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Annual financial statements

1	Approval of the fnancial statements
2	Certifcate by company secretary
2	Preparer of the annual fnancial statements
3	Independent auditors’ report
4	Report to shareholders on the activities of the
	audit committee
6	Directors’ report
9	Chief fnancial offcer’s report
12	Accounting policies
23	Judgements made by management
26	Consolidated statement of fnancial position
27	Consolidated income statement
28	Consolidated statement of comprehensive income
29	Consolidated statement of changes in equity
31	Consolidated statement of cash fows
32	Segmental information
34	Notes to the consolidated fnancial statements
74	Subsidiaries and non-controlling interest
77	Company statement of fnancial position
78	Company income statement
79	Company statement of comprehensive income
80	Company statement of changes in equity
81	Company statement of cash fows
82	Notes to the company fnancial statements
99	Abridged remuneration report
108	PPC shareholder analysis
IBC	Corporate information

These consolidated and company annual financial statements were published on 21 December 2015.

APPROVAL OF the ANNUAL FINANCIAL StAteMeNtS

for the year ended 30 September 2015

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 (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB) in issue and effective for the group at 30 September 2015 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.

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 98 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 these annual financial statements.

The consolidated and company annual financial statements were approved by the board of directors on 17 November 2015 and are signed on its behalf by:

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BL Sibiya Chairman 17 November 2015 Sandton

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DJ Castle Chief executive officer

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MMt Ramano Chief financial officer

PPC Ltd Annual financial statements 2015

CeRtIFICAte By COMPANy SeCRetARy

for the year ended 30 September 2015

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.

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JhDLR Snyman

Group company secretary

17 November 2015

PRePAReR OF the ANNUAL FINANCIAL StAteMeNtS

for the year ended 30 September 2015

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

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MMt Ramano Chief financial officer 17 November 2015

PPC Ltd Annual financial statements 2015

INDePeNDeNt AUDItORS’ RePORt

tO the ShARehOLDeRS OF PPC LIMIteD

We have audited the consolidated and separate annual financial statements of PPC Limited set out on pages 12 to 98, which comprise the statement of financial position as at 30 September 2015, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Opinion

In our opinion, the annual financial statements present fairly, in all material respects, the financial position of PPC Limited as at 30 September 2015, and its financial performance and its 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

Directors’ responsibility for the annual financial statements

The company’s directors are responsible for the preparation and fair presentation of these 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 financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these 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.

As part of our audit of the financial statements for the year ended 30 September 2015, we have read the directors’ report, the audit committee’s report and the company secretary’s certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements.

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

Report on other legal and regulatory requirements

As part of our audit of the consolidated and separate annual financial statements for the year ended 30 September 2015, 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.

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Deloitte & touche

Registered auditor Per: B Nyembe Partner 17 November 2015

National executive: LL Bam chief executive; AE Swiegers chief operating officer; GM Pinnock Audit; N Sing risk advisory; NB Kader tax; TP Pillay consulting; S Gwala; B Paas; K Black clients and industries; JK Mazzacco talent and transformation; M Jordan strategy; MJ Comber reputation and risk; TJ Brown chairman of the board.

*Partner and registered auditor.

A full list of partners and directors is available on request.

BBBEE rating: Level 2 contribution in terms of the Chartered Accountancy Profession Sector Code.

Member of Deloitte Touche Tohmatsu Limited.

PPC Ltd Annual financial statements 2015

RePORt tO ShARehOLDeRS ON the ACtIVItIeS OF the AUDIt COMMIttee

for the year ended 30 September 2015

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 ReFeReNCe

The audit committee has adopted formal terms of reference that were updated during the year and approved by the board of directors, and has executed its duties in the past financial year in line with these terms of reference.

StAtUtORy DUtIeS

In executing its statutory duties in the 2015 financial year, the audit committee:

Nominated Mr Nyembe, from the audit firm, Deloitte & Touche (Deloitte), for appointment. In the opinion of the committee, Mr Nyembe was independent of the company
Determined Deloitte’s terms of engagement
Believes that the appointment of Deloitte complies with the relevant provisions of the Companies Act, JSE listings requirements and King III
Developed and implemented a policy setting out the extent of any non-audit services the external auditors may provide to the company or which the external auditors may not provide
Pre-approved all non-audit service contracts with Deloitte

COMPOSItION

The committee consists of four independent non-executive directors:

NAMe QUALIFICAtION PeRIOD SeRVeD	NAMe QUALIFICAtION PeRIOD SeRVeD	NAMe QUALIFICAtION PeRIOD SeRVeD


Tim Ross (chairman) Bridgette Modise Todd Moyo Peter Nelson	CA(SA) CA(SA) CA(ZIM)(SA) CA(SA)	7 4 1 1

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

Received no complaints on the accounting practices and internal audit of the company, the auditing of its financial statements, internal financial controls, or other related matters; however, a letter was received from the JSE in terms of its proactive monitoring process whereby it requested information around disclosures in the 2014 annual financial statements. This query was satisfactorily addressed.

DeLegAteD DUtIeS

In 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:

MeetINgS

The audit committee held five scheduled meetings during the year, with attendance shown below:

31 March 2015 11 May 2015 2 October 2015 9 November 2015 27 November 2015	All present All present All present All present All present

Financial statements

The committee reviewed the annual financial statements, summarised annual financial statements, interim and preliminary announcements, accompanying reports to shareholders and other announcements on the company’s 2015 results to the public.

Integrated reporting

Recommended to the board to engage an external assurance provider on material sustainability issues
Reviewed the disclosure of sustainability issues in the integrated report to ensure it is reliable and does not conflict with the financial information
Recommended the integrated report for approval by the board.

PPC Ltd Annual financial statements 2015

Internal audit

Took responsibility for the performance assessment of Mr Semenya, chief audit executive
Approved the internal audit plan and changes to the plan and satisfied itself that the audit plan makes provision for effectively addressing the critical risk areas of the business
Reviewed internal audit’s compliance with its charter (which was updated during the year and approved by the committee) and considered whether the internal audit function has the necessary resources, budget and standing within PPC to enable it to discharge its functions.

Financial function

The committee has reviewed the expertise, resources and experience of the company’s finance function, and confirms this to shareholders
In making these assessments, we have obtained feedback from both external and internal audit
Based on the processes and assurances obtained, we believe the accounting practices are effective.

Oversight of risk management

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

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.

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 material internal financial controls are effective.

external audit

Evaluated and reported on the independence of the external auditor
Reviewed the quality and effectiveness of the external audit process
Based on our satisfaction with the results of activities outlined above, recommended to the board that Deloitte should be reappointed for 2015, with Mr Nyembe nominated as the registered auditor
Determined the fees to be paid and the terms of engagement of the auditor
Ensured the appointment of the auditor complies with the Companies Act and other relevant legislation.

Financial director

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

Combined assurance

During the year, further progress has been made to align the combined assurance model with the enhanced risk framework of the group. This review will only be completed in 2016.

Regulatory compliance

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

On behalf of the audit committee

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tim Ross Chairman 17 November 2015

PPC Ltd Annual financial statements 2015 5

DIReCtORS’ RePORt

for the year ended 30 September 2015

The directors have pleasure in presenting their report on the annual financial statements of the company and of the group for the year ended 30 September 2015.

BUSINeSS ACtIVItIeS

PPC Ltd, its subsidiaries, joint ventures and associates, operate in Africa as producers of cementitious, aggregates, readymix, lime and limestone, fly ash and packaging materials.

The principal activities of the company and its subsidiaries remain unchanged from the previous year.

ReVIeW OF OPeRAtIONS

A comprehensive review of operations is detailed in the attached annual report.

StAteD CAPItAL

The issued share capital of the company at 30 September 2015 was 605 379 648 shares of no par value (2014: 605 379 648 shares of no par value).

In terms of the group’s long-term employee incentive scheme, R24 million (2014: R53 million) of shares were purchased on the open market in terms of the current year’s allocation and are treated as treasury shares during the vesting period of the award. The 2012 awards of R23 million or 531 179 shares (2011 awards: R16 million or 619 457 shares) vested during the year and are no longer treated as treasury shares.

A portion of shares from PPC’s first broad-based black economic empowerment (BBBEE) transaction of R9 million (287 361 shares) (2014: 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 165 million (2014: debit R1 173 million).

Details of shares authorised, issued and unissued at 30 September 2015 are disclosed in note 10 to the consolidated financial statements.

Except for the long-term share incentive scheme purchases, the company did not purchase any of its own shares during the year under review.

Details relating to the beneficial shareholders owning more than 5% of the issued share capital of the company appear in the “PPC Shareholder Analysis” section on page 108.

DIReCtORS’ INteReStS IN the ISSUeD ShARe CAPItAL OF the gROUP

Details of the beneficial holdings of directors of the company and their families in the ordinary share capital of the company are given in the remuneration report included in these annual financial statements.

Certain directors and non-executive directors have indirect shareholding in the company following the completion of the BBBEE transactions completed in 2008 and 2012. Details thereof are also provided in the abridged remuneration report on page 99.

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

SUBSIDIARy COMPANIeS

When Safika Cement was purchased in December 2013, put options were concluded with the non-controlling shareholders whereby their shareholding would be sold to PPC at prescribed dates. In July 2015, PPC purchased one of the non-controlling shareholder’s 21,1% shareholding for R108 million. Post the acquisition of these shares, PPC now owns 85,4% of the shares in Safika Cement. For details on the outstanding put options, refer note 14 in the consolidated financial statements.

As noted in our 2015 interim commentary, our local partner in the DRC, Barnet Group SARL (Barnet), completed its subscription into PPC Barnet DRC Holdings (DRC HoldCo), the holding company for our DRC-based operating entities. In September 2015, the International Finance Corporation (IFC) subscribed for 10% of the shareholding in DRC HoldCo for US$11 million. Post Barnet and the IFC’s subscription, PPC now holds 69% of DRC HoldCo.

Details of the group’s subsidiaries can be found on page 74 in the consolidated financial statements.

eQUIty ACCOUNteD INVeStMeNtS

PPC is in the process of selling its 25% shareholding in Afripack Limited, and as a result this investment has been reclassified from equity accounted investments to non-current assets held for sale. It is anticipated that the transaction will be finalised during the first half of the 2016 calendar year.

RegISteR OF MeMBeRS

The register of members of the company is open for inspection to members and the public, during normal office hours, at the offices of the company’s transfer secretaries, Computershare Services (Pty) Limited, or at Corpserve Pvt Limited (Zimbabwe).

Further details can be obtained in notes 4 and 6 in the consolidated financial statements.

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

6 PPC Ltd Annual financial statements 2015

SPeCIAL ReSOLUtIONS

At the annual general meeting held on 26 January 2015 the following special resolutions were approved:

Granting approval for the company to enter into intercompany 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.

SPeCIAL ReSOLUtIONS PASSeD By SUBSIDIARy COMPANIeS

No special resolutions were passed by subsidiaries of the company.

DIVIDeNDS

DIVIDeNDS	DIVIDeNDS
Cents per share Number Description Declaration date Record date Payment date 2015 2014


224 Final 17 November 2015 8 January 2016 11 January 2016 33 223 Interim 18 May 2015 12 June 2015 15 June 2015 24	76 38

The full year dividend of 57 cents per share represented a 2,3 times cover, which is at the upper band of the company’s dividend policy of 1,8 to 2,5 times cover.

In future, the company’s dividend policy will take into account its growth considerations as well as prudency regarding its capital structure, and will therefore have a flexible dividend policy with regard to the quantum and form of dividends instead of a cash dividend policy based on a stated dividend cover.

PROPeRty, PLANt AND eQUIPMeNt

At 30 September 2015 the group’s net investment in property, plant and equipment amounted to R10 648 million (2014: R7 223 million), details of which are set out in note 1 to the consolidated financial statements. Significant investments have been made to increase our footprint beyond South Africa resulting in R1 709 million, R311 million and R478 million being spent in DRC, Rwanda and Zimbabwe respectively. Included in property, plant and equipment is capital work in progress of R2 814 million (2014: R1 248 million) relating to the projects in the DRC, Zimbabwe and South Africa.

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.

BORROWINgS

At 30 September 2015 total group borrowings amounted to R8 221 million (2014: R6 091 million) with the increase in borrowings being driven by the group’s African expansion strategy, with nonSouth African borrowings amounting to R2 357 million (2014: R653 million).

The company’s covenants, imposed in 2008 for our first BBBEE transaction, have been renegotiated. The new covenant levels now aligns with the group’s African growth strategy, as the funders have agreed to exclude non-recourse project finance from the definition of PPC’s indebtedness.

During the year, Standard & Poor’s Ratings Services lowered its longterm South Africa national scale rating for PPC to zaA from zaA+, but affirmed its “zaA-2” short-term South Africa national scale rating, as the funders have agreed to exclude non-recourse project finance from the definition on PPC’s indebtedness.

The company is in the process of restructuring its first BBBEE transaction, which is anticipated to have a favourable impact on the overall borrowing position of the group. Details of the restructure will be communicated to shareholders during the first half of the 2016 calendar year.

Certain of the company’s properties remain the subject of land claims. The company continues discussions with the Land Claims Commissioner and is 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 on the group’s borrowings can be found in note 13 to the consolidated financial statements.

Details of the group’s commitments of R4 814 million (2014: R4 034 million) can be found in note 31 to the consolidated financial statements.

PPC Ltd Annual financial statements 2015 7

DIReCtORS’

RePORt Continued

for the year ended 30 September 2015

eVeNtS AFteR RePORtINg DAte

There are no events that occurred after the reporting date that may have a material impact on the group’s reported financial position at 30 September 2015.

COMPANy SeCRetARy

The company secretary of PPC Ltd is Mr JHDLR Snyman. His business and postal addresses appear in the corporate information section.

AUDIt COMMIttee

gOINg CONCeRN

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

DIReCtORS

The directors in office at the date of this report in the corporate information section.

At the annual general meeting (AGM) held on 26 January 2015, Ms N Goldin and Messrs TJ Leaf-Wright, T Mboweni, CH Naude, PG Nelson and D Ufitikirezi were elected as directors of the company while Mr DJ Castle was re-elected as a director. Mr J Shibambo and Ms NB Langa-Royds retired from the board with effect from conclusion of the AGM.

The 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.

COMPetItION COMMISSION

In 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.

AUDItORS

Deloitte & Touche were reappointed as auditors to the company at the annual general meeting held on 26 January 2015.

yeAR-eND

The board has approved the change in financial year-end from September to March, with the first March year-end being March 2016. The change was necessitated by the growth in the business and increasing complexity.

With effect from 22 September 2015, Dr D Ufitikirezi resigned as a director.

The following directors are required to retire by rotation in terms of the memorandum of incorporation. Being eligible Messrs TDA Ross and SK Mhlarhi offer themselves for re-election and the nominations committee has recommended their re-election:

TDA Ross
MP Malungani
SK Mhlarhi
BL Sibiya.

8 PPC Ltd Annual financial statements 2015

ChIeF FINANCIAL OFFICeR’S RePORt

Overview

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

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

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

group strategy.

tryphosa Ramano Chief financial officer

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

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income statement
2015 2014
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enue (Rm) 9 227 enue earned from rest of Africa (%) 28 TDA (Rm) 2 362 adline earnings per re (cents) 145 rmalised headline nings per share nts) 149	9 039 27 2 358 179 175
PPC LtdAnnual fnancial

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

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

PPC Ltd Annual financial statements 2015 9

ChIeF FINANCIAL OFFICeR’S RePORt Continued

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FINANCIAL

Revenue from our rest of Africa portfolio grew 8% to R2,6 billion

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

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

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

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

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

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

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

Statement of financial position

2015 Rm	2014 Rm


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

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

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

10 PPC Ltd Annual financial statements 2015

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

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

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

Borrowings 2015	2014


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

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

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

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

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

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

Cash flow

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2015 2014
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sh generated from erations before rking capital vements (Rm) 2 416 working capital vement (Rm) 300 sh generated from erations after rking capital vements (Rm) 2 716 sh conversion ratio 1,14	2 472 111 2 583 1,10

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

Dividends

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

Looking ahead

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

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

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

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

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

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

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MMt Ramano Chief financial officer 17 November 2015

PPC Ltd Annual financial statements 2015 11

ACCOUNtINg POLICIeS

for the year ended 30 September 2015

BASIS OF PRePARAtION

The 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 2015 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 using the historical cost convention except for certain financial instruments and liabilities that are stated at fair value.

The basis of preparation is consistent with the prior year except where the group has adopted new or revised accounting standards, amendments and interpretations of those standards, which became effective during the year in review.

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

The 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.

IFRIC 21 Levies

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

Investment Entities (amendments to IFRS 10, IFRS 12 and IAS 27)

The amendment to the standards provides an exemption for “investment entities” (as defined) from the consolidation of particular subsidiaries and instead requires 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 .

The amendment further requires the following:

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
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).

IAS 32 (amendment) Offsetting Financial Assets and Financial Liabilities: Presentation

The 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 39 (amendment) Novation of Derivatives and

Continuation of Hedge Accounting

The 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

The interpretation provides guidance on when to recognise a liability for a levy imposed by 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.

The interpretation 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.

The annual improvements have made a number of amendments to IFRS as follows:

Annual improvements to IFRS 2010 – 2012

IFRS 2 Share-Based Payment – Amends the definitions of “vesting condition” and “market condition” and adds definitions for “performance condition” and “service condition”
IFRS 3 Business Combinations – Requires contingent consideration that is classified as an asset or a liability to be measured at fair value at each reporting date
IFRS 8 Operating Segments – 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 Fair Value Measurement – Clarifies that issuing IFRS 13 and amending IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement did not remove the ability to measure certain short-term receivables and payables on an undiscounted basis (amends basis for conclusions only)
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets – 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 Related Party Disclosures – Clarifies how payments to entities providing management services are to be disclosed.

12 PPC Ltd Annual financial statements 2015

Annual improvements to IFRS 2011 – 2013

IFRS 1 First-time Adoption of IFRS – Clarifies which versions of IFRS can be used on initial adoption (amends basis for conclusions only)
IFRS 3 Business Combinations – 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 Fair Value Measurement – Clarifies the scope of the portfolio exception in paragraph 52
IAS 40 Investment Property – Clarifies the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property.

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

IAS 36 (amendment) Recoverable Amount Disclosures for Non-Financial Assets

The amendment reduces the circumstances in which the recoverable amounts of assets or cash-generating units are required to be disclosed. It clarifies the disclosures required and introduces an explicit requirement to disclose the discount rate used in determining impairment (or reversals) where the recoverable amount (based on fair value less costs of disposal) is determined using a present value technique.

The amendment has a disclosure impact on the group, and as a result, the required disclosures in terms of the main classes affected and main events and circumstances for impairment losses recognised have been made and retrospectively applied.

The group has not applied the following new and revised standards and interpretations that have been issued but are not yet effective:

Amendment to IAS 1 Presentation of Financial Statements : Disclosure Initiative
Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities : Applying the Consolidation Exception
Amendment to IFRS 11 Accounting for Acquisition of Interests in Joint Operations
Amendment to IAS 16 and IAS 41 Agriculture: Bearer Plants
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation
Amendment to IAS 27 Equity Method in Separate Financial Statements
IFRS 14 Regulatory Deferral Accounts
Annual improvements 2012 – 2014 cycle
IFRS 15 Revenue from Contracts with Customers
IFRS 9 Financial Instruments .

The group does not anticipate that the amendments will have a material impact on the consolidated financial results.

Republic of the Congo and Mozambique where local accounting standards are not in line with IFRS as it is a requirement to comply with OHADA and Primavera respectively.

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 the Pronto group of companies (Pronto) and the DRC incorporated subsidiaries, have the same financial year-end as the company. The financial year-end of the Pronto entities will be amended to align with PPC in the upcoming year as the group intends changing its year-end to March. 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 holding company and/or subsidiaries of the holding company and other fellow subsidiaries are eliminated in full.

UNDeRLyINg CONCePtS

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

Financial assets and financial 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 financial liabilities is disclosed in the notes to the consolidated financial statements.

Changes in accounting policies are accounted for in accordance with the transitional provisions noted in the applicable accounting 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.

BASIS OF CONSOLIDAtION

The group consolidates all of its subsidiaries. Accounting policies are applied consistently in all group companies except for CIMERWA who revalues its property, plant and equipment and the Democratic

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

PPC Ltd Annual financial statements 2015 13

ACCOUNtINg POLICIeS Continued

for the year ended 30 September 2015

ReCOgNItION OF ASSetS AND LIABILItIeS

Assets 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 LIABILItIeS

Financial 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 settled 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 during more than one year. 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 provides 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 the inventory produced and the 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 direct 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 required by local legislation. Gains and losses on qualifying cash flow hedges attributable to that asset are also included in the cost.

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 used during the period:

Land	Not depreciated
Capital work in progress	Not depreciated
Buildings	Straight line	up to 30 years
Plant	Straight line	up to 35 years
Vehicles	Straight line	up to 10 years
Furniture and equipment	Straight line	up to 6 years
Mineral rights	Straight line	Estimated life of
		reserve
Leasehold 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.

The stripping activity asset is depreciated over the expected useful life of the identified component of the orebody that becomes more accessible as a result of the stripping activity.

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 PPe

Project 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 repayment in units of currency expected and is thus

14 PPC Ltd Annual financial statements 2015

not translated at each reporting date. On the portion of any invoice for PPE that is offset by the advance payment, the amount capitalised to PPE is recorded at the historical carrying amount of the advance payment.

Advance payments for PPE are classified as a non-current asset as the prepayment will be recycled to PPE.

FACtORy DeCOMMISSIONINg AND QUARRy RehABILItAtION

Group companies restore mine and processing sites at the end of their productive lives to conditions acceptable and prescribed by local regulations and consistent with the group’s environmental policies.

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’ post-mining operations.

The expected cost of decommissioning or restoration, 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 is included with finance costs (time value if 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 to the respective asset or recognised in profit or loss as appropriate.

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 ASSetS

An intangible asset is an identifiable non-monetary asset without physical substance, which is not integrated with a tangible asset and comprises brands, mineral reserves, patents, trademarks, customer relationships, 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. If assessed as having an indefinite useful life, intangible assets are not amortised but tested for impairment annually and impaired if required. If assessed as having a finite useful life, intangible assets are amortised over its useful life 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 not, 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.

gOODWILL

The 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.

exPLORAtION COSt

The group expenses all exploration and evaluation costs until management concludes that future economic benefits are more likely than not of being realised. In evaluating if costs incurred meet the criteria to be capitalised, sources of information are used depending on the level of exploration undertaken.

While the criteria for determining capitalisation is based on the “probability” of future economic benefits, the information that management uses to make that determination depends on the level of exploration.

Goodwill arising on the acquisition of a subsidiary is recognised separately as an intangible asset and is stated at cost less impairment losses. Goodwill is not amortised but tested for impairment annually 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 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.

PPC Ltd Annual financial statements 2015 15

ACCOUNtINg POLICIeS Continued

for the year ended 30 September 2015

BUSINeSS COMBINAtIONS

On acquisition date, fair values are attributed to the identifiable assets, liabilities and contingent liabilities. A 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 the statement of changes 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 and the services received.

IMPAIRMeNt OF ASSetS

At each reporting date the carrying amount of tangible and intangible assets are assessed to determine whether there is any indication that those assets may have suffered impairment. 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, its 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 in prior years. 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 VeNtUReS

Investments 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 SUBSIDIARIeS

The 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 tRUStS

The 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 SPVs, thus they are controlled by PPC. These entities are consolidated until the date that effective control ceases.

INteReStS IN ASSOCIAteS

The 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 the disposal date, except when the investment is classified as held for sale, in which case it is accounted for as a non-current asset 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. 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

16 PPC Ltd Annual financial statements 2015

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 VeNtUReS

Joint 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, described under interest in associates above.

available-for-sale financial asset. 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 LIABILItIeS

Financial 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 loss

Financial 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 cost

FINANCIAL ASSetS

Financial 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 investments

Investments 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 loss

Financial assets are classified as fair value through profit or loss where the financial asset is either held for trading or is designated as 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 receivables

Trade 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 where recoverability is doubtful. 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 assets

Investments 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 a non-current

Financial 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 INStRUMeNtS

The 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 OPtIONS

Put options granted to non-controlling shareholders of PPC subsidiaries entitle the non-controlling shareholders to sell their interest, or a part thereof, in the subsidiary at future dates to PPC.

In such cases, 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, noncontrolling interest is reduced by the initial present value recorded and is not adjusted until the settlement of the put option.

Time value of money adjustments are recorded in respect of this liability within finance costs using the effective interest method. The estimated future purchase price is fair valued at each reporting date and any change 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.

PPC Ltd Annual financial statements 2015 17

ACCOUNtINg POLICIeS Continued

for the year ended 30 September 2015

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.

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 improvements

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 in 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 or other carrying amount 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
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 and loss.

Leasehold 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 lessor

Rental 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 PAyMeNtS

For 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 sharebased 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.

LeASINg

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

In the capacity of a lessee

Finance 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 date of acquisition. Finance costs represent the difference between the total leasing commitments and the fair value of the assets acquired. Finance costs 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.

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 over the vesting period.

18 PPC Ltd Annual financial statements 2015

equity settled

Equity 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, based on management’s best estimate.

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.

INVeNtORIeS

Inventories 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 discount 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 SALe

Non-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.

empowerment and management incentive transactions

To the extent that an entity grants shares or share options in a BBBEE, indigenisation (empowerment) or management incentive transaction and the 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 the profit or loss in the period in which the transaction becomes effective. Where the empowerment and 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 share or share option.

DeFeRReD tAx ASSetS

A 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 the tax rates that have been enacted or substantially enacted at reporting date.

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. From the date that an equity accounted investment is classified as held for sale, the equity accounted earnings are not provided for.

CASh AND CASh eQUIVALeNtS

Cash 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 as restricted.

PPC Ltd Annual financial statements 2015 19

ACCOUNtINg POLICIeS Continued

for the year ended 30 September 2015

DeFeRReD tAx LIABILIty

A deferred tax liability represents the amount of income taxes payable in future periods in respect of taxable temporary differences.

and risks for which future cash flow estimates have not been adjusted.

tReASURy ShAReS

A deferred tax liability 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.

Shares 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 is 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.

DeFINeD CONtRIBUtION RetIReMeNt PLANS

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

DeFINeD BeNeFIt POSt-eMPLOyMeNt heALthCARe BeNeFItS

The 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 at each reporting period.

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.

Dividends received on treasury shares are eliminated on consolidation.

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

DIVIDeNDS

Dividends 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 the forfeitable share plan 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 paid is recognised as an expense.

ReVeNUe

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.

PROVISIONS

Provisions 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

Revenue represents the gross inflow of economic benefits during the period arising in the course of the 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 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.

20 PPC Ltd Annual financial statements 2015

eMPLOyee BeNeFIt COStS

The 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 service that increases 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.

exCePtIONAL IteMS

Exceptional 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, subsidiaries, other non-current assets, impairments of capital items and goodwill and other items identified by management as warranting separate disclosure.

tAx

Income 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.

BORROWINg COStS

Borrowing 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 use as intended by management.

To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to the expenditures on that qualifying asset. The capitalisation rate shall be the weighted average of the borrowing costs applicable to the borrowings that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining the qualifying plant.

All other borrowing costs are expensed in the period in which they are incurred.

Current tax

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

Deferred tax

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

DISCONtINUeD OPeRAtIONS

The 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.

tRANSACtION COStS

Transaction 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.

Transaction costs of an equity transaction are deducted against equity. Transaction costs related to an issue of a compound financial instrument are allocated to the liability and equity components in proportion to the allocation of proceeds.

INVeStMeNt INCOMe

Interest 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.

FOReIgN CURReNCy tRANSLAtIONS

The 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 foreign 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 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 differences are recognised in profit or loss.

PPC Ltd Annual financial statements 2015 21

ACCOUNtINg POLICIeS Continued

for the year ended 30 September 2015

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 the transaction occurred.

Resulting exchange 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 DAte

Recognised 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 FIgUReS

Comparative 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.

The group evaluates the performance of its reportable segments on various measures, including revenue, EBITDA and net profit, together with various financial performance measurements. The group accounts for intersegment 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:

Cement

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

Lime

The 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 readymix

The aggregates 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 was included in this segment from the effective date of consolidation of Pronto, being July 2014.

OPeRAtINg SegMeNt INFORMAtION

Reporting segments

The 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.

Other

Comprises the various consolidated trusts and trust funding SPVs relating to the company’s BBBEE transactions.

22 PPC Ltd Annual financial statements 2015

JUDgeMeNtS MADe By MANAgeMeNt

for the year ended 30 September 2015

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.

The level of capital expenditure incurred compared to the construction cost;
Completion of a reasonable period of testing of the plant and equipment;
The plant has been turned over to operations from the construction team;
A specified percentage of design capacity for the plant has been achieved over a continuous period;
The ability to produce the product in a saleable form and within specifications;
The ability to sustain on-going production over a certain period.

ReSeRVeS eStIMAteS

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 VALUeS

Property, 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 reassessing asset lives, factors such as technological innovation, product lifecycles, life-of-mine and maintenance programmes are taken into account.

Except for Pronto Readymix, 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.

COStS tO Be CAPItALISeD tO A PROJeCt

Certain costs may not qualify to be recognised as assets in their own right but may satisfy the directly attributable criteria. Thus, judgement is required in applying the recognition criteria and the projectspecific circumstances.

Significant judgement is also required to identify if incidental costs earned during the testing and ramp-up period should be recognised against the asset.

COMMISSIONINg DAte

The phase of each construction project is assessed to determine when the plant starts operating. The commissioning date is the date when the plant is in a condition necessary for it to be capable of operating in the manner intended by management.

The criteria used to assess the commissioning date are determined by the unique nature of each plant. Various criteria are considered to assess when the plant is substantially complete and ready for its intended use and moves into the production phase. Some of the criteria applied include, but are not limited to, the following:

Reserves are estimates of the amount of ore that can be economically and legally extracted from our mining properties. Reserves and mineral resource estimates are based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the orebody, and require geological judgements to interpret the data.

The estimation of recoverable reserves is based upon factors such as estimates of selling prices, future capital requirements and production costs along with geological assumptions and judgements made in estimating the size and grade of the orebody.

Changes in the reserve or resource estimates may impact the carrying value of exploration and evaluation assets, mine properties, PPE, goodwill, provision for rehabilitation, recognition of deferred taxation assets and depreciation and amortisation charges.

WASte StRIPPINg COStS

The 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.

BUSINeSS COMBINAtIONS

On 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 intangible assets with indefinite lives, including goodwill, are not amortised, which could therefore result in differing amortisation charges.

Majority of the assets making up the project are substantially complete and ready for use;

PPC Ltd Annual financial statements 2015 23

JUDgeMeNtS MADe By MANAgeMeNt Continued

for the year ended 30 September 2015

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

regarding economic growth, interest, inflation and tax rates and the competitive environment.

VALUAtION OF FINANCIAL INStRUMeNtS

gOODWILL AND INtANgIBLe ASSetS WIth INDeFINIte USeFUL LIVeS

Goodwill 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.

The 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.

IMPAIRMeNt OF tRADe ReCeIVABLeS

The 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.

IMPAIRMeNt OF ASSetS

PPE and intangible assets with definite useful lives 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, the company determines the recoverable amount of the cash-generating unit to which the asset belongs.

DeFeRReD tAxAtION ASSetS

Deferred taxation 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

FAIR VALUe OF ShARe-BASeD PAyMeNtS

Fair value used in calculating the amount to be expensed as a sharebased 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 plan incentive schemes and sharebased 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

OBLIgAtIONS

Estimating 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 VALUAtIONS

Actuarial valuations of employee benefit obligations under the now closed defined healthcare benefit plans are based on assumptions

24 PPC Ltd Annual financial statements 2015

which include employee turnover, mortality rates, discount rates, healthcare inflation, the rate of compensation increases and current market conditions.

PUt OPtIONS

Following the IFC subscription into PPC Barnet DRC Holdings in September 2015, the group now has exposure to two separate put options. 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.

INCOMe tAxeS

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

AVeRAge tRANSLAtION RAteS

CONSOLIDAtION OF SPeCIAL PURPOSe VehICLeS

Special 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, have been included in group borrowings on consolidation.

WeIghteD AVeRAge NUMBeR OF ShAReS

Using 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, diluted and headline earnings per share.

Income 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.

CONtINgeNt LIABILItIeS

A 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. 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.

SOURCeS OF eStIMAtION UNCeRtAINty

There 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.

PPC Ltd Annual financial statements 2015 25

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 September 2015

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2015 2014
Notes Rm Rm
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ASSETS Non-current assets Property, plant and equipment 1 Goodwill 2 Other intangible assets 3 Equity accounted investments 4 Other non-current assets 5 Deferred taxation assets 11 Non-current assets held for sale 6 Current assets Inventories 7 Trade and other receivables 8 Cash and cash equivalents 9	12 202	8 938
	10 648 254 772 125 355 48	7 223 268 681 223 534 9
	76 2 979	– 2 637
	1 029 1 232 718	894 1 180 563

Total assets	15 257	11 575
EQUITY AND LIABILITIES Capital and reserves Stated capital 10 Other reserves Retained proft	(1 165) 1 402 2 406	(1 173) 733 2 255
Equity attributable to shareholders of PPC Ltd Non-controlling interests	2 643 521	1 815 603
Total equity Non-current liabilities Deferred taxation liabilities 11 Provisions 12 Long-term borrowings 13 Other non-current liabilities 14 Current liabilities Short-term borrowings 15 Trade and other payables and short-term provisions 16	3 164 8 813	2 418 7 186
	1 059 400 6 711 643	1 030 374 5 740 42
	3 280	1 971
	1 510 1 770	351 1 620

Total equity and liabilities	15 257	11 575

26 PPC Ltd Annual financial statements 2015

CONSOLIDATED INCOME STATEMENT

for the year ended 30 September 2015

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2015 2014
Notes Rm Rm
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Revenue 9 227 Cost of sales 6 437	9 039 6 266
Gross proft 2 790 Administration and other operating expenditure 1 130	2 773 1 030
Operating proft before item listed below: 1 660 Empowerment transactions IFRS 2 charges 43*	1 743 38
Operating proft 17 1 617 Fair value adjustments on fnancial instruments 18 22 Finance costs 19 518 Investment income 20 28	1 705 38 505 53
Proft before equity accounted earnings and exceptional adjustments 1 149 (Loss)/earnings from equity accounted investments 4 (16) Impairments 21 (81) Other exceptional adjustments 21 –	1 291 24 (111) 1
Proft before taxation 1 052 Taxation 22 391	1 205 356
Proft for the year 661	849
Attributable to: Shareholders of PPC Ltd 698 Non-controlling interests (37)	840 9
661	849
Earnings per share (cents) 23 Basic 133 Diluted 131	160 158

Comprise BBBEE, Zimbabwe indigenisation and DRC IFRS2 charges.

PPC Ltd Annual financial statements 2015 27

CONSOLIDATED STATEMENT OF COMPREhENSIvE INCOME

for the year ended 30 September 2015

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Foreign Available- Total
currency for-sale compre-
translation financial hedging Retained hensive
reserve assets reserve profit income
Rm Rm Rm Rm Rm
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2015 Proft for the year Items that will be reclassifed to proft or loss Revaluation of available-for-sale fnancial asset Taxation on revaluation of available-for-sale fnancial asset Effect of cash fow hedges Taxation on effect of cash fow hedges Translation of foreign operations Other comprehensive income net of taxation	– – – 661 661 751 (3) 27 – 775
	– (7) – – (7) – 3 – 3 – – 38 – 38 – – (11) – (11) 751 1 – – 752
	751 (3) 27 – 775
Total comprehensive income	751 (3) 27 661 1 436
Attributable to: Shareholders of PPC Ltd Non-controlling interests
	618 (3) 27 698 1 340 133 – – (37) 96

2014 Proft for the year Items that will be reclassifed to proft or loss Revaluation of available-for-sale fnancial asset Taxation on revaluation of available-for-sale fnancial asset Effect of cash fow hedges Translation of foreign operations Other comprehensive income net of taxation	– – – 849 849 255 47 7 – 309
	– 58 – – 58 – (11) – – (11) – – 7 – 7 255 – – – 255
	255 47 7 – 309
Total comprehensive income	255 47 7 849 1 158
Attributable to: Shareholders of PPC Ltd Non-controlling interests
	214 47 7 840 1 108 41 – – 9 50

28 PPC Ltd Annual financial statements 2015

CONSOLIDATED STATEMENT OF ChANGES IN EQUITY

for the year ended 30 September 2015

	State capita R	d l m Foreign currency trans- lation reserve Rm Available- for-sale fnancial assets Rm hedging reserve Rm Equity compen- sation reserve Rm Retained proft Rm Equity attri- butable to share- holders of PPC Ltd Rm Non- control- ling interests Rm Total equity Rm Other reserves


2015 Balance at beginning of the year Movement for the year Dividends declared IFRS 2 charges Put option recognised on non-controlling shareholder investment in subsidiary Recognition of non-controlling interest in subsidiary Total comprehensive income/(loss) Transactions with non-controlling shareholders recognised directly in equity Treasury shares purchased in terms of the FSP incentive scheme Vesting of certain shares held by BBBEE 1 entities Vesting of certain FSP incentive scheme awards	(1 17	3) 416 84 – 233 2 255 1 815 603 2 418 8 618 (3) 27 27 151 828 (82) 746
	(2 2	– – – – – (540) (540) (19) (559) – – – – 59 – 59 – 59 – – – – – – – (422) (422) – – – – – – – 256 256 – 618 (3) 27 – 698 1 340 96 1 436 – – – – – (7) (7) 7 – 4) – – – – – (24) – (24) 9 – – – (9) – – – – 3 – – – (23) – – – –

Balance at 30 September 2015	(1 16	5) 1 034 81 27 260 2 406 2 643 521 3 164

PPC Ltd Annual financial statements 2015 29

CONSOLIDATED STATEMENT OF ChANGES IN EQUITY Continued

for the year ended 30 September 2015

	Stated capital Rm	Un- realised surplus on reclassi- fcation of plant Rm Foreign currency trans- lation reserve Rm Available- for-sale fnancial assets Rm hedging reserve Rm Equity compen- sation reserve Rm Retained proft Rm Equity attri- butable to share- holders of PPC Ltd Rm Non- control- ling interests Rm Total equity Rm Other reserves


2014 Balance at beginning of the year Movement for the year Acquisitions of subsidiary companies Dividends declared IFRS 2 charges Put option liabilities recognised on acquisition of subsidiary company Total comprehensive income Transfer to retained proft Treasury shares purchased in terms of the FSP incentive scheme Vesting of certain shares held by BBBEE 1 entities Vesting of certain FSP incentive scheme awards	(1 236) 63	1 202 37 (7) 306 2 257 1 560 582 2 142 (1) 214 47 7 (73) (2) 255 21 276
	– – – – – – (53) 100 16	– – – – – – – 140 140 – – – – – (848) (848) (32) (880) – – – – 48 – 48 – 48 – – – – – – – (137) (137) – 214 47 7 – 840 1 108 50 1 158 (1) – – – (5) 6 – – – – – – – – – (53) – (53) – – – – (100) – – – – – – – – (16) – – – –

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

30 PPC Ltd Annual financial statements 2015

CONSOLIDATED STATEMENT OF CASh FLOWS

for the year ended 30 September 2015

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2015 2014
Notes Rm Rm
----- End of picture text -----


CASh FLOWS FROM OPERATING ACTIvITIES Proft before taxation and equity accounted earnings 1 068 *Adjustments for:* Amortisation of intangible assets 3 90 IFRS 2 charges 59 Depreciation 1 612 Dividends received 20 (11) Finance costs 19 518 Gross impairments and other exceptional adjustments 21 81 Interest received 20 (17) Other non-cash fow items 16	1 181 72 49 543 (18) 505 110 (35) 65
Operating cash fows before movements in working capital 2 416 Movements in inventories (68) Movements in trade and other receivables 156 Movements in trade and other payables and provisions 212	2 472 101 143 (133)
Cash generated from operations 2 716 Finance costs paid 25 (408) Dividends received 20 11 Interest received 20 17 Taxation paid 26 (489)	2 583 (426) 18 35 (499)
Cash available from operations 1 847 Dividends paid 27 (559)	1 711 (880)
Net cash infow from operating activities 1 288	831
CASh FLOWS FROM INvESTING ACTIvITIES Acquisitions of equity accounted investments 4 – Acquisitions of subsidiary companies 28 – Acquisition of additional shares in subsidiary 14 (108) Investments in intangible assets 3 (36) Investments in property, plant and equipment 29 (2 856) Movements in fnancial assets 30 – Proceeds from disposal of property, plant and equipment 5	(3) (662) – (63) (2 119) 3 4
Net cash outfow from investing activities (2 995)	(2 840)
Net cash outfow before fnancing activities (1 707)	(2 009)
CASh FLOWS FROM FINANCING ACTIvITIES Net long-term borrowings raised 660 Net short-term borrowings raised/(repaid) 1 136 Proceeds raised from bond issuance 13 – Purchase of shares in terms of FSP incentive scheme (24)	590 (389) 1 750 (53)
Net cash infow from fnancing activities 1 772	1 898
Net increase/(decrease) in cash and cash equivalents 65 Cash and cash equivalents at the beginning of the year 563 Cash and cash equivalents acquired on acquisitions of subsidiary companies 28 – Impact of foreign exchange rate movements on opening cash and cash equivalents 90	(111) 492 149 33
Cash and cash equivalents at end of the year 9 718	563
Cash earnings per share (cents) 23 351	325

PPC Ltd Annual financial statements 2015 31

SEGMENTAL INFORMATION

for the year ended 30 September 2015

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

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.

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SEGMENT PROFIT OR LOSS Consolidated
2015 2014
Rm Rm
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Revenue South Africa Rest of Africa	6 795 2 624	6 671 2 432
Intersegment revenue	9 419 (192)
Total revenue	9 227
Operating proft before item listed below Empowerment transactions IFRS 2 charges	1 660 43
Operating proft South Africa Rest of Africa Fair value adjustments on fnancial instruments Finance costs Investment income	1 617
	1 120 497
	22 518 28
Proft before earnings from equity accounted investments and exceptional adjustments (Loss)/earnings from equity accounted investments Impairments and other exceptional adjustments	1 149 (16) (81)
Proft before taxation Taxation	1 052 391
Proft for theyear	661
Depreciation and amortisation EBITDA~ South Africa Rest of Africa EBITDA margin (%) SEGMENT FINANCIAL POSITION Assets Non-current assets South Africa Rest of Africa Current assets Non-current assets held for sale Total assets South Africa Rest of Africa Investments in property, plant and equipment (refer note 29) Capital commitments (refer note 31) Liabilities Non-current liabilities Current liabilities Total liabilities South Africa Rest of Africa	702 2 362
	1 706 656
	25,6
	12 202
	5 141 7 061
	2 979 76
	15 257
	6 687 8 570
	2 856 4 643
	8 813 3 280
	12 093
	8 343 3 750

Includes readymix from the effective date of consolidation of Pronto, being July 2014. Aggregates and readymix have been aggregated in line with industry practices.

^ Comprises BBBEE trusts and trust funding SPVs.

~ Excluding Empowerment IFRS 2 charges. In 2014, restructuring costs were added back when EBITDA was disclosed in the segment analysis. This has been amended in the current year and not adjusted when disclosing EBITDA.

32 PPC Ltd Annual financial statements 2015

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Cement Lime Aggregates and readymix [#] Other [^]
2015 2014 2015 2014 2015 2014 2015 2014
Rm Rm Rm Rm Rm Rm Rm Rm
----- End of picture text -----


4 999 2 507	5 395 853 2 315 18	792 943 25 99	484 – 92 –	– –
7 506	7 710 871	817 1 042	576 –	–
1 422 43	1 590 133 38 –	96 105 – –	57 – – –	– –
1 379	1 552 133	96 105	57 –	– – – 2 110 –
881 498	1 072 133 480 –	96 106 – (1)	62 – (5) –	– –
34 382 19	40 – 384 4 48 1	1 (12) 3 29 2 8	(5) – 8 103 3 –
1 050 (16) (59)	1 256 130 24 – (81) –	96 72 – – – (22)	47 (103) – – (29) –	(108) – –
975 325	1 199 130 314 35	96 50 25 31	18 (103) 17 –	(108) –
650	885 95	71 19	1 (103)	(108)
594 2 016	542 45 2 132 178	40 63 136 168	33 – 90 –	– – – – –
1 364 652	1 569 178 563 –	136 164 – 4	85 – 5 –	– –
26,9	27,7 20,4	16,6 16,1	15,6 –
11 251	7 991 310	310 641	637 –	– – – 1 –
4 231 7 020	4 107 310 3 884 –	310 600 – 41	602 – 35 –	– –
2 536 76	2 191 185 – –	192 254 – –	253 4 – –
13 863	10 182 495	502 895	890 4	1 1 – – – 1 221 73 1 294 1 294 –
5 376 8 487	5 225 495 4 957 –	502 812 – 83	813 4 77 –	1 –
2 741 4 588	2 025 45 3 860 28	62 70 7 27	32 – 29 –
7 492 2 921	5 768 94 1 707 105	101 89 48 162	96 1 138 143 92	1 221 73
10 413	7 475 199	149 251	239 1 230
6 692 3 721	5 789 199 1 686 –	149 222 – 29	214 1 230 25 –	1 294 –

PPC Ltd Annual financial statements 2015 33

NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 September 2015

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Freehold and
leasehold Plant,
land, Factory vehicles,
buildings and decommis- furniture Capitalised
mineral sioning and leased
rights assets equipment plant Total
Rm Rm Rm Rm Rm
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PROPERTY, PLANT AND EQUIPMENT 2015 Cost Accumulated depreciation and impairments	1 229 138 14 198 157 451 51 4 418 154	15 722 5 074
	778 87 9 780 3	10 648
Movements during the year Net carrying value at beginning of the year Additions To enhance existing operations To expand operations Depreciation Disposals Other movements Impairments Reallocation to inventory (refer note 7) Reallocation to other intangible assets (refer note 3) Reclassifcation to non-current assets held for sale (refer note 6) Translation differences	862 111 6 244 6 49 – 3 216 4	7 223 3 269
	13 – 385 4 36 – 2 831 –	402 2 867
	(43) (11) (555) (3) – – (6) – 5 (13) – (4) (27) – (30) – – – (4) – (115) – – – (40) – – – 87 – 915 –	(612) (6) (12) (57) (4) (115) (40) 1 002
Net carrying value at end of the year	778 87 9 780 3	10 648
Translation differences comprise Cost Accumulated depreciation 2014 Cost Accumulated depreciation and impairments	1 246 151 10 092 153 384 40 3 848 147	1 108 (106)
		1 002
		11 642 4 419
	862 111 6 244 6	7 223
Movements during the year Net carrying value at beginning of the year Acquisitions of subsidiary companies (refer note 28) Additions To enhance existing operations To expand operations Depreciation Disposals Other movements Impairments (refer note 21) Reallocation to inventory (refer note 7) Translation differences	687 111 4 714 10 47 – 178 – 160 – 1 748 –	5 522 225 1 908
	18 – 572 – 142 – 1 176 –	590 1 318
	(34) (4) (501) (4) – – (4) – 1 (4) 4 – (29) – (17) – – – (16) – 30 8 138 –	(543) (4) 1 (46) (16) 176
Net carrying value at end of the year	862 111 6 244 6	7 223
The translation differences comprise Cost Accumulated depreciation		213 (37)
		176

34 PPC Ltd Annual financial statements 2015

1. PROPERTY, PLANT AND EQUIPMENT continued

Assets pledged as security

Property, plant and equipment with a net carrying value of R2 167 million, R2 166 million and R22 million (2014: Rnil, R1 502 million and Rnil) are encumbered and used as security for the borrowings in the DRC, Rwanda and Zimbabwe respectively (refer note 13).

Impairment of property, plant and equipment

An impairment of R14 million was recorded against property, plant and equipment relating to old plant at CIMERWA that would not be used post-commissioning of the new plant. The impairment is included under cement in the segment analysis.

Costs of R27 million relating to the limestone quarry in Zimbabwe have been impaired due to uncertainty of future development prospects. This impairment is included under cement in the segment analysis.

Post the group’s decision to no longer pursue the current Algeria project, it was deemed appropriate that the costs capitalised of R15 million be impaired. The impairment is included under cement in the segment analysis.

Other minor impairments of property, plant and equipment amounted to R1 million.

In the prior year property, plant and equipment of R17 million was impaired at Aggregate Quarries of Botswana. The cash-generating unit was assessed for potential impairment which indicated that Aggregate Quarries of Botswana plant and equipment needed to be impaired. The valuation was calculated using discounted cash flow methodology, with a discount rate of 18,89%. In the past two years, Aggregate Quarries of Botswana had been making operating losses. This impairment is included in aggregates and readymix in the segment analysis.

Also in the prior year, an impairment of R29 million was charged against CIMERWA’s land and buildings and mineral rights, and is included under cement in the segmental analysis. Following a review of all items of property, plant and equipment at CIMERWA, certain assets relating to the old plant were identified that would not be used post-commissioning of the new plant which necessitated the impairment.

Other information

The cost of land included in the above amounts to R248 million (2014: R248 million).

Included in plant, vehicles, furniture and equipment is capital work in progress of R3 258 million (2014: R1 248 million), with R2 281 million (2014: R307 million), Rnil (2014: R964 million) and R568 million (2014: Rnil) relating to the DRC, Rwanda and Zimbabwe expansions respectively.

Borrowing costs of R196 million (2014: R36 million) have been capitalised to property, plant and equipment (refer note 19). A capitalisation rate of 7,71% was used for general group borrowings.

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 note 31.

PPC Ltd Annual financial statements 2015 35

NOTES TO ThE CONSOLIDATED FINANCIAL STATEMENTS Continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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2.	GOODWILL Cost 356 Accumulated impairment loss 102	336 68
	254	268
	Movements of goodwill Net carrying value at beginning of the year 268 Acquisitions of subsidiary companies (refer note 28) – Impairments (22) Translation differences 8	101 227 (65) 5
	Net carrying value at end of the year 254	268
	Goodwill is allocated to the following cash-generating units: CIMERWA Limited 49 Safka Cement Holdings (Pty) Ltd 78 Pronto Holdings (Pty) Ltd 127	41 78 149
	254	268

Impairments

Pronto Holdings (Pty) Ltd (Pronto)

The recoverable amount of R758 million (2014: R620 million) for the cash-generating unit was 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, which is in line with the company’s budgeting cycle time horizon as management believes this should provide a more accurate base for the value in use calculation. A discount rate of 12% (2014: 14%) and terminal growth rate of 8% (2014: 8%) have been used in the valuation.

Cash flow projections during the forecast period are based on similar pricing and margins to those currently being achieved by the business. Selling prices and cost of sales are forecast to increase at rates linked to local inflation forecasts and varying between 2% and 3% (2014: 5% and 6%). The values used reflect past experiences while the economic growth rates of approximately 3% (2014: 3%) per annum are management’s best estimates that have been prepared using leading financial institutions’ forecasts.

Following the goodwill impairment assessment reviews, the recoverable amount of Pronto was calculated to be lower than its carrying amount, resulting in an impairment of R22 million. No impairment was recognised in 2014. Pronto is included under aggregates and readymix in the segmental analysis.

It is estimated that a decrease in growth rates by 1% to 5% in aggregate would result in the carrying amount of the cash-generating unit to exceed its recoverable amount.

CIMERWA Limited (CIMERWA)

The recoverable amount of R731 million (2014: R677 million) for 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 and a post-forecast period of eight years, bringing the total period of the cash flows to 15 years which is the estimated life of mine. The discount rate used in the valuation was 20% (2014: 21%).

Cash flow projections during the forecast period of seven years were based on improved margins and profitability, following the planned commissioning of the new plant, taking cognisance of an appropriate ramp-up period. Selling prices and cost of sales were forecast to increase at applicable inflation rates varying between 7% and 8% (2014: 5% and 6%). The cash flow post the forecast period has been extrapolated using specific growth rates of 4% (2014: 5%) per annum, with the forecast period limited to the life of mine, currently estimated at around 15 years.

The forecast takes into consideration the future trends within the industry, geographical location, and expected growth in neighbouring countries. The values used reflect past experiences while the economic growth rates are management’s best estimates that have been prepared using leading financial institutions’ forecasts.

In 2014, the recoverable amount was deemed to be lower than the current carrying value, resulting in an impairment of R65 million being charged against profit and loss. CIMERWA is included under cement in the segmental analysis. No impairments were required in 2015.

There are no indications that any reasonable possible change in the key assumptions on which the recoverable amount has been calculated would cause the carrying amount to exceed the recoverable amount of this cash-generating unit.

36 PPC Ltd Annual financial statements 2015

2. GOODWILL continued Impairments continued

Safika Cement Holdings (Pty) Ltd (Safika)

The recoverable amount of R766 million (2014: R550 million) for the Safika cash-generating unit was 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. A discount rate of 12% (2014: 14%) has been used in the valuation.

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 forecasts varying between 2% and 3% (2014: 5% and 6%). The values used reflect past experiences while the economic growth rates of approximately 3% (2014: 3%) per annum are management’s best estimates that have been prepared using leading financial institutions’ forecasts.

Following the goodwill impairment assessment reviews, the recoverable amount was calculated to be higher than its carrying amount, resulting in no impairment. No impairment was recorded in 2014.

It is estimated that a decrease in growth rates by 2% to 8% in aggregate would result in the carrying amount of the cash-generating unit to exceed its amount.

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Brand,
Right ERP trademarks
of use development and
of mineral and other customer
asset software relationships Total
Rm Rm Rm Rm
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3.	OThER INTANGIBLE ASSETS 2015 Cost 194 320 551 1 065 Accumulated amortisation and impairments 3 177 113 293
	191 143 438 772
	Movements during the year Net carrying value at beginning of the year 54 132 495 681 Additions – 36 – 36 Amortisation (1) (31) (58) (90) Transfers and other movements 115 3 – 118 Translation differences 23 3 1 27*
	Net carrying value at end of the year 191 143 438 772
	2014 Cost 56 271 545 872 Accumulated amortisation and impairments 2 139 50 191
	54 132 495 681
	Movements during the year Net carrying value at beginning of the year 53 83 96 232 Acquisitions of subsidiary companies (refer note 28) – – 428 428 Additions – 63 – 63 Amortisation (1) (33) (38) (72) Transfers and other movements – 19 – 19 Translation differences 2 – 9 11
	Net carrying value at end of the year 54 132 495 681

Brand, trademarks and customer relationships

Included in brand, trademarks and customer relationships are brand and trademarks of R332 million (2014: R359 million), contracted and non-contracted customer relationships of R106 million (2014: R132 million) and favourable lease terms of Rnil (2014: R4 million). 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.

The group does not have any indefinite useful life intangible assets, other than goodwill (refer note 2).

As communicated in the 2014 annual financial statements, the company was still finalising the split between property, plant and equipment (PPE) and intangible assets on the contribution made by the Barnet Group SARL, non-controlling shareholder, into PPC Barnet DRC Holdings (refer note 16). This split was finalised and R115 million has been transferred from PPE and is included under right of use of mineral assets. The asset will be amortised over the estimated useful life of the reserve.

PPC Ltd Annual financial statements 2015 37

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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4.	EQUITY ACCOUNTED INvESTMENTS Investments at cost at beginning of the year Investments made during the year Transferred to subsidiaries Transferred to non-current assets held for sale (refer note 6) Acquired through the acquisitions of subsidiary companies (refer note 28)	133 – – (7) –	305 3 (176) – 1
	Investments at cost at end of the year Share of retained (loss)/proft: Retained proft at beginning of the year Share of current year’s (loss)/proft Transferred to subsidiaries Transferred to non-current assets held for sale (refer note 6) Loans advanced Balance at beginning of the year Interest capitalised Transferred to trade and other receivables (refer note 8) Repayments	126 (1)	133 44
		44 (16) – (29)	59 24 (39) –
		–	46
		46 3 (46) (3)	46 2 – (2)

		125	223
	valuation of interest in equity accounted investments Fair value of unlisted equity accounted investments, including loans advanced	397	561

Habesha Cement Share Company (Habesha) comprises the majority of the group’s investment in equity accounted investments and therefore only the valuation methodology and assumptions relating to the investment are disclosed.

The fair value of Habesha was determined using the discounted cash flow methodology. A discount rate of 23% (2014: 27%), relevant to Ethiopia and adjusted for project and business risk was used.

Investments made during the year

Habesha Cement Share Company (Habesha)

In 2014, PPC acquired a further equity stake in Habesha, for a purchase consideration of R3 million marginally increasing PPC’s shareholding in the company to 31,6%.

Transferred to subsidiaries

In 2014, PPC obtained control over Pronto following the acquisition of the remaining 50% in the company for R280 million, making it a wholly owned subsidiary. Refer note 28.

Loans advanced to associates

At year-end no loans were outstanding, but in the prior year R3 million of the loans advanced bore interest at the prime lending rate, while the remaining balance was interest-free. Where appropriate, bonds are registered over land and movable assets as security.

38 PPC Ltd Annual financial statements 2015

	2015 Rm	2015 Rm	2014 Rm	2014 Rm


4.	EQUITY ACCOUNTED INvESTMENTScontinued Key fnancial information of associates$ Non-current assets 735 Current assets 467 Total assets 1 202 Total equity 505 Non-current liabilities 628 Current liabilities 70 Revenue – Operating proft – Proft after taxation – Comprehensive income –		514 779 1 293 465 285 543 1 531 113 79 79
	Interest Carrying value, including loans advanced Name Nature of business 2015 % 2014 % Financial year-end@ 2015 Rm 2014 Rm


	Incorporated in South Africa Afripack Limited (refer note 6) Packaging 25 First Gas (Pty) Ltd LP gas and liquid fuels distribution – Metlakgola Construction & Development (Pty) Ltd Construction 40 Olegra Oil (Pty) Ltd Used oil collection and flling station 29 Rhulanani Concrete Mixers (Pty) Ltd Readymix concrete 40 Hoekplaats Dolomite (Pty) Ltd Quarrying 49 Incorporated in Ethiopia Habesha Cement Share Company Cement manufacturer 31,6	25 September – 40 February – 40 February – 29 February 3 40 February – 49 February 1 31,6 June 121		96 – 1 2 2 1 121
		125		223

Habesha is deemed to be a material equity accounted investment as its carrying value approximates 97% of the group’s equity accounted investments and will have a material impact when fully operational. Afripack has now been classified as a non-current asset held for sale.

$ 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’s year-end.

PPC Ltd Annual financial statements 2015 39

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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5.	OThER NON-CURRENT ASSETS Unlisted investment at fair value 82 Unlisted collective investment 117	95 114
	199 Loans advanced 1 Advance payments for plant and equipment 148 Investment in government bonds 7	209 3 322 –
	355	534
	Valuation of unlisted investments including loans advanced (excluding advance payments) 207	212

Unlisted investment at fair value

PPC holds a 6,75% (2014: 6,75%) shareholding in Ciments du Bourbon, incorporated in Reunion. Negotiations have been concluded for the sale of the investment and the purchase consideration has been deemed to be its fair value. In the prior year the fair value of the investment was calculated using a dividend yield valuation methodology, using comparable company dividend yields of 7% and applied to forecast dividends. The sale is anticipated to be finalised during the first quarter of 2016. The movement in fair value of R13 million (2014: R58 million) has been recorded against other comprehensive income.

Unlisted collective investment

Comprises an investment by the PPC Environmental Trust in South African unit trusts, with fair value being calculated using the ruling unit trust price on 30 September 2015. Put options are also held over the value of the investments in order to protect the capital of the portfolio. At 30 September 2015, the value of the put options were not material. During the year, a further R5 million (2014: R4 million) was reinvested in the unit trusts. These funds are held to fund PPC’s South African environmental obligations.

Loans advanced

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. The capital and interest are repayable by 2017.

Advance payments for plant and equipment

In terms of the construction agreements with the suppliers of the new cement plants in Rwanda and DRC, a portion of the full contract price is required to be paid in advance of the plant construction. The advance payments are secured by advance payment bonds, and will be recycled to property, plant and equipment as the plants are constructed. The decline from 2014 is as a result of the utilisation of the advance payments in Rwanda.

Investment in government bonds

Represents government of Zimbabwe treasury bills carried at fair value. The treasury bills were issued in the current year in exchange for funds previously expropriated by the government in 2007. The treasury bills have a face value of R10 million, repayable in three equal annual instalments from June 2017 to June 2019. A discount rate of 12% was applied in determining the fair value. Interest is paid bi-annually at a rate of 5% per annum.

40 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
6. NON-CURRENT ASSETS hELD FOR SALE
Equity accounted investment (refer note 4) 36 –
Property, plant and equipment (refer note 1) 40 –
76 –
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Equity accounted investment

PPC holds a 25% stake in Afripack Limited, which was previously held as an equity accounted investment. The company is currently in the process of selling its full shareholding in Afripack. A sales agreement has been signed and the conditions precedent to the sale are expected to be met in the new financial year and finalisation of the transaction to occur shortly thereafter.

Afripack’s carrying amount immediately before classification as held for sale was R36 million which is lower than its fair value less costs to sell of R70 million. The fair value represents the selling price per the sales agreement less estimated transaction costs. Afripack is included under the cement segment in the segment analysis.

Property, plant and equipment

PPC Zimbabwe intends to dispose of houses at its Colleen Bawn and Bulawayo factories in the next 12 months. No impairment loss was recognised on reclassification of land as management expects that the fair value (estimated based on recent market prices of similar properties) less costs to sell is higher than the current carrying amount.

	2015 Rm	2014 Rm
7.

	INvENTORIES Raw materials 176 Work in progress 188 Finished goods 426 Maintenance stores 455 Inventory obsolescence (216)	207 92 221 553 (179)
	1 029	894

Inventories are determined on the weighted average formula basis.

During the year an amount of R4 million (2014: R16 million), for critical spares, was reclassified between property, plant and equipment and inventory (refer note 1).

The cost of inventories recognised as an expense in cost of sales during the year was R4 906 million (2014: R4 872 million).

No inventories have been pledged as security.

PPC Ltd Annual financial statements 2015 41

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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8.	TRADE AND OThER RECEIvABLES Trade receivables Allowance for doubtful debts	931 (70)	1 064 (30)
	Net trade receivables Loan relating to non-current assets held for sale (refer note 6) Derivative fnancial instruments (cash fow hedge) Derivative fnancial instruments (fair value hedge) Other fnancial receivables	861 46 38 13 50	1 034 – – – 57
	Trade and other fnancial receivables Prepayments Taxation prepaid VAT receivable on plant and equipment imported into the DRC	1 008 75 8 141	1 091 61 28 –
		1 232	1 180
	Net trade receivables comprise Trade receivables that are neither past due nor impaired Trade receivables that would otherwise be impaired whose terms have been renegotiated Trade receivables that are past due but not impaired	861	1 034
		745 1 115	875 2 157

No receivables have been pledged as security.

No individual customer represents more than 10% of the group’s revenue and exposure at year-end. The group’s largest customer comprises 6% (2014: 7%) of trade receivables.

Normal credit terms vary between 30 and 60 days. Allowance for doubtful debt 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.

Before granting credit to a customer, the group uses an internal credit scoring system to assess the potential customer’s credit quality and limit. 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.

42 PPC Ltd Annual financial statements 2015

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Aggregates
and
Cement Lime readymix Total
Rm Rm Rm Rm
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8.	TRADE AND OThER RECEIvABLEScontinued Trade receivables that are neither past due nor impaired 2015 526 109 110 745 2014 672 91 112 875 There is no history of material default relating to trade receivables in this category. Trade receivables that are past due but not impaired 2015 Ageing beyond normal terms 89 13 13 115 1 – 30 days 73 – 4 77 31 – 60 days 5 – 2 7 61 – 90 days 5 – 4 9 91 – 180 days – 13 2 15 Greater than 180 days 6 – 1 7 Fair value of collateral held 31 – – 31 2014 Ageing beyond normal terms 143 6 8 157 1 – 30 days 76 3 4 83 31 – 60 days 13 – 3 16 61 – 90 days 16 3 1 20 91 – 180 days 35 – – 35 Greater than 180 days 3 – – 3 Fair value of collateral held 32 – – 32 Allowance for doubtful debts 2015 Balance at beginning of the year 25 – 5 30 Allowance raised through proft or loss 32 13 3 48 Utilisation of allowance (12) – (1) (13) Translation differences 5 – – 5	TRADE AND OThER RECEIvABLEScontinued Trade receivables that are neither past due nor impaired 2015 526 109 110 745 2014 672 91 112 875 There is no history of material default relating to trade receivables in this category. Trade receivables that are past due but not impaired 2015 Ageing beyond normal terms 89 13 13 115 1 – 30 days 73 – 4 77 31 – 60 days 5 – 2 7 61 – 90 days 5 – 4 9 91 – 180 days – 13 2 15 Greater than 180 days 6 – 1 7 Fair value of collateral held 31 – – 31 2014 Ageing beyond normal terms 143 6 8 157 1 – 30 days 76 3 4 83 31 – 60 days 13 – 3 16 61 – 90 days 16 3 1 20 91 – 180 days 35 – – 35 Greater than 180 days 3 – – 3 Fair value of collateral held 32 – – 32 Allowance for doubtful debts 2015 Balance at beginning of the year 25 – 5 30 Allowance raised through proft or loss 32 13 3 48 Utilisation of allowance (12) – (1) (13) Translation differences 5 – – 5
		73 – 4 77 5 – 2 7 5 – 4 9 – 13 2 15 6 – 1 7
		31 – – 31 143 6 8 157
		76 3 4 83 13 – 3 16 16 3 1 20 35 – – 35 3 – – 3
		32 – – 32 25 – 5 30 32 13 3 48 (12) – (1) (13) 5 – – 5
	Balance at end of the year	50 13 7 70
	2014 Balance at beginning of the year Allowance raised through proft or loss Utilisation of allowance	15 – 4 19 12 – 1 13 (2) – – (2)
	Balance at end of the year	25 – 5 30

PPC Ltd Annual financial statements 2015 43

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

	2015 Rm	2014 Rm


9.	CASh AND CASh EQUIvALENTS Cash and cash equivalents 718	563
	Currency analysis: Botswana pula 58 Mozambican metical 26 Rwandan franc 194 South African rand 72 United States dollar 368	38 37 66 109 313
	718	563
	Amounts denominated in foreign currencies have been translated at ruling exchange rates at year-end, (refer note 40). Cash restricted for use relating to: PPC Environmental Trust 4 Consolidated BBBEE entities 7	6 1
	11	7
	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.
	2015 Shares	2014 Shares
10.

	STATED CAPITAL Authorised ordinary shares 700 000 000	700 000 000
	Number of ordinary shares and weighted average number of shares Total shares in issue at beginning of the year 605 379 648 Adjustments for shares treated as treasury shares: Shares held by consolidated participants of the second BBBEE transaction (37 382 193) Shares held by consolidated BBBEE trusts and trust funding SPVs (34 477 308) Shares held by consolidated Porthold Trust Pvt Limited (1 284 556) Shares purchased in terms of the FSP incentive scheme (6 342 640)	605 379 648 (37 382 193) (34 764 669) (1 284 556) (5 865 851)
	Total shares in issue (net of treasury shares) 525 892 951	526 082 379
	Authorised preference shares 20 000 000 Twenty million preference shares of R1 000 each. No preference shares have been issued.	20 000 000

44 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
10. STATED CAPITAL continued
Stated capital
Balance at beginning of the year (1 173) (1 236)
Shares purchased in terms of the FSP share incentive scheme treated as treasury shares (24) (53)
Vesting of shares held by certain BBBEE 1 entities 9 100
Vesting of shares on a portion of the shares held in terms of the FSP incentive scheme 23 16
Balance at end of the year (1 165) (1 173)
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Shares held by consolidated participants of the second BBBEE transaction

Shares issued in terms of the second BBBEE transaction which was facilitated by means of a notional vendor funding (NVF) mechanism. These shares participate in 20% of the dividends declared by PPC during the NVF period, which ends 30 September 2019. With the exception of the Bafati Investment Trust, entities participating in this transaction are consolidated into the PPC group in terms of IFRS 10 Consolidated financial statements .

Shares held by consolidated BBBEE trusts and trust funding SPvs

In terms of IFRS 10 Consolidated financial statements , certain of the BBBEE trusts and trust funding SPVs from PPC’s first BBBEE transaction are consolidated, and as a result, shares owned by these entities are carried as treasury shares on consolidation. During the year, 287 361 shares (2014: 3 202 770 shares) vested to beneficiaries and are no longer treated as treasury shares.

Shares held by consolidated Porthold Trust Pvt Limited

Shares owned by a Zimbabwe employee trust company are treated as treasury shares.

FSP incentive scheme

In terms of the forfeitable share plan (FSP) incentive scheme, 6 342 640 shares (2014: 5 865 851 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. A total of 531 179 shares (2014: 619 457 shares) vested during the year and are no longer treated as treasury shares.

In terms of IFRS requirements, 13% (2014: 13%) of the total shares in issue are treated as treasury shares following the consolidation of the various BBBEE entities, employee trusts and incentive share schemes.

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

	Unissued shares Shares 2015	Shares 2014


	Ordinary shares 94 620 352 Preference shares 20 000 000	94 620 352 20 000 000

PPC Ltd Annual financial statements 2015 45

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
11. DEFERRED TAXATION
Movement
Net liability at beginning of the year: 1 021 1 063
Deferred taxation asset 9 –
Deferred taxation liability 1 030 1 063
Acquisitions of subsidiary companies (refer note 28) – 150
Income statement charge (60) –
Charged directly to equity 6 11
Transfer to taxation payable – (240)
Translation differences 44 37
Net liability at end of the year: 1 011 1 021
Deferred taxation asset 48 9
Deferred taxation liability 1 059 1 030
Analysis of deferred taxation
Property, plant and equipment 1 068 970
Other non-current assets 187 198
Current assets 3 12
Non-current liabilities (89) (95)
Current liabilities (74) (43)
Reserves (84) (21)
1 011 1 021
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Transfer to taxation payable

In the prior year, the previously assessed loss in PPC Zimbabwe 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, was transferred to current taxation.

	2015 Rm	2014 Rm
12.

	PROvISIONS Factory decommissioning and quarry rehabilitation 361 Post-retirement healthcare benefts 39	339 35
	400	374

46 PPC Ltd Annual financial statements 2015

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Factory
decommissioning Post-retirement
and quarry healthcare
rehabilitation benefits Total
Rm Rm Rm
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12.	PROvISIONScontinued Movement of provisions 2015 Balance at beginning of the year 339 35 374 Amounts added – 3 (3) Amounts reversed/utilised (12) – (12) Other movements (6) – (6) Time value of money adjustments 29 – 29 Translation differences 11 1 12
	Balance at end of the year 361 39 400
	To be incurred: Between two and fve years 20 – 20 More than fve years 341 39 380
	361 39 400
	2014 Balance at beginning of the year 316 32 348 Amounts added – 2 2 Amounts reversed/utilised (4) – (4) Time value of money adjustments 27 – 27 Translation differences – 1 1
	Balance at end of the year 339 35 374
	To be incurred: Between two and fve years 16 – 16 More than fve years 323 35 358
	339 35 374

Factory decommissioning and quarry rehabilitation

Group companies are required to restore mining and processing sites at the end of their productive lives to an acceptable condition consistent with local regulations. 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 (2014: R66 million) has been contributed to the PPC Environmental Trust with the current value of the trust assets amounting to R117 million (2014: R114 million), refer note 5.

Post-retirement healthcare benefits

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.

Included in the provision are the following:

Cement and Concrete Institute employees

The provision relates to post-employment healthcare benefits in respect of former employees of the Cement and Concrete Institute and amounted to R10 million (2014: R9 million). This liability is revalued every three years; it 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 members

The provision relates to post-employment healthcare benefits in respect of certain Corner House Pension Fund and Lime Acres continuation members and amounted to R21 million (2014: R19 million). This liability will be revalued in 2016; it was last actuarially valued during June 2012. The liability has been determined using the projected unit credit method.

Porthold post-retirement medical fund

The 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 R8 million (2014: R7 million). This liability is revalued every three years; it was last actuarially valued during September 2015. The liability has been determined using the projected unit credit method.

PPC Ltd Annual financial statements 2015

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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13.	LONG-TERM BORROWINGS Borrowings Terms Security Interest rate Bonds Various, refer page 49 Unsecured Various, refer page 49 Long-term loan Interest is payable bi-annually with a bullet capital repayment in December 2016 Unsecured Fixed 10,86% Project funding Long-term loan US dollar-denominated, repayable by 2024 Secured by CIMERWA’s property, plant and equipment (refer note 1) Variable at 650 basis points above six-month US dollar LIBOR Long-term loan Rwandan franc- denominated, repayable by 2024 Secured by CIMERWA’s property, plant and equipment (refer note 1) Fixed 16% Long-term loan US dollar-denominated, interest payable bi-annually. First capital repayment will be in December 2016; thereafter bi-annual repayments in equal instalments over fve years Secured by PPC Zimbabwe’s property, plant and equipment (refer note 1) Six-month US dollar LIBOR plus 700 basis points Long-term loan US dollar-denominated, capital and interest payable bi-annually starting July 2017 ending January 2025 Secured by PPC Barnet DRC’s property, plant and equipment (refer note 1) Six-month US dollar LIBOR plus 725 basis points BBBEE transaction Preference shares Dividends are payable bi-annually, with annual redemptions ending December 2016 Secured by guarantee from PPC Ltd Variable rates at 85% of prime and fxed rates of 9,24% to 9,37% Preference shares Dividends are payable bi-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 Preference shares Capital and dividends repayable by December 2016, with capital capped at R400 million Secured by guarantee from PPC Ltd Variable rates at 78% of prime Long-term loans Capital and interest repayable by December 2016, with capital capped at R700 million Secured by guarantee from PPC Ltd Variable rates at 285 basis points above JIBAR	2 398 1 520 2 357	2 395 1 520 605
		641 357 421 938	359 246 – –
		1 227	1 290
		64 72 395 696	90 116 393 691

	Long-term borrowings _Less:_Short-term portion of long-term borrowings (refer note 15)	7 502 (791)	5 810 (70)
		6 711	5 740

48 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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13.	LONG-TERM BORROWINGScontinued Maturity analysis of obligations: One year 791 Two years 2 877 Three years 303 Four years 1 056 Five and more years 2 475	70 763 2 706 61 2 210
	7 502	5 810
	Percentage loans linked to fxed interest rates 52 Percentage loans linked to variable interest rates 48 Assets encumbered are as follows: Property, plant and equipment (refer note 1) 4 355	30 70 1 502

Bonds

Comprise four unsecured bonds, issued under the company’s R6 billion domestic medium-term note programme, and are recognised net of capitalised transaction costs of R2 million (2014: R5 million):

Number	Issue date	value	Term	Interest rate
PPC 001	March 2013	R650 million	3 years	3-month JIBAR plus 1,26%
PPC 002	December 2013	R750 million	5 years	3-month JIBAR plus 1,50%
PPC 003	July 2014	R750 million	5 years	3-month JIBAR plus 1,48%
PPC 004	July 2014	R250 million	7 years	9,86% fxed

The group is in compliance with its debt covenants for the year ended September 2015. The company’s covenants, imposed in 2008 for our first BBBEE transaction, have been renegotiated to exclude non-recourse project finance from the definition of PPC’s indebtedness. Further details of maturity analysis and interest rates are disclosed in note 36 on financial risk management.

PPC Ltd Annual financial statements 2015 49

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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14.	OThER NON-CURRENT LIABILITIES Cash settled share-based payment liability (refer note 34) 5 Liability to non-controlling interest in wholly owned subsidiary 17 Put option liabilities 464 Retentions held for plant and equipment 204	18 – 145 –
	690 _Less:_Short-term portion of other non-current liabilities (47)	163 (121)
	643	42
	Put option liabilities Balance at beginning of the year 145 Fair value adjustments on remeasurements (14) Put options exercised (108) Put options granted 422 Time value of money adjustments 19	– (5) – 137 13
	Balance at end of the year 464	145
	Comprising: Safka Cement 42 PPC Barnet DRC Holdings 422	145 –
	464	145

Liability to non-controlling interest in wholly owned subsidiary

Relates to interest on initial equity contributions into the DRC group of companies by a non-controlling shareholder. The interest will be repaid once the external funding has been settled.

Retentions held for plant and equipment

Retentions held on the construction of the cement plants in Rwanda and the DRC. These retentions will be paid over to the contractors once the plants achieve guaranteed performance targets.

Put option liabilities

safika Cement

With the purchase of the initial 69,3% equity stake in Safika Cement (refer note 28), PPC granted non-controlling shareholders individual put options, with different exercise dates, for the sale of their remaining shares in the company to PPC. One of the put options, representing 21,1% shareholding in Safika Cement, was exercised in the current year for R108 million. The other put options were anticipated to be exercised on the fifth anniversary of the transaction, however these will now be exercised in the next financial year to be settlement by the issue of PPC’s shares and cash subject to shareholders’ approval. The liability of R42 million (2014: R105 million) has therefore been classified as a current liability (refer note 16). The put option value of the R108 million that has been exercised was based on the company’s EBITDA achieved applying an earnings multiple between four and five times EBITDA less net debt. The remainder of the put options have been valued on the same principle due to the revised settlement date.

PPC Barnet DRC Holdings

The International Finance Corporation (IFC) was issued a put option in the current year in terms of which PPC is required to purchase all or part of the class C shares held by the IFC in PPC Barnet DRC Holdings. The put option may be exercised after six years from when the IFC subscribed for the shares but only for a five-year period. The put option value is based on the company’s forecast EBITDA applying an eight times earnings multiple less net debt. Forecast EBITDA is based on financial forecasts approved by management, with pricing and margins similar to those currently being achieved by the business unit while selling prices and costs are forecast to increase at local inflation projections and extrapolated using local GDP growth rates ranging between 5% and 9% taking cognisance of the plant production ramp-up. The present value of the put option was calculated at R422 million.

50 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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15.	ShORT-TERM BORROWINGS Short-term loans and bank overdrafts 719 Short-term portion of long-term borrowings (refer note 13) 791	281 70
	1 510	351
	Details of maturity analysis and interest rates are disclosed in note 36 on fnancial risk management.
16.	TRADE AND OThER PAYABLES AND ShORT-TERM PROvISIONS Cash settled share-based payment liability (short-term portion) (refer note 14) 5 Derivative fnancial instruments 1 Equity contribution for future non-controlling interest in wholly owned subsidiary – Other fnancial payables 260 Put option liability (refer note 14) 42 Retentions held for plant and equipment 116 Trade payables and accruals 924	16 1 115 296 105 81 664
	Trade and other fnancial payables 1 348 Payroll accruals 310 Restructuring costs – Taxation payable 80 VAT payable 32	1 278 194 6 125 17
	1 770	1 620

Equity contribution for future non-controlling interest in wholly owned subsidiary

The amount recognised in the prior year includes the value of land and mining rights transferred by a future non-controlling shareholder for equity in the DRC companies. Certain conditions were not met in 2014 and the shares in PPC Barnet DRC Holdings, the holding company for the DRC group of companies, were only issued to the non-controlling shareholder in the current year, resulting in the amount recorded as a liability in the prior year being transferred to non-controlling interests post the issuance of these shares.

Trade and other payables, payroll accruals and regulatory obligations are payable within a 30 to 60-day period.

PPC Ltd Annual financial statements 2015 51

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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17.	OPERATING PROFIT Operating proft includes: Amortisation of intangible assets (refer note 3) Auditors’ remuneration Fees Other Dividends paid to BBBEE trusts treated as an expense on consolidation Depreciation (refer note 1) Cost of sales Operating costs Distribution costs included in cost of sales Exploration and research costs Operating lease charges – land and buildings Staff costs South Africa Rest of Africa Including: Cash settled share incentive scheme reversed (refer note 34) Equity settled share incentive scheme charge Directors’ remuneration^ Employees’ remuneration Restructuring costs Retirement beneft contributions (refer note 33)	90 21	72 15
		18 3	11 4
		– 612	7 543
		543 69	499 44
		1 058 1 23 1 325	1 320 1 18 1 213
		1 116 209	1 024 189
		(10) 13 26 1 190 8 98	(5) 10 44 1 024 16 94
	_Less:_Costs capitalised to plant and equipment and intangibles	1 325 (8)	1 183 (1)
		1 317	1 182
	^For further details refer the abridged remuneration report on pages 99 to 107.
18.	FAIR vALUE ADJUSTMENTS ON FINANCIAL INSTRUMENTS Gain on ineffective portion of cash fow hedge (Loss)/gain on unlisted collective investments (refer note 5) Gain on remeasurement of put option liabilities (refer note 14) Gain on translation of foreign currency-denominated monetaryitems	– (2) 14 10	2 5 8 23
		22	38
19.	FINANCE COSTS Bank and other short-term borrowings Bonds Long-term loans	48 189 313	73 108 203
	Capitalised to plant and equipment and intangibles	550 (196)	384 (36)
	Finance costs before BBBEE transaction and time value of money adjustments BBBEE transaction Dividends on redeemable preference shares Long-term borrowings Time value of money adjustments on rehabilitation and decommissioning provisions andput option liabilities	354 116	348 110
		42 74	48 62
		48	47
	South Africa Rest of Africa	518	505
		488 30	481 24
	The total fnance costs excluding time value of money adjustments, relate to borrowings held at amortised cost. For details of borrowings refer notes 13 and 36.

52 PPC Ltd Annual financial statements 2015

		2015 Rm	2014 Rm


20.	INvESTMENT INCOME Dividends on unlisted investments Interest received: Cash and cash equivalents Overpayment of taxation Non-current assets	11 13 4 –	18 21 11 3
		28	53
	Interest received relates to assets held at amortised cost. For further details refer note 36.
21.	IMPAIRMENTS AND OThER EXCEPTIONAL ADJUSTMENTS Gain on remeasurement of equity stake in Pronto (refer note 28) Impairment of goodwill (refer note 2) Impairment of fnancial asset Impairment of loans advanced Impairment of property, plant and equipment (refer note 1)	– (22) (1) (1) (57)	1 (65) – – (46)
	Gross impairments and other exceptional adjustments Taxation impact	(81) 15	(110) 12
	Net impairments and other exceptional adjustments	(66)	(98)
22.	TAXATION South African normal taxation Current taxation Current year Prior years Deferred taxation Current year Prior years Foreign normal taxation Current taxation Current year Prior year Deferred taxation Current year Withholding taxation	314	248
		342 (28)	318 (70)
		(44)
		(25) (19)	– –
		125	88
		109 16	88 –
		(16)	–
		(16)	–
		12	20
	Taxation charge	391	356
		%	%


	Reconciliation of taxation rates Proft before taxation (excluding earnings from equity accounted investments) Prior years’ taxation impact	36,6 2,7	30,1 5,9
	Proft before taxation, excluding prior years’ taxation adjustments Adjustment due to the inclusion of dividend income	39,3 0,3	36,0 0,4
	Effective rate of taxation Income taxation effect of: Disallowable charges, permanent differences and impairments Empowerment transactions and IFRS 2 charges not taxation deductible Finance costs on BBBEE transaction not taxation deductible Foreign taxation rate differential Withholding taxation	39,6 (11,6)	36,4 (8,4)
		(8,9) (1,1) (2,1) 1,6 (1,1)	(4,4) (0,8) (2,4) 0,9 (1,7)

	South African normal taxation rate	28	28

PPC Ltd Annual financial statements 2015 53

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Shares Shares
23. EARNINGS AND HEADLINE EARNINGS PER SHARE
23.1 Number of shares and weighted average number of shares
Number of shares
Total shares in issue 605 379 648 605 379 648
Shares issued in terms of second BBBEE transaction treated as treasury shares (37 382 193) (37 382 193)
Shares held by consolidated BBBEE trusts and trust funding SPVs treated as treasury shares (34 477 308) (34 764 669)
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 (6 342 640) (5 865 851)
Vesting of shares held by certain BBBEE 1 entities (59 671) (666 878)
FSP incentive scheme weighted average number of shares 188 778 764 582
Weighted average number of shares used for basic earnings per share calculation 526 022 059 526 180 083
Dilutive adjustment for shares held in terms of the FSP incentive scheme 6 342 640 5 865 851
Dilutive adjustment for potential ordinary shares in terms of the first BBBEE transaction – 287 361
FSP incentive scheme weighted average number of shares (188 778) (764 582)
Vesting of shares held by certain BBBEE 1 entities 59 671 666 878
Weighted average number of shares issued in terms of the second BBBEE transaction – 519 185
Weighted average number of shares used for dilutive earnings per share calculation 532 235 591 532 754 776
Weighted average number of shares
Used for earnings and headline earnings per share 526 022 059 526 180 083
Used for dilutive earnings and headline earnings per share 532 235 591 532 754 776
Used for cash earnings per share 526 022 059 526 180 083
Shares are weighted for the period in which they are entitled to participate in the net profit of the group.
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	2015 Rm	2014 Rm

23.2 Basic earnings
Net proft	661	849
Attributable to:
Shareholders of PPC Ltd	698	840
Non-controlling interests	(37)	9
	661	849
Normalisation adjustments*	82	79
Normalised net proft	743	928
Attributable to:
Shareholders of PPC Ltd	775	909
Non-controlling interests	(32)	19
	743	928

Normalised earnings adjust the reported earnings for the effects of empowerment transaction IFRS 2 charges, restructuring costs, impairments and other exceptional adjustments net of taxation and prior year taxation adjustments.

54 PPC Ltd Annual financial statements 2015

	2015 Cents	2014 Cents


23. 23.3 23.4 23.5 23.6	EARNINGS AND HEADLINE EARNINGS PER SHAREcontinued Earnings per share (cents) Basic 133 Diluted 131 Basic (normalised) 148 Diluted (normalised) 147	160 158 175 173
	2015 Rm	2014 Rm


	Headline earnings (Rm) Headline earnings is calculated as follows: Net proft 661 Adjusted for: Gain on remeasurement of equity accounted stake in Pronto – Impairment loss on goodwill 22 Impairment loss on loans advanced and fnancial assets 2 Impairment losses on property, plant and equipment 57 Taxation impact (15)	849 (1) 65 – 46 (12)
	Headline earnings 727	947
	Attributable to: Shareholders of PPC Ltd 759 Non-controlling interests (32)	927 20
	727 Normalisation adjustments 19*	947 (19)
	Normalised headline earnings 746	928
	Attributable to: Shareholders of PPC Ltd 778 Non-controlling interests (32)	908 20
	746	928
	2015 Cents	2014 Cents


	Headline earnings per share Basic 145 Diluted 143 Basic (normalised) 149 Diluted (normalised) 147	179 176 175 173
	Cash earnings per share 351 Calculated on cash available from operations (Rm) 1 847	325 1 711

Normalised earnings adjust the reported earnings for the effects of empowerment transaction IFRS 2 charges, restructuring costs, accelerated depreciation and impairments net of taxation and prior year taxation adjustments.

PPC Ltd Annual financial statements 2015 55

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

	2015 Rm	2014 Rm


24.	DIVIDENDS Ordinary shares Final number 222 – 76 cents per share (2014: 118 cents) 410 Interim number 223 – 24 cents per share (2014: 38 cents) 130	640 240
	540	880
	On 17 November 2015, the board approved a fnal dividend of 33 cents per share, payable to ordinary shareholders in respect of the year ended 30 September 2015 and will be paid out of profts as determined by the directors. The local dividends tax rate is 15% and no secondary tax on companies (STC) credits have been utilised in this declaration. The dividends tax to be withheld by the company amounts to 4,95 cents per share, giving a net dividend payable to shareholders of 28,05 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 Tuesday, 17 November 2015 Last day to trade “cum” dividend Thursday, 31 December 2015 Shares trade “ex” dividend Monday, 4 January 2016 Record date Friday, 8 January 2016 Payment date Monday, 11 January 2016 Share certifcates may not be dematerialised or rematerialised between Monday, 4 January 2016 and Friday, 8 January 2016, both dates inclusive. Transfers between the South African and Zimbabwean registers may not take place between Monday, 4 January 2016 and Friday, 8 January 2016, 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, 4 January 2016 Record date Friday, 8 January 2016 Payment date, on or shortly after Monday, 11 January 2016 The register of members in Zimbabwe will be closed from Monday, 4 January 2016 and Friday, 8 January 2016, 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 (ZAR). 2015 Rm 2014 Rm


	Dividends per share (cents) Interim number 223 – declared 18 May 2015 24 Final number 224 – declared 17 November 2015 33	38 76
	Full year dividend 57	114
25.	FINANCE COSTS PAID Finance costs as per income statement charge 518 Interest capitalised on bonds – Time value of money adjustments (48) Interest capitalised to plant and equipment – Fair value adjustments – BBBEE transaction fnance costs capitalised (62)	505 6 (42) 36 15 (94)
	408	426

56 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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26.	TAXATION PAID Net amounts payable/(receivable) at beginning of the year 97 Charge per income statement (excluding deferred taxation) 451 Transfer from deferred taxation to normal taxation (refer note 11) – Impact of foreign rate differences and other non-cash fow movements 13 Net amounts outstanding at end of the year (72)	(42) 356 240 42 (97)
	489	499
27.	DIVIDENDS PAID Dividends declared to PPC shareholders 540 Dividends declared by subsidiaries to non-controlling interests 19	848 32
	559	880
28.	BUSINESS COMBINATIONS Fair value of assets and liabilities acquired at date of acquisition Property, plant and equipment – Goodwill – Other intangible assets – Financial assets Cash and cash equivalents – Other current assets – Long-term borrowings – Long-term provisions and deferred taxation – Current liabilities –	225 227 428 1 149 288 (10) (150) (146)
	Net fair value of assets and liabilities acquired – Non-controlling interests – Less: Fair value of the previously held equity accounted stake –	1 012 (140) (215)
	Total consideration –	657

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

Pronto Holdings (Pty) Ltd (Pronto)

During July 2014, PPC acquired the remaining 50% equity stake in Pronto, making it a wholly owned subsidiary. Pronto is a prominent Gauteng based readymix and fly ash supplier, with nine readymix batching plants. This acquisition provided PPC with 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 which was recognised in 2014. The fair values presented at the time were provisional and are now final, with no changes made to the provisional numbers.

Safika Cement Holdings (Pty) Ltd (Safika Cement)

During December 2013, all conditions to the transaction were filled and PPC acquired a 69,3% equity stake in Safika Cement for R377 million and was consolidated from the effective date of the transaction. This transaction further enhanced 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. During 2015 a further 21,1% was acquired for R108 million, bringing PPC’s shareholding in Safika Cement to 85,4%. Details on the put option are included in note 14.

Quarries of Botswana

In October 2011 all conditions precedent with regard 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 was paid during the 2014 financial year.

PPC Ltd Annual financial statements 2015 57

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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29.	ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT Movement in advance payments to contractors (refer note 5) (174) Freehold and leasehold land, buildings and mineral rights (refer note 1) 49 Mining and mineral rights transferred by future non-controlling shareholders (refer note 16) – Plant, vehicles, furniture and equipment (refer note 1) 3 220 Movement in retentions paid to contractors (refer notes 14 and 16) (239)	322 160 (115) 1 748 4
	2 856	2 119
30.	MOVEMENT IN INVESTMENTS AND LOANS Net movement (156) Acquisitions of equity accounted investments – Advance payments (refer note 5) 174 Other non-cash fow movements (47) Revaluation of available-for-sale fnancial asset directly in equity (refer note 5) 13 Share of equity accounted investments’ losses/(profts) 16 Transferred to subsidiaries (refer note 28) –	201 3 (322) (12) (58) (24) 215
	–	3
31.	COMMITMENTS Contracted capital commitments 3 594 Approved capital commitments 1 049	2 786 1 110
	Capital commitments 4 643 Operating lease commitments 171	3 896 138
	4 814	4 034
	Capital commitments South Africa 2 409 Rest of Africa 2 234	242 3 654
	4 643	3 896
	Capital commitments are anticipated to be incurred: Within one year 2 758 Between one and two years 1 518 Beyond two years 367	2 246 1 572 78
	4 643	3 896

Capital expenditure commitments 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.

Project funding has been secured for the DRC and Zimbabwe projects, amounting to US$168 million and US$75 million respectively. In addition, the IFC has subscribed for equity in the DRC project and now holds 10% equity in the project. The one million tons per annum plant in the DRC is expected to be commissioned at the end of calendar year 2016, while the 700 000 tons per annum mill in Zimbabwe is also on track to be commissioned at the end of calendar year 2016. The one million tons per annum kiln expansion at Slurry is planned to be commissioned during the 2018 financial year.

58 PPC Ltd Annual financial statements 2015

31. COMMITMENTS continued

COMMITMENTScontinued
2021 and thereafter Rm 2017 to 2020 Rm 2016 Rm Total 2015 Rm	Total 2014 Rm


Operating lease commitments Land and buildings 57 84 19 160 Other – 7 4 11	119 19
171	138

In 2013, the company signed a ten-year lease for its head office and the lease comprises majority of the operating lease commitments at year-end. The lease contains annual escalations of 8% for the offices and operating costs annual escalation of 10%. The lease has a five-year renewal period with initial renewal escalation rate at the prevailing market rate.

32. CONTINGENT LIABILITIES

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

33. 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 Safika 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 Barloworld Botswana Retirement Fund.

Rwanda-based employees belong to Rwanda Social Board.

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

Employees based in the DRC do not have a pension or provident fund, but belong to the National Institute of Social Security per the country requirements.

Defined contribution plans

The total cost charged to the income statement of R98 million (2014: R94 million) represents contributions payable to these schemes by the group at rates specified in the rules of the schemes. At 30 September 2015, all contributions due in respect of the current reporting period had been paid over to the schemes.

PPC Ltd Annual financial statements 2015 59

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

34. SHARE-BASED PAYMENTS

34.1 Cash settled

Executive directors and certain senior employees have been granted cash settled share appreciation rights in terms of the PPC 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

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Total 2013 2012 2009 [^] 2008 [^] 2007 [^]
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Date of grant Grant price (based on fve-day volume weighted average price or zero) (rand) Number of rightsgranted 8 258 000	30/9/2013 28/9/2012 25/9/2009 17/11/2008 17/9/2008 – – 35,35 31,80 43,00 170 000 170 000 2 166 000 2 212 000 3 540 000
Directors (with performance conditions) 2 166 000 Executives (with performance conditions) 1 390 000 Senior management 4 702 000	170 000 170 000 360 000 435 000 1 031 000 – – 458 000 456 000 476 000 – – 1 348 000 1 321 000 2 033 000
Movement duringtheyear (269 000)	– (170 000) (10 000) (12 000) (77 000)
Vested – directors (170 000) Forfeited – senior management (99 000)	– (170 000) – – – – – (10 000) (12 000) (77 000)
Movement in prior years (4 261 500) Unexercised/unvested at 30 September 2015 3 727 500*	– – (1 027 000) (1 130 500) (2 104 000) 170 000 – 1 129 000 1 069 500 1 359 000
Directors (with performance conditions) 170 000 Senior management 3 557 500	170 000 – – – – – – 1 129 000 1 069 500 1 359 000
Vesting in thirds after the third, fourth and ffth anniversary of the grant date
Automatically exercised on the third anniversary of the grant date Expiry date (lapse if not exercised) Share appreciation rights were valued using binomial option pricing, taking into account the following inputs: PPC share price of R17,10 at end of the year (rand) Expected volatility of stock over remaining life of the option (%) Risk-free rate(%)	Yes Yes Yes Yes Yes 30/9/2016 28/9/2015 25/9/2019 17/9/2018 8/8/2017 28,64 30,40 31,92 7,88 7,61 7,15

Executives hold no unexercised rights.

^ These shares have vested but have not been exercised as at 30 September 2015.

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.

2015 Rm	2014 Rm


Reversal of previous charges recognised in the current year (10) The carrying amount of the liability relating to cash settled share appreciation rights as at 30 September (refer note 14) 5	(5) 18

34.2 Equity settled

Executive directors and certain senior employees have been granted equity settled share appreciation rights in terms of PPC’s Long-Term Incentive Plan 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. The scheme was amended in 2015 to include equity settled awards. All grants are approved by the remuneration committee.

60 PPC Ltd Annual financial statements 2015

34. SHARE-BASED PAYMENTS continued

34.2 Equity settled continued Share appreciation rights granted:

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2015
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Date of grant Grant price (based on fve-day volume weighted average price) (rand) Number of rights granted (all with performance conditions) Directors Management (including prescribed offcers) Forfeited during the year - management Unvested at 30 September 2015 Directors Management (including prescribed offcers) Vesting date Expiry date (lapse if not exercised)	29/05/2015 19,71 9 923 152
	2 914 952 7 008 200
	(135 515) 9 787 637
	2 914 952 6 872 685
	19/02/2018 19/02/2021

In terms of IFRS 2, the fair value of each equity settled share appreciation right awarded, which will be expensed over the vesting period in return for services rendered, is based on the five-day volume weighted average price preceding the grant date 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.

2015 Rm	2014 Rm


The carrying amount of the equity settled share appreciation rights as at 30 September 3	–

34.3

Forfeitable share plan

The forfeitable share plan (FSP), a long-term incentive, was introduced in 2011 and extended in 2012 to executive directors and prescribed officers. 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 33 months, 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. During the year, performance-linked awards were made using equity settled share appreciation rights instead of forfeitable shares.

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 remeasured 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 perfor- mance awards	29 May 2015 18 Feb 2014 15 Mar 2013 16 Feb 2012 Reten- tion awards Retention awards Perfor- mance awards Retention awards Perfor- mance awards Retention awards Perfor- mance awards


	Number of shares granted to directors 296 950 980 400 Number of shares granted to management and prescribed offcers 4 977 400 2 423 800 Average purchase price of shares acquired (R) Estimated fair value per share at grant date (R)	182 050 40 100 329 200 36 600 322 900 38 200 328 300 2 180 100 1 262 600 1 140 700 900 400 791 600 634 300 491 500 19,96 29,17 29,17 32,58 32,58 31,19 31,19 19,96 29,17 29,17 32,58 32,58 31,19 31,19

PPC Ltd Annual financial statements 2015

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

35. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

Refer accounting policies on page 12, 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.

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Effective date
reporting Possible
period on or implication
Revised statements in issue not yet effective after on PPC
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For adoption during 2016 fnancial year
None currently.
For adoption during 2017 fnancial year
IAS 1_Presentation of Financial Statements_(amendment)Disclosure Initiative– amendment to	1 January 2016	No impact
address perceived impediments to preparers exercising their judgement in presenting their fnancial reports by making the following changes:
• Clarifcation that information should not be obscured by aggregating or by providing immaterial information, materiality considerations apply to the all parts of the fnancial statements, and even when a standard requires a specifc disclosure, materiality considerations
do apply
• Clarifcation that the list of line items to be presented in these statements can be
disaggregated and aggregated as relevant and additional guidance on sub-totals in these statements and clarifcation that an entity’s share of OCI of equity accounted associates and
joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassifed to proft or loss
• Additional examples of possible ways of ordering the notes to clarify that understandability
and comparability should be considered when determining the order of the notes and to
demonstrate that the notes need not be presented in the order so far listed in paragraph
114 of IAS 1
IFRS 14_Regulatory Deferral Accounts_permits an entity which is a frst-time adopter of	1 January 2016	No impact
International Financial Reporting Standards to continue to account, with some limited changes,
for “regulatory deferral account balances” in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent fnancial statements.
Agriculture: Bearer Plants(amendments to IAS 16 and IAS 41) amends IAS 16_Property, Plant,_	1 January 2016	No impact
_Equipment_and IAS 41_Agriculture_to:
• Include “bearer plants” within the scope of IAS 16 rather than IAS 41, allowing such assets
to be accounted for as property, plant and equipment and measured after initial recognition
on a cost or revaluation basis in accordance with IAS 16
• Introduces a defnition of “bearer plants” as a living plant that is used in the production or
supply of agricultural produce, is expected to bear produce for more than one period and has
a remote likelihood of being sold as agricultural produce, except for incidental scrap sales
• Clarifes that produce growing on bearer plants remains within the scope of IAS 41
IFRS 11 (amendment)Accounting for Acquisition of Interests in Joint Operations– the	1 January 2016	No impact
amendment requires an acquirer of an interest in a joint operation in which the activity constitutes a business (as defned in IFRS 3_Business Combinations_) to:
• Apply all of the business combinations accounting principles in IFRS 3_Business Combinations_ and other IFRS, except for those principles that confict with the guidance in IFRS 11_Joint_
Arrangement
• Disclose the information required by IFRS 3 and other IFRS for business combinations
The amendments apply both to the initial acquisition of an interest in joint operation, and the
acquisition of an additional interest in a joint operation (in the latter case, previously held
interests are not remeasured).

62 PPC Ltd Annual financial statements 2015

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35. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES continued
Effective date
reporting Possible
period on or implication
Revised statements in issue not yet effective after on PPC
1 January 2016 No impact
----- End of picture text -----

	(amendments to IFRS 10 and IAS 28) amends IFRS 10_Consolidated Financial Statements_and IAS 28_Investment in Associates and Joint Ventures_to clarify the treatment of the sale or contribution of assets from an investor to its associate or joint venture, as follows: • Require full recognition in the investor’s fnancial statements of gains and losses arising on the sale or contribution of assets that constitute a business (as defned in IFRS 3_Business Combinations_) • Require the partial recognition of gains and losses where the assets do not constitute a business, ie a gain or loss is recognised only to the extent of the unrelated investors’ interests in that associate or joint venture These requirements apply regardless of the legal form of the transaction, eg whether the sale or contribution of assets occurs by an investor transferring shares in an subsidiary that holds the assets (resulting in loss of control of the subsidiary), or by the direct sale of the assets themselves
	Clarifcation of Acceptable Methods of Depreciation and Amortisation(amendment to IAS 16 and IAS 38) amends IAS 16_Property, Plant and Equipment_and IAS 38_Intangible Assets_to: 1 January 2016 No impact • Clarify that a depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is not appropriate for property, plant and equipment • Introduce a rebuttable presumption that an amortisation method that is based on the revenue generated by an activity that includes the use of an intangible asset is inappropriate, which can only be overcome in limited circumstances where the intangible asset is expressed as a measure of revenue, or when it can be demonstrated that revenue and the consumption of the economic benefts of the intangible asset are highly correlated • Add guidance that expected future reductions in the selling price of an item that was produced using an asset could indicate the expectation of technological or commercial obsolescence of the asset, which, in turn, might refect a reduction of the future economic benefts embodied in the asset
	Investment Entities: Applying the Consolidation Exception(amendments to IAS 28, IFRS 10 and IFRS 12) amends IAS 28_Investment in Associates and Joint Ventures_, IFRS 10_Consolidated_ _Financial Statements_and IFRS 12_Disclosure of Interests in Other Entities_to address issues that have arisen in the context of applying the consolidation exception for investment entities by clarifying the following points: 1 January 2016 No impact • The exemption from preparing consolidated fnancial statements for an intermediate parent entity is available to a parent entity that is a subsidiary of an investment entity, even if the investment entity measures all of its subsidiaries at fair value • A subsidiary that provides services related to the parent’s investment activities should not be consolidated if the subsidiary itself is an investment entity • When applying the equity method to an associate or a joint venture, a non-investment entity investor in an investment entity may retain the fair value measurement applied by the associate or joint venture to its interests in subsidiaries • An investment entity measuring all of its subsidiaries at fair value provides the disclosures relating to investment entities required by IFRS 12
	IAS 27 (amendment)Equity Method in Separate Financial Statements_amends IAS 27_Separate _Financial Statements_to permit investments in subsidiaries, joint ventures and associates to be optionally accounted for using the equity method in separate fnancial statements. 1 January 2016 Optional
	IASB improvements to IFRS 2012 – 2014 makes amendments to the following standards: 1 July 2018 No impact • IFRS 5 – Adds specifc guidance in IFRS 5 for cases in which an entity reclassifes an asset from held for sale to held for distribution or vice versa and cases in which held for distribution accounting is discontinued • IFRS 7 – Additional guidance to clarifes whether a servicing contract is continuing involvement in a transferred asset, and clarifcation on offsetting disclosures in condensed interim fnancial statements • IAS 9 – Clarifes that the high-quality corporate bonds used in estimating the discount rate for post-employment benefts should be denominated in the same currency as the benefts to be paid. • IAS 34 – Clarifes the meaning of “elsewhere in the interim report” and require a cross-reference
	For adoption during 2019 fnancial year IFRS 15_Revenue from Contracts with Customers_ 1 January 2018 Yes IFRS 9_Financial Instruments_ 1 January 2018 Yes

PPC Ltd Annual financial statements 2015 63

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

36. FINANCIAL RISK MANAGEMENT

The group’s financial instruments consist mainly of borrowings from financial institutions, deposits with banks, local money market instruments and accounts receivable and payable.

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 management

The 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 notes 13, 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 the redemption of existing debt.

Treasury risk management

Senior financial executives meet on a regular basis to analyse currency and interest rate exposure 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 management

Trade and capital commitments

The 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 or loss when the hedged transaction affects the income statement where appropriate. Fair value gain of the forward exchange contracts at reporting date is R10 million.

Cash flow hedge accounting applied in respect of foreign currency risk

2015 Rm	2014 Rm


Fair value of asset – foreign currency forward exchange 38	–
The amounts below represent forward exchange contract commitments to purchase foreign currencies: <1 year Rm 1 to 3 years Rm	Total Rm


2015 479 – 2014 327 140	479 467
Total forward exchange contracts comprise the following: 2015	2014


Euro (€m) 1 Average rate (R/€) 14,76 US dollar (US$m) 34 Average rate (R/US$) 12,99	1 15,72 39 11,92

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.

64 PPC Ltd Annual financial statements 2015

36. FINANCIAL RISK MANAGEMENT continued

Interest rate management

The 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 the refinancing of existing borrowings are structured according to expected movements in interest rates. The profile of total borrowings is as follows:

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Years of 2015 2014
Description repayment Rm Rm
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Secured BBBEE transaction (refer note 13) 2016 – 2017 1 229 Long-term loans denominated in foreign currencies (refer note 13) 2016 – 2025 2 357	1 290 605
3 586	1 895
Unsecured Long-term loans (refer note 13) 2017 1 520 Short-term loans and bank overdrafts (refer note 15) 2016 719 Bonds (refer note 13) 2016 – 2021 2 396	1 520 281 2 395
4 635	4 196

The group entered into an interest rate swap agreement in 2008 in which a variable rate was swapped for a fixed rate of 9,37%. Unsecured, short-term loans bear interest at market rates.

As at September 2015, the following interest rate swap contract was held in respect of the consolidated debt of the BBBEE trusts and trust funding SPVs:

trust funding SPVs:
Fair value Related underlying liability Currency Notional amount Rm Fixed interest rate (nacs) % Maturity date Rm 2015 Rm	of liability 2014 Rm


A preference shares (rate linked to prime) ZAR 14 9,37 2016 1	1
Total 1	1

Movements on cash flow hedges amounting to R27 million (2014: R7 million), net of taxation, were recognised in other comprehensive income during the year.

Sensitivity analysis

Interest rate risk

At 30 September 2015, if all floating interest rates on interest-bearing loan receivables, short-term cash investments, short-term loans payable and bank overdrafts at that date had been 100 basis points higher, with all other variables held constant, attributable earnings would have been R44 million (earnings per share: 8 cents) lower. Conversely, at 30 September 2015, 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 R44 million (earnings per share: 8 cents) higher.

Equity price risk – cash settled share appreciation rights

At 30 September 2015, if the PPC share price had been R12,50 higher, with all other variables held constant, attributable earnings would have been R16 million (earnings per share: 3 cents) lower. Conversely, at 30 September 2015, if the PPC share price had been R12,50 lower, with all other variables held constant, attributable earnings would have been R4 million (earnings per share: 1 cent) higher.

PPC Ltd Annual financial statements 2015 65

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

36. FINANCIAL RISK MANAGEMENT continued Fair values of financial assets and liabilities

The carrying values of certain financial assets and liabilities, which are accounted for at historical cost, may differ from their fair values.

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Cement
Carrying
amount Fair value
Notes Rm Rm
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2015
Financial assets
*Available-for-sale*		82	82
Unlisted investments at fair value	5	82	82
*Loans and receivables*		1 571	1 571
Investment in government bonds	5	7	7
Loans advanced	5	1	1
Loans relating to non-current assets held for sale	8	46	46
Derivative fnancial instruments (cash fow and fair value hedges)	8	51	51
Trade and other fnancial receivables	8	793	793
Cash and cash equivalents	9	673	673
*At fair value through proft and loss*		193	227
Unlisted collective investment (held for trading)	5	117	117
Non-current assets held for sale	6	76	110
Financial liabilities
*At amortised cost*		8 239	8 255
Long-term borrowings	13	5 573	5 589
Short-term borrowings	15	1 419	1 419
Trade and other fnancial payables	16	1 247	1 247
*At fair value through proft and loss*		469	469
Cash settled share-based payment liability	14	5	5
Put option liabilities	14	464	464
*Derivatives*		–	–
Derivative fnancial instrument	16	–	–
2014
Financial assets
*Available-for-sale*		95	95
Unlisted investments at fair value	5	95	95
*Loans and receivables*		1 501	1 501
Loans advanced	5	3	3
Loans to equity accounted companies	4	46	46
Trade and other fnancial receivables	8	935	935
Cash and cash equivalents	9	517	517
*At fair value through proft and loss*		114	114
Unlisted collective investment (held for trading)	5	114	114
Financial liabilities
*At amortised cost*		3 260	3 289
Long-term borrowings	13	1 826	1 855
Short-term borrowings	15	351	351
Trade and other fnancial payables	16	1 083	1 083
*At fair value through proft and loss*		163	163
Cash settled share-based payment liability	14	18	18
Put option liabilities	14	145	145
*Derivatives*		–	–
Derivative fnancial instrument – non-current (cash fow hedge)	16	–	–

66 PPC Ltd Annual financial statements 2015

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----- Start of picture text -----

Lime Aggregates and readymix Other Total
Carrying Carrying Carrying Carrying
amount Fair value amount Fair value amount Fair value amount Fair value
Rm Rm Rm Rm Rm Rm Rm Rm
----- End of picture text -----

–	–	–	–		–		–		82		82
–	–	–	–		–		–		82		82
99	99	60	60		4		4	1	734	1	734
–	–	–	–		–		–		7		7
–	–	–	–		–		–		1		1
–	–	–	–		–		–		46		46
–	–	–	–		–		–		51		51
91	91	27	27		–		–		911		911
8	8	33	33		4		4		718		718
–	–	–	–		–		–		193		227
–	–	–	–		–		–		117		117
–	–	–	–		–		–		76		110
108	108	148	148	1	230	1	230	9	725	9	741
–	–	–	–	1	138	1	138	6	711	6	727
–	–	–	–		91		91	1	510	1	510
108	108	148	148		1		1	1	504	1	504
–	–	–	–		–		–		469		469
–	–	–	–		–		–		5		5
–	–	–	–		–		–		464		464
–	–	–	–		1		1		1		1
–	–	–	–		1		1		1		1
–	–	–	–		–		–		95		95
–	–	–	–		–		–		95		95
115	115	87	87		–		–	1	703	1	703
–	–	–	–		–		–		3		3
–	–	–	–		–		–		46		46
108	108	48	48		–		–	1	091	1	091
7	7	39	39		–		–		563		563
–	–	–	–		–		–		114		114
–	–	–	–		–		–		114		114
42	42	31	31	3	914	3	914	7	247	7	276
–	–	–	–	3	914	3	914	5	740	5	769
–	–	–	–		–		–		351		351
42	42	31	31		–		–	1	156	1	156
–	–	–	–		–				163		163
–	–	–	–		–		–		18		18
–	–	–	–		–		–		145		145
–	–	–	–		1		1		1		1
–	–	–	–		1		1		1		1

PPC Ltd Annual financial statements 2015 67

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

36. FINANCIAL RISK MANAGEMENT continued

Credit risk management

The 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 2015, 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:

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----- Start of picture text -----

Aggregates
and
Cement Lime readymix Other Total
Rm Rm Rm Rm Rm
Maximum credit risk exposure
2015 1 689 8 33 4 1 734
2014 1 501 115 87 – 1 703
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Liquidity risk management

Liquidity 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 368 million and utilised 26% of these facilities at 30 September 2015. At year-end, R1 752 million of borrowing facilities remain unutilised. These numbers exclude facilities in respect of debt consolidation 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 Rm	2 to 3 years Rm	>3 years Rm	Total Rm
2015
Long-term borrowings	7 502	791	3 180	3 531	7 502
Short-term borrowings	719	719	–	–	719
Trade and other payables	1 770	1 770	–	–	1 770
2014
Long-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

Refer note 13 for borrowing details.

68 PPC Ltd Annual financial statements 2015

36. FINANCIAL RISK MANAGEMENT continued

Methods and assumptions used by the group in determining fair values

The estimated fair value of financial instruments is determined, at discrete points in time, by reference to the mid-price in an active market wherever possible. Where no such active market exists for the particular asset or liability, the group uses valuation techniques to arrive at fair value, including the use of prices obtained in recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market participants.

The fair value of unlisted investment has been valued based on the purchase agreement following the decision to dispose of the investment, while unlisted collective investment is valued using the closing unit price at period end. Investment in government bonds is valued using the discounted face value of the bills. Further details are disclosed in note 5.

The fair value of loans receivable and payable is based on the market rates of the loan and the recoverability.

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

Put option liabilities have been calculated using EBITDA forecasts prepared by management and discounted to present value. Further details are disclosed in note 14.

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 34.

Fair value hierarchy disclosures

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Notes Level 1 Level 2 Level 3 Total
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2015
Financial assets
*Available-for-sale*
Unlisted investment at fair value	5	–	82	–	82
*Loans and receivables*
Investment in government bonds	5	–	7	–	7
Loans advanced	5	–	1	–	1
Loans relating to non-current assets held for sale	8	–	46	–	46
Derivative fnancial instruments	8	51	–	–	51
Trade and other fnancial receivables	8	–	911	–	911
Cash and cash equivalents	9	718	–	–	718
*At fair value through proft and loss*
Unlisted collective investment at fair value (held for
trading)	5	117	–	–	117
Non-current assets held for sale	6	–	110	–	110
Total fnancial assets		886	1 157	–	2 043
Financial liabilities
*At amortised cost*
Long-term borrowings	13	2 396	4 331	–	6 727
Short-term borrowings	15	1 510	–	–	1 510
Trade and other fnancial payables and retentions	16	–	1 504	–	1 504
*At fair value through proft and loss*
Derivative instruments – current (held for trading)	14	–	5	–	5
Put option liabilities	14	–	–	464	464
*Derivatives*
Derivative fnancial instruments	16	–	1	–	1
Total fnancial liabilities		3 906	5 841	464	10 211

PPC Ltd Annual financial statements 2015 69

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

36. FINANCIAL RISK MANAGEMENT continued

Fair value hierarchy disclosures continued

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Notes Level 1 Level 2 Level 3 Total
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2014
Financial assets
*Available-for-sale*
Unlisted investment at fair value	5	–	–	95	95
*Loans and receivables*
Loans advanced	5	–	3	–	3
Loans to equity accounted companies	4	–	46	–	46
Trade and other fnancial receivables	8	–	1 091	–	1 091
Cash and cash equivalents	9	563	–	–	563
*At fair value through proft and loss*
Unlisted collective investments at fair value
(held for trading)	5	114	–	–	114
Total fnancial assets		677	1 140	95	1 912
Financial liabilities
*At amortised cost*
Long-term borrowings	13	2 395	3 374	–	5 769
Short-term borrowings	15	351	–	–	351
Trade and other fnancial payables	16	–	1 156	–	1 156
*At fair value through proft or loss*
Derivative instruments – current (held for trading)	14	–	18	–	18
Put option liabilities	14	–	–	145	145
*Derivatives*
Derivative instruments – non-current (cash fow hedge)	16	–	1	–	1
Total fnancial liabilities		2 746	4 549	145	7 440

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 marketrelated data.

Level 3 – financial assets and liabilities that are valued using unobservable data, and requires management judgement in determining the fair value. Refer notes 5 and 14 for quantitative information and significant assumptions on the unobservable inputs used to determine fair values for financial assets and liabilities respectively.

70 PPC Ltd Annual financial statements 2015

36. FINANCIAL RISK MANAGEMENT continued

Fair value hierarchy disclosures continued

The unlisted investment at fair value has been transferred from level 3 to level 2 because observable market data became available (refer note 5).

Level 3 sensitivity analysis

*Level 3 sensitivity analysis*
			Carrying
	Valuation	Key	value	Increase	Decrease
Financial instrument	technique	assumptions	Rm	Rm	Rm

	Earnings	EBITDA and
Put option liabilities	multiple	net debt	422	20	20

If the key unobservable inputs to the valuation model, being estimated EBITDA and net debt, were 1% higher/lower while all the other variables were held constant, the carrying amount of the put option liabilities would decrease/increase by R20 million.

The sensitivities are based only on the DRC put option as any movement on the remainder of the Safika Cement put options are not deemed material due to expected time of when put option will be settled.

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----- Start of picture text -----

2015 2014
Rm Rm
Movements in level 3 financial instruments
----- End of picture text -----

Movements in level 3 fnancial instruments Financial assets(refer note 5) Balance at beginning of the year 95 Remeasurements (13) Transfers to level 2 (82) Balance at end of the year – Financial liabilities(refer note 14) Balance at beginning of the year 145 Exercised during the year (108) Put options issued 422 Remeasurements (14) Time value of money adjustments 19 Balance at end of the year 464	Movements in level 3 fnancial instruments Financial assets(refer note 5) Balance at beginning of the year 95 Remeasurements (13) Transfers to level 2 (82) Balance at end of the year – Financial liabilities(refer note 14) Balance at beginning of the year 145 Exercised during the year (108) Put options issued 422 Remeasurements (14) Time value of money adjustments 19 Balance at end of the year 464
	Financial assets(refer note 5) Balance at beginning of the year 95 Remeasurements (13) Transfers to level 2 (82)	37 58 –
	Balance at end of the year –	95
	Financial liabilities(refer note 14) Balance at beginning of the year 145 Exercised during the year (108) Put options issued 422 Remeasurements (14) Time value of money adjustments 19	– – 137 (8) 16
	Balance at end of the year 464	145

PPC Ltd Annual financial statements 2015 71

NOTES TO THE cONSOlidaTEd FiNaNcial STaTEMENTS continued

for the year ended 30 September 2015

37. RELATED PARTY TRANSACTIONS

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----- Start of picture text -----

Parent
company of Subsidiary of
reporting reporting
entity entity
Rm Rm
----- End of picture text -----

2015
Interest received
Afripack Limited	–	3
Goods and services purchased/(sold)
Afripack Limited	87	–
Amounts due (to)/from as at end of the year
Afripack Limited	(9)	46
2014
Interest received
Afripack Limited	–	3
Goods and services purchased/(sold)
Afripack Limited	131	–
Pronto Building Materials (Pty) Ltd (until 30 June 2014)	(151)	–
Amounts due (to)/from as at end of the year
Afripack Limited	(13)	43
Metlakgola Construction & Development (Pty) Ltd	–	1
Rhulanani Concrete Mixers (Pty) Ltd	–	2

Group companies, in the ordinary course of business, entered into purchase transactions with 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 R42 million (2014: R65 million) were paid to the PPC SBP Consortium Funding SPV (Pty) Ltd. 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 Fundings SPV (Pty) Ltd.

72 PPC Ltd Annual financial statements 2015

38. ADDITIONAL DISCLOSURE

Directors, prescribed officers and key management

The 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 abridged remuneration report on pages 99 to 107.

Shareholders

The principal shareholders of the company are disclosed on page 108.

39. EVENTS AFTER REPORTING DATE

There are no events that occurred after the reporting date that may have a material impact on the group’s reported consolidated financial position at 30 September 2015.

40. CURRENCY CONVERSION GUIDE

Approximate value of foreign currencies relative to the rand at 30 September

40. CURRENCY CONVERSION GUIDE Approximate value of foreign currencies relative to the rand at 30 September
2015 Botswana pula 1,32 Euro 15,42 US dollar 13,82 Rwandan franc 0,02 Mozambican metical 0,33	2014


	1,22 14,28 11,31 0,02 0,37

PPC Ltd Annual financial statements 2015 73

SUBSIDIARIES AND NON-CONTROLLING INTEREST

as at 30 September 2015

SUBSIDIARIES AND NON-CONTROLLING INTERESTS

The consolidated annual financial statements for the year ended 30 September 2015 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, voting rights are aligned to the proportionate ownership. Noncontrolling shareholders have significant interests in two of the group’s subsidiaries, namely CIMERWA Limited (CIMERWA) and PPC Barnet DRC Holdings. Following the further investment in Safika Cement Holdings (Pty) Ltd (Safika Cement) during the year, via the exercise of a put option, non-controlling interest in Safika Cement is not considered significant in the current year.

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

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----- Start of picture text -----

Name of subsidiary Principal activity
----- End of picture text -----

PPC Zimbabwe Limited	Manufacturer and supplier of both bag and bulk cement for use within
	Zimbabwe and surrounding countries
PPC Botswana (Pty) Ltd	Manufacturer, wholesaler and distributor of cementitious products, both bag and
	bulk, within Botswana
PPC International Holdings (Pty) Ltd	Holding company for PPC’s rest of Africa investments
PPC Lime Limited	Manufacturer and supplier of highly reactive lump lime, burnt lime and burnt
	dolomite for use in South Africa and other surrounding countries
Pretoria Portland Cement International Holdings	Holding company for PPC’s investments in Mozambique and PPC Aggregates
	Quarries Botswana
Pronto Building Materials (Pty) Ltd	Manufacture and supplier of readymix concrete and dry mortar mix in Gauteng
Ulula Ash (Pty) Ltd	Manufacture and supplier of fy ash
Safka Cement Holdings (Pty) Ltd*	Manufacturer and supplier of blended cement within South Africa
PPC Aggregate Quarries (Pty) Ltd	Manufacturer and supplier of stone, sand, road layer material and special
	aggregate-related products in Gauteng
PPC Aggregate Quarries Botswana (Pty) Ltd	Manufacturer and supplier of stone, sand, road layer material and special
	aggregate-related products in Gaborone and Francistown
Kgale Quarries (Pty) Ltd	Manufacturer and supplier of stone, sand, road layer material and special
	aggregate-related products in Gaborone
CIMERWA Limited	Manufacturer and supplier of both bag and bulk cement for use within Rwanda
	and surrounding countries
PPC Barnet DRC Holdings^	Holding company for PPC’s expansion into the DRC and surrounding cement
	markets
PPC Barnet DRC Trading SA	Supplier of bag cement for use within the DRC and surrounding countries
PPC Barnet DRC Manufacturing SA	Manufacturer of both bag and bulk cement for use within the DRC 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 into the Maputo and Tete regions

During the year one of the non-controlling shareholders exercised its put option and sold 21,1% of Safika Cement to PPC Ltd. For details on the outstanding put options, refer note 14. In order to retain and incentivise the Safika Cement management team, a notional vendor funding transaction was concluded for 5% of the business. The transaction period is for five years.

^ During the year Barnet Group SARL and IFC subscribed for equity in PPC Barnet DRC Holdings. There is an agreement whereby the IFC can put its shares to PPC in future. Refer note 14.

It is foreseen that the entities will commence with their primary activities at the end of the 2016 calendar year 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.

74 PPC Ltd Annual financial statements 2015

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----- Start of picture text -----

Proportion of ownership
interest and voting power
held by the group
Country of
incorporation 2015 2014 Holding company
----- End of picture text -----

Zimbabwe
70%
Botswana
100%
South Africa
100%
South Africa
100%
Mauritius
100%
South Africa
100%
South Africa
100%
South Africa
85%
South Africa
100%
Botswana
100%
Botswana
100%
Rwanda
51%
Mauritius
69%
Democratic Republic of the Congo
100%
Democratic Republic of the Congo
100%
Democratic Republic of the Congo
100%
Mozambique
100%

70%
PPC Ltd
100%
PPC Ltd
100%
PPC Ltd
100%
PPC Ltd
100%
PPC Ltd
100%
Pronto Holdings (Pty) Ltd
100%
Pronto Building Materials (Pty) Ltd
69%
PPC Ltd
100%
PPC Ltd
100%
Pretoria Portland Cement International
Holdings
100%
PPC Botswana (Pty) Ltd
51%
PPC International Holdings (Pty) Ltd
100%
PPC International Holdings (Pty) Ltd
100%
PPC Barnet DRC Holdings
100%
PPC Barnet DRC Holdings
100%
PPC Barnet DRC Holdings
100%
PPC Mozambique Holdings

PPC Ltd Annual financial statements 2015 75

SUBSIDIARIES AND NON-CONTROLLING INTEREST Continued

as at 30 September 2015

SUBSIDIARIES AND NON-CONTROLLING INTERESTS continued

The following summarised financial information is presented for PPC Barnet DRC Holdings, CIMERWA Limited (CIMERWA) and Safika Cement Holdings (Pty) Ltd (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 intergroup eliminations with other group entities. These entities are deemed material due to their respective non-controlling shareholders being a major component of the value reflected on the consolidated statement of financial position.

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----- Start of picture text -----

PPC Barnet Safika
DRC Holdings CIMERWA CIMERWA Cement
2015 2015 2014 2014
Rm Rm Rm Rm
Revenue 107 265 234 833
EBITDA (27) (20) (1) 83
Net (loss)/profit for the year (132) (35) (26) 38
Net (loss)/profit attributable to non-controlling interests (38) (17) (13) 12
Dividends paid to non-controlling interests – – – 34
Total assets 2 836 2 434 2 002 306
Total liabilities 2 649 1 274 865 93
Equity attributable to non-controlling interests (170) 635 557 140
----- End of picture text -----

During the year, PPC acquired 21,1% additional interest in Safika Cement, increasing its shareholding to 85,4%. An amount of R108 million, being the proportionate share of the carrying amount of the net assets, has been transferred from non-controlling interest, which also represents the amount paid.

PPC Barnet DRC Holdings was acquired in 2014 and was 100% owned by PPC. In the current year shares were issued to non-controlling shareholders amount of R256 million, being the proportionate share of the carrying amount of the net assets, has been transferred to noncontrolling interests, which also represents the value amount and assets received.

CIMERWA was acquired in January 2013, while Safika Cement was acquired with effect from January 2014.

ATTRIBUTABLE INTEREST IN SUBSIDIARIES

2015 Rm	2014 Rm


Attributable interest in the aggregate amount of profts and losses of subsidiaries, after taxation and non-controlling interest: Profts 183 Losses (146)	433 (168)

76 PPC Ltd Annual financial statements 2015

Company STaTEmEnT oF FInanCIaL poSITIon

as at 30 September 2015

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----- Start of picture text -----

2015 2014
Notes Rm Rm
----- End of picture text -----


aSSETS non-current assets Property, plant and equipment 1 Intangible assets 2 Equity accounted investments 4 Other non-current assets 3 Non-current asset held for sale 4 Current assets Inventories 5 Trade and other receivables 6 Amounts owing by subsidiaries 3 Taxation receivable Cash and cash equivalents	5 491	5 152
	3 709 128 – 1 654	3 474 112 7 1 559
	7 3 121	– 2 645
	489 658 1 970 – 4	444 723 1 441 34 3

Total assets	8 619	7 797
EQUITy anD LIaBILITIES Capital and reserves Stated capital 7 Other reserves Retained proft	(730) 91 1 144	(729) 374 1 050
Total equity non-current liabilities Deferred taxation liabilities 8 Provisions 10 Long-term borrowings 9 Other non-current liabilities 11 Current liabilities Short-term borrowings 12 Taxation payable Trade and other payables 13 Amounts owing to subsidiaries 3	505 5 613	695 5 915
	555 252 4 384 422	571 241 5 063 40
	2 501	1 187
	1 274 64 888 275	249 – 818 120

Total equity and liabilities	8 619	7 797

PPC Ltd Annual financial statements 2015 77

Company InComE STaTEmEnT

for the year ended 30 September 2015

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----- Start of picture text -----

2015 2014
Notes Rm Rm
----- End of picture text -----

Revenue 5 536 Cost of sales 3 864	5 898 3 999
Gross proft 1 672 Administration and other operating expenditure 294	1 899 401
operating proft before BBBEE IFRS 2 charges 14 1 378 BBBEE IFRS 2 charges 35	1 498 36
operating proft 1 343 Fair value adjustments on fnancial instruments 15 32 Finance costs 16 535 Investment income 17 16	1 462 6 468 41
proft before impairments and other exceptional adjustments 856 Impairments and other exceptional adjustments 18 (16)	1 041 (1)
proft before taxation 840 Taxation 19 197	1 040 221
proft for the year 643	819

78 PPC Ltd Annual financial statements 2015

Company STaTEmEnT oF CompREHEnSIvE InComE

for the year ended 30 September 2015

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----- Start of picture text -----

available- Total
for-sale compre-
financial Hedging Retained hensive
assets reserve profit income
Rm Rm Rm Rm
----- End of picture text -----

2015 proft for the year Items that will be reclassifed to proft or loss Revaluation of available-for-sale fnancial asset Taxation on the revaluation of available-for-sale fnancial asset Cash fow hedge recognised directly through equity Taxation on cash fow hedge other comprehensive proft net of taxation	– – 643 643 (10) 27 – 17
	(13) – – (13) 3 – – 3 – 38 – 38 – (11) – (11)
	(10) 27 – 17
Total comprehensive income	(10) 27 643 660
2014 proft for the year Items that will be reclassifed to proft or loss Revaluation of available-for-sale fnancial asset Taxation on the revaluation of available-for-sale fnancial asset Cash fow hedge recognised directly through equity other comprehensive proft net of taxation	– – 819 819 47 7 – 54
	58 – – 58 (11) – – (11) – 7 – 7
	47 7 – 54
Total comprehensive income	47 7 819 873

PPC Ltd Annual financial statements 2015 79

Company STaTEmEnT oF CHanGES In EQUITy

for the year ended 30 September 2015

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----- Start of picture text -----

other reserves
Equity
available-for- compen-
Stated sale financial sation Hedging put Retained
capital assets reserve reserve options profit Total
Rm Rm Rm Rm Rm Rm Rm
----- End of picture text -----

2015 Balance at beginning of the year movement for the year BBBEE IFRS 2 charges Dividends declared Exercise of put option FSP IFRS 2 charges Movement recognised directly in retained income Put option recognised on non-controlling shareholder investment in subsidiary company (refer note 11) Total comprehensive (loss)/income Treasury shares purchased in terms of the FSP incentive scheme^ Vesting of certain FSP incentive scheme awards	(729) 288 223 – (137) 1 050 695 (1) (10) 28 27 (328) 94 (190)
	– – 35 – – – 35 – – – – – (563) (563) – – – – 94 – 94 – – 16 – – – 16 – – – – – 14 14 – – – – (422) – (422) – (10) – 27 – 643 660 (24) – – – – – (24) 23 – (23) – – – –

Balance at 30 September 2015	(730) 278 251 27 (465) 1 144 505
2014 Balance at beginning of the year movement for the year Acquisitions of subsidiary companies (refer notes 11 and 13) BBBEE IFRS 2 charges Dividends declared FSP IFRS 2 charges Total comprehensive income Transfer to retained income Treasury shares purchased in terms of the FSP incentive scheme^ Vesting of certain FSP incentive scheme awards	(692) 241 196 (7) – 1 105 843 (37) 47 27 7 (137) (55) (148)
	– – – – (137) – (137) – – 36 – – – 36 – – – – – (879) (879) – – 12 – – – 12 – 47 – 7 – 819 873 – – (5) – – 5 – (53) – – – – – (53) 16 – (16) – – – –

Balance at 30 September 2014	(729) 288 223 – (137) 1 050 695

^ For further details on the FSP incentive scheme, refer note 34 in the consolidated financial statements.

80 PPC Ltd Annual financial statements 2015

Company STaTEmEnT oF CaSH FLoWS

for the year ended 30 September 2015

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----- Start of picture text -----

2015 2014
Notes Rm Rm
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CaSH FLoW FRom opERaTInG aCTIvITIES proft before exceptional adjustments 856 Adjustments for: Amortisation of intangible assets 2 22 IFRS 2 charges 51 Depreciation 1 395 Dividends received 17 (5) Fair value gains on fnancial instruments 15 (32) Finance costs 16 535 Income from subsidiary companies 14 (419) Interest received 17 (11) Other non-cash fow items –	1 041 25 48 384 (14) (6) 468 (351) (27) (19)
operating cash fows before movements in working capital 1 392 Movement in inventories (55) Movement in trade and other receivables 103 Movement in trade and other payables 171	1 549 38 (62) (110)
Cash generated from operations 1 611 Dividends received 5 Finance costs paid 20 (405) Income received from subsidiary companies 14 419 Interest received 17 11 Taxation paid 21 (124)	1 415 14 (337) 351 27 (202)
Cash available from operations 1 517 Dividends paid (563)	1 268 (879)
net cash infow from operating activities 954	389
CaSH FLoW FRom InvESTInG aCTIvITIES Acquisition of additional shares in subsidiary (108) Acquisitions of subsidiary companies 3 – Investments in intangible assets 2 (35) Investments in property, plant and equipment 22 (657) Movement in net amounts owing by subsidiary companies 3 (362) Proceeds from disposal of property, plant and equipment 1	– (657) (61) (395) (823) 1
net cash outfow from investing activities (1 161)	(1 935)
net cash outfow before fnancing activities (207)	(1 546)
CaSH FLoW FRom FInanCInG aCTIvITIES BBBEE transaction repaid (144) Net borrowings raised/(repaid) 376 Proceeds raised from bond issuance 9 – Purchase of shares in terms of FSP incentive scheme 7 (24)	(34) (254) 1 750 (53)
net cash infow from fnancing activities 208	1 409
net movement in cash and cash equivalents 1 Cash and cash equivalents at beginning of the year 3	(137) 140
Cash and cash equivalents at end of the year 4	3

PPC Ltd Annual financial statements 2015 81

noTES To THE Company FInanCIaL STaTEmEnTS

for the year ended 30 September 2015

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Freehold
and leasehold plant,
land, Factory vehicles,
buildings decommis - furniture Capitalised
and mineral sioning and leased
rights assets equipment plant Total
Rm Rm Rm Rm Rm
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1.	pRopERTy, pLanT anD EQUIpmEnT 2015 Cost 594 63 6 561 153 7 371 Accumulated depreciation and impairments 267 25 3 221 149 3 662
	327 38 3 340 4 3 709
	Movements during the year Net carrying value at beginning of the year 326 40 3 101 7 3 474 Additions 18 – 639 – 657 Depreciation (17) (1) (374) (3) (395) Disposals – – (1) – (1) Impairments – – (16) – (16) Other movements/reallocation – (1) (9) – (10)
	Net carrying value at end of the year 327 38 3 340 4 3 709
	2014 Cost 576 64 5 992 153 6 785 Accumulated depreciation and impairments 250 24 2 891 146 3 311
	326 40 3 101 7 3 474
	Movements during the year Net carrying value at beginning of the year 327 44 3 075 11 3 457 Additions 15 – 380 – 395 Depreciation (17) (1) (362) (4) (384) Disposals – – (2) – (2) Other movements/reallocation 1 (3) 10 – 8
	Net carrying value at end of the year 326 40 3 101 7 3 474

Included in plant, vehicles, furniture and equipment is capital work in progress of R357 million (2014: R121 million).

A significant portion of the impairment loss recognised relates to Algeria project costs that were capitalised in prior years. Following the group’s decision to no longer pursue the current Algeria project, it is deemed appropriate that the costs capitalised of R15 million be impaired.

Certain of the company’s properties are the subject of land claims. Discussion with the Land Claims Commissioner continue and outcomes of the claims referred to the Land Claims Court are still due. The claims are not expected to have a material impact on the company’s operations.

During the year an amount of R4 million (2014: R15 million) for critical spares was reclassified between property, plant and equipment and inventory.

Borrowing costs of R3 million (2014: Rnil) have been capitalised to property, plant and equipment (refer note 16).

Refer the consolidated notes for additional disclosures on property, plant and equipment and impairments.

82 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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2.	InTanGIBLE aSSETS ERp development and other software Cost Accumulated amortisation and impairments	257 129	221 109
		128	112
	Net carrying value at beginning of the year Additions Amortisation Transfers and other movements*	112 35 (22) 3	76 61 (25) –
	Net carrying value at end of the year	128	112
	* During the year R3 million (2014: Rnil) was reclassifed between property, plant and equipment and intangible assets.
3.	oTHER non-CURREnT aSSETS Investments in subsidiaries Investments in subsidiaries at beginning of the year Investment in Safka Cement Investment in Pronto	1 420 108 –	583 377 460
	Investments in subsidiaries at end of the year Unlisted investments Unlisted investments at fair value Contributions to PPC Environmental Trust	1 528 126	1 420 139
		82 44	95 44

		1 654	1 559
	Comprising: Other non-current assets Other non-current fnancial assets	1 572 82	1 464 95
		1 654	1 559
	Interests in subsidiaries Shares at cost less amounts written off and dividends received at beginning of the year _Add:_Investments in subsidiaries	1 427 108	590 837
	_Add:_Amounts owing by subsidiaries	1 535 1 970	1 427 1 441
	_Less:_Amounts owing to subsidiaries	3 505 (275)	2 868 (120)
		3 230	2 748

PPC Ltd Annual financial statements 2015 83

NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

for the year ended 30 September 2015

3. oTHER non-CURREnT aSSETS continued

Investment in Safika Cement

During the year, the company acquired an additional 21,1% equity stake in Safika Cement for R108 million bringing PPC’s shareholding to 85,6% after the initial investment of R377 million for 69,3% in 2014. 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. The remaining non-controlling shareholders hold a put option to put their shareholding to the company. For details of the put option refer note 11.

Unlisted investments at fair value

The company holds a 6,75% (2014: 6,75%) shareholding in Ciments du Bourbon, incorporated in Reunion. Negotiations have been concluded for the sale of the investment and the purchase consideration has been deemed to be its fair value. In the prior year the fair value of the investment was calculated using a dividend yield valuation methodology, using comparable company dividend yields of 6,88% and applied to forecast dividends. The sale is anticipated to be finalised during the first quarter of 2016. The movement in fair value of R13 million (2014: R58 million) has been recorded against other comprehensive income.

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 and Energy Affairs to fund the company’s decommissioning and rehabilitation obligations. The carrying value of the underlying trust’s investments is R93 million.

amounts owing by and to subsidiaries

The loans generally have no fixed terms of repayment, are unsecured and, where required, interest is calculated using ruling marketrelated interest rates.

	2015 Rm	2014 Rm


	EQUITy aCCoUnTED InvESTmEnTS Investments at cost at beginning of the year 7 Transferred to investment in subsidiaries^ – Transferred to non-current asset held for sale (7)*	186 (179) –
	–	7
	Fair value of equity accounted investments as determined by the directors –	194

^ In June 2014 PPC acquired the remaining 50% equity stake in Pronto making it a wholly owned subsidiary. Pronto is a prominent Gauteng-based readymix and fly ash supplier, with nine batching plants. This provided 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.

The company is currently in the process of selling its 25% stake in Afripack. A sales agreement has been signed and the conditions precedent to the sale are expected to be met in the new financial year and finalisation of the transaction to occur shortly thereafter. Afripack’s carrying amount at cost which has been classified as held for sale is R7 million which is lower than its fair value less costs to sell of R70 million. The fair value represents the selling price per the sales agreement less estimated transaction cost.

	2015 Rm	2014 Rm
5.

	InvEnToRIES Raw materials 79 Work in progress 120 Finished goods 78 Maintenance stores 311 Inventory obsolescence (99)	90 70 99 274 (89)
	489	444
	Amount of inventories recognised as an expense during the year 2 810	2 445

Inventories are determined on the weighted average formula bases.

During the year an amount of R4 million (2014: R15 million) for critical spares was reclassified to property, plant and equipment (refer note 1).

No inventories have been pledged as security.

84 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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6.	TRaDE anD oTHER RECEIvaBLES Trade receivables Allowance for doubtful debts	579 (16)	652 (7)
	Net trade receivables Derivative fnancial instruments (cash fow hedge) Other fnancial receivables	563 38 27	645 – 30
	Trade and other fnancial receivables Prepayments	628 30	675 48
		658	723
	No receivables have been pledged as security. Amounts due to the company should be settled within the company’s normal credit terms of 30 to 60 days. net trade receivables comprise: Trade receivables that are neither past due nor impaired^ Trade receivables that are past due but not impaired ^ There is no history of material default relating to trade receivables in this category. Trade receivables that are past due but not impaired Ageing beyond normal credit terms 1 – 30 days 31 – 60 days 61 – 90 days More than180 days Fair value of collateral held The majority of collateral held consists of bank guarantees, with the balance comprising suretyships, mortgage bonds, notarial bonds and cessions. Impairment of trade receivables Balance at beginning of the year Allowance raised through proft or loss Utilisation of allowance	563	645
		488 75	561 84
		75	84
		68 2 2 3	76 6 – 2
		31 7 9 –	32 9 – (2)
	Balance at end of the year	16	7

PPC Ltd Annual financial statements 2015 85

NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

for the year ended 30 September 2015

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2015 2014
Shares Shares
7. STaTED CapITaL
authorised ordianry shares 700 000 000 700 000 000
Issued ordinary shares
Total shares in issue 605 379 648 605 379 648
Adjustments for shares treated as treasury shares:
Shares purchased in terms of the FSP incentive scheme (6 342 640) (5 865 851)
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) 572 556 058 573 032 847
authorised preference shares 20 000 000 20 000 000
Twenty million preference shares of R1 000 each. No preference shares have been issued.
2015 2015
Rm Rm
Stated capital
Balance at beginning of the year (729) (692)
Shares purchased in terms of the FSP incentive scheme treated as treasury shares (24) (53)
Vesting of a portion of the shares held in terms of the FSP incentive scheme 23 16
Balance at end of the year (730) (729)
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BBBEE trusts and trust funding Spvs

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 consolidated in terms of IFRS (refer note 9).

FSp incentive scheme

In terms of the forfeitable share plan (FSP) 6 342 640 shares (2014: 5 865 851 shares) have been purchased on the JSE in total, and are treated as treasury shares during the various vesting periods of the awards. During the year 531 179 shares (2014: 619 457 shares) vested and are no longer treated as treasury shares.

	Shares 2015	Shares 2014


	Unissued shares Ordinary shares 94 620 352 Preference shares 20 000 000	94 620 352 20 000 000

86 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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8.	DEFERRED TaXaTIon LIaBILITIES Movement Balance at beginning of the year 571 Charged directly to equity 8 Charged to the income statement (24)	548 11 12
	Balance at end of the year 555	571
	Analysis of deferred taxation Property, plant and equipment 678 Other non-current assets 32 Current assets 5 Non-current liabilities (66) Current liabilities (54) Reserves (40)	633 35 7 (69) (37) 2
	555	571

PPC Ltd Annual financial statements 2015 87

NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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9.	LonG-TERm BoRRoWInGS Borrowings Terms Security Interest rate Bonds Various, refer below Unsecured Various, refer below Long-term loan Interest is payable semi-annually with a bullet capital repayment in December 2016 Unsecured Fixed 10,86% BBBEE transaction 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 Variable rates at 85% of prime Preference shares Both capital and dividends are payable in December 2016, with capital capped at R400 million Secured by guarantee from PPC Variable rates at 78% of prime Long-term loans Both capital and interest are payable in December 2016, with capital capped at R700 million Secured by guarantee from PPC Variable rates at 285 basis points above JIBAR	2 398 1 520 1 115	2 395 1 520 1 165
		24 395 696	81 393 691

	Long-term borrowings _Less:_Short-term portion of long-term borrowings (refer note 12)	5 033 (649)	5 080 (17)
		4 384	5 063
	maturity analysis of obligations: One year Two years Three years Four years Five years and more	649 2 637 – 749 998	17 680 2 637 748 998
		5 033	5 080

Bonds

Comprise four unsecured bonds, issued under the company’s R6 billion domestic medium-term note programme, and are recognised net of capitalised transaction costs of R2 million (2014: R5 million), with details below:

number	Issue date	value	Term	Interest rate
Bond 1	March 2013	R650 million	3 years	3-month JIBAR plus 1,26%
Bond 2	December 2013	R750 million	5 years	3-month JIBAR plus 1,5%
Bond 3	July 2014	R750 million	3 years	3-month JIBAR plus 1,48%
Bond 4	July 2014	R250 million	5 years	Fixed at 9,86%

BBBEE transaction

PPC provided guarantees to the holders of the preference shares issued by the Black Managers Trust Funding SPV, the holders of the 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.

As recorded in note 13 to the consolidated financial statements, the company has renegotiated the covenants on the BBBEE transaction.

88 PPC Ltd Annual financial statements 2015

	2015 Rm	2014 Rm


10.	pRovISIonS Factory decommissioning and quarry rehabilitation 221 Post-retirement healthcare benefts 31	213 28
	252	241
	Factory decommis- sioning and quarry rehabilitation Rm post- retirement healthcare benefts Rm	Total Rm


	2015 Balance at beginning of the year 213 28 Amounts added – 3 Amounts reversed/utilised (4) – Other movements (6) – Time value of money adjustments 18 –	241 3 (4) (6) 18
	Balance at end of the year 221 31	252
	To be incurred: Between two and fve years 6 – More than fve years 215 31	6 246
	221 31	252
	2014 Balance at beginning of the year 199 26 Amounts added – 2 Amounts reversed/utilised (3) – Time value of money adjustments 17 –	225 2 (3) 17
	Balance at end of the year 213 28	241
	To be incurred: Between two and fve years 7 – More than fve years 206 28	7 234
	213 28	241

Factory decommissioning and quarry rehabilitation

The 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 (2014: R44 million) has been contributed to the PPC Environmental Trust (refer note 3).

post-retirement healthcare benefits

Benefits under these schemes were granted to employees under historical employment contracts and the schemes are closed to new members. Included in the provision are the following:

Cement and Concrete Institute employees

The 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 R10 million (2014: R9 million). The liability is revalued every three years and was last revalued during February 2013. The liability has been determined using the projected unit credit method.

Corner House Pension Fund and Lime Acres continuation members

The provision relates to post-employment healthcare benefits in respect of certain Corner House Pension Fund and Lime Acres continuation members, and amounted to R21 million (2014: R19 million).

The liability will be revalued in 2016 and was last actuarially valued during June 2012. The liability has been determined using the projected unit credit method.

PPC Ltd Annual financial statements 2015

NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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11.	oTHER non-CURREnT LIaBILITIES Cash settled share-based payment liability 5 Put option liabilities 464	16 145
	469 _Less:_Short-term portion of other non-current liabilities (47)	161 (121)
	422	40
	For further details on the cash settled share-based payment liability, refer note 34 in the consolidated fnancial statements. Movement in put option liabilities Balance at beginning of the year 145 Fair value adjustments on remeasurements (14) Put options exercised (108) Put options granted 422 Time value of money adjustments 19	– (5) – 137 13
	Balance at end of the year 464	145
	Comprising: Safka Cement 42 PPC Barnet DRC Holdings 422	145 –
	464	145

put option liabilities

Safika Cement

With the purchase of the initial 69,3% equity stake in Safika Cement (refer note 28 of the consolidated financial statements), PPC granted non-controlling shareholders individual put options, with different exercise dates, for the sale of their remaining shares in the company to PPC. One of the put options representing 21,1% shareholding in Safika Cement was exercised in the current year for R108 million. The other put options were anticipated to be exercised on the fifth anniversary of the transaction; however, these will now be exercised in the next financial year with settlement by the issue of PPC’s shares and cash, subject to shareholders’ approval. The liability of R42 million (2014: R105 million) has therefore been classified as a current liability (refer note 16). The put option value of the R108 million that has been exercised was based on the company’s EBITDA achieved applying an earnings multiple between four and five times EBITDA less net debt. The remainder of the put options have been valued on the same principle due to the revised settlement date.

PPC Barnet DRC

The International Finance Corporation (IFC) was issued a put option in the current year in terms of which PPC is required to purchase all or part of the class C shares held by the IFC in PPC Barnet DRC Holdings. The put option may be exercised after six years from when IFC subscribed for the shares but only for a five-year period. The put option value is based on the company’s forecast EBITDA applying an eight times earnings multiple less net debt. Forecast EBITDA is based on financial forecasts approved by management, with pricing and margins similar to those currently being achieved by the business unit while selling prices and costs are forecast to increase at local inflation projections and extrapolated using local GDP growth rates ranging between 5% and 9% taking cognisance of the plant production ramp-up. The present value of the put option was calculated at R422 million.

90 PPC Ltd Annual financial statements 2015

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2015 2014
Rm Rm
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12.	SHoRT-TERm BoRRoWInGS Short-term loans and bank overdraft Short-term portion of long-term borrowings (refer note 9)	625 649	232 17
		1 274	249
13.	TRaDE anD oTHER payaBLES Cash settled share-based payment liability Derivative fnancial instruments (cash fow hedge) Finance costs accrued Other fnancial payables Put option liability (refer note 11) Trade payables and accruals	5 1 49 95 42 473	16 1 50 118 105 376
	Trade and other fnancial payables Payroll accruals VAT payable	665 195 28	666 138 14
		888	818
	Trade and other payables are payable within 30 to 60-day period.
14.	opERaTInG pRoFIT operating proft includes: Amortisation of intangible assets (refer note 2) Auditors’ remuneration Fees Other Depreciation (refer note 1): Cost of sales Operating costs Distribution costs included in cost of sales Exploration and research costs Income from subsidiary companies: Fees Interest Dividends Operating lease charges – land and buildings Proft on disposal of plant and equipment Staff costs Equity settled share incentive scheme charge Cash settled share incentive scheme charge^ Directors’ remuneration* Employees’ remuneration Restructuring costs paid to employees Retirement beneft contributions	22 7	25 7
		6 1	4 3
		395	384
		361 34	360 24
		767 1 419	840 1 351
		64 94 261	59 – 292
		18 – 13 7 26 721 8 71	16 1 10 6 44 788 – 66
	_Less:_Costs capitalised to plant and equipment and intangibles	846 (8)	914 (3)
		838	911

^ Refer note 34 of consolidated financial statements.

For further details refer the abridged remuneration report on pages 99 to 107.

PPC Ltd Annual financial statements 2015 91

noTES To THE Company FInanCIaL STaTEmEnTS Continued

for the year ended 30 September 2015

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2015 2014
Rm Rm
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15.	FaIR vaLUE aDJUSTmEnTS on FInanCIaL InSTRUmEnTS Gain on remeasurement of put option liabilities (refer note 11) Gain/(loss) on derivatives designated as economic hedging instruments Gain on translation of foreign denominated monetary items	14 14 4	8 (5) 3
		32	6
16.	FInanCE CoSTS Bank and other borrowings Bonds Long-term loan _Less:_Capitalised to plant and equipment BBBEE transaction Dividends on redeemable preference shares Long-term borrowings Subsidiary companies Time value of money adjustments Unwinding of discount on rehabilitation and decommissioning provisions Unwinding of discount on put option liabilities	41 186 166 (3) 96	59 108 166 – 100
		34 62	38 62
		12 37	3 32
		18 19	15 17

		535	468
17.	InvESTmEnT InComE Dividends on unlisted investments Interest on deposits and non-current assets	5 11	14 27
		16	41
18.	ImpaIRmEnTS anD oTHER EXCEpTIonaL aDJUSTmEnTS Impairment of property, plant and equipment (refer note 1)	(16)	(1)

92 PPC Ltd Annual financial statements 2015

		2015 Rm	2014 Rm


19.	TaXaTIon Normal taxation Current year Prior year	231 (22)	257 (70)
		209	187
	Deferred taxation Current year Prior year	(5) (19)	12 –
		(24)	12
	Withholding taxation	12	22
	Total taxation charge	197	221
		2015 %	2014 %


	Reconciliation of taxation rates Proft before taxation Prior year taxation impact	23,5 4,9	21,3 6,7
	Proft before taxation, excluding prior year taxation adjustments Adjustment due to the inclusion of dividend income	28,4 8,9	28,0 7,7
	Effective rate of taxation Income taxation effect of: Disallowable charges, permanent differences and impairments Empowerment transactions and IFRS 2 charges not taxation deductible Withholding taxation	37,3 (9,3)	35,7 (7,7)
		(6,2) (1,7) (1,4)	(2,2) (3,5) (2,0)

	South African normal taxation rate	28,0	28,0
20.	FInanCE CoSTS paID Finance costs as per income statement charge (refer note 16) Interest capitalised to plant and equipment Time value of money adjustments BBBEE transaction fnance costs capitalised Redeemable preference share dividends capitalised Interest on long-term borrowings capitalised	535 3 (37) (96)	468 – (32) (99)
		(34) (62)	(43) (56)

		405	337
21.	TaXaTIon paID Net amounts receivable at beginning of the year Charge per income statement excluding deferred taxation (refer note 19) Net amounts (payable)/receivable at end of the year	(33) 221 (64)	(40) 209 33
		124	202
22.	aCQUISITIon oF pRopERTy, pLanT anD EQUIpmEnT Freehold and leasehold land, buildings and mineral rights (refer note 1) Plant, vehicles, furniture and equipment (refer note 1)	18 639	15 380
		657	395

PPC Ltd Annual financial statements 2015 93

noTES To THE Company FInanCIaL STaTEmEnTS Continued

for the year ended 30 September 2015

	2015 Rm	2014 Rm


23.	movEmEnTS In InvESTmEnTS anD LoanS Net movement (95) Revaluation of available-for-sale fnancial assets directly in equity (refer note 3) (13) Investment in subsidiary companies 108	(715) 58 657
	–	–

24. ConTInGEnT LIaBILITIES

Litigation, current or pending, is not considered likely to have a material adverse effect on the company.

PPC Ntsika Fund (Pty) Ltd 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.

The company has provided security for general banking facilities of PPC Lime Limited and PPC Aggregate Quarries (Pty) Ltd in aggregate of R900 million.

25. FInanCIaL RISK manaGEmEnT Fair values of financial assets and liabilities

The 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.

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2015 2014
Carrying Carrying
amount Fair value amount Fair value
Notes Rm Rm Rm Rm
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Financial assets
Unlisted investment at fair value
3
82
82
Trade and other fnancial receivables
6
590
590
Derivative fnancial instruments
6
38
38
Amounts owing by subsidiary companies
3
1 970
1 970
Cash and cash equivalents
4
4
Financial liabilities
Long-term borrowings
9
4 384
4 384
Short-term borrowings
12
1 274
1 274
Amounts owing to subsidiary companies
3
275
275
Trade and other fnancial payables
13
622
622
Put option liabilities
11
464
464
Derivative fnancial instruments
13
1
1

95
95
675
675
–
–
1 441
1 441
3
3
5 063
5 063
249
249
120
120
560
560
145
145
1
1

94 PPC Ltd Annual financial statements 2015

	2015 Rm	2014 Rm


25.	FInanCIaL RISK manaGEmEnTcontinued Credit risk management Maximum credit risk exposure^ 2 632	2 174
	^ Maximum credit risk exposure includes long-term receivables, trade and other receivables and cash and cash equivalents. Fair value hierarchy disclosures valuation with reference to prices quoted in an active market Level 1 Rm valuation based on observable inputs Level 2 Rm valuation based on unobservable inputs Level 3 Rm Total Rm

	2015 Financial assets *Available-for-sale* Unlisted investments at fair value – 82 – 82 *Loans and receivables* Amounts owing by subsidiary companies – 1 970 – 1 970 Trade and other fnancial receivables – 590 – 590 Derivative fnancial instruments – 38 – 38 Cash and cash equivalents 4 – – 4
	Total fnancial assets 4 2 680 – 2 684
	Financial liabilities Amounts owing to subsidiary companies – 275 – 275 Long-term borrowings 1 747 2 637 – 4 384 Short-term borrowings 649 625 – 1 274 Put option liabilities – – 464 464 Trade and other fnancial payables – 622 – 622 Derivative fnancial instruments – 1 – 1
	Total fnancial liabilities 2 396 4 160 464 7 020

For movements and disclosure of level 3 items, refer note 36 in the consolidated financial statements.

PPC Ltd Annual financial statements 2015 95

noTES To THE Company FInanCIaL STaTEmEnTS Continued

for the year ended 30 September 2015

25. FInanCIaL RISK manaGEmEnT continued

Fair value hierarchy disclosures continued

Fair value hierarchy disclosurescontinued
	valuation
	with
	reference to
	prices	valuation	valuation
	quoted	based on	based on
	in an active	observable	unobservable
	market	inputs	inputs
	Level 1	Level 2	Level 3	Total
	Rm	Rm	Rm	Rm

2014
Financial assets
*Available-for-sale*
Unlisted investments at fair value	–	–	95	95
*Loans and receivables*
Amounts owing by subsidiaries	–	1 441	–	1 441
Trade and other fnancial receivables	–	675	–	675
Cash and cash equivalents	3	–	–	3
Total fnancial assets	3	2 116	95	2 214
Financial liabilities
Amounts owing to subsidiaries	–	120	–	120
Long-term borrowings	2 395	2 668	–	5 063
Short-term borrowings	–	249	–	249
Put option liabilities	–	–	145	145
Trade and other fnancial payables	–	560	–	560
Derivative instruments – current (cash fow hedge)	–	1	–	1
Total fnancial liabilities	2 395	3 598	145	6 138

Level 3 – financial assets and liabilities that are valued using unobservable data, and requires management judgement in determining the fair value.

96 PPC Ltd Annual financial statements 2015

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----- Start of picture text -----

2015 2014
Rm Rm
----- End of picture text -----

26.
RELaTED paRTy TRanSaCTIonS
In addition to the related party transactions disclosed in the consolidated fnancial statements, the
company had the following related party transactions:
Goods sold to
PPC Barnet DRC Trading Company SA
60
PPC Botswana (Pty) Ltd
343
PPC Zimbabwe Limited
61
PPC Lime Limited
8
PPC Mozambique SA
1
Pronto Building Materials (Pty) Ltd
150
Safka Cement Holdings (Pty) Ltd
645
Goods purchased from
PPC Lime Limited
40
Afripack Limited
87
Pronto Holdings (Pty) Ltd
1
PPC Zimbabwe Limited
21
Technical services provided to
PPC Lime Limited
8
Kgale Quarries (Pty) Ltd
1
PPC Botswana (Pty) Ltd
2
PPC Aggregate Quarries (Pty) Ltd
2
PPC Zimbabwe Limited
6
PPC Barnet DRC trading company SA
11
CIMERWA Limited
5
Technical services received from
PPC Aggregate Quarries (Pty) Ltd
–
Interest received from
PPC International Holdings
94
Interest paid to
PPC Aggregate Quarries (Pty) Ltd
3
PPC Ntsika Fund (Pty) Ltd
1
Community Service Groups and Strategic Black Partners
166
Pronto Building Materials (Pty) Ltd
3
Safka Cement Holdings (Pty) Ltd
1
PPC Lime Limited
4
Dividends received from
PPC Lime Limited
43
PPC Aggregate Quarries (Pty) Ltd
16
PPC Zimbabwe Limited
62
Safka Cement Holdings (Pty) Ltd
86
Pronto Holdings (Pty) Ltd
50
Slurrylink (Pty) Ltd
4
Varsrivier Marmer (Pty) Ltd
–
Cape Portland Cement Company Limited
–

55
285
132
8
21
63
481
35
105
2
–
37
10
1
–
9
–
2
3
–
2
1
166
–
–
1
72
21
114
79
–
–
5
1

PPC Ltd Annual financial statements 2015 97

noTES To THE Company FInanCIaL STaTEmEnTS Continued

for the year ended 30 September 2015

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----- Start of picture text -----

2015 2014
Rm Rm
----- End of picture text -----


26. RELaTED paRTy TRanSaCTIonScontinued Dividends paid Porthold Trust (Pvt) Ltd In terms of the frst BBBEE transaction PPC Black Independent Non-executive Directors Trust The PPC Black Managers Trust PPC Team Beneft Trust Funding SPV (Pty) Ltd PPC Construction Industry Associations Trust Funding SPV (Pty) Ltd PPC Education Trust Funding SPV (Pty) Ltd PPC Community Trust Funding SPV (Pty) Ltd Community Service Groups and Strategic Black Partners In terms of the second BBBEE transaction PPC Masakhane Trust PPC Bafati Trust Strategic Black Partners Trade amounts due from PPC Barnet DRC trading company SA PPC Botswana (Pty) Ltd PPC Zimbabwe Limited PPC Mozambique SA PPC Lime Limited Safka Cement Holdings (Pty) Ltd Pronto Building Materials (Pty) Ltd amounts due by/(to) PPC Aggregate Quarries (Pty) Ltd PPC Lime Limited PPC Ntsika Fund (Pty) Ltd PPC Botswana (Pty) Ltd Slurrylink (Pty) Ltd PPC International Holdings (Pty) Ltd Pretoria Portland Cement International Holdings (Pty) Ltd Pronto Building Materials (Pty) Ltd Safka Cement Holdings (Pty) Ltd Community Service Groups and Strategic Black Partners Long-term loan Interest capitalised	1 – 10 3 11 6 4 49 5 1 2 19 35 19 3 1 9 16 (63) (121) (23) 2 5 1 676 286 (55) (12) (1 532)	2 1 16 4 18 9 6 76 8 1 3 25 26 18 4 1 15 18 (50) (81) 52 – (4) 1 376 – – – (1 548)
	(1 520) (12)	(1 520) (28)

The terms and conditions of these transactions are determined on an arm’s length basis.

27. aDDITIonaL DISCLoSURE

Refer the consolidated financial statements for additional disclosure on the following:

Accounting policies
Commitments
Events after reporting date
Financial risk management
Foreign exchange gains and losses
Related party transactions
Retirement benefit information
Share-based payments.

98 PPC Ltd Annual financial statements 2015

aBRIDGED REmUnERaTIon REpoRT

for the year ended 30 September 2015

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 renumeration, 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 2015

The executive directors and prescribed officers’ remuneration for the year ended 30 September 2015 was as follows;

SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000	SaLaRy R000 RETIRE- mEnT anD mEDICaL ConTRI- BUTIonS R000 CaR aLLoW- anCE R000 STI R000 LTI REaLISED R000 oTHER R000 ToTaL R000


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

1 Appointed 12 January 2015.

2 Vesting of restricted share units granted in 2012.

3 Reimbursement to permanent employer while performing the role of executive chairman for three months.

4 Vesting of FSP with no performance conditions, granted in 2012.

5 Restraint of trade payment.

6 Restraint of trade payment and relieving allowance.

7 Seconded from Safika Cement from March 2015, “other” comprises secondment allowance.

8 Resigned in october 2014; “other” comprises leave pay.

PPC Ltd Annual financial statements 2015 99

aBRIDGED REmUnERaTIon REpoRT Continued

for the year ended 30 September 2015

Remuneration paid to executive directors and prescribed officers in 2014

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

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----- Start of picture text -----

TGp
RETIRE-
mEnT
anD
mEDICaL CaR LTI DISCRE-
ConTRI- aLLoW- REaLISED TIonaRy
SaLaRy BUTIonS anCE STI vaLUE oTHER BonUS ToTaL
R000 R000 R000 R000 R000 [1] R000 R000 R000
----- End of picture text -----

2 899 – 1 390 2 117 1 836 1 249 1 928 1 309 1 433 1 489 1 965 1 930 771 227 4 439	813 – 348 259 354 118 592 191 142 195 354 316 147 36 563	240 – 323 120 410 – 232 – – 118 320 260 115 27 –	– – – – – – – – – – – – – – –	4 904 – 265 – 370 – 423 – – – 432 322 292 3 020 1 962	2 – 3 8 1 152 – 6 – – 3 5 7 1 973 3 787 14 768	605 – 318 483 548 329 606 381 412 478 479 – – – –

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

3 other payments include a relocation allowance (R152 000) and a payment in lieu of transfer costs (R1 000 000).

4 Employed for nine months of the financial year.
5 Employed for nine months of the financial year.
6 Employed for seven months of the financial year. other payments included annual leave (R117 000), severance pay (R1 322 000), 13th cheque (R28 000) and Masakhane share units (R506 000).

7 Employed for one month of the financial year. other payments include severance pay (R3 472 164), annual leave (R100 739) and Masakhane shares (R214 159).

8 Employed for 12 months of the financial year, but resigned in the last week of September 2014.

100 PPC Ltd Annual financial statements 2015

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

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----- Start of picture text -----

CommITTEE
SoCIaL,
ETHICS
CHaIR- RISK anD anD
BoaRD man nomI- Com- REmU- TRanSFoR- InvEST- SpECIaL
FEES FEES naTIonS aUDIT pLIanCE nERaTIon maTIon mEnT mEETInGS ToTaL
R000 R000 R000 R000 R000 R000 R000 R000 R000 R000
----- End of picture text -----

DJ Castle1 N Goldin ZJ Kganyago2 NB Langa Royds3 TJ Leaf-Wright MP Malungani T Mboweni SK Mhlarhi B Modise T Moyo CH Naude PG Nelson TDA Ross J Shibambo4 BL Sibiya D Uftikirezi5	50 223 252 82 202 273 202 294 252 294 223 223 367 82 – 138	– – – – – – – – – – – – – – 1 221 –	– – – 43 – – 40 – – 96 – – 52 43 142 24	48 – 37 – – – – – 94 57 – 57 210 – – –	– – – – 63 – – – 179 – 63 – 88 28 – –	– 119 – 108 – – – 169 – – 119 244 – 53 33 –	– – – 72 56 87 99 – – – – – – 35 45 –	18 19 18 – 38 148 – 74 – – – – 55 – 55 –	215 – 480 332 – 215 – 215 215 215 – – 567 215 538 –	331 361 787 637 359 723 341 752 740 662 405 524 1 339 456 2 034 162
	3 157	1 221	440	503	421	845	394	425	3 207	10 613

1 Served as non-executive director for three months before becoming CEo.
2 Alternate director to BL Sibiya.
3 Retired January 2015.
4 Retired January 2015.

5 Resigned September 2015.

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

BoaRD FEES R000 CHaIR- man FEES R000	BoaRD FEES R000 CHaIR- man FEES R000	BoaRD FEES R000 CHaIR- man FEES R000	CommITTEE	CommITTEE	CommITTEE	CommITTEE	CommITTEE	CommITTEE	CommITTEE	CommITTEE	CommITTEE
			nomIn- aTIonS R000 aUDIT R000 RISK anD Com- pLIanCE R000 REmUnE- RaTIon R000 SoCIaL, ETHICS anD TRanSFoR- maTIon R000 SpECIaL mEETInGS R000 InvEST- mEnT R000 oTHER4 R000 ToTaL R000


ZJ Kganyago NB Langa-Royds AJ Lamprecht1 MP Malungani SK Mhlarhi B Modise T Moyo2 TDA Ross J Shibambo BL Sibiya3	226 226 56 246 246 226 189 244 246 –	– – – – – – – – – 1 120	5 2 1 5	– 105 1 – 1 – – – – – – 118 5 – – 254 9 – – –	18 – – – – 140 18 89 107 18	– 171 – – 94 – – – 115 –	– 204 30 62 – – – – 100 –	123 268 – 86 89 90 72 107 107 251	– 17 180 53 – – 35 – 35	30 30 – – – 30 – – – –	502 950 124 574 482 604 294 729 734 1 424
	1 905	1 120	14	6 477	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.

PPC Ltd Annual financial statements 2015 101

aBRIDGED REmUnERaTIon REpoRT Continued

for the year ended 30 September 2015

interests of executive directors and prescribed officers in share capital

directors received vested rights in 2008 in a trust owning donated shares which were subject to vesting conditions and a lock-in expiring annually in thirds from 15 December 2012 and expiring on 15 December 2014.

The aggregate direct beneficial holdings of directors and their immediate families (none of whom has a holding of over 1%) in the issued ordinary shares of the company are detailed below. There are no indirect holdings by directors and their immediate families. There have been no material changes in these shareholdings since that date.

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 lockin period restricting transferability which expires in September 2019.


	nUmBER	nUmBER	t
namE	oF SHaRES aS aT 30 SEpTEmBER 2015	oF SHaRES aS aT 30 SEpTEmBER 2014	i
Current directors
MMT Ramano ZJ Kganyago prescribed offcers JHDLR Snyman	134 143 95 787 24 100	134 143 – 24 100

paRTICIpaTIon RIGHTS	BEE 1	BEE 2
Executive directors
MMT Ramano	335 249	372 737
prescribed offcers
PL Booysen	–	16 322
HN Buthelezi	–	218 676
JT Claassen	–	22 501
AC Lowan	–	118 850
KPP Meijer FK Molefe	– –	28 488 171 490
T Sibisi*	–	188 639
JHDLR Snyman	–	18 167
JJ Taljaard	–	25 384

interests of directors and prescribed officers in BBBee schemes In 2008, in terms of the company’s first BBBEE transaction, certain executive directors and prescribed officers were granted participation rights in the loan-funded Black Managers Trust which owns shares that are subject to vesting conditions and a lock-in period restricting transferability which expires on 15 December 2016. In addition, during the 2012 financial year, they each received rights to 2 541 shares in a trust owning donated shares which were subject to a lock-in expiring on 15 December 2013. Certain non-executive

*Rights will be forfeited on date of resignation

102 PPC Ltd Annual financial statements 2015

Value of long-term incentives

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----- Start of picture text -----

nUmBER pRICE on
nUmBER nUmBER EXERCISED/ nUmBER EXERCISE
aLLoCaTED aLLoCaTED vESTED FoRFEITED DaTE/ EXERCISE/ CURREnT vaLUE
In In In In GRanT vESTInG vESTInG UnIT aT yEaR
pRIoR CURREnT CURREnT CURREnT CLoSInG pRICE pRICE GaIn vaLUE EnD
aWaRD DaTE yEaRS yEaR yEaR yEaR nUmBER (R) (R) (R000) (R) (R000)
----- End of picture text -----*

Executive directors DJ Castle Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions 2015/05/29	– –	2 333 652 125 150	– –	– –	2 333 652 125 150	19,71 –			4,11 17,10	9 591 2 140
Total								–		11 731
mmT Ramano Share appreciation rights 2012/09/28 cash settled 2013/09/30 cash settled 2015/05/29	170 000 170 000 –	– – 581 300	170 000 – –	– – –	– 170 000 581 300	– – 19,71	19,11	3 249	16,25 4,11	– 2 763 2 389
	340 000	581 300	170 000	–	751 300					5 152
Forfeitable shares – with performance conditions 2012/09/28 2013/03/15 2014/02/18	96 800 78 700 128 700	– – –	– – –	96 800 – –	– 78 700 128 700	– – –			– 17,10	– 2 201
	304 200	–	–	96 800	207 400					2 201
Forfeitable shares – no performance conditions 2015/05/29	–	56 900	–	–	56 900	–			17,10	973
Total								3 249		8 326
prescribed offcers pL Booysen Share appreciation rights 2007/08/08 cash settled 2008/09/17 cash settled 2009/09/25 cash settled 2015/05/29	30 000 24 000 22 000 –	– – – 114 400	– – – –	– – – –	30 000 24 000 22 000 114 400	43,00 31,80 35,35 19,71			0,09 0,80 0,77 4,11	3 19 17 470
	76 000	114 400	–	–	190 400					509
Forfeitable shares – no performance conditions 2012/02/16 2013/03/15 2014/02/18 2015/05/29	6 500 6 800 9 900 –	– – – 18 400	6 500 – – –	– – – –	– 6 800 9 900 18 400	– – – –	21,08	137	17,10 17,10 17,10	116 169 315
	23 200	18 400	6 500	–	35 100					600
Forfeitable shares – with performance conditions 2012/02/16 2013/03/15 2014/02/18	5 400 7 600 16 600	– – –	– – –	5 400 – –	– 7 600 16 600	– – –			– 17,10	– 284
	29 600	–	–	5 400	24 200					284
Total								137		1 393

All instruments are equity settled, unless otherwise indicated.

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

PPC Ltd Annual financial statements 2015 103

aBRIDGED

REmUnERaTIon REpoRT Continued

for the year ended 30 September 2015

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prescribed offcers continued Hn Buthelezi Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions 2014/02/18 2015/05/29	– 12 400 –	151 200 – 24 300	– – –	– – –	151 200 12 400 24 300	19,71 – –			4,11 17,10 17,10	621 212 416
	12 400	24 300	–	–	36 700					628
Forfeitable shares – with performance conditions 2014/02/18	20 700	–	–	–	20 700	–			17,10	354
Total								–		1 603
JT Claassen Share appreciation rights 2007/08/08 cash settled 2008/09/17 cash settled 2009/09/25 cash settled 2015/05/29	40 000 24 000 26 000 –	– – – 148 800	– – – –	– – – –	40 000 24 000 26 000 148 800	43,00 31,80 35,35 19,71			0,09 0,80 0,77 4,11	4 19 20 612
	90 000	148 800	–	–	238 800					655
Forfeitable shares – no performance conditions 2012/02/16 2013/03/15 2014/02/18 2015/05/29	10 200 10 400 33 353 –	– – – 23 900	10 200 – – –	– – – –	– 10 400 33 353 23 900	– – – –	21,08	215	17,10 17,10 17,10	178 570 409
	53 953	23 900	10 200	–	67 653					1 157
Forfeitable shares – with performance conditions 2012/02/16 2013/03/15 2014/02/18	12 700 17 300 21 500	– – –	– – –	12 700 – –	– 17 300 21 500	– – –			– 17,10	– 368
	51 500	–	–	12 700	38 800					368
Total								215		2 180
aC Lowan Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions 2013/03/15 2014/02/18 2015/05/29	– 4 800 6 500 –	103 000 – – 16 600	– – – –	– – – –	103 000 4 800 6 500 16 600	19,71 – – –			4,11 17,10 17,10 17,10	423 82 111 284
	11 300	16 600	–	–	27 900					477
Forfeitable shares – with performance conditions 2013/03/15 2014/02/18	5 400 10 800	– –	– –	– –	5 400 10 800	– –			– 17,10	– 185
	16 200	–	–	–	16 200					185
Total								–		1 085

All instruments are equity settled, unless otherwise indicated.

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

104 PPC Ltd Annual financial statements 2015

==> picture [484 x 68] intentionally omitted <==

prescribed offcers continued Kpp meijer (leaves 30/11/2015) Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions 2012/02/16 2013/03/15 2014/02/18 2015/05/29	– 11 200 12 300 13 300 –	170 500 – – – 27 400	– 11 200 – – –	– – – – –	170 500 – 12 300 13 300 27 400	19,71 – – – –	202	4,11 17,10 17,10 17,10	701 210 227 469
	36 800	27 400	11 200	–	53 000				906
Forfeitable shares – with performance conditions 2012/02/16 2013/03/15 2014/02/18	14 000 20 500 22 200	– – –	– – –	14 000 – –	– 20 500 22 200	– – –		– 17,10	– 380
	56 700	–	–	14 000	42 700				380
Total							202		1 987
FK molefe Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions 2014/02/18 2015/05/29	– 9 900 –	114 400 – 18 400	– – –	– – –	114 400 9 900 18 400	19,71 – –		4,11 17,10 17,10	470 169 315
	9 900	18 400	–	–	28 300				484
Forfeitable shares – with performance conditions 2014/02/18	16 600	–	–	–	16 600	–		17,10	284
Total							–		1 238

All instruments are equity settled, unless otherwise indicated.

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

PPC Ltd Annual financial statements 2015 105

aBRIDGED

REmUnERaTIon REpoRT Continued

for the year ended 30 September 2015

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prescribed offcers continued TR Sibisi (resigned 15/12/2015) Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions** 2014/02/18 2015/05/29	– 10 900 –	125 900 – 20 300	– – –	– – –	125 900 10 900 20 300	19,71 – –			4,11 17,10 17,10	517 186 347
	10 900	20 300	–	–	31 200					533
Forfeitable shares – with performance conditions 2014/02/18	18 200	–	–	–	18 200	–			17,10	311
Total								–		1 361
JHDLR Snyman Share appreciation rights 2007/08/08 cash settled 2008/09/17 cash settled 2009/09/25 cash settled 2015/05/29	25 000 27 000 23 000 –	– – – 114 400	– – – –	– – – –	25 000 27 000 23 000 114 400	47,36 31,80 35,35 19,71			0,09 0,80 0,77 4,11	2 22 18 470
	75 000	114 400	–	–	189 400					513
Forfeitable shares – no performance conditions 2012/02/16 2013/03/15 2014/02/18 2015/05/29	15 500 8 400 9 000 –	– – – 18 400	15 500 – – –	– – – –	– 8 400 9 000 18 400	– – – –	18,95	294	17,10 17,10 17,10	144 154 315
	32 900	18 400	15 500	–	35 800					613
Forfeitable shares – with performance conditions 2012/02/16 2013/03/15 2014/02/18	19 500 13 900 15 100	– –	– – –	19 500 – –	– 13 900 15 100	– – –			– 17,10	– 258
	48 500	–	–	19 500	29 000					258
Total								294		1 383

All instruments are equity settled, unless otherwise indicated.

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

** Instruments subsequently forfeited on date of resignation.

106 PPC Ltd Annual financial statements 2015

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----- Start of picture text -----

nUmBER pRICE on
nUmBER nUmBER EXERCISED/ nUmBER EXERCISE
aLLoCaTED aLLoCaTED vESTED FoRFEITED DaTE/ EXERCISE/ CURREnT vaLUE
In In In In GRanT vESTInG vESTInG UnIT aT yEaR
pRIoR CURREnT CURREnT CURREnT CLoSInG pRICE pRICE GaIn vaLUE EnD
aWaRD DaTE yEaRS yEaR yEaR yEaR nUmBER (R) (R) (R’000) (R) (R000)
----- End of picture text -----*

prescribed offcers continued JJ Taljaard Share appreciation rights 2015/05/29 Forfeitable shares – no performance conditions 2012/02/16 2013/03/15 2014/02/18 2015/05/29	– 11 500 11 800 13 100 –	151 000 – – – 24 300	– 11 500 – – –	– – – – –	151 000 – 11 800 13 100 24 300	19,71 – – – –	207	4,11 17,10 17,10 17,10	621 202 224 416
	36 400	24 300	11 500	–	49 200				842
Forfeitable shares – with performance conditions 2012/02/16 2013/03/15 2014/02/18	14 300 19 700 21 900	– – –	– – –	14 300 – –	– 19 700 21 900	– – –		– 17,10	– 374
	55 900	–	–	14 300	41 600				374
Total							207		1 837
RS Tomes (resigned 23/10/2014) Share appreciation rights 2007/08/08 cash settled Forfeitable shares – no performance conditions 2012/02/16 2013/03/15 2014/02/18	33 000 9 100 9 200 12 500	– – – –	– – – –	33 000 9 100 9 200 12 500	– – – –	43,00 – – –
	30 800	–	–	30 800	–
Forfeitable shares – with performance conditions 2012/02/16 2013/03/15 2014/02/18	11 300 15 400 20 800	– – –	– – –	11 300 15 400 20 800	– – –	– – –
	47 500	–	–	47 500	–
Total
Retired directors SG Helepi (resigned 14 February 2013) Share appreciation rights 2007/08/08 cash settled	18 000	–	–	–	18 000	43,00		0,09	2
Total							–		2

All instruments are equity settled, unless otherwise indicated.

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

PPC Ltd Annual financial statements 2015 107

ppC SHaREHoLDER anaLySIS

as at 30 September 2015

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number of number
shareholders % of shares %
SHaREHoLDER SpREaD
1 – 1 000 shares 7 360 54,86 3 050 049 0,50
1 001 – 10 000 shares 4 859 36,22 15 761 726 2,60
10 001 – 100 000 shares 877 6,54 25 343 774 4,19
100 001 – 1 000 000 shares 243 1,81 76 931 583 12,71
1 000 001 shares and over 78 0,58 484 292 516 80,00
Total 13 417 100 605 379 648 100
DISTRIBUTIon oF SHaREHoLDERS
Banks 94 0,70 154 014 342 25,44
Broad-based black ownership 17 0,13 145 378 510 24,01
Brokers 74 0,55 24 055 932 3,97
Close corporations 119 0,89 670 568 0,11
Endowment funds 45 0,34 1 273 571 0,21
Individuals 10 686 79,65 26 665 251 4,40
Insurance companies 82 0,61 11 607 418 1,92
Investment companies 16 0,12 768 941 0,13
Medical aid schemes 10 0,07 246 364 0,04
Mutual funds 214 1,59 85 788 709 14,17
Nominees and trusts 1 539 11,47 11 933 888 1,97
Other corporations 72 0,54 831 840 0,14
Pension funds 177 1,32 130 285 890 21,52
Private companies 270 2,01 10 189 801 1,68
Sovereign wealth fund 2 0,01 1 668 623 0,28
Total 13 417 100 605 379 648 100
pUBLIC/non-pUBLIC SHaREHoLDERS
non-public shareholders 21 0,16 238 499 689 39,40
Directors’ holdings 3 0,02 163 243 0,03
Broad-based black ownership 17 0,13 145 378 510 24,01
Strategic holdings (10% or more) 1 0,01 92 957 936 15,36
public shareholders 13 396 99,84 366 879 959 60,60
Total 13 417 100 605 379 648 100
number
of shares %
BEnEFICIaL SHaREHoLDERS HoLDInG 3% oR moRE oF THE ISSUED SHaRE CapITaL
Government Employees Pension Fund 92 957 936 15,36
PPC SBP Consortium Funding SPV (Pty) Ltd 39 988 926 6,61
PPC Masakhane Employee Share (Est) Trust 26 757 780 4,42
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108 PPC Ltd Annual financial statements 2015

COrPOrATE iNfOrmATiON

PPC LTd

(Incorporated in the Republic of South Africa) Company registration number: 1892/000667/06 JSE code: PPC JSE ISIN code: ZAE000170049 ZSE code: PPC

dirECTOrS

Executive: DJ Castle (chief executive officer), MMT Ramano (chief financial officer) Non-executive: BL Sibiya (chairman), N Goldin, ZJ Kganyagi, TJ Leaf-Wright, MP Malungani, T Mboweni, SK Mhlarhi, B Modise, T Mayo*, CH Naude, PE Nelson, TDA Ross

*Zimbabwean

AudiTOrS

Deloitte & Touche Deloitte Place The Woodlands Woodlands Drive Woodmead, Sandton Private Bag X6 Gallo Manor, 2052, South Africa Telephone +27 11 806 5000 Telefax +27 11 806 5111

SECrETAry ANd rEgiSTErEd OffiCE

JHDLR Snyman 148 Katherine Street, Sandton, South Africa PO Box 787416 Sandton, 2146, South Africa Telephone +27 11 386 9000 Telefax +27 11 386 9001 Email [email protected]

SPONSOr: SOuTh AfriCA

Merrill Lynch SA (Pty) Ltd 138 West Street Sandown, Sandton PO Box 651987 Benmore, 2010, South Africa Telephone +27 11 305 5555 Telefax +27 11 305 5600

TrANSfEr SECrETAriES: SOuTh AfriCA

Computershare Services (Pty) Ltd 70 Marshall Street Marshalltown Johannesburg 2001 PO Box 61051 Marshalltown, 2107, South Africa Telephone +27 11 370 5000 Telefax +27 11 688 5200 Email [email protected]

TrANSfEr SECrETAriES: ZimbAbwE

Corpserve Pvt Limited 4th Floor, Intermarket Centre Corner First Street and Kwame Nkrumah Avenue Harare, Zimbabwe PO Box 2208 Harare, Zimbabwe Telephone +263 4 758 193/751 559 Telefax +263 4 752 629

SPONSOr: ZimbAbwE

Imara Edwards Securities Pvt Limited Block 2, Tendeseka Office Park Samora Machel Avenue Harare, Zimbabwe PO Box 1475 Harare, Zimbabwe Telephone +263 4 790 090 Telefax +263 4 791 345

fiNANCiAL CALENdAr

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Financial year-end 30 September
Annual general meeting 25 January 2016
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rEPOrTS
Preliminary announcement of annual results	Published	June
Interim results for half year to September	Published	November
Annual fnancial statements	Published	July
dividENdS
Interim	If declared	November
	Paid	January
Final	If declared	June
	Paid	August

*The company has changed its year-end to March with effect from the 2016 financial year.

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www.ppc.co.za

AI assistant

PPC LIMITED — Annual Report 2015

48790_rns_2015-12-18_f27d2ead-76eb-4573-a8fd-00dc6fab1aab.pdf

CONTENTS

Annual financial statements

APPROVAL OF the ANNUAL FINANCIAL StAteMeNtS

CeRtIFICAte By COMPANy SeCRetARy

JhDLR Snyman

PRePAReR OF the ANNUAL FINANCIAL StAteMeNtS

INDePeNDeNt AUDItORS’ RePORt

tO the ShARehOLDeRS OF PPC LIMIteD

Opinion

Other reports required by the Companies Act

Directors’ responsibility for the annual financial statements

Auditors’ responsibility

Report on other legal and regulatory requirements

Deloitte & touche

RePORt tO ShARehOLDeRS ON the ACtIVItIeS OF the AUDIt COMMIttee

teRMS OF ReFeReNCe

StAtUtORy DUtIeS

COMPOSItION

DeLegAteD DUtIeS

MeetINgS

Financial statements

Integrated reporting

Internal audit

Financial function

Oversight of risk management

Risk management

Internal financial controls

external audit

Financial director

Combined assurance

Regulatory compliance

DIReCtORS’ RePORt

BUSINeSS ACtIVItIeS

ReVIeW OF OPeRAtIONS

StAteD CAPItAL

DIReCtORS’ INteReStS IN the ISSUeD ShARe CAPItAL OF the gROUP

SUBSIDIARy COMPANIeS

eQUIty ACCOUNteD INVeStMeNtS

RegISteR OF MeMBeRS

SPeCIAL ReSOLUtIONS

SPeCIAL ReSOLUtIONS PASSeD By SUBSIDIARy COMPANIeS

DIVIDeNDS

PROPeRty, PLANt AND eQUIPMeNt

BORROWINgS

DIReCtORS’

RePORt Continued

eVeNtS AFteR RePORtINg DAte

COMPANy SeCRetARy

AUDIt COMMIttee

gOINg CONCeRN

DIReCtORS

COMPetItION COMMISSION

AUDItORS

yeAR-eND

Overview

group strategy.

ChIeF FINANCIAL OFFICeR’S RePORt Continued

FINANCIAL

Dividends

Looking ahead

ACCOUNtINg POLICIeS

BASIS OF PRePARAtION

IAS 19 (amendment) Defined Benefit Plans: Employee Contribution

IFRIC 21 Levies

Investment Entities (amendments to IFRS 10, IFRS 12 and IAS 27)

IAS 32 (amendment) Offsetting Financial Assets and Financial Liabilities: Presentation

IAS 39 (amendment) Novation of Derivatives and

Continuation of Hedge Accounting

Annual improvements to IFRS 2010 – 2012

Annual improvements to IFRS 2011 – 2013

IAS 36 (amendment) Recoverable Amount Disclosures for Non-Financial Assets

UNDeRLyINg CONCePtS

BASIS OF CONSOLIDAtION

ACCOUNtINg POLICIeS Continued

ReCOgNItION OF ASSetS AND LIABILItIeS

DeReCOgNItION OF ASSetS AND LIABILItIeS

PROPeRty, PLANt AND eQUIPMeNt

PPC LIMITED Annual Report 2015