annual financial statements 2014 - ppc ltd. income statement 27 consolidated statement of...

PPC A

nnual financial statements 2014

Annual financial statements 2014

Annual financial statementsApproval of annual financial statements 1Certificate by company secretary 2Preparer of the annual financial statements 2Independent auditors’ report 3Report to shareholders on the activities of the audit committee 4Directors’ report 6Chief financial officer’s report 9Accounting policies 12Judgements made by management 23Consolidated statement of financial position 26Consolidated income statement 27Consolidated statement of comprehensive income 28Consolidated statement of changes in equity 29Consolidated statement of cash flows 31Segmental information 32Notes to the group financial statements 34Annexure 1 – Subsidiaries and non-controlling interest 74Company statement of financial position 77Company income statement 78Company statement of comprehensive income 79Company statement of changes in equity 80Company statement of cash flows 81Notes to the company financial statements 82Abridged remuneration report 98PPC shareholder analysis 107Corporate information 108Financial calendar 108A profile of our business IBC

Contents

Vision

To grow PPC into a leading emerging-market business.

PPC operates in emerging markets, where

70% of the world’s cement is produced

and consumed. These markets are largely

characterised by higher growth in populations,

GDP and cement demand. Collectively, they offer

new opportunities and deliver higher returns for

producers of cement and related products.

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.

EXCELLENCE CUSTOMERS

STAK

EHO

LDER

VALU

E

EMPL

OY

EE S

ATI

SFA

CTIO

N

LEGITIMACY

PPC values

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.

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.

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.

Creating a better life for all stakeholders

Everyone’s contribution creates the value. All stakeholders share in the

value and success we create.

Integrity is non-negotiable

We meet our commitments. We do what we say. We are honest and obey the law.

for the year ended 30 September 2014

PPC Ltd Annual financial statements 2014 1

Approval of annual financial statements

The directors of the company are responsible for the integrity and objectivity of the annual financial statements and other information contained in this annual report, which have been prepared in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa.

In discharging this responsibility, the group maintains suitable internal control systems designed to provide reasonable assurance that assets are safeguarded and that transactions are executed and recorded in accordance with group policies, noting that internal control systems only provide reasonable, but not absolute assurance against material loss or misstatement.

The directors, supported by the audit committee, are satisfied that such controls, systems and procedures are in place to minimise the possibility of material loss or misstatement. The directors are satisfied that such control systems have been maintained during the year.

Following operational and cash forecast reviews, the directors believe that the group has adequate resources to continue in operation for the foreseeable future and the annual financial statements appearing on pages 12 to 97 have, therefore, been prepared on a going-concern basis.

The annual financial statements have been audited by the external auditing firm, Deloitte & Touche, who have been given unrestricted access to all financial records and other related data, including minutes of all meetings of the board of directors, committees of the board and executives. The directors believe that all representations made to the independent auditors during the audit were valid and appropriate. Deloitte & Touche’s unmodified report is presented on page 3 of this annual report.

The annual financial statements were approved by the board of directors on 17 November 2014 and are signed on its behalf by:

BL Sibiya MMT Ramano TDA RossExecutive chairman Chief financial officer Lead independent director

17 November 2014

Sandton

2 PPC Ltd Annual financial statements 2014


Certificate by company secretary

In terms of section 88(2)(e) of the Companies Act 71 of 2008, as amended, I certify that PPC Ltd has lodged with the Companies and Intellectual Property Commission all such returns as are required of a public company in terms of this Act and that such returns are true, correct and up to date.

JHDLR SnymanGroup company secretary

17 November 2014

Preparer of the annual financial statementsfor the year ended 30 September 2014

These annual financial statements have been prepared under the supervision of the chief financial officer, MMT Ramano CA(SA).

MMT RamanoChief financial officer

17 November 2014



Independent auditors’ report

To the shareholders of PPCWe have audited the consolidated and separate annual financial statements of PPC Ltd set out on pages 12 to 97, which comprise the statements of financial position as at 30 September 2014, and the income statements, statements of other comprehensive income, the statements of changes in equity and the statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ responsibility for the annual financial statementsThe company’s directors are responsible for the preparation and fair presentation of these consolidated and separate annual financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate annual financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these consolidated and separate annual financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the annual financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the annual financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the annual financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated and separate annual financial statements present fairly, in all material respects, the consolidated and separate financial position of PPC Ltd as at 30 September 2014, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Other reports required by the Companies Act As part of our audit of the consolidated and separate annual financial statements for the year ended 30 September 2014, we have read the directors’ report, the audit committee’s report, the remuneration report and the company secretary’s certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited annual financial statements.

These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate annual financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Deloitte & ToucheRegistered auditorsPer: B NyembePartner

17 November 2014



Report to shareholders on the activities of the audit committee

The 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 have been updated during the year and approved by the board of directors, and has executed its duties during the past financial year in accordance with these terms of reference.

CompositionThe committee consists of four independent non-executive directors:

Name Qualifications Period served

ZJ Kganyago BCom 6 years

TDA Ross CA(SA) 6 years

B Modise CA(SA) 3 years

DJ Castle BSc, BCom, MBA, CFA 0 years

The CEO, CFO, chief audit executive, senior financial executives of the group and representatives from the external and internal auditors attend the committee meetings. The internal and external auditors have unrestricted access to the audit committee.

MeetingsThe audit committee held four scheduled meetings during the year, with attendance shown below:

Director April May September November

ZJ Kganyago √ √ √ √

TDA Ross √ √ √ √

B Modise √ √ √ √

DJ Castle* √

*DJ Castle only joined the committee in October 2014.

An additional meeting was held in November to review the integrated report.

Statutory dutiesIn execution of its statutory duties during the 2014 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 that the external auditors may provide to the company or that 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 content or auditing of its financial statements, the internal financial controls, or other related matters.

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:

Combined assuranceDuring the year, the board has approved the group combined assurance model which will be implemented in 2015.

Financial statementsThe 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 2014 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 that it is reliable and does not conflict with the financial information

■■ Recommended the integrated report for approval by the board.

Internal audit■■ Took responsibility for the performance assessment of Mr Semenya, the 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 has been updated during the year and was approved by the audit 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 – internal financial controls – fraud risks as it relates 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 the 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 that the appointment of the auditor complies with the Companies Act and other relevant legislation.

Financial director■■ The committee has satisfied itself of the appropriateness of the expertise and experience of Ms Ramano, the financial director, and wishes to confirm this to shareholders.

Financial function■■ The committee has reviewed the expertise, resources and experience of the company’s finance function, and wishes to confirm 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 that the accounting practices are effective.

Oversight of risk managementThe committee engages with the risk and compliance committee to ensure adequate understanding of risk management processes.

Internal financial controls■■ Reviewed the effectiveness of the company’s system of internal financial controls, including receiving assurance from management and internal audit

■■ Reviewed material issues raised by the internal and external audit process

■■ Based on the processes and assurances obtained, we believe that significant internal financial controls are effective.

Regulatory complianceThe audit committee has complied with all applicable legal and regulatory responsibilities.

Integrated reportBased on processes and assurances obtained, we have recommended the integrated report to the board for approval.

On behalf of the audit committee

Tim Ross Chairman

17 November 2014



Directors’ report

The directors have pleasure in presenting their report on the annual financial statements of the company and group for the year ended 30 September 2014.

Business activitiesPPC Ltd, its subsidiaries, joint ventures and associates, operate in Africa as manufacturers of cementitious, aggregates products and readymix, lime and limestone, fly ash and packaging materials.

The principal activities of the company remain unchanged from the previous year. With the exception of Pronto Holdings Pty Limited (Pronto) becoming a wholly owned subsidiary during the year, all other subsidiaries and their principal activities remain unchanged. Pronto is a prominent Gauteng-based readymix and fly ash supplier.

Review of operationsA comprehensive review of operations is detailed in the attached group financial statements.

Stated capitalOn 30 September 2014 the issued shares of the company were 605 379 648 of no par value (2013: 605 379 648 of no par value).

In terms of the group’s long-term employee incentive scheme, the forfeitable share plan, R53 million (2013: R56 million) of shares were purchased on the open market and are treated as treasury shares during the vesting period of the award. Forfeitable share incentive awards amounting to R16 million (619 457 shares) vested during the year and are no longer treated as treasury shares.

In December 2013, a portion of shares from PPC’s first broad-based black economic empowerment (BBBEE) transaction to the value of R100 million (3 202 770 shares) vested to the respective beneficiaries and are no longer treated as treasury shares. At year end, the stated capital balance amounted to debit R1 173 million (2013: debit R1 236 million).

During the year, shareholders approved the creation of 20 000 000 preference shares in terms of the restructuring of the company’s first BBBEE transaction. None of the preference shares have been issued.

Details of shares authorised, issued and unissued at 30 September 2014 are disclosed in note 9 to the group financial statements.

The company did not purchase any of its own shares during the year under review.

ShareholdersThe shareholders’ register of the company is open for inspection to shareholders and the public, during normal office hours, at the offices of the company’s transfer secretaries, Link Market Services South Africa (Pty) Limited, or at Corpserve Pvt Limited (Zimbabwe).

Details of the transfer secretaries can be found in the corporate information section on page 108.

Details relating to the beneficial shareholders owning more than 3% of the issued share capital of the company appear in the “PPC shareholder analysis” section on page 107.

Directors’ interest in the issued shares of the groupDetails of the beneficial holdings of directors of the company and their families in the ordinary shares of the company are given in the remuneration report included in the annual financial statements.

Certain directors and non-executive directors have indirect shareholding in the company following the completion of the BBBEE transactions. Details thereof are also provided in the remuneration report.

There has been no change in the directors’ interest since year end.

Subsidiary companiesIn December 2013, PPC acquired a 69,3% equity stake in Safika Cement Holdings Pty Limited, a cement blending company with five blending facilities and a milling operation, for a purchase consideration of R377 million. Further details of the fair value assets and liabilities acquired can be found in note 28 to the group financial statements.

The remaining 50% equity stake in Pronto was purchased in July 2014 for R280 million, resulting in Pronto becoming a wholly owned subsidiary. PPC’s investment in Pronto was previously accounted for as an equity-accounted investment. Further details of the fair value assets and liabilities acquired can be found in note 28 to the group financial statements.

Equity-accounted investmentsIn February 2014, PPC acquired an additional equity stake in Habesha Cement Share Company (Habesha), incorporated in Ethiopia, for a consideration of R3 million, marginally increasing PPC’s shareholding in the company to 31,6%. The investment continues to be equity accounted.

Subsequent to year end, PPC advised that it has entered into a transaction that will see it increase its stake in Habesha to 51%. Further details of the proposed transaction can be found in note 32 to the group financial statements.

Special resolutionsAt the annual general meeting held on 27 January 2014 the following special resolutions were approved:■■ Granting approval for the company to enter into inter-company loans with subsidiaries and other related entities within the group

■■ The pre-approval of the remuneration of non-executive directors■■ General authority to repurchase own shares or acquisition of the company’s shares by a subsidiary company.

At the general meeting of shareholders held on 18 March 2014, the following special resolutions were approved:■■ The increase in stated capital by the creation of 20 000 000 preference shares

■■ Various amendments to the memorandum of incorporation


■■ Placing the preference shares under the control of the directors, subject to certain conditions relating to the restructuring of the company’s first BBBEE transaction

■■ Placing the remaining preference shares, not issued for the restructure of the first BBBEE transaction, under the control of the directors

■■ Authority to repurchase the PPC shares owned by the PPC Black Managers Trust

■■ Authority to repurchase the PPC shares owned by the PPC Community Trust Funding SPV

■■ Authority to repurchase the PPC shares owned by the PPC Construction Industry Associations Trust Funding SPV

■■ Authority to repurchase the PPC shares owned by the PPC Education Trust Funding SPV

■■ Authority to repurchase the PPC shares owned by the PPC Team Benefit Trust Funding SPV

■■ Specific authority to provide financial assistance in respect of the settlement of obligations associated with the first BBBEE transaction

■■ Specific authority to provide financial assistance to PPC Phakamani Trust

■■ Specific authority to repurchase PPC Phakamani Trust repurchase shares.

For further details on the special resolutions and proposed transaction to restructure a portion of the company’s first BBBEE transaction, refer to the circular, dated 11 February 2014, which can be found on www.ppc.co.za.

Dividends

Number Description Declaration date Record date Payment date

Cents per share

2014 2013

222 Final 17 November 2014 9 January 2015 12 January 2015 76 118221 Interim 19 May 2014 13 June 2014 17 June 2014 38 38

Given the company’s expansion strategy, the board has resolved to increase the company’s dividend range from 1,2 to 1,5 to a new range of 1,8 to 2,5 times.

Property, plant and equipmentAt 30 September 2014, the group’s net investment in property, plant and equipment amounted to R7 223 million (2013: R5 522 million), details of which are set out in note 1 to the group financial statements. Significant investments have been made in the rest of Africa amounting to R1 139 million during the year.

There has been no change in the nature of the property, plant and equipment or to the policies relating to the use thereof during the year.

Certain of the company’s properties remain the subject of land claims. The company continues discussions with the Land Claims Commissioner and awaiting the outcome of claims referred to the Land Claims Court. The claims are not expected to have a material impact on the company’s operations.

Details of commitments of the group can be found in note 31.

BorrowingsDuring the financial year, the company issued three bonds totalling R1 750 million, at competitive rates, with all issuances being oversubscribed. This brings the total bond issuance to R2 400 million, with R3 600 million still available under the company’s R6 billion domestic medium-term note programme. There has been no change in PPC’s credit rating by Standard & Poor’s.

The group’s capital expansion projects are being funded mainly using project funding, with limited recourses to PPC Ltd once the respective plants have been commissioned.

At 30 September 2014, total borrowings amounted to R6 091 million (2013: R4 046 million), and remain within the group’s stated target debt levels.

Events after 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 2014.

Going concernThe directors consider that the company has adequate resources to continue operating for the foreseeable future and that it is therefore appropriate to adopt the going-concern basis in preparing the company’s financial statements. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements.

DirectorsThe directors in office at the date of this report appear on page 108.

At the annual general meeting held on 27 January 2014, Mr T Moyo was elected as a director of the company while Ms B Modise and Mr J Shibambo were re-elected as directors.

During the year, Mr AJ Lamprecht informed the board he was not available for re-election and resigned after serving on the board since 1997. Mr KM Gordhan resigned as CEO and director of the company during September 2014.



Directors’ report continued

The following directors will retire in accordance with the SENS announcement made by the company on 3 December 2014:■■ DJ Castle■■ NB Langa-Royds■■ MMT Ramano*■■ J Shibambo

* The newly elected board will consider the appointment of executive directors to the board. This includes the appointment of Ms Ramano.

Group company secretaryThe group company secretary of PPC Ltd is Mr JHDLR Snyman. His business and postal address appear in the corporate information section on page 108.

Audit committeeThe directors confirm that the audit committee has addressed specific responsibilities required in terms of section 94(7) of the Companies Act 71 of 2008, as amended. Further details are contained within the audit committee report on pages 4 to 5 of this report.

Competition CommissionIn terms of the conditional leniency agreement with the Competition Commission, PPC continues to cooperate with their investigation and from our perspective there have been no significant new developments.

AuditorsIn terms of section 90 of the Companies Act, Deloitte & Touche were reappointed as auditors to the company at the annual general meeting held on 27 January 2014.


Chief financial officer’s report

OverviewDespite the lower level of profitability reported this financial year, we are proud of our strategic achievements in the period. Notably, we concluded two acquisitions at a combined transaction value of R657 million in South Africa and finalised funding for the DRC and Zimbabwean expansion projects. We also issued three corporate bonds totalling R1 750 million at competitive rates with all issuances oversubscribed. These achievements are expected to bode well for the long-term profitability and sustainability of the group.

The lower level of economic growth in the regions in which we operate has curtailed cement volume growth, with declines recorded in both South Africa and Botswana, but somewhat supported by increased exports. Our lime business also recorded burnt product volume declines following a moderated offtake from the steel and alloys industries, while the aggregates division performed well with increased demand in its optimal operating environment.

Income statement

2014 2013

Revenue (Rm) 9 039 8 316

Revenue earned from the rest of Africa (%) 27 24

EBITDA (Rm) 2 358 2 440

Headline earnings per share (cents) 179 179

Dividend cover (times) 1,5 1,4

Revenue was 9% higher than last year at R9 039 million (2013: R8 316 million). The favourable impact of businesses acquired during the year, of around R500 million, was unfortunately offset by lower revenue recorded by the South African cement business due to year-on-year volume declines and pricing pressures. Good revenue growth was recorded by our Zimbabwean operations, with revenue increasing as a result of improved export pricing and the benefit from a devaluing rand over the period. On a like-for-like basis, revenue would have been 3% above last year.

2013

Lime

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2014

Revenue (Rm)

8 000

8 200

8 400

8 600

8 800

9 000

9 200

8 316 1960

269

(230)

8 434

116

136

353 9 039

Revenue earned from the rest of Africa contributed 27% (2013: 24%) and showed growth on last year, even after taking the newly acquired South African business units into consideration. If the impact of Pronto and Safika Cement are excluded, the rest of Africa would have contributed 28% to overall revenue.

Cost of sales exceeded revenue growth to end the year 13% higher than last year at R6 266 million (2013: R5 546 million). South African cement delivered cost of sales on a rand per tonne basis, increased by 8% reflecting higher outbound logistical, electricity and timing of maintenance costs, partly offset by savings in coal and salaries. The lower volumes have limited our ability to fully absorb fixed costs, affecting gross margins. Cost of sales would have approximated R5 875 million on a like-for-like basis with 2013.

Administration and other operating expenditure increased by 21% to R1 030 million (2013: R853 million). New businesses, including amortisation charges of R30 million on fair value adjustments recognised on business combinations, accounted for most of the increase. Excluding the impact of acquired overheads, group overheads would have reflected modest growth of 6%. The unfavourable impact of currency devaluations on foreign

Tryphosa RamanoChief financial officer


Chief financial officer’s report continued

currency denominated overheads was offset by a lower short-term incentive provision, and partial reversal of IFRS 2 charges on the performance element of the forfeitable share programme incentive awards vesting in February 2015.

The lower level of profitability in the South African cement business was not fully offset by the consolidation of Safika Cement and Pronto, albeit at lower margins, with EBITDA ending 3% below last year at R2 358 million (2013: R2 440 million). On a like-for-like basis, EBITDA would have been 8% lower than 2013. An EBITDA margin of 26,1% (2013: 29,3%) was achieved. The strategy of securing a channel to market is proving successful with R112 million added to EBITDA from the South African businesses acquired this year. EBITDA earned in foreign-denominated currencies was favourably impacted by currency movements in rand terms, calculated at 2% of last year’s EBITDA.

2013

Intern

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Ceme

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2014

EBITDA (Rm) (before empowerment and restructuring costs)

2 000

2 100

2 200

2 300

2 400

2 500

2 600

2 700

2 504

*Includes head of�ce activities.

100 17

(15)

(336)

2 27029

83 (8) 2 374

Finance costs of R505 million (2013: R404 million) were 25% above last year on increased net borrowing levels following drawdowns on facilities for plant expansions. Interest of R36 million (2013: R4 million) was capitalised to property, plant and equipment on the CIMERWA expansion, with time value of money adjustments on the environmental provisions and put option liabilities amounting to R47 million (2013: R21 million).

Impairments and other exceptional items charged to the income statement of R110 million follows an impairment of goodwill and plant and equipment of R94 million at our CIMERWA business and further impairment of R17 million relating to plant and equipment at the aggregates business in Botswana on the back of continued low-volume profitability in that country.

The total taxation charge for the year was R356 million (2013: R507 million), with an effective rate of taxation of 30,1% (2013: 35,8%), including an overprovision of current taxation of R70 million. The company has always adopted a prudent approach when providing for current taxation and provides for taxation concessions only once assessed by the respective tax authorities. The group’s tax department has therefore been expanded to support the growing business and complexities in which we now operate.

Headline earnings per share of 179 cents were in line with 2013.

Statement of financial position

2014 2013

Property, plant and equipment (Rm) 7 223 5 522

Goodwill and other intangible assets (Rm) 949 333

Total borrowings (Rm) 6 091 4 046

Net debt to EBITDA (%) 2,4 1,2

Investments of R2 182 million (2013: R970 million) in property, plant and equipment (PPE), together with acquisition-related capex of R225 million, increased PPE to R7 223 million (2013: R5 522 million). Most of the capital expenditure occurred outside South Africa, with R695 million and R445 million incurred on the Rwanda and DRC projects respectively. Zimbabwe continues to upgrade its operations, with R275 million disbursed, and the balance incurred in South Africa mainly on maintenance and environmental capex.

Capital commitments at year end were R3 896 million (2013: R1 088 million), mostly linked to the DRC and Zimbabwean expansion projects with R2 246 million and R1 572 million expected to be spent in the 2015 and 2016 financial years respectively. Project funding has been secured for new projects in the DRC and Zimbabwe of US$168 million and US$75 million respectively, with limited recourse to PPC Ltd’s statement of financial position only until performance targets are achieved on the DRC project. In Zimbabwe and Rwanda, projects are fully supported by the respective business units in those countries.

For many years, the group’s intangible assets were immaterial and comprised mainly computer-related software. After recent acquisitions, goodwill and other intangibles, such as brands and non-contractual customer relationships, have contributed to significant growth in this account. During the year, R227 million and R428 million was added to goodwill and other intangibles respectively following the Safika Cement and Pronto acquisitions.

Equity-accounted investments decreased by R187 million following the acquisition of the remaining shareholding in Pronto for R280 million and the business being reclassified as a wholly owned subsidiary. The group continues to increase its stake in Habesha Cement Share Company, Ethiopia, to bring our shareholding to 32%. Other non-current assets increased as advance payments were made to suppliers of plant and equipment for the DRC project.

Net working capital, excluding put option liabilities and retentions, of R852 million (2013: R766 million) was impacted by payment of the derivative liability on interest rate swaps of R113 million and restructuring accruals of R64 million. Inventory has been well controlled and ended below 2013 levels, while trade receivables remain tightly managed with impairments to gross debtors at only 2%, in line with last year. We have experienced certain customers applying for business rescue and debtors’ days increasing marginally, in line with tough trading conditions.


Following the significant growth in PPE, borrowings reflect a corresponding increase, ending the year at R6 091 million (2013: R4 046 million), with net debt to EBITDA of 2,4 (2013: 1,2) remaining below our internal levels of maximum 3,0 times cover. We continue to explore optimal ways of restructuring the funding on our first BBBEE transaction.

Cash flow

2014 2013

Cash generated from operations before working capital movements (Rm)

2 472 2 486

Net working capital movement (Rm) 111 399

Cash conversion ratio 1,1 1,1

Cash generated from operations before working capital movements of R2 472 million (2013: R2 486 million) was marginally below last year. The group continues to focus on working capital management and again reduced net working capital year on year from a cash flow perspective, noting that 2013 had some anomalies, particularly interest rates swaps and restructuring accruals.

2013 Ne

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2014

Net movements in cash and cash equivalents (Rm)

-500

0

500

1 000

1 500

2 000

2 500

218

1 804 33

(110)(157)

(288)

(399)

(1 212)(111)

The group’s cash conversion ratio, being cash generated from operations over EBITDA, declined marginally below 2013 levels after repaying the derivative liability on the interest rate swaps and restructuring accruals.

DividendsA final dividend of 76 cents per share has been declared, bringing the full-year dividend to 114 cents per share (2013: 156 cents per share), with a divided cover of 1,5 times (2013: 1,4 times). This remained within our current dividend range of 1,2 to 1,5 times but, as indicated in last year’s report, the company was reviewing its dividend cover. Given the company’s expansion strategy, the board has resolved to increase the dividend cover range from 1,2 to 1,5 times to a new range of 1,8 to 2,5 times.

Focus areasFor the 2015 financial year, we remain cautious about the level of economic growth in South Africa, but look forward to positive contributions from CIMERWA after commissioning the new plant and the full-year financial contribution from Safika Cement and Pronto.

As previously communicated in the circular to approve our second BBBEE transaction, the group structure will be simplified to align to our expansion and “keeping the home fires burning” strategies. This restructure is expected to be finalised in the first half of 2015.

The integration of all new businesses, both greenfields and brownfields, will be a priority to maximise synergies and align governance processes to support the businesses and allow the flexibility of entrepreneurship. To support integrations and optimisations, renewed focus has been given to the use of information technologies in the group and we have a strong pipeline of projects to further enhance our business processes.

In concluding, I thank the group’s finance teams for their continued support and dedication to PPC during the year.

MMT RamanoChief financial officer17 November 2014


Basis of preparationThe consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB) in issue and effective for the group at 30 September 2014 and the SAICA financial reporting guides, as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act of South Africa.

The basis of preparation is consistent in all material respects with those applied in the prior year except where the group has adopted new or revised accounting standards and interpretations of those standards.

The following amendments and interpretations, which did not have a material impact on reported results, were adopted in the current year:

IAS 19 (amendment) Employee BenefitsThe amendments to IAS 19 require the following:■■ The recognition of changes in the net defined liability/(asset) including immediate recognition of defined benefit cost, disaggregation of defined benefit cost into components, recognition of re-measurements in other comprehensive income, plan amendments, curtailments and settlements.

■■ Introduction of enhanced disclosures about defined benefit plans.

■■ Modification of accounting for termination benefits, including distinguishing benefits provided in exchange for services and benefits provided in exchange for the termination of employment.

■■ Clarification of various miscellaneous issues, including the classification of employee benefits, current estimates of mortality rates, tax and administrative costs and risk sharing and conditional indexation features.

■■ Incorporation of other matters submitted to the IFRS Interpretations Committee.

The standard has no impact on the group financial position as the group already recognises costs in line with the standard and disaggregates the employee benefit cost into components.

IFRS 11 Joint ArrangementsThe standard replaces IAS 31 Interests in Joint Ventures, and the guidance contained in a related interpretation, SIC 13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers. It establishes principles that are applicable to the accounting for all joint arrangements and requires a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations in accordance with that type of joint arrangement.

The group already differentiates between the types of its joint arrangements, namely interests in joint ventures, and assessed its accounting for joint ventures in terms of IFRS 11 and concluded that the application had no material impact.

IAS 28 (amendment) Investments in Associates and Joint VenturesThe standard prescribes the accounting for investment in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.

The group already uses the equity method to account for investments in associates and joint ventures.

IAS 27 Separate Financial StatementsThe standard requires that when an entity prepares separate financial statements, investments in subsidiaries, associates, and jointly controlled entities are accounted for either at cost or in accordance with IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement. The recognition of dividends, certain group reorganisations and a number of disclosure requirements are also dealt with by the standard.

The group already prepares separate financial statements in line with the requirements of the standard.

IFRS 10 Consolidated Financial StatementsThe standard replaces parts of IAS 27 Consolidated and Separate Financial Statement and SIC 12 Consolidation – Special Purpose Entities. IFRS 10 identifies the principles of control, determines how to identify whether an investor controls an investee and therefore must consolidate the investee, and sets out the principles for the preparation of consolidated financial statements.

The group assessed the impact of IFRS 10 on its subsidiaries and there were no material changes to entities consolidated into the PPC group.

IFRIC 20 Stripping Costs in the Production Phase of a Surface MineThe interpretation clarifies the requirements for accounting for stripping costs associated with waste removal in surface mining, including when production stripping costs should be recognised as an asset, how the asset is initially recognised, and subsequent measurement. An exercise to determine the impact of IFRIC 20 within the group was performed, and based on the results, it has been concluded that there is no material impact on the prior year or current year financial statements.

As the group does not have material prior year stripping assets (prior to the effective date), the transitional adjustments of IFRIC 20 are not applicable.

Annual improvements to IFRS 2009 – 2011 cycleThe annual improvements have made a number of amendments to IFRS:■■ IFRS 1 – Permit the repeated application of IFRS 1, borrowing costs on certain qualifying assets

■■ IAS 1 – Clarification of the requirements for comparative information


Accounting policies


■■ IAS 16 – Classification of servicing equipment■■ IAS 32 – Clarify that tax effect of a distribution to holders of equity instruments should be accounted for in accordance with IAS 12 Income Taxes

■■ IAS 34 – Clarify interim reporting of segment information for total assets in order to enhance consistency with the requirements in IFRS 8 Operating Segments.

The following amendments and interpretations, which have a disclosure impact on reported results, were adopted in the current year:

IFRS 7 (amendment) Offsetting of Financial Assets and Financial LiabilitiesThe amendment requires information about all recognised financial instruments that are set off. It also requires disclosure of information about recognised financial instruments which are subject to enforceable master netting arrangements and similar agreements, even if they are not set off under IAS 32 Financial Instruments: Presentation.

In the prior year, the group offset its financial assets and financial liabilities, in respect of interest rate swaps. The group has applied retrospectively the disclosure requirements of IFRS 7 amendment by disclosing the gross amount of the financial assets and liabilities (refer note 13).

IFRS 12 Disclosure of Interests in Other EntitiesThis standard requires extensive disclosure of information that enables users of the financial statements to evaluate the nature of and risks associated with interests in other entities. The effects of those interests on the financial position, financial performance and cash flows are also required to be disclosed.

There is a disclosure impact on the group, and as a result more extensive disclosures relating to subsidiaries have been made (refer Annexure 1 subsidiaries and non-controlling interest on pages 74 to 76 of this report).

IFRS 13 Fair Value MeasurementThis standard applies when another IFRS requires or permits fair value measurements or disclosures regarding fair value measurements. With some exceptions, the standard requires entities to classify these measurements into a fair value hierarchy based on the nature of the inputs. If the inputs used to measure fair value are categorised into different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the level of the lowest level input that is significant to the entire measurement.

There is a disclosure impact on the group, with more extensive disclosure made in the current year (refer note 35). IFRS 13 requires prospective application from 1 January 2013 therefore the group has not made any new disclosures for 2013 comparative period. Other than additional disclosures, the application of IFRS 13 has not had any material impact on the amounts recognised in the consolidated financial statements.

The group has not applied the following new and revised standards and interpretations that have been issued but are not yet effective:■■ Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities

■■ Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets

■■ Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting

■■ Annual improvements 2010 – 2012 cycle■■ Annual improvements 2011 – 2013 cycle■■ IFRIC 21 Levies■■ IFRS 9 Financial Instruments

The group does not anticipate that the amendments will have a material impact on the consolidated financial results (refer note 35).

Basis of consolidationThe group consolidates all of its subsidiaries. Accounting policies are applied consistently in all group companies, except for CIMERWA that revalues their property, plant and equipment and in the Democratic Republic of the Congo where local accounting standards are not in line with IFRS.

Where a subsidiary of the group uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to that subsidiary’s financial statements in preparing the consolidated financial statements to ensure consistency with the group’s accounting policies.

The results of subsidiaries are included from the effective date of acquisition up to the effective date of disposal. All subsidiaries, with the exception of Pronto Holdings Pty Limited (Pronto) and the DRC incorporated subsidiaries, have the same financial year end as the company.

Pronto’s results from the effective date of acquisition are consolidated into the group and have been audited. Due to the completion of the transaction, in the last quarter of PPC’s financial year, and timing of regulatory approvals, Pronto’s financial year was not adjusted. The financial year end of Pronto will be amended in the next reporting period to align with the PPC Ltd.

The financial year end of the respective DRC incorporated entities is December and is prescribed by local legislation.

Total comprehensive income of subsidiaries is attributed to shareholders of PPC and non-controlling interests even if this results in a debit to non-controlling interests.

The group’s interests in joint ventures and associates are accounted for using the equity method of accounting.

All intragroup balances, transactions, income and expenses and profit or losses resulting from intragroup transactions between the parent and/or subsidiaries of the parent and other fellow subsidiaries are eliminated in full.



Accounting policies continued

Underlying conceptsThe consolidated financial statements are prepared on the going-concern basis using accrual accounting.

Assets and liabilities and income and expenses are not offset unless specifically permitted by an accounting standard.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when a legally enforceable right to set off the amounts exists and the intention is either to settle on a net basis or to realise the asset and settle the liability simultaneously. The gross amount of the financial assets and liabilities is disclosed in notes to the annual financial statements.

Changes in accounting policies are accounted for in accordance with the transitional provisions noted in the applicable standard. If no such guidance is given, then changes are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

Prior period errors are retrospectively restated unless it is impracticable to do so, in which case they are applied prospectively.

Changes in accounting estimates are recognised in profit or loss, and are prospectively applied.

Preparing financial statements in conformity with IFRS requires estimates and assumptions that may affect reported amounts and related disclosures. Actual results could differ from these estimates. For further information refer to “Judgements made by management” on pages 23 to 25 of these financial statements.

Recognition of assets and liabilitiesAssets are only recognised if they meet the definition of an asset, it is probable that future economic benefits associated with the asset will flow to the group and the cost or fair value can be reliably measured.

Liabilities are only recognised if they meet the definition of a liability, it is probable that future economic benefits associated with the liability will flow from the group and the cost or fair value can be reliably measured.

Financial instruments are recognised when the group becomes a party to the contractual provisions of the instrument. Financial assets and liabilities, as a result of firm commitments, are only recognised when one of the parties has performed under the contract.

Derecognition of assets and liabilitiesFinancial assets are derecognised when the contractual rights to receive cash flows have been transferred or have expired or when substantially all the risks and rewards of ownership have passed.

All other assets are derecognised on disposal or when no future economic benefits are expected from their use.

Financial liabilities are derecognised when the relevant obligation has either been discharged or cancelled or has expired.

Property, plant and equipment Property, plant and equipment (PPE) represents tangible items and intangible items that are integrated with tangible items that are held for use in the production or supply of goods and are expected to be used for more than one reporting period. Day-to-day servicing costs, such as labour and consumables, are expensed in profit and loss.

Items of PPE are initially recognised at cost, which includes any costs directly attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, including waste stripping costs.

Waste stripping costs are the costs incurred when overburden or waste material is removed to obtain access to an orebody. The stripping activity is accounted for as an addition to, or as an enhancement of, an existing asset and classified according to the nature of the existing asset of which it forms part. The costs of stripping activity are accounted for in accordance with the inventories accounting policy to the extent that the benefit from the stripping activity is realised in the form of inventory produced. The costs of stripping activity which provide a benefit in the form of improved access to ore are recognised as a non-current “stripping activity asset”. When the costs of the stripping activity asset and the inventory produced are not separately identifiable, production stripping costs are allocated between inventory produced and stripping activity asset based on the volume of waste extracted compared with the expected volume, for a given volume of ore production.

The cost of self-constructed assets includes expenditures on materials, direct labour and an allocated portion of project overheads. Cost also includes the estimated cost of dismantling and removing the assets and site rehabilitation costs to the extent that they relate to the construction of the asset and are required by local legislation. Gains and losses on qualifying cash flow hedges attributable to that asset are also included in the cost, where applicable.

Subsequent to initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and impairments.

Owner-occupied properties in the course of construction are carried at cost, less any impairment loss where the recoverable amount of the asset is estimated to be lower than its carrying value.


Depreciation is charged so as to write off the depreciable amount of the assets, other than land, over their estimated useful lives, using a method that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Where significant parts of an asset have different useful lives to the asset itself, these parts are depreciated over their estimated useful lives.

The methods of depreciation and useful lives are reviewed annually. The following methods and rates were generally used during the year:

Land Not depreciatedBuildings Straight line up to 30 yearsPlant Straight line up to 35 yearsVehicles Straight line up to 10 yearsFurniture and equipment Straight line up to 6 yearsMineral rights Straight line Estimated life of

reserveLeasehold improvements Straight line Written off over the

lease period or shorter period if appropriate

Assets held under finance leases are depreciated over their expected useful lives or the term of the relevant lease, whichever is the shorter.

Stripping activity assets are depreciated over the expected useful life of the identified component of the orebody.

The gain or loss arising on the disposal or scrapping of PPE is recognised in profit or loss.

Advance payments denominated in foreign currency for significant items of property, plant and equipmentProject advance payments denominated in foreign currency are initially recorded at the ruling exchange rate on the date of the payment. The advance payment is treated as a non-monetary asset as there is no expected repayment in units of currency and is thus not translated at each reporting date. On the portion of any invoice for PPE that is offset by the advance payment, the amounts capitalised to PPE are recorded at the historical carrying amount of the advance payment.

Factory decommissioning and quarry rehabilitationGroup companies restore mine and processing sites at the end of their productive lives to conditions acceptable and prescribed by local regulations and in line with existing technologies.

Decommissioning provision is the estimated cost to dismantle all structures and rehabilitate the land on which the plant is located, while rehabilitation is the estimated cost of restoring the quarries following the ongoing mining operations.

The expected cost of any committed decommissioning or restoration programme, discounted to its net present value, is provided and capitalised at the beginning of each project. The capitalised cost is

depreciated over the expected life of the asset, and the increase in the net present value of the provision for the expected cost is included under finance costs (time value of money adjustments).

Changes in the measurement of an existing decommissioning or restoration liability that result from changes in the estimated timing or amount of expected costs, or a change in the discount rate, are adjusted firstly to the respective asset or recognised in profit or loss if no asset has been recorded.

In South Africa, payments are made to a rehabilitation trust fund in accordance with statutory requirements. Currently, there are no such regulations in the other jurisdictions in which the group operates for the creation of a rehabilitation trust fund. The investments in the trust fund are carried at fair value through profit or loss. The trust is consolidated as the group is the sole contributor to the fund and exercises full control over the trust. Cash and cash equivalents held by the fund are reflected as restrictive cash. Investments made into the trust fund by the respective companies are carried at cost.

Intangible assetsAn intangible asset is an identifiable non-monetary asset without physical substance, which is not integrated with a tangible asset. It includes brands, customer relationships, mineral reserves, patents, trademarks, capitalised development costs and certain costs of purchasing and installation of major information systems (including packaged software).

Intangible assets are initially recognised at cost if acquired separately or internally generated or at fair value if acquired as part of a business combination. After initial recognition, intangible assets are carried at cost less accumulated amortisation and impairment losses, where applicable. If assessed as having an indefinite useful life, intangible assets are not amortised but tested for impairment annually and impaired if necessary. If assessed as having a finite useful life, intangible assets are amortised over their useful lives using the straight-line basis or volume basis, for mineral reserves, and tested for impairment if there are indications that it may be impaired.

The useful life of an intangible asset with a finite life is reviewed annually to determine whether the finite life assessment continues to be supportable. If a finite life is no longer deemed appropriate, the change in the useful life assessment is made prospectively.

Research costs are recognised in profit or loss when they are incurred.

Development costs are capitalised only when and if they meet the criteria for capitalisation. Otherwise they are recognised in profit or loss.

Patents and trademarks are measured initially at cost and amortised on a straight-line basis over their estimated useful lives.

The gain or loss arising on the disposal of an intangible asset is recognised in profit or loss.


GoodwillThe excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill. Goodwill represents the future economic benefits arising from assets that are not capable of being individually identified and separately recognised in a business combination.

Goodwill arising on the acquisition of a subsidiary is recognised separately as an intangible asset and is stated at cost less impairments. Goodwill is not amortised but tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amount should be impaired. Goodwill arising on acquisition of equity-accounted associates and joint ventures is included in the carrying amount of the respective investment.

On disposal of a subsidiary, associate, joint venture or business unit to which goodwill was allocated on acquisition, the amount attributable to such goodwill is included in the determination of the profit or loss on the respective disposal.

Business combinationsOn acquisition date, fair values are attributed to the identifiable assets, liabilities and contingent liabilities. Non-controlling interest at acquisition date is determined as the non-controlling shareholders’ proportionate share of the fair value of the net identifiable assets of the entity acquired.

When an acquisition is achieved in stages (step acquisition), the identifiable assets and liabilities are recognised at their full fair value when control is obtained, and any adjustment to fair values related to these assets and liabilities previously held as an equity interest is recognised in profit or loss.

When there is a change in the interest in a subsidiary after control is obtained, that does not result in a loss in control, the difference between the fair value of the consideration transferred and the amount by which the non-controlling interest is adjusted is recognised directly in equity.

If, on a business combination, the fair value of the group’s interest in the identifiable assets, liabilities and contingent liabilities exceeds the consideration transferred, this excess is recognised in profit or loss immediately.

Acquisition-related costs to effect a business combination are expensed in the period they are incurred.

Impairment of assetsAt each reporting date the carrying amount of the tangible and intangible assets are assessed to determine whether there is any indication that those assets may have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is

estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is estimated. Value in use is estimated taking into account future cash flows, forecast market conditions and the expected remaining lives of the assets.

If the recoverable amount of an asset, or cash-generating unit, is estimated to be less than the carrying amount, the carrying amount is reduced to the higher of the recoverable amount or zero. Impairment losses are recognised in profit or loss. The loss is first allocated to reduce the carrying amount of goodwill and then to the other assets of the cash-generating unit. Subsequent to the recognition of an impairment loss, the depreciation or amortisation charge for the asset is adjusted to allocate its remaining carrying value over the asset’s remaining useful life.

If an impairment loss subsequently reverses, the carrying amount of the asset, or cash-generating unit, is increased to the revised estimate of its recoverable amount but limited to the carrying amount that would have been determined had no impairment loss been recognised. A reversal of an impairment loss is recognised in profit or loss.

Goodwill acquired in a business combination and intangible assets with indefinite useful lives and cash-generating units to which these assets have been allocated are tested for impairment annually irrespective of whether there is any indication of impairment. Impairment losses recognised for goodwill are not subsequently reversed.

For financial assets carried at amortised cost, the amount of impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of a financial asset is reduced by the impairment loss directly for all financial assets except for trade receivables, where the carrying amount is reduced through the use of an allowance account. Subsidiaries, associates and joint venturesInvestments in subsidiaries, associates and joint ventures in the separate financial statements presented by the company, are recognised at cost less any accumulated impairment losses.

Interests in subsidiariesThe consolidated financial statements incorporate the assets, liabilities, income, expenses and cash flows of the company and its subsidiaries as if they were a single economic entity.

The results of special purpose vehicles and companies that in substance are controlled by the group are consolidated.




Special purpose vehicles and employee trustsThe group operates broad-based black economic empowerment and indigenisation schemes through SPV companies and trusts. These entities are operated for the purposes of incentivising staff to promote the continued growth of the group and to promote black economic empowerment or localisation.

The group generally retains the residual risks and/or benefits associated with the trusts, thus they are controlled by PPC. In terms of IFRS, the appropriate accounting treatment for these entities is to consolidate their results until the date that effective control ceases.

Interests in associatesThe consolidated financial statements incorporate the assets, liabilities, income and expenses of associates using the equity method of accounting, applying the group’s accounting policies, from the acquisition date to disposal date, except when the investment is classified as held for sale, in which case it is accounted for as non-current assets held for sale.

The investment in the associate is carried at cost and adjusted for post-acquisition changes in the group’s share of net assets of the associate, less any impairment in value. Any long-term debt interests, which in substance form part of the group’s net investment in the associate, are also included in the total carrying value of the associate. Losses of an associate in excess of the group’s interest in that associate are not recognised, unless the group has incurred legal or constructive obligations or made payments on behalf of the associate.

Where a group entity transacts with an associate of the group, unrealised profits and losses are eliminated to the extent of the group’s interest in the relevant associate.

Interests in joint venturesJoint ventures are entities in which the group holds an interest on a long-term basis and which are jointly controlled by the group and other ventures under a contractual agreement. The group’s interest in the joint venture is accounted for using the equity accounting method, as described under interest in associates above.

Financial assetsFinancial assets are initially measured at fair value plus transaction costs. Transaction costs in respect of financial assets classified at fair value through profit or loss are, however, expensed.

Financial assets are classified into the following categories:

Held-to-maturity investmentsInvestments classified as held-to-maturity financial assets are measured at amortised cost using the effective interest rate method less any impairment losses recognised to reflect irrecoverable amounts.

Financial assets at fair value through profit or lossFinancial assets are classified as fair value through profit or loss where the financial asset is either held for trading or is designated at fair value through profit or loss. Financial assets at fair value through profit or loss are carried at fair value with any gains or losses being recognised in profit or loss. Fair value, for this purpose, is market value if listed or a value arrived at by using appropriate valuation models if unlisted.

Loans and receivablesTrade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables and are measured at amortised cost using the effective interest rate method less allowances for doubtful debts. Write-downs of these assets are expensed in profit or loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Available-for-sale financial assetsInvestments in unlisted shares are classified as available-for-sale financial assets. These investments are carried at fair value with any gains or losses being recognised directly in other comprehensive income. Fair value, for this purpose, is a value arrived at by using appropriate valuation models. An investment intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, is classified as non-current available-for-sale financial assets. Where the investment is disposed of or determined to be impaired, the cumulative or a portion of the gain or loss previously recognised in equity is included in profit or loss for the period.

Financial liabilitiesFinancial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost.

Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss are measured at fair value with any resultant gain or loss recognised in profit or loss.

Financial liabilities measured at amortised costFinancial liabilities measured at amortised cost are initially measured at fair value, net of transaction costs. These financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Derivative financial instrumentsThe group enters into a variety of derivative financial instruments, such as forward exchange contracts and interest rate swaps, to manage its exposure to interest rate and foreign exchange rate movements.


Derivatives that are assets or liabilities are measured at fair value, with changes in fair value being included in profit or loss other than derivatives designated as cash flow hedges. To the extent that a derivative instrument has a maturity period of longer than one year, the fair value of these instruments will be reflected as a non-current asset or liability.

Put optionsPut options granted to non-controlling shareholders of PPC subsidiaries entitle the non-controlling shareholders to sell their interest in the subsidiary at contracted dates to PPC.

In such case, PPC consolidates the subsidiary’s results and recognises the fair value of the put options, being the present value of the estimated future purchase price, as a financial liability. Where the options are expected to be exercised in a period exceeding one year, the fair value is reflected as non-current. In raising this liability, non-controlling interest is reduced by the initial present value recorded and is not adjusted until the settlement of the put options.

Time value of money adjustments are recorded in respect of the liability within finance costs. The estimated future purchase price is fair valued at each reporting date and any changes in the value of the liability as a result of changes in the assumptions used to estimate the future purchase price are recorded in profit or loss. Hedge accounting If a fair value hedge meets the conditions for hedge accounting, any gain or loss on the hedged item attributable to the hedged risk is included in the carrying amount of the hedged item and recognised in profit or loss.

If a cash flow hedge meets the conditions for hedge accounting, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly as other comprehensive income and the ineffective portion, if any, is recognised in profit or loss.

If an effective hedge of a forecast transaction subsequently results in the recognition of a financial asset or financial liability, the associated gains or losses recognised in equity are transferred to income in the same period in which the asset or liability affects profit or loss.

If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, the associated gains or losses recognised as other comprehensive income are included in the initial measurement of the acquisition cost of the asset or liability.

Hedge accounting is discontinued on a prospective basis when:■■ the hedge no longer meets the hedge accounting criteria (including when it becomes ineffective);

■■ the hedge instrument is sold, terminated or exercised;

■■ for cash flow hedges, the forecast transaction is no longer expected to occur; or

■■ the hedge designation is revoked.

Any cumulative gain or loss on the hedging instrument for a forecast transaction is retained in other comprehensive income until the transaction occurs, unless the transaction is no longer expected to occur, in which case the gain or loss is transferred to profit or loss.

LeasingLeases are classified as finance leases or operating leases at the inception of the lease.

In the capacity of a lesseeFinance leases are recognised as assets and liabilities at the lower of the fair value of the asset and the present value of the minimum lease payments at the acquisition date. Finance costs represent the difference between the total leasing commitments and the fair value of the assets acquired, and are charged to profit or loss over the term of the lease and at interest rates applicable to the lease on the remaining balance of the obligations.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease or another basis if more representative of the time pattern of the lessee’s benefit.

Leasehold improvementsLeasehold improvements are capitalised, initially measured at cost and subsequent to initial measurement, they are measured at cost less accumulated depreciation and impairment losses.

Leasehold improvements are depreciated over the lease term or useful life, whichever is the shorter.

In the capacity of a lessorRental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Share-based paymentsFor share-based payment transactions among group entities, in the underlying separate financial statements, the entity receiving the goods or services measures the goods or services received as an equity-settled share-based payment transaction when the awards granted are its own equity instruments, or the entity has no obligation to settle the share-based payment transaction. In all other circumstances, the entity receiving the goods or services shall measure the goods or services as a cash-settled share-based payment transaction. The entity settling a share-based payment transaction when another entity in the group receives the goods or services, shall recognise the transaction as an equity-settled share-




based payment transaction only if it is settled in the entity’s own equity instruments. Otherwise, the transaction shall be recognised as a cash-settled share-based payment transaction.

Cash settled The cost of cash-settled transactions is measured initially at fair value at the grant date using the binomial option pricing model, which takes into account the terms and conditions upon which the instruments were granted. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations such as volatility, dividend yield, staff turnover and vesting period. This fair value is expensed over the vesting period with a corresponding charge to liabilities. The liability is remeasured at each reporting period, up to and including the settlement date, with changes in fair value recognised in profit or loss.

Equity settledEquity-settled share-based payments are measured at the fair value of the equity instruments at grant date. The fair value of the share options at grant date is recognised and charged against profit or loss together with a corresponding movement in equity over the vesting period. Any fair value adjustments are calculated over the vesting period, ending on the date on which the performance conditions are fulfilled and the employees become fully entitled to exercise their options. The cumulative expense recognised for share options granted at each reporting date until the vesting date, reflects the extent to which the vesting period has expired and the number of share option grants that will ultimately vest, on management’s best estimate, at that date.

Where an equity-settled award is cancelled by the group, it is accounted for as an acceleration of the vesting of the awards and is treated as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award.

Empowerment and management incentive transactionsTo the extent that an entity grants shares or share options in a BBBEE, indigenisation (empowerment) or management incentive transaction and the fair value of the cash and other assets received is less than the fair value of the shares or share options granted, such difference is charged to profit or loss in the period in which the transaction becomes effective. Where the empowerment or management incentive transaction includes service conditions, the difference is charged to profit or loss over the period of these service conditions. The issuance of fully vested shares, or rights to shares, is presumed to relate to past service, requiring the full amount of the grant date fair value to be expensed immediately.

A restriction on the transfer of the shares or share options is taken into account in determining the fair value of the shares or share options.

Deferred tax assetsA deferred tax asset represents the amount of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses and the carry forward of unused tax credits.

Deferred tax assets are reviewed at each reporting date and only recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised and is accounted for using the balance sheet liability method. It is measured at tax rates that have been enacted or substantially enacted at the reporting date.

InventoriesInventories are assets held for sale in the ordinary course of business, in the process of production for such sale or in the form of materials or supplies to be consumed in the production process.

Inventories are initially recognised at cost, determined using a weighted average cost formula.

Subsequent to initial recognition, inventories are stated at the lower of cost and net realisable value. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition, net of discounts and rebates received. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion, distribution and selling.

Non-current assets held for saleNon-current assets held for sale or disposal groups are classified as held for sale if the carrying amount will be recovered principally through sale rather than through continuing use. This condition is regarded as being met only when the sale is highly probable and the asset held for sale or disposal groups are available for immediate sale in their present condition.

Where a disposal group held for sale will result in the loss of control of a subsidiary, all the assets and liabilities of that subsidiary are classified as held for sale, regardless of whether a non-controlling interest in the former subsidiary is to be retained after the sale.

Immediately prior to being classified as held for sale, the carrying amount of the item is measured in accordance with the applicable IFRS. After classification as held for sale, it is measured at the lower of the carrying amount or fair value less costs to sell. An impairment loss is recognised in profit or loss for any initial and subsequent write-down of the asset and disposal group to fair value less costs to sell. A gain for any subsequent increase in fair value less costs to sell is recognised in profit or loss to the extent that it is not in excess of the cumulative impairment loss previously recognised.

Non-current assets or disposal groups that are classified as held for sale are not depreciated.


Cash and cash equivalentsCash and cash equivalents are measured at fair value, with changes in fair value being included in profit or loss.

Cash and cash equivalents that are subject to restrictions on use are included under cash and cash equivalents but reflected at restricted.

Deferred tax liabilityA deferred tax liability represents the amount of income taxes payable in future periods in respect of taxable temporary differences and is recognised for taxable temporary differences, unless specifically exempt, at the tax rates that have been enacted or substantially enacted at the reporting date.

Deferred tax arising on investments in subsidiaries, associates and joint ventures is recognised except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Defined contribution retirement plansPayments to defined contribution retirement plans are charged to profit or loss as incurred.

Defined post-employment healthcare benefitsThe cost of providing defined healthcare benefits is determined using the projected unit credit method. Valuations are conducted every three years by independent actuaries and interim adjustments to those valuations are made annually.

Actuarial gains and losses are recognised in other comprehensive income.

Gains or losses on the curtailment or settlement of a defined benefit plan are recognised in profit or loss when the group is demonstrably committed to the curtailment or settlement.

The amount recognised in the statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and the unrecognised past service costs.

ProvisionsProvisions represent liabilities of uncertain timing or amount.

Provisions are recognised when the entity has a present legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made for the amount of the obligation.

Provisions for onerous contracts are established after taking into consideration the recognition of impairment losses that have occurred on assets dedicated to those specific contracts.

Provisions are measured at the amount required to settle the present obligation. Where the effect of discounting is material, provisions are measured at their present value using an appropriate discount rate that reflects the current market assessment of time value of money and risks for which future cash flow estimates have not been adjusted.

Treasury sharesShares in the company held by group subsidiary companies, SPVs and employee trusts that require consolidation are classified as treasury shares. The consideration paid, inclusive of directly attributable costs, is disclosed as a deduction against equity. The issued and weighted average number of shares are reduced by the treasury shares, weighted for the period they have been held by the subsidiary company, SPVs or employee trusts, for the purpose of determining earnings and headline earnings per share calculations.

Dividends received on treasury shares are eliminated on consolidation.

Shares repurchased by the company and subsequently cancelled are shown as adjustments against equity.

DividendsDividends to equity holders are only recognised as a liability when declared and are included in the statement of changes in equity.

Dividends paid to employees in terms of the various empowerment schemes and in terms of forfeitable share incentive scheme, are recognised directly in equity if the awards are expected to vest and for awards that are not expected to vest, the dividend is recognised as an expense.

RevenueRevenue represents the gross inflow of economic benefits during the period arising in the course of ordinary activities when those inflows result in increases in equity, other than increases relating to contributions from equity participants.

Revenue is measured at the amount received or receivable net of cash and settlement discounts, rebates, and other indirect taxes.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred, delivery has been made and title has passed, the amount of the revenue and the related costs can be reliably measured and it is probable that the customer will pay for the goods.




Cost of sales When inventories are sold, the carrying amount is recognised as part of cost of sales. Any write-down of inventories to net realisable value and all losses of inventories or reversals of previous write-downs or losses are also recognised in cost of sales in the period the write-down, loss or reversal occurs. Cost of sales also includes the cost of delivering products to the customers.

Employee benefit costsThe cost of providing employee benefits is accounted for in the period in which the benefits are earned by employees.

The cost of short-term employee benefits is recognised in the period in which the service is rendered and is not discounted. The expected cost of short-term accumulating leave is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absences occur.

The expected cost of profit-sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their use as intended by management. All other borrowing costs are expensed in the period in which they are incurred.

Transaction costsTransaction costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability are included or deducted from the fair value of the financial asset or financial liability respectively, while transaction costs of an equity transaction are deducted from equity.

Transaction costs include fees and commissions paid to agents (including employees acting as selling agents), advisers, brokers and dealers, levies by regulatory agencies and securities exchanges, and transfer taxes and duties.

Investment incomeInterest income is accrued on a time basis by reference to the principal outstanding and at the interest rate applicable.

Dividend income from investments is recognised when the shareholders’ right to receive payment has been established.

Exceptional itemsExceptional items cover those amounts, which are not considered to be of an operating nature, and generally include profit and loss on disposal of property, investments and businesses, other non-current assets, impairments of capital items and goodwill and other items identified by management as warranting separate disclosure.

TaxIncome tax expense represents the sum of the tax currently payable and deferred tax. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

Current taxThe charge for current tax is based on the results for the year as adjusted for income that is exempt, and expenses that are not deductible, and applicable allowances, using tax rates that are applicable to the taxable income.

Deferred taxDeferred tax is recognised in profit or loss for all temporary differences, unless specifically exempt, at the tax rates that have been enacted or substantially enacted at the reporting date, except when it relates to items credited or charged directly to equity, in which case the tax is recognised in equity.

Discontinued operationsThe results of discontinued operations are presented separately in profit or loss and the assets associated with these operations are included with non-current assets held for sale in the statement of financial position.

Foreign currency translationsThe group and company annual financial statements are presented in South African rand, being the company’s functional currency.

The functional currency of each entity within the group is determined based on the currency of the primary economic environment in which that entity operates. Transactions in currencies other than the entity’s functional currency are recognised at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in such currencies are translated at the rates ruling at the reporting date. Non-monetary items that are retranslated at the rates prevailing at the date when the fair value was determined and non-monetary items that are measured in terms on historical cost in a foreign currency are not translated.

Gains and losses arising on exchange rate differences are recognised in profit or loss.

The financial statements of entities within the group, whose functional currencies are different to the group’s presentation currency, are translated as follows:■■ Assets, including goodwill, and liabilities at exchange rates ruling on the reporting date

■■ Income, expense items and cash flows at the average exchange rates for the period

■■ Equity items, at the exchange rate ruling when they arose.


Resulting exchange rate differences are classified as a foreign currency translation reserve and recognised directly in the statement of comprehensive income. On disposal of such a business unit, the applicable portion of this reserve is recognised in profit or loss before being translated into the group’s presentation currency.

Events after reporting dateRecognised amounts in the financial statements are adjusted to reflect events arising after the reporting date that provide evidence of conditions that existed at the reporting date. Events that are indicative of conditions that arose after the reporting date are dealt with by way of an explanatory note.

Comparative figuresComparative figures are restated in the event of a change in accounting policy or prior period errors. Furthermore, where there is a subdivision of ordinary shares during the current period, the comparatives figures are restated.

Operating segment informationReporting segmentsThe group has four main reporting segments that comprise the structure used by the group executive committee (GEC) to make key operating decisions and assess performance. The group’s reportable segments are operating segments that are differentiated by the activities that each undertakes and the products they manufacture and market in which products are sold.

The group evaluates the performance of its reportable segments based on revenue and EBITDA. The group accounts for inter-segment sales and transfers as if the sales and transfers were

entered into under the same terms and conditions as would have been entered into in market-related transactions.

The financial information of the group’s reportable segments is reported to the GEC for purposes of making decisions about allocating resources to the segment and assessing its performance.

The group’s reporting segments comprise the following segments:

CementThe cement division’s activities include the mining of limestone for the manufacture and supply of cementitious products and head office activities.

LimeThe lime division’s activities include the mining of limestone, and the manufacture and supply of metallurgical grade limestone, burnt lime and burnt dolomite.

Aggregates and readymixThe aggregate and readymix division’s activities include the mining and supply of aggregates and metallurgical grade dolomitic limestone and the supply of readymix concrete, dry mortars and fly ash. Readymix is included in 2014 from the effective date of consolidation of Pronto.

OtherOther comprises the various consolidated trusts and trust funding SPVs relating to the broad-based black economic empowerment transaction.




The preparation of financial statements in conformity with International Financial Reporting Standards (IFRS) requires management to make estimates, assumptions and judgements that affect reported amounts and related disclosures, and therefore actual results, when realised in future, could differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and subsequent periods if the revision affects both.

Judgements made by management in applying the accounting policies that could have a significant effect on the amounts recognised in the financial statements are:

Asset lives and residual valuesProperty, plant and equipment (PPE) are depreciated over their estimated useful lives. The actual lives of the assets are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product lifecycles, life-of-mine and maintenance programmes are taken into account.

The residual value of all PPE of the group is regarded to be zero as PPE items are intended to be used for their entire useful life and at that stage the residual value is deemed to be of minimal value.

Business combinationsOn the acquisition of a business or group of assets defined as a business, a determination of the fair value and useful life of tangible and intangible assets acquired is performed in terms of IFRS 3 Business Combinations. The determination of the fair values, measurement of the non-controlling interest and resultant goodwill, requires judgement in terms of the valuation methodology to be applied and the various inputs used in the underlying models.

The allocation of the purchase price affects the results of the group as intangible assets with finite lives are amortised over their estimated useful lives, while indefinite lived intangible assets, including goodwill, are not amortised, which could therefore result in differing amortisation charges.

Future events could cause the assumptions used initially to change, thereby potentially having an impact on the results and net position of the group.

Goodwill and intangible assets with indefinite useful livesGoodwill and intangible assets with indefinite useful lives are considered for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill or intangible asset is allocated. The recoverable amount is generally calculated by applying the discounted cash flow methodology using forecasts approved by management.

Determining the expected cash flows is judgemental in nature and involves the use of significant estimates and assumptions.

Impairment of assetsPPE and intangible assets are considered for impairment when there are events or changes in circumstances which indicate that the carrying amount of the assets may be impaired. Factors taken into consideration in reaching such decisions include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit.

The future cash flows expected to be generated by the assets are forecast, taking into account market conditions and the expected useful lives of the assets which require judgement. The present value of these cash flows, determined using an appropriate discount rate, is compared to the current net asset value and, if lower, the assets are written down to the present value calculated.

If it is not possible to estimate the recoverable amount of the individual asset, an entity shall determine the recoverable amount of the cash-generating unit to which the asset belongs.

Deferred tax assetsDeferred tax assets are recognised to the extent it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Future tax profits are estimated based on business plans which include estimates and assumptions regarding economic growth, interest, inflation and tax rates and the competitive environment.

Valuation of financial instrumentsThe valuation of derivative financial instruments is based on the market position at the reporting date and other assumptions such as volatility, intrinsic value, time value and interest rates. The value of the derivative instruments fluctuates and the actual amounts realised may differ materially from their value at the reporting date.


Judgements made by management



Judgements made by management continued

Provision for net realisable value of inventoryThe provision for net realisable value of inventory represents management’s best estimate, based on historic sales trends, assessment on quality and volume and ruling selling prices, of the extent to which the stock on hand at the reporting date will be sold below cost.

Impairment of doubtful debtsThe provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due in accordance with the original terms of credit given and includes an assessment of recoverability based on historical trend analysis and circumstances that exist at the reporting date.

Consolidation of special purpose vehiclesSpecial purpose vehicles (SPVs) established in terms of the various empowerment transactions and management retention schemes have been consolidated in the group results where there is evidence of control over the various SPVs in terms of IFRS 10 Consolidated Financial Statements. The PPC shares owned by the SPVs and consolidated trusts have therefore been treated as treasury shares and the related borrowings, where applicable, have been included in group borrowings on consolidation (refer to notes 9 and 11).

Weighted average number of sharesUsing the weighted average number of shares during the period reflects the possibility that the amount of shareholders’ capital varied during the period as a result of a larger or smaller number of shares being outstanding at any time. Judgement is required to determine the number of shares and the timing when shares are issued, also considering the assessment of consolidation or deconsolidation of various SPVs during the period. The calculation of the weighted average number of shares impacts the calculation of basic and diluted earnings per share.

Fair value of share-based paymentsFair value used in calculating the amount to be expensed as a share-based payment is subject to a level of uncertainty. The group is required to calculate the fair value of the cash-settled and equity-settled instruments granted to employees in terms of the share option schemes, forfeitable share incentive schemes and share-based payment charges relating to empowerment transactions. These fair values are calculated by applying a valuation model, which is in itself judgemental, and takes into account certain inherently uncertain assumptions such as dividend yield, performance conditions and staff turnover.

Factory decommissioning and rehabilitation obligationsEstimating the future costs of these obligations is complex as most of the obligations will only be fulfilled in the foreseeable future. Furthermore, the resulting provisions are influenced by changing technologies, life-of-mine, political, environmental, safety, business and statutory considerations through the various jurisdictions in which PPC operates.

Post-employment healthcare benefit valuationsActuarial valuations of employee benefit obligations under the now closed defined healthcare benefit plans are based on assumptions which include employee turnover, mortality rates, discount rates, medical inflation, the expected long-term return on plan assets, the rate of compensation increases and current market conditions.

Put optionsPut options were granted to the remaining non-controlling shareholders of Safika Cement Holdings Pty Limited (Safika Cement) at the time of PPC’s acquisition of a controlling stake in the business, entitling them to sell their interests in Safika Cement to PPC at future contracted dates. PPC has recognised the fair value of the non-controlling interests, being the present value of the future estimated option price, as a financial liability in the statement of financial position with a corresponding entry reducing non-controlling interests. The present value and timing of the expected redemptions and amounts need to be determined at each reporting date.

Judgement is used in calculating the expected future redemption values and timing as to when the various non-controlling shareholders will exercise their options.

RetentionsIn terms of plant construction contracts, a portion of the cost of the plant is retained by the group until certain performance and operating targets are achieved. Judgement is required to determine the timing of when the retentions will be paid over to the contractor. Any portion deemed to be only payable after 12 months is classified as a non-current liability.

Provision for restructuring costsThe group estimates the level of provision required for restructuring costs based on historical experience as well as other specific relevant factors.

Contingent liabilitiesA possible obligation depending on whether some uncertain future event occurs, or a present obligation but payment is not probable or the amount cannot be measured reliably. A contingent liability is disclosed but not accrued. Disclosure is, however, not required if payment is remote. Contingent liabilities assumed in a business combination are recognised to the extent that there is a present obligation that arose from past events and its fair value can be measured reliably.

Waste-stripping costsThe allocation of stripping costs between inventory produced and non-current assets is based on the volume of waste extracted compared to the expected stripping ratio of the respective mine and mineral body. Any change in management’s estimates could impact the stripping costs capitalised and depreciation of the related asset.


Exceptional itemsExceptional items are expense or income items recorded in a period which have been determined by management as being material by their size or incidence and are presented separately within the results of the group. The determination of which items are disclosed as exceptional items may affect the presentation of profit measures including EBITDA and normalised earnings per share, and requires a degree of judgement.

Income taxesThe group is subject to tax in several jurisdictions and judgement is therefore required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises provisions for tax based on estimates of the taxes that are likely to become due. Where the final tax outcome is different from the amounts that were initially recorded, such differences impact the current income tax and deferred tax provisions in the period in which such determination is made.

Average translation ratesIncome and expenditure transactions are translated using the average rate of exchange for the period. Management considers the average rate to approximate the actual rates prevailing on the dates on which these transactions occur.

Sources of estimation uncertaintyThere are no significant assumptions made concerning the future or other sources of estimation uncertainty that have been identified as giving rise to a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Going concernManagement considers key financial information and loan covenant compliance in its approved medium-term budgets, together with its existing term facilities, to conclude that the going-concern assumption used in the compilation of its annual financial statements is appropriate.


as at 30 September 2014

Consolidated statement of financial position

Notes2014

Rm2013

Rm

ASSETSNon-current assets 8 938 6 411 Property, plant and equipment 1 7 223 5 522

Goodwill 2 268 101 Other intangible assets 3 681 232 Equity accounted investments 4 223 410 Other non-current assets 5 534 146 Deferred taxation assets 10 9 –

Current assets 2 637 2 465 Inventories 6 894 923 Trade and other receivables 7 1 180 1 050 Cash and cash equivalents 8 563 492

Total assets 11 575 8 876

EQUITY AND LIABILITIESCapital and reservesStated capital 9 (1 173) (1 236)Other reserves 733 539 Retained profit 2 255 2 257

Equity attributable to shareholders of PPC Ltd 1 815 1 560 Non-controlling interests 603 582

Total equity 2 418 2 142

Non-current liabilities 7 186 4 900 Deferred taxation liabilities 10 1 030 1 063 Long-term borrowings 11 5 740 3 462 Provisions 12 374 348 Other non-current liabilities 13 42 27

Current liabilities 1 971 1 834 Short-term borrowings 14 351 584 Trade and other payables and short-term provisions 15 1 620 1 250

Total equity and liabilities 11 575 8 876



Consolidated income statement

Notes2014

Rm2013

Rm

Revenue 9 039 8 316 Cost of sales 6 266 5 546

Gross profit 2 773 2 770 Administration and other operating expenditure 1 030 853

Operating profit before items listed below: 1 743 1 917 BBBEE IFRS 2 charges 37 48 Zimbabwe indigenisation costs 1 93

Operating profit 16 1 705 1 776Fair value adjustments on financial instruments 17 38 25 Finance costs 18 505 404 Investment income 19 53 22

Profit before equity accounted earnings and exceptional items 1 291 1 419Earnings from equity accounted investments 4 24 20 Impairments 20 (111) (13)Other exceptional adjustments 20 1 12

Profit before taxation 1 205 1 438Taxation 21 356 507

Profit for the year 849 931

Attributable to:Shareholders of PPC Ltd 840 931

Non-controlling interests 9 –

849 931

Earnings per share (cents) 22Basic 160 178

Diluted 158 175



Consolidated statement of comprehensive income

Unrealised surplus on

reclassi-fication of plant

Rm

Foreign currency

translation reserve

Rm

Available-for-sale

financial assets

Rm

Hedging reserves

Rm

Retained profit

Rm

Total compre-hensive income

Rm

2014Profit for the year – – – – 849 849 Items that will not be reclassified to profit or loss – – 47 – – 47

Revaluation of available-for-sale financial investments – – 58 – – 58 Taxation on revaluation of available-for-sale financial investments – – (11) – – (11)Items that will be reclassified to profit or loss upon derecognition – 214 – 7 – 221 Effect of cash flow hedges – – – 7 – 7 Effect of translation of foreign operations – 214 – – – 214

Other comprehensive incomenet of taxation – 214 47 7 – 268

Total comprehensive income – 214 47 7 849 1 117

2013Profit for the year – – – – 931 931 Items that will not be reclassified to profit or loss (4) – 9 – 4 9 Revaluation of available-for-sale financial investments – – 11 – – 11 Taxation on revaluation of available-for-sale financial investments – – (2) – – (2)Transfer to retained profit (4) – – – 4 – Items that will be reclassified to profit or loss upon derecognition – 157 – 36 – 193 Effect of cash flow hedges – – – 36 – 36 Effect of translation of foreign operations – 157 – – – 157 Other comprehensive incomenet of taxation (4) 157 9 36 4 202

Total comprehensive income (4) 157 9 36 935 1 133



Consolidated statement of changes in equity

Other reserves

Stated capital

Rm

Un-realised

surplus on reclassi-fication of plant

Rm

Foreign currency

trans-lation

reserves Rm

Available-for-sale

financial assets

Rm

Hedging reserves

Rm

Equity compen-

sation reserves

Rm

Retained profit

Rm

Equity attri-

butable to

share-holders of PPC

LtdRm

Non-control-

ling interests

Rm

Total equity

Rm

2014Opening balance at the beginning of the year (1 236) 1 202 37 (7) 306 2 257 1 560 582 2 142Movements for the year 63 (1) 214 47 7 (73) (2) 255 21 276Acquisitions of subsidiary companies (refer to note 28) – – – – – – – – 140 140 Dividends declared (refer to note 23) – – – – – – (848) (848) (32) (880)IFRS 2 charges – – – – – 48 – 48 – 48 Non-controlling interests’share of foreign currency translation reserve – – – – – – – – 41 41 Put option liabilities recognised with acquisition of subsidiary company (refer to note 13) – – – – – – – – (137) (137)Total comprehensive income – – 214 47 7 – 840 1 108 9 1 117 Transfer to retained profit – (1) – – – (5) 6 – – – Treasury shares held in terms of the FSP share incentive scheme (53) – – – – – – (53) – (53)Vesting of certain BBBEE 1 entities 100 – – – – (100) – – – –

Vesting of certain FSP share incentive scheme awards 16 – – – – (16) – – – –

Balance at 30 September 2014 (1 173) – 416 84 – 233 2 255 1 815 603 2 418



Consolidated statement of changes in equity continued

Other reserves

Stated capital

Rm

Un-realised

surplus on reclassi-fication of plant

Rm

Foreign currency

trans-lation

reserves Rm

Available-for-sale

financial assets

Rm

Hedging reserves

Rm

Equity compen-

sation reserves

Rm

Retained profit

Rm

Equity attri-

butable to

share-holders of PPC

LtdRm

Non-control-

ling interests

Rm

Total equity

Rm

2013Opening balance at the beginning of the year (1 181) 5 45 25 (43) 250 2 075 1 176 – 1 176Movements for the year (55) (4) 157 12 36 56 182 384 582 966Acquisitions of subsidiary companies (refer to note 28) – – – – – – – – 512 512 Dividends declared (refer to note 23) – – – – – – (770) (770) – (770)Contribution from participants of the Zimbabwe indigenisation transaction – – – – – – – – 3 3 IFRS 2 charges – – – – – 139 – 139 – 139 Non-controlling interests’share of foreign currency translation reserve – – – – – – – – 5 5 Reclassification movements – – – 3 – (3) – – – – Sale of shares by consolidated BBBEE entity (refer to note 9) 1 – – – – (1) – – – – Total comprehensive income – (4) 157 9 36 – 935 1 133 – 1 133 Transfer to retained profit – – – – – (17) 17 – – – Treasury shares held in terms of the FSP share incentive scheme (56) – – – – – – (56) – (56)Zimbabwe IFRS 2 charges transferred to non-controlling interests – – – – – (62) – (62) 62 –

Balance at 30 September 2013 (1 236) 1 202 37 (7) 306 2 257 1 560 582 2 142



Consolidated statement of cash flows

Notes2014

Rm2013

Rm

CASH FLOWS FROM OPERATING ACTIVITIESProfit before taxation and equity accounted earnings 1 181 1 418Adjustments for:

Amortisation of intangible assets 3 72 34BBBEE IFRS 2 charges 48 48Depreciation 1 543 488Dividends received 19 (18) (4)Finance costs 18 505 404Gross impairments and other exceptional adjustments 20 110 13Interest received 19 (35) (18)Other non-cash flow items 65 22Profit on sale of non-current assets 20 – (12)Zimbabwe indigenisation costs 1 93

Operating cash flows before movements in working capital 2 472 2 486Movements in inventories 101 (12)Movements in trade and other receivables 143 63Movements in trade and other payables and provisions (133) 348

Cash generated from operations 2 583 2 885Finance costs paid 25 (426) (269)Dividends received 18 4Interest received 19 35 18Taxation paid 26 (499) (525)

Cash available from operations 1 711 2 113Dividends paid 27 (880) (770)

Net cash inflow from operating activities 831 1 343

CASH FLOWS FROM INVESTING ACTIVITIESAcquisitions of equity accounted investments 4 (3) (126)Acquisitions of subsidiary companies 28 (662) (140)Investments in intangible assets 3 (63) (6)Investments in property, plant and equipment 29 (2 119) (964)Movements in financial assets 30 3 2 Proceeds on disposal of property, plant and equipment 4 15

Net cash outflow from investing activities (2 840) (1 219)

Net cash (outflow)/inflow before financing activities (2 009) 124

CASH FLOWS FROM FINANCING ACTIVITIESLong-term borrowings raised/(repaid) 590 (102)Net short-term borrowings repaid (389) (398)Proceeds raised from bond issuance 11 1 750 650Purchase of shares in terms of FSP share incentive scheme (53) (56)

Net cash inflow from financing activities 1 898 94

Net (decrease)/increase in cash and cash equivalents (111) 218Cash and cash equivalents at the beginning of the year 492 248Cash and cash equivalents acquired on acquisitions of subsidiary companies 28 149 6 Impact of foreign exchange rate movements on opening cash and cash equivalents 33 20

Cash and cash equivalents at the end of the year 8 563 492

Cash earnings per share (cents) 22 325 404



Segmental information

The group discloses its operating segments according to the business units which are regularly reviewed by the group executive committee which comprise cement, lime, aggregates and readymix and other. For details on the operating segments refer to the accounting policies.

Group Cement* Lime Aggregates and readymix# Other^

2014Rm

2013Rm

2014Rm

2013Rm

2014Rm

2013Rm

2014Rm

2013Rm

2014Rm

2013Rm

RevenueSouth Africa 6 671 6 392 5 395 5 413 792 724 484 255 – – Rest of Africa 2 432 1 960 2 315 1 806 25 74 92 80 – –

9 103 8 352 7 710 7 219 817 798 576 335 – –

Inter-segment revenue (64) (36)

Total revenue 9 039 8 316

Operating profit before items listed below 1 759 1 981 1 595 1 846 107 126 57 25 – (16)BBBEE IFRS 2 charges 37 48 37 44 – 3 – 1 – – Restructuring costs 16 64 5 64 11 – – – – – Zimbabwe indigenisation costs 1 93 1 93 – – – – – –

Operating profit 1 705 1 776 1 552 1 645 96 123 57 24 – (16)South Africa 1 230 1 465 1 072 1 326 96 123 62 32 – (16)Rest of Africa 475 311 480 319 – – (5) (8) – –

Fair value adjustments on financial instruments 38 25 40 29 1 1 (5) (6) 2 1 Finance costs 505 404 384 264 3 2 8 5 110 133 Investment income 53 22 48 17 2 3 3 2 – –

Profit before earnings from equity accounted investments and exceptional items

1 291 1 419 1 256 1 427 96 125 47 15 (108) (148)

Earnings from equity accounted investments 24 20 24 20 – – – – – – Impairments and other exceptional adjustments (110) (1) (81) 10 – – (29) (11) – –

Profit before taxation 1 205 1 438 1 199 1 457 96 125 18 4 (108) (148)Taxation 356 507 314 464 25 34 17 9 – –

Net profit 849 931 885 993 71 91 1 (5) (108) (148)

Depreciation and amortisation 615 522 542 465 40 36 33 21 – – EBITDA~ 2 374 2 504 2 137 2 312 147 162 90 46 – (16)

South Africa 1 801 1 970 1 569 1 778 147 162 85 46 – (16)Rest of Africa 573 534 568 534 – – 5 – – –

EBITDA margin (%) 26,3 30,1 27,7 32,0 18,0 20,4 15,6 13,7 – –

AssetsNon-current assets 8 938 6 411 7 991 5 968 310 286 637 157 – – Current assets 2 637 2 465 2 191 2 133 192 201 253 126 1 5

Total assets 11 575 8 876 10 182 8 101 502 487 890 283 1 5 South Africa 6 541 6 202 5 225 5 527 502 487 813 183 1 5 Rest of Africa 5 034 2 674 4 957 2 574 – – 77 100 – –

Investments in property, plant and equipment (refer to note 29)

2 119 964 2 025 917 62 37 32 10 – –

Capital commitments (refer to note 31) 3 896 1 088 3 860 1 078 7 9 29 1 – –

LiabilitiesNon-current liabilities 7 186 4 900 5 768 3 575 101 91 96 21 1 221 1 213Current liabilities 1 971 1 834 1 707 1 529 48 73 143 58 73 174

Total liabilities 9 157 6 734 7 475 5 104 149 164 239 79 1 294 1 387 South Africa 7 446 5 702 5 789 4 104 149 164 214 47 1 294 1 387 Rest of Africa 1 711 1 032 1 686 1 000 – – 25 32 – –

Revenue is split between South Africa and the rest of Africa based on where the underlying goods are anticipated to be consumed or used by the customer.

No individual customer comprises more than 10% of group revenue.

* Includes head office activities.# Includes readymix in 2014 from the effective date of consolidation of Pronto.^ Other comprises BBBEE trusts and trust funding SPVs.~ Excluding BBBEE IFRS 2 charges, Zimbabwe indigenisation costs and restructuring costs.


The group discloses its operating segments according to the business units which are regularly reviewed by the group executive committee which comprise cement, lime, aggregates and readymix and other. For details on the operating segments refer to the accounting policies.

Group Cement* Lime Aggregates and readymix# Other^

2014Rm

2013Rm

2014Rm

2013Rm

2014Rm

2013Rm

2014Rm

2013Rm

2014Rm

2013Rm

RevenueSouth Africa 6 671 6 392 5 395 5 413 792 724 484 255 – – Rest of Africa 2 432 1 960 2 315 1 806 25 74 92 80 – –

9 103 8 352 7 710 7 219 817 798 576 335 – –

Inter-segment revenue (64) (36)

Total revenue 9 039 8 316

Operating profit before items listed below 1 759 1 981 1 595 1 846 107 126 57 25 – (16)BBBEE IFRS 2 charges 37 48 37 44 – 3 – 1 – – Restructuring costs 16 64 5 64 11 – – – – – Zimbabwe indigenisation costs 1 93 1 93 – – – – – –

Operating profit 1 705 1 776 1 552 1 645 96 123 57 24 – (16)South Africa 1 230 1 465 1 072 1 326 96 123 62 32 – (16)Rest of Africa 475 311 480 319 – – (5) (8) – –

Fair value adjustments on financial instruments 38 25 40 29 1 1 (5) (6) 2 1 Finance costs 505 404 384 264 3 2 8 5 110 133 Investment income 53 22 48 17 2 3 3 2 – –

Profit before earnings from equity accounted investments and exceptional items

1 291 1 419 1 256 1 427 96 125 47 15 (108) (148)

Earnings from equity accounted investments 24 20 24 20 – – – – – – Impairments and other exceptional adjustments (110) (1) (81) 10 – – (29) (11) – –

Profit before taxation 1 205 1 438 1 199 1 457 96 125 18 4 (108) (148)Taxation 356 507 314 464 25 34 17 9 – –

Net profit 849 931 885 993 71 91 1 (5) (108) (148)

Depreciation and amortisation 615 522 542 465 40 36 33 21 – – EBITDA~ 2 374 2 504 2 137 2 312 147 162 90 46 – (16)

South Africa 1 801 1 970 1 569 1 778 147 162 85 46 – (16)Rest of Africa 573 534 568 534 – – 5 – – –

EBITDA margin (%) 26,3 30,1 27,7 32,0 18,0 20,4 15,6 13,7 – –

AssetsNon-current assets 8 938 6 411 7 991 5 968 310 286 637 157 – – Current assets 2 637 2 465 2 191 2 133 192 201 253 126 1 5

Total assets 11 575 8 876 10 182 8 101 502 487 890 283 1 5 South Africa 6 541 6 202 5 225 5 527 502 487 813 183 1 5 Rest of Africa 5 034 2 674 4 957 2 574 – – 77 100 – –

Investments in property, plant and equipment (refer to note 29)

2 119 964 2 025 917 62 37 32 10 – –

Capital commitments (refer to note 31) 3 896 1 088 3 860 1 078 7 9 29 1 – –

LiabilitiesNon-current liabilities 7 186 4 900 5 768 3 575 101 91 96 21 1 221 1 213Current liabilities 1 971 1 834 1 707 1 529 48 73 143 58 73 174

Total liabilities 9 157 6 734 7 475 5 104 149 164 239 79 1 294 1 387 South Africa 7 446 5 702 5 789 4 104 149 164 214 47 1 294 1 387 Rest of Africa 1 711 1 032 1 686 1 000 – – 25 32 – –

Revenue is split between South Africa and the rest of Africa based on where the underlying goods are anticipated to be consumed or used by the customer.

No individual customer comprises more than 10% of group revenue.

* Includes head office activities.# Includes readymix in 2014 from the effective date of consolidation of Pronto.^ Other comprises BBBEE trusts and trust funding SPVs.~ Excluding BBBEE IFRS 2 charges, Zimbabwe indigenisation costs and restructuring costs.



Notes to the group financial statements

Freehold and

leasehold land,

buildings and

mineral rights

Rm

Factorydecommis-

sioningassets

Rm

Plant, vehicles,furniture

andequipment

Rm

Capitalisedleasedplant

RmTotal

Rm

1. PROPERTY, PLANT AND EQUIPMENT2014Cost 1 246 151 10 092 153 11 642Accumulated depreciation and impairments 384 40 3 848 147 4 419

Net carrying value at the end of the year 862 111 6 244 6 7 223

2013Cost 1 011 146 7 996 153 9 306 Accumulated depreciation and impairments 324 35 3 282 143 3 784


Property, plant and equipment with a net carrying value of R1 502 million (2013: R87 million) are encumbered as disclosed in note 11. These assets are used as security for the borrowings at CIMERWA.

Included in plant, vehicles, furniture and equipment is capital work in progress of R1 248 million (2013: R211 million), with R307 million and R964 million relating to the DRC and Rwanda expansions respectively.

The cost of land included above amounts to R248 million (2013: R215 million).

During the year property, plant and equipment of R46 million (2013: R6 million) was impaired. The impairments relate to aggregate quarries of Botswana and CIMERWA. The cash-generating units were assessed for potential impairment which indicated that CIMERWA freehold land and aggregate quarries of Botswana plant and equipment are impaired.

Certain of the group’s properties in South Africa are the subject of land claims. Discussions with the Land Claims Commissioner continue and the outcome of the claims referred to the Land Claims Court are still due. The claims are not expected to have a material impact on the group’s operations.

For details on capital commitments at year end, refer to note 31.


Freehold and

leasehold land,

buildings and

mineral rights

Rm

Factorydecommis-

sioningassets

Rm

Plant, vehicles,furniture

andequipment

Rm


RmTotal

Rm

1. PROPERTY, PLANT AND EQUIPMENT continuedMovement of property, plant and equipment 2014Net carrying value at the beginning of the year 687 111 4 714 10 5 522 Acquisitions of subsidiary companies (refer to note 28) 47 – 178 – 225 Additions 160 – 1 748 – 1 908

To enhance existing operations 18 – 572 – 590 To expand operations 142 – 1 176 – 1 318

Depreciation (34) (4) (501) (4) (543)Disposals – – (4) – (4)Other movements 1 (4) 4 – 1Impairments (refer to note 20) (29) – (17) – (46)Reallocation to inventory – – (16) – (16)Translation differences^ 30 8 138 – 176

Net carrying value at the end of the year 862 111 6 244 6 7 223 ^ The translation differences comprise: Cost 213 Accumulated depreciation (37)

176

2013Net carrying value at the beginning of the year 516 101 3 852 14 4 483 Acquisitions of subsidiary companies (refer to note 28) 132 – 301 – 433 Additions 43 – 921 – 964

To enhance existing operations 31 – 415 – 446 To expand operations 12 – 506 – 518

Depreciation (29) (4) (451) (4) (488)Disposals (2) – (2) – (4)Impairments (refer to note 20) – – (6) – (6)Other movements (11) 2 – – (9)Reallocation to inventory – – (4) – (4)Other transfers 5 – – – 5 Translation differences^ 33 12 103 – 148

Net carrying value at the end of the year 687 111 4 714 10 5 522 ^ The translation differences comprise: Cost 177

Accumulated depreciation (29)

148



Notes to the group financial statements continued

2014Rm

2013Rm

2. GOODWILLCost 336 107 Accumulated impairment loss 68 6

Net carrying value at the end of the year 268 101

Movement of goodwillNet carrying value at the beginning of the year 101 6 Acquisitions of subsidiary companies (refer to note 28) 227 100 Impairments (refer to note 20)^ (65) (6)Translation differences 5 1


Goodwill is allocated to the following subsidiary companies:CIMERWA Limited 41 101Safika Cement Holdings Pty Limited* 78 – Pronto Holdings Pty Limited* 149 –

268 101

^ Impairments Included in impairments are the following:

Aggregate quarries of Botswana During 2013 the goodwill acquired on the aggregate quarry acquisition in Botswana was assessed for potential impairment at a cash-

generating unit level, being each of the three respective quarries. This review indicated an impairment relating to the Selebi Phikwe quarry and as a result the full goodwill recognised on acquisition of R6 million was impaired. The valuation was performed using discounted cash flow methodology and applying growth and discount rates applicable to the Botswana environment.

CIMERWA Limited The recoverable amount of this cash-generating unit was determined based on a value-in-use calculation, using cash flow projections

based on financial forecasts approved by management and covering an initial seven-year period. The discount rate used in the valuation was based on an appropriate hurdle rate for Rwanda and adjusted for specific company and business-related risk factors.

Cash flow projections during the forecast period are based on improved margins and profitability following the planned commissioning of the new plant early in the 2015 calendar year, taking cognisance of an appropriate ramp-up period. Selling prices and cost of sales were forecast to increase at applicable inflation rates. The cash flow post the forecast period has been extrapolated using in-country specific growth rates, with the forecast period limited to the life of mine, currently estimated at around 15 years. Post the end of mine, alternative sources of raw materials have been factored into the projections.

Following the impairment review, the calculated value was deemed to be lower than the current carrying value, resulting in an impairment of R65 million being charged against profit and loss, under impairments.

* Safika Cement Holdings Pty Limited and Pronto Holdings Pty Limited The recoverable amounts of these cash-generating units are determined based on value-in-use calculations, using cash flow projections

based on financial forecasts approved by management and covering an initial seven-year period. The discount rate used in the valuations were based on PPC’s weighted average cost of capital, adjusted for specific company and business-related risk factors.

Cash flow projections during the forecast period are based on similar pricing and margins to those currently being achieved by the businesses. Selling prices and cost of sales are forecast to increase at rates linked to local inflation projections. The cash flows post the forecast period have been extrapolated using local GDP growth rates.

No impairments were deemed necessary during the year under review.


Right of useof mineral

assetRm

ERPdevelopment

and other software

Rm

Brand,trademarks

andcustomer

relationshipsRm

TotalRm

3. OTHER INTANGIBLE ASSETS2014Cost 56 271 545 872 Accumulated amortisation and impairments 2 139 50 191

Net carrying value at the end of the year 54 132 495 681

2013Cost 59 204 100 363 Accumulated amortisation and impairments 6 121 4 131


Movement of intangible assets 2014Net carrying value at the beginning of the year 53 83 96 232 Acquisitions of subsidiary companies (refer to note 28) – – 428 428 Additions – 63 – 63 Amortisation (1) (33) (38) (72)Transfers and other movements – 19 – 19 Translation differences 2 – 9 11


2013Net carrying value at the beginning of the year 26 107 – 133 Acquisitions of subsidiary companies (refer to note 28) 25 – 99 124 Additions 2 4 – 6 Amortisation (1) (29) (4) (34)Translation differences 1 1 1 3


Intangible assets were recognised on the acquisitions of Pronto, Safika Cement and CIMERWA (refer to note 28). Included in brand, trademarks and customer relationships are brand and trademarks of R359 million (2013: R96 million), contracted and non-contracted customer relationships of R132 million (2013: Rnil) and favourable lease terms of R4 million (2013: Rnil). Brands and trademarks are amortised over a period not exceeding 15 years, while customer relationships are amortised over a five-year period. Favourable lease terms are amortised over the remaining period of the lease, not exceeding three years.

The group does not have any indefinite life intangible assets, other than goodwill.



2014Rm

2013Rm

4. EQUITY ACCOUNTED INVESTMENTSInvestments at cost at the beginning of the year 305 179Investments made during the year* 3 126Acquired through the acquisition of subsidiary companies (refer to note 28) 1 –

Investments at cost at the end of the year 309 305Share of retained profit 83 59Retained profit at the beginning of the year 59 39Share of current year’s profit 24 20

392 364Transferred to subsidiariess (215) –

177 364Loans advanced^ 46 46Balance at the beginning of the year 46 49Interest capitalised 2 2Impairments (refer to note 20)~ – (1)Repayments (2) (4)

223 410

Valuation of interest in equity accounted investmentsFair value of unlisted equity accounted investments, including loans advanced, as determined by the directors 561 443

Fair value of equity accounted investments was determined by using the discounted cash flow methodology. A discount rate relevant to each country and adjusted for specific project and business risks was used. The increase in fair value can be ascribed to the change in valuation methodology applied in calculating the fair value of Habesha. In previous years, the fair value of PPC’s share was considered to approximate the carrying value as the business was still in early phases of project commencement.

* Investments made during the year Habesha Cement Share Company (Habesha)

During the year, PPC acquired a further equity stake in Habesha, for a purchase consideration of R3 million (2013: R16 million) marginally increasing PPC’s shareholding in the company to 31,6% (2013: 30,7%). Post-year end, PPC entered into an agreement to purchase a further 20% shareholding in Habesha, subject to certain regulatory approvals. Refer to note 32.

S Transferred to subsidiaries PPC obtained control over Pronto following the acquisition of the remaining 50% in the company during the year for R280 million,

making it a wholly owned subsidiary. In 2013, PPC acquired a further 25% for R110 million, which brought the shareholding to 50% at the time. Refer to note 28.

^ Loans advanced to associates Of the loans advanced to associates, R3 million bears interest at the prime lending rate, while the remaining balance is interest-free.

Where appropriate, bonds are registered over land and movable assets as security. The capital and interest are repayable by August 2017.

~ Impairments During the year, an impairment of Rnil (2013: R1 million) was recorded on the loans advanced, to adjust the loans to the expected

recoverable amount, net of securities.



2014Rm

2013Rm

4. EQUITY ACCOUNTED INVESTMENTS continuedKey financial information of associates$

Non-current assets 514 629 Current assets 779 984 Total assets 1 293 1 613 Total equity 465 891 Non-current liabilities 285 311 Current liabilities 543 411 Revenue 1 531 1 803 Operating profit 113 105 Profit after taxation 79 59 Comprehensive income 79 59

Interest Carrying value, including loans advanced

NameNature of business

2014%

2013%

Financial@ year end

2014Rm

2013Rm

Incorporated in South AfricaAfripack Limited Packaging 25 25 September 96 83 First Gas (Pty) Limited LP gas and

liquid fuels distribution

40 40 February – –

Metlakgola Construction & Development (Pty) Limited

Construction 40 40 February 1 1

Olegra Oil (Pty) Limited Used oil collection and filling station

29 29 February 2 3

Pronto Holdings Pty Limited Readymix concrete and fly ash

50 February – 203

Rhulanani Concrete Mixers (Pty) Limited

Readymix concrete

40 40 February 2 2

Hoekplaats Dolomite (Pty) Limited

Quarrying 49 February 1 –

Incorporated in EthiopiaHabesha Cement Share Company

Cement manufacturer

31,6 30,7 July 121 118

223 410

Afripack is considered a material equity accounted investment as it comprises the majority of the equity accounted earnings for the year, noting that Pronto is now a wholly owned subsidiary. Habesha is also deemed to be a material equity accounted investment as its carrying value is more than half of the total value of the group’s equity accounted investments and will have a material impact when fully operational.$ The financial information provided represents the full results of equity accounted investments.@ Management accounts together with the financial statements are used to align earnings in equity accounting investments with PPC year end.



2014Rm

2013Rm

5. OTHER NON-CURRENT ASSETSUnlisted investment at fair value@ 95 37 Unlisted collective investment* 114 105

209 142 Loans advanced~ 3 4 Advance payments for plant and equipment^ 322 –

534 146

Directors’ valuation of unlisted investments including loans advanced 212 146

@ Unlisted investment at fair value PPC Ltd holds a 6,75% (2013: 6,75%) shareholding in Ciments du Bourbon, incorporated in Reunion. The fair value of the investment

has been calculated using a dividend yield valuation methodology, using comparable company dividend yields. The movement in fair value of R58 million (2013: R9 million) has been credited against other comprehensive income. The basis of determining the fair value of the investment has changed from an earnings multiple approach, as used in previous years, to the dividend yield methodology used in the current year, which aligns with the group’s influence and investment returns.

* Unlisted collective investment Comprises an investment by the PPC Environmental Trust. Put options are also held over the value of the assets in order to protect the

capital of the portfolio. At 30 September 2014, the value of the put options were not material. During the year, a further R4 million was reinvested in the unit trusts. These funds are held to fund PPC’s South African environmental obligations.

~ Loans advanced These loans have been advanced to fund enterprise development companies and bear interest at rates between prime less 2% and

prime less 5%, and are secured by bonds over land and moveable assets. Interest received on the loans is Rnil (2013: R2 million). The capital and interest are repayable until 2017.

^ Advance payments In terms of the construction agreements with the suppliers of the new cement plants in Rwanda and the DRC, a portion of the full

contract price is required to be paid in advance of the project commencing. The advance payments are secured by advance payment bonds issued by Citibank, and will be recycled to property, plant and equipment as the plants are constructed.

2014Rm

2013Rm

6. INVENTORIESRaw materials 207 164Work in progress 92 159Finished goods 221 180Maintenance stores 553 566Inventory obsolescence (179) (146)

894 923

Inventory obsolescenceBalance at the beginning of the year 146 115Raised during the year 29 28Utilised during the year – (4)Released during the year (2) (1)Translation differences 6 8

Balance at the end of the year 179 146

Inventories are determined on the weighted average formula basis.

During the year, an amount of R16 million (2013: R4 million), for critical spares, was reclassified between property, plant and equipment and inventory.

The cost of inventories recognised as an expense during the year was R4 872 million (2013: R4 324 million).

No inventories have been pledged as security.



2014Rm

2013Rm

7. TRADE AND OTHER RECEIVABLESTrade receivables 1 064 835Less: Impairment of trade receivables (30) (19)

Net trade receivables 1 034 816Other financial receivables 57 58

Trade and other financial receivables 1 091 874Prepayments 61 133Taxation prepaid 28 43

1 180 1 050

Net trade receivables comprise: 1 034 816Trade receivables that are neither past due nor impaired 875 691Trade receivables that would otherwise be impaired whose terms have been renegotiated 2 9Trade receivables that are past due but not impaired 157 116

Trade receivables have increased following the consolidation of Safika Cement and Pronto during the year. Refer to note 28.

No receivables have been pledged as security.

No individual customer represents more than 10% of the group’s revenue and exposure at year end of more than 10% of net trade receivables.

Where credit is given, normal credit terms are 30 to 60 days. Impairment is generally determined by the ageing on an account, financial position of the customer and security held. When a customer applies for business rescue or liquidates, the amount due is immediately provided for, if not already provided for.

The credit quality of a customer is assessed with reference to credit bureau reports, financial statements analysis, trade references, bank codes and securities. Accounts are reviewed annually with high risk customers monitored more frequently. Collateral held comprises bank guarantees, cession of book debt, deed of surety, cross company guarantees and notarial bonds.

Cement Rm

LimeRm

Aggregates and

readymix Rm

TotalRm

Trade receivables that are neither past due nor impaired2014 672 91 112 875 2013 571 84 36 691

There is no history of material default relating to trade receivables in this category.

Trade receivables that are past due but not impaired2014Ageing beyond normal terms 143 6 8 157 1 – 30 days 76 3 4 8331 – 60 days 13 – 3 1661 – 90 days 16 3 1 2091 – 180 days 35 – – 35 Greater than 180 days 3 – – 3 Fair value of collateral held 32 – – 32

2013Ageing beyond normal terms 103 1 12 116 1 – 30 days 62 1 5 68 31 – 60 days – – 6 6 61 – 90 days 20 – – 20 91 – 180 days 13 – 1 14 Greater than 180 days 8 – – 8 Fair value of collateral held 68 – – 68



Cement Rm

LimeRm

Aggregates and

readymix Rm

TotalRm

7. TRADE AND OTHER RECEIVABLES continuedImpairment of trade receivables2014Balance at the beginning of the year 15 – 4 19 Allowance raised through profit or loss 12 – 1 13 Utilisation of allowance (2) – – (2)

Balance at the end of the year 25 – 5 30

2013Balance at the beginning of the year 16 – 4 20 Allowance raised through profit or loss 5 – – 5 Utilisation of allowance (6) – – (6)

Balance at the end of the year 15 – 4 19

2014Rm

2013Rm

8. CASH AND CASH EQUIVALENTSCash and cash equivalents 563 492

Currency analysis:Botswana pula 38 25Mozambican metical 37 19Rwandan franc 66 90South African rand 109 111United States dollar 313 247

563 492

Amounts denominated in foreign currencies have been translated at ruling exchange rates at year end. Refer to note 41 for exchange rates used.

Cash restricted for use relating to:PPC Environmental Trust 6 6Consolidated BBBEE entities 1 6

7 12

Cash and cash equivalents include cash on hand and cash on deposit, net of outstanding bank overdrafts, where there is a right of set-off. The majority of the funds denominated in Rwandan franc and US dollar are to be used specifically for the expansions in Rwanda and the DRC respectively.



2014Shares

2013Shares

9. STATED CAPITALAuthorised shares 700 000 000 700 000 000

Issued ordinary sharesTotal shares in issue at the beginning of the year 605 379 648 566 029 971 Shares issued in terms of second BBBEE transaction& – 39 349 677

Total shares in issue at the end of the year 605 379 648 605 379 648 Less: Shares held by consolidated participants of the second BBBEE transaction treated as treasury shares& (37 382 193) (39 349 677)Less: Shares held by consolidated BBBEE trusts and trust funding SPVs treated as treasury shares^ (34 764 669) (37 967 439)Less: Shares held by consolidated Porthold Trust Pvt Limited treated as treasury shares~ (1 284 556) (1 284 556)Less: Shares purchased in terms of the FSP incentive scheme treated as treasury shares# (5 865 851) (4 744 733)

Total shares in issue (net of treasury shares) 526 082 379 522 033 243

Authorised preference shares 20 000 000 –

During 2014, shareholders approved the creation of 20 million preference shares, of R1 000 each, in terms of the proposed restructure of a portion of PPC’s first BBBEE transaction. No preference shares have been issued post the approval.

Rm Rm

Stated capitalBalance at the beginning of the year (1 236) (1 181)Shares purchased in terms of the FSP share incentive scheme treated as treasury shares# (53) (56)Sale of shares, treated as treasury shares, by consolidated BEE entity* – 1 Vesting of shares held by certain BBBEE 1 entities 100 – Vesting on a portion of the shares held in terms of the FSP incentive scheme# 16 –

Balance at the end of the year (1 173) (1 236)

Unissued shares (shares)Ordinary shares 94 620 352 94 620 352Preference shares 20 000 000 – & Shares issued in terms of PPC’s second BBBEE transaction which was facilitated by means of notional vendor financing (NVF) mechanism

resulting in these shares only participating in 20% of the dividends declared by PPC during the NVF period, ending 30 September 2019. With the exception of the Bafati Investment Trust, entities participating in this transaction are consolidated into the PPC group during the transaction term.

^ In terms of IFRS 10 Consolidated Financial Statements, certain of the BBBEE trusts and trust funding SPVs from PPC’s first transactions are consolidated, and as a result, shares owned by these entities are carried as treasury shares on consolidation. In December 2013, 3 202 770 shares vested to beneficiaries and are no longer treated as treasury shares.

~ Shares owned by a Zimbabwe employee trust company are treated as treasury shares.# In terms of the forfeitable share incentive scheme, 5 865 851 shares (2013: 4 744 733 shares) are held for participants of this long-term

incentive scheme. The shares are treated as treasury shares during the vesting periods of the awards. In February 2014, 619 457 shares vested and are no longer treated as treasury shares.

* During 2013, the Current Team Trust, a PPC consolidated trust which was consolidated into the group in terms of the first BBBEE transaction, sold a portion of their shareholding in the open market for the benefit of beneficiaries that passed away.

Due to IFRS requirements, 13% (2013: 14%) of the total shares in issue are treated as treasury shares by consolidated subsidiaries in terms of the BBBEE transaction and FSP share incentive scheme.



2014Rm

2013Rm

10. DEFERRED TAXATIONNet liability at the beginning of the year comprises: 1 063 856

Deferred taxation asset – 3 Deferred taxation liability 1 063 859

Acquisitions of subsidiary companies (refer to note 28) 150 79 Income statement charge – 66 Charged directly in equity 11 2 Translation differences 37 60 Transfer to taxation payable^ (240) –

Net liability at the end of the year comprises: 1 021 1 063 Deferred taxation asset 9 – Deferred taxation liability 1 030 1 063

Opening balance

Rm

Acqui-sitions

ofsubsidiarycompanies

Rm

Charged to the

income statement

Rm

Charged directly

to equityRm

Translation differences

Rm

Transfer to taxation payable

Rm

Closing balance

Rm

2014Property, plant and equipment 910 36 1 – 23 – 970 Other non-current assets 68 120 (5) 11 3 1 198 Current assets 15 – (4) – 1 – 12 Non-current liabilities (84) (2) (8) – (1) – (95)Current liabilities (71) – 28 – – – (43)Reserves 225 (4) (12) – 11 (241) (21)

1 063 150 – 11 37 (240) 1 021

2013Property, plant and equipment 798 48 37 – 27 – 910 Other non-current assets 33 37 (4) 2 – – 68 Current assets 3 – 10 – 2 – 15 Non-current liabilities (76) – (7) – (1) – (84)Current liabilities (26) (1) (43) – (1) – (71)Reserves 124 (5) 73 – 33 – 225

856 79 66 2 60 – 1 063 ^ During the year, the previously assessed loss at Porthold which had been calculated by applying local transition guidelines, following the change

in functional currency of Zimbabwe was not approved by the revenue authorities. The deferred taxation that was being recognised on profits made by the company, while engagements were taking place with the revenue authorities to resolve, has been transferred to current taxation. In light of the amounts involved, a payment plan has been agreed that will see the company pay the past taxes, inclusive of interest, by the end of the 2015 financial year.



2014Rm

2013Rm

11. LONG-TERM BORROWINGSBorrowings Terms Security Interest rateLong-term loan Interest is payable semi-annually

with a bullet capital repayment in December 2016

Unsecured Fixed 10,86% 1 520 1 519

Bonds# Various, refer below# Unsecured Refer below# 2 395 645

Long-term loan US dollar-denominated, repayable by 2024

Secured by CIMERWA’s land and buildings (refer to note 1)

Variable at 650 basis points above LIBOR

359 87

Long-term loan Rwandan franc-denominated, repayable by 2024

Secured by CIMERWA’s land and buildings (refer to note 1)

Fixed 16% 246 –

Long-term loan Rwandan franc-denominated, repayable in 2014

Unsecured Fixed 16% – 23

BBBEE funding transaction 1 290 1 273 Preference shares^ Dividends are payable semi-

annually, with annual redemptions ending December 2016

Secured by guarantee from PPC Ltd

Variable rates at 85% of prime and fixed rates of 9,24% to 9,37%

90 110

Preference shares* Dividends are payable semi-annually with capital redeemable from surplus funds. Compulsory annual redemptions until December 2016

Secured by PPC shares held by the SPVs

Variable rates at 85% of prime

116 154

Preference shares* Capital and dividends are payable by December 2016, with capital capped at R400 million



393 368

Long-term loans Capital and interest are payable by December 2016, with capital capped at R700 million


Variable rates at 285 basis points above JIBAR

691 641

Long-term borrowings 5 810 3 547Less: Short-term portion of long-term borrowings (refer to note 14) (70) (85)

5 740 3 462# Comprises four unsecured bonds, issued under the company’s R6 billion domestic medium-term note programme, and are recognised net of

capitalised transaction costs of R5 million (2013: R5 million):

Number Issue date Value Term Interest rate

PPC 001 March 2013 R650 million 3 years 3-month JIBAR + 1,26%PPC 002 December 2013 R750 million 5 years 3-month JIBAR + 1,50%PPC 003 July 2014 R750 million 5 years 3-month JIBAR + 1,48%PPC 004 July 2014 R250 million 7 years 9,86%

^ Issued by PPC Black Managers Trust Funding SPV (Pty) Limited, a wholly owned subsidiary company of PPC Ltd, which was incorporated in terms of PPC’s first BBBEE transaction.

* BBBEE trust owned SPVs formed for the company’s first BBBEE transaction, namely PPC Community Trust Funding SPV (Pty) Limited, PPC Construction Industry Associations Trust Funding SPV (Pty) Limited, PPC Education Trust Funding SPV (Pty) Limited and PPC Team Benefit Trust Funding SPV (Pty) Limited.



2014Rm

2013Rm

11. LONG-TERM BORROWINGS continuedMaturity analysis of obligations:

One year 70 85 Two years 763 74 Three years 2 706 756 Four years 61 2 591 Five years and more 2 210 41

5 810 3 547

% loans linked to fixed interest rates 30 43% loans linked to variable interest rates 70 57

Assets encumbered are as follows:Plant and equipment (refer to note 1) 1 502 87

The group is in compliance with its debt covenants, none of which are expected to represent material restrictions on funding or investment policies in the foreseeable future.

Further details of maturity analysis and interest rates are disclosed in note 37 on financial risk management.

2014Rm

2013Rm

12. PROVISIONS Factory decommissioning and quarry rehabilitation 339 316Post-retirement healthcare benefits 35 32

374 348



Factorydecommissioning

and quarryrehabilitation

Rm

Post-retirementhealthcare

benefitsRm

TotalRm

12. PROVISIONS continuedMovement of provisions2014Balance at the beginning of the year 316 32 348 Amounts added – 2 2 Amounts reversed (4) – (4)Translation differences – 1 1 Time value of money adjustments 27 – 27

Balance at the end of the year 339 35 374

To be incurred:Between two and five years 16 – 16 More than five years 323 35 358

339 35 374

2013Balance at the beginning of the year 291 29 320 Amounts added 4 3 7 Time value of money adjustments 21 – 21


To be incurred:Between two and five years 15 – 15 More than five years 301 32 333

316 32 348

Factory decommissioning and quarry rehabilitationGroup companies in South Africa, Botswana, Rwanda and Zimbabwe are required to restore mining and processing sites at the end of their productive lives to an acceptable condition consistent with local regulations. As the operations in the DRC have not commenced, no provision has been made. PPC has set up an environmental trust in South Africa to administer the local funding requirements of its decommissioning and rehabilitation obligations. To date, R66 million (2013: R66 million) has been contributed to the PPC Environmental Trust with the current value of the trust assets amounting to R114 million (2013: R111 million).

Post-retirement healthcare benefitsIncluded in the provision are the following:

Historically, qualifying employees were granted certain post-retirement healthcare benefits. The obligation for the employer to pay medical aid contributions after retirement is no longer part of the conditions of employment for new employees. A number of pensioners remain entitled to this benefit, the cost of which has been fully provided and disclosed above.

Cement and Concrete Institute employeesThe provision relates to post-employment healthcare benefits in respect of former employees of the Cement and Concrete Institute and amounted to R9 million (2013: R8 million). This liability is revalued every three years and was last actuarially valued during February 2013. The liability has been determined using the projected unit credit method.

Corner House Pension Fund and Lime Acres continuation membersThe provision relates to post-employment healthcare benefits in respect of certain Corner House Pension Fund and Lime Acres continuation members and amounted to R19 million (2013: R18 million). This liability is revalued every three years and was last actuarially valued during June 2012. The liability has been determined using the projected unit credit method.

Porthold Post-retirement Medical FundThe provision relates to healthcare benefits for both active and retired employees who joined the medical aid scheme on or after 1 October 2001 and amounted to R7 million (2013: R6 million). This liability is revalued every three years and was last actuarially valued during June 2012. The liability has been determined using the projected unit credit method.

Benefits under these schemes were granted to employees under historical employment contracts and the schemes are closed to new members.



2014Rm

2013Rm

13. OTHER NON-CURRENT LIABILITIESCash-settled share-based payment liability 18 24 Derivative financial instruments^ – 2 Loan to CIMERWA from non-controlling shareholder – 23 Put option liabilities* 145 –

163 49 Less: Short-term portion of other non-current liabilities (121) (22)

42 27 ^ The derivative financial instruments relate to the long-term portion fair value of the interest rate swap agreements entered into in order to fix

the future interest payments on the preference shares raised to finance the first BBBEE transaction. The derivative liability and interest on swaps is repayable in January 2015, relate to the A preference share amounting to Rnil (2013: R2 million), refer to note 15.

* With the purchase of the 69,3% equity stake in Safika Cement (refer to note 28), PPC granted non-controlling shareholders individual put options, with varying exercise dates, for the sale of their remaining shares in the company to PPC. One of the put options is anticipated to be exercised next year and R105 million has therefore been classified as a current liability. The put option price is based on the company’s forecasted EBITDA applying an earnings multiple dependent on the level of EBITDA achieved. The balance of the put options is anticipated to be exercised after the fifth anniversary of the transaction. The present value of the put options were calculated at R145 million and time value of money adjustments of R16 million have been recognised since initial recording of the liability. Forecasted EBITDA is based on financial forecasts approved by management, with pricing and margins similar to those currently being achieved by the business. Selling prices and costs are forecast to increase at local inflation projections and extrapolated using local GDP growth rates. Subsequent to the initial recognition of the liability of R137 million, the value of the put options have been remeasured resulting in the initial liability being reduced by R8 million, mainly due to the lower macro-economic growth projections for the local economy, and recorded under fair value adjustments on financial instruments.

Further details of the cash-settled share-based payment liability are disclosed in note 35.



2014Rm

2013Rm

14. SHORT-TERM BORROWINGS Short-term loans and bank overdrafts 281 499 Short-term portion of long-term borrowings (refer to note 11) 70 85

351 584

Details of maturity analysis and interest rates are disclosed in note 37 on financial risk management.

15. TRADE AND OTHER PAYABLES AND SHORT-TERM PROVISIONSCash-settled share-based payment liability 16 22 Derivative financial instruments^ 1 112 Equity contribution for future non-controlling interest in wholly owned subsidiary$ 115 – Other financial payables 296 32 Put option liability@ 105 – Retentions held for plant and equipment* 81 85 Trade payables and accruals 664 535

Trade and other financial payables 1 278 786 Payroll accruals 194 260 Restructuring costs 6 64 Taxation payable 125 1 VAT payable 17 41 Other non-financial payables – 98

1 620 1 250 ^ Included in derivative financial instruments is the net financial liability payable on the interest rate swaps, and has been netted off in accordance

with IAS 32 Financial Instruments: Presentation. The financial asset amounts to Rnil (2013: R325 million), and the financial liability amounts to R1 million (2013: R429 million). Interest rate swap liabilities of R113 million were settled in December 2013.

$ Includes the value of land and mining rights transferred by future non-controlling shareholders for equity in the DRC companies. Certain conditions still need to be met before the shares in PPC Barnet DRC Holdings, the holding company for the DRC group of companies, are issued to the non-controlling shareholders. Post the issuance of these shares and the IFC shares, discussed in note 40, PPC will hold 69% of the shares in PPC Barnet DRC Holdings. A corresponding amount has been recorded in property, plant and equipment (PPE). The company is currently determining the appropriate split between PPE and other intangibles, and any transfers between categories will be recorded in 2015.

@ Short-term portion of the put option liabilities (refer to note 13).* Retentions held on the construction of the cement plant in Rwanda. These retentions will be paid over to the contractors once the plant

achieves guaranteed performance targets.

Trade and other payables are payable within a 30 to 60-day period. Trade payables have increased following the consolidation of Safika Cement and Pronto during the year. Refer to note 28. The 2013 restructuring costs were paid during the first quarter of the 2014 financial year.



2014Rm

2013Rm

16. OPERATING PROFITOperating profit includes:Amortisation of intangible assets (refer to note 3) 72 34 Auditors’ remuneration 15 13

Fees 11 10 Other 4 3

Consultation fees incurred on empowerment transactions – 4 Dividends paid to BBBEE trusts treated as an expense on consolidation 7 14 Depreciation (refer to note 1) 543 488

Cost of sales 499 459 Operating costs 44 29

Distribution costs included in cost of sales 1 320 1 139 Exploration and research costs 1 10 Operating lease charges – land and buildings 18 12 Profit on disposal of property, plant and equipment – 11 Staff costs 1 213 1 215

South Africa 1 024 1 018 Rest of Africa 189 197

Comprising:Cash-settled share incentive scheme charge (refer to note 35) (5) (3)Equity-settled share incentive scheme charge 10 29 Directors’ remuneration^ 44 40 Employees’ remuneration 1 024 1 001 Restructuring costs 16 64 Retirement benefit contributions (refer to note 34) 94 84

1 183 1 215 Less: Costs capitalised to plant and equipment and intangibles (1) –

1 182 1 215 ^ For further details please refer to the abridged remuneration report on pages 98 to 106.



2014Rm

2013Rm

17. FAIR VALUE ADJUSTMENTS ON FINANCIAL INSTRUMENTSGain on derivatives designated as economic hedging instruments – 1 Gain on ineffective portion of cash flow hedge 2 1 Gain on unlisted collective investments (refer to note 5) 5 5 Gain on remeasurement of put option liabilities (refer to note 13) 8 – Gain on translation of foreign currency denominated monetary items 23 18

38 25

18. FINANCE COSTSBank and other short-term borrowings 73 70 Bonds 108 11 Long-term loans 203 172 BBBEE funding transaction 110 133

Dividends on redeemable preference shares 48 57 Long-term borrowings 62 76

Finance lease interest – 1 Time value of money adjustments on rehabilitation and decommissioning provisions and put option liabilities 47 21

Total finance costs 541 408 Capitalised to plant and equipment and intangibles (36) (4)

505 404 South Africa 481 398 Rest of Africa 24 6

The total finance costs excluding time value of money adjustments, relate to borrowings held at amortised cost. For details of borrowings refer to notes 11 and 37.

19. INVESTMENT INCOMEDividends

Unlisted investments 18 4 Interest received*

Cash and cash equivalents 21 15 Overpayment of taxation 11 – Non-current assets 3 3

53 22

* The total interest received relates to assets held at amortised cost. For further details refer to note 37.

20. Impairments and other exceptional adjustmentsProfit on disposal of properties – 11 Gain on remeasurement of equity stake in Pronto (refer note 28) 1 – Impairment of goodwill (refer to note 2) (65) (6)Impairment of property, plant and equipment (refer to note 1) (46) (6)Profit on disposal of equity accounted investment – 1 Impairment of loans advanced to equity accounted investees (refer to note 4) – (1)

Gross impairments and other exceptional adjustments (110) (1)Current taxation – (2)Deferred taxation 12 –

Net impairments and other exceptional adjustments (98) (3)



2014Rm

2013Rm

21. TAXATIONNormal taxation

Current year 406 418 Prior year (70) 5

336 423

Deferred taxationCurrent year – 66

Other taxationCapital gains taxation – 2 Securities transfer taxation – 1 Withholding taxation 20 15

Taxation attributable to the company and its subsidiaries 356 507

% %

Reconciliation of taxation rateTotal taxation as a percentage of profit before taxation (excluding earnings from equity accounted investments) 30,1 35,8 Prior year taxation impact^ 5,9 (0,5)

Taxation as a percentage of profit before taxation, excluding prior year taxation adjustments 36,0 35,3 Adjustment due to the inclusion of dividend income 0,4 0,1

Effective rate of taxation 36,4 35,4 Reduction in rate of taxation 3,3 2,6

Permanent differences 2,4 1,5 Foreign taxation rate differential 0,9 1,1

Increase in rate of taxation (11,6) (10,0)Capital gains taxation – (0,2)Disallowable charges, permanent differences and impairments (6,7) (1,7)Empowerment transactions and IFRS 2 charges not taxation deductible (0,8) (2,8)Finance costs on BBBEE funding transaction not taxation deductible (2,4) (2,6)Taxation on unprovided losses carried forward – (1,7)Withholding taxation (1,7) (1,0)

South African normal taxation rate 28 28 ^ Represents a taxation refund relating to prior years of R70 million.



2014Share

2013Shares

22. EARNINGS AND HEADLINE EARNINGS PER SHARE22.1 Number of shares and weighted average number of shares

Number of sharesTotal shares in issue held by consolidated participants at the end of the year 605 379 648 605 355 883Shares issued in terms of second BBBEE transaction treated as treasury shares (37 382 193) (39 349 677)Shares held by consolidated BBBEE trusts and trust funding SPVs treated as treasury shares^ (34 764 669) (37 967 439)Shares held by consolidated Porthold Trust Pvt Limited treated as treasury shares@ (1 284 556) (1 284 556)Shares purchased in terms of the FSP incentive scheme treated as treasury shares@ (5 865 851) (4 076 101)Vesting of shares held by certain BBBEE1 entities (666 878) – FSP share incentive scheme weighted average number of shares 764 582 –

Weighted average number of shares used for basic earnings per share calculation 526 180 083 522 678 110 Dilutive adjustment for shares held in terms of the FSP incentive scheme 5 865 851 3 974 113 Dilutive adjustment for potential ordinary shares in terms of first BBBEE transaction 287 361 3 152 029 FSP incentive scheme weighted average number of shares (764 582) – Vesting of shares held by certain BBBEE1 entities 666 878 – Weighted average number of shares issued in terms of the second BBBEE transaction 519 185 1 065 234

Weighted average number of shares used for dilutive earnings per share calculation 532 754 776 530 869 486

Weighted average number of sharesUsed for earnings and headline earnings per share 526 180 083 522 678 110 Used for dilutive earnings and headline earnings per share 532 754 776 530 869 486 Used for cash earnings per share 526 180 083 522 678 110

Shares are weighted for the period in which they are entitled to participate in the net profit of the group.

2014Rm

2013Rm

22.2 Basic earningsNet profit 849 931 Attributable to:

Shareholders of PPC Ltd 840 931 Non-controlling interests 9 –

849 931 Normalisation adjustments$ 79 188

Normalised net profit 928 1 119

Attributable to: Shareholders of PPC Ltd 909 1 119Non-controlling interests 19 –

928 1 119^ For additional information refer to notes 9 and 11.@ For additional information refer to note 9.



2014Cents

2013Cents

22. EARNINGS AND HEADLINE EARNINGS PER SHARE continued22.3 Earnings per share

Basic 160 178 Diluted 158 175 Basic (normalised)$ 175 214 Diluted (normalised)$ 173 212

Rm Rm

22.4 Headline earningsHeadline earnings is calculated as follows:Net profit 849 931 Adjusted for:

Gain on remeasurement of equity accounted stake in Pronto (1) – Impairment losses of property, plant and equipment 46 6Taxation on impairment of property, plant and equipment (12) –Impairment loss of goodwill 65 6Impairment loss of financial assets – 1 Profit on disposal of property, plant and equipment and intangibles – (11)Taxation on profit on disposal of property, plant and equipment and intangible assets – 2

Headline earnings 947 935

Attributable to:Shareholders of PPC Ltd 927 935 Non-controlling interests 20 –

947 935Normalisation adjustments$ (19) 188

Normalised headline earnings$ 928 1 123

Attributable to:Shareholders of PPC Ltd 908 1 123 Non-controlling interests 20 –

928 1 123

Cents Cents

22.5 Headline earnings per shareBasic 179 179Diluted 176 176Basic (normalised) 175 215Diluted (normalised) 173 212

22.6 Cash earnings per share 325 404Calculated on cash available from operations (Rm) 1 711 2 113$ Normalised earnings adjusts the reported earnings for the effects of BBBEE IFRS 2 charges, Zimbabwe indigenisation costs, restructuring costs,

impairments net of taxation and prior year taxation adjustments. The calculation of normalised earnings has been updated since published in SENS on 18 November 2014.



2014Rm

2013Rm

23. DIVIDENDSFinal number 220 – 118 cents per share (2013: 108 cents) 640 569 Interim number 221 – 38 cents per share (2013: 38 cents) 240 201

880 770

On 17 November 2014, the board approved a final dividend of 76 cents per share, payable to ordinary shareholders in respect of the year ended 30 September 2014 and will be paid out of profits as determined by the directors.

The local dividends tax rate is 15% and no STC credits have been utilised in this declaration. The dividends tax to be withheld by the company amounts to 11,4 cents per share, giving a net dividend payable to shareholders of 64,6 cents per share where no exemption is applicable.

The important dates pertaining to this dividend for shareholder trading on the JSE Limited are as follows: Declaration date Monday, 17 November 2014Last day to trade “cum” dividend Friday, 2 January 2015Shares trade “ex” dividend Monday, 5 January 2015Record date Friday, 9 January 2015Payment date Monday, 12 January 2015

Share certificates may not be dematerialised or rematerialised between Monday, 5 January 2015 and Friday, 9 January 2015, both dates inclusive. Transfers between the South African and Zimbabwean registers may not take place between Monday, 5 January 2015 and Friday, 9 January 2015, both dates inclusive.

The important dates pertaining to this dividend for shareholders trading on the Zimbabwe Stock Exchange are as follows:Shares trade “ex” dividend Monday, 5 January 2015Record date Friday, 9 January 2015Payment date, on or shortly after Monday, 12 January 2015

The register of members in Zimbabwe will be closed from Monday, 5 January 2015 to Friday, 9 January 2015, both days inclusive, for the purpose of determining those shareholders to whom the dividend will be paid. The dividend payable to shareholders registered in Zimbabwe will be paid in South African rand.

Cents Cents

Dividends per share (cents)Interim number 221 – declared 19 May 2014 38 38Final number 222 – declared 17 November 2014 76 118

114 156

Rm Rm

24. Attributable interest in subsidiariesAttributable interest in the aggregate amount of profits and losses of subsidiaries, after taxation and non-controlling interest:Profits 433 233 Losses (168) (71)



2014Rm

2013Rm

25. FINANCE COSTS PAIDFinance costs as per income statement charge 505 404 Interest capitalised on bonds 6 – Time value of money adjustments (42) (21)Interest capitalised to plant and equipment 36 4 Fair value adjustments 15 – BBBEE funding transaction (94) (118)

Redeemable preference shares dividends capitalised (32) (42)Interest capitalised on long-term borrowings (62) (76)

426 269

26. TAXATION PAIDNet amounts (receivable)/payable at the beginning of the year (42) 42 Charge per income statement (excluding deferred taxation) 356 441 Transfer from deferred taxation to normal taxation (refer to note 10) 240 – Impact of foreign rate differences and other non-cash flow movements 42 – Net amounts (outstanding)/receivable at the end of the year (97) 42

Taxation receivable 28 43Taxation payable (125) (1)

499 525

27. DIVIDENDS PAIDDividends declared to PPC and BBBEE shareholders 848 770 Dividends declared by subsidiary to non-controlling interests 32 –

880 770

28. ACQUISITIONS OF SUBSIDIARY COMPANIESFair value of assets and liabilities acquired at date of acquisitionProperty, plant and equipment 225 433 Goodwill 227 100 Other intangible assets 428 124 Financial assets 1 – Cash and cash equivalents 149 6 Other current assets 288 749 Long-term borrowings (10) (108)Long-term provisions and deferred taxation (150) (75)Short-term borrowings – (35)Current liabilities (146) (47)Other – (6)

Net fair value of assets and liabilities acquired 1 012 1 141 Non-controlling interests (140) (512)Less: Fair value of previously held equity accounted stake (215) –

Total consideration 657 629 Consideration payable for new equity in CIMERWA – (493)

Consideration payable to external entities 657 136

Goodwill represents growth and synergies expected to accrue from the acquisitions, including security of supply channels to the market.



28. ACQUISITIONS OF SUBSIDIARY COMPANIES continuedPronto Holdings Pty Limited (Pronto)During July 2014, PPC acquired the remaining 50% equity stake in Pronto for R280 million, making it a wholly owned subsidiary. Pronto is a prominent Gauteng-based readymix and fly ash supplier, with nine readymix batching plants. This acquisition provides PPC additional ways to increase its cement distribution channel while also expanding its range of complementary products available to the building and construction industry. In accordance with the requirements of IFRS on step-acquisitions, the previously held equity accounted investment was revalued resulting in an adjustment gain of R1 million. The fair values presented are provisional and are subject to further review for 12 months post acquisition date. No material changes are anticipated.

Pronto was consolidated from 1 July 2014 and favourably impacted group revenue by R136 million, after eliminations, and reported EBITDA of R29 million. The impact on both earnings and headline earnings per share was 3 cents per share.

Transaction costs of R1 million had been incurred during the year and are recorded under administration and other operating expenditure.

Safika Cement Holdings Pty Limited (Safika Cement)During December 2013, all conditions to the transaction were fulfilled and PPC acquired a 69,3% equity stake in Safika Cement for R377 million. This transaction further enhances PPC´s South African footprint through Safika Cement´s five blending facilities and one milling operation that produce blended cement under three brands: IDM Best Build, Castle and the Spar Build-It house brand. The purchase price allocation has been finalised and there are no material differences from the values reported in the 2014 interim results.

Safika Cement favourably impacted group revenue by R353 million, after eliminations, and recorded EBITDA of R83 million. The impact on both earnings and headline earnings per share was 7 cents per share.

At the acquisition date, PPC granted put options to non-controlling shareholders. For details on the put options, refer to note 13.

Transaction costs of R3 million had been incurred during the year and are recorded under administration and other operating expenditure.

CIMERWA Limited (CIMERWA) In February 2013, PPC acquired a 51% equity stake in CIMERWA, a Rwandan cement company, for a transaction value of US$69 million (R629 million) with US$15 million (R136 million) being paid to previous shareholders of the company, while a further US$54 million was used to subscribe for shares in CIMERWA of which US$31 million was paid during the 2013 financial year and the balance settled during this reporting year. As the company is consolidated, the equity subscription is payable to CIMERWA and therefore only the US$15 million payable external to the PPC group was reflected as a cash flow outside the consolidated PPC group. The fair values of assets acquired and liabilities have now been finalised, with no material changes to the amounts previously disclosed.

CIMERWA favourably impacted revenue by R234 million (2013: R118 million) and reported an EBITDA loss of R1 million (2013: profit of R7 million). The impact on earnings and headline earnings per share was a reduction of 21 cents per share (2013: nil) and 5 cents per share (2013: nil) respectively. For comparability purposes, it should be noted that CIMERWA was only consolidated for eight months in 2013.

Quarries of BotswanaIn October 2011, all conditions precedent with regards to the transaction to acquire three aggregate quarries and related assets in Botswana were met. The transaction value amounted to R52 million and was funded over a two-year period. The final payment of R5 million (2013: R4 million) was paid in this reporting period.

2014Rm

2013Rm

29. ACQUISITION OF PROPERTY, PLANT AND EQUIPMENTAdvance payments to contractors (refer to note 5) 322 – Freehold and leasehold land, buildings and mineral rights (refer to note 1) 160 43 Mining and mineral rights transferred by future non-controlling shareholders (refer to note 15) (115) – Plant, vehicles, furniture and equipment (refer to note 1) 1 748 921 Retentions paid to contractors (refer to note 15) 4 –

2 119 964

30. MOVEMENT IN INVESTMENTS AND LOANSNet movement 201 (10)Acquisitions of equity accounted investments 3 – Advance payments (refer to note 5) (322) – Other non-cash flow movements (12) – Revaluation of available-for-sale financial assets directly in equity (refer to note 5) (58) 12Share of equity accounted investments profits (24) – Transferred to subsidiaries (refer to note 4) 215 –

3 2



2014Rm

2013Rm

31. COMMITMENTSCapital commitments:

Contracted 2 786 752Approved 1 110 336

3 896 1 088

South Africa 242 202Rest of Africa 3 654 886

3 896 1 088

Capital commitments are anticipated to be incurred:Within one year 2 246 975Between one and two years 1 572 95Beyond two years 78 18

3 896 1 088

Commitments for capital expenditure are stated in current values which, together with expected price escalations, will be financed from surplus cash generated and borrowing facilities available to the group. The increase in contracted commitments includes the DRC cement plant and Zimbabwe cement mill expansion project. Project funding of US$168 million and US$75 million for the DRC and Zimbabwe projects respectively has been secured.

2017 andthereafter

Rm2016

Rm2015

Rm

Total2014

Rm

Total2013

Rm

Operating lease commitments

Land and buildings 94 11 14 119 189

Other 8 5 6 19 6

138 195

In 2013, the company signed a 10-year lease for its head office and this lease comprises the majority of the operating lease commitments at year end.



32. REST OF AFRICA EXPANSIONThe company continues to investigate business opportunities in both South Africa and the rest of Africa in line with its expansion strategy. The following transactions have been communicated to the market and are still subject to final approvals:

EthiopiaDuring November 2014, PPC advised of the conclusion of discussions to acquire the Industrial Development Corporation´s 20% stake in Ethiopian-based Habesha Cement Share Company (Habesha) for a purchase consideration of US$13 million. Financial close is expected in December 2014 once all conditions have been satisfied. PPC initially acquired 27% shareholding in Habesha in July 2012, and has subsequently increased its shareholding to 31%. This acquisition increases PPC´s stake in Habesha to 51% while the balance of the shareholding in Habesha is held by over 16 000 local shareholders. Habesha has begun the construction of a 1,4 million tonne per annum facility 35km north-west from the bustling city of Addis Ababa. Project costs for this factory are approximately US$135 million and commissioning of the plant is anticipated in 2016.

AlgeriaThe company signed the memorandum of understanding, valid for 12 months, with Hodna Cement Company in June 2014, for the construction of a new cement plant in Algeria. The project is estimated to cost approximately US$350 million. It is expected that PPC will have 49% shareholding in the project. The feasibility of the project is still under way and will be presented to the board for approval once results are positive.

33. CONTINGENT LIABILITIESLitigation, current or pending, is not considered likely to have a material adverse effect on the group.

34. RETIREMENT BENEFIT AND POST-RETIREMENT INFORMATION It is the policy of the group to encourage, facilitate and contribute to the provision of retirement benefits for all permanent employees. To this end, the group’s permanent employees are usually required to be members of a pension and/or a provident fund, depending on local requirements.

South African-based employees, except for Safrika Cement and Pronto, belong to the PPC retirement fund, which consists of the Pretoria Portland Cement Defined Contribution Pension and Provident Funds. Safika Cement employees belong to the Liberty Provident Fund.

Botswana-based employees belong to the Barloworld Botswana Retirement Fund.

Rwanda-based employees belong to the Rwanda Social Board.

Zimbabwe-based employees belong to the National Social Security Authority Scheme and UNICEM Pension Fund.

Defined contribution plansThe total cost charged to the income statement of R94 million (2013: R84 million) represents contributions payable to these schemes by the group at rates specified in the rules of the schemes. At 30 September 2014, all contributions due in respect of the current reporting period had been paid over to the schemes.



35. SHARE-BASED PAYMENTS 35.1 Cash settled

Executive directors and certain senior employees have been granted cash-settled share appreciation rights in terms of PPC’s Long-Term Incentive Plan. The scheme was implemented during 2007, in recognition of services rendered, to encourage long-term shareholder value creation, and as an incentive for current and prospective employees to benefit from growth in the value of PPC in the medium and long term. All grants are approved by the remuneration committee.

Share appreciation rights granted

Total 2013 2012 2011 2009 2009 2008 2007

Date of grant 30/09/2013 28/09/2012 01/08/2011 25/09/2009 25/09/2009 17/11/2008 17/09/2008

Grant price (based on five-day volume weighted average price or zero) (rand) – – – 35,35 – 31,80 43,00

Number of rights granted 9 768 968 170 000 170 000 164 968 2 166 000 1 346 000 2 212 000 3 540 000

Directors (with performance conditions) 2 767 000 170 000 170 000 150 000 360 000 451 000 435 000 1 031 000

Executives (with performance conditions) 1 390 000 – – – 458 000 – 456 000 476 000

Senior management 5 611 968 – – 14 968 1 348 000 895 000 1 321 000 2 033 000

Movement during the year (647 300) – – (150 000) (366 000) (24 300) (9 000) (98 000)

Vested – directors (166 875) – – (150 000) – (16 875) – –

Forfeited – directors (247 425) – – – (240 000) (7 425) – –

Forfeited – executives (100 000) – – – (100 000) – – –

Forfeited – senior management (133 000) – – – (26 000) – (9 000) (98 000)

Movement in prior years (5 125 168) – – (14 968) (661 000) (1 321 700) (1 121 500) (2 006 000)

2007 to 2012 (3 979 268) – – (14 968) (248 000) (1 254 800) (460 500) (2 001 000)

2013 (1 145 900) – – – (413 000) (66 900) (661 000) (5 000)

Unexercised at 30 September 2014* 3 996 500 170 000 170 000 – 1 139 000 – 1 081 500 1 436 000

Directors (with performance conditions) 340 000 170 000 170 000 – – – – –

Senior management 3 656 500 – – – 1 139 000 – 1 081 500 1 436 000

Vesting in thirds after the third, fourth and fifth anniversary of the grant date

Automatically exercised on the third anniversary of the grant date Yes Yes Yes Yes Yes Yes Yes

Expiry date (lapse if not exercised) 30/09/2016 28/09/2015 01/08/2014 25/09/2019 24/09/2014 17/09/2018 08/08/2017

Share appreciation rights were valued using binomial option pricing, taking into account the following inputs:

Market price of PPC shares at the end of the year (rand) 29,56 29,56 29,56 29,56 29,56

Expected volatility of stock over remaining life of the option (%) 23,92 23,81 24,11

Risk-free rate (%) 7,38 7,27 6,97

* Executives hold no unexercised rights.

Expected volatility is based on the historical share price over the past year.

Vesting of the zero grant price rights granted to directors is subject to individual performance conditions related to the directors’ areas of responsibility.




2014Rm

2013Rm

35. SHARE-BASED PAYMENTS continued35.1 Cash settled continued

Reversal of previous charges recognised in the current year (refer to note 16) (5) (3)The carrying amount of the liability relating to cash-settled share appreciation rights as at 30 September (refer to note 15) 18 22

35.2 Forfeitable share planThe Forfeitable Share Plan (FSP), a long-term incentive, was introduced in 2011 and extended in 2012 to executive directors and prescribed officers, following shareholder approval. Its purpose is to provide both an incentive to deliver the group’s strategy over the long term and to be a retention mechanism. Participants will receive forfeitable shares for no consideration and will participate in dividends and shareholder rights from the date of grant, but may only dispose of the shares after the vesting date. Vesting of the retention awards is subject to employment for a period of three years, and vesting of the performance awards is additionally subject to satisfaction of certain performance conditions, failing which the employee will forfeit the shares and they may be sold by PPC and the net proceeds retained by the group. The performance conditions relate to growth in headline earnings per share measured over a three-year period.

Shares are purchased directly by PPC on the JSE Limited over a number of days following the grant date. The shares are held by an agent on behalf of the participants until the vesting date.

In terms of IFRS 2, the fair value of each share awarded, which will be expensed over the vesting period in return for services rendered, is based on the average market price of acquiring the share and is not re-measured subsequently. The service and performance conditions are taken into account in the number of instruments that are expected to vest. Subsequent revisions are made for changes in estimated attrition and probability of satisfaction of performance conditions.

Date of grant

Total retention

awards

Total perform-

ance awards

18/02/2014 15/03/2013 16/02/2012

Retention awards

Perform-ance

awardsRetention

awards

Perform-ance

awardsRetention

awards

Perform-ance

awards

Number of shares granted to directors 114 900 980 400 40 100 329 200 36 600 322 900 38 200 328 300

Number of shares granted to management and prescribed officers 2 797 300 2 423 800 1 262 600 1 140 700 900 400 791 600 634 300 491 500

Average purchase price of shares acquired (R) 29,17 29,17 32,58 32,58 31,19 31,19

Estimated fair value per share at grant date (R) 29,17 29,17 32,58 32,58 31,19 31,19



36. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURESRefer to the accounting policies on pages 12 to 22 for new and revised accounting standards and interpretation of those standards which have been adopted in the current year.

The following amendments to published accounting standards are in issue but not yet effective. These revised standards and interpretations will be adopted by PPC in the future.

Revised statements in issue not yet effective

Effective date reporting period on or after

Possible implication on PPC

For adoption during the 2015 financial yearInvestment Entities (amendments to IFRS 10, IFRS 12 and IAS 27) amends IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements to:■■ Provide “investment entities” (as defined) an exemption from the consolidation of particular subsidiaries and instead require that an investment entity measure the investment in each eligible subsidiary at fair value through profit or loss in accordance with IFRS 9 Financial Instruments or IAS 39 Financial Instruments: Recognition and Measurement

■■ Require additional disclosure about why the entity is considered an investment entity, details of the entity’s unconsolidated subsidiaries, and the nature of relationship and certain transactions between the investment entity and its subsidiaries

■■ Require an investment entity to account for its investment in a relevant subsidiary in the same way in its consolidated and separate financial statements (or to only provide separate financial statements if all subsidiaries are unconsolidated).

1 January 2014 No impact

IAS 32 (amendment) Offsetting Financial Assets and Financial Liabilities: Presentation – amendment clarifies certain aspects because of diversity in application of the requirements on offsetting and focuses on four main areas:■■ The meaning of “currently has a legally enforceable right of set-off”■■ The application of simultaneous realisation and settlement■■ The offsetting of collateral amounts■■ The unit of account for applying the offsetting requirements.


IAS 36 (amendment) Recoverable Amount Disclosures for Non-Financial Assets – amendment reduces the circumstances in which the recoverable amount of assets or cash-generating units is required to be disclosed, clarifies the disclosures required, and introduces an explicit requirement to disclose the discount rate used in determining impairment (or reversals) where recoverable amount (based on fair value less costs of disposal) is determined using a present value technique.

1 January 2014 Disclosure impact

IAS 39 (amendment) Novation of Derivatives and Continuation of Hedge Accounting – amendment makes it clear that there is no need to discontinue hedge accounting if a hedging derivative is novated, provided certain criteria are met. A novation indicates an event where the original parties to a derivative agree that one or more clearing counterparties replace their original counterparty to become the new counterparty to each of the parties. In order to apply the amendments and continue hedge accounting, novation to a central counterparty must happen as a consequence of laws or regulations or the introduction of laws or regulations.


IAS 19 (amendment) Defined Benefit Plans: Employee Contribution – amendment clarifies the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service. In addition, it permits a practical expedient if the amount of the contributions is independent of the number of years of service, in that contributions, can, but are not required, to be recognised as a reduction in the service cost in the period in which the related service is rendered.

1 July 2014 No impact



Revised statements in issue not yet effective continued

Effective date reporting period on or after

Possible implication on PPC

36. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES continuedFor adoption during the 2015 financial year continued

IASB improvements to IFRS 2010 – 2012 makes amendments to the following standards:■■ IFRS 2 – amends the definitions of “vesting condition” and “market condition” and adds definitions for “performance condition” and “service condition”

■■ IFRS 3 – requires contingent consideration that is classified as an asset or a liability to be measured at fair value at each reporting date

■■ IFRS 8 – requires disclosure of the judgements made by management in applying the aggregation criteria to operating segments, clarify reconciliations of segment assets only required if segment assets are reported regularly

■■ IFRS 13 – clarifies that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure certain short-term receivables and payables on an undiscounted basis (amends basis for conclusions only)

■■ IAS 16 and IAS 38 – clarifies that the gross amount of property, plant and equipment is adjusted in a manner consistent with a revaluation of the carrying amount

■■ IAS 24 – clarifies how payments to entities providing management services are to be disclosed


IASB improvements to IFRS 2011 – 2013 – makes amendments to the following standards:■■ IFRS 1 – clarifies which versions of IFRS can be used on initial adoption (amends basis for conclusions only)

■■ IFRS 3 – clarifies that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself

■■ IFRS 13 – clarifies the scope of the portfolio exception in paragraph 52■■ IAS 40 – clarifies the inter-relationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property


IFRIC 21 Levies – provides guidance on when to recognise a liability for a levy imposed by a government, both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain.


The interpretation identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the levy in accordance with the relevant legislation. It provides the following guidance on recognition of a liability to pay levies:■■ The liability is recognised progressively if the obligating event occurs over a period of time

■■ If an obligation is triggered on reaching a minimum threshold, the liability is recognised when that minimum threshold is reached.

For adoption during the 2016 financial year

IFRS 9 Financial Instruments: Classification and measurement 1 January 2015Assessment still to be finalised

For adoption during the 2017 financial yearIFRS 14 Regulatory deferral accounts 1 January 2016 No impact

IAS 16 and IAS 41 Agriculture: Bearer Plants 1 January 2016 No impact

IFRS 11 Accounting for Acquisition of Interests in Joint Operations 1 January 2016 No impact

IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture


IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation




37. FINANCIAL RISK MANAGEMENTThe group’s financial instruments consist mainly of borrowings from financial institutions, deposits with banks, local money market instruments, accounts receivable and payable, and leases.

Forward exchange contracts and interest rate swaps are used by the group for hedging purposes. The group does not speculate in the trading of derivative instruments.

Capital risk managementThe group manages its capital to ensure that entities in the group will continue as going concerns, while maximising the return to stakeholders through the optimisation of debt and equity.

The capital structure of the group consists of debt, which includes the borrowings disclosed in note 11, cash and cash equivalents as disclosed in note 8, and equity attributable to PPC Ltd shareholders, comprising stated capital, reserves and retained profit.

A committee including PPC’s senior financial executives review the capital structure on a quarterly basis. As part of this review, the cost of capital and the risks associated with each class of capital are considered. Based on recommendations of the committee, PPC balances its overall capital structure through issues of equity instruments, dividend cover reviews, and the issue of new debt or redemption of existing debt.

Treasury risk managementSenior financial executives meet on a regular basis to analyse currency and interest rate exposures and to re-evaluate treasury management strategies against latest economic forecasts. The group’s treasury operation provides South African entities with access to local money markets and provides local subsidiaries with the benefit of bulk financing and depositing.

Foreign currency managementTrade and capital commitmentsThe group is exposed to exchange rate fluctuations as it undertakes transactions denominated in foreign currencies in the normal course of business. Exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts. Where possible, entities in the group cover forward all material foreign currency commitments unless there is a natural hedge.

Forward exchange contracts are carried at fair value with the resultant profit or loss included in income. The only exception relates to the effective portion of cash flow hedges, where profits or losses are recognised as other comprehensive income and are either included in the initial acquisition cost of the hedged assets, or are transferred to profit and loss when the hedged transaction affects the income statement where appropriate. Fair value gain of the forward exchange contracts at reporting date is R467 million.




37. FINANCIAL RISK MANAGEMENT continuedForeign currency management continuedTrade and capital commitments continuedThe amounts below represent forward exchange contract commitments to purchase foreign currencies:

<1 yearRm

1 to 3 yearsRm

Total Rm

2014 327 140 467 2013 13 – 13

Total forward exchange contracts comprise the following:

2014 2013

Euro (€m) 1 2Average rate R/€ 15,72 13,37US dollar (US$m) 39 2Average rate (R/US$) 11,92 10,12

The average rates shown above include the cost of forward cover.

PPC is exposed to translation risk as its foreign subsidiaries report in different currencies to that of the holding company. This is managed primarily through borrowings denominated in the relevant foreign currencies to the extent that such funding is available on reasonable terms in the local capital markets.

Interest rate managementThe group is exposed to interest rate risk arising from fluctuations in financing costs on loans which are at variable interest rates. As part of the process of maintaining a balance between the group’s fixed and variable rate borrowings, the interest rate characteristics of new borrowings and refinancing of existing borrowings are structured according to expected movements in interest rates. The profile of total borrowings is as follows:

DescriptionYears of

repayment2014

Rm2013

Rm

Secured BBBEE funding transaction (refer to note 11) 2014 – 2017 1 290 1 273 Long-term loans denominated in foreign currencies (refer to note 11) 2017 605 87

1 895 1 360

UnsecuredLong-term loan (refer to note 11) 2017 1 520 1 519 Short-term loans and bank overdrafts (refer to note 14) 2014 281 499 Corporate bonds (refer to note 11) 2016 2 395 645 Other non-current liabilities (refer to note 11) 2017 – 23

4 196 2 686

The group has entered into interest rate swap agreements for which variable rates have been swapped for fixed rates ranging from 9,24% to 9,37%.

Unsecured short-term loans bear interest at rates varying between 6,40% and 11,36% per annum for the year under review.


37. FINANCIAL RISK MANAGEMENT continuedHedge accounting applied in respect of interest rate riskAs at September 2014, the following designated cash flow hedge interest rate swap contracts were held in respect of the consolidated debt of the BEE trusts and trust funding SPVs:

Fair value of liability

Related underlying liability Currency

Notional amount

Rm

Fixed interest

rate (nacs)

%

Maturity dateRm

2014Rm

2013Rm

A preference shares (rate linked to prime) ZAR 169 9,24 – 9,37 2014 – 2017 1 2 B preference shares (rate linked to prime) ZAR 253 9,17 2014 – 33 Long-term loans (rate linked to JIBAR) ZAR 420 11,36 2014 – 79

Total 1 114

Movements on cash flow hedges amounting to R7 million (2013: R36 million) were recognised in other comprehensive income during the year.

Sensitivity analysisInterest rate riskAt 30 September 2014, if all floating interest rates on interest-bearing loan receivables, short-term cash investments, short-term loans payable, bank overdrafts and long-term loans at that date had been 100 basis points higher, with all other variables held constant, attributable earnings would have been R27 million (earnings per share: 5 cents) lower. Conversely, at 30 September 2014, if all floating interest rates at that date had been 100 basis points lower, with all other variables held constant, the attributable earnings would have been R27 million (earnings per share: 5 cents) higher.

Equity price risk – cash-settled share appreciation rightsAt 30 September 2014, if the PPC share price had been R5 higher, with all other variables held constant, attributable earnings would have been R7 million (earnings per share: 1 cents) lower. Conversely, at 30 September 2014, if the PPC share price had been R5 lower, with all other variables held constant, attributable earnings would have been R5 million (earnings per share: 1 cents) higher.



37. FINANCIAL RISK MANAGEMENT continuedFair values of financial assets and liabilitiesThe carrying values of certain financial assets and liabilities, which are accounted for at historical cost, may differ from their fair values.The estimated fair value of financial instruments is determined, at discrete points in time, by reference to the quoted bid price or asking price (as appropriate) in an active market wherever possible. These estimates involve uncertainties and cannot be determined with precision. Where no such active market exists for the particular asset or liability, the company uses a valuation technique to arrive at the 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.

Cement Lime Aggregates and readymix Other Total

Notes

Carrying amount

RmFair value

Rm

Carrying amount

RmFair value

Rm

Carrying amount

RmFair value

Rm

Carrying amount

RmFair value

Rm

Carrying amount

RmFair value

Rm

2014Financial assetsAvailable for sale 95 95 – – – – – – 95 95 Unlisted investments at fair value 5 95 95 – – – – – – 95 95 Loans and receivables 1 501 1 501 115 115 87 87 – – 1 703 1 703 Loans advanced 5 3 3 – – – – – – 3 3 Loans to equity accounted companies 4 46 46 – – – – – – 46 46 Trade and other financial receivables 7 935 935 108 108 48 48 – – 1 091 1 091 Cash and cash equivalents 8 517 517 7 7 39 39 – – 563 563 At fair value through profit and loss 114 114 – – – – – – 114 114 Unlisted collective investment (held for trading) 5 114 114 – – – – – – 114 114 Financial liabilitiesAt amortised cost 3 260 3 289 42 42 31 31 3 914 3 914 7 247 7 276 Long-term borrowings 11 1 826 1 855 – – – – 3 914 3 914 5 740 5 769 Short-term borrowings 14 351 351 – – – – – – 351 351Trade and other financial payables 15 1 083 1 083 42 42 31 31 – – 1 156 1 156 At fair value through profit and loss 163 163 – – – – – – 163 163 Derivative instruments – current (held for trading) 15 18 18 – – – – – – 18 18 Put option liabilities 13 145 145 – – – – – – 145 145 Derivatives – – – – – – 1 1 1 1 Derivative instruments – non-current (cash flow hedge) 15 – – – – – – 1 1 1 1

2013Financial assetsAvailable for sale 37 37 – – – – – – 37 37Unlisted investments at fair value 5 37 37 – – – – – – 37 37Loans and receivables 1 231 1 231 110 110 70 70 5 5 1 416 1 416Loans advanced 5 4 4 – – – – – – 4 4Loans to equity accounted companies 4 46 46 – – – – – – 46 46Trade and other financial receivables 7 733 733 92 92 49 49 – – 874 874Cash and cash equivalents 8 448 448 18 18 21 21 5 5 492 492At fair value through profit or loss 105 105 – – – – – – 105 105Unlisted collective investment (held for trading) 5 105 105 – – – – – – 105 105Financial liabilitiesAt amortised cost 3 265 3 326 45 45 31 31 1 272 1 272 4 613 4 674 Long-term borrowings 11 2 251 2 312 – – – – 1 211 1 211 3 462 3 523 Short-term borrowings 14 523 523 – – – – 61 61 584 584 Trade and other financial payables 15 491 491 45 45 31 31 – – 567 567 At fair value through profit or loss 22 22 – – – – – – 22 22 Derivative instruments – current (held for trading) 15 22 22 – – – – – – 22 22 Derivatives – – – – – – 114 114 114 114 Derivative instruments – non-current (cash flow hedge) 13 – – – – – – 2 2 2 2 Derivative instruments – current (cash flow hedge) 15 – – – – – – 112 112 112 112




37. FINANCIAL RISK MANAGEMENT continuedCredit risk managementThe potential exposure to credit risk is represented by the carrying amounts of trade receivables, short-term cash investments and derivative assets in the statement of financial position. Trade receivables comprise a large, widespread customer base and credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. To manage this risk, the granting of credit is controlled by application and account limits, and the group only deals with creditworthy customers supported by appropriate collateral. The group credit committee, chaired by the group CFO, meets on a quarterly basis to monitor trade receivables and approve granting of account limits. The group annually re-evaluates counterparty limits and the financial reliability of its customers. Provision is made for specific doubtful debts where appropriate, and as at 30 September 2014, management did not consider there to be any material credit risk exposure that was not already covered by security or a doubtful debt provision.

The group only deposits short-term cash with financial institutions of high-quality credit standing.

The following table highlights the split of maximum credit exposure:

CementRm

LimeRm

Aggregates and

readymix Rm

Other Rm

TotalRm

Maximum credit risk exposure2014 1 501 115 87 – 1 703 2013 1 231 110 70 5 1 416

Liquidity risk managementLiquidity risk is the risk of the group being unable to meet its payment obligations when they fall due. The group manages liquidity risk centrally by maintaining an appropriate balance between long-term and short-term debt, ensuring borrowing facilities are adequate to meet its liquidity requirements at all times, and by monitoring forecast and actual cash flows.

The company had borrowing facilities of R2 568 million and had utilised 8% of these facilities at 30 September 2014. At year end, R2 367 million of borrowing facilities remain unutilised. These numbers exclude facilities in respect of debt consolidated as a result of BBBEE funding-related guarantees and project finance in Rwanda, the DRC and Zimbabwe. The company has a R6 billion domestic medium-term note programme of which R2,4 billion has been issued.

The following table details the group’s remaining contractual maturity for its financial liabilities. The table has been prepared based on undiscounted cash flows at the earliest date on which the group can be required to pay. The amounts include both interest accrued and capital.

Nominal value of liability

Rm<1 year

Rm2 to 3 years

Rm>3 years

RmTotal

Rm

2014Long-term borrowings 5 810 70 3 469 2 271 5 810 Short-term borrowings 281 281 – – 281 Trade and other payables 1 620 1 620 – – 1 620

2013Long-term borrowings 3 547 85 830 2 632 3 547 Short-term borrowings 499 499 – – 499 Trade and other payables 1 250 1 250 – – 1 250

The company’s borrowing powers are not restricted by its memorandum of incorporation.

Refer to note 11 for borrowings details



37. FINANCIAL RISK MANAGEMENT continuedMethods and assumptions used by the group in determining fair valuesThe 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, dividend yield and other valuation techniques commonly used by market participants. (Refer to the fair value hierarchy.)

The fair value of unlisted investments has been calculated using the dividend yield methodology. Further details are disclosed in note 5.

Put option liabilities has been calculated using EBITDA forecasts prepared by management and discounting to present value. Further details are disclosed in note 13.

The fair values of cash and cash equivalents, trade and other receivables and trade and other payables approximate the respective carrying amounts of these financial instruments because of the short period to maturity.

The fair value of derivative financial instruments relating to cash-settled share appreciation rights is determined with reference to valuations performed by third-party financial institutions at reporting date, using an actuarial binomial pricing model. The inputs into the model are shown in note 35.

Fair value hierarchy disclosures

Valuation with

reference to prices

quoted in an active

marketLevel 1

Rm

Valuationbased on

observableinputs

Level 2Rm

Valuationbased on

unobserv-able

inputLevel 3

Rm

Totalfair value

Rm

2014Financial assetsAvailable for sale Unlisted investments at fair value – – 95 95 Loans and receivablesLoans advanced – 3 – 3 Loans to equity accounted companies – 46 – 46 Trade and other financial receivables – 1 091 – 1 091 Cash and cash equivalents 563 – – 563 At fair value through profit and loss Unlisted collective investments at fair value (held for trading) 114 – – 114

Total financial assets 677 1 140 95 1 912

Financial liabilitiesAt amortised costLong-term borrowings^ 2 395 3 374 – 5 769 Short-term borrowings 351 – – 351 Trade and other financial payables – 1 156 – 1 156 At fair value through profit and loss Derivative instruments – current (held for trading) – 18 – 18 Put option liabilities – – 145 145 DerivativesDerivative instruments – non-current (cash flow hedge) – 1 – 1

Total financial liabilities 2 746 4 549 145 7 440

^The fair value of the bonds, included in long-term borrowings, is considered a level 1.



Valuation with

reference to prices

quoted in an active

marketLevel 1

Rm

Valuationbased on

observableinputs

Level 2Rm

Valuationbased on

unobserv-able

inputLevel 3

Rm

Totalfair value

Rm

37. FINANCIAL RISK MANAGEMENT continued2013Financial assetsAvailable for sale Unlisted investments at fair value – – 37 37 Loans and receivablesLoans advanced – 4 – 4 Loans to equity accounted companies – 46 – 46 Trade and other financial receivables – 874 – 874 Cash and cash equivalents 492 – – 492 At fair value through profit and loss Unlisted collective investments at fair value (held for trading) 105 – – 105

Total financial assets 597 924 37 1 558

Financial liabilitiesAt amortised costLong-term borrowings – 3 523 – 3 523 Short-term borrowings 584 – – 584 Trade and other financial payables – 567 – 567 At fair value through profit or lossCash-settled share-based payment liability – 22 – 22 DerivativesDerivative instruments – non-current (cash flow hedge) – 2 – 2 Derivative instruments – current (cash flow hedge) – 112 – 112

Total financial liabilities 584 4 226 – 4 810

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.



Parent company of

reporting entity

Rm

Subsidiary of reporting

entityRm

38. RELATED-PARTY TRANSACTIONS2014Interest receivedAfripack Limited – 3 Goods and services purchased/(sold)Afripack Limited 131 –Pronto Holdings Pty Limited (until 30 June 2014) (151) –Amounts due (to)/from as at the end of the yearAfripack Limited (13) 43 Metlakgola Construction & Development (Pty) Limited – 1 Rhulanani Concrete Mixers (Pty) Limited – 2 2013Interest receivedAfripack Limited – (2)Goods and services purchased/(sold)Afripack Limited 61 –Pronto Holdings Pty Limited 4 –Pronto Holdings Pty Limited (172) –Amounts due (to)/from as at the end of the yearAfripack Limited (5) 42Metlakgola Construction & Development (Pty) Limited – 1Olegra Oil (Pty) Limited – 1Pronto Holdings Pty Limited 25 –Rhulanani Concrete Mixers (Pty) Limited – 2

Group companies, in the ordinary course of business, entered into purchase transactions with joint ventures, associates and subsidiaries. The terms and conditions of these transactions are determined on an arm’s length basis.

In addition to the above related-party transactions, dividends of R65 million (2013: R59 million) were paid to the PPC SBP Consortium Funding SPV (Pty) Limited. This company owns 41 956 330 shares in PPC, including 1 967 404 shares issued in terms of the BBBEE second transaction which participate in only 20% of the dividend declared. SK Mhlarhi and MP Malungani are common directors of both PPC and the PPC SBP Consortium Funding SPV (Pty) Limited.

39. ADDITIONAL DISCLOSUREDirectors, prescribed officers and key managementThe executive directors and prescribed officers of PPC are regarded as key management personnel. Details regarding directors’ and prescribed officers’ remuneration and interest are disclosed in the remuneration report.ShareholdersThe principal shareholders of the company are disclosed on page 107.

40. EVENTS AFTER REPORTING DATEIn November 2014, the International Finance Corporation (IFC) signed a subscription agreement to acquire a 10% stake in PPC Barnet DRC Holdings, completing the DRC shareholders requirements and commitment from IFC. Post the issuance of these shares, PPC will hold 69%, Barnet 21% and IFC 10% of the shares in PPC Barnet DRC Holdings.

Other than the Habesha transaction and IFC subscription into PPC Barnet DRC Holdings noted above, there are no other events that occurred after the reporting date that may have a material impact on the group’s reported financial position at 30 September 2014.

2014 2013

41. CURRENCY CONVERSION GUIDEApproximate value of foreign currencies relative to the rand at 30 September:Botswana pula 1,22 1,15Euro 14,28 13,60US dollar 11,31 10,05Rwandan franc 0,02 0,02Mozambican metical 0,37 0,34


Annexure 1 – Subsidiaries and non-controlling interest

The consolidated annual financial statements for the year ended 30 September 2014 include the results and statements of financial position of the company and all of its subsidiaries.

The group consists of subsidiaries, either directly or indirectly held by the company, and holds the majority of voting rights in all subsidiaries except for the respective BBBEE entities consolidated in terms of IFRS 10 where voting rights are aligned to the proportionate ownership. Non-controlling shareholders have significant interests in two of the group’s subsidiaries, namely CIMERWA Limited (CIMERWA) and Safika Cement Holdings Pty Limited (Safika Cement).

The key trading subsidiaries, their activities and respective holding companies are:

Name of subsidiary Principal activityCountry of incorporation

Proportion of ownership interest and voting power held by the group

Holding company2014

%2013

%

Portland Holdings Limited^ Manufacturer and supplier of both bag and bulk cement for use within Zimbabwe and surrounding countries

Zimbabwe 70 70 PPC Ltd

PPC Botswana (Pty) Limited Manufacturer, wholesaler and distributor of cementitious products, both bag and bulk, within Botswana

Botswana 100 100 PPC Ltd

PPC International Holdings Pty Limited Holding company for PPC’s rest of Africa investments South Africa 100 100 PPC LtdPPC Lime Limited Manufacturer and supplier of highly reactive lump lime, burnt lime and burnt dolomite

for use in South Africa and surrounding countriesSouth Africa 100 100 PPC Ltd

Pretoria Portland Cement International Holdings Holding company for PPC’s investments in Mozambique and PPC Aggregate Quarries of Botswana

Mauritius 100 100 PPC Ltd

Pronto Holdings Pty Limited Manufacturer and supplier of readymix concrete, fly ash and dry mortar mix in Gauteng South Africa 100 50 PPC LtdSafika Cement Holdings Pty Limited Manufacturer and supplier of blended cement within South Africa South Africa 69 – PPC LtdPPC Aggregate Quarries (Pty) Limited Manufacturer and supplier of stone, sand, road layer material and special aggregate-

related products in GautengSouth Africa 100 100 PPC Ltd

PPC Aggregate Quarries Botswana (Pty) Limited Manufacturer and supplier of stone, sand, road layer material and special aggregate-related products in Gaborone and Francistown

Botswana 100 100 Pretoria Portland Cement International Holdings

Kgale Quarries (Pty) Limited Manufacturer and supplier of stone, sand, road layer material and special aggregate-related products in Gaborone

Botswana 100 100 PPC Botswana (Pty) Limited

CIMERWA Limited Manufacturer and supplier of both bag and bulk cement for use within Rwanda and surrounding countries

Rwanda 51 51 PPC International Holdings Pty Limited

PPC Barnet DRC Holdings* Holding company for PPC’s expansion into the DRC cement market Mauritius 100 PPC International Holdings Pty Limited

PPC Barnet DRC Trading SA Supplier of bag cement for use within the DRC and surrounding countries Democratic Republic of the Congo 100 PPC Barnet DRC HoldingsPPC Barnet DRC Manufacturing SA Manufacturer of both bag and bulk cement for use within Rwanda and surrounding

countries#

Democratic Republic of the Congo 100 PPC Barnet DRC Holdings

PPC Barnet DRC Quarrying SA Owner of the mineral right in the DRC and responsible for the primary phase of quarrying#


PPC Mozambique SA Supplier of cement, sourced primarily from Zimbabwe and South Africa, into the Mozambique market, mainly the Maputo and Tete regions

Mozambique 100 100 PPC Mozambique Holdings

at 30 September 2014

^ During 2013, Portland Holdings Limited finalised their indigenisation transaction, with non-controlling interests purchasing 29,6% of the company through a notional vendor financing (NVF) mechanism. During the NVF period, the non-controlling shareholders only share in a portion of the dividend declared and do not participate in the earnings of the company.

* During the financial year, PPC concluded agreements that will see the group enter the DRC cement market together with local partners, the Barnet group, and as a result the various entities were formed during the 2014 financial year. The non-controlling shareholders will hold approximately 31% of the company subsequent to the fulfilment of certain conditions. It is anticipated that these conditions will be achieved during the first quarter of PPC’s 2015 financial year. To date, the future non-controlling shareholders have transferred land and mining rights to the PPC Barnet group of companies valued at R115 million, which has been reflected as a current liability in the consolidated annual financial statements. Post year end, the IFC signed a subscription agreement to acquire a 10% stake in PPC Barnet DRC Holdings. Refer note 40 in the group annual financial statements.

# It is foreseen that the entities will commence with their primary activities during 2016 upon completion of the plant.

Other than the normal regulations and exchange controls applicable in the various countries in which the group operates, there are no significant restrictions that could materially impact the ability to access or use assets and settle liabilities in foreign jurisdictions.


The consolidated annual financial statements for the year ended 30 September 2014 include the results and statements of financial position of the company and all of its subsidiaries.

The group consists of subsidiaries, either directly or indirectly held by the company, and holds the majority of voting rights in all subsidiaries except for the respective BBBEE entities consolidated in terms of IFRS 10 where voting rights are aligned to the proportionate ownership. Non-controlling shareholders have significant interests in two of the group’s subsidiaries, namely CIMERWA Limited (CIMERWA) and Safika Cement Holdings Pty Limited (Safika Cement).

The key trading subsidiaries, their activities and respective holding companies are:

Name of subsidiary Principal activityCountry of incorporation

Proportion of ownership interest and voting power held by the group

Holding company2014

%2013

%

Portland Holdings Limited^ Manufacturer and supplier of both bag and bulk cement for use within Zimbabwe and surrounding countries

Zimbabwe 70 70 PPC Ltd

PPC Botswana (Pty) Limited Manufacturer, wholesaler and distributor of cementitious products, both bag and bulk, within Botswana

Botswana 100 100 PPC Ltd

PPC International Holdings Pty Limited Holding company for PPC’s rest of Africa investments South Africa 100 100 PPC LtdPPC Lime Limited Manufacturer and supplier of highly reactive lump lime, burnt lime and burnt dolomite

for use in South Africa and surrounding countriesSouth Africa 100 100 PPC Ltd

Pretoria Portland Cement International Holdings Holding company for PPC’s investments in Mozambique and PPC Aggregate Quarries of Botswana

Mauritius 100 100 PPC Ltd

Pronto Holdings Pty Limited Manufacturer and supplier of readymix concrete, fly ash and dry mortar mix in Gauteng South Africa 100 50 PPC LtdSafika Cement Holdings Pty Limited Manufacturer and supplier of blended cement within South Africa South Africa 69 – PPC LtdPPC Aggregate Quarries (Pty) Limited Manufacturer and supplier of stone, sand, road layer material and special aggregate-

related products in GautengSouth Africa 100 100 PPC Ltd

PPC Aggregate Quarries Botswana (Pty) Limited Manufacturer and supplier of stone, sand, road layer material and special aggregate-related products in Gaborone and Francistown

Botswana 100 100 Pretoria Portland Cement International Holdings

Kgale Quarries (Pty) Limited Manufacturer and supplier of stone, sand, road layer material and special aggregate-related products in Gaborone

Botswana 100 100 PPC Botswana (Pty) Limited

CIMERWA Limited Manufacturer and supplier of both bag and bulk cement for use within Rwanda and surrounding countries

Rwanda 51 51 PPC International Holdings Pty Limited

PPC Barnet DRC Holdings* Holding company for PPC’s expansion into the DRC cement market Mauritius 100 PPC International Holdings Pty Limited

PPC Barnet DRC Trading SA Supplier of bag cement for use within the DRC and surrounding countries Democratic Republic of the Congo 100 PPC Barnet DRC HoldingsPPC Barnet DRC Manufacturing SA Manufacturer of both bag and bulk cement for use within Rwanda and surrounding

countries#


PPC Barnet DRC Quarrying SA Owner of the mineral right in the DRC and responsible for the primary phase of quarrying#


PPC Mozambique SA Supplier of cement, sourced primarily from Zimbabwe and South Africa, into the Mozambique market, mainly the Maputo and Tete regions

Mozambique 100 100 PPC Mozambique Holdings


The following summarised financial information is presented for CIMERWA and Safika Cement, based on their respective consolidated financial statements which were prepared in accordance with IFRS, modified for fair value adjustments to financial assets and liabilities at the acquisition date. The information is before inter-company eliminations with other group entities. These entities are deemed material due to their respective percentages in the total non-controlling interest as reflected in the group’s statements of financial position.

CIMERWA Safika Cement

2014 Rm

2013Rm

2014Rm

2013Rm

Revenue 234 118 833 EBITDA (1) 7 83 Net (loss)/profit for the year (26) (6) 38 Net (loss)/profit attributable to non-controlling interests (13) (3) 12 Dividends paid to non-controlling interests – – 34 Total assets 2 002 1 372 306 Total liabilities 865 328 93 Equity attributable to non-controlling interests 557 512 140

CIMERWA was acquired in January 2013, while Safika Cement was acquired with effect from January 2014. Details can be found in note 28.

Annexure 1 – Subsidiaries and non-controlling interest continued



as at 30 September 2014

Company statement of financial position

Notes2014

Rm2013

Rm

ASSETSNon-current assets 5 152 4 383Property, plant and equipment 1 3 474 3 457Intangible assets 2 112 76Other non-current assets 3 1 559 664Equity-accounted investments 4 7 186Current assets 2 645 1 924Inventories 5 444 482Trade and other receivables 6 723 661Amounts owing by subsidiaries 3 1 441 601Taxation receivable 34 40Cash and cash equivalents 3 140

Total assets 7 797 6 307

EQUITY AND LIABILITIESCapital and reservesStated capital 7 (729) (692)Other reserves 374 430Retained profit 1 050 1 105

Total equity 695 843Non-current liabilities 5 915 4 036Deferred taxation liabilities 8 571 548Long-term borrowings 9 5 063 3 261Provisions 10 241 225Other non-current liabilities 11 40 2Current liabilities 1 187 1 428Short-term borrowings 12 249 502Trade and other payables 13 818 823Amounts owing to subsidiaries 3 120 103

Total equity and liabilities 7 797 6 307


Company income statement

Notes2014

Rm2013

Rm

Revenue 5 898 6 035 Cost of sales 3 999 3 887

Gross profit 1 899 2 148 Administrative and other operating expenditure 401 439

Operating profit before BBBEE IFRS 2 charges 14 1 498 1 709 BBBEE IFRS 2 charges 36 44

Operating profit 1 462 1 665 Fair value gains on financial instruments 15 6 27 Finance costs 16 468 380 Investment income 17 41 9

Profit before exceptional items 1 041 1 321 Exceptional items 18 (1) 11

Profit before taxation 1 040 1 332 Taxation 19 221 388

Profit for the year 819 944



Company statement of comprehensive income

Available-for-sale

financialassets

Rm

Hedgingreserves

Rm

Retainedprofit

Rm

Totalcompre-hensiveincome

Rm

2014Profit for the year – – 819 819 Items that will not be reclassified to profit or loss 47 – – 47 Revaluation of available-for-sale financial assets 58 – – 58 Taxation on the revaluation of available-for-sale financial assets (11) – – (11)Items that will be reclassified to profit or loss upon derecognition – 7 – 7 Cash flow hedge recognised directly through equity – 7 – 7 Other comprehensive profit, net of taxation 47 7 – 54

Total comprehensive income 47 7 819 873

2013Profit for the year – – 944 944 Items that will not be reclassified to profit or loss 9 – – 9 Revaluation of available-for-sale financial assets 11 – – 11 Taxation on the revaluation of available-for-sale financial assets (2) – – (2)Items that will be reclassified to profit or loss upon derecognition – 36 – 36 Cash flow hedge recognised directly through equity – 36 – 36 Other comprehensive profit, net of taxation 9 36 – 45

Total comprehensive income 9 36 944 989



Company statement of changes in equity

Other reserves

Stated capital

Rm

Available-for-sale

financialassets

Rm

Equitycompen-

sationreserves

Rm

Hedging reserves

Rm

Putoption

Rm

Retainedprofit

RmTotal

Rm

2014Opening balance at the beginning of the year (692) 241 196 (7) – 1 105 843 Movements for the year (37) 47 27 7 (137) (55) (148)Recognised on the acquisition of a subsidiary (refer to notes 11 and 13) – – – – (137) – (137)BBBEE IFRS 2 charges – – 36 – – – 36 Dividends declared – – – – – (879) (879)FSP IFRS 2 charges – – 12 – – – 12 Purchase of treasury shares in terms of the FSP share incentive scheme^ (53) – – – – – (53)Total comprehensive income – 47 – 7 – 819 873 Vesting of FSP share incentive scheme awards 16 – (16) – – – – Transfer to retained income – – (5) – – 5 –

Balance at 30 September 2014 (729) 288 223 – (137) 1 050 695

2013Opening balance at the beginning of the year (636) 230 136 (43) – 971 658 Movements for the year (56) 11 60 36 – 134 185 BBBEE IFRS 2 charges – – 44 – – – 44 Dividends declared – – – – – (823) (823)FSP IFRS 2 charges – – 31 – – – 31 Other reserve movements – 2 (2) – – – – Purchase of treasury shares in terms of the FSP share incentive scheme^ (56) – – – – – (56)Total comprehensive income – 9 – 36 – 944 989 Transfer to retained income – – (13) – – 13 –

Balance at 30 September 2013 (692) 241 196 (7) – 1 105 843 ^ For further details on the FSP share scheme, refer to note 35 in the group financials.



Company statement of cash flows

Notes2014

Rm2013

Rm

CASH FLOWS FROM OPERATING ACTIVITIESProfit before exceptional items 1 041 1 321 Adjustments for:

Amortisation of intangible assets 2 25 21 BBBEE IFRS 2 charges 48 44 Depreciation 1 384 372Dividends received 17 (14) –Fair value gains on financial instruments 15 (6) (27)Finance costs 16 468 380 Income from subsidiary companies 14 (351) (226)Interest received 17 (27) (9)Other non-cash flow items (19) (24)

Operating cash flows before movements in working capital 1 549 1 852 Movement in inventories 38 (18)Movement in trade and other receivables (62) (18)Movement in trade and other payables and provisions (110) 199

Cash generated from operations 1 415 2 015 Dividends received from investments 17 14 – Finance costs paid 20 (337) (289)Income received from subsidiary companies 14 351 226 Interest received 17 27 9 Taxation paid 21 (202) (440)

Cash available from operations 1 268 1 521 Dividends paid (879) (823)

Net cash inflow from operating activities 389 698

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of equity-accounted investments 4 – (110)Acquisitions of subsidiary companies 3 (657) – Investments in intangible assets 2 (61) (3)Investments in property, plant and equipment 22 (395) (387)Net movement in net amounts owing by subsidiaries 3 (823) (402)Proceeds from disposal of property, plant and equipment 1 15

Net cash outflow from investing activities (1 935) (887)

Net cash outflow before financing activities (1 546) (189)

CASH FLOWS FROM FINANCING ACTIVITIESBBBEE funding transaction (34) (32)Net short-term borrowings repaid (254) (339)Proceeds raised from bond issuance 9 1 750 650 Purchase of shares in terms of FSP share scheme 7 (53) (56)

Net cash inflow from financing activities 1 409 223

Net (decrease)/increase in cash and cash equivalents (137) 34 Cash and cash equivalents at the beginning of the year 140 106

Cash and cash equivalents at the end of the year 3 140



Freehold and

leasehold land,

buildings and

mineral rights

Rm

Factorydecommis-

sioningassets

Rm

Plant, vehicles,

furnitureand

equipmentRm


RmTotal

Rm

1. PROPERTY, PLANT AND EQUIPMENT2014Cost 576 64 5 992 153 6 785Accumulated depreciation and impairments 250 24 2 891 146 3 311


2013Cost 561 67 5 661 153 6 442Accumulated depreciation and impairments 234 23 2 586 142 2 985


Movement of property, plant and equipment2014Net carrying value at the beginning of the year 327 44 3 075 11 3 457Additions 15 – 380 – 395Depreciation (17) (1) (362) (4) (384)Disposals – – (2) – (2)Other movements/reallocation 1 (3) 10 – 8


2013Net carrying value at the beginning of the year 325 46 3 058 14 3 443Additions 21 – 366 – 387Depreciation (17) (2) (350) (3) (372)Disposals (2) – (1) – (3)Other movements/reallocation – – 2 – 2


Included in plant, vehicles, furniture and equipment is capital work in progress of R121 million (2013: R94 million).

Certain of the company’s properties are the subject of land claims. The company is in the process of discussion with the Land Claims Commissioner and is awaiting the outcome of the claims referred to the Land Claims Court. The claims are not expected to have a material impact on the company’s operations.

During the year, an amount of R15 million (2013: R4 million) for critical spares was reclassified to inventory.

Refer to the group financials for additional disclosures on property, plant and equipment.

Notes to the company financial statementsfor the year ended 30 September 2014


2014Rm

2013Rm

2. INTANGIBLE ASSETSERP development and other softwareCost 221 172Accumulated amortisation and impairments 109 96


Movement of intangible assetsNet carrying value at the beginning of the year 76 93 Additions 61 3 Amortisation (25) (21)Other movements – 1


3. OTHER NON-CURRENT ASSETSInvestments in subsidiariesInvestments in subsidiaries at the beginning of the year 583 583 Investment in Safika Cement$ 377 – Investment in Pronton 460 –

Investments in subsidiaries at the end of the year 1 420 583

Unlisted investments 139 81 Unlisted investments at fair value^ 95 37 Contributions to PPC Environmental Trust@ 44 44 Comprising:Other non-current assets 1 464 627 Other non-current financial assets 95 37

1 559 664

Interests in subsidiariesShares at cost less amounts written off and dividends received at the beginning of the year 590 590 Add: Investment in new subsidiaries 837 –

1 427 590 Add: Amounts owing by subsidiaries* 1 441 601

2 868 1 191Less: Amounts owing to subsidiaries* (120) (103)

2 748 1 088 $ Investment in Safika Cement During December 2013, all conditions to the transaction were fulfilled and PPC acquired a 69,3% equity stake in Safika Cement for R377 million. This

transaction further enhances PPC´s South African footprint through Safika Cement´s five blending facilities and one milling operation that produce blended 32.5N cement under three brands: IDM Best Build, Castle and the Spar Build-It house brand.

n Investment in Pronto During July 2014, PPC acquired the remaining 50% equity stake in Pronto making it a wholly owned subsidiary for R280 million. Pronto is a prominent

Gauteng-based readymix and fly ash supplier, with nine batching plants. This provides PPC additional ways to increase its cement distribution channel to the market while also expanding its range of complementary products available to the building and construction industries. Included in the investment in Pronto is the cost of the previously held 50% equity stake of R180 million.

^ Unlisted investments at fair value PPC Ltd holds a 6,75% (2013: 6,75%) shareholding in Ciments du Bourbon, incorporated in Reunion. The fair value of the investment has

been calculated using a dividend yield valuation methodology, using comparable company dividend yields. The movement in fair value of R58 million (2013: R9 million) has been credited against other comprehensive income. The basis of determining the fair value of the investment has changed from an earnings multiple approach, as used in previous years, to the dividend yield methodology used in the current year, which aligns with the group’s influence and investment returns.

@ Contributions to PPC Environmental Trust These contributions are invested with independent financial institutions in a collective investment scheme and cash investments, and can be utilised

on approval from the Department of Mineral Resources and Energy Affairs for rehabilitation costs. The carrying value of the underlying trust’s investments is R92 million.

* Amounts owing by and to subsidiaries The loans have no fixed terms of repayment, are unsecured and, where appropriate, interest is calculated using ruling market-related interest rates.

Refer to note 26 for details of amounts owing by and to subsidiaries at year end.

During the current year the company advanced R1 billion (2013: R437 million) to PPC International Holdings Pty Limited, a wholly owned subsidiary company, for equity contributions to CIMERWA and DRC.


2014Rm

2013Rm

4. EQUITY-ACCOUNTED INVESTMENTSInvestments at cost at the beginning of the year 186 76 Investments made during the year – 110 Transferred as a result of business combination^ (179) –

7 186

Fair value of unlisted equity-accounted investments as determined by the directors 194 266

Refer to note 5 in the group financials for further information.

^Transferred as a result of business combination

In June 2014, PPC acquired the remaining 50% in Pronto making it a wholly owned subsidiary (refer to note 3). In 2013, PPC acquired a further 25% in Pronto for R110 million, with the purchase consideration determined using an EBITDA multiple less net debt.

5. INVENTORIESRaw materials 90 78 Work in progress 70 107 Finished goods 99 94 Maintenance stores 274 284 Inventory obsolescence (89) (81)

444 482

Amount of inventories recognised as an expense during the year 2 445 2 557 Inventory obsolescenceBalance at the beginning of the year 81 67Raised during the year 9 17Utilised during the year – (2)Released during the year (1) (1)


Inventories are determined on the weighted average formula bases.

During the year, an amount of R15 million (2013: R4 million) for critical spares was reclassified to property, plant and equipment.

No inventories have been pledged as security.

Notes to the company financial statements continued



2014Rm

2013Rm

6. TRADE AND OTHER RECEIVABLESTrade receivables 652 606 Less: Impairment of trade receivables (7) (9)

Net trade receivables 645 597 Other financial receivables 30 28

Trade and other financial receivables 675 625 Prepayments 48 36

723 661

No receivables have been pledged as security. Amounts due to the company should be settled within the normal credit terms of 30 to 60 days.Net trade receivables comprise: 645 597 Trade receivables that are neither past due nor impaired^ 561 524 Financial assets that would otherwise be impaired whose terms have been renegotiated – 9 Trade receivables that are past due but not impaired 84 64 ^There is no history of default relating to trade receivables in this category.

Trade receivables that are past due but not impairedAgeing beyond normal terms 84 64 1 – 30 days 76 56 31 – 60 days 6 – 61 – 90 days – 2 Greater than 180 days 2 6 Fair value of collateral held 32 68 Collateral held consists of bank guarantees, cession of book debt, deed of surety, cross- company guarantees and notarial bonds.Impairment of trade receivablesBalance at the beginning of the year 9 13 Allowance utilised (2) (4)



2014Shares

2013Shares

7. STATED CAPITALAuthorised shares 700 000 000 700 000 000

Issued sharesTotal shares in issue at the beginning of the year 605 379 648 566 029 971 Shares issued in terms of second BBBEE transaction^ – 39 349 677

Total shares in issue at the end of the year 605 379 648 605 379 648 Shares held by consolidated BBBEE trusts and trust funding SPVs treated as treasury shares~ (26 480 950) (26 480 950)

Total shares in issue, net of treasury shares 578 898 698 578 898 698

Authorised preference shares 20 000 000 –During 2014, shareholders approved the creation of 20 million preference shares, of R1 000 each, in terms of the restructure of a portion of PPC’s first BBBEE transaction. No preference shares have been issued post the approval.

Rm Rm

Stated capitalBalance at the beginning of the year (692) (636)Shares purchased in terms of the FSP incentive scheme treated as treasury shares# (53) (56)Vesting of FSP incentive scheme awards 16 –

Balance at the end of the year (729) (692)

^ Shares issued in terms of PPC’s second BBBEE transaction which was facilitated by means of notional vendor financing (NVF) mechanism resulting in these shares only participating in 20% of the dividends declared by PPC during the NVF period, ending 30 September 2019. With the exception of the Bafati Investment Trust, entities participating in this transaction are consolidated into the PPC group during the transaction term.

~ In terms of the BBBEE transaction that was effected during December 2008, PPC provided guarantees to the holders of the A preference shares issued by the Black Managers Trust Funding SPV, the holders of the B preference shares issued by the respective trust funding SPVs, and all of the long-term loans issued to the Black Managers Trust and the respective trust funding SPVs. The funding raised by the Black Managers Trust and SPV was used to purchase shares in PPC at market value, in terms of a scheme of arrangement. In substance, the shares purchased by the Black Managers Trust and trust funding SPV were indirectly funded by PPC. The shares are accordingly reflected as treasury shares and the corresponding long-term borrowings were raised (refer to note 9).

# In terms of the forfeitable share plan 5 865 851 shares (2013: 4 744 733) were purchased on the JSE, and are treated as treasury shares during the various vesting periods of the awards.

Unissued shares (shares)Ordinary shares 94 620 352 94 620 352

Preference shares 20 000 000




2014Rm

2013Rm

8. DEFERRED TAXATION LIABILITIESBalance at the beginning of the year 548 538 Charged directly to equity 11 2 Charged to the income statement 12 8


Opening balance

Rm

Charged to the income statement

Rm

Charged directly to

equityRm

Closing balance

Rm

2014Property, plant and equipment 629 4 – 633 Other non-current assets 25 (1) 11 35 Current assets 8 (1) – 7 Non-current liabilities (64) (5) – (69)Current liabilities (52) 15 – (37)Reserves 2 – – 2

548 12 11 571

2013Property, plant and equipment 598 31 – 629 Other non-current assets 18 5 2 25 Current assets – 8 – 8 Non-current liabilities (59) (5) – (64)Current liabilities (21) (31) – (52)Reserves 2 – – 2

538 8 2 548


2014Rm

2013Rm

9. LONG-TERM BORROWINGSBorrowings Terms Security Interest rateLong-term loan Interest is payable semi-annually

with a bullet capital repayment in December 2016

Unsecured Fixed 10,86% 1 520 1 519

Bonds# Various, see below# Unsecured Refer below# 2 395 645

BBBEE funding transaction^ 1 165 1 113

A preference shares Dividends are payable semi-annually with capital redeemable from surplus cash. Compulsory annual redemptions are effective until December 2016

Secured by guarantee from PPC


81 104

B preference shares Both capital and dividends are payable in December 2016 with capital capped at R400 million



393 368

Long-term loans Both capital and interest are payable in December 2016 with capital capped at R700 million


Variable rates, at 285 basis points above JIBAR

691 641

Long-term borrowings 5 080 3 277Less: Short-term portion of long-term borrowings (refer to note 12) (17) (16)

5 063 3 261

Maturity analysis of obligations:One year 17 16Two years 680 1 033Three years 2 637 678Four years 748 1 550Five years and more 998 –

5 080 3 277

# Comprises four unsecured bonds, issued under the company’s R6 billion domestic medium term note programme, and are recognised net of capitalised transaction costs of R5 million (2013: R5 million), with details below:

Number Issue date Value Term Interest rate

PPC 001 March 2013 R650 million 3 years 3-month JIBAR + 1,26%PPC 002 December 2013 R750 million 5 years 3-month JIBAR + 1,50%PPC 003 July 2014 R750 million 5 years 3-month JIBAR + 1,48%PPC 004 July 2014 R250 million 7 years Fixed at 9,86%

^ PPC provided guarantees to the holders of the A preference shares issued by the Black Managers Trust Funding SPV, the holders of the B preference shares issued by the respective trust funding SPVs, and all of the long-term loans issued by the Black Managers Trust and the respective trust funding SPVs.

The company is in compliance with its debt covenants, none of which are expected to represent material restrictions on funding or investment policies in the foreseeable future.




2014Rm

2013Rm

10. PROVISIONSFactory decommissioning and quarry rehabilitation 213 199Post-retirement healthcare benefits 28 26

241 225

Factorydecom-

missioningand quarry

rehabilitationRm

Post-retirementhealthcare

benefitsRm

TotalRm

Movement of provisions2014Balance at the beginning of the year 199 26 225 Amounts added – 2 2 Amounts reversed (3) – (3) Time value of money adjustments 17 – 17


To be incurred:– Between two and five years 7 – 7 – More than five years 206 28 234

213 28 241

2013Balance at the beginning of the year 185 23 208 Amounts added 1 3 4 Time value of money adjustments 13 – 13


To be incurred:– Between two and five years 7 – 7

– More than five years 192 26 218

199 26 225

Factory decommissioning and quarry rehabilitationThe company is required to restore mining and processing sites at the end of their productive lives to an acceptable condition consistent with the group’s environmental policies and in line with local legislation. PPC has set up an environmental trust to administer the funds required to fund the expected cost of decommissioning or restoration. To date, R44 million (2013: R44 million) has been contributed to the PPC Environmental Trust (refer to note 3).

Retirement and post-retirement benefitsIncluded in the provision are the following:Cement and Concrete Institute employeesThe provision relates to PPC’s proportionate share of the post-retirement healthcare liability for previous employees of the Cement and Concrete Institute and amounted to R9 million (2013: R8 million). This liability was last actuarially valued during February 2013 and was determined using the projected unit credit method.

Corner House Pension Fund and Lime Acres continuation membersThe provision relates to post-employment healthcare benefits in respect of certain Corner House Pension Fund and Lime Acres continuation members, and amounted to R19 million (2013: R18 million). The liability has been determined using the projected unit credit method and was actuarially valued during June 2012.

Benefits under these schemes were granted to employees under historical employment contracts and the schemes are closed to new members.



2014Rm

2013Rm

11. OTHER NON-CURRENT LIABILITIESCash-settled share-based payment liability 16 22 Put option liabilities# 145 – Derivative financial instruments (cash flow hedge)^ – 2

161 24 Less: Short-term portion (121) (22)

40 2

For further details on the cash-settled share-based payment liability, refer to note 34 in the group financials.

# With the purchase of the 69,3% equity stake in Safika Cement (refer to note 28 in the group financials), PPC granted non-controlling shareholders individual put options, with varying exercise dates, for the sale of their remaining shares in the company to PPC. One of the put options is anticipated to be exercised next year and R105 million has therefore been classified as a current liability. The put option price is based on the company’s forecasted EBITDA applying an earnings multiple dependent on the level of EBITDA achieved. The balance of the put options are anticipated to be exercised after the fifth anniversary of the transaction. The present value of the put options were calculated at R145 million and time value of money adjustments of R16 million have been recognised since initial recording of the liability. Forecasted EBITDA is based on financial forecasts approved by management, with pricing and margins similar to those currently being achieved by the business. Selling prices and costs are forecast to increase at local inflation projections and extrapolated using local GDP growth rates. Subsequent to the initial recognition of the liability of R137 million, the value of the put options has been re-measured resulting in the initial liability being reduced by R8 million, mainly due to the lower macro-economic growth projections for the local economy, and recorded under fair value adjustments on financial instruments.

^ The derivative financial instrument relates to the long-term portion fair value of the interest rate swap agreement entered into in order to fix the future interest payments on the preference shares raised to finance the first BBBEE transaction. The derivative liability and interest on swap relates to the A preference share amounting to Rnil (2013: R2 million) (refer to note 13).

12. SHORT-TERM BORROWINGSShort-term loans and bank overdrafts 232 486 Short-term portion of long-term borrowings (refer to note 9) 17 16

249 502

13. TRADE AND OTHER PAYABLESCash-settled share-based payment liability 16 22 Derivative financial instruments 1 112 Put option liability (refer to note 11) 105 – Finance costs accrued 50 32 Other financial payables 118 123 Trade payables and accruals 376 314

Trade and other financial payables 666 603 Payroll accruals 138 174 Restructuring costs* – 15 VAT payable 14 31

818 823

Trade and other payables are payable within the normal trade terms of 30 to 60-day periods.

^ Included in derivative financial instruments is the net financial liability payable on the interest rate swaps, and has been netted off in accordance with IAS 32 Financial Instruments: Presentation. The financial asset amounts to Rnil (2013: R325 million), and the financial liability amounts to R1 million (2013: R429 million). Interest rate swaps liabilities of R113 million were settled in December 2013.

* During September 2013, PPC approved a voluntary separation programme at the Riebeeck factory, the total provision amounted to R15 million and was paid in 2014.



2014Rm

2013Rm

14. OPERATING PROFITOperating profit includes:Amortisation of intangible assets (refer to note 2) 25 21 Auditors’ remuneration 7 7

Fees 4 5 Other 3 2

Depreciation (refer to note 1) 384 372 Cost of sales 360 355 Operating costs 24 17

Distribution costs included in cost of sales 840 844 Exploration and research costs 1 1 Income from subsidiary companies: 351 226

Fees 59 55 Dividends 292 171

Operating lease charges – land and buildings 16 12 Profit on disposal of plant and equipment 1 11 Staff costsEquity-settled share incentive scheme charge 10 27 Cash-settled share incentive scheme charge 6 4 Directors’ remuneration 44 40 Employees’ remuneration 788 687 Restructuring costs paid to employees – 15 Retirement benefit contributions 66 61

914 834 Less: Costs capitalised to plant and equipment and intangibles (3) –

911 834

15. FAIR VALUE GAINS ON FINANCIAL INSTRUMENTSGain on remeasurement of put option liabilities 8 – Loss on derivatives designated as economic hedging instruments (5) – Losses on translation of foreign-denominated monetary items 3 27

6 27

16. FINANCE COSTSBank and other borrowings 59 66 Bonds 108 11 Long-term loan 166 166 BBBEE funding transaction 100 120

Dividends on redeemable preference shares 38 44 Long-term borrowings 62 76

Finance lease interest – 1 Subsidiary companies 3 3 Time value of money adjustments 32 13

468 380


2014Rm

2013Rm

17. INVESTMENT INCOMEDividends

Unlisted investments 14 – Interest received

On deposits and non-current assets 27 9

41 9

18. EXCEPTIONAL ITEMSImpairment of loan to subsidiary company (1) – Profit on disposal of properties – 11

(1) 11

19. TAXATIONNormal taxation

Current year 257 359 Prior year (70) 3

187 362

Withholding taxationCurrent year 22 15

Deferred taxationCurrent year 12 8

Other taxationCapital gains taxation – 2 Securities transfer taxation – 1

– 3

Taxation attributable to the company 221 388

2014%

2013%

Reconciliation of rate of taxationTaxation as a percentage of profit before taxation 21,3 28,9Prior year taxation impact 6,7 –

Taxation as a percentage of profit before taxation, excluding prior year taxation adjustments 28,0 28,9 Adjustment due to the inclusion of dividend income 7,7 3,6

Effective rate of taxation 35,7 32,5 Reduction in rate of taxation 3,2 1,4

Permanent differences and exempt income 3,2 1,4 Increase in rate of taxation (10,9) (5,9)

Disallowable charges (5,4) (1,4)BBBEE IFRS 2 charges (3,5) (3,3)Capital gains taxation – (0,2)Withholding taxation (2,0) (1,0)

South African normal taxation rate 28,0 28,0




2014Rm

2013Rm

20. FINANCE COSTS PAID Finance costs as per income statement charge 468 380 Time value of money adjustments (32) (13)BBBEE funding transaction (99) (78)

Redeemable preference share dividends capitalised (43) (46)Interest on long-term borrowings capitalised (56) (32)

337 289

21. TAXATION PAIDNet amounts (receivable)/outstanding at the beginning of the year (40) 20 Charge per income statement (excluding deferred taxation) 209 380 Net amounts receivable at the end of the year 33 40

202 440

22. ACQUISITION OF PROPERTY, PLANT AND EQUIPMENTFreehold and leasehold land, buildings and mineral rights 15 21 Plant, vehicles, furniture and equipment 380 366

395 387

23. MOVEMENTS IN INVESTMENTS AND LOANSNet movement (715) (12)Revaluation of available-for-sale financial assets directly in equity 58 12 Investment in subsidiary companies 657 –

– –

24. CONTINGENT LIABILITIESLitigation, current or pending, is not considered likely to have a material adverse effect on the company.

PPC Ntsika Fund (Pty) Limited, PPC International Holdings Pty Limited and PPC Black Managers Trust Funding SPV (Pty) Limited, wholly owned subsidiary companies, are technically insolvent. The company has provided guarantees in the way of a subordination agreement relating to the loans that are receivable from these companies.

For details on guarantees provided by PPC Ltd in terms of the BBBEE transaction, refer to note 9.


25. FINANCIAL RISK MANAGEMENTFair values of financial assets and liabilitiesThe carrying values of certain financial assets and liabilities, which are accounted for at historical cost, may differ from their fair values.

The estimated fair values have been determined using available market information and approximate valuation methodologies.

Notes

2014 2013

Carrying amount

Rm

Fairvalue

Rm

Carrying amount

Rm

Fairvalue

Rm

Financial assetsUnlisted investment at fair value 3 95 95 37 37 Trade and other financial receivables 6 675 675 634 634 Amounts owing by subsidiaries 3 1 441 1 441 601 601 Cash and cash equivalents 3 3 140 140

Financial liabilitiesLong-term borrowings 9 5 063 5 063 3 261 3 322 Short-term borrowings 12 249 249 502 502 Amounts owing to subsidiaries 3 120 120 103 103 Trade and other financial payables 13 560 560 491 491 Put option liabilities 13 145 145 – – Derivative instruments – current (cash flow hedge) 11, 13 1 1 112 112 Derivative instruments – non-current (cash flow hedge) 11, 13 – – 2 2

2014Rm

2013Rm

Credit risk management

Maximum credit risk exposure^ 2 174 1 451 ^ Maximum credit risk exposure includes long-term receivables, trade and other receivables and cash and cash equivalents.




Valuationwith

referenceto prices

quoted inan active

marketLevel 1

Rm

Valuation based on

observableinputs

Level 2Rm

Valuation based on

unobservable inputs

Level 3Rm

TotalRm

25. FINANCIAL RISK MANAGEMENT continuedFair value hierarchy disclosures:2014Financial assetsAvailable for sale Unlisted investments at fair value – – 95 95Loans and receivablesAmounts owing by subsidiaries – 1 441 – 1 441Trade and other financial receivables – 675 – 675 Cash and cash equivalents 3 – – 3


Financial liabilitiesAmounts owing to subsidiary companies – 120 – 120Long-term borrowings 2 395 2 668 – 5 063 Short-term borrowings – 249 – 249Safika put option liabilities – 145 145Trade and other financial payables – 560 – 560 Derivative instruments – current (cash flow hedge) – 1 – 1

Total financial liabilities 2 395 3 598 145 6 138

2013Financial assetsAvailable for sale Unlisted investments at fair value – – 37 37 Loans and receivablesAmounts owing by subsidiaries – 601 – 601 Trade and other financial receivables – 701 – 701 Cash and cash equivalents 140 – – 140


Financial liabilitiesLong-term borrowings – 3 261 – 3 261 Short-term borrowings – 502 – 502 Trade and other financial payables – 491 – 491 Derivative instruments – current (cash flow hedge) – 112 – 112 Derivative instruments – non-current (cash flow hedge) – 2 – 2 Amounts owing to subsidiaries – 103 – 103

Total financial liabilities – 4 471 – 4 471

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.


2014Rm

2013Rm

26. RELATED-PARTY TRANSACTIONSIn addition to the related-party transactions disclosed in the group results, the company had the following related-party transactions:Goods sold toPPC Barnet DRC Trading Company SA 55 – PPC Botswana (Pty) Limited 285 240 Portland Holdings Limited 132 105 PPC Lime Limited 8 7 PPC Mozambique SA 21 40 Pronto Holdings Pty Limited 63 135Safika Cement Holdings Pty Limited 481 –

Goods purchased fromPPC Lime Limited 35 29 Pronto Holdings Pty Limited 2 4

Technical services provided toPPC Lime Limited 37 36 PPC Aggregate Quarries (Pty) Limited 10 10 PPC Botswana (Pty) Limited 1 1 Portland Holdings Limited 9 5 CIMERWA Limited 2 3

Technical services received fromPPC Aggregate Quarries (Pty) Limited 3 3

Interest paid toPPC Aggregate Quarries (Pty) Limited 2 2 PPC Ntsika Fund (Pty) Limited 1 1 CSG and SBP 166 166 PPC Lime Limited 1 –

Dividends received fromPPC Botswana (Pty) Limited – 11 PPC Lime Limited 72 55 PPC Aggregate Quarries (Pty) Limited 21 17 Portland Holdings Limited 114 89 Safika Cement Holdings Pty Limited 79 – Varsrivier Marmer (Pty) Limited 5 – Cape Portland Cement Company Limited 1 –

Dividends paid Porthold Trust Pvt Limited 2 2

in terms of the first BBBEE transactionThe Current PPC Team Trust^ – 4 The Future PPC Team Trust^ – 1 PPC Black Independent Non-executive Directors Trust 1 1 The PPC Black Managers Trust 16 15 PPC Team Benefit Trust Funding SPV (Pty) Limited 4 4 PPC Construction Industry Associations Trust Funding SPV (Pty) Limited 18 17 PPC Education Trust Funding SPV (Pty) Limited 9 8 PPC Community Trust Funding SPV (Pty) Limited 6 6 Community Service Groups and Strategic Black Partners (refer to notes 9, 11 and 16) 76 71 PPC Mkhulu Trust^ – 1

in terms of the second BBBEE transactionPPC Masakhane Trust 8 8 PPC Bafati Trust 1 1 PPC SBP Consortium Funding SPV (Pty) Limited 3 3 ^Shares held by these trusts vested to employees, and as a result these trusts have been deconsolidated and are in process of being unwound.




2014Rm

2013Rm

26. RELATED-PARTY-TRANSACTIONS continuedTrade amounts due fromPPC Barnet DRC Trading Company SA 25 – PPC Botswana (Pty) Limited 26 24 Portland Holdings Limited 18 13 PPC Mozambique SA 4 5 PPC Lime Limited 1 1 Safika Cement Holdings Pty Limited 15 – Pronto Holdings Pty Limited 18 –

Amounts due by/(to)Cape Portland Cement Company Limited – (5)PPC Aggregate Quarries (Pty) Limited (50) (44)PPC Lime Limited (81) (42)PPC Ntsika Fund (Pty) Limited 52 54Slurrylink (Pty) Limited (4) (4)Varsrivier Marmer (Pty) Limited – (1)PPC International Holdings Pty Limited 1 376 541Community Service Groups and Strategic Black Partners (refer to note 9) (1 548) (1 547)

Long-term loan (1 520) (1 519) Interest capitalised (28) (28)

The terms and conditions of these transactions are determined on an arm’s length basis.

27. ADDITIONAL DISCLOSURERefer to the group financial statements for additional disclosure on the following:

Accounting policiesCommitmentsDirectors’ remuneration and interestEvents after reporting dateFinancial risk managementForeign exchange gains and lossesRelated-party transactionsRetirement benefit informationShare-based payments


Abridged remuneration report

The remuneration philosophy of the group is fully disclosed in the integrated report, which can be found on www.ppc.co.za. An extract of the remuneration report, with focus on remuneration, incentives and shareholding of the directors and prescribed officers is included in this annual financial report.

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

TGP Variable pay

TotalR000

SalaryR000

Retirement and

medical contributions

R000

Car allowance

R000

Incentive bonus

R000

LTI realised

valueR0001

OtherR000

Discretionarybonus

R000

Executive directorsMMT Ramano 2 899 813 240 – 4 904 2 605 9 463BL Sibiya2 – – – – – – – –

Prescribed officersPL Booysen 1 390 348 323 – 265 3 318 2 647 HN Buthelezi 2 117 259 120 – – 8 483 2 987 JT Claassen3 1 836 354 410 – 370 1 152 548 4 670 AC Lowan 1 249 118 – – – – 329 1 696 KPP Meijer 1 928 592 232 – 423 6 606 3 787 FK Molefe4 1 309 191 – – – – 381 1 881 T Sibisi5 1 433 142 – – – – 412 1 987 JHDLR Snyman 1 489 195 118 – – 3 478 2 283JJ Taljaard 1 965 354 320 – 432 5 479 3 555 RS 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 7321 Arising from the 2011 RSS award, the 2011 FSP with no performance conditions, the final third of the 2009 RSS 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. No salary has been reflected

as remuneration for services as an executive director as the contract starts from 1 October.3 Other payments included a relocation allowance (R152 000) and a payment (R1 000 000) in lieu of transfer cost, duties and fees.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 shares (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.



Remuneration paid to executive directors and prescribed officers in 2013

TGP Variable pay

TotalR000

SalaryR000

Retirement and

medical contributions

R000

Car allowance

R000

Incentive bonusR000

LTI realised

value*R000

OtherR000

Executive directorsP Esterhuysen5 2 721 427 324 – 749 3 2335 7 454

KM Gordhan3 4 916 584 – 2 871 – 2 8 373

MMT Ramano 2 681 894 240 1 589 – 4 5 408

Prescribed officersPL Booysen 1 086 282 318 531 – 5 2 222

JT Claassen 1 480 343 480 641 – 5 2 949

AC Lowan 1 086 103 – 524 – 4 1 717

KPP Meijer 1 874 569 239 710 – 15 3 407

KP Odendaal 1 967 285 71 641 – 4 2 968

JHDLR Snyman 1 464 211 142 763 – 7 2 587

JJ Taljaard 1 903 339 320 934 – 3 3 499

RS Tomes 1 430 315 260 527 – 4 2 536

A Wadee 1 400 253 60 509 – 7 2 229

Past directorsS Abdul Kader1 2 383 340 – – – 989 3 712

SG Helepi2 1 034 169 121 – 1 042 3 153 5 519

P Stuiver4 911 141 75 – – 3 200 4 327

The following directors were not eligible for a short-term incentive bonus in 2013 as they were not in employment at the date of payment in November 2013: S Abdul Kader, P Esterhuysen, SG Helepi and P Stuiver.* Arising from the last tranche of the 2008 LTIP award, the second third of the 2009 LTIP award, the 2009 RSS award and the 2012 FSP award that vested early

for participants who terminated their services. 1 Employed for 10 months of the financial year.2 Employed for 6 months of the financial year.3 Employed for 11 months of the financial year.4 Employed for 3 months of the financial year.5 Refer page 98.


Non-executive directors’ feesNon-executive directors’ fees are as approved by the previous AGM and valid from that date until the next AGM.

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

Board

feesR000

Chairman

feesR000

Committee

TotalR000

Nomin-ations

R000AuditR000

Risk and com-

plianceR000

Remuner-ationR000

Social and

ethicsR000

Specialmeetings

R000DealR000

Other4

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 6 417 1 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..

Total emoluments to non-executive directors for the year ended 30 September 2013 were:

Board

feesR000

Chairman

feesR000

Committee

TotalR000

Nomin-ationsR000

AuditR000

Risk and com-

plianceR000

Remuner-ationR000

Social and

ethicsR000

Specialmeetings

R000Deal

R000

ZJ Kganyago 242 – – 99 – – – 33 33 407

NB Langa-Royds 242 – 55 – – 149 179 81 – 706

AJ Lamprecht 214 – 55 – – – 88 191 32 580

MP Malungani 196 – – – – – 78 97 64 435

SK Mhlarhi 242 – – – – 73 – 81 16 412

B Modise 224 – – 99 83 – – 48 – 454

TDA Ross 224 – – 198 104 – – 95 – 621

J Shibambo 196 – 55 – 211 73 88 81 – 704

BL Sibiya – 877 110 – – – – 113 32 1 132

1 780 877 275 396 398 295 433 820 177 5 451

Abridged remuneration report continued



Interests of executive directors and prescribed officers in share capitalThe 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.

Interests of directors and prescribed officers in BBBEE schemesIn 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 are subject to a lock-in which expired on 15 December 2013. Certain non-executive directors received vested rights in 2008 in a trust owning donated shares which are subject to vesting conditions and a lock-in expiring annually in thirds from 15 December 2012 and expiring on 15 December 2014.

Name 2014 2013

Current directorsMMT Ramano 134 143 –SK Mhlarhi 5 000 5 000

Prescribed officers JHDLR Snyman 24 100 –

Past directors KM Gordhan 1 518 371 977 944P Stuiver 58 800 34 930

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 BEE1 BEE2

Executive directorsMMT Ramano 335 249 372 737

Non-executive directors ZJ Kganyago 95 787 –NB Langa-Royds 95 787 –J Shibambo 95 787 –

Prescribed officers PL 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 384RS Tomes 87 586 200 567

Past directors P Esterhuysen – 34 720KM Gordhan – –SG Helepi 86 524 –


Value of long-term incentivesThe tables below deal with the company’s prior and current long-term incentives as at 30 September 2014.

Award date

Numberallocated

in prioryears

Numberallocatedin current

year

Numberexercised/vested in

currentyear

Numberforfeited

in currentyear

Closingnumber

Grantprice

Price onexercise

date/vesting

price

Exercise/vesting

gainR000

Current unit

valueR*

Value at year end

R000

EXECUTIVE DIRECTORSMMT RamanoShare appreciation rights (RSS)01/08/2011 150 000 – 150 000 – – – 32,69 4 904 28/09/2012 170 000 – – – 170 000 – 28,09 4 77530/09/2013 170 000 – – – 170 000 – 26,68 4 536

490 000 – 150 000 – 340 000 – 9 311

FSP – with performance conditions28/09/2012 96 800 – – – 96 800 – – – –15/03/2013 78 700 – – – 78 700 – – 32,58 2 56418/02/2014 – 128 700 – – 128 700 – – 29,17 3 754

175 500 128 700 – – 304 200 – – 6 318

Total 4 904 15 629

PRESCRIBED OFFICERSPL BooysenShare appreciation rights (LTIP)08/08/2007 30 000 – – – 30 000 43,00 1,38 4117/09/2008 24 000 – – – 24 000 31,80 4,44 10725/09/2009 22 000 – – – 22 000 35,35 3,96 87

76 000 – – – 76 000 235

FSP – no performance conditions30/09/2011 8 900 – 8 900 – – – 29,81 265 16/02/2012 6 500 – – – 6 500 – 31,19 20315/03/2013 6 800 – – – 6 800 – 32,58 22218/02/2014 – 9 900 – – 9 900 – 29,17 289

22 200 9 900 8 900 – 23 200 – 713

FSP – with performance conditions16/02/2012 5 400 – – – 5 400 – – –15/03/2013 7 600 – – – 7 600 – 32,58 24818/02/2014 – 16 600 – – 16 600 – 29,17 484

13 000 16 600 – – 29 600 – 732

Total 265 1 680

HN ButheleziFSP – no performance conditions18/02/2014 – 12 400 – – 12 400 – 29,17 362

FSP – with performance conditions18/02/2014 – 20 700 – – 20 700 – 29,17 604

Total 966




Award date

Numberallocated

in prioryears


year


currentyear

Numberforfeited

in currentyear

Closingnumber

Grantprice

Price onexercise

date/vesting

price

Exercise/vesting

gainR000

Current unit

valueR*

Value at year end

R000

PRESCRIBED OFFICERS continuedJT ClaassenShare appreciation rights (LTIP)08/08/2007 40 000 – – – 40 000 43,00 1,38 5517/09/2008 24 000 – – – 24 000 31,80 4,44 10725/09/2009 26 000 – – – 26 000 35,35 3,96 103

90 000 – – – 90 000 265FSP – no performance conditions30/09/2011 12 400 – 12 400 – – – 29,81 370 16/02/2012 10 200 – – – 10 200 – 31,19 31815/03/2013 10 400 – – – 10 400 – 32,58 33918/02/2014 – 33 353 – – 33 353 – 29,17 973

33 000 33 353 12 400 – 53 953 – 1 630FSP – with performance conditions16/02/2012 12 700 – – _ 12 700 – – –15/03/2013 17 300 – – – 17 300 – 32,58 56418/02/2014 – 21 500 – – 21 500 – 29,17 627

30 000 21 500 – – 51 500 – 1 191Total 370 3 085

AC LowanFSP – no performance conditions15/03/2013 4 800 – – – 4 800 – 32,58 15618/02/2014 – 6 500 – – 6 500 – 29,17 190

4 800 6 500 – – 11 300 – 346FSP – with performance conditions15/03/2013 5 400 – – – 5 400 – 32,58 17618/02/2014 – 10 800 – – 10 800 – 29,17 315

5 400 10 800 – – 16 200 – 491Total 837

KPP MeijerShare appreciation rights (LTIP)08/08/2007 85 000 – – 85 000 – 43,00 17/09/2008 60 000 – – 60 000 – 31,80 25/09/2009 59 000 – – 59 000 – 35,35

204 000 – – 204 000 – FSP – no performance conditions30/09/2011 14 200 – 14 200 – – – 29,81 423 16/02/2012 11 200 – – – 11 200 – 31,19 34915/03/2013 12 300 – – – 12 300 – 32,58 40118/02/2014 – 13 300 – – 13 300 – 29,17 388

37 700 13 300 14 200 – 36 800 – 1 138FSP – with performance conditions16/02/2012 14 000 – – – 14 000 – – –15/03/2013 20 500 – – – 20 500 – 32,58 66818/02/2014 – 22 200 – – 22 200 – 29,17 648

34 500 22 200 – – 56 700 – 1 315

Total 423 2 453


Award date

Numberallocated

in prioryears


year


currentyear

Numberforfeited

in currentyear

Closingnumber

Grantprice

Price onexercise

date/vesting

price

Exercise/vesting

gainR000

Current unit

valueR*

Value at year end

R000

FK MolefeFSP – no performance conditions18/02/2014 – 9 900 – – 9 900 – 29,17 289

FSP – with performance conditions

18/02/2014 – 16 600 – – 16 600 – 29,17 484

Total 773

TR SibisiFSP – no performance conditions18/02/2014 – 10 900 – – 10 900 – 29,17 318

FSP – with performance conditions

18/02/2014 – 18 200 – – 18 200 – 29,17 531

Total 849

JHDLR SnymanShare appreciation rights (LTIP)08/08/2007 25 000 – – – 25 000 47,36 1,38 3517/09/2008 27 000 – – – 27 000 31,80 4,44 12025/09/2009 23 000 – – – 23 000 35,35 3,96 91

75 000 – – – 75 000 245

FSP – no performance conditions16/02/2012 15 500 – – – 15 500 – 31,19 48315/03/2013 8 400 – – – 8 400 – 32,58 27418/02/2014 – 9 000 – – 9 000 – 29,17 263

23 900 9 000 – – 32 900 – 1 020


33 400 15 100 – – 48 500 – 893

Total 2 158




Award date

Numberallocated

in prioryears


year


currentyear

Numberforfeited

in currentyear

Closingnumber

Grantprice

Price onexercise

date/vesting

price

Exercise/vesting

gainR000

Current unit

valueR*

Value at year end

R000

JJ TaljaardShare appreciation rights (LTIP)08/08/2007 100 000 – – 100 000 – 43,00 17/09/2008 63 000 – – 63 000 – 31,80 25/09/2009 62 000 – – 62 000 – 35,35

225 000 – – 225 000 –


37 800 13 100 14 500 – 36 400 – 1 125


34 000 21 900 – – 55 900 – 1 281

Total 432 2 406

RS Tomes (resigned 23 October 2014) (Note 1)Share appreciation rights (LTIP)08/08/2007 33 000 – – – 33 000 43,00 1,38 4617/09/2008 35 000 – – 35 000 – 31,80 25/09/2009 38 000 – – 38 000 – 35,35

106 000 – – 73 000 33 000 46


29 100 12 500 10 800 – 30 800 – 948


26 700 20 800 – – 47 500 – 1 108

Total 322 2 102


Award date

Numberallocated

in prioryears


year


currentyear

Numberforfeited

in currentyear

Closingnumber

Grantprice

Price onexercise

date/vesting

price

Exercise/vesting

gainR000

Current unit

valueR*

Value at year end

R000

PAST DIRECTORSRH Dent (retired 31 December 2010)Share appreciation rights (LTIP)25/09/2009 120 000 – – 120 000 – 35,35

P Esterhuysen (resigned 15 October 2013)Share appreciation rights (LTIP)25/09/2009 120 000 – – 120 000 – 35,35

Share appreciation rights (RSS)25/09/2009 24 300 – 16 875 7 425 – – 30,84 520

FSP – with performance conditions28/09/2012 88 000 – 71 500 16 500 – – 30,84 2 205 15/03/2013 61 300 – 13 622 47 678 – – 30,84 420

149 300 – 85 122 64 178 – –

Total 3 146

KM Gordhan (resigned 22 September 2014)FSP – no performance conditions15/03/2013 25 300 – 25 300 – – – 30,00 759 18/02/2014 – 40 100 40 100 – – – 30,00 1 203

25 300 40 100 65 400 – – –

FSP – with performance conditions15/03/2013 126 600 – – 126 600 – – 18/02/2014 – 200 500 – 200 500 – –

126 600 200 500 – 327 100 – –

Total 1 962

SG Helepi (resigned 14 February 2013)Share appreciation rights (LTIP)08/08/2007 18 000 – – – 18 000 43,00 1,38 2525/09/2009 36 000 – – 36 000 – 35,35

54 000 – – 36 000 18 000

Total 25

* 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.




PPC shareholder analysis

Register date: 26 September 2014Issued share capital: 605 379 648

SHAREHOLDER SPREADNumber of

shareholders %Number of

shares %

1 – 1 000 shares 7 868 53,08 3 413 737 0,561 001 – 10 000 shares 5 754 38,82 18 681 503 3,0910 001 – 100 000 shares 929 6,27 25 409 083 4,20100 001 – 1 000 000 shares 203 1,37 66 730 102 11,021 000 001 shares and over 69 0,46 491 145 223 81,13

Total 14 823 100 605 379 648 100

DISTRIBUTION OF SHAREHOLDERSBanks 136 0,92 184 101 451 30,41Broad-based black ownership 18 0,12 144 786 388 23,92Brokers 80 0,54 10 478 405 1,73Close corporations 142 0,96 574 464 0,09Endowment funds 67 0,45 1 074 623 0,18Individuals 11 690 78,86 28 616 770 4,73Insurance companies 23 0,16 13 456 838 2,22Investment companies 18 0,12 1 684 150 0,28Medical aid schemes 6 0,04 174 927 0,03Mutual funds 224 1,51 103 462 648 17,09Nominees and trusts 1 935 13,05 12 083 961 2,00Other corporations 77 0,52 524 318 0,09Pension funds 127 0,86 85 025 251 14,04Private companies 256 1,73 5 680 293 0,94Public companies 17 0,11 191 659 0,03Sovereign wealth fund 7 0,05 13 463 502 2,22

Total 14 823 100 605 379 648 100

PUBLIC/NON-PUBLIC SHAREHOLDERSNon-public shareholders 21 0,14 217 293 662 35,89Directors’ holdings 2 0,01 139 143 0,02Broad-based black ownership 18 0,12 144 786 388 23,92Strategic holdings (10% or more) 1 0,01 72 368 131 11,95Public shareholders 14 802 99,86 388 085 986 64,11

Total 14 823 100 605 379 648 100

BENEFICIAL SHAREHOLDERS HOLDING 3% OR MORENumber of

shares %

Government Employees Pension Fund 72 368 131 11,95PPC SBP Consortium Funding SPV (Pty) Limited 39 988 926 6,61PPC Masakhane Employee Share Trust 26 757 780 4,42Foord Balanced Fund 21 093 194 3,48


PPC LtdIncorporated in the Republic of South AfricaCompany registration number 1892/000667/06

JSE code: PPCJSE ISIN code: ZAE000170049ZSE code: PPC

DirectorsBL Sibiya (executive chairman), DJ Castle, ZJ Kganyago, NB Langa-Royds, MP Malungani, S Mhlarhi, B Modise, T Moyo*, MMT Ramano (chief financial officer), TDA Ross (lead independent director), J Shibambo *Zimbabwean

Registered office148 Katherine Street, Sandton, South AfricaPO Box 787416, Sandton 2146, South Africa

Transfer secretariesLink Market Services SA (Pty) Limited13th floor, Rennies House19 Ameshoff StreetBraamfonteinSouth AfricaPO Box 4844Johannesburg, South Africa

Company secretaryJHDLR Snyman148 Katherine StreetSandtonSouth Africa

AuditorsDeloitte & ToucheDeloitte PlaceThe WoodlandsWoodlands DriveWoodmead, SandtonPrivate Bag X6Gallo Manor, South Africa

Transfer secretaries: ZimbabweCorpserve (Private) Limited4th floor, Intermarket CentreCorner 1st Street/Kwame Nkrumah AvenueHarare, ZimbabwePO Box 2208Harare, Zimbabwe

Sponsor: South AfricaMerrill Lynch SA (Pty) Limited138 West StreetSandown, SandtonPO Box 651987Benmore, South Africa

Sponsor: ZimbabweImara Edwards Securities (Private) LimitedBlock 2, Tendeseka Office ParkSamora Machel AvenueHarare, ZimbabwePO Box 1475Harare, Zimbabwe

Corporate information

Financial calendar

Financial year endAnnual general meeting

30 September26 January 2015

ReportsInterim results for half-year to March Published MayPreliminary announcement of annual results Published NovemberAnnual financial statements Published December

DividendsInterim Declared May

Paid JuneFinal Declared November

Paid January

BASTION GRAPHICS

A profile of our business

Investment proposition■■ Cash generative■■ Excellent dividend yield

and history■■ Leading producer in

southern Africa with best

geographic spread■■ Strong financial position■■ Financial strength to

explore expansion

opportunities■■ Experienced management

team■■ Exploiting growth

opportunities in Africa

Democratic Republic

of the Congo

Ethiopia

Botswana

South Africa

Rwanda

Zimbabwe Mozambique

Algeria

■■Current operations■■■Current operations and current project■■Current project■■Feasibility study

www.ppc.co.za

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