant by the end of calendar 2016 will ensure the company is positioned for the expected economic upturn in the medium term and the anticipated associated infrastructural development and investment.

In Mozambique, consensus continues to project a favourable long-term outlook for economic growth. For our materials handling facility in Tete this does, however, hinge on the recovery of the international resources segment and the country’s ability to unlock significant investments made in developing the Tete coal reserves.

Company and project overview PPC Zimbabwe is a 70%-owned subsidiary of PPC, with a clinker manufacturing operation at Colleen Bawn and a grinding and packaging plant in Bulawayo. It is the largest cement manufacturer in Zimbabwe, with market-leader status and a well-established brand.

With a current installed capacity of just over 1mtpa, we are the only supplier in Zimbabwe capable of offering palletised cement, which has reduced cost and customer turnaround times. The company has also recently invested in technical upgrades at both plants, while construction of a 700 000tpa grinding and dispatch plant in Harare is progressing well.

Review of 2015PPC Zimbabwe enjoyed a sixth consecutive year of increased domestic cement demand, albeit on a slower growth trajectory than prior years. However, 2015 cement exports declined significantly on the back of a strengthening US dollar against regional currencies and increased competition. This was partly offset by higher clinker exports. The central positioning of Zimbabwe facilitates export opportunities for the business, especially to Zambia, Mozambique and Malawi, but it also makes Zimbabwe more susceptible to cement imports from the same regional countries.

The benefits of recent investments to modernise our plants are being realised. Our Colleen Bawn clinker plant improved both reliability and rated output during the year, with average daily production above 2 000 tonnes achieved for the first time in July 2015, at a reliability factor of over 90%. The ongoing focus on cost efficiencies has contributed to higher margins. This, together with improved logistics efficiencies, has made the company more competitive in the border and northern regions.

PPC Zimbabwe’s current capacity is just over 1mtpa, produced in Bulawayo. After commissioning the Harare plant, we plan to retire two of our smaller inefficient cement mills, resulting in a combined national capacity of 1,4mtpa.

Construction of the US$85 million mill in Harare is proceeding well, with the project around 50% complete in September 2015, and the rail siding contract 32% complete. The Sinoma EPC contract is progressing against plan with design work 95% complete, 95% of equipment manufactured and 65% delivered to site, and civil construction 40% complete.

Roads to the site, water, sewage infrastructure and power supply from the national power utility are complete. All equipment has either been delivered to site or en route. Plant commissioning is expected towards the end of calendar 2016, and will enable the company to improve the use of its existing labour force as key staff members for the factory will be drawn from staff at our Bulawayo and Colleen Bawn operations.

ZIMBABWE


Cement product rangeZimbabweOPC, Surebuild PMC and Unicem, trusted 32,5N multipurpose cement, are produced and distributed from the Bulawayo factory.

ZIMBABWE

Zimbabwe

1

3

21 Colleen Bawn2 Bulawayo3 Harare

(under construction)

Cement plant Milling depot

RWANDA

CIMERWA’s operational LTIFR at the end of September 2015 was 0,36, with 145 days since the last safety incident. On completion of the construction of the new plant, the LTIFR for the project was 0,49.

OutlookThe plant is well located to supply cement to the Rwanda, eastern DRC and Burundi regions. The medium-term economic outlook for Rwanda and the region remains positive, with the main Rwanda market expected to continue expanding at 7% to 8% in a stable inflation environment.

Aligned with the government’s national development plans of Rwanda Vision 2020, Economic Development and Poverty Reduction Strategy 2 and a rapidly growing middle class, cement demand in Rwanda is expected to grow steadily over the medium term. The percentage of the population living in urban settlements is now about 15%, and expected to rise to 35% by 2017. More urban settlements will need to be developed, as well as secondary cities in combination with Kigali. An estimated 450 000 dwellings are required in Kigali (at an average 10 tonnes of cement per dwelling).

Political turmoil in Burundi after the July 2015 election will affect our ability to export to that market. Exports to the region remain a key focus as a strategic response to our foreign currency exposure.

Company and project overview In January 2013, PPC acquired a 51% equity stake in CIMERWA Limited, the only integrated cement producer in Rwanda. Our new 600 000tpa plant was commissioned in the second half of 2015, and inaugurated by the Rwanda Right Honourable Prime Minister Anastase Murekezi in August 2015.

The new plant incorporates the latest technology and was supplied on a turnkey basis by China National Aero-Technology International Engineering Corporation Limited, with mechanical and electrical equipment supplied and erected by Jiangsu Pengfei. CIMERWA’s engineering and management representatives are Holtec of India. Some US$94 million in debt financing was secured from a consortium of regional banks to part-finance the project.

Review of 2015We continued to improve the efficiency of the old plant, with a c.14% improvement in output achieved over the corresponding period last year. The old plant was partly mothballed in July 2015. Construction of the new plant was completed within the budget of US$170 million. Provisional acceptance testing is well advanced, with outstanding testing on the raw mill, kiln and cement mills to be completed shortly. The provisional acceptance certificate is expected in the last quarter of calendar 2015.

Power for the plant was secured with the government of Rwanda providing generators on site until the connection to the main grid is achieved. As part of the new plant investment, the surrounding community continues to benefit directly from the upgrade of the 11,6km road to the town of Bugarama. CIMERWA has spent a total of US$4,2 million on this upgrade.

The plant uses a five-stage pre-calciner kiln with a grate cooler. This advanced technology keeps particulate emissions significantly below 50mg/Nm3. We are therefore pleased with the early performance of the new plant.

The product from the new plant was well accepted in the market and we have achieved a satisfactory ramp-up in the three months from July 2015. In September 2015, the plant produced at around 60% of full capacity. Gradual ramp-up to full production is expected over the next two years. Initiatives to develop the local transport industry continue, with the introduction of a contracted fleet.

A wide range of empowerment-focused corporate social responsibility initiatives have been launched. In line with the group’s people philosophy, recruitment for critical positions is complete and we have a programme of shadowing and transferring skills to local teams. Extensive support was received from the PPC group during commissioning and performance testing, and broad support will continue.

1 CIMERWA Limited

Cement plant

Cement product rangeRwandaCIMERWA produces a 42,5N Portland Pozzolana cement and a 32,5N Portland Pozzolana cement.

RWANDA

Rwanda

1

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DEMOCRATIC REPUBLIC OF THE CONGO (DRC)

deteriorated as imports from the Far East and recently from neighbouring Angola increased. Engagement with government for local industry protection continues.

We opened a technical training facility to develop technical skills in villages surrounding the plant. The first intake, including youth and women, successfully completed their training course during the year. Stakeholder engagement continues at all levels to ensure we continue building our brand, relationships and a strong local cement industry as a responsible corporate citizen. In particular, we have engaged current and future local cement producers to establish an association that will engage with industry stakeholders in the DRC.

The operational readiness programme is on track and the evaluation of key raw material and logistics supply arrangements is well advanced. Recruitment of critical skills has started and retention will be supported by a comprehensive programme at our training facility and other PPC operations. The project LTIFR is 0,19 with 256 days since the last lost-time injury.

OutlookGDP growth in the DRC of around 7% is expected in the medium term with a steady reduction of the infrastructure deficit and expanding investment due to continuing government reforms. This will support a continued increase in cement demand, and we are well located to serve the Kinshasa, Matadi and interior markets. With additional capacity under construction in the region, our targeted commissioning date of end calendar 2016 will give us a first-mover advantage.

We remain cognisant of the presidential election scheduled for 2016, as this could coincide with the scheduled cement plant commissioning.

Company and project overview PPC, in partnership with the Barnet Group and International Finance Corporation (IFC), is building a 1mtpa integrated cement plant for around US$280 million. The plant is near Kimpese in the Kongo Central province in western DRC, 230km south-west of the capital Kinshasa. Ercom Engineering is the technical consultant and Sinoma is the EPC contractor. The new plant is 60% project debt funded with the IFC and PTA Bank as joint lead arrangers.

The PPC Barnet DRC Company is 69% owned by PPC, with 21% held by our local partner, the Barnet Group, and 10% held by the IFC.

Review of 2015Construction is on schedule with the major civil works completed by the end of September 2015. The cement silos’ slides are complete and construction of the packing plant and loading area is under way. Structural steel and mechanical erection began in August. Overall construction is 55% complete.

In tandem with mine planning, the quarry was opened towards the end of the period and the haul road is being constructed.

PPC Barnet in conjunction with the country’s utility company, Société Nationale d’Electricité (SNEL), will be constructing a 13km overhead transmission line to supply power to the cement plant as a public-private partnership. Key agreements on financing, construction and power supply have been signed with SNEL. The target is to complete the bulk power project and have permanent power at the site by end-June 2016.

The company has been awarded key investment incentives by the country’s investment promotion agency, ANAPI. Government engagement is ongoing to finalise the award of exemption for VAT and other tax incentives.

Our cement trading business continues to import and trade own-manufactured PPC branded cement into Kinshasa and Matadi. This has allowed us to establish the PPC brand in the market and the management team continues to develop a good understanding of the country and business environment. During the year, selling prices

1 Kinshasa

2 Kimpese (under construction)

Sales depots

Cement plant

Cement product rangeDRCPPC currently exports a 32,5N and 42,5N class cement manufactured at PPC’s South African facilities to DRC.

Democratic Republic of the Congo

DRC

Kinshasa21

ETHIOPIA

OutlookConstruction activity in Ethiopia is brisk and our outlook for cement demand in the country remains strong. The government’s growth and transformation plan (2010) focuses on infrastructure development, industrialisation and housing to improve the country’s economy and raise GDP. This will underscore future cement demand.

The plant is expected to be commissioned in the second quarter of calendar 2017. Future development plans include the opportunity to double production capacity.

Company and project overview In 2012, PPC and South Africa’s Industrial Development Corporation (IDC) respectively acquired a 27% and 20% equity stake in Ethiopia’s Habesha Cement Share Company (Habesha). In 2014, PPC increased its stake to 31%, while the transaction to acquire the IDC’s 20% stake was not concluded.

Habesha is the first cement share company in Ethiopia, with over 16 000 local shareholders. The modern plant is designed for an annual cement capacity of 1,4 million tonnes, and well positioned to serve the Addis Ababa market as it is 35km north-west of the capital. The plant is being supplied and built by China’s Northern Heavy Industries Group (NHI) which has built over 100 cement plants in China, and supplied and erected a plant for Ethiopia’s National Cement in Dire Dawa. TATA Consulting Engineers is the engineering and management representative.

The project is funded by a combination of equity and debt financing by Development Bank of Ethiopia and PTA Bank. Execution was initially delayed mainly due to a lack of funding. After a thorough review of the project, the full project costs are now anticipated to be between US$170 million and US$180 million. This will be funded from additional equity and debt. We are completing our due diligence and business case, which will inform our participation in this capital raising.

Review of 2015Construction is well under way, with overall project progress at 52%, civil construction 45% complete and mechanical erection started. The plant design is 95% complete, 90% of equipment manufactured and 70% already delivered to site. The main plant power agreement is in place with the Ethiopian power authorities to allow for construction of the 14km single-circuit transmission line to site.

In 2015, PPC conducted safety visits to the construction site and is working with the Habesha senior team to improve construction safety systems and standards. The Habesha safety engineer visited our DRC project to gain construction safety experience and identify suitable construction safety systems and standards. Habesha recorded two safety incidents in 2015, which regrettably resulted in one fatality. The project’s LTIFR ended at 0,99. PPC is working closely with the Habesha senior leaders to identify and develop appropriate operational safety and health management systems and standards to be included in the Habesha operational readiness plan.

1 Habesha Cement (under construction)

Cement plant

Ethiopia1

ETHIOPIA

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We recognise that innovation is more than just ideas In order to harness the benefits of innovation ideas we will create an innovation process

We will create an innovation culture as the core driver of the business

I N N O VAT I O N C U LT U R E


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CORPORATE GOVERNANCE REVIEW

ChairmanKey objectives:

Board leadership and performance, custodian of the corporate

governance processes.

More on page 53.

The PPC boardKey objectives:

Strategic planning, setting objectives, appointing CEO, monitoring

implementation of board plans and strategies.

More on page 54.

The investment committeeKey objectives:

Evaluation investment in or divestment from other enterprises

for purposes of enhancing the

sustainable income of the group.

See page 61 for more details.

Social, ethics and

transformation committeeKey objectives:

Monitor company activities on social, transformation and

economic development, stakeholder

relationships, good corporate citizenship, environment, labour

and employment.


Audit committeeKey objectives:

Provide governance and compliance

oversight over the financial results, performance of

internal and external

audit and the group’s system

of internal control.


Remuneration committeeKey objectives:

Establish a remuneration policy, monitor

executive remuneration and

ensure the mix of salary and incentives

supports achieving PPC’s targets.


Nominations committeeKey objectives:

Ensure appropriate board composition

induction and training of directors

and succession plans.


Risk and compliance committeeKey objectives:

Oversee implementation of an effective policy and plan for risk

management and disclosure on

risk that is comprehensive and

relevant.


GOVERNANCEOur governance report is structured in two parts in line with the latest practice in governance reporting. The first part tells the governance story

of PPC, while the second focuses on compliance with applicable governance and regulatory standards.

PART 1High level overview of governance in the PPC group

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The chairman of our board is Bheki Sibiya who has been annually

reappointed since 2008. He was an independent non-executive

director for most of the review period. As chairman, he is responsible

for board leadership and board governance, assisted by the company

secretary. Together, they are responsible for the board’s annual work

plan and ensuring the performance of the board is annually reviewed

against performance standards.

In executing his responsibilities and those of the board, Bheki is

assisted by a very capable team of directors. On 17 November 2015,

13 directors served on the group board. The majority were non-

executive directors, with an independent majority when classified

against JSE listings requirements.

More information on board composition and activities follows in this

report. Most notable was the appointment of a new CEO,

Darryll Castle, in January 2015 and the appointment of six new

non-executive directors at the AGM in January 2015. The board also

confirmed the appointed of Tim Ross as lead independent director.

During the year the following resignations were received:

Joe Shibambo (January 2015)

Ntombi Langa-Royds (January 2015)

Dr Daniel Ufitikirezi (September 2015)

Key roles and responsibilitiesKey roles in the corporate governance of PPC lie mainly in the

responsibilities of three functionaries:

The chairman: Bheki Sibiya

The role of the chairman is set out in a document approved by

the board:

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 and shareholders, and the

public at large

The CEO: Darryll Castle

The role of the CEO is determined by the board, formalised in the

board charter and managed through his annual scorecard:

The CEO leads the company and the management team. He

is responsible for the day-to-day operations of the company and is

its principal spokesperson, while the chairman is the leader of

the board

The company secretary: Jaco Snyman

The role of the company secretary is largely determined in section

88 the Companies Act 2008 (the Act):

Guiding PPC’s directors collectively and individually on their duties,

responsibilities and powers

Making directors aware of any law affecting the company

Reporting to the board any failure by the company or a director to

comply with the memorandum of incorporation, rules of the

company or the Act

Ensuring minutes of all shareholders’ meetings, board meetings

and the meetings of any committees of the directors are properly

recorded

Certifying in the annual financial statements whether the company

has filed required returns and notices in terms of this Act, and

whether all returns and notices appear to be true, correct and up

to date

Ensuring a copy of the company’s annual financial statements is

sent to every person who is entitled to it

The group company secretary 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 in 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, where appropriate,

owners of securities in the company are properly administered in line

with pertinent laws. Details of his qualifications and experience

appear on page 24. The board evaluates the company secretary’s

performance as part of its annual board evaluation.

He is responsible for compliance with the rules and listings

requirements of the JSE 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 company secretary is satisfied that he is able to effectively

perform the role as gatekeeper of good governance in the company

and to carry out his role and responsibilities as company secretary.



How the board operatesThe members of our board are shown below:

Bridgette Modise

Todd Moyo

Executive directors Non-executive directors Independent non-executive directors

Bheki Sibiya

Tim Ross

Tim Leaf-

WrightNicky Goldin

Charles Naude

Peter Nelson

Peter Malungani

Sydney Mhlarhi

Tito Mboweni

Tryphosa Ramano

Darryll Castle

The nominations committee annually evaluates whether the board’s

size, diversity and demographics make it effective. A number of

studies have shown that the composition of the board can have a

significant impact on company performance. Early studies on board

composition focused on factors such as independence of directors,

with the impact of cognitive diversity in decision-making gaining

recognition only in recent years. Recent diversity studies have

focused on gender diversity with interesting, but mixed, results.

At year-end, the board comprised an independent non-executive

chairman, two executives and 11 non-executive directors. At its

meeting in November 2015, the nominations committee evaluated

the independence of non-executive directors and concluded that the

following directors are independent as defined in King III (the code)

and the JSE listings requirement directors:

The board has made notable progress in transformation and

compliance with the code as reflected in the following graphs.

Balance between executives and non-executives

During the review period, the balance on the PPC board between

executive and non-executive directors moved further in favour of

non-executive directors after the appointment of additional

non-executives while the number of executives remained at two.

CORPORATE GOVERNANCE REVIEW CONTINUED

BALANCE BETWEEN EXECUTIVES AND NON-EXECUTIVES

10

12 12 12

14 14

1211

13

15

12

9

0

3

6

2007 2008

Executive directors Non-executive directors

2009 2010 2011 2012 2013 2014 2015

Gender balance

At PPC, 23% of board members are women, and the chairperson of

the risk committee is female.

GENDER BALANCE

10

12 12 12

14 14

12 1213

15

12

9

0

3

6

2007 2008

Women Men

2009 2010 2011 2012 2013 2014 2015

Racial balance

At 17 November 2015, 53% of directors were black.

RACIAL BALANCE

10

12 12 12

14 14

1211

13

15

12

9

0

3

6

2007 2008

Black directors White directors

2009 2010 2011 2012 2013 2014 2015

Age analysis

Age diversity is considered when the nominations committee evaluates

board composition. The average age of directors is 54.


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Board tenure

All major ratings agencies include an assessment of board tenure as

one of their criteria for evaluating board effectiveness, with longer

tenure potentially leading to lower scores. The average tenure on

our board is three years.

BOARD TENURE

2,64

4,54

3,0

5

4

3

2

1

02013 2014 2015

Directors are appointed through a formal process and the

nominations committee assists in identifying suitable candidates to

propose to shareholders. This process is detailed in the company’s

selection and appointment policy. The primary objective of this policy

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 sustainable value creation and long-term growth.

The nominations committee oversees this policy.

A formal induction programme is in place for new directors, and

directors with less experience are developed through training

programmes. For continuing development, PPC encourages directors

to attend the professional development programmes of the Institute

of Directors in Southern Africa (IoDSA).

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 table below indicates the attendance of directors at scheduled meetings from 17 November 2014 to 17 November 2015:

BOARD MEMBERS*

BOARD STRATEGY

SESSION BOARD AGM AUDIT

RISK AND

COM-PLIANCE

NOMI-NATIONS

REMUNE-RATION

SOCIAL, ETHICS

ANDTRANSFOR-

MATIONINVEST-

MENTATTEND-

ANCE

BL Sibiya (chair) 1/1 5/5 1 2/2 4/4 3/3 16/16

DJ Castle 1/1 5/5 1 4/4 3/3 2/2 4/4 2/2 3/3 25/25

N Goldin@ 1/1 4/4 4/4 3/3 12/12

NB Langa-Royds^ 1/1 1 2/2

T Leaf-Wright@ 1/1 3/4 3/3 2/2 3/3 12/13

MP Malungani 1/1 4/5 1 2/2 3/3 11/12

T Mboweni@ 1/1 3/4 2/2 2/2 8/9

SK Mhlarhi 1/1 5/5 1 4/4 3/3 14/14

B Modise 0/1 5/5 1 4/4 3/3 13/14

T Moyo 1/1 5/5 1 4/4 2/2 13/13

C Naude@ 1/1 4/4 3/3 4/4 12/12

PG Nelson@ 1/1 4/4 4/4 4/4 13/13

T Ramano 1/1 5/5 1 4/4 3/3 0/2 2/4 2/2 3/3 21/25

TDA Ross 1/1 5/5 1 4/4 3/3 3/3 17/17

J Shibambo^ 1/1 1 2/2

D Ufitikirezi#@ 0/1 2/4 0/2 2/7^ Resigned at 2015 AGM. @ Appointed at 2015 AGM. # Resigned on 22 September 2015. * ZJ Kganyago is an alternate director.

MEMBERS SESSION BOARD AGM AUDIT PLIANCE NATIONS RATION MATION MENT ANCE

^ RResiesie gnegneg d ad at 2t 2015015 AGAGMM. @ Appointed at 2015 AGM.

BL Sibiya (chair) 1/1 5/5 1 2/2 4/4 3/3 16/16

DJ Castle 1/1 5/5 1 4/4 3/3 2/2 4/4 2/2 3/3 25/25

N Goldin@ 1/1 4/4 4/4 3/3 12/12

NB Langa-Royds^ 1/1 1 2/2

T Leaf-Wright@ 1/1 3/4 3/3 2/2 3/3 12/13

MP Malungani 1/1 4/5 1 2/2 3/3 11/12

T Mboweni@ 1/1 3/4 2/2 2/2 8/9

SK Mhlarhi 1/1 5/5 1 4/4 3/3 14/14

B Modise 0/1 5/5 1 4/4 3/3 13/14

T Moyo 1/1 5/5 1 4/4 2/2 13/13

C Naude@ 1/1 4/4 3/3 4/4 12/12

PG Nelson@ 1/1 4/4 4/4 4/4 13/13

T Ramano 1/1 5/5 1 4/4 3/3 0/2 2/4 2/2 3/3 21/25

TDA Ross 1/1 5/5 1 4/4 3/3 3/3 17/17

J Shibambo^ 1/1 1 2/2

D Ufitikirezi#@ 0/1 2/4 0/2 2/7



Annual board evaluationThe code requires annual board performance evaluations by the

chairman or an independent service provider and that the results of

these evaluations should identify training needs for directors. This

year, the nominations committee appointed the IoDSA to conduct

the annual evaluation. Key findings included:

Board members would appreciate more interaction with line

management

The board was of the view that succession planning must be made

a priority in future. The experience with the last CEO left

PPC exposed

Board members believed there was not enough flow of information

from management to the board between board meetings

Round-robin resolutions are circulated with insufficient information

More can be done to keep stakeholders informed of major issues

as they arise

The late delivery of certain sections of board packs was also

mentioned

The findings of this assessment have been shared with both the

2014 and current board members at two separate events. As a

result, most findings have been addressed by the CEO, chairman and

company secretary.

Strategic planningAs a key performance area of the board, group strategy is mapped

by the board in consultation with PPC’s executive committee (exco).

The board appreciates the fact that strategy, risk, performance and

sustainability are inseparable and annually reviews the strategy at its

meeting in July.

Internal controlReporting in the company is structured so that key issues are

escalated through the management team and ultimately to the

board, if appropriate.

The board has delegated to the audit committee responsibility for

reviewing, in detail, the effectiveness of the company’s system of

internal controls. After completing these reviews, the committee

reports to the board on its findings so that the board can take a view

on this matter. This has been subject to regular review over a number

of years, resulting in several refinements.

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

The committees are appropriately constituted with due regard to

the skills required

The board has a framework for delegating authority to

management

How board committees operateThe board has six standing committees through which it operates.

Committees play an important role in enhancing good corporate

governance, improving internal controls and thus the sustainable

performance of the company. The current board committees and

their chairpersons are:

Bheki Sibiya

Tim Ross

Bridgette Modise

Tito Mboweni

Peter Malungani

Peter Nelson

Board committees

BOARD COMMITTEE:Nominations

BOARD COMMITTEE:

Audit

BOARD COMMITTEE:

Risk and compliance

BOARD COMMITTEE:

Social, ethics and transformation

BOARD COMMITTEE:

Remuneration

BOARD COMMITTEE:Investment

The chairpersons of these committees are independent non-

executive directors, except for the investment committee. Although

Peter Malungani is not an independent director, the board has

appointed him as chairperson based on his experience and skills.

In the interest of free information flow and good oversight, full or

summary minutes of all committee meetings are included in

document packs for board meetings. In addition, each chairperson is

required to present an annual report on the activities of that

committee at the board’s meeting in November.

Based on these reports and minutes of the committees, their

performance and conformance to terms of reference are annually

evaluated by the board.

At its meeting in November 2015, the board concluded that all

committees had executed their responsibilities within the scope of

their respective terms of reference in the review period.

All the committees may obtain, at PPC’s expense, independent

professional advice on any matters covered by its terms of reference.


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About the audit committeeThe current members of the audit committee are:

NAME QUALIFICATION STATUS

TDA Ross (chair) CA(SA) IndependentB Modise CA(SA) IndependentT Moyo CA(Z), CA(SA) IndependentPG Nelson CA(SA) Independent

All members are independent, as required by the code and the Act.

Todd Moyo and Peter Nelson were appointed to the committee in

February 2015. Darryll Castle resigned as a member of the committee

on his appointment as CEO.

Tim Ross has chaired 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 CEO and CFO, attend

committee meetings by invitation. Similarly, external and internal

auditors attend meetings by invitation and have no voting rights.

The chairperson reports to the board on the committee’s activities

and recommendations. The chief audit executive reports to the

chairperson of the committee and to the CEO on day-to-day matters.

The latest minutes of committee meetings are included in

board packs.

The audit committee has adopted formal terms of reference that

have been approved by the board, and has executed its duties in the

past financial year in line with these terms of reference. Among

others, 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, particularly:

All factors and risks that may affect 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

TDA Ross (chair) CA(SA) IndependentB Modise CA(SA) IndependentT Moyo CA(Z), CA(SA) IndependentPG Nelson CA(SA) Independent

Reviews the annual financial statements, interim reports,

preliminary or provisional result announcements, summarised

integrated information, any other intended release of price-

sensitive information and prospectuses, trading statements and

similar documents

Comments in the annual financial statements on the financial

statements, accounting practices and effectiveness of internal

financial controls

Reviews 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

Reviews the content of summarised information for whether it

provides a balanced view

Engages the external auditors to provide assurance on summarised

financial information

Prepares a report for inclusion in the integrated report and annual

financial statements for the financial year (page 64):

– 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

Recommends the integrated report for approval by the board

Internal auditThe committee is responsible for overseeing the internal audit

function, 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

any outsourced/company’s internal audit service provider

Approving the internal audit plan and any significant changes,

and satisfying itself that this plan will effectively address critical

risk areas of the business

Ensuring the internal audit function is subject to an independent

quality review, as the committee determines it 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

in PPC to enable it to discharge its functions

Risk managementThe committee is an integral component of the risk management

process. Specifically, the committee must oversee:

Financial risk

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 the fees to be paid and terms of engagement of

the auditor

Ensure the appointment of the auditor complies with the 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 directorThe audit committee must annually consider and satisfy itself of the

appropriateness of the expertise and experience of the financial

director and must confirm this to shareholders in its annual report.

Financial functionThe committee reviews the expertise, resources and experience of

the company’s finance function, and discloses the results in the

integrated report and to shareholders.

Internal controlsThe chief audit executive has completed a report to the board on the

effectiveness of controls and risk management, which was tabled at

the board meeting in November 2015. In this report, he concluded

that he is satisfied that the governance, risk management and

internal controls are adequate to identify any breakdowns that

would result in material loss to the group. He 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. He also concluded that he was not aware of anything that

would cause him to believe that controls over financial processes do

not provide a sound basis for preparing reliable financial statements.

IT governanceIn recent years, PPC has made appropriate investments to ensure its

information technology (IT) systems and governance processes

comply with the recommendations of King III. This is detailed in the

King III application table on our website. Specific developments

during the year included:

The IT charter, framework and policy documents were reviewed

and approved by the audit committee, and implemented

The IT strategy was approved by the board and is aligned to the

business strategy and objectives by focusing on robust

infrastructure, an enabling platform and solid governance

processes

Initiating an information security management system to ensure

the integrity, confidentiality and availability of information

About the risk and compliance committeeThe members of the committee are:


B Modise (chair) CA(SA) IndependentDJ Castle BSc, BCom, MBA,

CFA Executive

T Leaf-Wright Chartered Institute of Secretaries

Independent

C Naude BSc hons, MBL IndependentTDA Ross CA(SA) Independent

The CEO, Darryll Castle, was appointed to the committee to align it

with the best practice recommendations of the code during the year.

All other members of the committee are non-executive directors.

Members of the executive team responsible for risk and compliance

management attend committee meetings by invitation. Similarly,

external and internal auditors attend meetings by invitation but have

no voting rights. The chairperson reports to the board on 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. Among other issues, the

committee’s terms of reference include 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 through related 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

B Modise (chair) CA(SA) IndependentDJ Castle BSc, BCom, MBA,

CFAExecutive

T Leaf-Wright Chartered Institute of Secretaries

Independent

C Naude BSc hons, MBL IndependentTDA Ross CA(SA) Independent


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The 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 for 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 the 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 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

The committee reported on its activities for the review period

at the board meeting in November 2015. At this meeting, the

board confirmed that the committee has complied with its terms

of reference.

About the remuneration committeeThe members of the remuneration committee are:


PG Nelson (chair) CA(SA) IndependentN Goldin BCom, MBA IndependentSK Mhlarhi CA(SA) Non-executiveC Naude BSc hons, MBL IndependentBL Sibiya MBA Independent

During the year, Mr Nelson was appointed as chairman of this

committee. Ms Goldin, Mr Naude and Mr Sibiya were appointed as

new members. All members are non-executive directors. PwC,

appointed by the company, acted as remuneration advisers to the

committee and provided detailed information on market trends and

the competitive positioning of remuneration.

PG Nelson (chair) CA(SA) IndependentN Goldin BCom, MBA IndependentSK Mhlarhi CA(SA) Non-executiveC Naude BSc hons, MBL IndependentBL Sibiya MBA Independent

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 in the

integrated report in terms of being timely, comprehensive

and relevant

For a more detailed review on risk, refer to page 66. The report on

compliance appears on page 68.

The committee reported on its activities for the review period at the

board meeting in November 2015. At this meeting, the board

confirmed that the committee has complied with its terms

of reference.

About the nominations committeeThe members of the nominations committee are:


BL Sibiya (chair) MBA IndependentT Mboweni BA, MA, CD(SA) IndependentT Moyo CA(Z), CA(SA) Independent

Mr Ross (lead independent director) stepped down as chairman and

member of the committee after Mr Castle was appointed as CEO in

January 2015 and Mr Sibiya could step down as executive chairman

of PPC. Mr Mboweni and Dr Ufitikirezi were appointed as new

members of this committee in February 2015. Dr Ufitikirezi resigned

as a director of the board during the year and was not replaced on

the nominations committee.

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, which are reviewed annually. The chairperson reports to the

board on activities and recommendations made by the committee

and the latest minutes of committee meetings are included in

board packs.

T

a(l d d d d ) d d h d

BL Sibiya (chair) MBA IndependentT Mboweni BA, MA, CD(SA) IndependentT Moyo CA(Z), CA(SA) Independent


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.

The 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 and

recommending to the board this be included in the integrated

report

The remuneration policy of the company is annually presented to

shareholders. PPC’s remuneration policy appears on page 70 and

shareholders will be requested to pass a non-binding advisory to

indicate support for this policy at the annual general meeting.

The committee has reviewed group remuneration policies to ensure

these are aligned with the company’s strategy and linked to individual

performance.


About the social, ethics and transformation committeeThe members of the social, ethics and transformation committee

are:


T Mboweni (chair)

BA, MA, CD(SA) Independent

MP Malungani BCom Non-executiveT Leaf-Wright Chartered Institute

of SecretariesIndependent

During the year Mr Mboweni was appointed as the chairman of this

committee and Mr Leaf-Wright as a new member. All members are

non-executive directors.


board and reviewed annually. The chairperson reports to the board

on activities and recommendations made by the committee and the

latest minutes of committee meetings are included in board packs.

In line with its terms of reference, the committee’s objectives are to

assist the board in monitoring PPC’s activities – against relevant

legislation, other legal requirements or prevailing codes of best

practice – on matters relating to:

Social and economic development

Corporate citizenship

Transformation

The environment

Health and public safety

Stakeholder relationships

Labour and employment

The committee reported on its activities for the review period at the

board meeting in November 2015. At this meeting, the board

confirmed that the committee has complied with its terms

of reference.

T Mboweni (chair)

BA, MA, CD(SA) Independent

MP Malungani BCom Non-executiveT Leaf-Wright Chartered Institute



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Operational investments (business unit growth objectives)

Approve investment decisions above threshold levels

Consider and evaluate the merits of investment proposals, impact

of the proposal on operational strategy and the likelihood of

achieving the targeted return from that investment

Monitor the performance of the group relative to the investment

objectives of management

Approve proposed divestments of assets in the operational

portfolio, terms of divestment transactions to be considered and

exit strategies

Other initiatives (improve efficiencies in a cost-effective way)

Approve initiatives with a total cost above threshold (total cost will

include all cost elements and should be calculated over the total

project lifespan)

Consider the strategic impact of the proposed initiative

Evaluate the financial merits in initiative business cases

PART IICorporate governance complianceThis section deals with disclosure on compliance with relevant and

prescribed corporate governance principles. For the convenience of

shareholders, all King III disclosures are made in one place to give the

reader a complete picture.

Compliance with King III on corporate governanceIn the year ended 30 September 2015 and to the date of this

document, we complied with the practices and applied the principles

of the King Report on Corporate Governance known as King III (the

code) unless indicated otherwise. The full review is available on the

company’s website at http://www.ppc.co.za/media/104058/2015-

report-on-the-application-of-the-king-iii-principles-vers-4.pdf.

We describe how we have applied those principles in this report,

notably, in the following section, together with the sections on risk

management, IT governance and directors’ remuneration.

About the investment committeeDuring the year, the board established the investment committee.

This replaces the ad hoc deal committee and has an extended

responsibility. See the details below.

The members of the Investment committee are:


MP Malungani (chair)

BCom Non-executive

N Goldin BCom, MBA IndependentT Leaf-Wright Chartered Institute


SK Mhlarhi CA(SA) Non-executiveTDA Ross CA(SA) IndependentBL Sibiya MBA Independent

During the year, Mr Leaf-Wright and Ms Golding were appointed as

new members.


board and performs all functions necessary to fulfil the role stated in

its terms of reference, including:

Strategic investments (to enhance long-term sustainable income)

Consider prospective acquisitions for their ability to enhance the

long-term sustainable income of the group

Evaluate the merits of investment proposals within strategic

guidelines, potential financial returns and risk of the investment

Evaluate/monitor the performance of strategic investments

included in the strategic investment portfolio, relative to the

original business plan

Approve proposed divestments from identified investments and

the terms of divestment transactions

Strategic alliances (to position PPC strategically for future markets/

benefits)

Consider prospective strategic alliances

Evaluate the merits of alliance proposals to consider the benefits

that could derive from the proposed positioning relative to the

imposed risks (especially reputation risk)

Evaluate/monitor the performance of strategic alliances relative to

original objectives

Approval to exit strategic alliances as well as associated conditions

for divestment

O

MP Malungani (chair)

BCom Non-executive

N Goldin BCom, MBA IndependentT Leaf-Wright Chartered Institute


SK Mhlarhi CA(SA) Non-executiveTDA Ross CA(SA) IndependentBL Sibiya MBA Independent



Compliance with mandatory principles for JSE main board issuersParagraph 3.84 of the JSE listings requirements stipulates that issuers must comply with specific requirements on corporate governance and

issuers do not have the option of explaining any non-compliance. PPC has complied with all mandatory principles to the extent indicated below.

PARAGRAPH REQUIRED PRACTICE COMPLIANCE

3.84(a) There must be a policy detailing procedures for appointment to the board of directors. Such appointments must be formal and transparent and a matter for the board of directors as a whole, assisted where appropriate by a nominations committee. The nominations committee must constitute only non-executive directors, of whom the majority must be independent (as defined in paragraph 3.84(f)(iii)), and should be chaired by the chairman of the board of directors.

The PPC board has appointed a nominations committee with a formal mandate that includes the obligation to ensure that “directors are appointed through a formal process”. In this regard, the committee has a formal policy in place.

3.84(b) There must be a policy evidencing a clear balance of power and authority at board of directors’ level, to ensure that no one director has unfettered powers of decision-making.

The board charter specifies the different roles of members to maintain a balance of power. The roles of the chairman and CEO are clearly defined to avoid role confusion. In addition, a guideline is in place that specifies the role of the chairman.

3.84(c) The issuer must have an appointed chief executive officer and a chairman and these positions must not be held by the same person. The chairman must either be an independent director, or the issuer must appoint a lead independent director, in accordance with the King Code.

See above. In addition, Mr Ross was appointed lead independent director.

3.84(d) All issuers must, in compliance with the King Code, appoint an audit committee and a remuneration committee and if required, given the nature of the business and composition of the board of directors, a risk and nominations committee. The composition of such committees, a brief description of their mandates, the number of meetings held and other relevant information must be disclosed in the integrated report.

The board has appointed an audit committee, remuneration committee, nominations committee, risk and compliance committee and social, ethics and transformation committee. Details are disclosed in the corporate governance review.

3.84(e) A brief CV of each director standing for election or re-election at a general meeting or the annual general meeting (which election or re-election may not take place at a meeting contemplated in section 60 of the Act) should accompany the notice of the general meeting or annual general meeting.

The current directors standing for re-election are included in the notice of AGM together with their CVs.

3.84(f) The capacity of each director must be categorised as executive, non-executive or independent, using the prescribed guidelines.

The nominations committee annually evaluates the independence of all directors.

3.84(g) All issuers must have an executive financial director. The JSE may, at its discretion, when requested to do so by the issuer and due to special circumstances, allow the financial director to be employed on a part-time basis only. This request must be accompanied by a detailed motivation by the issuer and the audit committee.

Ms Ramano has been appointed as the CFO of PPC and she is in the full-time employment of the company.

3.84(h) The audit committee must annually consider and satisfy itself of the appropriateness of the expertise and experience of the financial director. The issuer must confirm this by reporting to shareholders in its integrated report that the audit committee has executed this responsibility.

The audit committee has assessed the appropriateness of the expertise and experience of the CFO. Please refer to the report of the audit committee on page 65.

3.84(a) There must be a policy detailing procedures for appointment to the board of directors. Such appointments must be formal and transparent and a matter for the board of directors as a whole, assisted where appropriate by a nominations committee. The nominations committee must constitute only non-executive directors, of whom the majority must be independent (as defined in paragraph 3.84(f)(iii)), and should be chaired by the chairman of the board of directors.

The PPC board has appointed a nominations committee with a formal mandate that includes the obligation to ensure that “directors are appointed through a formal process”. In this regard, the committee has a formal policy in place.

3.84(b) There must be a policy evidencing a clear balance of power and authority at board of directors’ level, to ensure that no one director has unfettered powers of decision-making.

The board charter specifies the different roles of members to maintain a balance of power. The roles of the chairman and CEO are clearly defined to avoid role confusion. In addition, a guideline is in place that specifies the role of the chairman.

3.84(c) The issuer must have an appointed chief executive officer and a chairman and these positions must not be held by the same person. The chairman must either be an independent director, or the issuer must appoint a lead independent director, in accordance with the King Code.

See above. In addition, Mr Ross was appointed lead independent director.

3.84(d) All issuers must, in compliance with the King Code, appoint an audit committee and a remuneration committee and if required, given the nature of the business and composition of the board of directors, a risk and nominations committee. The composition of such committees, a brief description of their mandates, the number of meetings held and other relevant information must be disclosed in the integrated report.

The board has appointed an audit committee, remuneration committee, nominations committee, riskand compliance committee and social, ethics and transformation committee. Details are disclosed in the corporate governance review.

3.84(e) A brief CV of each director standing for election or re-election at a general meeting or the annual general meeting (which election or re-election may not take place at a meeting contemplated in section 60 of the Act) should accompany the notice of the general meeting or annual general meeting.

The current directors standing for re-election are included in the notice of AGM together with their CVs.

3.84(f) The capacity of each director must be categorised as executive, non-executive or independent, using the prescribed guidelines.

The nominations committee annually evaluates the independence of all directors.

3.84(g) All issuers must have an executive financial director. The JSE may, at its discretion, when requested to do so by the issuer and due to special circumstances, allow the financial director to be employed on a part-time basis only. This request must be accompanied by a detailed motivation by the issuer and the audit committee.

Ms Ramano has been appointed as the CFO of PPC and she is in the full-time employment of the company.

3.84(h) The audit committee must annually consider and satisfy itself of the appropriateness of the expertise and experience of the financial director. The issuer must confirm this by reporting to shareholders in its integrated report that the audit committee has executed this responsibility.

The audit committee has assessed the appropriateness of the expertise and experience of the CFO. Please refer to the report of the audit committee on page 65.


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PARAGRAPH REQUIRED PRACTICE COMPLIANCE

3.84(i) The board of directors must annually consider and satisfy itself on the competence, qualifications and experience of the company secretary. The issuer must confirm this by reporting to shareholders in its integrated report that the board of directors has executed this responsibility. This communication must specifically include details of the steps which the board of directors took to make this annual assessment and provide information that demonstrates the actual competence, qualifications and experience of the company secretary.

The board annually assess the competence qualifications and experience of the company secretary. Please refer to the corporate governance report on page 53.

3.84(j) The recommended practice of the King Report on Governance for South Africa highlights, inter alia, that the company secretary should maintain an arm’s length relationship with the board of directors and should ideally not be a director.

The company secretary is not a director of PPC and the board has confirmed that he has maintained an arm’s length relationship with the board.

Compliance with non-mandatory principlesParagraph 8.63(a) of the listings requirements deal with principles of the code that are not mandatory, and the King committee issued a practice

note on reporting in terms of this paragraph in 2013.

The King committee recommends that this assessment be documented and reported in the form of a register. The register should cover all

75 King III principles and include detail on how each principle is applied. This register should be a living document and be continually updated.

The King committee, after consulting with the JSE, has recommended that JSE issuers publish their complete King III application register on their

websites. The company’s register is published on its website http://www.ppc.co.za/media/104058/2015-report-on-the-application-of-the-king-

iii-principles-vers-4.pdf.

l h d l

3.84(i) The board of directors must annually consider and satisfy itself on the competence, qualifications and experience of the company secretary. The issuer must confirm this by reporting to shareholders in its integrated report that the board of directors has executed this responsibility. This communication must specifically include details of the steps which the board of directors took to make this annual assessment and provide information that demonstrates the actual competence, qualifications and experience of the company secretary.

The board annually assess the competence qualifications and experience of the company secretary. Please refer to the corporate governance report on page 53.

3.84(j) The recommended practice of the King Report on Governance for South Africa highlights, inter alia, that the company secretary should maintain an arm’s length relationship with the board of directors and should ideally not be a director.

The company secretary is not a director of PPC and the board has confirmed that he has maintained an arm’slength relationship with the board.


AUDIT COMMITTEE REPORTReport to shareholders on the activities of the audit committee for the year ended 30 September 2015The audit committee is a committee of the board of directors and in

addition to having specific statutory responsibilities to shareholders

in terms of the Companies Act, it assists the board by 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 of

directors, and has executed its duties in the past financial year in line

with these terms of reference.

CompositionThe committee consists of four independent non-executive directors:

NAME QUALIFICATION

PERIOD SERVED (YEARS)

TDA Ross (chairman) CA(SA) 7

B Modise CA(SA) 4

T Moyo CA(Z), CA(SA) 1

PG Nelson CA(SA) 1

The CEO, CFO, chief audit executive, senior financial executives of

the group and representatives from the external and internal auditors

attend committee meetings. The internal and external auditors have

unrestricted access to the audit committee.

MeetingsThe audit committee held four* scheduled meetings during the year,

with attendance shown below:

31 March 2015 All present

11 May 2015 All present

2 October 2015 All present

9 November 2015 All present

* A meeting was planned for 27 November to approve the integrated report

TDA Ross (chairman) CA(SA) 7

B Modise CA(SA) 4

T Moyo CA(Z), CA(SA) 1

PG Nelson CA(SA) 1

* A meeting was planned for 27 November to approve the integrated report

31 March 2015 All present

11 May 2015 All present

2 October 2015 All present

9 November 2015 All present

Statutory dutiesIn executing its statutory duties in the 2015 financial year, the

audit committee:

Nominated Mr Nyembe, from the audit firm, Deloitte & Touche

(Deloitte), 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 provide to the

company or which the external auditors may not provide

Pre-approved all non-audit service contracts with Deloitte

Received no complaints on the accounting practices and internal

audit of the company, the auditing of its financial statements,

internal financial controls, or other related matters; however, a

letter was received from the JSE in terms of its proactive monitoring

process whereby it requested information around disclosures in

the 2014 annual financial statements. The query was satisfactorily

addressed

Delegated dutiesIn executing its delegated duties and making its assessments (as

reflected in its terms of reference), the audit committee obtained

feedback from external and internal audit, and based on the

processes and assurances obtained, believes the accounting practices

are effective. Accordingly, the committee fulfilled all its obligations

including:

Financial statements

The committee reviewed the annual financial statements,

summarised annual financial statements, interim and preliminary

announcements, accompanying reports to shareholders and other

announcements on the company’s 2015 results to the public.

Integrated reporting

Recommended to the board to 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

COMMITTEE REPORTS


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Financial function

The committee has reviewed the expertise, resources and

experience of the company’s finance function, and confirms this

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 practices are effective

Oversight of risk management

The committee engages with the risk and compliance committee to

ensure adequate understanding of risk management processes.


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

material internal financial controls are effective

Combined assurance

During the year, further progress has been made to align the

combined assurance model with the enhanced risk framework of

the group. This review will only be completed in 2016.

Regulatory compliance

The audit committee has complied with all applicable legal and

regulatory responsibilities.

On behalf of the audit committee

Tim Ross (chairman)

17 November 2015

Internal audit

Took responsibility for the performance assessment of

Mr Semenya, chief audit executive

Approved the internal audit plan and changes to the plan and

satisfied itself that the audit plan makes provision for effectively

addressing 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

Risk management

The committee is an integral component of the risk management

process and specifically reviewed:

Financial risks

Financial reporting risks


Fraud risks as they 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, recommended to the board that Deloitte should be

reappointed for 2015, with Mr Nyembe nominated as the

registered auditor

Determined the fees to be paid and the terms of engagement of

the auditor

Ensured 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.


COMMITTEE REPORTS CONTINUED

RISK REPORT TO SHAREHOLDERS

IntroductionThe main objective of risk management at PPC is to ensure sustainable growth in all our businesses and promote a proactive approach in evaluating, resolving and reporting risks associated with our businesses.

To achieve the main objective, management has established a structured and disciplined approach to risk management, articulated in the policy statement:To ensure protection of shareholder value through the establishment of an integrated risk management framework/system for identifying, assessing, mitigating, monitoring, evaluating and reporting risks.

This policy statement was developed in 2014 in the context of the growth strategy, current business profile and new business endeavours, and is meant to ensure continuity of business and protecting the interests of investors. Therefore it covers all activities in the PPC group and events outside the company that have a bearing on the group’s businesses.

ResponsibilitiesThe board is accountable to shareholders for the governance of risk and ensuring the company’s strategy and business plans have properly considered and evaluated associated risks.

The board has delegated responsibility to evaluate the risk management process, effectiveness of risk management activities, key risks facing the company and appropriate responses to its risk and compliance committee.

The responsibility to design, implement and monitor the risk management plan has been delegated to management. The risk management plan aims to ensure that the associated policy is

implemented and that risk management processes are embedded in all the organisation’s practices and business procedures. The risk management process includes five activities:

ESTABLISHING CONTEXT

COMMUNICATION AND CONSULTATIONMONITOR AND

REVIEW

RISK MITIGATION

RISK ASSESSMENT

Management monitors risk management through continuous measurement and reporting of the company’s risk management performance to the risk and compliance committee. It also ensures resources are available to assist those accountable for managing risk. Control assurance focuses on continuously improving the underlying quality and sustainability of the company’s business activities.

RESPONSIBILITIES AND REPORTING

BUSINESS UNITGeneral managers, country managers

and project managers

EXECUTIVE COMMITTEEFunctional and

operational executives

BOARDRisk and compliance

committee

UNIT-SPECIFIC RISK Develop business unit risk registers

and profilesMonitor risk responsesGeneral risk awareness

RISK MANAGEMENTDevelop annual risk plans

Consolidate the business and functional risk registers

Review the corporate risk exposure

Monitor risk management

RISK GOVERNANCEApprove risk policy

Approve risk frameworkApprove annual risk management plans

Monitor progress on risk Review effectiveness of risk

assessments


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PPC’s risk management maturity journeyPPC’s historical approach to risk management has been reviewed in recent years within the context of its expansion strategy. Following this revision, enterprise risk management (ERM) maturity can be tracked from implementation of the revised risk management processes in 2014 to an optimised risk management process, fully aligned to business strategy. This is a long-term process that requires much management time and effort to move between each ERM maturity stage. Management, under the leadership of the chief executive officer, is committed to reaching the state of “optimised” by the end of 2016.

Achieving this level of ERM maturity will require that all business units in the PPC group should reach the same maturity level for risk assessment and response management by the target date. The maturity tracking model is shown below.

2016 TARGET

CURRENT

MATURITY MODEL

INITIAL

management strategy

standards, tools and techniques

INFORMAL

“risk-specific”

integration

an event with negative consequences

techniques without formal application of standards

between “risks” and “hazards”

GOVERNANCE-DRIVEN

framework, programme statement and policy

assessments

all risk types not approached uniformly

INTEGRATED AND CHANGE-DRIVEN

management approach to risk

management across all units

managed in a uniform system

uncertainty and linked to objectives

performance-based standards

INTELLIGENT AND OPTIMISED

approach

and informed decision-making

systems integrated

embedded in culture

understanding of standards, tools and techniques

Group functional risk sessions were facilitated by group riskAn SA business risk register was compiled with the local business team and the PPC executive risk workshop facilitated in October 2015. Follow-up meetings have been scheduled to progress this work

Activities in general risk management included:The risk policy and framework were extensively updated and submitted to the November 2014 risk and compliance committee meeting for approval, which was given. The risk management plan was approved for 2015 Insurance underwriting surveys at all PPC sites were facilitated in the first half of 2015 as part of the insurance renewal programmeThe annual rail safety permit submission was compiled and sent to the regulator in December 2014, with the permit issued in February 2015. An audit on the PPC human factor management system was conducted by the regulator at group level and no major findings were logged The risk self-assessment programme was planned, all audit files reviewed, updated and distributed to the sites. The audit programme was managed and the audits conductedThe DRC management team was assisted in compiling an emergency evacuation plan

Achievements in 2015During the review period, a risk management software solution (SAP GRC) was implemented for the group. In December 2014, all site champions and risk managers were trained on the new system. The user environment was tested and went live later that month, with all risk registers loaded into the system by the end of February.

PPC internal audit commissioned an audit on the implementation of phase 1 of the project, which found that project implementation had been without flaws and objectives had been achieved.

The time devoted to this implementation is paying off. Risk awareness has improved substantially, driven by the CEO who has assisted group risk in its work.

Risk assessment activities for the year included:Monthly updates of expansion project risk registers, mostly in group risk facilitated workshopsQuarterly site updates facilitated by risk managers. The operations of lime, Zimbabwe, CIMERWA and aggregates were facilitated by group risk annually while other reviews were managed locally


The compliance framework has been established by management (closely related to the ethics and risk management functions) to manage compliance risk in the PPC group. In executing this responsibility, it relies on the assistance of management teams from all subsidiaries and business units and designated unit compliance officers.

PPC’s universe of legislationSouth AfricaWith the assistance of the compliance and legal department, a register of legislation applicable to PPC or a specific business unit was identified. The register also indicates:

Regulators responsible for enforcing the legislationBasic content and scope of the legislationAnalysis of the impact of legislationDetails of penalties for non-compliance

COMPLIANCE REPORT TO SHAREHOLDERS

As a governance principle, the board ensures PPC complies with applicable laws and considers non-binding rules, codes and standards.

In the group, this responsibility has been delegated to the risk management and compliance committee. This committee’s responsibilities include monitoring compliance issues, approving the compliance policy, ensuring it is observed and that compliance risk is reported (refer to the corporate governance report for more detail).

Management is responsible for implementing the compliance policy and the day-to-day management of compliance risks. This includes responsibility for ensuring appropriate remedial or disciplinary action is taken if breaches are identified.

PPC CODE OF ETHICS, POLICIES, GUIDELINES AND GOVERNANCE

COMMUNICATION AND REPORTING

PREVENTION

board

compliance officers

compliance

short-term incentive scheme of the group

DETECTION

compliance risks

procedures

random audits both internal and external

RESPONSE

findings

compliance performance

To review our regulatory universe for updates, amendments and repeals to South African legislation, we appointed a reputable firm of attorneys. In recent months, we have started using online application software that automatically updates our universe of legislation and sends out regulatory alerts of significance to all unit compliance officers.

Rest of AfricaSimilarly external firms have been appointed to update our regulatory universes for our operations in Zimbabwe, Botswana, Rwanda and the DRC. This process is backed by training from the group and centred around formalising processes and compliance.



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Legislation watchlist

CURRENT WATCHLIST OF PPC SA

The National Water Amendment Act has been promulgated and came into operation on 2 September 2014, the same date as the National Environmental Laws Amendment Act 2014.

Draft National Pollution Prevention Plans published in terms of the National Environmental Management: Air Quality Act 39 of 2004.

The National Environmental Management Laws Amendment Act 25 of 2014 was signed by the president. The Act seeks to amend various sections of the National Environmental Management Act 1998; National Environmental Management: Waste Act 2008; and National Environmental Management Amendment Act 2008.

Draft National Environmental Laws Amendment Bill 2015.

Draft National Greenhouse Gas Emission Reporting Regulations.

Carbon Budgets and Desired Emission Reduction Objective (Deros).

Employment Equity Amendment Act.

Draft Carbon Tax bill.

The speed of change in environmental legislation has been a challenge for the cement industry. PPC continues to engage extensively on legislation that could affect our business. Current engagements have focused on air quality, water issues at national and local level, climate change and waste issues including definitions of waste.

The following compliance initiatives are worth mentioning:

PoPI compliance trackerThe long-awaited Protection of Personal Information (PoPI) Act was finally signed into law by the president toward the end of last year. Since we have a responsibility to comply with the eight “processing conditions” of the Act, a number of staff members from human resources, procurement, finance, governance, legal and IT attended a full-day workshop.

We are currently working with IT to ensure all policies and data systems are updated and aligned to ensure compliance.

Weighbridge complianceWith the axle-weighting legislation in place, we have implemented new software at all sites, excluding Port Elizabeth. The plan is to complete the project which will include a post-implementation review at some sites and complete the Port Elizabeth installation by 30 November 2015.

Competition law trainingSince the introduction of an enhanced online competition law training system, we have reached all sites with great success. The online programme is focused on giving our employees sufficient knowledge to identify and avoid competition law concerns that may arise. The training covers Competition Commission investigations, creating a competition law manual, employee policy directive and competition law updates.

Case studies and assessment tests enable participants to understand the issues and engage with the relevant legal provisions. At the end of each module, participants complete multiple choice questions.

Centralised policy systemAs part of our ongoing compliance projects, we are centralising and standardising all company policies. This will ensure all employees in the PPC group have ready access to well-developed and understandable policies.

Bridgette ModiseChairman of the risk and compliance committee17 November 2015


PPC REMUNERATION REPORT

Dear shareholderI am pleased to present the remuneration committee’s report for the year ended September 2015, highlighting some of the key issues and amendments which the remuneration committee considered during the year. This report addresses in more detail the company’s overall remuneration policy and particularly executive remuneration, both fixed and variable elements, as well as fees paid to non-executive directors.

The year has been challenging for the company and indeed the construction industry. Market growth was subdued with a limited number of major infrastructure projects while market supply and competition increased significantly due to a combination of new entrants and the importing of cement. The company also underwent a number of robust corporate challenges resulting in changes to the board and management. Given these challenges, it was important for the remuneration committee to reflect on shareholder views, the delivery of sustained value and the attraction and retention of key skills at all levels within the organisation.

The short-term incentive structures were also reviewed with the aim of widening the performance criteria to include additional financial and non-financial drivers integral to the creation of sustained long-term value.

The long-term incentive structures were also reviewed to include share appreciation rights to leverage the value of these incentives and drive performance, particularly with regard for the need to deliver the pipeline of new projects. With this in mind, depending on grade, up to 75% of the long-term share awards in 2015 constituted share appreciation rights with performance criteria.

The CEO was granted additional long-term incentives in 2015 in recognition of his role in delivering on future business plans and strategy and also serves as a retention incentive.

The remuneration committee believes that the remuneration policy is appropriate for the company having regard to the operating environment and opportunities. The remuneration committee, however, remains alert to views and developments which strive to improve alignment and increase long-term performance and sustainability.

The remuneration committee has been mindful of the general investor calls for clear reporting on the alignment between the group’s strategy and incentive performance conditions and overall performance relative to the set performance conditions. The remuneration committee has refined its reporting in response to investor feedback and believes that the changes set out in the report are appropriate. We have also considered the concerns and queries raised by our shareholders, and we provide the remuneration committee’s responses at the end of this report (page 81).

The report this year is again presented in two parts, with the first part setting out the company’s remuneration philosophy and policy, and the second part detailing the implementation of the policy in the 2015 financial year.

The remuneration committee is satisfied that the principles laid down by the King Code of Corporate Governance for South Africa (King III) and the Companies Act 2008 (the Act) have been adhered to, unless otherwise stated in this report.

Peter NelsonChairman of the remuneration committee17 November 2015



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PART 1: REMUNERATION POLICYGovernance and the remuneration committeeRole of the remuneration committee

As a committee of the board, the remuneration committee assists in

setting the company’s remuneration policy and directors’ and

prescribed officers’ remuneration. The remuneration committee

operates according to its terms of reference, which are published on

the company’s website.

Members of remuneration committee

Members are non-executive directors, and the majority are

independent as defined by King III. The committee held four

meetings in 2015, with attendance shown on page 55.

The chief executive, chief financial officer and head of human

resources attend meetings by invitation, to assist the committee in

executing its mandate. Other members of executive management

can be invited when appropriate. No executives participate in the

vote process or are present at committee meetings when their own

remuneration is discussed or considered.

The remuneration committee uses the services of PwC as standing

independent advisers.

Remuneration committee terms of reference

Please refer to page 60 for the remuneration committee’s terms

of reference

OUR REMUNERATION POLICY

MAXIMUM REWARDS ARE ACHIEVED ONLY FOR HIGH PERFORMANCE AND HIGH SHAREHOLDER RETURNS

Ensure employees are rewarded fairly and appropriately

Attract, retain and motivate individuals with the necessary calibre and behaviour

FIXED PAY

Appropriate to recruit and retain, but no in-built premium

for performance

SHORT-TERM INCENTIVES

Aligned to financial performance and strategic

priorities

LONG-TERM INCENTIVES

Aligned to shareholder returns

Key principles of the remuneration policy

PPC recognises that one of its competitive sources of value is its employees, and believes that in order to meet business objectives, the

remuneration and reward policies and practices must be based on the following principles:

Encourage organisational, team and individual performance

Designed to drive a high-performance culture

Based on the premise that employees should share in the success of the company

Be designed to attract and retain high-calibre individuals with the optimum mixture of competencies

Takes into account industry benchmarks and practices of comparable companies of a similar size

The policy conforms to King III and is based on the following principles:

Remuneration practices are aligned with corporate strategy

Total rewards are set at levels that are competitive in the relevant market

Incentive-based rewards are earned by achieving demanding performance conditions consistent with shareholder interests over the short,

medium and long term

Incentive plans, performance measures and targets are structured to operate effectively throughout the business cycle

The design of long-term incentives is prudent and does not expose shareholders to unreasonable financial risk



Remuneration of executive directors and prescribed officersElements of remuneration

ELEMENT DEFINITION

Fixed Total guaranteed pay (TGP)

The fixed element of remuneration is referred to as total guaranteed pay and includes salary, car allowance, retirement, life insurance and medical aid contributions.

Variable Short-term incentives (STIs)

An annual short-term incentive is paid in cash and provides executive directors and prescribed officers with an incentive to achieve the company’s short and medium-term goals, with payment levels based on both company and individual performance.

Long-term incentives (LTIs)

Long-term incentives comprise instruments, awarded under two plans: Share appreciation rights (SARs) awarded under the PPC share appreciation right scheme (SAR scheme)Forfeitable shares awarded under the PPC forfeitable share plan (FSP)

A mix of these instruments is awarded and where used for performance, the vesting is subject to company performance vesting conditions and where used for retention, continued employment is used as a vesting condition.

Previously, the company also awarded instruments under a restricted share unit scheme (RSU), which was a cash settled performance-linked share scheme.

The total remuneration for the CEO, CFO and other prescribed officers (on average) in three different performance scenarios is depicted in the

graphs below. A graph of the actual remuneration outcomes for the year appears on page 78 of Part 2 of this report.

BELOW EXPECTED PERFORMANCE (R000)7 000

6 000

5 000

4 000

3 000

2 000

1 000

0Prescribed officers Chief financial officer Chief executive officer

TGP STI LTI** Indicative expected value of retention FSPs on grant date.

AT EXPECTED PERFORMANCE (R000)15 000

12 000

9 000

6 000

3 000


STI* LTI** * Based on an expected 65% personal score.**Indicative expected value on grant date.

TGP

MAXIMUM PERFORMANCE (R000)18 000

16 000

14 000

12 000

10 000

8 000

6 000

4 000

2 000


TGP STI LTI** Indicative expected value on grant date assuming full vesting.

Fixed Total guaranteed pay (TGP)

The fixed element of remuneration is referred to as total guaranteed pay and includes salary,car allowance, retirement, life insurance and medical aid contributions.

Variable Short-term incentives (STIs)

An annual short-term incentive is paid in cash and provides executive directors and prescribed officers with an incentive to achieve the company’s short and medium-term goals, with payment levels based on both company and individual performance.


Long-term incentives comprise instruments, awarded under two plans: Share appreciation rights (SARs) awarded under the PPC share appreciation right scheme (SAR scheme)Forfeitable shares awarded under the PPC forfeitable share plan (FSP)

A mix of these instruments is awarded and where used for performance, the vesting is subject to company performance vesting conditions and where used for retention, continued employment is used as a vesting condition.

Previously, the company also awarded instruments under a restricted share unit scheme (RSU), which was a cash settled performance-linked share scheme.


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Total guaranteed pay (TGP)The company generally pays fixed remuneration at the median.

Monthly pay and benefits are targeted to be competitive for

comparable roles in companies of similar complexity and size, taking

cognisance of the performance of the employee concerned. Market

data is used to benchmark salary and benefits and to inform

decisions on salary adjustments. Salary increases are not guaranteed

and are adjusted annually at financial year-end based on market

benchmarks, market inflation, and company affordability,

performance and to address market anomalies.

Professional advisers appointed by the remuneration committee

provide benchmark information.

In the reporting period, a new listed comparator group was selected

to benchmark executive remuneration. The grouping was based on

the basic materials, industrials and consumer goods sectors on the

JSE. In addition, market capitalisation and companies with an African

and international reach were also considered. The selected peer

group selected comprises: Omnia Holdings Limited, Lonmin plc,

AECI Limited, KAP Industrial Limited, RCI Foods Limited, Tongaat

Hulett Limited, Sibanye Gold Limited, African Rainbow Minerals

Limited, Northam Platinum Limited, Barloworld Limited, Sappi

Limited, Nampak Limited, AVI Limited, Gold Fields Limited and

Exxaro Resources Limited.

BenefitsThe following benefits are provided as part of TGP:

Participation in the PPC Retirement Fund is compulsory for all

permanent employees. The fund is an in-house defined

contribution fund and also provides risk cover for death

and disability

All employees are required to belong to a choice of company-

sponsored external medical aids or to be a member of their

spouse/life partner’s medical aid

All employees are covered for death, medical and disability

expenses as a result of an accident

Employees who need to use their motor vehicle in their duties

can elect to allocate an appropriate portion of their TGP as a

car allowance

Short-term incentives (STIs)

Purpose To reward employees for contributing in the delivery of the company’s financial and strategic objectives. The STI scheme has been designed to be easy to understand, and to pay out fairly, and be differentiated according to personal performance, while being linked to PPC’s overall financial performance.

Participation Employees participate in the STI and levels of participation and minimum qualifying targets (thresholds) vary according to employee grades, with higher financial thresholds for senior executives.

Operation The STI scheme is measured over a one-year period, using the following formula:

Annual TGP x STI limit % x company performance % x personal performance %.

The remuneration committee retains the right to vary the terms of the STI in special circumstances.

STI limit percentage The STI limit varies according to grade such that in the case of executive directors and prescribed officers the STI is capped at 140% of TGP.

Company performance measures and percentages

A combination of financial (70%) and non-financial (30%) business drivers is used. The financial drivers include EBITDA, normalised HEPS and the cash-conversion ratio. The non-financial drivers relate to transformation, sustainability and safety. Targets and thresholds are set annually for each of the drivers with the aim of delivering the overall business plan and essential elements of long-term sustainability.

The company performance is measured relative to the above targets can range from 0% (threshold performance) to 150% (stretch performance).

No bonus is payable below threshold performance.

Personal performance measures and percentages

Personal performance is measured through personal scorecards which contain objective and subjective measures, including financial and non-financial objectives, and cover all aspects of the individual’s role that are important to the creation of value and sustainability.

Personal performance ranges from 50% (threshold performance) to 120% (stretch performance). A personal performance factor of less than 50% will result in no bonus being payable, irrespective of the company performance outcome.

Changes for 2016 The sustainability measures are likely to be supplemented and the maximum levels of participation for executives will be reviewed in line with industry standards.

Purpose To reward employees for contributing in the delivery of the company’s financial and strategic objectives. The STI scheme has been designed to be easy to understand, and to pay out fairly, and be differentiated according to personal performance, while being linked to PPC’s overall financial performance.

Participation Employees participate in the STI and levels of participation and minimum qualifying targets (thresholds) vary according to employee grades, with higher financial thresholds for senior executives.

Operation The STI scheme is measured over a one-year period, using the following formula:

Annual TGP x STI limit % x company performance % x personal performance %.

The remuneration committee retains the right to vary the terms of the STI in special circumstances.

STI limit percentage The STI limit varies according to grade such that in the case of executive directors and prescribed officersthe STI is capped at 140% of TGP.

Company performance measures and percentages

A combination of financial (70%) and non-financial (30%) business drivers is used. The financial drivers include EBITDA, normalised HEPS and the cash-conversion ratio. The non-financial drivers relate to transformation, sustainability and safety. Targets and thresholds are set annually for each of the driverswith the aim of delivering the overall business plan and essential elements of long-term sustainability.

The company performance is measured relative to the above targets can range from 0% (thresholdperformance) to 150% (stretch performance).

No bonus is payable below threshold performance.

Personal performance measures and percentages

Personal performance is measured through personal scorecards which contain objective and subjective measures, including financial and non-financial objectives, and cover all aspects of the individual’s role that are important to the creation of value and sustainability.

Personal performance ranges from 50% (threshold performance) to 120% (stretch performance). A personal performance factor of less than 50% will result in no bonus being payable, irrespective of thecompany performance outcome.

Changes for 2016 The sustainability measures are likely to be supplemented and the maximum levels of participation forexecutives will be reviewed in line with industry standards.



The company introduced the forfeitable share plan (FSP) in 2011/2012 with awards to executive directors comprising both performance shares

(75%) and retention shares (25%).

Prior to that, the company operated a cash settled share appreciation right (SAR) scheme, under which SARs were granted. As leveraged

instruments, the SARs provided employees with the right to receive the appreciation in the share price between grant and exercise price.

The company reviewed its LTIs during the course of 2014/2015. The outcome of the review indicated that the FSP in isolation did not provide

adequate incentive or leverage to participants, and it was consequently decided to use an equity settled SAR scheme alongside the FSP.

This revised approach recognises the company’s robust business plans and growth opportunities and the importance of delivering on these

plans for the long-term benefits of all shareholders. The policy applicable to both instruments is explained below.

Purpose To align participants with shareholders over the long term by making performance awards, the vesting of which is subject to company performance conditions and continued employment, and to act as a retention tool by making retention awards, the vesting of which is subject to continued employment.

Operation and instruments

Annual awards are made, using a combination of:Share appreciation rights – these are rights given to employees to the extent of the appreciation in the share price between the grant date and exercise date Forfeitable shares – these are free shares with full voting and dividend rights from the award date

Performance versus retention instruments

The policy for executive directors and prescribed officers is that at least 75% and 50% respectively of the total LTI award should be performance based.

In the case of executive directors and prescribed officers, the SAR scheme is currently used to incentivise performance, whilst the FSP is used to address retention. The mix between FSP and SAR awards is as follows:

PERFORMANCE % (SARs)

RETENTION % (FSPs)

Executive directors 75 25

Prescribed officers 50 50

Performance measurement

Appropriately stretched performance conditions are set by the remuneration committee each time an award is made, measured over a three-year performance period. In line with best practice, vesting is applied on a sliding scale as follows:

30% vesting occurs at threshold performance 100% vesting occurs at target performanceLinear vesting is applied between threshold and target with no vesting below threshold

Vesting periods Awards of forfeitable shares will vest in year three, subject to continued employment from the date of award.

SAR awards will vest in year three to the extent that the performance conditions have been satisfied, and will lapse if not exercised by the sixth anniversary of the award date. SARs are also subject to continued employment from the date of award until exercised.

Dilution The LTIs are not dilutive as they can only be settled by purchasing shares on the market.

Changes for 2016 No changes are being considered to the framework; however, performance measures are subject to review at the time of making new awards.

Purpose To align participants with shareholders over the long term by making performance awards, the vesting of which is subject to company performance conditions and continued employment, and to act as a retention tool by making retention awards, the vesting of which is subject to continued employment.

Operation and instruments

Annual awards are made, using a combination of:Share appreciation rights – these are rights given to employees to the extent of the appreciation in the share price between the grant date and exercise date Forfeitable shares – these are free shares with full voting and dividend rights from the award date

Performance versus retentioninstruments

The policy for executive directors and prescribed officers is that at least 75% and 50% respectively of the total LTI award should be performance based.

In the case of executive directors and prescribed officers, the SAR scheme is currently used to incentivise performance, whilst the FSP is used to address retention. The mix between FSP and SAR awards is as follows:

PERFORMANCE % (SARs)

RETENTION% (FSPs)

Executive directors 75 25

Prescribed officers 50 50

Performance measurement

Appropriately stretched performance conditions are set by the remuneration committee each time an award ismade, measured over a three-year performance period. In line with best practice, vesting is applied on a sliding scale as follows:

30% vesting occurs at threshold performance 100% vesting occurs at target performanceLinear vesting is applied between threshold and target with no vesting below threshold

Vesting periods Awards of forfeitable shares will vest in year three, subject to continued employment from the date of award.

SAR awards will vest in year three to the extent that the performance conditions have been satisfied, and will lapse if not exercised by the sixth anniversary of the award date. SARs are also subject to continued employment from the date of award until exercised.

Dilution The LTIs are not dilutive as they can only be settled by purchasing shares on the market.

Changes for 2016 No changes are being considered to the framework; however, performance measures are subject to review at the time of making new awards.



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Summary of main changes to the remuneration policy

In 2015, the following material changes were made to the

remuneration policy:

STI parameters have been updated to improve alignment to

shareholders, and now include strategic non-financial elements

The LTI was reviewed in detail and an equity settled SAR scheme

introduced to be used alongside the FSP

LTI performance conditions were reviewed and now include a

combination of earnings, cash, return and strategic measures

The company is moving to the Paterson grading system and the

process is expected to be completed by December 2016

PART 2: IMPLEMENTATION OF POLICIES FOR THE REVIEW PERIOD

during the yearThe main issues considered and approved by the remuneration

committee for 2015 were:

Review of the remuneration policy

Approval of the remuneration committee work plan for 2015

Review of best practice relating to executive remuneration

Approval of the remuneration report

Review of shareholder feedback following the annual general

meeting

Annual salary review and job grading for executive directors and

prescribed officers and ratification of the overall salary increase

percentage for other staff

Approval of the short-term incentive targets for executive directors

and prescribed officers and all other staff

Approval of the short-term incentive outcomes for 2015

In-depth review of the LT

LTI award for the incoming CEO

Approval of the 2015 LTI awards for all participants and

performance conditions to ensure shareholder alignment

Review of benefits offered to all employees

Review of executive employment agreements

Review of fees payable to non-executive directors

2015 total guaranteed pay (TGP) adjustmentsExecutive directors and prescribed officers received on average a 6%

adjustment to TGP. This compares to an increase percentage range

of between 6% and 7% for all other employees.

BEE schemes

South African employees participated in a BBBEE scheme in 2008

and a second scheme in 2012. Certain directors and prescribed

officers also participated in these schemes as detailed on page 81.

Employment contracts – executive directors

The remuneration committee, subject to circumstances, will maintain

the following policy for executive directors’ employment contracts:

All agreements should contain a restraint of trade clause

Contracts should not commit the company to pay on termination

arising from the director’s failure to perform agreed duties

Employment contracts should not contain balloon payments

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. The newly appointed CEO is an exception

having an optional six-month compensation in the event that he

decides to resign post the change in control

Appointment of non-executive directors

Non-executive directors appointed during the year are subject to

election by shareholders at the first annual general meeting following

their appointment, after which they must retire according to the

board rotation plan.

Non-executive director fees

The chief executive officer recommends the non-executive director

fee structures to the remuneration committee for onward approval

by the board, after obtaining input from its independent advisers

regarding benchmark studies based on the same 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 remuneration committee’s view, are

sufficient to attract board members with the appropriate level of skill

and expertise. Fees are not automatically increased, but as a principle,

are aimed at the median of the selected comparator group.

Non-binding advisory vote

The remuneration policy contained in Part 1 will be subject to a non-

binding, advisory vote at the annual general meeting to be held in

January 2016. The remuneration policy is reviewed annually as the

company strives to achieve the highest levels of alignment and

performance and accordingly shareholder views are central to

these reviews.


2015 STI outcomesThe STI outcomes for executive directors and prescribed officers have been calculated as follows:

PERFORMANCE MEASURE WEIGHTING ACHIEVEMENT

OUTCOMEDJ

CASTLEMMT

RAMANOPRESCRIBED

OFFICERS1

Financial performance targets:EBITDA 25% 0 0 0 0Normalised HEPS 25% 0 0 0 0Cash conversion ratio 20% 150% 30% 30% 30%Non-financial performance targets:Transformation (BEE level) 10% 100% 10% 10% 10%Sustainability (dust emissions) 10% 150% 15% 15% 15%

Safety (LTIFR) 10% 0 0 0 0

Company performance 55% 55% 55%x x x

Personal performance 70% 66% 61%

Total (% of maximum STI opportunity) 39% 36% 34%x x x

Maximum STI opportunity (% of TGP) 140% 140% 140%x x x

Board discretionary factor2 86% 86% 86%x x x

Annual TGP (R000) 3 9943 4 149 2 477

STI (R000) 1 853 1 821 1 0011 Prescribed officers shown as an average. Personal performance scores ranged from 57% to 65%.2 Based on an assessment of the quantum of the STI giving due consideration to company performance, previous STIs and other relevant factors.3 Annual TGP of R5 325 000 pro rated.

Executive directors and prescribed officers received the following STI for the period:

STI R000

PERCENTAGE OF TGP

Executive directors

DJ Castle 1 853 35MMT Ramano 1 821 44

Prescribed officersPL Booysen 854 41HN Buthelezi 1 140 41JT Claassen 1 289 41AC Lowan 782 41KPP Meijer 1 244 40FK Molefe 789 38T Sibisi 1 000 43JHDLR Snyman 869 41JJ Taljaard 1 047 38

PERFORMANCE MEASURE WEIGHTING ACHIEVEMENT

1 Prrescesc ibribrib deded ffioffiofficercers ss shhowhown an as as an an aververageage P. Persersonaonall pl p ferferformormancance se scorcoreses ranran dgedged ffrfromom 57%57% toto 6565%%.2 Based on an assessment of the quantum of the STI giving due consideration to company performance previous STIs and other relevant factorsr

Financial performance targets:EBITDA 25% 0 0 0 0Normalised HEPS 25% 0 0 0 0Cash conversion ratio 20% 150% 30% 30% 30%Non-financial performance targets:Transformation (BEE level) 10% 100% 10% 10% 10%Sustainability (dust emissions) 10% 150% 15% 15% 15%

Safety (LTIFR) 10% 0 0 0 0

Company performance 55% 55% 55%x x x

Personal performance 70% 66% 61%

Total (% of maximum STI opportunity) 39% 36% 34%x x x

Maximum STI opportunity (% of TGP) 140% 140% 140%x x x

Board discretionary factor2 86% 86% 86%x x x

Annual TGP (R000) 3 9943 4 149 2 477

STI (R000) 1 853 1 821 1 001

Executive directors

DJ Castle 1 853 35MMT Ramano 1 821 44

Prescribed officersPL Booysen 854 41HN Buthelezi 1 140 41JT Claassen 1 289 41AC Lowan 782 41KPP Meijer 1 244 40FK Molefe 789 38T Sibisi 1 000 43JHDLR Snyman 869 41JJ Taljaard 1 047 38



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2015 LTIs awarded In 2015 the company granted a combination of SARs and FSP shares to executive directors and prescribed officers. The FSP shares were granted

as retention awards with continued employment as the vesting criteria, while the SARs were granted as performance awards, subject to

company performance conditions and continued employment. The usual vesting period of three years was reduced by three months in

recognition of the delays in issuing awards which arose when the company was under a JSE cautionary due to corporate action and was not

able to make the awards.

The SAR awards were subject to the following performance conditions:

CONDITIONWEIGHTING

%

THRESHOLD (30%

VESTING)

TARGET (100%

VESTING)

Growth in normalised basic HEPS 37,5 CPI CPI + GDPROIC 37,5 Real WACC Real WACC + 2,5%Growth in cash available from operations 5 CPI CPI + GDPExecution of SA business plan 10 85% achievement 100% achievementExecution of international business plan 10 85% achievement 100% achievement

The company is facing many challenges and opportunities and has several major local and international investments to bring on stream. The

successful delivery of these key strategic initiatives is important to both the long-term success and value of the company. The CEO is the driver

of these strategies and integral to success thereof. The remuneration committee was of the view that it would be beneficial to further

incentivise and secure the retention of the newly appointed CEO by way of granting additional SARs and FSP shares with a combined value of

R6 million, split 75%, 25% respectively. These awards are subject to the same performance and vesting conditions as the 2015 SAR and

FSP awards.

In 2015, executive directors and prescribed officers received a combination of SAR and FSP awards as indicated below:

BASIS OF AWARD

(EXPECTED VALUE

AS A % OF TGP)

PERFORMANCEAWARDS %

(SARs)1

RETENTIONAWARDS%

(FSPs)1

NUMBER OF PERFORMANCE AWARDS (SAR)

NUMBER OF RETENTION

AWARDS (FSP)

INDICATIVE EXPECTED VALUE ON

GRANT DATE R000

Executive directorsDJ Castle2 – – – 1 401 052 75 150 6 000 DJ Castle3 75% 75% 25% 932 600 50 000 3 993MMT Ramano3 60% 75% 25% 581 300 31 200 2 490MMT Ramano4 – – – – 25 700 513Prescribed officersPL Booysen 35% 50% 50% 114 400 18 400 735HN Buthelezi 35% 50% 50% 151 200 24 300 971JT Claassen 35% 50% 50% 148 800 23 900 955AC Lowan 35% 50% 50% 103 000 16 600 662KPP Meijer 35% 50% 50% 170 500 27 400 1 095FK Molefe 35% 50% 50% 114 400 18 400 735T Sibisi 35% 50% 50% 125 900 20 300 810JHDLR Snyman 35% 50% 50% 114 400 18 400 735JJ Taljaard 35% 50% 50% 151 000 24 300 970

1 The split between SAR and FSP is based on the indicative expected value at date of grant.2 CEO additional allocation as explained above.3 Annual allocation. 4 CFO additional allocation per employment contract.

Growth in normalised basic HEPS 37,5 CPI CPI + GDPROIC 37,5 Real WACC Real WACC + 2,5%Growth in cash available from operations 5 CPI CPI + GDPExecution of SA business plan 10 85% achievement 100% achievementExecution of international business plan 10 85% achievement 100% achievement

) ( ) ( ) ( ) ( )

1 Thhe se s liplipli bt bt betwetweeneen SASASARR aR a dndnd FSPFSPFSP iisis bbaba dsedsed onon hthth ie ie i dindindicatcatiiveive exexpecpec dtedted vavalluelue atat ddadatete fofof gragrantnt.2 CEO additional allocation as explained above

Executive directorsDJ Castle2 – – – 1 401 052 75 150 6 000 DJ Castle3 75% 75% 25% 932 600 50 000 3 993MMT Ramano3 60% 75% 25% 581 300 31 200 2 490MMT Ramano4 – – – – 25 700 513Prescribed officersPL Booysen 35% 50% 50% 114 400 18 400 735HN Buthelezi 35% 50% 50% 151 200 24 300 971JT Claassen 35% 50% 50% 148 800 23 900 955AC Lowan 35% 50% 50% 103 000 16 600 662KPP Meijer 35% 50% 50% 170 500 27 400 1 095FK Molefe 35% 50% 50% 114 400 18 400 735T Sibisi 35% 50% 50% 125 900 20 300 810JHDLR Snyman 35% 50% 50% 114 400 18 400 735JJ Taljaard 35% 50% 50% 151 000 24 300 970



Vesting of 2012 FSPs The FSP awards granted during 2012 comprised performance shares and retention shares. The performance condition required growth in HEPS from 2011 to 2014 to exceed growth in CPI over the three years by at least three percentage points. CPI grew by 18%, but HEPS only grew by 7%, with the result that none of the performance awards have vested. The retention awards have vested.

Total remuneration outcomes The actual remuneration outcomes for 2015 are illustrated alongside.

ACTUAL PERFORMANCE10 000

9 000

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0

STI LTI***

Prescribed officers* Chief financial officer Chief executive officer**

* Average TGP. ** Appointed 12 January 2015.*** Realised value of awards made in prior years.

TGP

Remuneration paid to executive directors and prescribed officers in 2015

SALARYR000

RETIRE-MENT

AND MEDICAL CONTRI-

BUTIONSR000

CAR ALLOW-

ANCER000

STIR000

LTI REALISED

R000OTHER

R000TOTAL

R000

Executive directorsDJ Castle1 3 520 420 – 1 853 – 2 5 795MMT Ramano 3 026 881 240 1 821 3 2482 11 9 227BL Sibiya3 862 – – – – – 862Prescribed officersPL Booysen 1 386 390 324 854 1374 6 3 097HN Buthelezi 2 434 291 50 1 140 – 7015 4 616JT Claassen 2 137 424 360 1 289 2154 1 0216 5 446AC Lowan 1 812 162 – 782 – 87 2 627KPP Meijer 2 235 663 232 1 244 2024 7895 5 365FK Molefe 1 832 268 – 789 – – 2 889RM Rein7 1 605 96 214 – – 378 2 293T Sibisi 2 315 310 – 1 000 – – 3 195JHDLR Snyman 1 766 217 117 869 2944 5 3 268JJ Taljaard 2 076 375 320 1 047 2074 2 4 027RS Tomes8 299 53 38 – – 288 678

1 Appointed 12 January 2015.2 Vesting of restricted share units granted in 2012.3 Reimbursement to permanent employer while performing the role of executive chairman for three months.4 Vesting of FSP with no performance conditions, granted in 2012.5 Restraint of trade payment.6 Restraint of trade payment and relieving allowance.7 Seconded from Safika Cement from March 2015, “Other” comprises secondment allowance.8 Resigned in October 2014; “Other” comprises leave pay.

1 Apppoiipointentedd 1d 12 J2 Januanuaryary 20201515.2 Vesting of restricted share units granted in 2012

Executive directorsDJ Castle1 3 520 420 – 1 853 – 2 5 795MMT Ramano 3 026 881 240 1 821 3 2482 11 9 227BL Sibiya3 862 – – – – – 862Prescribed officersPL Booysen 1 386 390 324 854 1374 6 3 097HN Buthelezi 2 434 291 50 1 140 – 7015 4 616JT Claassen 2 137 424 360 1 289 2154 1 0216 5 446AC Lowan 1 812 162 – 782 – 87 2 627KPP Meijer 2 235 663 232 1 244 2024 7895 5 365FK Molefe 1 832 268 – 789 – – 2 889RM Rein7 1 605 96 214 – – 378 2 293T Sibisi 2 315 310 – 1 000 – – 3 195JHDLR Snyman 1 766 217 117 869 2944 5 3 268JJ Taljaard 2 076 375 320 1 047 2074 2 4 027RS Tomes8 299 53 38 – – 288 678


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Remuneration paid to executive directors and prescribed officers in 2014

The executive directors’ and prescribed officers’ remuneration for the year ended 30 September 2014 was as follows:

SALARYR000

TGPRETIRE-

MENT AND

MEDICAL CONTRI-

BUTIONSR000

CARALLOW-

ANCER000

STIR000

LTI REALISED

VALUER0001

OTHERR000

DISCRE-TIONARY

BONUSR000

TOTALR000

Executive directorsMMT Ramano 2 899 813 240 – 4 904 2 605 9 463BL Sibiya2 – – – – – – – – Prescribed officersPL Booysen 1 390 348 323 – 265 3 318 2 647HN Buthelezi 2 117 259 120 – – 8 483 2 987JT Claassen3 1 836 354 410 – 370 1 152 548 4 670AC Lowan 1 249 118 – – – – 329 1 696KPP Meijer 1 928 592 232 – 423 6 606 3 787FK Molefe4 1 309 191 – – – – 381 1 881T Sibisi5 1 433 142 – – – – 412 1 987JHDLR Snyman 1 489 195 118 – – 3 478 2 283JJ Taljaard 1 965 354 320 – 432 5 479 3 555RS Tomes 1 930 316 260 – 322 7 – 2 835 A Wadee6 771 147 115 – 292 1 973 – 3 298 Past directorsP Esterhuysen7 227 36 27 – 3 020 3 787 – 7 097KM Gordhan8 4 439 563 – – 1 962 14 768 – 21 732

1 Arising from the 2011 RSU award, the 2011 FSP with no performance conditions, the final third of the 2009 RSU award and FSP awards that vested early for participants who terminated their services.

2 Following the resignation of Mr K Gordhan on 22 September 2014, Mr B Sibiya assumed an executive role in the company. Remuneration for services as an executive director started from 1 October.

3 Other payments include a relocation allowance (R152 000) and a payment in lieu of transfer costs (R1 000 000).4 Employed for nine months of the financial year.5 Employed for nine months of the financial year.6 Employed for seven months of the financial year. Other payments included annual leave (R117 000), severance pay (R1 322 000), 13th cheque (R28 000) and

Masakhane share units (R506 000).7 Employed for one month of the financial year. Other payments include severance pay (R3 472 164), annual leave (R100 739) and Masakhane shares (R214 159).8 Employed for 12 months of the financial year, but resigned in the last week of September 2014.

1 AriArisinisin fg fg fromrom ththth 2e 2e 2011011011 RSRSRSUU aU awarwarddd, ththethe 202020111111 FSPFSPFSP iwiwiththth nono perperfforformanmancece conconditditditiionionss, ththethe fifinfin lalal thithithi drdrd fofof ththethe 202020090909 RSURSURSU awaw dardard anand Fd Fd FSPSPSP awaawarrddsds ththathatt vt v testest deded earearllyly fforfor rrrrparticipants who terminated their services

Executive directorsMMT Ramano 2 899 813 240 – 4 904 2 605 9 463BL Sibiya2 – – – – – – – –Prescribed officersPL Booysen 1 390 348 323 – 265 3 318 2 647HN Buthelezi 2 117 259 120 – – 8 483 2 987JT Claassen3 1 836 354 410 – 370 1 152 548 4 670AC Lowan 1 249 118 – – – – 329 1 696KPP Meijer 1 928 592 232 – 423 6 606 3 787FK Molefe4 1 309 191 – – – – 381 1 881T Sibisi5 1 433 142 – – – – 412 1 987JHDLR Snyman 1 489 195 118 – – 3 478 2 283JJ Taljaard 1 965 354 320 – 432 5 479 3 555RS Tomes 1 930 316 260 – 322 7 – 2 835 A Wadee6 771 147 115 – 292 1 973 – 3 298Past directorsP Esterhuysen7 227 36 27 – 3 020 3 787 – 7 097KM Gordhan8 4 439 563 – – 1 962 14 768 – 21 732



Increase in non-executive director fees Non-executive directors’ fees are as approved by the previous annual general meeting and valid from that date until the next AGM. Following a benchmarking exercise, the board recommended a 6% increase. Please refer to the Notice of AGM for the approval of non-executive director fees.

Total emoluments to non-executive directors for the year ending 30 September 2015 were:

COMMITTEE

BOARD FEESR000

CHAIR-MAN FEESR000

NOMI-NATIONS

R000AUDIT

R000

RISK AND COM-

PLIANCER000

REMU-NERATION

R000

SOCIAL, ETHICS

ANDTRANSFOR-

MATIONR000

INVEST-MENTR000

SPECIAL MEETINGS

R000TOTAL

R000

DJ Castle1 50 – – 48 – – – 18 215 331N Goldin 223 – – – – 119 – 19 – 361ZJ Kganyago2 252 – – 37 – – – 18 480 787NB Langa Royds3 82 – 43 – – 108 72 – 332 637TJ Leaf-Wright 202 – – – 63 – 56 38 – 359MP Malungani 273 – – – – – 87 148 215 723T Mboweni 202 – 40 – – – 99 – – 341SK Mhlarhi 294 – – – – 169 – 74 215 752B Modise 252 – – 94 179 – – – 215 740T Moyo 294 – 96 57 – – – – 215 662CH Naude 223 – – – 63 119 – – – 405PG Nelson 223 – – 57 – 244 – – – 524TDA Ross 367 – 52 210 88 – – 55 567 1 339J Shibambo4 82 – 43 – 28 53 35 – 215 456BL Sibiya – 1 221 142 – – 33 45 55 538 2 034D Ufitikirezi5 138 – 24 – – – – – – 162

3 157 1 221 440 503 421 845 394 425 3 207 10 6131 Served as non-executive director for three months before becoming the CEO.2 Alternate director to BL Sibiya.3 Retired January 2015.4 Retired January 2015.5 Resigned September 2015.

Total emoluments to non-executive directors for the year ended 30 September 2014 were:

COMMITTEE

BOARD FEESR000

CHAIR-MANFEESR000

NOMIN-ATIONS

R000AUDIT

R000

RISK AND COM-

PLIANCER000

REMUNE-RATION

R000

SOCIAL, ETHICS

ANDTRANSFOR-

MATIONR000

SPECIALMEETINGS

R000

INVEST-MENTR000

OTHER4

R000TOTAL

R000

ZJ Kganyago 226 – – 105 18 – – 123 30 502

NB Langa-Royds 226 – 51 – – 171 204 268 – 30 950

AJ Lamprecht1 56 – 21 – – – 30 – 17 – 124

MP Malungani 246 – – – – – 62 86 180 – 574

SK Mhlarhi 246 – – – – 94 – 89 53 – 482

B Modise 226 – – 118 140 – – 90 – 30 604

T Moyo2 189 – 15 – 18 – – 72 – – 294

TDA Ross 244 – – 254 89 – – 107 35 – 729

J Shibambo 246 – 59 – 107 115 100 107 – – 734

BL Sibiya3 – 1 120 – – 18 – – 251 35 – 1 424

1 905 1 120 146 477 390 380 396 1 193 320 90 6 4171 Retired January 2014.2 Appointed November 2013. 3 Subsequently appointed as executive chairperson on 22 September 2014.4 Three meetings of the PPC Bafati Investment Trust.

1 Sererveddved asas nonon-en execxec iutiutiveve didirdirectectoror fforfor hththreeree momo hnthnth bs bs b fefoeforere bbecbec iomiomingng hthethe CECECEOOO.2 Alternate director to BL Sibiya.

DJ Castle1 50 – – 48 – – – 18 215 331N Goldin 223 – – – – 119 – 19 – 361ZJ Kganyago2 252 – – 37 – – – 18 480 787NB Langa Royds3 82 – 43 – – 108 72 – 332 637TJ Leaf-Wright 202 – – – 63 – 56 38 – 359MP Malungani 273 – – – – – 87 148 215 723T Mboweni 202 – 40 – – – 99 – – 341SK Mhlarhi 294 – – – – 169 – 74 215 752B Modise 252 – – 94 179 – – – 215 740T Moyo 294 – 96 57 – – – – 215 662CH Naude 223 – – – 63 119 – – – 405PG Nelson 223 – – 57 – 244 – – – 524TDA Ross 367 – 52 210 88 – – 55 567 1 339J Shibambo4 82 – 43 – 28 53 35 – 215 456BL Sibiya – 1 221 142 – – 33 45 55 538 2 034D Ufitikirezi5 138 – 24 – – – – – – 162

3 157 1 221 440 503 421 845 394 425 3 207 10 613

1 RetRettiireired Jd Jd Januanuaryary 202020141414.2 Appointed November 2013.

ZJ Kganyago 226 – – 105 18 – – 123 30 502

NB Langa-Royds 226 – 51 – – 171 204 268 – 30 950

AJ Lamprecht1 56 – 21 – – – 30 – 17 – 124

MP Malungani 246 – – – – – 62 86 180 – 574

SK Mhlarhi 246 – – – – 94 – 89 53 – 482

B Modise 226 – – 118 140 – – 90 – 30 604

T Moyo2 189 – 15 – 18 – – 72 – – 294

TDA Ross 244 – – 254 89 – – 107 35 – 729

J Shibambo 246 – 59 – 107 115 100 107 – – 734

BL Sibiya3 – 1 120 – – 18 – – 251 35 – 1 424

1 905 1 120 146 477 390 380 396 1 193 320 90 6 417


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Interests of executive directors and prescribed officers in

share capital

The aggregate direct beneficial holdings of directors and their

immediate families (none of whom has a holding of over 1%) in the

issued ordinary shares of the company are detailed below. There are

no indirect holdings by directors and their immediate families. There

have been no material changes in these shareholdings since

that date.

NAME

NUMBER OF SHARES

AS AT 30 SEPTEMBER

2015

NUMBER OF SHARES

AS AT 30 SEPTEMBER

2014

Current directorsMMT Ramano 134 143 134 143ZJ Kganyago 95 787 –Prescribed officersJHDLR Snyman 24 100 24 100

Interests of directors and prescribed officers in BBBEE schemes

In 2008, in terms of the company’s first BBBEE transaction, certain

executive directors and prescribed officers were granted participation

rights in the loan-funded Black Managers Trust which owns shares

that are subject to vesting conditions and a lock-in period restricting

transferability which expires on 15 December 2016. In addition,

during the 2012 financial year, they each received rights to

2 541 shares in a trust owning donated shares which were subject to

a lock-in expiring on 15 December 2013. Certain non-executive

Current directorsMMT Ramano 134 143 134 143ZJ Kganyago 95 787 –Prescribed officersJHDLR Snyman 24 100 24 100

directors received vested rights in 2008 in a trust owning donated

shares which were subject to vesting conditions and a lock-in

expiring annually in thirds from 15 December 2012 and expiring on

15 December 2014.

During the 2013 financial year, following the implementation of the

company’s second BBBEE transaction, executive directors and

prescribed officers were included among the South African

employees granted participation rights in a notional loan-funded

trust owning shares that are subject to vesting conditions and a lock-

in period restricting transferability which expires in September 2019.

PARTICIPATION RIGHTS BEE 1 BEE 2

Executive directorsMMT Ramano 335 249 372 737Prescribed officersPL Booysen – 16 322HN Buthelezi – 218 676JT Claassen – 22 501AC Lowan – 118 850KPP Meijer – 28 488FK Molefe – 171 490T Sibisi* – 188 639JHDLR Snyman – 18 167JJ Taljaard – 25 384

*Rights will be forfeited on date of resignation*RiRighthtghts ws willillill bbebe ffofo frferfeititeitedd od o dn dn d tateate fofof rere isigsig tnatnatiionion

Executive directorsMMT Ramano 335 249 372 737Prescribed officersPL Booysen – 16 322HN Buthelezi – 218 676JT Claassen – 22 501AC Lowan – 118 850KPP Meijer – 28 488FK Molefe – 171 490T Sibisi* – 188 639JHDLR Snyman – 18 167JJ Taljaard – 25 384

Shareholder engagement

CONCERNS AND QUERIES RAISED BY SHAREHOLDERS RESPONSES AND ACTIONS TAKEN BY THE COMMITTEE

PPC did not have a return on capital measure for any of its incentive schemes

PPC has now adopted the ROIC measure in the long-term incentive structure

Previously PPC had no sustainability targets linked to incentives PPC has now added a sustainability component to the short-term incentives

The remuneration report should reflect the full terms of reference of the remuneration committee

The full terms of reference of the remuneration committee is included in the report via a link on the PPC website

The existence of a CEO discretionary bonus pool was questioned by shareholders

The CEO’s discretionary bonus pool has been discontinued

No changes to the remuneration policy are listed The material changes are dealt with in the chairman’s introductory letter and explained elsewhere

PPC did not have a return on capital measure for any of its incentive schemes

PPC has now adopted the ROIC measure in the long-term incentive structure

Previously PPC had no sustainability targets linked to incentives PPC has now added a sustainability component to the short-term incentives

The remuneration report should reflect the full terms of reference of the remuneration committee

The full terms of reference of the remuneration committee is included in the report via a link on the PPC website

The existence of a CEO discretionary bonus pool was questioned by shareholders

The CEO’s discretionary bonus pool has been discontinued

No changes to the remuneration policy are listed The material changes are dealt with in the chairman’s introductory letter and explained elsewhere



Value of long-term incentives

AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)

Executive directorsDJ CastleShare appreciation rights2015/05/29 – 2 333 652 – – 2 333 652 19,71 4,11 9 591 Forfeitable shares – no performance conditions2015/05/29 – 125 150 – – 125 150 – 17,10 2 140 Total – 11 731

MMT RamanoShare appreciation rights2012/09/28 cash settled 170 000 – 170 000 – – – 19,11 3 249 – 2013/09/30 cash settled 170 000 – – – 170 000 – 16,25 2 763 2015/05/29 – 581 300 – – 581 300 19,71 4,11 2 389

340 000 581 300 170 000 – 751 300 5 152

Forfeitable shares – with performance conditions2012/09/28 96 800 – – 96 800 – – 2013/03/15 78 700 – – – 78 700 – – – 2014/02/18 128 700 – – – 128 700 – 17,10 2 201

304 200 – – 96 800 207 400 2 201

Forfeitable shares – no performance conditions2015/05/29 – 56 900 – – 56 900 – 17,10 973 Total 3 249 8 326

Prescribed officersPL BooysenShare appreciation rights2007/08/08 cash settled 30 000 – – – 30 000 43,00 0,09 3 2008/09/17 cash settled 24 000 – – – 24 000 31,80 0,80 19 2009/09/25 cash settled 22 000 – – – 22 000 35,35 0,77 17 2015/05/29 – 114 400 – – 114 400 19,71 4,11 470

76 000 114 400 – – 190 400 509 Forfeitable shares – no performance conditions2012/02/16 6 500 – 6 500 – – – 21,08 1372013/03/15 6 800 – – – 6 800 – 17,10 116 2014/02/18 9 900 – – – 9 900 – 17,10 169 2015/05/29 – 18 400 – – 18 400 – 17,10 315

23 200 18 400 6 500 – 35 100 600

Forfeitable shares – with performance conditions2012/02/16 5 400 – – 5 400 – – 2013/03/15 7 600 – – – 7 600 – – – 2014/02/18 16 600 – – – 16 600 – 17,10 284

29 600 – – 5 400 24 200 284 Total 137 1 393

All instruments are equity settled, unless otherwise indicated.

* Instruments subject to a future performance condition have been reflected as if the performance condition will be fully satisfied, although circumstances may result in a different outcome.

Alll ininstrtstrumeume tntsnts arare ee e iquiquittyty tsetsettltletleddd, lunlunlessess totothherher iwiswis ie ie i dindindi tcatcat deded.

* I bj f f di i h b fl d if h f di i ill b f ll i fi d l h h i l id

Executive directorsDJ CastleShare appreciation rights2015/05/29 – 2 333 652 – – 2 333 652 19,71 4,11 9 591Forfeitable shares – noperformance conditions2015/05/29 – 125 150 – – 125 150 – 17,10 2 140Total – 11 731

MMT RamanoShare appreciation rights2012/09/28 cash settled 170 000 – 170 000 – – – 19,11 3 249 –2013/09/30 cash settled 170 000 – – – 170 000 – 16,25 2 7632015/05/29 – 581 300 – – 581 300 19,71 4,11 2 389

340 000 581 300 170 000 – 751 300 5 152

Forfeitable shares – withperformance conditions2012/09/28 96 800 – – 96 800 – –2013/03/15 78 700 – – – 78 700 – – –2014/02/18 128 700 – – – 128 700 – 17,10 2 201

304 200 – – 96 800 207 400 2 201

Forfeitable shares – noperformance conditions2015/05/29 – 56 900 – – 56 900 – 17,10 973Total 3 249 8 326

Prescribed officersPL BooysenShare appreciation rights2007/08/08 cash settled 30 000 – – – 30 000 43,00 0,09 32008/09/17 cash settled 24 000 – – – 24 000 31,80 0,80 192009/09/25 cash settled 22 000 – – – 22 000 35,35 0,77 172015/05/29 – 114 400 – – 114 400 19,71 4,11 470

76 000 114 400 – – 190 400 509Forfeitable shares – noperformance conditions2012/02/16 6 500 – 6 500 – – – 21,08 1372013/03/15 6 800 – – – 6 800 – 17,10 1162014/02/18 9 900 – – – 9 900 – 17,10 1692015/05/29 – 18 400 – – 18 400 – 17,10 315

23 200 18 400 6 500 – 35 100 600

Forfeitable shares – withperformance conditions2012/02/16 5 400 – – 5 400 – –2013/03/15 7 600 – – – 7 600 – – –2014/02/18 16 600 – – – 16 600 – 17,10 284

29 600 – – 5 400 24 200 284Total 137 1 393


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AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)

Prescribed officers continuedHN ButheleziShare appreciation rights2015/05/29 – 151 200 – – 151 200 19,71 4,11 621 Forfeitable shares – no performance conditions2014/02/18 12 400 – – – 12 400 – 17,10 212 2015/05/29 – 24 300 – – 24 300 – 17,10 416

12 400 24 300 – – 36 700 628

Forfeitable shares – with performance conditions2014/02/18 20 700 – – – 20 700 – 17,10 354 Total – 1 603 JT ClaassenShare appreciation rights2007/08/08 cash settled 40 000 – – – 40 000 43,00 0,09 4 2008/09/17 cash settled 24 000 – – – 24 000 31,80 0,80 19 2009/09/25 cash settled 26 000 – – – 26 000 35,35 0,77 20 2015/05/29 – 148 800 – – 148 800 19,71 4,11 612

90 000 148 800 – – 238 800 655

Forfeitable shares – no performance conditions2012/02/16 10 200 – 10 200 – – – 21,08 2152013/03/15 10 400 – – – 10 400 – 17,10 178 2014/02/18 33 353 – – – 33 353 – 17,10 570 2015/05/29 – 23 900 – – 23 900 – 17,10 409

53 953 23 900 10 200 – 67 653 1 157


51 500 – – 12 700 38 800 368 Total 215 2 180

AC LowanShare appreciation rights2015/05/29 – 103 000 – – 103 000 19,71 4,11 423 Forfeitable shares – no performance conditions2013/03/15 4 800 – – – 4 800 – 17,10 82 2014/02/18 6 500 – – – 6 500 – 17,10 111 2015/05/29 – 16 600 – – 16 600 – 17,10 284

11 300 16 600 – – 27 900 477

Forfeitable shares – with performance conditions2013/03/15 5 400 – – – 5 400 – – – 2014/02/18 10 800 – – – 10 800 – 17,10 185

16 200 – – – 16 200 185 Total – 1 085




* Instruments subject to a future performance condition have been reflected as if the performance condition will be fully satisfied although circumstances may result in ad

Prescribed officerscontinuedHN ButheleziShare appreciation rights2015/05/29 – 151 200 – – 151 200 19,71 4,11 621Forfeitable shares – noperformance conditions2014/02/18 12 400 – – – 12 400 – 17,10 2122015/05/29 – 24 300 – – 24 300 – 17,10 416

12 400 24 300 – – 36 700 628

Forfeitable shares – withperformance conditions2014/02/18 20 700 – – – 20 700 – 17,10 354Total – 1 603JT ClaassenShare appreciation rights2007/08/08 cash settled 40 000 – – – 40 000 43,00 0,09 42008/09/17 cash settled 24 000 – – – 24 000 31,80 0,80 192009/09/25 cash settled 26 000 – – – 26 000 35,35 0,77 202015/05/29 – 148 800 – – 148 800 19,71 4,11 612

90 000 148 800 – – 238 800 655

Forfeitable shares – noperformance conditions2012/02/16 10 200 – 10 200 – – – 21,08 2152013/03/15 10 400 – – – 10 400 – 17,10 1782014/02/18 33 353 – – – 33 353 – 17,10 5702015/05/29 – 23 900 – – 23 900 – 17,10 409

53 953 23 900 10 200 – 67 653 1 157


51 500 – – 12 700 38 800 368Total 215 2 180

AC LowanShare appreciation rights2015/05/29 – 103 000 – – 103 000 19,71 4,11 423Forfeitable shares – noperformance conditions2013/03/15 4 800 – – – 4 800 – 17,10 822014/02/18 6 500 – – – 6 500 – 17,10 1112015/05/29 – 16 600 – – 16 600 – 17,10 284

11 300 16 600 – – 27 900 477

Forfeitable shares – withperformance conditions2013/03/15 5 400 – – – 5 400 – – –2014/02/18 10 800 – – – 10 800 – 17,10 185

16 200 – – – 16 200 185Total – 1 085



AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)

Prescribed officers continued

KPP Meijer (leaves

Share appreciation rights2015/05/29 – 170 500 – – 170 500 19,71 4,11 701 Forfeitable shares – no performance conditions2012/02/16 11 200 – 11 200 – – – 18,00 202 2013/03/15 12 300 – – – 12 300 – 17,10 210 2014/02/18 13 300 – – – 13 300 – 17,10 227 2015/05/29 – 27 400 – – 27 400 – 17,10 469

36 800 27 400 11 200 – 53 000 906


56 700 – – 14 000 42 700 380

Total 202 1 987

FK MolefeShare appreciation rights2015/05/29 – 114 400 – – 114 400 19,71 4,11 470 Forfeitable shares – no performance conditions2014/02/18 9 900 – – – 9 900 – 17,10 169 2015/05/29 – 18 400 – – 18 400 – 17,10 315

9 900 18 400 – – 28 300 484

Forfeitable shares – with performance conditions2014/02/18 16 600 – – – 16 600 – 17,10 284

Total – 1 238





Prescribed officerscontinued

KPP Meijer (leaves

Share appreciation rights2015/05/29 – 170 500 – – 170 500 19,71 4,11 701Forfeitable shares – noperformance conditions2012/02/16 11 200 – 11 200 – – – 18,00 2022013/03/15 12 300 – – – 12 300 – 17,10 2102014/02/18 13 300 – – – 13 300 – 17,10 2272015/05/29 – 27 400 – – 27 400 – 17,10 469

36 800 27 400 11 200 – 53 000 906


56 700 – – 14 000 42 700 380

Total 202 1 987

FK MolefeShare appreciation rights2015/05/29 – 114 400 – – 114 400 19,71 4,11 470Forfeitable shares – noperformance conditions2014/02/18 9 900 – – – 9 900 – 17,10 1692015/05/29 – 18 400 – – 18 400 – 17,10 315

9 900 18 400 – – 28 300 484

Forfeitable shares – withperformance conditions2014/02/18 16 600 – – – 16 600 – 17,10 284

Total – 1 238


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AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)


TR Sibisi (resigned

Share appreciation rights2015/05/29 – 125 900 – – 125 900 19,71 4,11 517 Forfeitable shares – no performance conditions2014/02/18 10 900 – – – 10 900 – 17,10 186 2015/05/29 – 20 300 – – 20 300 – 17,10 347

10 900 20 300 – – 31 200 533

Forfeitable shares – with performance conditions2014/02/18 18 200 – – – 18 200 – 17,10 311

Total – 1 361

JHDLR SnymanShare appreciation rights2007/08/08 cash settled 25 000 – – – 25 000 47,36 0,09 2 2008/09/17 cash settled 27 000 – – – 27 000 31,80 0,80 22 2009/09/25 cash settled 23 000 – – – 23 000 35,35 0,77 18 2015/05/29 – 114 400 – – 114 400 19,71 4,11 470

75 000 114 400 – – 189 400 513

Forfeitable shares – no performance conditions2012/02/16 15 500 – 15 500 – – – 18,95 294 2013/03/15 8 400 – – – 8 400 – 17,10 144 2014/02/18 9 000 – – – 9 000 – 17,10 154 2015/05/29 – 18 400 – – 18 400 – 17,10 315

32 900 18 400 15 500 – 35 800 613

Forfeitable shares – with performance conditions2012/02/16 19 500 – 19 500 – – 2013/03/15 13 900 – – – 13 900 – – – 2014/02/18 15 100 – – – 15 100 – 17,10 258

48 500 – – 19 500 29 000 258

Total 294 1 383



** Instruments subsequently forfeited on date of resignation.

Alll ininstrstrstrumeumeumentsntsnts ararare ee ee equiquiquityty ty setsetsettletletledd,d, unlunlunlessessess otototherherherwiswiswise ie ie indindindicatcatcateded.ed.



TR Sibisi (resigned

Share appreciation rights2015/05/29 – 125 900 – – 125 900 19,71 4,11 517Forfeitable shares – noperformance conditions2014/02/18 10 900 – – – 10 900 – 17,10 1862015/05/29 – 20 300 – – 20 300 – 17,10 347

10 900 20 300 – – 31 200 533

Forfeitable shares – withperformance conditions2014/02/18 18 200 – – – 18 200 – 17,10 311

Total – 1 361

JHDLR SnymanShare appreciation rights2007/08/08 cash settled 25 000 – – – 25 000 47,36 0,09 22008/09/17 cash settled 27 000 – – – 27 000 31,80 0,80 222009/09/25 cash settled 23 000 – – – 23 000 35,35 0,77 182015/05/29 – 114 400 – – 114 400 19,71 4,11 470

75 000 114 400 – – 189 400 513

Forfeitable shares – noperformance conditions2012/02/16 15 500 – 15 500 – – – 18,95 2942013/03/15 8 400 – – – 8 400 – 17,10 1442014/02/18 9 000 – – – 9 000 – 17,10 1542015/05/29 – 18 400 – – 18 400 – 17,10 315

32 900 18 400 15 500 – 35 800 613

Forfeitable shares – withperformance conditions2012/02/16 19 500 – 19 500 – –2013/03/15 13 900 – – – 13 900 – – –2014/02/18 15 100 – – – 15 100 – 17,10 258

48 500 – – 19 500 29 000 258

Total 294 1 383



AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R’000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)


JJ TaljaardShare appreciation rights2015/05/29 – 151 000 – – 151 000 19,71 4,11 621 Forfeitable shares – no performance conditions2012/02/16 11 500 – 11 500 – – – 18,00 207 2013/03/15 11 800 – – – 11 800 – 17,10 202 2014/02/18 13 100 – – – 13 100 – 17,10 224 2015/05/29 – 24 300 – – 24 300 – 17,10 416

36 400 24 300 11 500 – 49 200 842

Forfeitable shares – with performance conditions2012/02/16 14 300 – – 14 300 – – 2013/03/15 19 700 – – – 19 700 – – –

2014/02/18 21 900 – – – 21 900 – 17,10 374

55 900 – – 14 300 41 600 374

Total 207 1 837

RS Tomes (resigned

Share appreciation rights2007/08/08 cash settled 33 000 – – 33 000 – 43,00 Forfeitable shares – no performance conditions2012/02/16 9 100 – – 9 100 – – 2013/03/15 9 200 – – 9 200 – – 2014/02/18 12 500 – – 12 500 – –

30 800 – – 30 800 –

Forfeitable shares – with performance conditions2012/02/16 11 300 – – 11 300 – – 2013/03/15 15 400 – – 15 400 – – 2014/02/18 20 800 – – 20 800 – –

47 500 – – 47 500 –

Total

Retired directorsSG Helepi (resigned 14 February 2013)Share appreciation rights2007/08/08 cash settled 18 000 – – – 18 000 43,00 0,09 2

Total – 2



All ininstrstrumeumentsnts arare ee e iquiquityty setset ltletleddd, lunlunlessess otothherher iwiswis ie ie i dindindicatcat deded.

* I t t bj t t f t f diti h b fl t d if th f diti ill b f ll ti fi d lth h i t lt id


JJ TaljaardShare appreciation rights2015/05/29 – 151 000 – – 151 000 19,71 4,11 621Forfeitable shares – noperformance conditions2012/02/16 11 500 – 11 500 – – – 18,00 2072013/03/15 11 800 – – – 11 800 – 17,10 2022014/02/18 13 100 – – – 13 100 – 17,10 2242015/05/29 – 24 300 – – 24 300 – 17,10 416

36 400 24 300 11 500 – 49 200 842

Forfeitable shares – withperformance conditions2012/02/16 14 300 – – 14 300 – –2013/03/15 19 700 – – – 19 700 – – –

2014/02/18 21 900 – – – 21 900 – 17,10 374

55 900 – – 14 300 41 600 374

Total 207 1 837

RS Tomes (resigned

Share appreciation rights2007/08/08 cash settled 33 000 – – 33 000 – 43,00Forfeitable shares – noperformance conditions2012/02/16 9 100 – – 9 100 – –2013/03/15 9 200 – – 9 200 – –2014/02/18 12 500 – – 12 500 – –

30 800 – – 30 800 –

Forfeitable shares – withperformance conditions2012/02/16 11 300 – – 11 300 – –2013/03/15 15 400 – – 15 400 – –2014/02/18 20 800 – – 20 800 – –

47 500 – – 47 500 –

Total

Retired directorsSG Helepi (resigned14 February 2013)Share appreciation rights2007/08/08 cash settled 18 000 – – – 18 000 43,00 0,09 2

Total – 2


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INFORMATIONTECHNOLOGY

The group information technology (IT) team’s main focus is to

facilitate PPC’s strategy and provide the platforms to exploit related

technology developments that can enhance the value to the

business. One of the key areas of focus is to ensure that IT risks are

managed to ensure the long-term sustainability of the business. The

IT team is responsible for ensuring PPC’s information assets are

protected amid rising security threats in the operating environment.

The group IT strategy has been revised to align with the corporate

strategy, and is based on five pillars:

Doing business easier – ensuring all stakeholders (customers,

business partners, shareholders, employees, and communities

where we operate) find it easier to do business with PPC. As such,

we explore new technology platforms like mobility and social

media to ensure PPC reaches its stakeholders in the manner

they prefer.

World-class connectivity and infrastructure – as PPC grows

into other geographies, group IT will ensure the necessary

infrastructure and connectivity is in place to support the business

in achieving its growth requirements. We continue to monitor

connectivity initiatives and technology developments throughout

the regions in which we operate to establish how best to position

PPC to take advantage of developments.

Fit for purpose – given the current global operating environment,

it is imperative that the group is more prudent in deploying its

resources. IT is no exception. We choose simplicity over complexity

while ensuring that business requirements are met accordingly.

The demand side is managed closely through the IT steering

committee where prioritisation and the business fit are determined.

Realising value is managed through different executive

committees.

Monetising the data – to deliver value to our stakeholders, it is

imperative to understand the business environment in which we

operate. Analytics have been identified as a key area to unlock

value from data owned by PPC.

Integration of IT and operations technology – technology

developments have blurred the lines between IT and operating

technology. In capitalising on new trends such as smart metering,

radio frequency identification (RFI), and others, it is important that

these two environments are integrated to achieve a factory floor

to corporate floor view of the business.

IT governanceThe IT environment is governed according to King III. The board has

delegated authority to ensure implementation of the IT governance

framework to the audit committee. The IT governance framework is

supported by COBIT 5 processes. The audit committee receives

regular updates (at least quarterly) from the management team on

the status of material IT projects. Group internal audit together with

the external auditors provide assurance on IT general controls and

internal financial controls affected by IT projects. Findings and

updates on remedial actions are reported to the executive committee

and the audit committee.

The design, implementation and execution of the IT governance

framework have been assigned to the group chief information

officer, who reports to the chief executive. The group finance

executive committee – a sub-committee of the group executive

committee – provides oversight on IT governance, with support from

the IT steering committee and other management committees. The

IT steering committee is responsible for ensuring alignment between

IT initiatives and the group’s strategic objectives. It is also responsible

for prioritising projects and allocating appropriate resources to

execute these.

IT is an integral part of PPC’s risk management. The group compliance

division ensures that enterprise IT risks are properly understood and

effective mitigation strategies are in place to reduce the impact. IT

complies with the group enterprise risk management framework

and is intimately involved in risk management processes. The board,

through the risk committee and audit committee, receives reports on

any IT risks from the compliance division and internal audit. The IT

team is the custodian of PPC’s information assets and responsible for

ensuring compliance. As the group expands to other geographies, IT

ensures compliance with in-country telecommunications laws and

other regulations.

88 PPC Ltd Abridged integrated report 2015

TA K I N G A S T R AT E G I C A P P R O A C H

We will understand the drivers, risks and trends in each of our regions and businesses, especially in the longer term and act accordinglyDefensive strategies are as important as offensive strategies


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PEOPLE REVIEW

HEALTH AND SAFETY

HighlightsTraining included safety fundamentals, accident

investigation and risk assessments

Introduced predeployment health requirements for

expatriate workers

Continued roll out of PPC Alive as planned in Botswana

Lowlights18 lost-time injuries in 2015

One fatality at Habesha construction site

One fatality at Slurry factory (October 2015)

PPC health and safetyHealth and safety are core values in PPC and we continuously strive

for excellent safety and health performance in all areas of our

operations. 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. Our

strategy is underpinned by the following:

Our people are our greatest asset

Good health and workplace safety is our most important priority

Together we are responsible for health and safety

Workplace injury and illness are preventable and managed

through sound safety and health risk management principles

Safety statisticsPPC uses management control as the guiding principle to determine whether safety statistics are reported as part of group figures or separately:

Where PPC has a majority share in the business and consolidates it financially, these safety statistics form part of group statisticsWhere PPC does not consolidate the financials (ie does not have the majority shareholding) and has limited management control through a signed agreement, statistics are excluded

Under this definition:Safika (91%) and Pronto (100%) health and safety data will be included from 2016 once systems and definitions have been alignedHabesha (31%) is excluded

From 2016, Safika (five sites) (IDM) and Pronto (nine sites) will be included in group safety data. We are conducting a readiness exercise with both organisations in preparation for including their data as part of group statistics. Figures for 2015 therefore exclude Safika and Pronto. Generally, off-site incidents (public roads or client sites) are not recorded in our safety statistics but, in Pronto’s case, due to the nature of its work, off-site incidents will be included. During the reporting period, Pronto recorded six off-site incidents where employees were injured to the extent they were booked off work for more than one day.

PPC is in an exciting phase with the new CIMERWA factory becoming operational in 2015, and three projects (in DRC, Zimbabwe and Slurry) in the construction phase. As directly managed projects, this safety data has been consolidated into group safety statistics.

The construction site at Habesha (Ethiopia) has been reported separately as PPC does not have management control. Regrettably, a contractor employee died and two others were seriously injured after an incident in September 2015.

PPC group safety statistics

TARGET2016

ACTUAL (EXCLUDING

SAFIKA AND

PRONTO)2015

ACTUAL (EXCLUDING

SAFIKA, PRONTO, DRC, CIMERWA AND MOZAMBIQUE)

2015

ACTUAL (PPC ONLY)

2014

ACTUAL (PPC ONLY)

2013

ACTUAL (PPC ONLY)

2012

Fatalities 0 0* 0 0 1 0

FFR1 per 200 000 hours worked 0 0 0 0 0,02 0Number of LTIs2 No target set 18 12 19 18 14LTIFR3 per 200 000 hours worked (12-month window) 0,275 0,24 0.23 0,25 0,28 0,23Days lost to LTIs No target set 804 586 663 1 060 553Significant administrative notices4 (number) No target set 4 4 2 9 9

1 Fatality frequency rate2 Lost-time injury3 Lost-time injury frequency rate4 Section 54 (DMR)5 2016 target will include Safika, Pronto, DRC, CIMERWA and Mozambique (actual for 2015 was 0,31)*Fatality recorded at Habesha and Slurry.

1 Fataatalilitlit fy fy freqrequenuencycy ratrateeFF2 Lost time injury

Fatalities 0 0* 0 0 1 0

FFR1 per 200 000 hours worked 0 0 0 0 0,02 0Number of LTIs2 No target set 18 12 19 18 14LTIFR3 per 200 000 hours worked (12-month window) 0,275 0,24 0.23 0,25 0,28 0,23Days lost to LTIs No target set 804 586 663 1 060 553Significant administrative notices4

(number) No target set 4 4 2 9 9


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The group LTIFR decreased from 0,25 to 0,24 in the review period,

while the number of LTIs rose from 16 to 18. PPC investigates all

incidents to understand the causes, and this is shared across

the group. Sadly, in October 2015 we recorded a fatality at our

Slurry factory.

20152014

TYPE OF LTI

16

14

34

14

10

5

8

4

7

15

11

20

15

0

5

10

Operational LTIs

Project LTIs PPC employees

injured

PPC contractors

injured

SA operations

LTIs

International holdings

LTIs

Authority visits

2015 2014

Number of visits by authorities 28 48Section 54 (SA – work stop) 4 2Section 55 (SA – notice to rectify) 16 2Other (non-SA) 2 7

For the review period, PPC received 20 notices from the Department

of Mineral Resources (DMR) and zero from the Department of

Labour (DoL) on health and safety issues. The reason for the increase

is the DMR’s focus on mining operations and stringent application of

legal requirements.

Occupational health PPC introduced predeployment health requirements for expatriate

workers (covering all employees and contractors travelling for

international assignments). These include medical assessments,

fitness to work and/or travel, individual travel health assessments,

vaccination requirements and malaria prophylaxis.

Under the mining charter scorecard, PPC reports on HIV/Aids and

tuberculosis programmes, which are run by clinics at group

operations. Prevalence is low for both diseases. No cases of silicosis

were reported during the year.

Number of visits by authorities 28 48Section 54 (SA – work stop) 4 2Section 55 (SA – notice to rectify) 16 2Other (non-SA) 2 7

All of PPC’s manufacturing sites remain certified to the OHSAS

18001 standard.

PPC remains active in the Chamber of Mines’ structures to interact,

obtain information and add value on complying with various

elements of the mining charter. The mining charter scorecard for all

sites was completed and submitted.

OutlookFor existing and well-established PPC operations (South Africa,

Zimbabwe and Botswana), our main focus for the year ahead is to

provide refresher training at all levels based on individual roles

and responsibilities (eg safety fundamentals, risk assessment

and accident investigation). In addition, we will ensure health and

safety systems are standardised throughout the group and, where

necessary, appropriate software tools are provided to effectively

manage health and safety matters. We are also concentrating on

management and reporting processes for occupational health.

The safety statistics for 2015 show that our construction projects

and operations in Africa require a new approach and much focus as

PPC has not traditionally operated in these areas. We will need to

carefully evaluate issues such as availability of competent health and

safety resources, language, lack of infrastructure, cultural differences,

in-country legislation, availability of quality equipment, remoteness

of sites and fit-for-purpose health and safety standards to ensure

that project health and safety plans accommodate these aspects. We

are developing fit-for-purpose occupational health and safety

management systems for both our projects and operations in Africa

(Rwanda, DRC and Ethiopia).

Focus areas for 2016Roll out of PPC Alive and training in safety fundamentals, accident

investigation and risk assessments

Detailed health and safety feedback per site as part of quarterly

operational reviews

Introduce quarterly health and safety reviews

Senior management involvement in lost-time injury investigations

Implement a health and safety data tool, with supporting

management information system

Baseline risk assessments


PEOPLE REVIEW CONTINUED

WORKFORCE

HighlightsLaunched cross-functional talent review sessions

44 housing transactions were completed for employees

participating in the PPC housing initiative to date

Commenced with new employee grading system

Developed and implemented a new independent

approach to Climate Survey

New people management system in place

New performance management system introduced

LowlightsResignation of senior executives

Managing our peopleUnderpinning PPC’s long history of success is a hard working, diligent

and dedicated team of 3 372 employees across our operations. We

believe that better business decisions and stronger performance are

driven by competent, high-calibre individuals operating in a diverse

environment with the right skills, experience and passion. Their

determination continues to drive our progress in executing our

strategy.

The changing competitive landscape has led to a change in our

business approach to achieve our strategic aspiration of sustainable

competitive returns for all our stakeholders by focusing on five key

business pillars:

World-class excellence in all we do

Provider of materials and solutions

Creating an innovative culture


Doubling our business every ten years

Our Kambuku philosophy has been an integral part of our people

processes for many years. The changing competitive landscape and

company strategy required refocusing and aligning our approach to

people management. These changes necessitated a robust change

management approach that focuses on delivering results and driving

a high-performance culture.

During the year, we introduced the #IGNITE change initiative which

will lay the foundation for the development of a “ONE TEAM” PPC

culture that will enable our strategy of innovation, being world class

and delivering results. This change programme will focus on the

following five broad elements:

Leadership effectiveness

Aligning the business behind the strategy

Head office effectiveness and value add

Development of “One Team” PPC culture

Talent management

Various initiatives within the different streams are being developed

and implemented. Key roleplayers, who will act as “change igniters”,

have been identified across the business to drive and support the

change initiatives.

Delivering business success through high performanceFor PPC to achieve its objectives, all employees must be aligned to

the strategic direction of the company (page 32). This is cascaded

throughout the organisation to create alignment and drive

functional, team and individual performance. Performance

management and development are therefore important steps to

enable staff to contribute to the success of PPC. The process is fair

and robust, with employees identifying and agreeing personal

development plans.

The performance management process comprises:

Scorecard alignment and agreement on key performance areas

Both objective and subjective measures

Ensures both parties are clear on expectations/delivery

Progress reviews and performance coaching

Short-term bonus payments and salary increases are linked to

performance against agreed scorecards. They are calculated on a

combination of individual achievement and company performance.

Our people management systemAligned to our business and HR functional strategies, we have

implemented people management systems. This approach forms an

integrated link between strategy, performance management,

remuneration and succession planning.


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PEOPLE MANAGEMENT SYSTEM

PPC strategy

Functional strategy

CEO scorecard

Individualscorecard

Talent board reviews (2pa)

Successionmanagement

(1pa)

Salary increases (1pa)

Scorecard and BTB (3pa)

Development and

mentorship

Performance management conversations

Continuous process

IDP

IDP

IDP

IDP

OCT:

Finalise individual

scorecard for new FY

JUNE:

Quarterly informal reviews }

SEPT:

Year end final

review

DEC:

Quarterly informal reviews

MARCH:

Mid year formal review

5

1

2

3

4

Talent reviews and succession managementThe objective of our succession management process is to safeguard

critical business positions by effectively managing vacancy risks,

particularly at leadership level and in positions identified as critical to

the success of our business. The aim is to identify, develop and retain

highly talented and diverse individuals to ensure a continuous supply

of potential successors for key leadership and critical positions.

During this year, we introduced cross-functional talent board reviews

across the business. The aim of the reviews is to identify key people

who will take the business to the next level while effectively

supporting and managing line employees. Feedback from these

reviews is used as input to succession management.

A great place to work – the PPC housing initiativeThe PPC employee housing support scheme was introduced in 2012.

The objective for the next few years is to assist over 300 employees

to improve their living conditions. Most eligible candidates do not

qualify for a state-funded RDP house or a mortgage, and fall in the

so-called “gap market”, making it virtually impossible for them to

become homeowners without support.

To date, 471 South African employees have enrolled in the housing

programme and are being assisted to become homeowners. So far,

44 employees have moved into their new homes, upgraded an

existing home or are awaiting title deeds before moving into

their homes.

This year, we introduced a similar housing initiative for our Zimbabwe

operations. The scheme will give lower-grade employees the

opportunity to purchase a low-cost house through the sale of around

700 high-density homes at the Colleen Bawn and Bulawayo

factories. Low-density homes are being retained for critical and

skilled staff at PPC Zimbabwe.



Empowering peoplePPC’s relevant, empowered, actualised and lasting (REAL)

transformation philosophy concentrates on maintaining a strong

foundation to grow and empower employees. As part of this

approach, the second phase of our BBBEE transaction in

2012 resulted in effective black ownership of PPC’s South African

operations increasing to 26%. This transaction supported the

conversion of our mining rights, and placed around 7% of

the holding company’s ownership in the hands of South

African employees.

In 2014, R100 million in shares from the 2008 BBBEE 1 transaction

vested in the hands of employees. Allied to this transaction, the PPC

Masakhane Employee Share Trust was created to allow all eligible

employees to become shareholders of PPC. Since the launch of

the PPC trust, employee shareholders have received over 26 million

shares and over R21 million in dividends. For the reporting period, an

additional 778 715 shares were transferred to new employee

shareholders.

Employee participation and engagement A fundamental principle of PPC’s culture is participation and

engagement. We believe 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:

CEO town hall sessions

Monthly feedback on business performance and strategic issues.

These sessions are facilitated by the CEO and broadcast across all

PPC sites by video link or recording. Employees can post questions or

give feedback on the PPC intranet.

CEO breakfast

The CEO held a series of breakfasts with groups of ten to 12 head

office employees over the course of the year. Entitled “How are

you?” the breakfasts are designed to give employees an opportunity

to engage with Darryll directly on any topic of their choosing.

Feedback from attendees has been overwhelmingly positive. The

CEO hosted nine breakfast sessions between March and September.

Ask Darryll

A portal, under the banner “Ask Darryll” was created on the PPC

intranet as a platform for employees across the group to submit

questions to the CEO. Answers to the questions are posted on the

webpage to the benefit of all employees. Over 100 questions were

submitted by employees within the first six months of the site

going live.

Key leader summits

Regular team meetings at plant or site level, and across the business,

involve all appointed, elected and informal leaders. The aim is to

inform employees about plant, site or business 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

Daily structured team-based discussions take place at shop-floor

level, weekly at sectional supervisory level, and monthly at

departmental level. There are around 365 active and effective

Invocoms operating across PPC. Through these Invocom engagement

Handover of houses to PPC housing initiative recipient, Ernest Mmolaatlou and Joel Morakanele from PPC Slurry


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sessions, 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 these forums.

In 2015, we implemented a new climate survey approach which was

conducted independently across PPC to assess morale and identify

improvement areas. This survey was conducted across all PPC

operations in South Africa and international for which an average

score of 75% was achieved. The results of this year’s survey will serve

as a baseline for future assessments. Initiatives from this climate

survey will be executed in the new fiscal year.

Recognition The prestigious Diamond Awards recognise individuals and teams

whose performance has been extraordinary throughout the year, as

nominated by their colleagues. These awards are intended to inspire

and encourage employees to achieve excellence and entrench a

high-performance culture. This year the categories were amended:

rising talent, customer service excellence (internal and external),

sales, production excellence, business support and safety. An

additional category recognises the #IGNITE initiative, the current PPC

change management initiative focused on cost optimisation,

effective leadership, talent management, strategy alignment and

culture change. This last category is a CEO discretionary award.

There are three finalists in each category, with an overall winner taking the Diamond Award in each category.There are three finalists in each category, with an overall winner taking the Diamond Award in each category.

Safety

Luke Satho

Forklift driver – Bulawayo,

Zimbabwe

Rising talent

Dakalo Mudau

Mining shift foreman –

Hercules Customer service

excellence

Peter Max

Sales consultant – Montague

Gardens

Sales

Faiza Surtie

Sales consultant – Gauteng

constructionProduction

excellence

Meshack Ndaba

Graduate production –

Port Elizabeth

Business support

Ernest Kgopa

Energy specialist –

Sandton

The winners for the 2015

Diamond Awards are:



PPC’s total workforce for 2015 is 3 372 compared to 3 017 in 2014. The overall workforce increased by 270, as we now include employees

from our subsidiary operations (Pronto and Safika).

Workforce analysis: South Africa*

AFRICAN COLOURED INDIAN

EE LEVELS FEMALE MALE TOTAL FEMALE MALE TOTAL FEMALE MALE TOTAL

Top management (CEO) 0 0 0 0 0 0 0 0 0Senior management 5 2 7 1 0 1 0 2 2Professional 32 31 63 6 23 29 3 19 22Skilled workers 124 353 477 75 173 248 18 4 22Semi-skilled 79 592 671 25 153 178 2 1 3Unskilled 9 5 14 0 0 0 0 0 0Learners 1 12 13 0 2 2 0 0 0

Total permanent 250 995 1 245 107 351 458 23 26 49

Learners 15 16 31 1 18 19 0 0 0Fixed term contracts 14 46 60 12 41 53 2 1 3

Total fixed term contracts 29 62 91 13 59 72 2 1 3

Grand total 279 1 057 1 336 120 410 530 25 27 52

* Levels as defined by the Employment Equity Act* Leveevellsls asas d fidefidefi dnedned bbyby hththe Ee E lmplmploymoymentent EqEq iuituity Ay Actct

Top management (CEO) 0 0 0 0 0 0 0 0 0Senior management 5 2 7 1 0 1 0 2 2Professional 32 31 63 6 23 29 3 19 22Skilled workers 124 353 477 75 173 248 18 4 22Semi-skilled 79 592 671 25 153 178 2 1 3Unskilled 9 5 14 0 0 0 0 0 0Learners 1 12 13 0 2 2 0 0 0

Total permanentTT 250 995 1 245 107 351 458 23 26 49

Learners 15 16 31 1 18 19 0 0 0Fixed term contracts 14 46 60 12 41 53 2 1 3

Total fixed term TTcontracts 29 62 91 13 59 72 2 1 3

Grand total 279 1 057 1 336 120 410 530 25 27 52

WORKFORCE ANALYSIS: INTERNATIONAL

139

469

242

743

500

400

300

0

100

200

Botswana

Male Female

Zimbabwe Rwanda Mozambique DRC

Expatriates per country

PPC SA permanent employees have been seconded to its subsidiaries

aligned with the talent board and succession management process.

Three years MD – PPC Zimbabwe

Seven years General manager – Botswana Cement

18 months CEO – CIMERWA Rwanda

One year MD – PPC Barnet DRC

Workforce demographics

PPC’s workforce is well balanced by age. Young and upcoming talent

(under 30) represents 18% of the workforce while the age group

normally associated with greater career stability represents 60%. The

risk of losing intellectual capital and institutional experience is well

managed, with only 21% of our employees aged 50 and above.


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WHITE SA NATIONALS FOREIGN

FEMALE MALE TOTAL FEMALE MALE TOTAL FEMALE MALE TOTALGRANDTOTAL

0 1 1 0 1 1 0 0 0 11 24 25 7 28 35 0 0 0 35

24 92 116 65 165 230 0 3 3 233113 248 361 330 778 1 108 3 11 14 1 122

3 7 10 109 753 862 0 2 2 8640 0 0 9 5 14 0 1 1 150 1 1 1 15 16 0 0 0 16

141 373 514 521 1 745 2 266 3 17 20 2 286

0 1 1 16 35 51 0 0 0 518 9 17 36 97 133 1 1 2 135

8 10 18 52 132 184 1 1 2 186

149 383 532 573 1 877 2 450 4 18 22 2 472

0 1 1 0 1 1 0 0 0 11 24 25 7 28 35 0 0 0 35

24 92 116 65 165 230 0 3 3 233113 248 361 330 778 1 108 3 11 14 1 122

3 7 10 109 753 862 0 2 2 8640 0 0 9 5 14 0 1 1 150 1 1 1 15 16 0 0 0 16

141 373 514 521 1 745 2 266 3 17 20 2 286

0 1 1 16 35 51 0 0 0 518 9 17 36 97 133 1 1 2 135

8 10 18 52 132 184 1 1 2 186

149 383 532 573 1 877 2 450 4 18 22 2 472

Employees for South Africa including our subsidiaries (Pronto and Safika)

FEMALE (%)

33

64

3

56

11

50

50

64

8

60

28

61

12

33

12

2728

100

80

60

0

20

40

African

30 to 50 years old Over 50 years old

Coloured Foreign Indian White Total

Under 30 years old

MALE (%)

16

60

24

66

11

83

6

93

7

53

39

60

24

2311 8 16

100

80

60

0

20

40

African

30 to 50 years old Over 50 years old

Coloured Foreign Indian White Total

Under 30 years old


Workforce turnover

The nature and purpose of fixed term contracts for employees are limited duration for relief of duty and short-term project requirements. These

numbers are not a true reflection of avoidable exits, and we have therefore excluded them.

The annual turnover rate (calculated using GRI methods) for 2015 is 7,8% in South Africa, 3,4% in Zimbabwe and 5,8% in Botswana

operations. We have recorded an overall decrease in labour turnover due to the voluntary retrenchments at our Riebeeck and Lime operations

as well as Zimbabwe and Botswana in 2014.

Permanent turnover for South Africa, Botswana and Zimbabwe

AGE GROUP

REGION

BOTSWANA SOUTH AFRICA ZIMBABWE

FEMALE MALE TOTAL FEMALE MALE TOTAL FEMALE MALE TOTAL

GRAND TOTAL

2015

GRAND TOTAL

2014

30 to 50 years old 12% 4% 5% 9% 6% 7% 0% 4% 3% 6% 8%Over 50 years old 0% 3% 3% 14% 12% 12% 0% 4% 4% 10% 17%Under 30 years old 33% 13% 18% 5% 7% 6% 0% 5% 4% 6% 9%Grand total 13% 4% 6% 9% 7% 8% 0% 4% 3% 7% 10%

Absenteeism rate (excludes Pronto and Safika)

We have now included the absenteeism rate of our Zimbabwe operation.

REGION

FEMALE MALE TOTAL

2015 2014 2015 2014 2015 2014

Botswana 1,3% 1,1% 0,6% 0,5% 0,7% 0,6%Zimbabwe 1,0% 0,8% 0,8% South Africa 2,0% 1,9% 2,0% 1,9% 2,0% 1,9%

Grand total (including sick leave) 1,9% 1,9% 1,7% 1,8% 1,7% 1,9%

Labour relations

In South Africa (excluding Pronto and Safika), 32,5% of employees are members of a recognised trade union, 57,2% in Botswana and 66,3%

in Zimbabwe. PPC supports freedom of association and relevant agreements between the company and various unions are in place.

People development

The development and growth of globally competitive people is a key principle of our HR strategy and culture. We believe in enriching our team

members by ensuring they have the right skills, knowledge and competencies to reach their potential. Training programmes are designed to

produce substantial benefits for both PPC and its employees.

30 to 50 years old 12% 4% 5% 9% 6% 7% 0% 4% 3% 6% 8%Over 50 years old 0% 3% 3% 14% 12% 12% 0% 4% 4% 10% 17%Under 30 years old 33% 13% 18% 5% 7% 6% 0% 5% 4% 6% 9%Grand total 13% 4% 6% 9% 7% 8% 0% 4% 3% 7% 10%

Botswana 1,3% 1,1% 0,6% 0,5% 0,7% 0,6%Zimbabwe 1,0% 0,8% 0,8%South Africa 2,0% 1,9% 2,0% 1,9% 2,0% 1,9%

Grand total (including sick leave) 1,9% 1,9% 1,7% 1,8% 1,7% 1,9%



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The following training hours were recorded for 2015:

Training hours per employment category: South Africa*

EMPLOYMENT CATEGORY

2015 TOTAL

TRAINING HOURS

2015 TOTAL

EMPLOYEES

2015 AVERAGE

HOURS PER EMPLOYEE

2014 TOTAL

TRAINING HOURS

2014 TOTAL

EMPLOYEES

2014 AVERAGE

HOURS PER EMPLOYEE

Top management 0 1 0 0 1 0Senior management 200 26 8 163 27 6Professional 5 876 216 27 4 925 220 22Skilled workers 53 135 1 043 51 78 668 1 056 75Semi-skilled 30 305 848 36 44 895 841 53Learners 149 485 67 2 231 106 177 57 1 863

Total 239 001 2 201 109 234 827 2 202 107

* Table excludes South Africa subsidiary workforce totals and training hours

Training hours per country: international

COUNTRY

2015TOTAL

TRAINING HOURS

2015 TOTAL

EMPLOYEES

2015 AVERAGE

HOURS PER EMPLOYEE

Zimbabwe 19 075 470 40,6Rwanda 582 242 2,4Botswana 364 139 2,6

Mozambique –

No formal training recorded

for 2015 –DRC – Not yet recorded –

Skills and development expenditure for 2015 was as follows:

Training expenditure as a percentage of wage bill: by race and gender for 2015

COUNTRYANNUAL

WAGE BILL

TRAINING EXPENDITURE

FOR 2015

TRAINING EXPENDITURE

AS PERCENTAGE OF ANNUAL WAGE BILL

SA (rand) 950 032 264 42 742 227 4,50Zimbabwe (US dollar) 9 296 093 208 586 2,24Botswana (pula) 33 316 449 342 352 1,03Rwanda (Rwandan franc) 2 065 558 666 42 917 438 2,08Mozambique (metical)* 5 208 000 – –DRC (Congolese franc)* 130 363 754 – –

* No formal training was recorded for 2015 in the DRC due to not being in commission and Mozambique due to size of operation

* TTablblable ee e lxclxcl dudeude Ss Ss S toutouth Ah Ah Af ifrifricaca bsubsub idsidsidiiariary wy w korkorkfforforcece t ttottot lalsals anand td td t irairai ininnin hg hg hourourss

Top management 0 1 0 0 1 0Senior management 200 26 8 163 27 6Professional 5 876 216 27 4 925 220 22Skilled workers 53 135 1 043 51 78 668 1 056 75Semi-skilled 30 305 848 36 44 895 841 53Learners 149 485 67 2 231 106 177 57 1 863

TotalTT 239 001 2 201 109 234 827 2 202 107

Zimbabwe 19 075 470 40,6Rwanda 582 242 2,4Botswana 364 139 2,6

Mozambique –

No formal training recorded

for 2015 –DRC – Not yet recorded –

* NNo ffo formorm lalal tratrai iiniiningng waswas rerecorcord ddedded ffofo 2r 2r 2015015015 iinin hthth De De DRCRCRC dduedue toto nono bt bt b ieinein ig ig in cn commommiississiionion anand Md Md Mozaoza bimbimbiqueque ddudue te to so siizeize fofof opoperaera itiotionn

SA (rand) 950 032 264 42 742 227 4,50Zimbabwe (US dollar) 9 296 093 208 586 2,24Botswana (pula) 33 316 449 342 352 1,03Rwanda (Rwandan franc) 2 065 558 666 42 917 438 2,08Mozambique (metical)* 5 208 000 – –DRC (Congolese franc)* 130 363 754 – –


Training expenditure by race and gender: South Africa (R000)

AFRICAN COLOURED INDIAN WHITE TOTAL TRAINING

EXPENDITUREMALE FEMALE MALE FEMALE MALE FEMALE MALE FEMALE

2015 17 401 6 589 9 837 2 150 283 242 5 344 894 42 7422014 14 714 6 115 10 238 999 462 312 4 452 759 38 0512013 6 115 4 697 10 796 2 301 648 419 8 224 1 584 34 784

283

5 3449 837

17 401

AfricanColoured

IndianWhite

MALE (R000)

242

8942 150

6 589

AfricanColoured

IndianWhite

FEMALE (R000)

In 2015, PPC spent R42,7 million or 4,5% of payroll (ie leviable amount) on skills development for employees compared to R38,1 million or

4,2% in 2014. Over 80% of this benefited previously disadvantaged employees.

PPC technical skills academy (TSA)

The PPC TSA 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 Mining Qualifications Authority (MQA)

accreditation and ISO 9001:2008 certification in the review period. Since 2002, TSA has successfully trained 221 engineering learners. Employed

and unemployed learners currently enrolled for engineering learnerships at TSA are shown below:

LEARNERSHIP PROGRAMME

AFRICAN INDIAN COLOURED WHITEMALE FEMALE MALE FEMALE MALE FEMALE MALE FEMALE TOTAL

Electrical 10 7 0 0 4 0 0 0 21Fitter and turner 10 2 0 0 9 1 1 0 23Plater-welder 4 1 0 0 6 0 0 0 11Diesel mechanic 5 1 0 0 2 0 0 0 8

Total 29 11 0 0 21 1 1 0 63

TSA is also accredited for learnerships in carbonate materials manufacturing processes and mining and surface excavations, both accredited by

the MQA and registered with the South African Qualifications Authority (SAQA). Participation on these programmes is as follows:

Carbonate materials manufacturing processes NQF level 4 learnership:

To date, 87 employees have successfully completed this programme and two learners are due for completion before December 2015.

Rock-breaking: surface excavations NQF level 3 learnership:

To date, 49 employees have successfully completed the programme with three learners due for completion before December 2015.

No additional learners were enrolled on these programmes in 2015 due to a fully trained target population.

2015 17 401 6 589 9 837 2 150 283 242 5 344 894 42 7422014 14 714 6 115 10 238 999 462 312 4 452 759 38 0512013 6 115 4 697 10 796 2 301 648 419 8 224 1 584 34 784

Electrical 10 7 0 0 4 0 0 0 21Fitter and turner 10 2 0 0 9 1 1 0 23Plater-welder 4 1 0 0 6 0 0 0 11Diesel mechanic 5 1 0 0 2 0 0 0 8

TotalTT 29 11 0 0 21 1 1 0 63



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PPC leadership talent development programme

As part of our strategy and approach to establish values-based

leadership in the organisation, we have initiated a leadership talent

development programme in partnership with the Gordon Institute of

Business (GIBS). The aim is to develop globally competitive leaders in

support of our business and HR strategy by focusing on carefully

selected desired outcomes, including:

A style of leadership that will underpin a multinational,

multicultural and high-performance company

Providing a forum for strategic decision-making so that socially

grounded leadership is a default approach rather than a

legislatively driven strategy

A leadership approach that acknowledges and incorporates the

tenets of African leadership to reorientate a South Africa-

dominated PPC into a truly international organisation

Provide a self-governing framework that transcends individuals

and is driven by the collective leadership of PPC

The first intake of 24 potential leaders in PPC completed the

programme in December 2014. Candidates represented our

businesses across Africa, with delegates from South Africa, Rwanda,

Botswana, Democratic Republic of the Congo and Zimbabwe.

A second group of 24 candidates was identified and nominated

through the talent board review process. This programme started in

August 2015 and will be completed in November 2015. As part of

this year’s delegation, we have included candidates from our South

African subsidiaries, Pronto and Safika. The participation of women

for this intake is 42% compared to 21% in the first intake.

Graduate development programme

The graduate development programme was implemented in 2008 to

give our Dinaledi bursars the opportunity to gain two years’ relevant

work experience and exposure. To date, 36 graduates have

successfully completed the programme, with 22 candidates

permanently employed at our operations.

Current graduate development programme students

The current breakdown is shown below:

FourAfrican males

SixAfrican females

Twocoloured males

Dinaledi bursary scheme

Our Dinaledi bursary scheme was introduced in 2006 to support the development of children mostly from previously disadvantaged communities.

To date, we have assisted 35 students in obtaining tertiary qualifications. Currently, 11 students are participating in this bursary scheme.

OneAfricanmale

OneAfrican female

Onewhite male

TwoAfricanmales

OneAfrican female

TwoAfricanmales

Twocoloured

males

Onecoloured female

Mining engineering

Mechanical engineering

Electrical engineering

Other qualifications

Study assistance

As part of our strategy to grow globally competitive people, we annually support team members in obtaining and furthering their qualifications.

During 2015, we supported 99 employees with study assistance of which ten were postgraduate degrees. Three of these employees are

studying towards their MBA degrees. Study assistance is granted in line with approved individual development plans. In 2014, 67 employees

received study assistance.


PPC external broad-based trustsThe broad-based trusts combined have an ownership of more than

3% allocated to them in terms of BBBEE. In the past, the PPC

Education Trust, which is a beneficiary of the BEE broad-based trust,

completed its mathematics and science project at high schools near

our operations. With a total investment of some R1,4 million, close

to 250 pupils benefited from this much-needed initiative. This trust

also ensured the successful completion of the artisan programme,

with all graduating learners employed in the group. To date, the

broad-based trusts have received some R26 million in dividends

since 2008.

PPC internal staff trustsIn December 2013 and 2014, shares belonging to four employee

trusts and the black non-executive directors trust vested. This

facilitated the transfer of 3,5 million shares, valued at R108 million,

directly to beneficiaries. This is in addition to dividends of over

R36,4 million received by beneficiaries since 2008.

Under the PPC Masakhane Employee Share Trust, our second

employee scheme, existing staff beneficiaries have received

R21,5 million in dividends. For the reporting period, 97% of the

26,7 million shares allotted to the trust have been allocated

to beneficiaries.

The PPC Bafati Investment Trust, launched as part of our BBBEE 2

structure, has been operationalised. Its mandate is to contribute in

meaningful and sustainable ways to enhancing the standard of living

and improving the well-being of previously disadvantaged people,

especially black women, in areas in which we operate. It also aims to

assist in their development and empowerment and to advance

BBBEE in line with the spirit and purpose of the BEE Act, mining

charter and codes. The trustees have shortlisted potential

beneficiaries and are in the final stages of their appointment as

beneficiaries. The trust has 1,9 million shares to allocate across

100 women beneficiaries from communities in PPC’s operations.

PPC Botswana share schemeThe staff scheme (Sesigo) for permanent team members of PPC

Botswana and Kgale quarries was introduced four years ago.

Under the scheme, team members 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,

111 employee beneficiaries have received P216 555 in cash payments.

EMPOWERED OWNERSHIP

HighlightsEffective 26% black ownership (which is made up of

broad-based trusts, employees and strategic business

partners) of South African operations in line with

mining charter requirements at transaction value of

around R3,8 billion

More than R1 billion of dividends have been paid to

black economic empowerment (BEE) structures to date,

of which some 90% was used to service the debt

In 2015, over R58 million in dividends was paid to

employees

Net value of shares totalling R108 million have been

transferred to PPC employees and PPC black non-

executive directors

PPC employees hold over 6% of PPC shares allocated to

them in terms of broad-based black economic

empowerment (BBBEE) and more than 3% owned by

broad-based trusts

Over R100 million in dividends paid to employees and

BBBEE beneficiaries since inception

PPC’s level 2 BBBEE rating maintained

R294 million advanced to the broad-based trusts to

assist with funding obligations

ChallengesMaintain level 2 BBBEE rating against new targets in

revised codes of good practice

Empowered ownership – BBBEE status level 2PPC continues to advance BBBEE in South Africa, recognising the

importance of meaningful mainstream economic participation by

black people in meeting the country’s socio-economic objectives.

The total transaction value of the combined BEE is approximately

R3,8 billion effected in two phases, being BEE 1 and BEE 2. After our

initial R2,7 billion BBBEE transaction seven years ago, the R1,1 billion

second phase was introduced in 2012. Black beneficiaries in broad-

based shareholder groupings, including employees and communities,

now hold an effective 26% of PPC’s South African operations,

meeting mining charter requirements.

During the period, we continued to engage with national and

provincial government departments to align our broad-based socio-

economic transformation objectives. Progress is guided by our

relevant, empowering, actualised and lasting (REAL) transformation

philosophy, the heart of all our social performance initiatives.

SOCIAL REVIEW


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Paved road at intersection – Daniëlskuil

Electrical network refurbishment Kgatelopele – Lime AcresIn 2015, PPC contributed R466 000 towards upgrading electrical

systems and networks to provide electricity to households in the

communities of Kgatelopele, in line with the municipal electrical

master plan. The project will be phased over five years and PPC will

contribute a total of R2,3 million as part of its social and labour plan

commitments.

Project in progress

Project in progress

SOCIAL AND LABOUR PLANSSocio-economic developmentPPC continues to address social challenges facing South Africa and

the communities in which we operate. In line with our social and

labour plans for 2014 to 2018, we are implementing community

development projects and contributing to much-needed social

development initiatives. PPC continues to interact with communities

and municipalities in various regions to identify development

priorities and contribute to the funding and implementation of

socio-economic initiatives. Six of eleven sites concluded development

programmes through local community engagement.

Social and labour plan highlights for 2015 Infrastructure development: roads and electrical network –

Northern Cape

Sports and recreation: sports courts – Northern Cape

Upgrade of the Riebeeck valley waste water treatment works –

Western Cape

Opening of the Vaalboschsloot community hall – North West

Reconstructing roads in Kgatelopele municipality – Lime AcresThis is a collaborative project between PPC Lime and Idwala in the

Northern Cape. Over R815 000 was spent in 2015 against PPC Lime

Acres’ social and labour plan commitments to assist the municipality

with the backlog of infrastructure, especially maintenance of roads

and sidewalks by paving access roads in the communities. This

promotes sustainable community development by creating

employment opportunities (some 40 people at the start of the

project), encourages community involvement, imparts technical skills

to unskilled and semi-skilled members of the community and retains

funds expended on the project in the community as far as possible.

In 2016, a further construction will benefit about 5 380 household

in Daniëlskuil/Lime Acres village with PPC contributing a total of

R2 million to complete the project.

Paved road at intersection – Daniëlskuil


2013/14 financial year, R1,5 million in 2014 and another R1,5 million

in 2015 as PPC’s total contribution of R5 million towards the total

cost of approximately R73 million. Construction is complete and the

plant is currently operational.

DMR audit and project site visit – Riebeeck valley waste water treatment plant

The premier of Bokone Bophirima province hands over the PPC-funded community hall in VaalboschslootOn 13 March 2015, the premier of Bokone Bophirima province,

Supra Obakeng Ramoeletsi Mahumapelo, and executive mayor of

Madibeng local municipality councillor Jostina Mothibe handed

over the community hall which was constructed by PPC for the

community of Vaalboschsloot. This 340-seater hall will provide the

community with a dignified space to house community events and

meetings as well as SASSA pay days, mobile clinic and other

community services provided by the municipality. The total value of

the hall is R4,8 million.

Beestekraal community hall

Multi-purpose sports court – Daniëlskuil PPC contributed R166 000 towards constructing a multi-purpose

sports facility at the Daniëlskuil Intermediate School as part of the

collaborative projects in the Kgatelopele integrated development

plan. This is the first phase and the facility will be extended with a full

athletics track over the remaining four years with PPC contributing

an additional R753 000.

Sports court – Daniëlskuil Intermediate School

Sports court – Daniëlskuil Intermediate School

Upgrade of the Riebeeck valley waste water treatment works – Western CapeIn 2013 PPC entered into a legacy agreement with the Swartland

municipality to assist with the upgrade of the Riebeeck valley waste

water treatment works. The water treatment plants at PPC Ongegund

and Riebeeck valley were aged and utilised to full capacity. Therefore,

a modern and state-of-the-art wastewater treatment plant was

designed to serve the entire Riebeeck valley and future expansions.

The Swartland municipality received R2 million from PPC in its

SOCIAL REVIEW CONTINUED


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Philosophy Our corporate social investment (CSI) is a cornerstone of PPC’s

transformation process and good governance programmes. As such,

PPC is committed to playing a role in developing an environment

that is characterised by sustainable development and underpinned

by our REAL transformation philosophy:

Relevant – add value to all stakeholders

Empower – make a difference; bridge the socio-economic gap

Actualise – part of the DNA of doing business; a way of life

Lasting – be sustainable, visible and have an emotional impact

Approach to CSIParameters that define the way in which our CSI initiatives are

selected and implemented include:

The CSI programme is strategically designed to align to our core

business, drawing on internal resource and competencies,

working with external stakeholders to leverage the impact of

involvement

Projects will be selected proactively, with PPC shaping guidelines

for project objectives, methodology and evaluation procedures

Implementation leverages on strategic partnerships, including

non-profit organisations with a credible social development and

governance track record

We continue to pursue opportunities to make sustainable

investments in communities where we operate. In South Africa,

R7,17 million (2014: R7,04 million) was invested in community

projects aligned to our CSI pillars across the country.

7%

EXPENDITURE BY CATEGORY

WelfareHIV/AidsOther – sportArts and culture

Job creationCommunity trainingEducationInfrastructure

1%

4%

52%

6%

18%

3%

8%

CORPORATE SOCIAL INVESTMENT

HighlightsThe CEO hosted directors and executives at Time for

Change for the PPC CEO Sleepout event

Carpenters were successfully trained and now

manufacture office furniture for new CIMERWA offices

Rural women were trained to make turf blocks for

CIMERWA factory

Contributed cement to build a dormitory to house

100 students at the African Leadership Academy

in Honeydew

LowlightsNeed to move to a more structured approach to

managing CSI

Social responsibility initiatives across the continent at

an early phase in line with the various project phases

Introduction PPC believes that being a responsible and caring corporate citizen is

a key component of true business leadership. Our group social policy

covers all operations, highlighting our strategic commitment to

sustainable development and specifying PPC’s relationships with

other organisations as part of the wider social, economic and

political environment.

As a socially grounded business, PPC strives to:

Create employment and income-generating initiatives through an

inclusive business approach where people at the base of the

supply pyramid provide goods, services and livelihoods on a

commercially viable basis to make them part of our value chain of

suppliers, distributors, retailers or customers

Evaluate the risks and impacts to the health and safety of

community members and establish preventive and control

measures

Minimise displacement, provide compensation for loss of assets,

improve the livelihoods of displaced people

Respect the human rights, dignity, aspirations and culture of

indigenous peoples

Protect cultural heritage from the adverse impacts of project

activities


Key projects are summarised below.

Welfare and charity support

In all countries where PPC operates, we continue to support

initiatives aligned to the Millennium Development Goals as well as

the Women Empowerment Principles and will endeavour to align to

the newly defined sustainable development goals.

Income generation and poverty alleviation

Time for Change (TFC)

PPC continues to partner with TFC, an NGO caring for abused and

abandoned children as well as young men and women who have

lived on the streets. TFC has grown steadily, and is now running

three small businesses in baking, sewing and food gardens. The

most popular items are PPC shopping bags and work suits from the

sewing room, as well as scones, muffins and cakes from the bakery.

Vegetables are grown for both own consumption and for selling to

street vendors, and commercial establishments, such as hotels.

A portion of the profits from the PPC shopping bag project has been

invested in implementing a class for slower learners at the centre,

with significant benefits for those children.

The Love of Christ Ministries (TLC)

Over the last four years, in line with TLC’s goal of becoming a self-

sustainable entity, PPC has supported it in establishing a free-range

poultry farming project. This now contributes to TLC’s food needs

and the profits from product sold to a restaurant provide a small

income to cover costs. This project also offers children at the centre

the opportunity of acquiring employable skills.

Humana People to People

Over the last three years, PPC has invested in the installation of a

ferro-cement tank to harvest rainwater and resuscitated two green

houses at the Doornkop Soweto project. Due to the success of this

project, funds were allocated to training the broader community,

with ten community gardens involving 100 households established

in 2015.

Learn to Earn

PPC’s sales and marketing office in Cape Town partnered with Learn

to Earn and invested in training women in sewing and baking skills.

A number of these women are now self-employed and supporting

their families.


Infrastructure development

Given the nature of our business, housing is a natural fit for a socially

grounded business. Our target is to facilitate 12 houses a year – one

each month. In 2015, PPC partnered with the Tshwane and

Johannesburg municipalities, and one house was built for the elderly

in Ivory Park, Johannesburg. We are working closely with the City of

Johannesburg and Tshwane to deliver the other 11 houses. To

support 16 Days of Activism for No Violence Against Women and

Children, we invested in constructing four houses for destitute

families at the Nelmapius project in Mamelodi, Pretoria. As a result,

PPC was recognised as the “best community builder for participation

in the CSI 16 Days campaign” by the Tshwane municipality.

Our Port Elizabeth operation repaired the caretaker’s house at Jarvis

Gqamlana School that had been destroyed in a fire. Restorations

exceeded the original condition.

PPC also contributed cement to construct:

A dormitory to house 100 students at the African Leadership

Academy in Honeydew

The Johannesburg Youth Orchestra building at the University of

Johannesburg

A wall and wide pavement to keep away snakes around the

Orange Farm Children’s Clinic

Four classrooms at Mkhanyo Primary School at KwaMhlanga

Arts and culture

PPC continues to support the Field Band Foundation, specifically the

Daniëlskuil Band in Lime Acres, Cullinan Band in Pretoria and the

Grahamstown band. These bands also perform at PPC events.

Field Band sponsored by PPC


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Education

Afrika Tikkun Phuthaditjaba Alexandra ECD programme

Investing in early childhood development (ECD) recognises that the

protection and development of children safeguards their well-being

and is the best guarantee of future peace, security and prosperity for

the community at large.

PPC continued its partnership with Afrika Tikkun, which includes

“adopting” two ECD classrooms in Alexandra. The ECD programme

in Alexandra has recorded great success during the year. Key

achievements include:

The preparation and assessments of 64 grade R children to ensure

they are school ready by November 2015

Recent assessments indicate that over 70% of developmental

milestones among ECD children have improved

62 families of the most vulnerable children receive family support

and food parcels, enabling them to more easily provide for their

children’s food security, health and well-being

Nine teachers retained their jobs and developed their ECD skills

Forest Town iPad project

Forest Town School for children with complex disabilities is very

committed to giving every child the best opportunities to engage in

their education, using innovative solutions that cater for individual

disabilities. PPC invested a further 40 iPads after the pilot programme

in 2014 (20 iPads) proved most beneficial to learners.

The iPad learning centre has brought 21st century technology to

Forest Town learners. It has trained Forest Town educators to be

technologically literate, and introduced specifically designed

programmes for special needs learners, transforming their perception

of education and making learning fun through interactive

applications (apps).

Learner at Forest Town demonstrating the use of iPad

Christel House South Africa

Christel House pupils are from surrounding settlements in the cape

flats region, characterised by abject poverty. Many are affected by

social issues such as violence, gangsterism, abuse and drugs, but still

attend school every day – highlighting their determination to

succeed despite their environments.

For the past 13 years, Christel House has taken children from South

Africa’s poorest, most troubled communities and, using its holistic

education model, achieved phenomenal success measured by

academic performance, employment achievements and the number

of citizens actively giving back to their communities and country.

PPC currently supports eight girls at R320 000 per year.

PPC also supports African Leadership Academy, Thandulwazi,

QuadPara Association of South Africa and others. Our factories,

especially Dwaalboom and Lime Acres, continue to invest significantly

in subsidising teachers’ salaries and children’s education respectively.

Employee volunteerism

There has been a noticeable increase in employee volunteerism. All

PPC sites, including head office and Zimbabwe, took part in Mandela

Day in July. Initiatives included baking pancakes for the elderly, and

food parcels for communities around PPC factories. During the year,

a number of employees participated in marathons, walks, cycling

and other initiatives to raise funds for various charities.

PPC Slurry women’s forum collected groceries from staff and donated to local charity


PPC De Hoek painted an early childhood development centre

CEO sleepout

Darryll Castle, PPC’s CEO, hosted some directors and executives at

Time for Change in July 2015. The sleepout served as a team-

building event for PPC executives, giving them an opportunity to

experience and appreciate what PPC is doing for marginalised

people in our society.

CEO sleepout at Time for Change

The evening started with executives interacting with youth from the

streets and hearing their stories about hardships on the streets and

how they treasure the opportunity of being housed at TFC. After

only three hours’ sleep, the team tackled chores at the centre. These

included baking scones before sunrise, making PPC shopping bags,

selling scones on the busy streets of Johannesburg and planting

vegetables on the roof-top boxes.

CEO sleepout at Time for Change


CSI beyond South African bordersBotswana

PPC Botswana’s CSI objectives are aligned with the country’s broader

national objectives and focused on education, especially early

childhood development, as well as women and youth empowerment

projects, in partnership with government, which are aimed at

creating employment and reducing poverty.

Molopolole project

PPC Botswana partnered with the Ministry of Trade and Infrastructure

and Department of Gender Equality to construct a building that will

house a knitting workshop. Government would like this initiative to

supply large tenders for knitwear in both the public and private

sectors. PPC also contributed towards workshops aimed at improving

the participants’ business and financial skills needed to run a

sustainable operation.

Mokolodi Crèche

The crèche is in a disadvantaged community close to the PPC

Aggregates’ Mokolodi quarry. PPC funded the crèche’s electricity

connection and invested in equipment and learning materials to

stimulate young minds.

Lady Khama Charity Trust

PPC continues to support the Lady Khama Charity Trust, a national

body that distributes funds to deserving small charities throughout

Botswana. PPC pledged significant annual contributions for a three-

year period, starting in 2012.

Mookane Junior Secondary School

PPC was the main sponsor of the school’s 2014 awards function,

recognising academic, sport and behavioural excellence. The school

is in the area where PPC explored extensively for limestone deposits.

Zimbabwe

United Bulawayo Hospital (UBH) and Mater Dei

PPC Zimbabwe invested in refurbishing the hospital’s maternity wing

and assisted Mater Dei, a private Catholic hospital to repair the roof

gutted by fire.

PPC Zimbabwe’s women’s forum gave a memorable “Christmas

cheer” to a most desperate group of handicapped children at Francis

Home, which also received 12 wheelchairs.

Some 150 towels sponsored by head office staff and 120 pairs of

sheets made by Time for Change were handed over to the Lady

Rodwell Maternity Hospital in Bulawayo.

Education

PPC Zimbabwe is supporting holiday schools where O-level students

are mentored in maths and science ahead of final exams.


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CIMERWA – Rwanda

The CIMERWA leadership sees much potential in the Western

Province, starting with its home territory in Bugarama in Muganza

District. Bugarama has potential to supply basmati rice to Africa,

fruit juices to the nation, household furniture, chickens and eggs for

local consumption and export, school uniforms and protective

clothing for companies in the province.

Community upliftment

CIMERWA is building strong partnerships with leaders and members

of the local community. It currently supports nursery and primary

schools, medical clinic and provides the community with clean,

piped water.

CIMERWA school

This school opened in 2003, offering nursery and primary school

education to 64 children of employees and the local community.

Today, the school has 453 students, 14 teachers and a principal.

CIMERWA Clinic

The clinic includes a pharmacy, 13-bed hospital and laboratory. It has

grown, over time, through new services like family planning, HIV

care, and immunisation with vaccines provided by the government.

The CIMERWA clinic currently has 11 staff members, including a

physician, two lab technicians, seven nurses and a cashier.

Socio-economic development

After several stakeholder and community engagement meetings in

2014, a number of enterprise development projects were identified

and have now been implemented.

Knitting project

CIMERWA management contributed some of the initial capital to

purchase wool and knitting needles in August 2014. Membership

has risen to over 20 girls who have either graduated or are

completing high school. The group meets during its free time under

the coordination and mentorship of CIMERWA school teachers and

some parents. Their main product is ponchos, which are most

popular in Rwanda, and profits now support over 20 children’s

school fees.

Tailoring project

CIMERWA recognised a need for personal protective clothing in the

plant and partnered with local tailors to produce the overalls in the

community. For the company’s 30th anniversary celebrations in

October 2014, local tailors were commissioned to produce

128 graduation gowns for students of the CIMERWA school.

Poultry project

A group of 20 young graduates from Bugarama were motivated to

start their own business and approached CIMERWA management

with their idea. In consulting with the CIMERWA team, they were

able to refine their concept and received seed capital from CIMERWA

staff and management. This went towards buying egg-laying

chickens and constructing the fowl run.

Carpentry project

This project stemmed from the immediate need for furniture in the

company and to make better use of the well-equipped carpentry

workshop. It also created an opportunity to hire and train

local carpenters.

A number of volunteers, who formed a cooperative, have been

trained as carpenters and acquired the skills to produce furniture for

CIMERWA and the local community. The cooperative is currently

manufacturing all office furniture for the new CIMERWA offices.

Jobs have been created in the process, as the instructor now trains

apprentices full-time while trainees receive a monthly salary.

Manufacturing of office furniture for new CIMERWA offices

Turf blocks

Due to the undulating terrain in Rwanda, it is important to find a

way of controlling soil erosion on sloping and steep land. With

support from CIMERWA, women from the community have been

trained to make turf blocks. They have formed a cooperative,

manufacturing hundreds of blocks every day, selling these blocks to

CIMERWA and constructing the slopes.

Turf block manufacturing for the CIMERWA plant


Supplier assessmentsPPC annually assesses its key suppliers via a structured questionnaire

that measures the health of the supplier’s business in the areas of:

Commercial

Engineering and technical

Environmental

Finance

Preferential procurement and empowerment status

Health and safety

Human resources

Quality and business continuity

This process assists PPC to mitigate risk and ensures that, in addition

to price and quality, the overall value proposition from suppliers

is realised.

Enterprise and supplier developmentWe view enterprise and supplier development as integral to

expanding the small, medium and micro-enterprise (SMME) sector in

South Africa. We actively support the national agenda to promote

SMME sustainability, poverty reduction and employment creation,

and shared economic growth.

Our aim is to migrate procurement from non-transformed companies

and bring new participants into mainstream procurement

opportunities without affecting our established value for money

principles.

Procurement practicesThe weighted BEE procurement spend constitutes 88% (R3,1 billion)

of the total measured procurement spend. The spend with suppliers

in different BBBEE levels are listed below:

Weighted BEE procurement per level

BBBEE LEVEL

VALUE(EXCLUDING

VAT (RM))

RECOG-NITION

%

WEIGHTEDBEE

PROCURE-MENT

(RM) %

Level 1 67 135 90 2Level 2 1 117 125 1 396 32Level 3 557 110 613 16Level 4 670 100 670 19Level 5 156 80 125 4Level 6 181 60 109 5Level 7 86 50 43 2Level 8 98 10 10 3Non-compliant 543 0 – 16

Grand total 3 475 3 056 100

Level 1 67 135 90 2Level 2 1 117 125 1 396 32Level 3 557 110 613 16Level 4 670 100 670 19Level 5 156 80 125 4Level 6 181 60 109 5Level 7 86 50 43 2Level 8 98 10 10 3Non-compliant 543 0 – 16

Grand total 3 475 3 056 100

PREFERENTIAL PROCUREMENTPPC seeks to maximise purchases from black-owned and black

women-owned companies to promote entrepreneurship and

enterprise development in local communities at regional, provincial

and national level. To create an enabling environment for these

businesses, PPC provides access to mainstream procurement

opportunities through a dedicated portal (www.ppcprocure.co.za).

For the review period, total spend was R4,97 billion (2014:

R4,9 billion); R3,5 billion was the measured spend of which 88%

(R3,1 billion) constituted weighted BEE procurement/recognised

spend under the dti’s revised codes of good practice (see table

below). Spend with suppliers who have valid BEE certificates issued

prior to the effective date of the revised codes, will be recognised.

Furthermore, PPC expects to meet the compliance target of 80%.

In terms of preferential spend against the mining charter, we met or

exceeded all targets, except for multinational contributions. We

await the Department of Mineral Resources’ revised mining charter

for 2015 to 2020.

SPEND CATEGORY

TARGET2015

%

ACTUAL2015

%

ACTUAL2014

%

ACTUAL2013

%

Capital goods 40 41 43 30Consumable goods 50 55 61 47Services 70 70 70 60

Supplier engagementTo ensure continuity in delivery, pricing and quality throughout the

value chain, PPC continues to evaluate the performance and progress

of its supply base in implementing transformation programmes.

Aspirant suppliers have the opportunity to engage PPC through our

innovative web-based procurement portal to assist with:

Easy access to information for supplier selection and rotation

Early identification of enterprise and supplier development

opportunities

Improving data integrity and security

Electronic tenders (e-tendering)

O

a

o

p

PT

Capital goods 40 41 43 30Consumable goods 50 55 61 47Services 70 70 70 60



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2%

32%

16%

5%

3%

2%

5%

16%

19%

PREFERENTIAL PROCUREMENT SPEND WITH SUPPLIERS CLASSIFIED TO THEIR BBBEE STATUS

Level 1Level 3Level 5Level 7Non-compliant

Level 2Level 4Level 6Level 8

The revised codes of good practice demand a fresh approach to

preferential procurement, given that the allotted 25 points can only

be earned if PPC procures from “empowering suppliers” irrespective

of their BEE status and spends a large portion of its procurement

budget with companies with high levels of black and black women

ownership. To assist our suppliers to clearly understand the impact of

the revised codes, full-day workshops were held with key suppliers in

Gauteng and the Western Cape.

Suppliers that secure PPC tenders are required to submit a

transformation plan, which becomes a material element to

the contract.

For the period under review, PPC’s verification audit is under way but

the group expects to meet the preferential procurement priority

pillar target of 40%:

BBBEE PROCUREMENT SPEND CATEGORY

REVISED CODESTARGET

2015%

TARGETPOINTS

All empowering suppliers 80 5Empowering qualifying small enterprises 15 3Exempt micro-enterprises 15 4Suppliers that are 51% black-owned 40 9Suppliers that are 30% black women-owned 12 4

Total 25

All empowering suppliers 80 5Empowering qualifying small enterprises 15 3Exempt micro-enterprises 15 4Suppliers that are 51% black-owned 40 9Suppliers that are 30% black women-owned 12 4

TotalTT 25


ENVIRONMENTALREVIEW

THE ENVIRONMENT

HighlightsPPC Slurry was granted authorisation by the

Department of Environmental Affairs to construct a

new kiln line (see lowlights). Slurry’s kiln 9 project

granted a tax incentive by the Department of Trade

and Industry for its broader socio-economic benefits

PPC De Hoek, Port Elizabeth, Dwaalboom and Slurry

was granted an extension of their compliance

timeframes

PPC De Hoek made progress with alternative energy

sources, through its tyre coprocessing project

PPC Slurry and De Hoek received their water use

licences, with only Dwaalboom licence pending

10% reduction in absolute carbon emissions of

finished cement

LowlightsThe appeal against authorisation granted to PPC Slurry

has resulted in a delay to the start of the construction

Public complaint on fugitive emissions at Hercules

facility

Excessive emissions from PPC Dwaalboom kiln 1 during

commissioning of cooler upgrade which was

communicated to the authorities

PPC environmental vision and policyPPC Ltd believes in operating a sustainable business and we are

committed to reducing the environmental impact of our operations

while continually improving environmental performance. We ensure

that sustainability forms an integral part of our business strategy

while we strive to minimise or eliminate negative impacts and

maximise positive impacts.

We encourage all our customers, suppliers and business associates

to meet similar environmental goals.

PPC is committed to:

Integrating environmental management into management

practices throughout the group

Implementing our environmental best practices to reduce adverse

environmental impacts of our operations and, where practical,

prevent pollution

Achieve continual environmental improvement by identifying

significant environmental aspects and setting objectives and

targets while reviewing environmental performance of our

workplace and surrounding environment

Ensure compliance to environmental legislation and other

requirements to which PPC subscribes

Responsible stewardship by managing natural resources through

efficient energy strategies and implementing waste reduction and

recycling where possible

Achieve effective and transparent communication with our

stakeholders through internal communiqués and environmental

management stakeholder forums

Train and educate our employees in environmental responsibilities

and build capacity among our stakeholders to identify, report and

act on opportunities to minimise environmental impacts

Manage our land through concurrent rehabilitation and

maintaining biodiversity

Employees and contractors working on PPC operations play a

fundamental role in achieving environmental objectives through:

Taking ownership of, and participating in, environmental

management programmes and initiatives

Integrating environmental concerns into everyday practice

Our group energy policy acknowledges that PPC is an energy-

intensive business. We are committed to developing energy and

carbon management programmes throughout the organisation,

considering lifecycle costs in procurement and design, and setting

energy-efficiency targets. PPC aims to source 10% of its energy

requirements from renewable or alternative energy sources by 2017.


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Material 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 2016, summarised below:

MATERIAL ISSUES

Challenging and changing environmental framework.

RESPONSE

PPC is committed to environmental legal compliance and where we have non-conformances we respond appropriately. We try and ensure that proposed legislation promotes sustainable business practices. MATERIAL ISSUES

Energy (electricity, coal and diesel) The cement industry needs significant thermal and electrical energy. Given the power challenges in South Africa, the price, quality, sustainable supply and use optimisation of both energy types are key to successful operation.

RESPONSE

PPC has projects to improve electrical and thermal efficiency and to evaluate alternative forms of energy supply. These include coprocessing waste materials instead of coal.

Operational

MATERIAL ISSUES

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

The proposed implementation of a CO2 tax will have financial implications for industry as a whole

RESPONSE

PPC has committed to reducing CO2 emissions, with significant progress over the past decade. We continue to improve energy and process efficiencies to continually reduce our CO2 emissions, carbon footprint and improve our reporting systems.

We are also actively participating in the consultative processes with government to ensure decision-makers have a clear perspective on issues, including carbon offset, carbon tax, carbon budgets, desired emission reduction outcomes and pollution prevention plans.

Environment

MATERIAL ISSUES

Efficient and responsible use of water resources.

RESPONSE

We are in the process of implementing comprehensive water management programmes aligned to our integrated water use licence commitments.

Water management

RESPONSE

PPC will continue to identify alternative raw materials such as used tyres and other alternative sources to replace our non-renewable energy sources. We will continue to classify our waste at our operations to ensure that waste recycling is enhanced.

MATERIAL ISSUES

Our waste-to-energy programme.

Waste

Compliance


ENVIRONMENTALREVIEW CONTINUED

At our Zimbabwe Msasa project, PPC was issued with an order on

fugitive emissions from cement supply silos during the construction

phase. The order is subject to withdrawal pending representation to

the environmental management agency. PPC submitted evidence

after addressing the said issues to REMA and we are now awaiting

response. There were no fines incurred for non-compliance at any

PPC operations.

Operational Energy

Energy remains one of our material issues. The cost of energy

accounts for 24% of our total operating cost. In terms of electrical

energy, PPC actively participates in load-shifting programmes

administered by power utility Eskom to improve security of supply to

the country. The operating environment at some of our South

African plants has become more challenging due to supply shortages.

PPC integrated demand management programme

PPC continued to benefit from the tightly controlled load-shifting

programme during the challenging power supply period. However,

of the five sites that participate in this programme, ironically some

could not achieve desired results because of interrupted power

supplies. Due to Eskom demand for load reduction to stabilise the

power constrain on the grid, our Dwaalboom plant could not realise

the planned load-shifting programme.

Energy performance1

GJ 2015 2014 2013

Direct 19 213 18 506 20 559Indirect 2 203 2 078 2 202

1 SA operations including aggregates, lime, cement and Safika

The year-on-year direct and indirect energy consumption is 4% and

6% up respectively. Energy performance has reduced mainly as a

result of the upgrade of Dwaalboom kiln 1 and the need to run an

old plant in order to satisfy the demand for cement.

Environment Carbon footprint

PPC is expanding the scope of reporting on indicators to include

recently acquired businesses and other regions in Africa. Accordingly,

the 2015 carbon performance includes Safika Holding under SA

cement performance. In 2016, there will be a focused programme to

build capacity across the business and expand assurance processes

for carbon and energy to all business units that contribute materially

to our environmental footprint.

1 SAA opoperaera itiotionsns iincincl dludludiinging agaggregregatgateses, lililimeme, cecemenment at a dndnd S fiSafiSafikkaka

Direct 19 213 18 506 20 559Indirect 2 203 2 078 2 202

ComplianceThe changing legislative framework and carbon tax

The regulatory environment on climate change mitigation is evolving

in South Africa. The government is developing a carbon tax,

allocating carbon budgets and implementing other measures in an

attempt to transition to a lower-carbon economy. A process is under

way to allocate appropriate carbon budgets for companies, which

will be expected to develop mitigation plans to meet this budget.

The carbon-budget approach being implemented by the Department

of Environmental Affairs is expected to align with the carbon tax

being developed by National Treasury. The implications are potentially

significant to PPC and the economy. PPC therefore initiated a process

to prepare for the requirements and engaged proactively. We

complied with the Department of Environmental Affairs’ request for

industries classified under the carbon budget to submit their

greenhouse gas data.

We assessed possible short, medium and long-term options to

mitigate greenhouse gas emissions and their associated costs across

our South African operations. This has been distilled into a full set of

feasible fuel, electricity and process-related emission-reduction

options for each major site.

Compliance management

In line with our environmental policy, PPC is committed to

environmental compliance across the group. To ensure this, we use a

combination of targeted internal audits, legal registers, external

legal auditing and external permit compliance audits. Our

environmental management systems ISO 14001 help us in

implementing and monitoring compliance. All our South African

cement plants and lime operations are certified under ISO 14001.

Industry forum response

The Association of Cementitious Material Producers (ACMP) still

plays a pivotal role in the engagement process and ensures that

cement industry issues are addressed through law reform processes,

for example, carbon tax, desired emission reduction outcomes,

carbon budgets, greenhouse gas emissions reporting and pollution

prevention plans.

Environmental management inspectorate

In total, PPC has had four audits by the environmental management

inspectorate, with two feedback reports received to date. One report

commended PPC Dwaalboom on its environmental performance.

PPC Hercules received a number of findings including a pre-

compliance notice and intention to issue a directive on fugitive

management of dust, especially at conveyance systems, annual

performance audit including emergency plan and submission of

emergency plan to City of Tshwane. These were addressed to the

satisfaction of the inspectors. No directives were issued to PPC.


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Absolute carbon emissions for the divisions with a material impact

on PPC’s carbon footprint are shown below:

CO2 emissions (tonnes)

TOTAL DIRECT INDIRECT

Cement, lime and dolomite2 4 565 558 4 016 916 548 642Cement SA3 3 549 866 3 066 076 483 790

Cement Zimbabwe 479 385 438 702 40 6832 Includes Safika, lime and cement operations (assured)3 Includes Safika and cement operations (assured)

The performance of Cement SA operations has improved significantly.

This is mainly due to the inclusion of Safika, which produces highly

extended cements with very low carbon intensities.

CEMENT SA

2011 2012 2013 2014 2015

CO2/t clinkerCO2/t cement

1 077

1 200

1 100

900

800

700

600

1 000

869

1 083

892

1 068

886

1 052

853

1 052 1 063

838

757

Absolute carbon emissions finished cement has reduced to 757kg

CO2/tonne, a 9,7% decrease year on year.

Efficient and responsible use of water resources South Africa is a water-stressed country and although the cement

industry is not water-intensive, PPC has a number of water

management programmes in place, including: awareness

programmes; monitoring and water balances; stormwater

management; and water use licensing processes.

Municipal water consumption

2015 2014 2013

766 592m3 718 028m3 693 213m3

2 Inclucluddesdes SSaSafikfikafika ll, liimeime anandd cd cemeementnt opeoperatratiionion (s (s (assassureured)d)d)3 Includes Safika and cement operations (assured)

Cement, lime and dolomite2 4 565 558 4 016 916 548 642Cement SA3 3 549 866 3 066 076 483 790

Cement Zimbabwe 479 385 438 702 40 683

766 592m3 718 028m3 693 213m3

The increase in overall municipal water consumption is as a result of

PPC Dwaalboom supply line being split to the neighbouring

Holfontein community. The metering has not been realigned to

exclude Holfontein. Overall the consumption should have been

down on a year-on-year basis due to the kiln 1 line not running for

four months.

Integrated water use licensing progress

PPC continues to engage with relevant authorities to facilitate the

licensing process and various amendments associated with licences.

PPC De Hoek and PPC Slurry were issued with water use licences in

2015 and we are still awaiting the licence for our Dwaalboom

operation.

PPC Colleen Bawn reusing treated wastewater case studyPPC Colleen Bawn is in Matabeleland South, the dry lowveld part of Zimbabwe characterised by low rainfall and lengthy periods of drought. The clinker plant uses water supplied by Zimbabwe National Water Agency (ZINWA). Erratic supply creates huge shortages that affect plant operation and a sustainable supply to the community: plant water shortages affect the conditioning of exhaust gas and result in elevated emissions.

The village population at Colleen Bawn also uses water supplied by ZINWA and 70% of this water goes to the sewerage works and is eventually collected and stored in the shale dam close to the sewerage plant.

PPC Colleen Bawn has embarked on a project to recover treated effluent for use in the conditioning towers. This will ensure reduced demand on ZINWA to provide raw water and contribute to conserving natural resources and ensuring water security. The project will assure compliance with regulatory requirements. State-of-the-art equipment and testing will ensure we expeditiously correct any deviations and non-conformances.



WasteAlternative fuels to energy

As part of our drive to diversify our energy sources, PPC plans to

introduce a wide range of alternative fuels. This will ensure we

become part of the solution to environmental challenges by

coprocessing waste material instead of sending it to landfill. Some of

these fuels could also reduce our carbon footprint.

Case studyPPC De Hoek kiln 6 has started coprocessing tyres with an

envisaged rate of 8 000 tonnes/annum. Tyres have a calorific

value of around 31MJ/kg, which makes it an ideal alternative

energy source for a cement kiln and preserves non-renewable

natural resources. When coprocessing tyres, the cement kiln

achieves total destruction and the ash is incorporated in

the product, resulting in no by-product. Kiln 6 is expected to

have a coprocessing capacity that results in a 10% to 15%

thermal substitution rate.

60 40

DisposedRecycled

GENERAL WASTE (%)

75

25

DisposedRecycled

HAZARDOUS WASTE (%)

In terms of waste management, PPC’s South African facilities

increased recycled waste by 6% for both general and hazardous

waste to 40% and 25% respectively.

Our commitment to environmental management systems

As part of our policy commitment, PPC operations use the

environmental management systems approach to identify

operational risks and manage these to ensure continual improvement

and environmental compliance. All our South African cement

operations are ISO 14001 certified by an independent certification

body, SABS, our lime facility is certified by Dekra and our aggregates

management systems are certified by the Aggregate and Sand

Producer Association of South Africa (ASPASA).


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To track and maintain environmental compliance, we have developed

environmental legal registers linked to environmental management

systems and these are audited every two years.

Case studyPPC Aggregate Quarries (Mooiplaas and Laezonia) is a member

of ASPASA and therefore subject to an environmental

performance audit every two years. The audit is aligned to the

ISO 14000 standard and focuses on measuring environmental

performance. PPC Mooiplaas and Laezonia achieved scores of

98,91% and 97,86% respectively, which positions Mooiplaas as

the number one quarry in the country and Laezonia among the

top ten.

Air quality managementPoint sources

Cement manufacturing releases air emissions such as dust, sulphur

dioxide (SO2), and oxides of nitrogen (NOx). In our South African

operations, all point sources are monitored continuously for these

emissions, except for Port Elizabeth where kiln gases are monitored

with a portable analyser. Our objective is to ensure that all operations,

including international, are continuously monitored by 2017.

Given the age of some of our plants, not all point sources meet

minimum emission standards under the regulated timeframe of

1 April 2015. PPC applied to the national air quality officer to

postpone compliance to this timeframe at the following operations:

PPC Slurry kiln 7, PPC Dwaalboom kiln 1, PPC De Hoek finishing mill

6, Port Elizabeth kiln 4, and finishing mill 2016 and 2018 respectively.

PPC was granted postponement for all point sources as per

its application.

The performance of our South African cement kilns are monitored on a year-on-year basis in line with our programme to comply with minimum

emission standards. The performance is as follows:

FYDUST NOX SO2

2015 2014 2013 2015 2014 2013 2015 2014 2013

Tonnes 896 978 734 11 301 8 912 8 395 250 367 891

Fugitive emissions

As part of our atmospheric emission licences, PPC formalised and submitted fugitive emission plans for all South African operations to the

regulator. Potential fugitive emission sources from the cement process include:

Mining – opencast mine where limestone is blasted and transported on haul roads

Crushing – limestone is crushed and screened in primary and secondary crushers, then transported and blended on material stockpiles

Raw material handling – raw materials received by road are stockpiled with limestone

Raw material grinding – all raw materials are proportionally extracted and mixed. Mixed raw materials are ground and stored in silos

Hercules case studyAs part of its fugitive management plan and to reduce fugitive dust emissions from conveying systems, PPC Hercules installed fit-for-purpose

dust collectors on transfer points to collect fine dust generated while transporting clinker. The upgrades have significantly reduced

fugitive missions.

Tonnes 896 978 734 11 301 8 912 8 395 250 367 891



Upgrade projectsPPC Slurry granted authorisation for kiln 9

PPC Slurry applied for environmental authorisation to construct a

new kiln line (Slurry kiln 9 or SK9) in 2014. In addition to the new

line, the project will include associated infrastructure and an

undercover material storage facility for corrective material. The kiln

will use alternative fuel and resources, reducing use of conventional

fuels. Bag filters will be fitted to ensure compliance with 2020

emissions standards and other applicable environmental legislation.

The upgrade process of the PPC Slurry facility is aimed at improving

the energy efficiency of the overall plant, with key components

including:

Constructing a modern six-stage pre-heater with in-line calciner

associated with SK9 (which is more energy and water efficient)

The new grate cooler for SK9 will reduce overall thermal energy

lost during the plant’s operation

Energy-efficient motors and fans specified in the design phase

All relevant major motors in the plants will be equipped with

variable speed drives for flow control, as these are more efficient

than typical fixed-speed motors

Some 600 temporary employment opportunities will be created

during the peak of the construction phase of this development.

Although most of these jobs will be skilled foreign labour, there will

be a significant component of local semi-skilled and unskilled labour.

There will also be entrepreneurial opportunities through services

provided to the project. The Department of Environmental Affairs

granted the authorisation in June 2015, but following an appeal, the

authorisation was revoked by the minister, delaying the project start.

The issue has now been resolved and the project can proceed.

PPC successfully applied for the 12i tax incentive programme, which

means that:

PPC qualifies for additional allowances of R350 million and

R8,9 million in support of capital investment and training

respectively

Slurry upgrade project achieved “preferred status” based on the

seven points awarded to it in terms of innovation, improved

energy efficiency, SMME procurement and skills development

Postponement upgrades

As part of our postponement compliance timeframes agreement

with the government, PPC De Hoek initiated the upgrade of a

finishing mill, which will ensure it meets 2020 compliance timeframes

by January 2016. PPC Dwaalboom completed the cooler upgrade

which led to significant reduction in dust emissions.

PPC Colleen Bawn

After receiving authorisation, PPC Colleen Bawn initiated the

construction of a state-of-the-art landfilling facility to replace the

current communal landfill, becoming the first company in Zimbabwe

to implement new stringent legal requirements. The new facility will

prevent the contamination of underground water.

Stakeholder engagement

PPC is committed to interacting with environmental stakeholders

through various channels of communication. We meet our

stakeholders at least twice a year to update them on projects,

emissions and address any issues.

PPC received 17 environmental complaints in 2015 covering water

pollution, dust eradication, blasting activity, noise and disclosure.

Some were addressed with the stakeholder concerned and others

are being addressed.

One of these complaints was submitted by the Centre for

Environmental Rights relating to insufficient disclosure of

environmental non-compliances in the annual reports for 2007 and

2012. PPC submitted its response to the centre, which was published

as part of the full disclosure report.

Mine rehabilitationPPC’s mine rehabilitation remains on track with 95% of disturbed

land restored. Areas with high potential for agriculture are leased to

local farmers for commercial farming. The wind farm at Grassridge,

owned by Innowind, provides for innovative sustainable end use of

our mining property.

PPC CONCURRENT REHABILITATION PERFORMANCE (%)

Sept2003

Sept2004

Sept2005

Sept2006

Sept2007

Sept2008

Sept2009

Sept2010

Sept2011

Sept2012

Sept2013

Sept2014

PPC actual – Concurrent rehabilitation objective

100

80

60

40

20

0


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We have undertaken a limited assurance engagement on the PPC Ltd (PPC) Global Reporting Initiative 3.1 Guidelines application level

and selected non-financial key performance indicator (KPI) disclosures to be published in the PPC integrated report for the year ended

30 September 2015.

Subject matter

The subject matter comprises the following, prepared in accordance with the Global Reporting Initiative 3.1 guidelines (GRI 3.1) supported by

management’s internal basis of preparation (the criteria):

NON-FINANCIAL KEY PERFORMANCE INDICATOR (KPI) SCOPE

Total workforce by employee type, employment contract, and region, broken down by gender

South Africa, Botswana and Zimbabwe

Total number and rate of new employee hires and employee turnover by age group, gender, and region


Percentage of employees covered by collective bargaining agreements South Africa excludes Safika and Pronto, Botswana Zimbabwe

Average hours of training per employee by gender, and by employee category South Africa excludes Safika and Pronto, Botswana, Zimbabwe

Rates of injury, occupational diseases, lost days, and total number of work-related fatalities, by region and by gender (including Botswana and Zimbabwe)

South Africa excludes Safika and Pronto, Botswana, Zimbabwe

Absenteeism (including Botswana) South Africa excludes Safika and Pronto, Botswana

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, and minority group membership

Group

Percentage of operations with implemented local community engagement, impact assessments and development programmes

South Africa excludes Safika and Pronto

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations (Rm)


Direct economic value generated and distributed (Rm) Group

Direct energy consumption by primary energy source (GJ) South Africa

Indirect energy consumptions by primary source (GJ) South Africa

Total direct and indirect greenhouse gas emissions by weight (tCO2e) South Africa

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations (Rm)


Total workforce by employee type, employment contract, and region, broken down by gender


Total number and rate of new employee hires and employee turnover by age group, gender, and region


Percentage of employees covered by collective bargaining agreements South Africa excludes Safika and Pronto, Botswana Zimbabwe

Average hours of training per employee by gender, and by employee category South Africa excludes Safika and Pronto, Botswana, Zimbabwe

Rates of injury, occupational diseases, lost days, and total number of work-related fatalities, by region and by gender (including Botswana and Zimbabwe)


Absenteeism (including Botswana) South Africa excludes Safika and Pronto, Botswana

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, and minority group membership

Group

Percentage of operations with implemented local community engagement, impact assessments and development programmes

South Africa excludes Safika and Pronto

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations (Rm)


Direct economic value generated and distributed (Rm) Group

Direct energy consumption by primary energy source (GJ) South Africa

Indirect energy consumptions by primary source (GJ) South Africa

Total direct and indirect greenhouse gas emissions by weight (tCO2e) South Africa

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations (Rm)


LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR, DELOITTE & TOUCHE, TO THE DIRECTORS OF PPC LIMITED


Directors’ responsibility

The directors, and where appropriate, those charged with

governance, are responsible for the selection, preparation and

presentation of the subject matter in accordance with the criteria.

This responsibility includes the identification of stakeholders and

stakeholder requirements, material matters, for commitments with

respect to sustainability performance and for the design,

implementation and maintenance of internal control relevant to the

preparation of the report that is free from material misstatement,

whether due to fraud or error.

Our independence and quality control

We have complied with the Code of Ethics for Professional

Accountants issued by the International Ethics Standards Board for

Accountants, which includes independence and other requirements

founded on the fundamental principles of integrity, objectivity,

professional competence and due care, confidentiality and

professional behaviour.

In accordance with International Standard on Quality Control 1,

Deloitte & Touche maintains a comprehensive system of quality

control including documented policies and procedures regarding

compliance with ethical requirements, professional standards and

applicable legal and regulatory requirements.

Auditors’ responsibility

Our responsibility is to express a limited assurance conclusion on the

selected subject matter based on the procedures we have performed

and the evidence we have obtained.

We conducted our limited assurance engagement in accordance

with the International Standard on Assurance Engagements (ISAE)

3000, Assurance Engagements other than Audits or Reviews of

Historical Financial Information, issued by the International Auditing

and Assurance Standards Board. That standard requires us to comply

with ethical requirements and to plan and perform our limited

assurance engagement to obtain sufficient appropriate evidence

about whether the selected subject matter is free from material

misstatement.

We do not accept any responsibility for any reports previously given

by us on any financial information used in relation to the subject

matter beyond that owed to those to whom those reports were

addressed by us at the dates of their issue.

Summary of work performed

A limited assurance engagement undertaken in accordance with

ISAE 3000 involves assessing the suitability in the circumstances of

the entity’s use of GRI 3.1 guidelines, supported by management’s

internal basis of preparation as the criteria for preparing the selected

subject matter, assessing the risks of material misstatement of the

selected subject matter whether due to fraud or error, responding to

the assessed risks as necessary in the circumstances, and evaluating

the overall presentation of the selected subject matter.

A limited assurance engagement is substantially less in scope than a

reasonable assurance engagement in relation to evidence gathering

and risk assessment procedures, including an understanding of

internal control, and the procedures performed in response to the

assessed risks. Consequently, less assurance is provided. The

procedures we performed were based on our professional judgement

and included inquiries, observation of processes performed,

inspection of documents, analytical procedures, evaluating the

appropriateness of quantification methods and reporting policies,

and agreeing or reconciling with underlying records. Accordingly, we

do not express a reasonable assurance opinion about whether the

entity’s selected subject matter have been prepared, in all material

respects, in accordance with the criteria.

Our evaluation mirrored the company’s own compilation process

and included:

Interviewing management and senior executives to obtain an

understanding of the internal control environment, risk assessment

process and information systems relevant to the sustainability

reporting process for the selected subject matter

Testing the systems and processes to generate, collate, aggregate,

validate and monitor the source data used to prepare the selected

subject matter for disclosure in the report

Our limited assurance engagement does not constitute an audit or

review of any of the underlying information in accordance with

International Standards on Auditing or International Standards on

Review Engagements and accordingly, we do not express an audit

opinion or review conclusion.

We believe that the evidence obtained is sufficient and appropriate

to provide a basis for our limited assurance conclusion.


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Conclusion

Based on the procedures we have performed and the evidence we

have obtained, nothing has come to our attention that causes us to

believe that the selected non-financial key performance indicator as

set out in the subject matter paragraph (of the audit report) for the

year ended 30 September 2015 is materially misstated or not

prepared, in all material respects, in accordance with GRI G3.1

supported by management’s internally developed methodology.

Based on the procedures performed and evidence obtained, nothing

has come to our attention that causes us to believe that

management’s declaration of an application level in accordance

with GRI G3.1 is materially misstated or not prepared, in all

material respects.

Other matters

Our report does not extend to any disclosures or assertions relating

to future performance plans and/or strategies disclosed in the

report.

The maintenance and integrity of the entity’s website is the

responsibility of management. Our procedures did not involve

consideration of these matters and, accordingly, we accept no

responsibility for any changes to either the information in the report

or our independent assurance report that may have occurred since

the initial date of presentation.

Restriction on use and distribution

Our work has been undertaken to enable us to express a limited

assurance conclusion on the selected subject matter to the directors

of PPC Ltd in accordance with the terms of our engagement, and for

no other purpose. We do not accept or assume liability to any party

other than the entity, for our work, for this report, or for the

conclusion we have reached.

Deloitte & Touche

Registered Auditors, 20 Woodlands Drive, Woodmead, 2052

Per AN le RichePartner

2 December 2015

National executive: LL Bam* chief executive; AE Swiegers* chief operating officer; GM Pinnock* audit; N Singh risk advisory; NB Kader* tax; TP Pillay consulting; S Gwala managed services; K Black* clients and industries; JK Mazzocco* talent and transformation; MJ Jarvis* finance; M Jordan* strategy; TJ Brown* chairman of the board; MJ Comber* deputy chairman of the board.

A full list of partners is available on request.*Partner and registered auditor.

D O U B L I N G O U R B U S I N E S S E V E R Y T E N Y E A R S

Recognising that Africa presents a unique growth opportunity in our time we will ensure that we at least maintain our market shareWe will have a deep understanding of the locations, owners and influencers of all relevant inputs, businesses and markets, and will leverage our position in order to maintain and extend our influenceUltimately we will utilise our strength to become a major global cement player

122 PPC Ltd

PPC Ltd 123

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124 PPC Ltd

DIRECTORS’ RESPONSIBILITY FOR THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

AUDITORS’ RESPONSIBILITY

INDEPENDENT AUDITORS’ REPORT TO THESHAREHOLDERS OF PPC LTD ON THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

OPINION

OTHER REPORTS REQUIRED BY THE COMPANIES ACT

Deloitte & Touche

Partner

PPC Ltd 125

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2015 Audited

Rm

Revenue 9 227 6 437

Gross profit 2 790 1 130

Operating profit before item listed below: 1 660 43

Operating profit 1 617 496 28

Profit before equity accounted earnings and exceptional adjustments 1 149

(16) (81)

–

Profit before taxation 1 052 391

Profit for the year 661

698 (37)

Other comprehensive income, net of taxation 775 Items that will be reclassified to profit or loss 775

38 (11) – 752

(7) 3

Total comprehensive income 1 436

1 340 96

EARNINGS PER SHARE (CENTS) 133

131

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126 PPC Ltd

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2015Audited

Rm

ASSETSNon-current assets 12 202

10 648 254 772 125 355 48

Non-current assets held for sale 76 –Current assets 2 979

1 029 1 232

718

Total assets 15 257

EQUITY AND LIABILITIESCapital and reserves

(1 165) 1 402 2 406

Equity attributable to shareholders of PPC Ltd 2 643 521

Total equity 3 164 Non-current liabilities 8 813

1 059 400

6 711 643

Current liabilities 3 280 1 510 1 770

Total equity and liabilities 15 257

Net asset book value per share (cents) 503

for the year ended 30 September 2015

PPC Ltd 127

SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS

2015Audited

Rm

Cash flow from operating activities 2 416

300

Cash generated from operations 2 716 (408)

28 (489)

Cash available from operations 1 847 (559)

Net cash inflow from operating activities 1 288

––

(108) – (2 892)

5

Net cash outflow from investing activities (2 995)

1 796 –

(24)

Net cash inflow from financing activities 1 772

Net movement in cash and cash equivalents 65 563

– 90

Cash and cash equivalents at end of the year 718

Cash earnings per share (cents)* 351

Cash conversion ratio^ 1,1

2015

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128 PPC Ltd

SUMMARISED CONSOLIDATED STATEMENT OFCHANGES IN EQUITY

Other

Statedcapital

Rm

Unrealisedsurplus

on reclassi-ficationof plant

Rm

Foreigncurrency

translationreserve

Rm

Balance at September 2013– – –– – –– – –– – –– –– –

– –– –– –

Balance at September 2014 (1 173) – 416 – – –– – –

– – –– – –– – 618 – – –

(24) – – 9 – –

23 – –

Balance at September 2015 (1 165) – 1 034

PPC Ltd 129

reserves

Available-for-sale

financialasset

Rm

Hedgingreserve

Rm

Equitycompensation

reserveRm

Retainedprofit

Rm

Equityattributable

toshareholders

of PPC LtdRm

Non-controlling

interestsRm

Totalequity

Rm

– – – –– –– – – –– – – –

– – – – –– – – –– – – – – –– – – – – –

84 – 233 2 255 1 815 603 2 418 – – – (540) (540) (19) (559)– – 59 – 59 – 59

– – – – – (422) (422)– – – – – 256 256

(3) 27 – 698 1 340 96 1 436 – – – (7) (7) 7 –– – – – (24) – (24)– – (9) – – – – – – (23) – – – –

81 27 260 2 406 2 643 521 3 164

2015

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130 PPC Ltd

SEGMENTALINFORMATION

Consolidated

2015 Rm

Revenue 6 795 2 624

9 419 (192)

Total revenue 9 227 Operating profit before item listed below 1 660

43 Operating profit 1 617

1 120 497 22

518 28

Profit before earnings from equity accounted investments and exceptional adjustments 1 149 (16) (81)

Profit before taxation 1 052 391

Profit for the year 661 702

2 362 1 706

656 25,6

Assets 12 202

5 141 7 061

2 979 76 –

15 257 6 687 8 570 2 856 4 643

Liabilities 8 813 3 280

12 093 8 343 3 750

PPC Ltd 131

Cement Lime Aggregates and readymix# Other^

2015 Rm

2015 Rm

2015 Rm

2015 Rm

4 999 853 943 – – 2 507 18 99 – –

7 506 871 1 042 – –

1 422 133 105 – – 43 – – – – – –

1 379 133 105 – – 881 133 106 – – 498 – – (1) – –

34 – (12) – 382 4 29 103

19 1 8 – –1 050 130 72 (103)

(16) – – – – – – (59) – – (22) – – 975 130 50 (103) 325 35 31 – – 650 95 19 (103) 594 45 63 – –

2 016 178 168 – – 1 364 178 164 – –

652 – – 4 – – 26,9 20,4 16,1 – –

11 251 310 641 – – 4 231 310 600 – – 7 020 – – 41 – –

2 536 185 254 4 76 – – – – – – –

13 863 495 895 4 5 376 495 812 4 8 487 – – 83 – – 2 741 45 70 – – 4 588 28 27 – –

7 492 94 89 1 138 2 921 105 162 92

10 413 199 251 1 230 6 692 199 222 1 230 3 721 – – 29 – –

2015

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132 PPC Ltd

NOTES TO THE SUMMARISED CONSOLIDATEDFINANCIAL STATEMENTS

1. BASIS OF PREPARATION

2015 Audited

Rm

2. FINANCE COSTS (INCLUDING FAIR VALUE ADJUSTMENTS ON FINANCIAL INSTRUMENTS) 48

189 313

550 (196)

354 116

42 74

48

518 (22)

496 474

22

PPC Ltd 133

2015 Audited

Rm

3. IMPAIRMENTS AND OTHER EXCEPTIONAL ADJUSTMENTS–

(22) (1) – (1) –

(57)

(81)

Impairment of property, plant and equipment

4. TAXATION%

36,6 2,7

39,3 0,3

39,6 (11,6)

(8,9) (1,1) (2,1) 1,6

(1,1)

28,0

2015

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NOTES TO THE SUMMARISED CONSOLIDATEDFINANCIAL STATEMENTS CONTINUEDfor the year ended 30 September 2015

134 PPC Ltd

2015 Audited

Cents

5. EARNINGS AND HEADLINE EARNINGS

133 131 148 147

145 143 149 147

133

15 (3)

145

Rm

661 81

(15)

727

759 (32)

661 82

743

775 (32)

PPC Ltd 135

2015 Audited

Rm

6. PROPERTY, PLANT AND EQUIPMENT 7 223

– 3 269 (612) (22) (57)

(115) – (40) –

1 002

10 648

778 87

9 780 3

10 648

Assets pledged as security

7. GOODWILL 268

– (22)

8

254

49 78

127

254 20

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136 PPC Ltd

2015 Audited

Rm

8. OTHER INTANGIBLE ASSETS 681

– 36

(90) 118 27

772

191 143 332 106

–

772

9. EQUITY ACCOUNTED INVESTMENTS 126

– (1)

125

– 121

4

125

PPC Ltd 137

2015 Audited

Rm

10. OTHER NON-CURRENT ASSETS 148

1 7 –

117 82

355

11. NON-CURRENT ASSETS HELD FOR SALE 36 – 40 –

76 –

2015

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138 PPC Ltd

2015 Audited

Rm

12. TRADE AND OTHER RECEIVABLES 931 (70)

861 46 – 38 – 13 – 50

1 008 75 8

141 –

1 232

Shares (000)

13. STATED CAPITALNumber of ordinary shares and weighted average number of shares

605 380

& (37 382) (34 478) (1 285) (6 343)

525 892

526 022 532 236 526 022

&

Consolidated Financial StatementsConsolidated Financial Statements

PPC Ltd 139

2015 Audited

Rm

13. STATED CAPITAL (1 173)

(24) 9

23

(1 165)

14. BORROWINGS‡ 1 748

1 520 2 306

641 ^ 421 –$ 938 –

306

5 574 1 137

441 696

6 711 1 510

8 221

‡

2015

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140 PPC Ltd

2015 Audited

Rm

14. BORROWINGS Maturity profile of borrowings:

1 510 2 877

303 1 056 2 475

8 221

Bond number, term and interest rate Issue date

650 750 750 250

2 400 Less (2)

2 398 Less (650) –

1 748

PPC Ltd 141

2015 Audited

Rm

15. OTHER NON-CURRENT LIABILITIES 5

17 – 464 204 –

690 Less (47)

643

Put option liabilitiesPPC Barnet DRC Holdings

Safika Cement

2015

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142 PPC Ltd

2015 Audited

Rm

16. TRADE AND OTHER PAYABLES 5 1 –

260 42

116 924

1 348 310

– 112

1 770

17. INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS 2 777

45 70

2 892 933

1 959

PPC Ltd 143

18. ACQUISITIONS OF SUBSIDIARY COMPANIES

–

–

–

–

Safika Cement Holdings (Pty) Ltd (Safika Cement)

Pronto Holdings (Pty) Ltd (Pronto)

Quarries of Botswana

2015

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144 PPC Ltd

2015 Audited

Rm

19. COMMITMENTS 3 594 1 049

4 643 171

4 814

2 409 2 234

4 643

2 758 1 518

367

4 643

PPC Ltd 145

20. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

2015 Audited

Rm

Financial assetsAvailable-for-sale

82 Loans and receivables

7 – 1 –

46 – 51 –

911 718

At fair value through profit and loss 117 110 –

Total financial assets 2 043 886

1 157 –

Financial liabilitiesAt amortised cost

6 727 1 510 1 504

At fair value through profit and loss 5

464 Derivatives

1

10 211 1 510 8 237

464 20

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20. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES continuedMethods and assumptions used by the group in determining fair values: * Level 1 – financial assets and liabilities that are valued accordingly to unadjusted market prices for similar assets and liabilities. Market

prices in this instance are readily available and the price represents regularly occurring transactions which have been concluded on an arm’s length transaction.

* Level 2 – financial assets and liabilities are valued using observable inputs, other than the market prices noted in the level 1 methodology, and make reference to pricing of similar assets and liabilities in an active market or by utilising observable prices and market-related data.

* Level 3 – financial assets and liabilities that are valued using unobservable data, and requires management judgement in determining the fair value. Refer note 15 for quantitative information and significant assumptions on the unobservable inputs used to determine fair value liabilities.

The estimated fair value of financial instruments is determined, at discrete points in time, by reference to the mid-price in an active market wherever possible. Where no such active market exists for the particular asset or liability, the group uses valuation techniques to arrive at fair value, including the use of prices obtained in recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market participants.

The fair value of the unlisted investment has been valued based on the purchase agreement following the decision to dispose of the investment, while unlisted collective investment is valued using the closing unit price at period end. Investment in government bonds is valued using the discounted face value of the bills. Further details are disclosed in note 10.

The fair value of loans receivable and payable is based on the market rates of the loan and the recoverability.

The fair value of cash and cash equivalents, trade and other financial receivables and trade and other financial payables approximate their respective carrying amounts of these financial instruments because of the short period to maturity.

Put option liabilities have been calculated using EBITDA forecasts prepared by management and discounted to present value. Further details are disclosed in note 15.

The fair value of derivative financial instruments relating to cash settled share appreciation rights is determined with reference to valuation performed by third-party financial institutions at reporting date, using an actuarial binomial pricing model.

Level 3 sensitivity analysis

Financial instrumentValuation technique

Key assumptions

Carrying value

Decrease (Rm)

Increase (Rm)

Put option liabilitiesEarnings multiple

EBITDA and net debt 422 20 20

If the key unobservable inputs to the valuation model, being estimated EBITDA and net debt, were 1% higher/lower while all other variables were held constant, carrying amount of the put option liabilities would decrease/increase by R20 million.

The sensitivities are only based on the DRC put option as any movement on the remainder of the Safika put options are not deemed material.

Movements in level 3 financial instruments2015

Rm2014

Rm

Financial assets

Balance at beginning of the year 95 37

Remeasurements (13) 58

Transfer to level 2 (82) –

Balance at end of the year – 95

Financial liabilitiesBalance at beginning of the year 145 –

Exercised during the year (108) –

Put options issued 422 137

Remeasurements (14) (8)

Time value of money adjustments 19 16

Balance at end of the year 464 145

21. EVENTS AFTER THE REPORTING DATEThere are no events that occurred after the reporting date that may have a material impact on the group’s reported financial position at 30 September 2015.


ELEMENT DESCRIPTION MEASURECOMPLIANCE TARGET 2015 PROGRESS

Reporting Reporting level of compliance with charter for calendar year

Documentary proof of receipt from DMR

Annual Employment equity and social and labour plans submitted

Ownership Minimum target for effective HDSA ownership

Meaningful economic participation

26% 26% target achieved in 2012

Full shareholder rights 26% R58 million in dividends paid to employee shareholders in 2015 (2014: R30 million)

Housing and living conditions

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

Percentage reduction of occupancy rate towards 2015 target

100% Company housing is provided at most remote locations. We also promote home ownership through the PPC homeowners support programme: 44 employees and their families have been supported to date. Over 200 employees are currently at various stages of becoming home owners through this programme

Converting and upgrading hostels into family units

Percentage conversion of hostels into family accommodation

100% 100%. Upgrade at Lime Acres, PPC’s only hostel, is complete

Procurement and enterprise development

Procurement spend from BEE entity

80% PPC has met the dti’s revised compliance target of 80%: 87% (R4,5 billion) of discretionary spending was with BEE empowering companies

Actual 2015

Actual 2014

Capital goods 40% 41% 43%

Services 70% 70% 70%

Consumable goods 50% 55% 61%

Multinational suppliers’ contribution to social fund

Annual spend on procurement from multinational suppliers

0,5% of procurement

value

The DMR is formulating a model to implement this contribution to social development

Employment equity

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

Top management (board) 40% 54%

Senior management (exco) 40% 50%

Middle management 40% 48%

Junior management 40% 63%

Core skills 40% 84%

Reporting Reporting level of compliance with charter for calendar year

Documentary proof of receipt from DMR

Annual Employment equity and social and labour plans submitted

Ownership Minimum target for effective HDSA ownership

Meaningful economic participation

26% 26% target achieved in 2012

Full shareholder rights 26% R58 million in dividends paid to employee shareholders in 2015 (2014: R30 million)

Housing and living conditions

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

Percentage reduction of occupancy rate towards 2015 target

100% Company housing is provided at most remote locations. We also promote home ownership through the PPC homeowners support programme: 44 employees and their families have been supported to date. Over 200 employees are currently at various stages of becoming home owners through this programme

Converting and upgrading hostels into family units

Percentage conversion of hostels into family accommodation

100% 100%. Upgrade at Lime Acres, PPC’s only hostel, is complete

Procurement and enterprise development

Procurement spend from BEE entity

80% PPC has met the dti’s revised compliance target of 80%: 87% (R4,5 billion) of discretionary spending was with BEE empowering companies

Actual 2015

Actual 2014

Capital goods 40% 41% 43%

Services 70% 70% 70%

Consumable goods 50% 55% 61%

Multinational suppliers’ contribution to social fund

Annual spend on procurement from multinational suppliers

0,5% of procurement

value

The DMR is formulating a model to implement this contribution to social development

Employment equity

Diversification of workplace to reflect the country’sdemographics to attain competitiveness

Top management (board) 40% 54%

Senior management (exco) 40% 50%

Middle management 40% 48%

Junior management 40% 63%

Core skills 40% 84%

MINING CHARTER SCORECARD

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MINING CHARTER SCORECARD CONTINUED

ELEMENT DESCRIPTION MEASURECOMPLIANCE TARGET 2015 PROGRESS

Human resources development (detailed table on page )

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 (excluding mandatory skills development levy)

5% 4,5% spent on skills development (R42,7 million)

Mine community development

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

Implement approved community projects

Up-to-date project

implementation

R11 million was spent on community development in 2015

Sustainable development and growth

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% Dedicated group safety and health manager. External company training safety and health representatives

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

Beneficiation 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 Africa. Aggregates are fully beneficiated in South Africa

Health and safety

Implementation of culture transformation framework

Percentage versus gap analysis

100% 100%

Percentage of employees embarking on occupational health and safety training

2% per annum 8% 8%

Percentage of leading practices from MHSC investigated for implementation

All investigated for 100% 100% 100%

Percentage of research findings from MOSH learning hub investigated for implementation


Health: percentage of mandatory occupational health reports submitted

Four required for 100% 100% 100%

Health: adherence to HIV/Aids and TB guidelines

Yes/no Yes On target

Human resources development (detailed table on page )

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


5% 4,5% spent on skills development (R42,7 million)

Mine community development

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

Implement approved community projects

Up-to-date project

implementation

R11 million was spent on community development in 2015

Sustainable development and growth

Improvement of industry’senvironmental management

Implementation of approved EMPs

100% All plants have approved EMPs

Improvement of industry’smine health and safety performance

Implementation of tripartite action plan on health and safety

100% Dedicated group safety and health manager. External company training safety and health representatives

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

Beneficiation 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 Africa. Aggregates are fully beneficiated in South Africa

Health and safety

Implementation of culture transformation framework

Percentage versus gap analysis

100% 100%

Percentage of employees embarking on occupational health and safety training

2% per annum 8% 8%

Percentage of leading practices from MHSC investigated for implementation


Percentage of research findings from MOSH learning hub investigated for implementation


Health: percentage of mandatory occupational health reports submitted

Four required for 100% 100% 100%

Health: adherence to HIV/Aids and TB guidelines

Yes/no Yes On target


Human resource development – 2015

A C I WDESCRIPTION MEASURES CATEGORY M F M F M F M F TOTAL

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


Learnerships and bursaries (of core and critical skills)

2 7 4 1 0 0 1 0 15

4 2 3 1 0 0 1 0 11

Artisans 30 12 26 2 0 0 4 0 74

ABET training (level I, II, III, IV and NQF 1)

66 4 3 2 0 0 2 0 77

Other training (school support and post-matric programmes)

108 employees are being assisted with post-matric qualifications12 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 BBBEE status as at September 2015 was audited and verified by rating agency EmpowerLogic. In terms of the dti codes of good practice, PPC is classified as a level 2 BBBEE contributor with a procurement recognition of 125%. This enables our customers to claim back 125% of their spending with our group for their own preferential procurement points. The certificate expires on 2 December 2015.

BBBEE STATUS – VERIFIED LEVEL 2 2015 POINTS

Elements obtained Equity ownership 22

Management composition 11

Employment equity 5,05

Skills development 8,34

Preferential procurement 19,54

Enterprise development 15

Socio-economic development 5

Black ownership 32,68% black ownership

10,72% black women ownership

Value-adding vendor Yes

BEE procurement recognition 125%

* Due to the nature of cement manufacture, PPC’s empowerment credentials are measured against both the South African mining charter scorecard and the South African dti’s revised codes of good practice. PPC reports on both in this section.

dti BBBEE status*

Develop requisite skills, including support for SA-based R&D initiatives intended to developsolutions in mining, processingand exploration technology efficiency (energyand water use in mining), beneficiation, environmental conservation and rehabilitation


Learnerships and bursaries (of coreand critical skills)

2 7 4 1 0 0 1 0 15

4 2 3 1 0 0 1 0 11

Artisans 30 12 26 2 0 0 4 0 74

ABET training (level I, II, III, IV and NQF 1)

66 4 3 2 0 0 2 0 77

Other training (school support and post-matric programmes)

108 employees are being assisted with post-matric qualifications12 students on graduate development programme

Support for SA-based R&D initiatives

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

* DueDue toto ththe ne natuaturere ofof cemcementent mamanufnufactactureure P, PPC’PC s es empompowerwermenment ct credredententialials as arere meameasursureded agaagainsinst bt bothoth ththe Se Soutouth Ah Afrifricancan mimininning cg charharterter scscoreorecarcard ad andnd thethe So th African dti’s re ised codes of good practice PPC reports on both in this section

Elements obtained Equity ownership 22

Management composition 11

Employment equity 5,05

Skills development 8,34

Preferential procurement 19,54

Enterprise development 15

Socio-economic development 5

Black ownership 32,68% black ownership

10,72% black women ownership

Value-adding vendorVV Yes

BEE procurement recognition 125%

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PPC SHAREHOLDERANALYSIS

SHAREHOLDER SPREADNumber of

shareholders %Number

of shares %

1 – 1 000 shares 7 360 54,86 3 050 049 0,501 001 – 10 000 shares 4 859 36,22 15 761 726 2,6010 001 – 100 000 shares 877 6,54 25 343 774 4,19100 001 – 1 000 000 shares 243 1,81 76 931 583 12,711 000 001 shares and over 78 0,58 484 292 516 80,00

Total 13 417 100 605 379 648 100

DISTRIBUTION OF SHAREHOLDERSBanks 94 0,70 154 014 342 25,44Broad-based black ownership 17 0,13 145 378 510 24,01Brokers 74 0,55 24 055 932 3,97Close corporations 119 0,89 670 568 0,11Endowment funds 45 0,34 1 273 571 0,21Individuals 10 686 79,65 26 665 251 4,40Insurance companies 82 0,61 11 607 418 1,92Investment companies 16 0,12 768 941 0,13Medical aid schemes 10 0,07 246 364 0,04Mutual funds 214 1,59 85 788 709 14,17Nominees and trusts 1 539 11,47 11 933 888 1,97Other corporations 72 0,54 831 840 0,14Pension funds 177 1,32 130 285 890 21,52Private companies 270 2,01 10 189 801 1,68Sovereign wealth fund 2 0,01 1 668 623 0,28

Total 13 417 100 605 379 648 100

PUBLIC/NON-PUBLIC SHAREHOLDERSNon-public shareholders 21 0,16 238 499 689 39,40Directors’ holdings 3 0,02 163 243 0,03Broad-based black ownership 17 0,13 145 378 510 24,01Strategic holdings (10% or more) 1 0,01 92 957 936 15,36Public shareholders 13 396 99,84 366 879 959 60,60

Total 13 417 100 605 379 648 100

BENEFICIAL SHAREHOLDERS HOLDING 3% OR MORE OF THE ISSUED SHARE CAPITAL

Number of shares in September

2015

% September

2015

Government Employees Pension Fund 92 957 936 15,36PPC SBP Consortium Funding SPV Pty Limited 39 988 926 6,61PPC Masakhane Employee Share (Est) Trust 26 757 780 4,42


FINANCIAL CALENDAR

Financial year-end 30 September* Annual general meeting 25 January 2016

REPORTS

Preliminary announcement of annual results Published June

Interim results for half year to September Published November

Annual financial statements Published July

DIVIDENDS

Interim If declared November

Paid January

Final If declared June

Paid August

*The company has changed its year-end to March with effect from the 2016 financial year.

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GLOSSARY

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 Capital 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 International Financial Reporting Standards

ISO International Standards Organisation

King III King Report on Corporate 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


GRI

INDEX TO GLOBAL REPORTING INITIATIVE INDICATORS (G3.1)

GRI TOPIC PAGE/LINK

STRATEGY AND ANALYSIS

1.1 Statement from chairman 3,14

1.2 Key impacts, risks and opportunities 4, 17, 18, 20

ORGANISATIONAL PROFILE

2.1 – 2.9 General organisational details IFC, 6, 8, 11

2.10 Awards 10

REPORT PARAMETERS

3.1 – 3.4 Report profile 3

3.5 – 3.11 Report scope and boundary 3

3.12 GRI index 153, Website

3.13 Assurance 3, 119

GOVERNANCE, COMMITMENTS AND ENGAGEMENT

4.1 – 4.10 Governance issues 52 – 87

4.11 – 4.13 Commitment to external initiatives 20 – 21; 103 – 111

4.14 – 4.17 Stakeholder engagement 20 – 21

ECONOMIC PERFORMANCE

EC1 Economic value generated and distributed 37

EC2 – EC4 Implications of climate change, defined benefit plan obligations, assistance from government

114 – 115

EC5 – EC7 Market presence IFC,11, 40 – 49

EC8 Infrastructure investments 40 – 49

EC9 Indirect economic impacts 103 – 104

ENVIRONMENTAL PERFORMANCE

EN1 – EN2 Materials used and recycling 18, 112 – 118

EN3 – EN7 Energy 112 – 118

EN8 – EN10 Water 112 – 118

EN11 – EN15 Biodiversity 118

EN16 – EN25 Emissions, effluents and waste 114 – 115

EN26 – EN27 Products and services N/R

EN28 Compliance 113

EN29 – EN30 Transport N/R

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GRI TOPIC PAGE/LINK

SOCIAL PERFORMANCE

HR1 – HR4 Human rights and non-discrimination 92 – 93

HR5 – HR11 Freedom of association, security practices, indigenous rights 98

LA1 – LA5, LA15 Workforce breakdown, turnover, labour relations 96 – 98

LA6 – LA9 Occupational health and safety 90 – 91

LA10 – LA12 Training and education 99 – 101

LA13 – LA14 Diversity and equal opportunity 95 – 101

SOCIETY

SO1, SO9, SO10 Community 102 – 109

SO2 – SO4 Corruption 60 – 61

SO5 – SO8 Public policy and anti-competitive behaviour 60 – 61

PR1 – PR9 Customer health and safety N/R

GRI CONTINUED

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CORPORATE INFORMATION

PPC LTD(Incorporated in the Republic of South Africa)Company registration number: 1892/000667/06JSE code: PPCJSE ISIN code: ZAE000170049ZSE code: PPC

DIRECTORSExecutive: DJ Castle (chief executive officer), MMT Ramano (chief financial officer)Non-executive: BL Sibiya (chairman), N Goldin, ZJ Kganyagi, TJ Leaf-Wright, MP Malungani, T Mboweni, SK Mhlarhi, B Modise, T Mayo*, CH Naude, PE Nelson, TDA Ross

*Zimbabwean

AUDITORSDeloitte & ToucheDeloitte PlaceThe WoodlandsWoodlands DriveWoodmead, SandtonPrivate Bag X6Gallo Manor, 2052, South AfricaTelephone +27 11 806 5000Telefax +27 11 806 5111

SECRETARY AND REGISTERED OFFICEJHDLR Snyman148 Katherine Street, Sandton, South AfricaPO Box 787416Sandton, 2146, South AfricaTelephone +27 11 386 9000Telefax +27 11 386 9001Email [email protected]

SPONSOR: SOUTH AFRICAMerrill Lynch SA (Pty) Ltd138 West StreetSandown, SandtonPO Box 651987Benmore, 2010, South AfricaTelephone +27 11 305 5555Telefax +27 11 305 5600

TRANSFER SECRETARIES: SOUTH AFRICAComputershare Services (Pty) Ltd70 Marshall StreetMarshalltownJohannesburg 2001PO Box 61051Marshalltown, 2107, South AfricaTelephone +27 11 370 5000Telefax +27 11 688 5200Email [email protected]

TRANSFER SECRETARIES: ZIMBABWECorpserve Pvt Limited4th Floor, Intermarket CentreCorner First Street and Kwame Nkrumah AvenueHarare, ZimbabwePO Box 2208Harare, ZimbabweTelephone +263 4 758 193/751 559Telefax +263 4 752 629

SPONSOR: ZIMBABWEImara Edwards Securities Pvt LimitedBlock 2, Tendeseka Office ParkSamora Machel Avenue Harare, ZimbabwePO Box 1475Harare, ZimbabweTelephone +263 4 790 090Telefax +263 4 791 345

FORWARD-LOOKING STATEMENTSThis report, including statements on the demand outlook, PPC’s expansion projects and its capital resources and expenditure, contains certain forward-looking views. By their nature, forward-looking statements involve risk and uncertainty and although PPC believes the expectations reflected in these 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.

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