PPC LIMITED — Annual Report 2016

Sep 30, 2016

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2016
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Strength in diversity

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ANNUAL FINANCIAL STATEMENTS 2016

Financial statements

• 1 Approval of the financial statements

• 2 Certificate by company secretary

• 2 Preparer of the financial statements

• 3 Independent auditor’s report

• 4 Directors’ report

• 7 Report to shareholders on the activities of the audit committee

• 9 Chief financial officer’s report

• 12 Accounting policies

• 20 Going concern basis of preparation

• 22 Judgements made by management

• 24 Consolidated statement of financial position

• 25 Consolidated income statement

• 26 Consolidated statement of other comprehensive income

• 27 Consolidated statement of changes in equity

• 29 Consolidated statement of cash flows 30 Segmental information

25 26 27 29 30	Consolidated income statement Consolidated statement of other comprehensive inco Consolidated statement of changes in equity Consolidated statement of cash fows Segmental information
32	Notes to the consolidated fnancial statements
72	Subsidiaries and non-controlling interests
75	Company statement of fnancial position
76	Company income statement
77	Company statement of other comprehensive income
78	Company statement of changes in equity
79	Company statement of cash fows
80	Notes to the company fnancial statements
97	Abridged remuneration report
100	PPC Ltd shareholder analysis
IBC	Corporate information
IBC	Financial calendar

For 124 years, PPC has tracked the growth and development of southern Africa, producing cement for many iconic landmarks, including the Union Buildings, Gariep Dam and Van Staden’s River Bridge, Kariba Dam, Gaborone Airport, the Gautrain, Cape Town Stadium, Medupi power station and much of southern Africa’s infrastructure. In recent years, PPC has extended its reach to support infrastructure development in several other African countries. Notably, we are now represented in Rwanda, the Democratic Republic of the Congo and Ethiopia.

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

PPC is a truly African success story – a focused business that reflects the strengths of its people, products and services. As we expand into the rest of the African continent, we will deploy our sustainable business model – one built to last for all stakeholders.

PRODUCT MIX INCLUDES:

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Our vision

A world-class provider of materials and solutions into the basic services sector, taking a strategic approach to more than doubling our business every 10 years.

Approval of the financial statements

for the period ended 31 March 2016

The directors of the company are responsible for the integrity and objectivity of the financial statements and other information contained in this report. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board in issue and effective for the group at 31 March 2016 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 in the manner required by the Companies Act of South Africa.

In discharging this responsibility, the group maintains suitable internal control systems designed to provide reasonable assurance that assets are safeguarded and that transactions are executed and recorded in accordance with group policies.

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 believe that the group has adequate resources to continue in operation for the foreseeable future and the financial statements appearing on pages 12 to 99 have, therefore, been prepared on a going concern basis. Refer to the going concern basis of preparation section on page 20 of this report for further detail around going concern.

The financial statements have been audited by the independent auditing firm, Deloitte & Touche, that has been given unrestricted access to all financial records and other related data, including minutes of all meetings of the board of directors, committees of the board and executives. The directors believe that all representations made to the independent auditors during the audit were valid and appropriate. Deloitte & Touche’s unmodified report is presented on page 3 of this report. The auditors have, however, included on emphasis of matter in their report, which makes reference to the going concern note.

The financial statements were approved by the board of directors on 24 August 2016 and are signed on its behalf by:

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PG Nelson Interim chairman

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DJ Castle Chief executive officer

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MMT Ramano Chief financial officer

PPC Ltd Annual financial statements 2016 page 1

Certificate by company secretary

for the period ended 31 March 2016

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 Company secretary 24 August 2016

Preparer of the financial statements

for the period ended 31 March 2016

These 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 24 August 2016

page 2

Independent auditor’s report

REPORT ON THE FINANCIAL STATEMENTS

We have audited the consolidated and separate financial statements of PPC Ltd set out on pages 12 to 99, which comprise the statements of financial position as at 31 March 2016, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Financial Statements

The company’s directors are responsible for the preparation and fair presentation of these 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on these 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the 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 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 financial statements.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of PPC Ltd as at 31 March 2016, 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.

Emphasis of matter

Without modifying our opinion above, we draw your attention to the going concern note on page 20.

Other reports required by the Companies Act

As part of our audit of the financial statements for the year ended 31 March 2016, we have read the company secretary’s certificate, the directors’ report, the audit committee’s report and the chief financial officer’s report 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

In terms of the Independent Regulatory Board for Auditors (IRBA) Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Deloitte & Touche has been the auditor of PPC Ltd for 14 years.

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Deloitte & Touche Registered Auditor

Per: B. Nyembe Partner 24 August 2016

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

National executive: LL Bam chief executive officer; TMM Jordan deputy chief executive officer; MJ Jarvis 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 Mazzocco talent and transformation; 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.

B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code.

Associate of Deloitte Africa, a member of Deloitte Touche Tohmatsu Limited.

PPC Ltd Annual financial statements 2016 page 3

Directors’ report

for the period ended 31 March 2016

The directors have pleasure in presenting their report on the financial statements of the company and of the group for the six month period ended 31 March 2016, being the company’s new financial year end.

GOING CONCERN

The board and executive management team had reviewed the group’s business and capital structure and developed appropriate business plans in order to be able to deal effectively with the effects of a continuation of the current low-price environment and slowing economic growth.

The unexpected event-driven review by S&P resulted in a downgrade in the company’s credit rating thereby triggering the acceleration of the outstanding notes and putting pressure on the group’s shortterm liquidity position. In order to alleviate the liquidity position, the company successfully finalised the liquidity and guarantee facility agreement, which permitted the repayment of R1 614 million out of the R1.75 billion of outstanding notes, and concluded an underwrite agreement for its R4 billion rights issue.

Based on the conclusion of the underwrite agreement, the group remains optimistic that the conditions of the rights issue will be met. In addition to the group’s current trading position, forecasts, facilities and guarantees in place, the directors believe that the group will be able to comply with its financial covenants and be able to meet its obligations as they fall due, and accordingly have formed a judgement that it is appropriate to prepare these financial statements on a going concern basis.

Further details can be found in the going concern basis of preparation section on page 20 of this report.

BUSINESS ACTIVITIES

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

The principal activities of the company and its subsidiaries remain unchanged from the previous reporting period. During the period, the company disposed of its non-controlling shareholding interest in Afripack. Further details of the disposal are included in the financial statements.

FINANCIAL PERFORMANCE

A comprehensive review of the group’s financial performance is detailed in the financial statements.

STATED CAPITAL

On 31 March 2016, the issued shares of the company were 607 180 890 of no par value (September 2015: 605 379 648 of no par value).

Following approval from shareholders at the annual general meeting in January 2016, the company issued 1 801 242 shares to partly settle the put option held by management of Safika Cement, with the balance being settled in cash.

During the current reporting period, no shares were purchased in terms of the group’s long-term employee incentive scheme, the forfeitable share plan, in contrast to the R24 million of shares (5 328 219 shares) that were purchased in the prior reporting period. The 2013 awards of R26 million comprising 779 152 shares vested during the period and are no longer treated as treasury shares.

At period end, the stated capital balance amounted to debit R1 113 million (September 2015: debit R1 165 million).

Details of shares authorised, issued and unissued at 31 March 2016 are disclosed in note 10 to the consolidated financial statements.

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

Post-period end, the company issued 17 565 872 shares following the finalisation of 3Q Mahuma Concrete (Pty) Ltd (3Q) acquisition, with the shares trading on the JSE with effect from 4 July 2016 thereby increasing the total shares in issue to 624 746 762.

On 1 August 2016, shareholders approved the increase in the authorised stated capital. Details can be found in note 38 in the consolidated financial statements.

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 Investor Services (Pty) Ltd, or at Corpserve (Pvt) Ltd (Zimbabwe).

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

Details relating to the beneficial shareholders owning more than 5% of the issued stated capital of the company appear in the PPC Ltd shareholder analysis section on page 100.

page 4

DIRECTORS’ INTEREST IN THE ISSUED SHARES OF THE

COMPANY

Details of the beneficial holdings of directors of the company and their families in the ordinary shares of the company are given in the remuneration report included in the abridged remuneration report.

Certain directors and non-executive directors have indirect shareholding in the company following the completion of the broad-based black economic empowerment transactions. Details thereof are also provided in the abridged remuneration report.

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

SUBSIDIARY COMPANIES

When Safika Cement was purchased in 2014, put options were concluded with the management non-controlling shareholders whereby their shareholding would be sold to PPC at prescribed dates. In March 2016, the company early settled the put option for a consideration of R44 million, which brings its current shareholding to 95%. The balance of the shareholding is held by management via a trust, through a notional vendor funding mechanism.

Details of the group’s subsidiaries can be found in the subsidiaries and non-controlling interests section on page 72.

As announced previously, the group was restructured with effect from 1 April 2016, with the South African cement business, previously part of PPC Ltd, being moved to a new wholly owned entity called PPC Cement South Africa (Pty) Ltd. Furthermore, the group will create a group services company, PPC Group Shared Services (Pty) Ltd, to better service the group’s growing footprint and align to the group’s strategic growth pillars, while the aggregates companies in Botswana will be amalgamated into one legal entity.

EQUITY-ACCOUNTED INVESTMENTS

PPC concluded the sale of its 25% shareholding in Afripack Limited for a consideration of R70 million, with the resultant profit included in other exceptional items in the income statement. Following the sale of the stake, the loan that had been made available to Afripack was settled.

During the period, the group followed its rights on a capital raise and invested a further R75 million in Habesha Cement Share Company, increasing its shareholding to 35% as not all shareholders followed their rights.

Further details can be obtained in note 4 in the consolidated financial statements.

SPECIAL RESOLUTIONS

At the annual general meeting held on 25 January 2016, 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

• The granting of shares for the acquisition of 3Q Mahuma Concrete (Pty) Ltd.

Post-period end, the following special resolutions were approved by shareholders:

• Increase to the authorised shares of the company

• Amendments to the MOI

• Authorisation for the ability to issue 30% or more of the company’s ordinary shares for the purpose of implementing the proposed rights offer.

SPECIAL RESOLUTIONS PASSED BY SUBSIDIARY COMPANIES

All conditions precedent to the acquisition of 100% of 3Q Mahuma Concrete (Pty) Ltd were finalised post the reporting period and the transaction was concluded on 1 July 2016. The contractually agreed purchase consideration of R140 million was settled via the issue of 17 565 872 PPC ordinary shares determined on a 14-day VWAP. However, in terms of IFRS, the transaction value needs to be recorded using a fair value of the share price on the transaction date. The spot price on 1 July 2016 of R7.68 per share is considered to be the fair value resulting in a recorded consideration of R135 million. Further details of the transaction are included in note 38.

No special resolutions were passed by subsidiaries of the company.

DIVIDENDS

No dividend has been declared during the reporting period aligning with the guidance given to shareholders in the 2015 year-end results announcement.

The company’s dividend policy takes into account its growth considerations as well as prudency regarding its capital structure, and is therefore flexible with regard to the quantum and form of dividends.

PPC Ltd Annual financial statements 2016 page 5

continued Directors’ report

for the period ended 31 March 2016

PROPERTY, PLANT AND EQUIPMENT

At 31 March 2016, the group’s net investment in property, plant and equipment amounted to R11 716 million (September 2015: R10 648 million), details of which are set out in note 1 to the consolidated financial statements.

Significant investments continue to be made outside of South Africa with R445 million and R276 million being spent in the DRC and Zimbabwe respectively.

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 period.

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

Details of the group commitments of R3 283 million (September 2015: R4 643 million) can be found in note 30 in the consolidated financial statements.

BORROWINGS

At 31 March 2016, total borrowings amounted to R9 171 million (September 2015: R8 221 million) with the increase in borrowings being driven by the group’s African expansion strategy, with non-South African borrowings amounting to R3 372 million (September 2015: R2 357 million).

Post-period end, Standard & Poor’s reviewed PPC’s rating with a resultant decline in the rating from the long-term South Africa national scale rating of zaA and zaA-2 short-term South Africa national scale to zaBB- and zaB respectively. Following the ratings decline, the company was compelled to offer an early redemption to noteholders and as a result the amount owing of R1.75 billion, previously classified as long term, was reclassified to short-term borrowings. This early redemption negatively impacted the shortterm liquidity position of the company. During June 2016, the company concluded the liquidity and guarantee facility agreement with Nedbank, Standard Bank, Rand Merchant Bank and Absa and payment of R1 614 million was made to noteholders who made an election for early redemption on 15 July 2016.

Details of borrowings can be found in note 13 in the consolidated financial statements.

EVENTS AFTER REPORTING DATE

Other than the impact of the ratings decline on the classification of notes, there are no other events that occurred after the reporting date that may have a material impact on the group’s reported financial position at 31 March 2016. There were, however, transactions and events that took place post the reporting period that require disclosure. These are described in detail in note 38 in the consolidated financial statements.

DIRECTORS

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

At the annual general meeting held on 25 January 2016, Ms S Dakile Hlongwane was elected as a director while Messrs SK Mhlarhi and TDA Ross were re-elected as directors. At the same meeting, Messrs MP Malungani and BL Sibiya retired as directors of the company. The board would like to thank them for their valuable contribution made to the growth of the group.

The following directors are required to retire by rotation in terms of the memorandum of incorporation but, being eligible, offer themselves for re-election and the nominations committee has recommended their re-election:

• N Goldin

• B Modise

• T Moyo.

GROUP COMPANY SECRETARY

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

AUDIT COMMITTEE

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 its 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 25 January 2016.

page 6

Report to the shareholders on the activities of the audit committee

The audit committee is a committee of the board of directors and in addition to having specific statutory responsibilities to shareholders in terms of the Companies Act, it assists the board by advising and making recommendations 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 reviewed during the period and approved by the board of directors, and has executed its duties in the past financial period in line with these terms of reference.

COMPOSITION

At the date of this report, the committee consists of three independent non-executive directors:

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Name Qualification Tenure
Tim Ross (chairman) CA(SA) 8
Bridgette Modise CA(SA) 5
Todd Moyo CA(ZIM); CA(SA) 2
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Peter Nelson was a member of the audit committee but subsequently resigned when he was appointed as PPC’s interim chairman. Once a new chairman is appointed, he will go back onto the audit committee.

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.

MEETINGS

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

26 January 2016 25 May 2016 3 June 2016 13 June 2016 11 August 2016	All present
	All present
	All present
	All present
	All present

STATUTORY DUTIES

In executing its statutory duties in the 2016 financial period relating to the appointment of the external auditors, 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

• Monitored compliance with the policy setting out the extent of any non-audit services the external auditors may provide to the company or which the external auditors may not provide

• Pre-approved all non-audit service contracts with Deloitte

• Received no complaints on the accounting practices and internal audit of the company, the content or auditing of its financial statements, internal financial controls, or other related matters.

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:

Financial statements

The committee reviewed the financial statements, summarised financial statements, interim and provisional announcements, accompanying reports to shareholders and other announcements on the company’s 2016 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.

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 period and approved by the committee) and considered whether the internal audit function has the necessary resources, budget and standing within PPC to enable it to discharge its functions.

Risk management

The committee is an integral component of the risk management process and specifically reviewed:

• Financial risks

• Financial reporting risks

• Internal financial controls

• Fraud risks as it relates to financial reporting

• IT governance.

PPC Ltd Annual financial statements 2016 page 7

Report to the shareholders on the activities of the audit committee continued

for the period ended 31 March 2016

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 2017, with Ms Radebe nominated as the registered auditor. As required, this rotation of audit partners is in line with the Companies Act requirements and Ms Radebe will replace Mr Nyembe

• 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.

Financial function

• The committee has reviewed the expertise, resources and experience of the group’s finance function, and confirms this to shareholders

• In making these assessments, the committee obtained feedback from both external and internal audit

• Based on the processes and assurances obtained, the committee believes 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.

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

• Noted the report undertaken by the internal audit team with reference to:

• The chief audit executive has completed a report to the board on the effectiveness of controls and risk management, which was tabled at the board meeting in June 2016. In this report he concluded that other than the weaknesses relating to governance, risk management and controls at PPC Barnet DRC, nothing has come to the attention of group internal audit to indicate that any significant breakdown in the functioning of controls, resulting in material loss to the group and the company, has occurred during the period and up to the date of this report. The items relating to PPC Barnet DRC are being attended to by management as a matter of urgency.

• Based on the processes and assurances obtained, the committee believes material internal financial controls are effective.

GOING CONCERN

As noted in the approval of the financial statements section on page 1 of these financial statements, the directors are required to consider whether the group will continue in operational existence for the foreseeable future.

In assessing the group’s ability to meet its obligations as they fall due, management prepared cash flow and detailed liquidity forecasts based on the business and strategic forecasts for a period in excess of 12 months.

Management reported to the committee the results of its going concern assessment, noting to the committee that the group’s capital structure after a successful rights issue should allow the group to comply with its financial covenants and meet its obligations as they fall due.

The committee interrogated management’s key assumptions used in compiling the business and strategic forecasts and resultant cash flow and liquidity forecasts used in the going concern assessment. The committee was satisfied that key assumptions were appropriate and sufficiently robust.

Terms of the rights issue and resultant circulars and underwrite agreements were presented by management and its advisers to the committee. The committee scrutinised these documents and provided guidance and recommendations on the content for inclusion in these documents.

The committee was further satisfied with the going concern disclosures in the financial statements and that an appropriate basis of preparation of the financial statements had been achieved. Detailed commentary around the disclosure of the group’s going concern position is included in the going concern basis of preparation section on page 20 and events after reporting date being note 38.

Combined assurance

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

11 August 2016

page 8

Chief financial officer’s report

for the period ended 31 March 2016

INTRODUCTION

Post-completion of our first March year end, S&P Global Ratings (S&P) released a report downgrading the company’s long and shortterm South African national scale corporate credit ratings to zaBB-/ zaB from zaA/zaA-2 respectively. As a result of this event-driven and unexpected ratings review which led to the company’s long-term rating falling below investment grade, the company was obliged to offer early redemption to noteholders in terms of the domestic medium-term note (DMTN) programme memorandum. As a result, the company reclassified the amounts outstanding to noteholders as short term, thereby negatively impacting the company’s short-term liquidity. The company has, subsequent to period end, made significant progress in addressing its short-term liquidity constraints, which have been discussed further in this report.

I am pleased to report that the group maintained its EBITDA and related margins despite continued pressures from a low economic growth environment combined with increased competitor activity. This has been achieved by the group’s continued commitment to the profit improvement programme (PIP), cost containment and strategy to improve all elements of cash flow generation.

In last year’s report, I noted the company was looking to restructure its first BBBEE transaction. After much investigation, the company has concluded that the most beneficial option for all parties is to allow the transaction to run its original course and conclude in December 2016.

We have recently completed the implementation of the group’s new legal organisational structure which will see the streamlining of our legal structure, changing the holding company from that of an operating and holding company into a traditional investment holding company and aligning the company structure with that of our group strategy. This streamlining became effective on 1 April 2016 and will form the basis of reporting going forward.

INCOME STATEMENT

In providing analysis on the income statement for the six months to March 2016, the comparison base used is the six months to March 2015. This, we believe, provides a more comparable basis for understanding the financial performance of the group rather than the 12 months to September 2015.

Total cement sales volumes for the six-month reporting period were 1% below last year at 2 614kt (2015: 2 629kt). South African cement volumes increased by 0.5% compared to the prior reporting period as the Western Cape and Eastern Cape provinces recorded double-digit growth on the back of reduced imports, while volumes in Gauteng and other inland provinces were lower compared to the prior reporting period due to increased competition.

In our rest of Africa portfolio, volumes in Zimbabwe declined 22% due to tighter market liquidity, increased local competition and lower disposable income, while cement volumes in Botswana declined 15% following increased competition in the southern African region. Since commissioning of the new plant in Rwanda in September 2015, over 124kt of cement has been sold seeing our market share rising in line with the increased output.

As a result of competition and overcapacity in the industry during the period under review, the group has experienced declining margins due to lower selling prices in South Africa and Botswana and our limited ability to pass on cost increases. Following the recent devaluation of the rand and other regional currencies against the US dollar, PPC Zimbabwe’s ability to compete in the export market has been negatively impacted and has been compounded by rising levels of imports into the country.

The group has maintained a policy of deliberate and calculated pricing, incentive and promotional initiatives to remain competitive and support brand confidence, further strengthened by its technical support services.

In the South African materials business, lime volumes were 12% lower for the six months ended 31 March 2016 compared to the corresponding period last year on the back of continued pressures in the steel industry. Volume growth was, however, recorded in both the aggregates and readymix businesses as they supplied major projects such as the Mall of Africa, N14 and Cedar Road projects as well as the Steyn City development.

As a result of the above, group revenue declined by 1% to R4 501 million (2015: R4 541 million).

During the six months ended 31 March 2016, the group generated a further R178 million in savings from PIP, largely on the back of improved cost efficiencies and strategic cost reductions favourably impacting both the cost of sales and administration and other operating expenditure lines. The success of PIP is evident in cost of sales increasing only 2% to R3 261 million (2015: R3 206 million), while administration and other operating expenditure declined by 12% to R489 million (2015: R554 million), with total administration and other operating expenditure approximating 11% of revenue (2015: 12%). It is pleasing to note that the cumulative sustainable benefits from PIP now amount to R390 million and reflect the group’s disciplined cost management culture which is evident in cost of sales for the South African cement business ending 3% lower than the prior period on a nominal per tonne basis.

PPC Ltd Annual financial statements 2016 page 9

continued Chief financial officer’s report

for the period ended 31 March 2016

EBITDA is up 2% at R1 144 million (2015: R1 123 million), with an EBITDA margin of 25.4% (2015: 24.7%) primarily due to improved efficiencies and cost savings.

Finance costs, including fair value adjustments on financial instruments, increased by 26% to R350 million (2015: R277 million). This increase was mainly due to interest of R88 million expensed to the income statement post-commissioning of our new plant in Rwanda in contrast to the prior reporting period where interest was being capitalised to property, plant and equipment during the commissioning phase.

Profit on disposal of non-core assets, being our investments in Afripack and Ciments du Bourbon amounted to R117 million. Impairments of R5 million were recorded on property, plant and equipment on loans advanced.

The group’s taxation charge decreased by 4% to R156 million (2015: R163 million) at an effective tax rate of 31% (2015: 36%). The decrease in the effective tax rate was mainly due to the tax rate differential on capital profits made on the disposal of non-core assets and favourable prior year tax reassessments.

Profit attributable to PPC shareholders increased 35% to R369 million (2015: R274 million), with the increase ascribed to the profit made on the sale of non-core assets partly offset by increased finance charges. In line with this, headline earnings per share ended 12% lower at 53 cents (2015: 60 cents) while normalised earnings per share of 56 cents was 8% lower than the prior year in part due to the increased finance costs as noted earlier.

STATEMENT OF FINANCIAL POSITION

In providing analysis on the statement of financial position, the comparable base used is the statement of financial position at 30 September 2015, as the group has invested substantially in expansion projects with a resultant increase in borrowings.

At 31 March 2016, property, plant and equipment amounted to R11 716 million (September 2015: R10 648 million), with capital investments in property, plant and equipment amounting to R1 176 million with R970 million being invested in the Slurry kiln 9 project in South Africa and expansions in the DRC and Zimbabwe. The group has made substantial progress with its projects; the 700ktpa plant in Zimbabwe, the 1mtpa plant in the DRC and the 1mtpa Slurry kiln 9 project anticipated to be commissioned end of

calendar 2016, early calendar 2017 and 2018 calendar respectively. Following the devaluation of the rand by approximately 7% postSeptember 2015, translation adjustments of R300 million were recorded to property, plant and equipment.

Capital commitments at period end amounted to R3 283 million (September 2015: R4 643 million). On the DRC project, we have identified additional potential startup funding requirements to which PPC might have to contribute between US$20 million and US$50 million which will be reimbursed to the company from future operating profits made by the DRC business. These payments may arise because of delayed VAT repayments (VAT exemption was only received in January 2016), settling of bank facilities relating to cement trading losses incurred ahead of commissioning and prefunding of future debt repayments.

In Ethiopia, the US$170 million to US$180 million, 1.4mtpa plant remains scheduled to be commissioned in the second quarter of calendar 2017. Plant construction is progressing well, with overall project progress at 71%. During the period, the group invested a further R75 million into Habesha, thereby increasing PPC’s shareholding to 35%.

Other non-current assets have increased by R235 million from September 2015 to R590 million following the reclassification of VAT incurred on the DRC project as the local revenue authorities indicated that there would be delays in refunding VAT receivables.

During March 2016, the company acquired the shareholding in Safika Cement that was previously owned by Safika Cement management, under a put option agreement, for R44 million. The purchase consideration was settled with a combination of cash and through the issue of new PPC shares. PPC now holds 95% of Safika Cement with the balance being owned by management, via a trust, through a notional vendor financing mechanism.

BORROWINGS AND GOING CONCERN

Group debt increased to R9 171 million (September 2015: R8 221 million) following further investments in our DRC, Zimbabwe and Slurry projects. As the project funding debt is mainly denominated in US dollar and Rwanda franc, the devaluation of the rand had an unfavourable impact on borrowings when translated into rand.

page 10

As noted earlier, the amounts outstanding on the DMTN programme were reclassified to short-term borrowings. The group secured funding, through a liquidity and guarantee facility agreement, from Absa Bank, Nedbank, Rand Merchant Bank and Standard Bank to facilitate early redemption of the notes. This repayment was successfully concluded in July 2016, where R1 614 million of outstanding notes were repaid where noteholders selected early redemption.

On 22 August 2016, the company concluded an underwrite agreement for the R4 billion rights issue, which is subject to standard material adverse change clauses. On successful conclusion of the rights issue, the group’s capital position will have been significantly enhanced ensuring the group continues to be a going concern for the foreseeable future. Further details can be found in the going concern basis of preparation section on page 20 of this report.

REVIEW AUDIT OPINION

Post-finalisation of the liquidity and guarantee funding and rights issue underwrite agreements, the disclaimer opinion received from our auditors on the reviewed financial results for the six months to March 2016, published on 14 June 2016, has been replaced with an unmodified audit opinion on the audited financial statements for the six months to March 2016. The auditors have, however, included an emphasis of matter in their unmodified report, which makes reference to the going concern note.

CASH FLOW

The group’s net cash inflow from operating activities decreased by R75 million from R224 million in the six months ended 31 March 2015 to R149 million for the current reporting period. This decrease was due to an increase in working capital, in particular accounts payable and inventory, and higher finance costs paid offset in part by lower dividend and taxation payments.

Net cash outflow from investing activities increased by R284 million to R1 283 million (2015: R999 million) as the group further invested in property, plant and equipment, incurred further VAT payments on property, plant and equipment acquired for the DRC project, which will be recovered over time, and an additional investment into Habesha Share Company Limited.

The group’s net cash inflow from financing activities increased by R217 million from R632 million in the six months ended 31 March 2015 to R849 million. This increase was due to net borrowings of

R1 499 million raised in the six months to March 2016 in comparison to the R632 million raised in 2015 as the group utilised further on project funding for its expansion projects. Drawdowns on project funding were partly offset by the repayment of our first note (PPC001) of R650 million.

DIVIDENDS

In line with the revised, more flexible dividend policy implemented last year and taking the current liquidity constraints and phasing of our build programme into consideration, no dividend was declared.

LOOKING FORWARD

We will focus on ensuring a successful rights issue with R4 billion gross proceeds expected to flow into the group to repay outstanding amounts advanced under the liquidity and guarantee facility while the remainder of the proceeds will be used to reduce current debt levels. Post-receipt of the rights offer proceeds and strengthening of the group’s capital structure, we will engage with the banks in order to optimally restructure our debt and related funding terms.

As noted earlier in the report, the company’s first BBBEE transaction will conclude in December 2016. Work has already commenced with advisers and engagements taking place with the authorities in order to implement a suitable mechanism to address the future BEE ownership shortfall following the limited transfer of BBBEE I.

On 1 July 2016, the acquisition of 100% of 3Q Mahuma Concrete (3Q) was concluded. This acquisition further enhances our channel management strategy and growth in the readymix concrete segment. We will focus on integrating 3Q into our business materials division further enhancing our service offering to our customers.

A key focus item will be the delivery on our financial and operating targets post-commissioning of the DRC plant.

In conclusion, I would like to thank team PPC for their support of PIP and its related initiatives, and particularly the finance teams across the group for their continued dedication during this period.

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MMT Ramano Chief financial officer 24 August 2016

PPC Ltd Annual financial statements 2016 page 11

Accounting policies

for the period ended 31 March 2016

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 31 March 2016 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 and the group has not adopted any new or revised accounting standards, amendments and interpretations of those standards, as none were effective during the period under review.

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

• IAS 7 Statement of Cash Flows : amendment as a result of the disclosure initiative

• IAS 12 Income Taxes : amendment by recognition of deferred tax assets for unrealised losses

• IFRS 7 Financial Instruments: Disclosure

• IFRS 15 Revenue from Contracts with Customers

• IFRS 9 Financial Instruments

• IFRS 16 Leases

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

During the period the company changed its financial year-end to March, aligning with its expansion ambitions, which will result in the amounts presented not being comparable.

BASIS OF CONSOLIDATION

The group consolidates all of its subsidiaries. Accounting policies are applied consistently in all group companies except for the Democratic Republic of the Congo (DRC) 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 information 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 CIMERWA and the DRC incorporated subsidiaries, have the same financial year end as the company. The

financial year end of the Pronto entities were amended during the period to align with PPC. 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.

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

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.

page 12

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.

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

Stripping activity assets are 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 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.

A 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 rehabilitation, 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 of money adjustments).

Changes in the measurement of an existing decommissioning or rehabilitation 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 if no asset was initially recorded.

In South Africa, payments are made to a rehabilitation trust fund in accordance with statutory requirements. Currently, there are no such regulations in the other jurisdictions in which the group operates for the creation of a rehabilitation trust fund; however, in the DRC bank guarantees are required. 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.

EXPLORATION COST

The group capitalises all exploration and evaluation costs. In evaluating if costs incurred meet the criteria to be capitalised, sources of information are used depending on the level of exploration undertaken.

PPC Ltd Annual financial statements 2016 page 13

continued Accounting policies

for the period ended 31 March 2016

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

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 or more frequently if events or changes in circumstances indicate that the carrying amount should be impaired 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.

A 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.

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.

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 relating 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.

page 14

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 special purpose vehicle (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 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.

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 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 noncurrent 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 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, non-

PPC Ltd Annual financial statements 2016 page 15

continued Accounting policies

for the period ended 31 March 2016

controlling 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 under fair value adjustments on financial instruments.

HEDGE ACCOUNTING

If a fair value hedge meets the conditions for hedge accounting, any gain or loss on the hedged item attributable to the hedged risk is included in the carrying amount of the hedged item and recognised in profit or loss.

If a cash flow hedge meets the conditions for hedge accounting, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly 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.

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 commencement of the lease. 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.

Leasehold improvements

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 straightline 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.

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 periods. 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.

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

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.

page 16

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.

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.

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.

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 or 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.

Amounts denominated in foreign currencies are translated at ruling exchange rates at the reporting date.

DEFERRED TAX LIABILITY

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

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.

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 profit and loss.

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

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

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

PPC Ltd Annual financial statements 2016 page 17

continued Accounting policies

for the period ended 31 March 2016

probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made for the amount of the obligation.

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

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

TREASURY SHARES

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.

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

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 writedowns 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.

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.

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.

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.

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.

Current tax

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

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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.

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 rate differences are recognised in profit or loss. The financial statements of entities within the group, whose functional currencies are different to the group’s presentation currency, are translated as follows:

• Assets, including goodwill, and liabilities at exchange rates ruling on the reporting date

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

• Equity items at the exchange rate ruling when 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.

RESERVES

Foreign currency – includes exchange differences arising on monetary items that form part of PPC’s net investment in a foreign operation.

Available for sale – includes fair value changes on available-for-sale assets. The cumulative gain/loss is recognised in profit/loss on derecognition of the AFS asset.

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 comparative figures are restated.

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.

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.

Other

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

Hedging – to the extent that certain hedges are effective, the gains or losses are included in the hedging reserve.

Equity compensation reserve – increase in equity from the issuance of shares relating to the forfeitable share incentive scheme and BEE transactions.

EVENTS AFTER THE 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.

PPC Ltd Annual financial statements 2016 page 19

Going concern basis of preparation

for the period ended 31 March 2016

In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether the group and company can continue in operational existence for the foreseeable future.

The financial performance of the group and company is dependent upon the wider economic environment in which it operates. Factors exist which are outside the control of the group which can have a significant impact on the business, specifically, volatility in the rand/US dollar exchange rate, energy prices and commodity prices, which impact on the business’s input costs. Despite the operational and cost containment achievements of the group over the last 12 months, the weaker cement price environment due to competitive pressures has put the group’s cash flows and profitability under pressure. The directors have determined that the group needs to take further decisive measures to improve its ability to operate in the current competitive pricing environment and enable it to benefit from any recovery in cement prices in the medium to long term.

In 2010, PPC embarked upon an expansion strategy to extract value from high-growth economies by expanding its footprint into the rest of Africa. The Rwanda expansion project was successfully commissioned in 2015 and during the next 12 months the group will commission its expansion projects in Zimbabwe, the DRC and Ethiopia. The result of these expansions will see an increase in gross production capacity of approximately three million tonnes per annum giving the group a strong foundation for further growth. Given the long lead time required to develop greenfield operations, the group has drawn down on pre-arranged project finance debt without an immediate concomitant increase in earnings and resultant cash flow.

During the same period of our expansion growth on the continent, external factors beyond the group’s control have seen a slowing global economy, significant decline in commodity prices which culminated in downward pressures on selling prices in the regions in which the group operates. In addition, South Africa which is a major contributor to earnings, has seen intensified competition in terms of new entrants and also imports into the country despite the economic slowdown. That has resulted in overcapacity in the South African market. The board and executive management have reviewed the group’s business and capital structure and developed a business plan in order to be able to deal effectively with the effects of a continuation of the current low selling price environment and limited economic growth. Key elements of the business plan are the reduction of costs and improvements in efficiencies, through the Profit Improvement Programme (PIP) implemented in 2015; from which R390 million of savings have been achieved; the curtailment of discretionary capital expenditure while preserving the ability of the business to increase production and compete efficiently when cement prices and economies improve. In prior years, the group had also completed the right-sizing of the various operations throughout the group.

As at 29 March 2016, the board had initiated a review of the group’s capital structure and potential rights issue. This capital raise investigation was at an advanced stage at the date of the S&P Global Ratings review.

Post our current reporting date S&P Global Ratings conducted an event-driven ratings review which was unexpected given that their annual review was supposed to be in June 2016. Given the unexpected event-driven ratings review, the outcome was the downgrade to sub-investment grade to ZaBB-/ZaB from ZaA/ZaA-2 long and short-term South African national scale. Due to the long-term rating falling below ZaBBB-, the company was required to offer early redemption in terms of its Domestic Medium Term Note (DMTN) programme memorandum. The principal value of the notes issued in terms of the DMTN programme amounted to R1,750 million as at 31 March 2016 and their maturity date was from the company’s 2019 financial year onwards. At period end, the company reclassified the full outstanding notes’ value from long-term borrowings to short-term borrowings, thereby creating a commercial insolvency where its current liabilities exceeded current assets.

In addition to this early redemption requirement, the company negotiated and finalised the liquidity and guarantee facility to a maximum of R2 billion, from Standard Bank of South Africa Limited, Rand Merchant Bank, Absa/Barclays Bank Limited and Nedbank Limited, that will bear interest at JIBAR plus 10% and guarantee fees of 7.5%. This facility was utilised to redeem the outstanding notes of R1,614 million on 15 July 2016 where noteholders opted to accept the company’s offer (refer long-term borrowings, note 13, and events after reporting date, note 38). The balance of the outstanding notes of R136 million will continue following the original terms of the respective notes, as no response was received from noteholders. Should there be a subsequent response from noteholders, the company may consider the request of noteholders but is not legally bound in terms of the DMTN programme. Raising and transaction fees, incurred post the reporting date, of R171 million will be capitalised to borrowings and amortised to the income statement over the five-month period of the facility.

The repayment of the liquidity and guarantee facility will be funded from the proceeds of the proposed rights issue, or 1 November 2016 if earlier. An additional R1 billion will also be utilised to repay other existing debt facilities out of the rights issue proceeds.

The board’s review of the group’s capital structure has resulted in significant steps being taken to strengthen the group’s financial position. As released on the JSE SENS on 31 May 2016, the board is undertaking a R4 billion rights issue. A significant step to the rights issue was taken on 1 August 2016, where shareholders approved the following resolutions at a general meeting of shareholders:

• The increase of the authorised stated capital from 700 000 000 shares to 10 000 000 000 shares

• The amendment to the memorandum of incorporation reflecting the increase in the authorised stated capital

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• The authorisation to issue additional shares that will exceed 30% of the existing voting power of the shares that were in issue

• The granting of a general authority to directors to issue the required number of shares for purposes of implementing the proposed rights offer.

Following these approvals, the company is proceeding with the R4 billion proposed rights offer, which is subject to standard material adverse change clauses.

Management has prepared cash flow forecasts for a period in excess of 12 months. Various scenarios have been considered to test the group’s resilience against business risks including:

• Significant adverse movements in the rand/US dollar exchange rate, from current forex levels, and cement selling prices or a combination thereof

• Failure to meet forecast demand targets.

The directors have concluded that the group’s new capital structure, after a successful rights issue and debt facilities amendments, provides sufficient headroom to cushion against downside operational risks and reduces the risk of breaching new debt covenants.

If the rights issue is unsuccessful for whatever reason, the group would have to consider other alternatives which may reduce the risk that the group would be able to meet its obligations as they fall due. These options may include:

• Renegotiating or refinancing existing facilities

• Full or partial curtailment of capital projects, which may result in significant financial penalties

• Exploring the disposal of assets

• Merger or acquisition transaction involving the company, although there is no certainty that such sales or transactions could be realised in the available timeframe on acceptable terms, or at all.

These actions require the participation and agreement of external parties, the directors are therefore not confident that any such alternative courses of action could be achieved in the limited time available, or that they would ultimately be successful or be in the best interest of shareholders over the long term. As a result, in the event that the proposed rights issue is not completed and the amended facilities agreements do not come into effect, the group would be unable to meet its obligations as they fall due.

The need for shareholder approval of the planned rights issue therefore represented a material uncertainty that could have cast significant doubt about the group’s and company’s ability to continue as a going concern such that it may be unable to realise its assets and discharge its liabilities in the normal course of business. Following approval from the shareholders at the general meeting on 1 August 2016, the directors believe that this uncertainty has been significantly eliminated.

The directors have concluded that the group’s new capital structure, after fulfilling the successful rights issue, will provide the necessary headroom to cushion against increased business risks and depreciation in the currency, and reduces the risk of breaching new debt covenants. Accordingly, the directors believe that the successful completion of the planned rights issue is the best option available to the company.

Based on the group’s expectation that the conditions of the planned rights issue will be met, in addition to the group’s current trading position and forecasts and facilities in place, the directors believe that the group will be able to comply with its financial covenants and be able to meet its obligations as they fall due, and accordingly have formed a judgement that it is appropriate to prepare the financial statements on a going concern basis. These financial statements therefore do not include any adjustments that would result if the going concern assumption was not used as the basis for the underlying preparation of the financial statements

PPC Ltd Annual financial statements 2016 page 21

Judgements made by management

for the period ended 31 March 2016

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

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

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

ASSET LIVES AND RESIDUAL 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 advancements, product lifecycles, life-of-mine and maintenance programmes are taken into account.

Except for Pronto, 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.

In the case of Pronto, the residual value assessments consider issues such as future market conditions, the remaining useful life of the asset and projected disposal values.

COSTS TO BE CAPITALISED TO A PROJECT

Significant judgement is required in identifying costs to be capitalised to a project during the construction, testing and ramp-up phases. Judgement is further required to identify indirect costs that could be capitalised.

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:

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

• 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 ongoing production over a certain period.

RESERVES ESTIMATES

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 and other relevant economical and technical data.

The estimation of recoverable reserves is based on 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.

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.

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

GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL 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 and appropriate discount rates approved by management.

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

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.

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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 the business plans which include estimates and assumptions regarding economic growth, interest, inflation and tax rates and the competitive environment.

VALUATION OF FINANCIAL INSTRUMENTS

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 instrument 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.

CLASSIFICATION OF NOTES

In determining the timing classification of the outstanding notes in terms of the company’s domestic medium-term programme (DMTN) at 31 March 2016, and taking cognisance of the S&P rating downgrade on the company, judgement was required in determining the maturity split of the outstanding notes between current and non-current. At the time of finalising the financial statements, engagement with noteholders had not been concluded and judgement was applied to classify all outstanding notes as short term due to the repayment obligation clauses as included in the DMTN programme.

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

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.

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 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

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 2016 page 23

Consolidated statement of financial position

as at 31 March 2016

Notes	31 March 2016 Rm	30 September 2015 Rm
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 12 Non-current assets held for sale 6 Current assets Inventories 7 Trade and other receivables 8 Cash and cash equivalents 9	13 579	12 202
	11 716 255 766 200 590 52	10 648 254 772 125 355 48
	42 2 768	76 2 979
	1 121 1 187 460	1 029 1 232 718
Total assets	16 389	15 257
EQUITY AND LIABILITIES Capital and reserves Stated capital 10 Other reserves Retained proft	(1 113) 1 558 2 583	(1 165) 1 402 2 406
Equity attributable to shareholders of PPC Ltd Non-controlling interests	3 028 535	2 643 521
Total equity Non-current liabilities Provisions 11 Deferred taxation liabilities 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	3 563 6 729	3 164 8 813
	408 1 178 4 614 529	400 1 059 6 711 643
	6 097	3 280
	4 557 1 540	1 510 1 770
Total equity and liabilities	16 389	15 257

page 24

Consolidated income statement

for the period ended 31 March 2016

Notes	Six months ended 31 March 2016	Twelve months ended 30 September 2015
Revenue Cost of sales	4 501 3 261	9 227 6 437
Gross proft Administration and other operating expenditure	1 240 489	2 790 1 130
Operating proft before item listed below: Empowerment transactions IFRS 2 charges(a)	751 18	1 660 43
Operating proft 17 Fair value adjustments on fnancial instruments 18 Finance costs 19 Investment income 20	733 (20) 330 12	1 617 22 518 28
Proft before equity-accounted earnings and exceptional items Earnings from equity-accounted investments 4 Impairments 21 Proft on disposal of non-core assets 21	395 – (5) 117	1 149 (16) (81) –
Proft before taxation Taxation 22	507 156	1 052 391
Proft for the period	351	661
Attributable to: Shareholders of PPC Ltd Non-controlling interests	369 (18)	698 (37)
	351	661
Earnings per share (cents) 23 Basic Diluted	70 69	133 131

(a) Comprises BBBEE, Zimbabwe indigenisation and DRC IFRS 2 charges.

PPC Ltd changed its financial year end from September to March. This is the first reporting cycle of the company using the March year end.

PPC Ltd Annual financial statements 2016 page 25

Consolidated statement of other comprehensive income

for the period ended 31 March 2016

	Foreign currency translation reserve Rm Available- for-sale fnancial assets Rm Hedging reserve Rm Retained proft Rm Total comprehensive income Rm
March 2016 Proft for the period Items that will be reclassifed to proft or loss Cash fow hedges Taxation on cash fow hedges Reclassifcation of proft on sale of available-for-sale fnancial asset to proft and loss Taxation impact on reclassifcation of proft on sale of available-for-sale fnancial asset to proft and loss Translation of foreign operations Other comprehensive income net of taxation	– – – 351 351 237 (67) 7 – 177
	– – 10 – 10 – – (3) – (3) – (82) – – (82) – 15 – – 15 237 – – – 237
	237 (67) 7 – 177
Total comprehensive income	237 (67) 7 351 528
Attributable to: Shareholders of PPC Ltd Non-controlling interests
	211 (67) 7 369 520 26 – – (18) 8
September 2015 Proft for the year Items that will be reclassifed to proft or loss Cash fow hedges Taxation on cash fow hedges Revaluation of available-for-sale fnancial asset Taxation on revaluation of available-for-sale fnancial asset Translation of foreign operations Other comprehensive income net of taxation	– – – 661 661 751 (3) 27 – 775
	– – 38 – 38 – – (11) – (11) – (7) – – (7) – 3 – – 3 751 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

page 26

Consolidated statement of changes in equity

for the year period ended 31 March 2016

	Stated capital Rm	Other reserves Equity attri- Foreign currency trans- lation reserve Rm Available- for-sale fnancial assets Rm Hedging reserve Rm Equity compen- sation reserve Rm Retained proft Rm butable to share- holders of PPC Ltd Rm Non- control- ling interests Rm Total equity Rm
March 2016 Balance at the beginning of the period Movement for the period Dividends declared IFRS 2 charges Issuance of shares to fund an additional investment in Safka Cement Total comprehensive income/(loss) Transactions with non-controlling shareholders recognised directly in equity Vesting of FSP incentive scheme awards	(1 165) 52	1 034 81 27 260 2 406 2 643 521 3 164 211 (67) 7 5 177 385 14 399
	– – 26 – – 26	– – – – (185) (185) – (185) – – – 31 – 31 – 31 – – – – – 26 – 26 211 (67) 7 – 369 520 8 528 – – – – (7) (7) 6 (1) – – – (26) – – – –
Balance at the end of the period	(1 113)	1 245 14 34 265 2 583 3 028 535 3 563

PPC Ltd Annual financial statements 2016 page 27

continued Consolidated statement of changes in equity

for the period ended 31 March 2016

	Stated capital Rm	Other reserves Equity attri- Foreign currency trans- lation reserve Rm Available- for-sale fnancial asset Rm Hedging reserve Rm Equity compen- sation reserve Rm Retained proft Rm butable to share- holders of PPC Ltd Rm Non- control- ling interests Rm Total equity Rm
September 2015 Balance at the beginning of the year Movement for the year Dividends declared IFRS 2 charges Non-controlling interest recognised following investment in subsidiary Put option recognised on non-controlling shareholder investment in subsidiary Shares purchased in terms of the FSP incentive scheme treated as treasury shares Total comprehensive income/(loss) Transactions with non-controlling shareholders recognised directly in equity Vesting of FSP incentive scheme awards Vesting of shares held by BBBEE 1 entities	(1 173) 8	416 84 – 233 2 255 1 815 603 2 418 618 (3) 27 27 151 828 (82) 746
	– – – – (24) – – 23 9	– – – – (540) (540) (19) (559) – – – 59 – 59 – 59 – – – – – – 256 256 – – – – – – (422) (422) – – – – – (24) – (24) 618 (3) 27 – 698 1 340 96 1 436 – – – – (7) (7) 7 – – – – (23) – – – – – – – (9) – – – –
Balance at the end of the year	(1 165)	1 034 81 27 260 2 406 2 643 521 3 164

page 28

Consolidated statement of cash flows

for the period ended 31 March 2016

Notes	Six months ended 31 March 2016 Rm	Twelve months ended 30 September 2015 Rm
CASH FLOWS FROM OPERATING ACTIVITIES Proft before taxation and equity-accounted earnings Adjustments for: Amortisation of intangible assets 3 Depreciation 1 Dividends received 20 Finance costs (including fair value adjustments on fnancial instruments) 19 Gross impairments and other exceptional adjustments 21 IFRS 2 charges Interest received 20 Other non-cash fow items	507 45 348 (3) 330 (112) 31 (5) (4)	1 068 90 612 (11) 518 81 59 (17) 16
Operating cash fows before movements in working capital Movements in inventories Movements in trade and other receivables Movements in trade and other payables and provisions	1 137 (72) (66) (186)	2 416 (68) 156 212
Cash generated from operations Finance costs paid 25 Investment income received 20 Taxation paid 26	813 (292) 8 (195)	2 716 (408) 28 (489)
Cash available from operations Dividends paid 27	334 (185)	1 847 (559)
Net cash infow from operating activities	149	1 288
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of additional shares in equity-accounted investment 4 Acquisition of additional shares in subsidiary 14 Investments in intangible assets 3 Investments in property, plant and equipment 28 Movements in fnancial assets 29 Movement in other non-current assets Proceeds from disposal of property, plant and equipment Proceeds on sale of equity-accounted investment and available-for-sale fnancial asset	(75) – (12) (1 176) 4 (181) 4 153	– (108) (36) (2 856) – – 5 –
Net cash outfow from investing activities	(1 283)	(2 995)
Net cash outfow before fnancing activities	(1 134)	(1 707)
CASH FLOWS FROM FINANCING ACTIVITIES Net long-term borrowings raised Net short-term borrowings raised Purchase of shares in terms of the FSP incentive scheme Repayment of note	206 1 293 – (650)	660 1 136 (24) –
Net cash infow from fnancing activities	849	1 772
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Exchange rate movements on opening cash and cash equivalents	(285) 718 27	65 563 90
Cash and cash equivalents at end of the period 9	460	718
Cash earnings per share (cents) 23	63	351

PPC Ltd Annual financial statements 2016 page 29

Segmental information

for the period ended 31 March 2016

The group discloses its operating segments according to the business units which are regularly reviewed by the group executive committee and comprise cement, lime, aggregates and readymix and other. There has been no change in reporting segments during the period under review but lime and aggregates and readymix are shown under the materials business.

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.

	31 March 2016 Rm
Revenue South Africa Rest of Africa	3 219 1 367
Inter-segment revenue Total revenue Operating proft before items listed below Empowerment transactions IFRS 2 charges Restructuringcosts	4 586 (85)
	4 501
	764 18 13
Operating proft South Africa Rest of Africa Fair value (loss)/gain on fnancial instruments Finance costs Investment income	733
	522 211
	(20) 330 12
Proft before earnings from equity-accounted investments and exceptional items Earnings from equity-accounted investments Impairments and other exceptional adjustments	395 – 112
Proft before taxation Taxation	507 156
Proft for theperiod	351
Depreciation and amortisation EBITDA South Africa Rest of Africa EBITDA margin (%) Assets Non-current assets South Africa Rest of Africa Current assets Non-current asset held for sale Total assets South Africa Rest of Africa Investments in property, plant and equipment Capital commitments (refer note 30) Liabilities Non-current liabilities Current liabilities Total liabilities South Africa Rest of Africa	393 1 144
	793 351
	25.4
	13 579
	5 205 8 374
	2 768 42
	16 389
	6 753 9 636
	1 176 3 283
	6 729 6 097
	12 826
	8 148 4 678

(a) Includes head office activities.

(b) Aggregates and readymix have been aggregated in line with industry practices.

(c) Comprises BBBEE trusts and trust funding SPVs.

page 30

	Cement(a)	Cement(a)	Materials business	Materials business	Materials business	Materials business	Other(c)	Other(c)
			Lime		Aggregates and readymix(b)
	31 March 2016 Rm	30 September 2015 Rm	31 March 2016 Rm	30 September 2015 Rm	31 March 2016 Rm	30 September 2015 Rm	31 March 2016 Rm	30 September 2015 Rm
	2 386 1 314	4 999 2 507	378 5	853 18	455 48	943 99	– –	– –
	3 700	7 506	383	871	503	1 042	–	–
	645 18 13	1 422 43 –	75 – –	133 – –	44 – –	105 – –	– – –	– – –
	614	1 379	75	133	44	105	–	– – – – 103 –
	404 210	881 498	75 –	133 –	43 1	106 (1)	– –	– –
	(20) 282 8	34 382 19	– 2 1	– 4 1	– 4 3	(12) 29 8	– 42 –
	320 – 113	1 050 (16) (59)	74 – –	130 – –	43 – (1)	72 – (22)	(42) – –	(103) – –
	433 129	975 325	74 21	130 35	42 6	50 31	(42) –	(103) –
	304	650	53	95	36	19	(42)	(103)
	340 972	594 2 016	21 96	45 178	32 76	63 168	– –	– – – – –
	624 348	1 364 652	96 –	178 –	73 3	164 4	– –	– –
	26.3	26.9	25.0	20.4	15.1	16.1	–
	12 613	11 251	325	310	641	641	–	– – – 4 –
	4 280 8 333	4 231 7 020	325 –	310 –	600 41	600 41	– –	– –
	2 343 42	2 536 76	187 –	185 –	237 –	254 –	1 –
	14 998	13 863	512	495	878	895	1	4 4 – – – 1 138 92 1 230 1 230 –
	5 441 9 557	5 376 8 487	512 –	495 –	799 79	812 83	1 –	4 –
	1 113 3 219	2 741 4 588	37 5	45 28	26 59	70 27	– –
	6 536 5 038	7 492 2 921	103 90	94 105	90 125	89 162	– 844	1 138 92
	11 574	10 413	193	199	215	251	844
	6 921 4 653	6 692 3 721	193 –	199 –	190 25	222 29	844 –	1 230 –

PPC Ltd Annual financial statements 2016 page 31

Notes to the consolidated financial statements

for the period ended 31 March 2016

		Freehold and leasehold land, buildings and mineral rights Rm Factory decommis- sioning assets Rm Plant, vehicles, furniture and equipment Rm Capitalised leased plant Rm Total Rm
1.	PROPERTY, PLANT AND EQUIPMENT March 2016 Cost Accumulated depreciation and impairments	1 276 134 15 586 158 17 154 476 55 4 750 157 5 438
		800 79 10 836 1 11 716
	Movements during the period Net carrying value at the beginning of the period Additions To enhance existing operations To expand operations Depreciation Disposals Impairments Other movements Reallocation from inventory (refer note 7) Translation differences	778 87 9 780 3 10 648 19 – 1 103 – 1 122
		15 – 177 – 192 4 – 926 – 930
		(16) (3) (326) (3) (348) – – (3) – (3) – – (4) – (4) – (10) – 1 (9) – – 10 – 10 19 5 276 – 300
	Net carrying value at the end of the period	800 79 10 836 1 11 716
	Translation differences comprise Cost Accumulated depreciation	342 (42)
		300
	September 2015 Cost Accumulated depreciation and impairments	1 229 138 14 198 157 15 722 451 51 4 418 154 5 074
		778 87 9 780 3 10 648
	Movements during the year Net carrying value at the 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 7 223 49 – 3 216 4 3 269
		13 – 385 4 402 36 – 2 831 – 2 867
		(43) (11) (555) (3) (612) – – (6) – (6) 5 (13) – (4) (12) (27) – (30) – (57) – – (4) – (4) (115) – – – (115) (40) – – – (40) 87 – 915 – 1 002
	Net carrying value at the end of the year	778 87 9 780 3 10 648
	Translation differences comprise Cost Accumulated depreciation	1 108 (106)
		1 002

page 32

1. PROPERTY, PLANT AND EQUIPMENT continued

Assets pledged as security

Property, plant and equipment with a net carrying value of R2 754 million, R2 140 million and R1 959 million (September 2015: R2 167 million, R2 166 million and R22 million) 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

Following reviews of property, plant and equipment for the period ended March 2016, other minor impairments of R4 million were processed, while in the prior reporting period the following impairments occurred:

• Costs of R27 million relating to a limestone quarry in Zimbabwe was impaired due to uncertainty of future development prospects.

• Post the group’s decision to no longer pursue the Algeria expansion project, it was deemed appropriate that the costs capitalised of R15 million be impaired.

• An impairment of R14 million relating to the old plant at CIMERWA that would not be used post commissioning of the new plant.

• Other minor impairments to property, plant and equipment amounting to R1 million.

Other information

The cost of land included in the above amounts to R269 million (September 2015: R248 million).

Included in plant, vehicles, furniture and equipment is capital work in progress of R4 317 million (September 2015: R3 258 million), with R2 882 million (September 2015: R2 281 million), R6 million (September 2015: Rnil), R101 million (September 2015: R241 million) and R817 million (September 2015: R568 million) relating to the DRC, Rwanda, Slurry and Zimbabwe expansions respectively.

In the current period the useful life of certain assets was reviewed, as assets were being used longer than their estimated useful life. The remaining life of reserves was aligned with the useful life of the relevant assets and buildings and structural assets assumed a useful life of 30 years from 1 October 2015. The change in accounting estimate was applied prospectively and resulted in an annual decrease in depreciation in the current period of R37 million, with deferred taxation of approximately R10 million, and resultant increase in future periods.

Borrowing costs of R119 million (September 2015: R196 million) have been capitalised to property, plant and equipment (refer note 19). A capitalisation rate of 7.71% (September 2015: 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 period end, refer note 30.

PPC Ltd Annual financial statements 2016 page 33

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
2.	GOODWILL Cost Accumulated impairment loss	358 103	356 102
		255	254
	Movements of goodwill Net carrying value at the beginning of the period Impairments Translation differences	254 – 1	268 (22) 8
	Net carrying value at the end of the period	255	254
	Goodwill, net of impairments, is allocated to the following cash-generating units: CIMERWA Limited Safka Cement Holdings (Pty) Ltd Pronto Holdings (Pty) Ltd	50 78 127	49 78 127
		255	254

Pronto Holdings (Pty) Ltd (Pronto)

The recoverable amount of R885 million (September 2015: R758 million) for the cash-generating unit was determined based on valuein-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 18% (September 2015: 12%) and terminal growth rate of 5.4% (September 2015: 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, with selling prices marginally below last year. Selling prices and cost of sales are forecast to increase at rates linked to local inflation forecasts and vary between 4% and 8% (September 2015: 2% and 3%). The values used reflect past experiences while the economic growth rates of approximately 3% (September 2015: 3%) per annum are management’s best estimates that have been prepared using leading financial institutions’ forecasts.

Following the goodwill impairment assessment review, the recoverable amount of Pronto was calculated to be higher than its carrying amount resulting in no impairment to goodwill. In the prior reporting period, the recoverable amount was calculated to be lower than its carrying value which resulted in an impairment of R22 million. Pronto is included under aggregates and readymix in the segmental analysis.

It is estimated that a decrease in growth rates by 10% to 13% (2015: 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 R959 million (September 2015: R731 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 22% (September 2015: 20%).

Cash flow projections during the forecast period of seven years were based on improved margins and profitability, following the commissioning of the new plant in September 2015, taking cognisance of an appropriate ramp-up period. Selling prices and cost of sales were forecast to increase at applicable inflation rates varying between 3% and 7% (September 2015: 7% and 8%), impacted by anticipated competitor activity in the earlier phase of the planning horizon. The cash flow post the forecast period has been extrapolated using specific growth rates of 4% (September 2015: 4%) 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 both the current and prior reporting periods, the recoverable amount was deemed to be higher than the current carrying value, resulting in no impairment being charged against profit and loss. CIMERWA is included under cement in the segmental analysis.

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.

page 34

2. GOODWILL continued

Safika Cement Holdings (Pty) Ltd (Safika)

The recoverable amount of R503 million (September 2015: R766 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 17% (September 2015: 12%) 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, noting that selling prices have reflected a marginal decline from last year. Selling prices and cost of sales are forecast to increase at rates linked to local inflation forecasts varying between 5% and 6% (September 2015: 2% and 3%). The values used reflect past experiences while the economic growth rates of approximately 3% (September 2015: 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 the year ended September 2015.

It is estimated that a decrease in growth rates by 5% to 6% in aggregate would result in the carrying amount of the cash-generating unit to exceed its amount.

3.

			Brand,
		ERP	trademarks
	Right of use	development	and
	of mineral	and other	customer
	asset	software	relationships	Total
	Rm	Rm	Rm	Rm
OTHER INTANGIBLE ASSETS
2016
Cost	218	336	553	1 107
Accumulated amortisation and impairments	4	196	141	341
	214	140	412	766
Movements during the period
Net carrying value at the beginning of the period	191	143	438	772
Additions	–	12	–	12
Amortisation	(1)	(16)	(28)	(45)
Translation differences	24	1	2	27
Net carrying value at the end of the period	214	140	412	766
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 the beginning of the year	54	132	495	681
Additions	–	36	–	36
Amortisation	(1)	(31)	(58)	(90)
Transfers and other movements(a)	115	3	–	118
Translation differences	23	3	1	27
Net carrying value at the end of the year	191	143	438	772

Brand, trademarks and customer relationships

Included in brand, trademarks and customer relationships are brand and trademarks of R339 million (September 2015: R332 million), contracted and non-contracted customer relationships of R73 million (September 2015: R106 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).

(a) The split between property, plant and equipment (PPE) and intangible assets on the contribution made by a then non-controlling shareholder into PPC Barnet DRC Holdings was finalised in 2015 and R115 million was transferred from PPE and represents the value of the mineral reserves and mining rights.

PPC Ltd Annual financial statements 2016 page 35

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
4.	EQUITY-ACCOUNTED INVESTMENTS Investments at cost at beginning of the period Investments made during the period Investments impaired during the period Transferred to non-current asset held for sale (refer note 6)	126 75 (1) –	133 – – (7)
	Investments at cost at end of the period Share of retained loss: Retained (loss)/proft at the beginning of the period Share of current year’s loss Transferred to non-current asset held for sale (refer note 6) Loans advanced Balance at the beginning of the period Interest capitalised Transferred to trade and other receivables (refer note 8) Repayments	200 –	126 (1)
		– – –	44 (16) (29)
		–	–
		– – – –	46 3 (46) (3)
		200	125
	Valuation of interest in equity-accounted investments Fair value of unlisted equity-accounted investments, including loans advanced	616	397

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 19% (September 2015: 23%), relevant to Ethiopia and adjusted for project and business risk was used.

Investment made during the period

During the period, an additional investment of R75 million was made in Habesha as PPC took up its share of a rights offer made by the company. As not all shareholders followed their rights, PPC’s shareholding subsequently increased to 35% from the 32% recorded at September 2015.

Loans advanced to associates

In the prior reporting period, the loan receivable from Afripack Limited of R46 million was reclassified to trade and other receivables.

page 36

		31 March 2016 Rm	30 September 2015 Rm
4.	EQUITY-ACCOUNTED INVESTMENTScontinued Key fnancial information of associates(a) Non-current assets Current assets Total assets Total equity Non-current liabilities Current liabilities	1 229 433 1 662 599 936 127	735 467 1 202 505 628 70

	Interest Carrying value, including loans advanced	Interest Carrying value, including loans advanced	Interest Carrying value, including loans advanced
Name Nature of business	2016 %	2015 % Financial year end(b) 2016 Rm	2015 Rm
Incorporated in South Africa Olegra Oil (Pty) Ltd Used oil collection and flling station Hoekplaats Dolomite (Pty) Ltd(c) Quarrying Incorporated in Ethiopia Habesha Cement Share Company Cement manufacturer	29 49 35	29 February 3 49 February – 32 June 197	3 1 121
		200	125

Habesha is deemed to be a material equity-accounted investment as its carrying value approximates 97% of the group’s equityaccounted investments and will have a material impact when fully operational.

(a) The financial information provided represents the full results of equity-accounted investments. As Habesha is not currently trading, no key financial information on the income statement is available.

(b) Management accounts together with the financial statements are used to align earnings in equity-accounted investments with PPC’s period end.

(c) An impairment of R1 million was recorded against the investment in Hoekplaats Dolomite (Pty) Ltd during the reporting period.

PPC Ltd Annual financial statements 2016 page 37

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
5.	OTHER NON-CURRENT ASSETS Unlisted investment at fair value Unlisted collective investment Derivative asset VAT receivable	– 119 2 319	82 117 – –
	Loans advanced Advance payments for plant and equipment Investment in government bonds	440 – 142 8	199 1 148 7
		590	355
	Valuation of unlisted investments including loans advanced (excluding advance payments)	289	207

Unlisted investment at fair value

PPC Ltd disposed of its 6.75% shareholding in Ciments du Bourbon, incorporated in Reunion, during the current reporting period, with the resulting gain of R83 million recorded in other exceptional items. Ciments du Bourbon was included under the cement segment in the segmental analysis.

Unlisted collective investment

Comprises an investment by the PPC Environmental Trust in local unit trusts, with fair value being calculated using the ruling unit trust prices on 31 March 2016. Put options are also held over the value of the investments in order to protect the capital of the portfolio. At 31 March 2016, the value of the put options were not material. During the period, a further R3 million (September 2015: R5 million) was reinvested into the unit trusts. These funds are held to fund PPC’s South African environmental obligations.

Derivative asset

In order to hedge the group’s exposure on its long-term share award programme, the group entered into a call option. At period end, a fair value adjustment of R8 million was recorded.

VAT receivable

The company has incurred VAT during the construction of the plant in the DRC and the amount receivable has been classified as noncurrent in the current reporting period in contrast to the prior reporting period where the full amount was classified as current. The change follows communication from the local revenue authorities around the delay in refund of VAT receivables.

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.

Advance payments for plant and equipment

In terms of the construction agreements with the suppliers of the new cement plants in Rwanda, DRC and Zimbabwe, 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.

Investment in government bonds

Represent government of Zimbabwe treasury bills carried at fair value. The treasury bills were issued in the prior 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 on initial recognition. Interest is paid biannually at a rate of 5% per annum.

page 38

		31 March 2016 Rm	30 September 2015 Rm
6.	NON-CURRENT ASSETS HELD FOR SALE Equity-accounted investment (refer note 4)(a) Property, plant and equipment (refer note 1)(b)	– 42	36 40
		42	76

• (a) During the current reporting period, the company finalised the sale of its 25% stake in Afripack for R70 million. The resultant profit of R34 million has been included in other exceptional items. In 2015, the carrying amount immediately before classification as held for sale was R36 million which was lower than its fair value less costs to sell of R70 million (which represented the estimated selling price per the sales agreement less estimated transaction costs). Afripack was included under the cement segment in the segmental analysis.

• (b) In September 2015, the PPC Zimbabwe board approved the disposal of houses at its Colleen Bawn and Bulawayo factories which was anticipated to be finalised in 12 months. The disposal was initially planned to be finalised by June 2016 but is now anticipated to be completed by November 2016. No impairment loss was recognised on the initial reclassification as management concluded that the fair value (estimated based on market prices of similar properties) less costs to sell was higher than the current carrying amount. PPC Zimbabwe is included under the cement segment in the segmental analysis.

7.		31 March 2016 Rm	30 September 2015 Rm
	INVENTORIES Raw materials Work in progress Finished goods Maintenance stores Inventory obsolescence	169 218 472 487 (225)	176 188 426 455 (216)
		1 121	1 029

Inventories are determined on the weighted average formula basis.

During the period, an amount of R10 million (September 2015: R4 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 R2 811 million (September 2015: R4 906 million).

No inventories have been pledged as security.

PPC Ltd Annual financial statements 2016 page 39

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
8.	TRADE AND OTHER RECEIVABLES Trade receivables Allowances for doubtful debts	982 (77)	931 (70)
	Net trade receivables Loan relating to non-current assets held for sale – Afripack (refer note 6) Mark to market cash fow hedge Mark to market fair value hedge Other fnancial receivables	905 – 48 28 111	861 46 38 13 50
	Trade and other fnancial receivables Prepayments Taxation prepaid VAT receivable on plant and equipment imported into the DRC (refer note 5)	1 092 65 30 –	1 008 75 8 141
		1 187	1 232
	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	905	861
		712 6 187	745 1 115

No receivables have been pledged as security.

No individual customer represents more than 10% of the group’s revenue and exposure at period end. The group’s largest customer comprises 5% (2015: 6%) 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.

page 40

		Cement Rm Lime Rm Aggregates and readymix Rm Total Rm
8.	TRADE AND OTHER RECEIVABLEScontinued Trade receivables that are neither past due nor impaired 2016 2015 There is no history of material default relating to trade receivables in this category. Trade receivables that are past due but not impaired 2016 Ageing beyond normal terms 1 – 30 days 31 – 60 days 61 – 90 days 91 – 180 days Greater than 180 days Fair value of collateral held 2015 Ageing beyond normal terms 1 – 30 days 31 – 60 days 61 – 90 days 91 – 180 days Greater than 180 days Fair value of collateral held Allowance for doubtful debts 2016 Balance at the beginning of the period Allowance raised through proft or loss Utilisation of allowance Translation of differences	532 76 104 712 526 109 110 745 161 16 10 187
		41 4 8 53 72 – – 72 7 – 1 8 15 12 1 28 26 – – 26
		20 – – 20 89 13 13 115
		73 – 4 77 5 – 2 7 5 – 4 9 – 13 2 15 6 – 1 7
		31 – – 31 50 13 7 70 11 – – 11 (4) (1) (2) (7) 3 – – 3
	Balance at the end of the period	60 12 5 77
	2015 Balance at the beginning of the year Allowance raised through proft or loss Utilisation of allowance Translation of differences	25 – 5 30 32 13 3 48 (12) – (1) (13) 5 – – 5
	Balance at the end of the year	50 13 7 70

PPC Ltd Annual financial statements 2016 page 41

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
9.	CASH AND CASH EQUIVALENTS Cash and cash equivalents	460	718
	Currency analysis: Botswana pula Mozambican metical Rwandan franc South African rand United States dollar	19 17 126 47 251	58 26 194 72 368
		460	718
	Amounts denominated in foreign currencies have been translated at ruling exchange rates at period end, (refer note 39). Cash restricted for use relating to: PPC Environmental Trust Consolidated BBBEE entities CIMERWA project fnance	6 1 247	4 7 –
		254	11
	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.
10.
		31 March 2016 Shares	30 September 2015 Shares
	STATED CAPITAL Authorised 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 period Shares issued to non-controlling shareholders in Safka Cement on exercise of put option	605 379 648 1 801 242	605 379 648 –
	Total shares in issue at end of the period before adjustments for shares treated as treasury shares Adjustments for shares treated as treasury shares: Shares held by consolidated participants of the second BBBEE transaction Shares held by consolidated BBBEE trusts and trust funding SPVs Shares held by consolidated Porthold Trust (Pvt) Ltd Shares purchased in terms of the FSP incentive scheme	607 180 890 (37 382 193) (34 477 308) (1 284 556) (5 563 488)	605 379 648 (37 382 193) (34 477 308) (1 284 556) (6 342 640)
	Total shares in issue (net of treasury shares)	528 473 345	525 892 951
	Authorised preference shares Twenty million preference shares of R1 000 each. No preference shares have been issued.	20 000 000	20 000 000
		Rm	Rm
	Stated capital Balance at the beginning of the period Shares issued to non-controlling shareholders in Safka Cement on exercise of put option Shares purchased in terms of the FSP incentive scheme Vesting of shares held by certain BBBEE 1 entities Vesting of shares held in terms of the FSP incentive scheme	(1 165) 26 – – 26	(1 173) – (24) 9 23
	Balance at the end of the period	(1 113)	(1 165)

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.

page 42

10. STATED CAPITAL continued Shares issued to non-controlling shareholders in Safika Cement on exercise of put option

At the annual general meeting held on 25 January 2016, shareholders approved the early settlement of the remaining put option held by management of Safika Cement Holdings (Pty) Ltd for R44 million, to be settled by issue of new shares of R26 million and cash of R18 million. The shares were issued on 31 March 2016.

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, with the transaction concluding on 30 September 2019. These shares participate in 20% of the dividends declared by PPC during the NVF period. 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 during the transaction term.

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, no shares (2015: 287 361 shares) vested to beneficiaries.

Shares held by consolidated Porthold Trust (Pvt) Ltd

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, 5 563 488 shares (September 2015: 6 342 640 shares) are held in total for participants of this long-term incentive scheme. The shares are treated as treasury shares during the vesting periods of the awards. During the period, 779 152 shares (September 2015: 531 179 shares) vested and are therefore no longer treated as treasury shares.

In terms of IFRS requirements, 13% (September 2015: 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)

Unissued shares (shares)
	Shares 2016	Shares 2015
Ordinary shares Preference shares	92 819 110 20 000 000	94 620 352 20 000 000

Of the unissued ordinary shares at the end of the period, the directors have the authority until the next annual general meeting to allot a maximum of 30 250 000 shares subject to the provisions of the Companies Act and JSE Listings Requirements.

11.		31 March 2016 Rm	30 September 2015 Rm
	PROVISIONS Factory decommissioning and quarry rehabilitation Post-retirement healthcare benefts	374 34	361 39
		408	400

PPC Ltd Annual financial statements 2016 page 43

continued Notes to the consolidated financial statements for the period ended 31 March 2016

	Factory decommissioning and quarry rehabilitation Rm Post-retirement healthcare benefts Rm Total Rm
11.	PROVISIONScontinued Movement of provisions March 2016 Balance at the beginning of the period 361 39 400 Amounts added 12 1 13 Amounts reversed/utilised (25) (5) (30) Time value of money adjustments 21 – 21 Transfer to short-term provision – (2) (2) Translation differences 5 1 6
	Balance at the end of the period 374 34 408
	To be incurred: Between two and fve years 32 7 39 More than fve years 342 27 369
	374 34 408
	September 2015 Balance at the 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 the 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

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, and in line with group policy. 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 (September 2015: R66 million) has been contributed to the PPC Environmental Trust with the current value of the trust assets amounting to R119 million (September 2015: R117 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 R16 million (September 2015: R10 million). This liability is revalued every three years; it was last actuarially valued during February 2013 and will be revalued during the next reporting period. 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 R10 million (September 2015: R21 million). This liability is revalued every three years and was last actuarially valued during February 2016. 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 (September 2015: R8 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.

page 44

		31 March 2016 Rm	30 September 2015 Rm
12.	DEFERRED TAXATION Net liability at the beginning of the period comprises: Deferred taxation asset Deferred taxation liability Income statement charge/(release) Prior year tax adjustment (Released)/charged directly to equity Translation differences	1 011	1 021
		48 1 059	9 1 030
		64 50 (13) 14	(60) 49 6 (5)
	Net liability at the end of the period comprises: Deferred taxation asset Deferred taxation liability Analysis of deferred taxation Property, plant and equipment Other non-current assets Current assets Non-current liabilities Current liabilities Reserves Taxation losses(a)	1 126	1 011
		52 1 178	48 1 059
		1 490 164 (2) (89) (38) (37) (362)	1 019 187 3 (89) (74) 9 (44)
		1 126	1 011

(a) In 2015, deferred taxation analysis included an amount of R84 million relating to reserves. The financial statements have been adjusted to show the deferred taxation relating to assessed taxation losses separately (R44 million), while a prior year adjustment relating to property, plant and equipment is now included in property, plant and equipment (R49 million) which reduced the previously reported number of R1 068 million to R1 019 million reflected above. Management believes this change provides improved disclosure for users of the financial statements.

CIMERWA has a net deferred taxation liability of R25 million at period end, which comprises capital allowances and net timing differences of R387 million reduced by taxation losses of R362 million. In terms of local legislation, taxation losses need to be utilised within five years from the initial year of assessment. At period end and based on the approved business plans, the company considered it probable that these taxation losses will be offset against future taxable profits. The utilisation of the taxation loss is highly dependent on economic growth in the region and performance of the business. If the economic growth or level of profitability is not achieved as anticipated, the company may need to write down the taxation losses in future reporting periods. Monitoring thereof will be done at each reporting period.

PPC Ltd Annual financial statements 2016 page 45

continued Notes to the consolidated financial statements for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
13.	LONG-TERM BORROWINGS Borrowings Terms Security Interest rate Notes(a) Various, refer below Unsecured Various, refer below Long-term loan(b) Interest is payable quarterly with a bullet capital repayment in September 2017 Unsecured Variable rates at 400 basis points above JIBAR Long-term loan Interest is payable monthly with a bullet capital repayable 18 months after notice period Unsecured Variable rates at 125 basis points above JIBAR Long-term loan Interest is payable biannually with a bullet capital repayment in December 2016 Unsecured Fixed 10.86% Project funding Long-term loan US dollar denominated, repayable in monthly instalments over a 10-year period starting March 2016 Secured by CIMERWA’s property, plant and equipment (refer note 1) Variable at 725 basis points above six-month US dollar LIBOR Long-term loan Rwandan franc denominated, repayable in monthly instalments over a 10-year period starting March 2016 Secured by CIMERWA’s property, plant and equipment (refer note 1) Fixed 16% Long-term loan US dollar denominated, interest payable biannually. First capital repayment in December 2016, thereafter biannual 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 biannually 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 BEE transaction Preference shares Dividends are payable biannually, with annual redemptions ending December 2016 Secured by guarantee from PPC Ltd Variable rates at 81.4% of prime and fxed rates of 9.24% to 9.37% Preference shares Dividends are payable biannually with capital redeemable from surplus funds. Compulsory annual redemptions until December 2016 Secured by PPC shares held by the SPVs Variable rates at 86.9% 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	1 747 555 900 1 417 3 372	2 398 – – 1 520 2 357
		806 474 550 1 542	641 357 421 938
		844	1 227
		33 16 393 402	64 72 395 696
	Long-term borrowings _Less:_Short-term portion of long-term borrowings (refer note 15)	8 835 (4 221)	7 502 (791)
		4 614	6 711

page 46

		31 March 2016 Rm	30 September 2015 Rm
13.	LONG-TERM BORROWINGScontinued Maturity analysis of long-term liabilities obligations: One year Two years Three years Four years Five and more years	4 221 1 777 394 393 2 050	791 2 877 303 1 056 2 475
		8 835	7 502
	Percentage loans linked to fxed interest rates Percentage loans linked to variable interest rates Assets encumbered are as follows: Plant and equipment (refer note 1)	66 34 6 853	52 48 4 355

(a) Notes

Comprise three (2015: Four) unsecured notes, issued under the company’s R6 billion domestic medium-term note programme, and are recognised net of capitalised transaction costs of R3 million (September 2015: R2 million):

Number	Issue date	Value	Term	Interest rate
PPC 002	December 2013	R750 million	5 years	3-month JIBAR plus 1.5%
PPC 003	July 2014	R750 million	5 years	3-month JIBAR plus 1.48%
PPC 004	July 2014	R250 million	7 years	9.86%

During the period PPC 001 of R650 million was redeemed.

On 30 May 2016, S&P Global Ratings (S&P) released a report on PPC which reflected a decline in ratings from zaA/zaA-2 to zaBB-/zaB long and short-term South Africa national scale. Due to the long-term rating falling below zaBBB-, the company was obliged to offer early redemption to noteholders in terms of the bond programme memorandum. The notes have therefore been reclassified from long-term to short-term borrowings.

During June 2016 the company has secured funding up to a maximum of R2 billion from Nedbank, Standard Bank, Rand Merchant Bank and Absa (the liquidity and guarantee facility agreement) which can only be used to reimburse the noteholders for the outstanding notes and related accrued finance costs.

The liquidity and guarantee facility will bear interest at JIBAR plus 10% and repayment is due from the proceeds of the proposed capital raise or 1 November 2016 if earlier. Post reporting date, the company utilised this facility to repay noteholders. The facility incurred fees of R171 million which will be amortised to the income statement over the five-month period of the facility. Further details are included in note 38.

(b) Long-term loan

During the period the company secured funding of R2 billion repayable in September 2017. The funding was partly used to settle the first note repayment while the balance of the facility will be used to repay the remaining portion of the BBBEE liability due in December 2016 after which the company will receive proceeds from the compulsory subscription by the Strategic Black Partners and Community Service Groups in terms of the company’s first BBBEE transaction. Transaction costs of R35 million were capitalised against the facility and will be amortised over the period of the funding.

The group is in compliance with its debt covenants for the March 2016 reporting period or where applicable received waivers in respect thereof. Refer to the going concern basis of preparation on page 20.

Further details of maturity analysis and interest rates are disclosed in note 35 on financial risk management.

PPC Ltd Annual financial statements 2016 page 47

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
14.	OTHER NON-CURRENT LIABILITIES Cash-settled share-based payment liability (refer note 33) Liability to non-controlling shareholder in subsidiary company Put option liabilities Retentions held for plant and equipment	3 17 415 97	5 17 464 204
	_Less:_Short-term portion of other non-current liabilities	532 (3)	690 (47)
		529	643
	Put option liabilities Balance at the beginning of the period Exercised during the period Put options issued Remeasurements Time value of money adjustments	464 (42) – (16) 9	145 (108) 422 (14) 19
	Balance at end of the period	415	464
	Comprising: Safka Cement PPC Barnet DRC Holdings	– 415	42 422
		415	464

Liability to non-controlling shareholder in subsidiary company

Relates to interest payable on initial equity contribution into the DRC group of companies by a non-controlling shareholder. The accruing of interest ceased in September 2015 and the amount payable 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. 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, 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, was exercised during the 2015 financial year for R108 million. The remaining put option was anticipated to be exercised on the fifth anniversary of the transaction, but in September 2015 this was classified as a current liability as it was the intention to early settle the remaining put option. In January 2016, shareholders approved the early settlement of the remaining put option through the combination of a fresh share issue and cash payment. At March 2016, the put option liability (refer note 16) was Rnil (September 2015: R42 million). The put option liability was calculated using the company’s forecast EBITDA applying an earnings multiple dependent on the level of EBITDA achieved less net debt.

PPC Barnet DRC Holdings

The International Finance Corporation (IFC) was issued a put option in 2015 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 a forward 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 forward multiple of eight was determined using comparison of publicly available information of other cement businesses operating in similar territories. The present value of the put option was calculated at R415 million (September 2015: R422 million).

page 48

		31 March 2016 Rm	30 September 2015 Rm
15.	SHORT-TERM BORROWINGS Short-term loans and bank overdrafts Short-term portion of long-term borrowings (refer note 13)	336 4 221	719 791
		4 557	1 510
	Details of maturity analysis and interest rates are disclosed in note 35 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) 3 Capital expenditure payables(a) 229 Derivative fnancial instruments 1 Other fnancial payables 89 Put option liability (refer note 14) – Retentions held for plant and equipment 67 Trade payables and accruals 994		5 147 1 113 42 116 924
	Trade and other fnancial payables 1 383 Payroll accruals 139 Taxationpayable 18		1 348 310 112
	1 540		1 770

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

(a) In 2015, other financial liabilities of R260 million included capital expenditure accruals of R147 million. The financial statements have been adjusted to show the capital accruals separately which management believes will provide improved disclosure for users of the financial statements.

PPC Ltd Annual financial statements 2016 page 49

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
17.	OPERATING PROFIT Operating proft includes: Amortisation of intangible assets (refer note 3) Auditors’ remuneration Fees Other 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 33) Equity-settled share incentive scheme charge Directors’ remuneration(a) Employees’ remuneration Restructuring costs Retirement beneft contributions (refer note 32)	45 12	90 21
		10 2	18 3
		348	612
		311 37	543 69
		548 – 13 770	1 058 1 23 1 325
		614 156	1 116 209
		(2) 20 10 674 13 55	(10) 13 26 1 190 8 98
	_Less:_Costs capitalised to plant and equipment and intangibles	770 (11)	1 325 (8)
		759	1 317
	(a)For further details, refer to the abridged remuneration report on pages 97 to 99.
18.	FAIR VALUE ADJUSTMENTS ON FINANCIAL INSTRUMENTS Gain on remeasurement of put option liabilities (refer note 14) Loss on unlisted collective investments (refer note 5) (Loss)/gain on translation of foreign currency-denominated monetary items	16 – (36)	14 (2) 10
		(20)	22
19.	FINANCE COSTS Bank and other short-term borrowings Notes Long-term loans	49 98 229	48 189 313
	Capitalised to plant and equipment and intangible assets	376 (119)	550 (196)
	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 and put option liabilities	257 41	354 116
		19 22	42 74
		32	48
	South Africa Rest of Africa	330	518
		258 72	488 30

The total finance costs, excluding time value of money adjustments, relate to borrowings held at amortised cost. For details of borrowings refer notes 13 and 35.

page 50

		31 March 2016 Rm	30 September 2015 Rm
20.	INVESTMENT INCOME Dividends on unlisted investments Interest received: Cash and cash equivalents Overpayment of taxation	3 5 4	11 13 4
		12	28
	Interest received relates to assets held at amortised cost. For further details refer note 35.
21.	IMPAIRMENTS AND OTHER EXCEPTIONAL ADJUSTMENTS Impairment of goodwill (refer note 2) Impairment of fnancial asset Impairment of loans advanced Impairment of property, plant and equipment (refer note 1) Proft on disposal of equity-accounted investment and available-for-sale fnancial asset	– – (1) (4) 117	(22) (1) (1) (57) –
	Gross impairments and other exceptional adjustments Taxation impact	112 (24)	(81) 15
	Net impairments and other exceptional adjustments	88	(66)
22.	TAXATION South African normal taxation Current taxation Current period Prior years Capital gains taxation Deferred taxation Current period Prior years Foreign normal taxation Current taxation Current period Prior years Deferred taxation Current period Withholding taxation	49	314
		42 (14) 21	342 (28) –
		72	(44)
		72 –	(25) (19)
		25	125
		25 –	109 16
		(11)	(16)
		(11)	(16)
		21	12
	Taxation charge	156	391
		%	%
	Taxation rate reconciliation Proft before taxation (excluding earnings from equity-accounted investments) Prior years’ taxation impact	30.8 2.8	36.6 2.7
	Proft before taxation, excluding prior years’ taxation adjustments Adjustment due to the inclusion of dividend income	33.6 –	39.3 0.3
	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 Capital gains differential on sale of non-core assets Withholding taxation	33.6 (5.6)	39.6 (11.6)
		(1.6) (1.0) (1.8) 0.5 2.4 (4.1)	(8.9) (1.1) (2.1) 1.6 – (1.1)
	South African normal taxation rate	28.0	28.0

PPC Ltd Annual financial statements 2016 page 51

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Shares	30 September 2015 Shares
23. 23.1 23.2 23.3	EARNINGS AND HEADLINE EARNINGS PER SHARE Number of shares and weighted average number of shares Number of shares Total shares in issue Shares issued in terms of second BBBEE transaction treated as treasury shares Shares held by consolidated BBBEE trusts and trust funding SPVs treated as treasury shares Shares held by consolidated Porthold Trust (Pvt) Ltd treated as treasury shares Shares purchased in terms of the FSP incentive scheme treated as treasury shares Vesting of shares held by certain BBBEE 1 entities FSP incentive scheme weighted average number of shares	605 379 648 (37 382 193) (34 477 308) (1 284 556) (5 563 488) – (596 073)	605 379 648 (37 382 193) (34 477 308) (1 284 556) (6 342 640) (59 671) 188 778
	Weighted average number of shares used for basic earnings per share calculation Dilutive adjustment for shares held in terms of the FSP incentive scheme FSP incentive scheme weighted average number of shares Timing of shares issued during the period Vesting of shares held by certain BBBEE 1 entities	526 076 030 5 563 488 596 073 1 801 242 –	526 022 059 6 342 640 (188 778) – 59 671
	Weighted average number of shares used for dilutive earnings per share calculation	534 036 833	532 235 591
	Weighted average number of shares Used for earnings and headline earnings per share Used for dilutive earnings and headline earnings per share Used for cash earnings per share	526 076 030 534 036 833 527 877 272	526 022 059 532 235 591 526 022 059
	Shares are weighted for the period in which they are entitled to participate in the net proft of the group. The difference between earnings and diluted earnings per share relates to shares held under the FSP incentive scheme that have not vested. Rm		Rm
	Basic earnings Proft for the period 351 Attributable to: Shareholders of PPC Ltd 369 Non-controlling interests (18)		661 698 (37)
	351 Normalisation adjustments(a) (76)		661 82
	Normalised net proft 275		743
	Attributable to: Shareholders of PPC Ltd 293 Non-controlling interests (18)		775 (32)
	275		743
	Cents		Cents
	Earnings per share Basic 70 Diluted 69 Basic (normalised) 56 Diluted (normalised) 55		133 131 148 147

page 52

		31 March 2016 Rm	30 September 2015 Rm
23. 23.4 23.5 23.6	EARNINGS AND HEADLINE EARNINGS PER SHAREcontinued Headline earnings Headline earnings is calculated as follows: Proft for the period Adjusted for: Impairment loss on goodwill Impairment of loans advanced and fnancial assets Impairment of property, plant and equipment Realised gains on disposal of investments Taxation impact	351 – 1 4 (117) 24	661 22 2 57 – (15)
	Headline earnings	263	727
	Attributable to: Shareholders of PPC Ltd Non-controlling interests Normalisation adjustments(a)
		281 (18)	759 (32)
		263 13	727 19
	Normalised headline earnings	276	746
	Attributable to: Shareholders of PPC Ltd Non-controlling interests
		294 (18)	778 (32)
		276	746
		Cents	Cents
	Headline earnings per share Basic Diluted Basic (normalised) Diluted (normalised)	53 52 56 55	145 143 149 147
	Cash earnings per share Calculated on cash available from operations (Rm)	63 334	351 1 847

(a) Normalised earnings adjusts 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.

PPC Ltd Annual financial statements 2016 page 53

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
24.	DIVIDENDS Ordinary shares Final number 224 – 33 cents per share (2015: 76 cents per share) Interim number 225 – nil cents per share (September 2015: 24 cents per share)	185 –	410 130
		185	540
	Dividends per share (cents) Interim number 223 – declared 18 May 2015 Final number 224 – declared 17 November 2015	– –	24 33
		–	57
25.	FINANCE COSTS PAID Finance costs as per income statement charge Time value of money adjustments BBBEE funding transaction fnance costs capitalised	330 (32) (6)	518 (48) (62)
		292	408
26.	TAXATION PAID Net amounts payable at the beginning of the period Charge per income statement (excluding deferred taxation) Impact of foreign rate differences and other non-cash fow movements Net amounts outstanding at the end of the period	72 95 1 27	97 451 13 (72)
		195	489
27.	DIVIDENDS PAID Dividends declared to PPC shareholders Dividends declared by subsidiary to non-controlling interests	185 –	540 19
		185	559
28.	ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT Freehold and leasehold land, buildings and mineral rights (refer note 1) Movement in advance payments to contractors (refer note 5) Movement in capital expenditure accruals Movement in retentions paid to contractors (refer notes 14 and 16) Plant, vehicles, furniture and equipment (refer note 1)	19 (6) (82) 142 1 103	49 (174) – (239) 3 220
		1 176	2 856

page 54

		31 March 2016 Rm	30 September 2015 Rm
29.	MOVEMENT IN INVESTMENTS AND LOANS Net movement Acquisition of equity-accounted investment Advance payments (refer note 5) Other non-cash fow movements Revaluation of available-for-sale fnancial asset directly in equity (refer note 5) Share of equity-accounted investments’ losses Movement in VAT receivable	(151) 75 (35) (82) 6 31 160	(156) – 174 (47) 13 16 –
		4	–
30.	COMMITMENTS Contracted capital commitments Approved capital commitments	2 289 994	3 594 1 049
	Capital commitments Operating lease commitments	3 283 124	4 643 171
		3 407	4 814
	Capital commitments South Africa Rest of Africa	1 649 1 634	2 409 2 234
		3 283	4 643
	Capital commitments are anticipated to be incurred: Within one year Between one and two years Greater than two years	2 731 543 9	2 758 1 518 367
		3 283	4 643

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 tonnes per annum plant in the DRC is expected to be commissioned during PPC’s 2017 financial year, while the 700 000 tonnes per annum mill in Zimbabwe is also on track to be commissioned at the end of the 2016 calendar year. The new one million tonnes per annum kiln expansion at Slurry is planned to be commissioned during the 2018 financial year. A portion of the planned rights issue will be used to fund existing capital commitments.

The transaction to acquire a 100% shareholding in 3Q Mahuma Concrete (Pty) Ltd was concluded past the reporting date. The purchase consideration of R135 million will be settled via the issue of new PPC shares. Details of which are included in note 38.

PPC Ltd Annual financial statements 2016 page 55

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

30. COMMITMENTS continued

COMMITMENTScontinued
2022 and thereafter Rm 2018 – 2021 Rm 2017 Rm	Total 2016 Rm	Total 2015 Rm
Operating lease commitments Land and buildings 42 58 19 Other – 4 1	119 5	160 11
	124	171

In 2013, the company signed a 10-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.

31. CONTINGENT LIABILITIES

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

32. 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’s requirements.

Defined contribution plans

The total cost charged to the income statement of R55 million (September 2015: R98 million) represents contributions payable to these schemes by the group at rates specified in the rules of the schemes. At 31 March 2016, all contributions due in respect of the current reporting period had been paid over to the schemes.

page 56

33. SHARE-BASED PAYMENTS

33.1 Cash settled

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

Share appreciation rights granted
	Total	2013 2009(a) 2008(a) 2007(a)
Date of grant Grant price (based on fve-day volume weighted average price or zero) (rand) Number of rights granted	8 088 000	30/9/2013 25/9/2009 17/11/2008 17/9/2008 – 35.35 31.80 43.00 170 000 2 166 000 2 212 000 3 540 000
Directors (with performance conditions) Executives (with performance conditions) Senior management	1 996 000 1 390 000 4 702 000	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 during the period (99 000) Vested – directors – Forfeited – senior management (99 000) Movement in prior years (4 261 500) Unexercised(b)/unvested at 31 March 2016 3 727 500 Directors (with performance conditions) 170 000 Senior management 3 557 500 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 R12.20 at the end of the year Expected volatility of stock over remaining life of the option (%) Risk-free rate (%)	(99 000)	– (10 000) (12 000) (77 000)
	– (99 000)	– – – – – (10 000) (12 000) (77 000)
	(4 261 500) 3 727 500	– (1 027 000) (1 130 500) (2 104 000) 170 000 1 129 000 1 069 500 1 359 000
	170 000 3 557 500	170 000 – – – – 1 129 000 1 069 500 1 359 000
		Yes Yes Yes Yes Yes Yes Yes 30/9/2016 19/9/25 17/9/2018 8/8/2017 34.46 37.09 44.66 8.50 8.20 7.50

(a) These rights have vested but have not been exercised as at 31 March 2016.

(b) Executives hold no unexercised rights.

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

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

PPC Ltd Annual financial statements 2016 page 57

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		2016 Rm	2015 Rm
33. 33.1 33.2	SHARE-BASED PAYMENTScontinued Cash settledcontinued Reversal of previous charges recognised in the current year The carrying amount of the liability relating to cash-settled share appreciation rights as at 31 March 2016 (2015: 30 September) (refer note 14)	(2) 3	(10) 5
	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 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. Shares will be purchased on the JSE Limited to settle the awards.

Share appreciation rights granted

Share appreciation rights granted
	2016 Rm
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 Forfeited in prior year – management Unvested at 31 March 2016 Directors Management (including prescribed offcers) Vesting date Expiry date (lapse if not exercised)	29/5/2015 19.71 9 923 152 2 914 952 7 008 200 (322 227) (135 515) 9 465 410 2 914 952 6 550 458 19/2/2018 19/2/2021

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 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.

	2016 Rm	2015 Rm
The carrying amount of the equity-settled share appreciation rights at period end	–	3

page 58

33. SHARE-BASED PAYMENTS continued

33.3 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 generally subject to employment for a period of three years, and vesting of the performance awards is additionally subject to satisfaction of certain performance conditions, failing which the employee will forfeit the shares and they may be sold by PPC and the net proceeds retained by the group. The performance conditions relate to growth in headline earnings per share measured over a three-year period. During the 2015 year, performance-linked awards were made using equity-settled share appreciation rights instead of forfeitable shares. No awards were made in the current period.

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.

			29 May	18 February	18 February	18 February	15	March	16 February	16 February
	Total	Total	2015	2014			2013		2012
	retention	performance	Retention	Retention	Performance		Retention	Performance	Retention	Performance
	awards	awards	awards	awards		awards	awards	awards	awards	awards
Date of grant:
Number of shares
granted to
directors	296 950	980 400	182 050	40 100		329 200	36 600	322 900	38 200	328 300
Number of shares
granted to
management and
prescribed offcers	4 977 400	2 423 800	2 180 100	1 262 600	1	140 700	900 400	791 600	634 300	491 500
Average
purchase price of
shares acquired
(R)			19.96	29.17		29.17	32.58	32.58	31.19	31.19
Estimated fair
value per share
at grant date (R)			19.96	29.17		29.17	32.58	32.58	31.19	31.19

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.

PPC Ltd Annual financial statements 2016 page 59

continued Notes to the consolidated financial statements for the period ended 31 March 2016

34. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

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.

interpretations will be adopted by PPC in the future.
	Effective date
	reporting
	period	Possible
	beginning on	implication
Revised statements in issue not yet effective	or after	on PPC
For adoption during 2017 fnancial year
IAS 1_presentation of Financial Statements_(amendment)Disclosure Initiative– amendment to	1 January 2016	Disclosure 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 subtotals 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 and_	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).
Clarifcation of Acceptable Methods of Depreciation and Amortisation(amendment to IAS 16	1 January 2016	No impact
and IAS 38) amends IAS 16_Property, Plant and Equipment_and IAS 38_Intangible Assets_to:
– 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.

page 60

34. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES continued

CHANGES IN ACCOUNTING POLICIES AND DISCLOSUREScontinued
	Effective date
	reporting
	period	Possible
	beginning on	implication
Revised statements in issue not yet effective	or after	on PPC
Investment Entities: Applying the Consolidation Exception(amendments to IAS 28, IFRS 10 and	1 January 2016	No impact
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:
– 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_	1 January 2016	Optional
_Financial Statements_to permit investments in subsidiaries, joint ventures and associates to be
optionally accounted for using the equity method in separate fnancial statements.
IASB improvements to IFRS 2012 – 2014 makes amendments to the following standards:	1 January 2016	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 clarify whether a servicing contract is continuing involvement
in a transferred asset, and clarifcation on offsetting disclosures in condensed interim fnancial
statements
– IAS 19 – Clarify 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 – Clarify the meaning of “elsewhere in the interim report” and require a cross-
reference.
For adoption during 2018 fnancial year
IAS 7_Statement of Cash Flows_: amendment as a result of the disclosure initiative	1 January 2017	Disclosure impact
IAS 12_Income Taxes_: amendment regarding the recognition of deferred tax assets for	1 January 2017	Disclosure impact
unrealised losses
For adoption during 2019 fnancial year
IFRS 7_Financial Instruments_: additional disclosure resulting from the introduction of the hedge	1 January 2018	Disclosure impact
accounting chapter in IFRS 9
IFRS 9_Financial Instruments_: classifcation and measurement	1 January 2018	Yes
IFRS 15_Revenue from Contracts with Customers_	1 January2018	Yes
For adoption during 2020 fnancial year
IFRS 16_Leases_	1 January 2019	Yes

PPC Ltd Annual financial statements 2016 page 61

continued Notes to the consolidated financial statements for the period ended 31 March 2016

35. 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 9, 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 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 R8 million.

Cash flow hedge accounting applied in respect of foreign currency risk

	2016 Rm	2015 Rm
Fair value of asset – foreign currency forward exchange	48	38
The amounts below represent forward exchange contract commitments to purchase foreign currencies: < 1 year Rm 1 to 3 years Rm		Total Rm
2016 449 2015 479	– –	449 479
Total forward exchange contracts comprise the following:
	2016	2015
Euro (€m) Average rate (R/€) US dollar (US$m) Average rate (R/US$)	– 16.54 29.0 13.13	1 14.76 34 12.99

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.

page 62

35. 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:

total borrowings is as follows:
Description Years of repayment	2016 Rm	2015 Rm
Secured BBBEE transaction (refer note 13) 2016 – 2017 Long-term loans denominated in foreign currencies (refer note 13) 2016 – 2025	844 3 372	1 229 2 357
	4 216	3 586
Unsecured Long-term loans (refer note 13) 2017 Short-term loans and bank overdrafts (refer note 15) 2016 Bonds (refer note 13) 2016 – 2021	2 872 336 1 747	1 520 719 2 396
	4 955	4 635

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 March 2016, the following interest rate swap contract was held in respect of the consolidated debt of the BBBEE trusts and trust funding SPVs:

funding SPVs:
Fixed interest	Fair value of liability
rate (nacs) % Related underlying liability Currency Notional amount Rm Maturity date Rm	2016 Rm	2015 Rm
A preference shares (rate linked to prime) ZAR 14 9.37 2016	–	1
Total	–	1

Movements on cash flow hedges amounting to R12 million (September 2015: R27 million), net of taxation, were recognised in other comprehensive income during the year.

Sensitivity analysis

Interest rate risk

At 31 March 2016, if all floating interest rates on interest-bearing loan receivables, short-term cash investments, short-term loans payable and bank overdrafts had been 100 basis points higher, with all other variables held constant, attributable earnings would have been R25 million (earnings per share: 5 cents) lower. Conversely, at 31 March 2016, 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 R25 million (earnings per share: 5 cents) higher.

Equity price risk – cash-settled share appreciation rights

At 31 March 2016, if the PPC share price had been R5.89 higher, with all other variables held constant, attributable earnings would have been R4 million (earnings per share: 1 cents) lower. Conversely, at 31 March 2016, if the PPC share price had been R5.89 lower, with all other variables held constant, attributable earnings would have been R1 million (earnings per share: 1 cent) higher.

PPC Ltd Annual financial statements 2016 page 63

continued Notes to the consolidated financial statements for the period ended 31 March 2016

35. 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.

Cement

		Carrying
		amount	Fair value
	Notes	Rm	Rm
March 2016
Financial assets
Loans and receivables		1 355	1 355
Investment in government bonds	5	8	8
Derivative fnancial instruments (cash fow and fair value hedges)	5/8	78	78
Trade and other fnancial receivables	8	861	861
Cash and cash equivalents	9	408	408
At fair value through proft and loss		161	161
Unlisted collective investment (held for trading)	5	119	119
Non-current assets held for sale	6	42	42
Financial liabilities
At amortised cost		9 664	9 663
Long-term borrowings	13	4 614	4 614
Short-term borrowings	15	3 713	3 712
Trade and other fnancial payables	14/16	1 337	1 337
At fair value through proft and loss		418	418
Cash-settled share-based payment liability	14	3	3
Put option liabilities	14	415	415
Derivatives		1	1
Derivative fnancial instrument	16	1	1
September 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	14/16	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	–	–

page 64

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
101	101	90	90	1	1	1 547	1 547
–	–	–	–	–	–	8	8
–	–	–	–	–	–	78	78
95	95	45	45	–	–	1 001	1 001
6	6	45	45	1	1	460	460
–	–	–	–	–	–	161	161
–	–	–	–	–	–	119	119
–	–	–	–	–	–	42	42
85	85	53	53	845	845	10 647	10 646
–	–	–	–	–	–	4 614	4 614
–	–	–	–	844	844	4 557	4 556
85	85	53	53	1	1	1 476	1 476
–	–	–	–	–	–	418	418
–	–	–	–	–	–	3	3
–	–	–	–	–	–	415	415
–	–	–	–	–	–	1	1
–	–	–	–	–	–	1	1
–	–	–	–	–	–	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

PPC Ltd Annual financial statements 2016 page 65

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

35. 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 31 March 2016, 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:

			Aggregates	Head offce
	Cement	Lime	and readymix	and other	Total
	Rm	Rm	Rm	Rm	Rm
Maximum credit risk exposure
March 2016	1 356	101	90	1	1 548
September 2015	1 689	8	33	4	1 734

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 560 million and utilised 46% of these facilities at 31 March 2016. At year end, R1 393 million of borrowing facilities remain unutilised. These numbers exclude facilities in respect of debt consolidation as a result of BBBEE fundingrelated 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.

and capital.
	< 1 year	1 to 3 years	> 3 years	Total
	Rm	Rm	Rm	Rm
March 2016
Long-term borrowings	4 221	2 171	2 443	8 835
Short-term borrowings	336	–	–	336
Trade and other payables	1 540	–	–	1 540
September 2015
Long-term borrowings	791	3 180	3 531	7 502
Short-term borrowings	719	–	–	719
Trade and other payables	1 770	–	–	1 770

Refer note 13 for borrowings details.

page 66

35. 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 33.

Fair value hierarchy disclosures

Fair value hierarchy disclosures
	Notes	Level 1	Level 2	Level 3	Total
March 2016
Financial assets
Loans and receivables
Investment in government bonds	5	–	8	–	8
Derivative fnancial instruments	5/8	78	–	–	78
Trade and other fnancial receivables	8	–	1 001	–	1 001
Cash and cash equivalents	9	460	–	–	460
At fair value through proft and loss
Unlisted collective investments at fair
value (held for trading)	5	119	–	–	119
Non-current assets held for sale	6	–	42	–	42
Total fnancial assets		657	1 051	–	1 708
Financial liabilities
At amortised cost
Long-term borrowings	13	–	4 614	–	4 614
Short-term borrowings	15	2 086	2 470	–	4 556
Trade and other fnancial payables and
retentions	16	–	1 476	–	1 476
At fair value through proft and loss
Derivative instruments – current (held for
trading)	14	–	3	–	3
Put option liabilities	14	–	–	415	415
Derivatives
Derivative fnancial instruments	16	–	1	–	1
Total fnancial liabilities		2 086	8 564	415	11 065

PPC Ltd Annual financial statements 2016 page 67

continued Notes to the consolidated financial statements for the period ended 31 March 2016

35.	FINANCIAL RISK MANAGEMENTcontinued Fair value hierarchy disclosurescontinued Notes Level 1 Level 2 Level 3 Total
	September 2015 Financial assets Available for sale Unlisted investments 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 investments 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

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.

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

page 68

35. FINANCIAL RISK MANAGEMENT continued

Level 3 sensitivity analysis

FINANCIAL RISK MANAGEME Level 3 sensitivity analysis	NTcontinued
			Carrying
	Valuation	Main	value	Increase	Decrease
Financial instrument	technique	assumptions	Rm	Rm	Rm
Put option liabilities	Earnings multiple	EBITDA and
		net debt	415	74	74

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 R74 million.

The sensitivities are based only on the DRC put option as the Safika Cement put options have been settled at period end.

Movements in level 3 financial instruments

Movements in level 3 fnancial instruments
	2016 Rm	2015 Rm
Financial assets (refer note 5) Balance at the beginning of the period Remeasurements Transfer to level 2	– – –	95 (13) (82)
Balance at the end of the period	–	–
Financial liabilities (refer note 14) Balance at the beginning of the period Exercised during the year Put options issued Remeasurements Time value of money adjustments	464 (42) – (16) 9	145 (108) 422 (14) 19
Balance at the end of the period	415	464

Remeasurements are recorded in fair value adjustments on financial instruments in the income statement.

PPC Ltd Annual financial statements 2016 page 69

continued Notes to the consolidated financial statements

for the period ended 31 March 2016

		Parent
		company	Subsidiary
		of reporting	of reporting
		entity	entity
		Rm	Rm
36.	RELATED-PARTY TRANSACTIONS
	2016
	Interest received
	Afripack Limited	1	–
	Goods and services purchased
	Afripack Limited	32	–
	2015
	Interest received
	Afripack Limited	–	3
	Goods and services purchased/(sold)
	Afripack Limited	87	–
	Amounts due (to)/from as at the end of the period
	Afripack Limited	(9)	46

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 R14 million (September 2015: R42 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 second BBBEE transaction which participate in only 20% of the dividend declared. SK Mhlarhi is a common director of both PPC and the PPC SBP Consortium Funding SPV (Pty) Ltd.

37. 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 97 to 99.

Shareholders

The principal shareholders of the company are disclosed on page 100.

38. EVENTS AFTER THE REPORTING DATE Liquidity and going concern

Following the finalisation of the liquidity guarantee facility, the company early redeemed R1 614 million of the outstanding notes on 15 July 2016, with the balance of the outstanding notes of R136 million (excluding transaction costs) following the original terms of the respective notes.

On 1 August 2016, the shareholders approved the following resolutions at a general meeting of shareholders:

• The increase of the authorised stated capital from 700 000 000 shares to 10 000 000 000 shares

• The amendment to the MOI reflecting the increase in the authorised stated capital

• The authorisation to issue additional shares that will exceed 30% of the existing voting power of the shares that were in issue

• The granting of a general authority to directors to issue the required number of shares for purposes of implementing the proposed rights offer.

Following these approvals, the company was able to proceed with the proposed rights offer.

On 24 August 2016, the proposed R4 billion rights offer was fully underwritten by the banks which is subject to standard material adverse change clauses. The company believes that the proceeds from the rights issue provides it with the necessary funding to continue as a going concern for the foreseeable future.

page 70

38. EVENTS AFTER THE REPORTING DATE continued Business combination

On 1 July 2016, all terms and conditions on the transaction to acquire 100% of 3Q Mahuma Concrete (Pty) Ltd (3Q) were achieved and 3Q became a wholly owned subsidiary. The acquisition consideration was settled via the issuance of 17 565 872 new PPC shares. The fair value of the shares issued for the acquisition, using the ruling share price of R7.68 on the effective date of the transaction, amounted to R135 million.

The commercial rationale for the transaction is to progress the company’s channel management strategy that serves as a complementary platform for cement growth in South Africa. PPC’s strategic intention is to be a provider of materials and solutions into the basic services sector. Cementitious distribution channels including readymix is increasingly being utilised as a conduit to grow and sustain cement sales volumes. At the time of acquisition, 3Q was the largest independent readymix concrete provider in South Africa and provides PPC with a further complementary platform to grow our service offering in this market segment. The South African market is evolving towards a concrete delivery model, which requires complementary building materials including cement, aggregates and readymix.

The company is in the process of finalising the fair value of the assets and liabilities as on the acquisition date. Provisional fair values of assets and liabilities are reflected below:

Non-current assets	113
Current assets	108
Non-current liabilities	(9)
Current liabilities	(77)
Total consideration	135

39. CURRENCY CONVERSION GUIDE

Approximate value of foreign currencies relative to the rand at 31 March

		2016	2015
	Botswana pula Euro US dollar Rwandan franc Mozambican metical	1.36 16.76 14.71 0.02 0.29	1.32 15.42 13.82 0.02 0.33

PPC Ltd Annual financial statements 2016 page 71

Subsidiaries and non-controlling interests

for the period ended 31 March 2016

SUBSIDIARIES AND NON-CONTROLLING INTERESTS

The consolidated annual financial statements for the period ended 31 March 2016 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 period, via the exercise of a put option, non-controlling interest in Safika Cement is not considered significant in the current period.

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

Name of subsidiary	Principal activity
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(a)	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(b)	Holding company for PPC’s expansion into the DRC cement market
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(c)
PPC Barnet DRC Quarrying SA	Owner of the mineral right in the DRC and responsible for the primary phase of quarrying(c)
PPC Mozambique SA	Supplier of cement, sourced primarily from Zimbabwe and South Africa, into the
	Mozambique market mainly into the Maputo and Tete regions

(a) The other put options, representing 9.59% shareholding in Safika Cement, were anticipated to be exercised on the fifth anniversary of the transaction, but in January 2016, shareholders approved the early settlement of the put options with the combination of a fresh share issue and cash payment. During 2015, one of the non-controlling shareholders exercised its put option and sold 21.1% of Safika Cement to PPC Ltd. For details, 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 and is for five years. Put option percentages are as per the original agreements and have not been adjusted for the impact of the NVF that was concluded post the original purchase date.

(b) In the year ended September 2015, 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.

(c) 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.

page 72

	Proportion of ownership interest and voting power held by the group	Proportion of ownership interest and voting power held by the group
Country of incorporation	2016 %	2015 % Holding company
Zimbabwe Botswana South Africa South Africa Mauritius South Africa South Africa South Africa South Africa Botswana Botswana Rwanda Mauritius Democratic Republic of the Congo Democratic Republic of the Congo Democratic Republic of the Congo Mozambique	70 100 100 100 100 100 100 95 100 100 100 51 69 100 100 100 100	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 85 PPC Ltd 100 PPC Ltd 100 Pretoria Portland Cement International Holdings 100 PPC Botswana (Pty) Ltd 51 PPC International Holdings (Pty) Ltd 69 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 2016 page 73

continued Subsidiaries and non-controlling interest

for the period ended 31 March 2016

SUBSIDIARIES AND NON-CONTROLLING INTERESTS continued

The following summarised financial information is presented for PPC Barnet DRC Holdings and CIMERWA Limited (CIMERWA) and, 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.

statement of fnancial position.
	PPC Barnet DRC Holdings 31 March 2016 Rm CIMERWA 31 March 2016 Rm	PPC Barnet DRC Holdings 30 September 2015 Rm CIMERWA 30 September 2015 Rm
Revenue EBITDA Net loss for the period Net loss attributable to non-controlling interests Total assets Total liabilities Equity attributable to non-controlling interests	34 328 (16) 107 (30) (30) (6) (15) 2 415 2 558 2 225 1 410 (159) 629	107 265 (27) (20) (132) (35) (38) (17) 2 836 2 434 2 649 1 274 (170) 635

PPC acquired 9.59% (2015: 21.1%) additional interest in Safika Cement, increasing its shareholding to 95%. An amount of R44 million (2015: 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.

In the September 2015 financial 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 non-controlling interests, which also represents the value amount and assets received.

ATTRIBUTABLE INTEREST IN SUBSIDIARIES

ATTRIBUTABLE INTEREST IN SUBSIDIARIES
	2016 Rm	2015 Rm
Attributable interest in the aggregate amount of profts and losses of subsidiaries, after taxation and non-controlling interest: Profts Losses	3 (21)	183 (146)

page 74

Company statement of financial position

as at 31 March 2016

Notes	31 March 2016 Rm	30 September 2015 Rm
ASSETS Non-current assets Property, plant and equipment 1 Intangible assets 2 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	5 443	5 491
	3 779 128 1 536	3 709 128 1 654
	– 3 171	7 3 121
	507 653 1 967 44 –	489 658 1 970 – 4
Total assets	8 614	8 619
EQUITY AND LIABILITIES Capital and reserves Stated capital 7 Other reserves Retained proft	(678) 78 1 292	(730) 91 1 144
Total equity Non-current liabilities Provisions 10 Deferred taxation liabilities 8 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	692 2 766	505 5 613
	255 641 1 454 416	252 555 4 384 422
	5 156	2 501
	4 259 – 714 183	1 274 64 888 275
Total equity and liabilities	8 614	8 619

PPC Ltd Annual financial statements 2016 page 75

Company income statement

for the period ended 31 March 2016

Notes	Six months ended 31 March 2016 Rm	Twelve months ended 30 September 2015 Rm
Revenue Cost of sales	2 531 1 814	5 536 3 864
Gross proft Administration and other operating expenditure	717 1	1 672 294
Operating proft before BBBEE IFRS 2 charges 14 BBBEE IFRS 2 charges	716 17	1 378 35
Operating proft Fair value adjustments on fnancial instruments 15 Finance costs 16 Investment income 17	699 20 286 7	1 343 32 535 16
Proft before impairments and other exceptional adjustments Impairments and other exceptional adjustments 18	440 (24)	856 (16)
Proft before taxation Taxation 19	416 82	840 197
Proft for the period	334	643

page 76

Company statement of other comprehensive income

for the period ended 31 March 2016

	Available- for-sale fnancial assets Rm Hedging reserve Rm Retained proft Rm Total comprehensive income Rm
2016 Proft for the period Items that will be reclassifed to proft or loss Reclassifcation of gain on sale of available-for-sale fnancial asset to proft and loss Taxation impact on reclassifcation of proft on sale of available-for-sale fnancial asset to proft and loss Cash fow hedge Taxation on cash fow hedge Other comprehensive proft net of taxation	– – 334 334 (67) 8 – (59)
	(82) – – (82) 15 – – 15 – 11 – 11 – (3) – (3)
	(67) 8 – (59)
Total comprehensive income	(67) 8 334 275
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 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

PPC Ltd Annual financial statements 2016 page 77

Company statement of changes in equity

for the period ended 31 March 2016

	Other reserves Stated capital Rm Available- for-sale fnancial assets Rm Equity compen- sation reserve Rm Hedging reserve Rm Put options Rm Retained proft Rm Total Rm
March 2016 Balance at the beginning of the period Movement for the period Dividends declared BBBEE IFRS 2 charges Exercise of put option FSP IFRS 2 charges Issuance of shares to fund an additional investment in Safka Cement Total comprehensive (loss)/income Vesting of FSP incentive scheme awards	(730) 278 251 27 (465) 1 144 505 52 (67) 4 8 42 148 187
	– – – – – (186) (186) – – 10 – – – 10 – – – – 42 – 42 – – 20 – – – 20 26 – – – – – 26 – (67) – 8 – 334 275 26 – (26) – – – –
Balance at 31 March 2016	(678) 211 255 35 (423) 1 292 692
September 2015 Balance at the beginning of the year Movement for the year BBBEE IFRS 2 charges Dividends declared Exercise of put option FSP IFRS 2 charges FSP incentive scheme treated as treasury shares^ Movement recognised directly in retained income Put option recognised on non-controlling shareholder investment in subsidiary company Total comprehensive (loss)/income Vesting of 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 (24) – – – – – (24) – – – – – 14 14 – – – – (422) – (422) – (10) – 27 – 643 660 23 – (23) – – – –
Balance at 30 September 2015	(730) 278 251 27 (465) 1 144 505

^ For further details on the FSP incentive scheme, refer note 33 in the consolidated financial statements.

page 78

Company statement of cash flows

for the period ended 31 March 2016

Notes Six months ended 31 March 2016 Rm	Twelve months ended 30 September 2015 Rm
CASH FLOWS FROM OPERATING ACTIVITIES Proft before exceptional adjustments 440 Adjustments for: Amortisation of intangible assets 2 12 IFRS 2 charges 30 Depreciation 1 177 Dividends received 17 – Fair value gains on fnancial instruments 15 (20) Finance costs 16 286 Income from subsidiary companies 14 (315) Interest received 17 (7)	856 22 51 395 (5) (32) 535 (419) (11)
Operating cash fows before movements in working capital 603 Movement in inventories (18) Movement in trade and other receivables 33 Movement in trade and other payables (174)	1 392 (55) 103 171
Cash generated from operations 444 Dividends received 17 – Finance costs paid 20 (233) Income received from subsidiary companies 14 315 Interest received 17 7 Taxation paid 21 (142)	1 611 5 (405) 419 11 (124)
Cash available from operations 391 Dividends paid (186)	1 517 (563)
Net cash infow from operating activities 205	954
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of additional shares in subsidiary – Investments in intangible assets 2 (12) Investments in property, plant and equipment 22 (244) Movement in fnancial assets 5 Movement in net amounts owing by subsidiary companies 3 (167) Proceeds from disposal of property, plant and equipment 1 Proceeds on disposal of equity-accounted investment and available-for-sale fnancial asset 153	(108) (35) (657) – (362) 1 –
Net cash outfow from investing activities (264)	(1 161)
Net cash outfow before fnancing activities (59)	(207)
CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings raised/(repaid) 705 Repayment of notes 9 (650) Purchase of shares in terms of the FSP incentive scheme 7 –	232 – (24)
Net cash infow from fnancing activities 55	208
Net (decrease)/increase in cash and cash equivalents (4) Cash and cash equivalents at the beginning of the period 4	1 3
Cash and cash equivalents at the end of the period –	4

PPC Ltd Annual financial statements 2016 page 79

Notes to the company financial statements

for the period ended 31 March 2016

	Freehold and leasehold land, buildings and mineral rights Rm Factory decommis- sioning assets Rm Plant, vehicles, furniture and equipment Rm Capitalised leased plant Rm Total Rm
1.	PROPERTY, PLANT AND EQUIPMENT March 2016 Cost 601 57 6 798 154 7 610 Accumulated depreciation and impairments 274 26 3 381 150 3 831
	327 31 3 417 4 3 779
	Movements during the period Net carrying value at the beginning of the period 327 38 3 340 4 3 709 Additions 7 – 237 – 244 Depreciation (6) (1) (168) (2) (177) Disposals – – (1) – (1) Impairments – – (4) – (4) Other movements/reallocation (1) (6) 13 2 8
	Net carrying value at the end of the period 327 31 3 417 4 3 779
	September 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 the 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 the end of the year 327 38 3 340 4 3 709

Included in plant, vehicles, furniture and equipment is capital work in progress of R202 million (September 2015: R357 million).

Following reviews of property, plant and equipment for the period ended 31 March 2016 other minor impairments of R4 million (September 2015: R1 million) were processed, and is reflected in other movements/reallocation.

A significant portion of the impairment loss recognised in 2015 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 was 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 continues 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 period, an amount of R10 million (September 2015: R4 million) for critical spares was reclassified between property, plant and equipment and inventory.

Borrowing costs of R13 million (September 2015: R3 million) have been capitalised to property, plant and equipment (refer note 16).

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

In the current period, the useful life of certain assets was reviewed, as assets were being used longer than their estimated useful life. The remaining life of reserves was aligned with the useful life of the relevant assets and buildings and structural assets assumed a useful life of 30 years from 1 October 2015. The change in accounting estimate was applied prospectively and resulted in an annual decrease in depreciation in the current and future periods of R34 million with deferred taxation approximately R10 million.

page 80

		31 March 2016 Rm	30 September 2015 Rm
2.	INTANGIBLE ASSETS ERP development and other software Cost Accumulated amortisation and impairments	257 129	257 129
		128	128
	Net carrying value at the beginning of the period Additions Amortisation Transfers and other movements	128 12 (12) –	112 35 (22) 3
	Net carrying value at the end of the period	128	128
3.	OTHER NON-CURRENT ASSETS Investments in subsidiaries and other Investments in subsidiaries at the beginning of the period Investment in Safka Cement Impairment of subsidiaries	1 527 44 (79)	1 420 108 –
	Investments in subsidiaries at the end of the period	1 492	1 528
	Unlisted investments Unlisted investment at fair value Contributions to PPC Environmental Trust	44	126
		– 44	82 44
		1 536	1 654
	Comprising: Other non-current assets Other non-current fnancial assets	1 536 –	1 572 82
		1 536	1 654
	Interests in subsidiaries Shares at cost less amounts written off and dividends received at the beginning of the period _Add:_Investments in Safka Cement	1 535 44	1 427 108
	_Add:_Amounts owing by subsidiaries	1 579 1 967	1 535 1 970
	_Less:_Amounts owing to subsidiaries	3 546 (183)	3 505 (275)
		3 363	3 230

Safika Cement

With the purchase of the initial 69.3% stake in Safika Cement, 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 was exercised during the 2015 financial year for R108 million. The remaining put option, was anticipated to be exercised on the fifth anniversary of the transaction, but in September 2015, this was classified as a current liability as it was the intention to early settle the remaining put option. In January 2016, shareholders approved the early settlement of the remaining put option with the combination of a fresh share issue and cash payment. At March 2016, the put option liability (refer note 16) was Rnil (September 2015: R42 million). The put option liability was calculated using the company’s forecast EBITDA applying an earnings multiple dependent on the level of EBITDA achieved less net debt.

(Put option percentages are as per the original agreement and have not been adjusted for the impact of the NVF that was concluded post the original purchase date.)

PPC Ltd Annual financial statements 2016 page 81

continued Notes to the company financial statements

for the period ended 31 March 2016

3. OTHER NON-CURRENT ASSETS continued

Unlisted investments at fair value

The company disposed of its 6.75% shareholding in Ciments du Bourbon, incorporated in Reunion, during the current reporting period, with the resulting gain of R83 million recorded in other exceptional items.

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 for rehabilitation costs. The carrying value of the underlying trust’s investments is R94 million (September 2015: R92 million).

Amounts owing by and to subsidiaries

The loans have no fixed terms of repayment, are unsecured and, where appropriate, interest is calculated using ruling market-related interest rates.

4.		31 March 2016 Rm	30 September 2015 Rm
	EQUITY-ACCOUNTED INVESTMENTS Investments at cost Transferred to non-current asset held for sale(a)	– –	7 (7)
		–	–
	a)During the current reporting period, the company fnalised the sale of its 25% stake in Afripack for R70 million. The resultant proft of R63 million has been included in other exceptional items. In 2015, the carrying amount immediately before classifcation as held for sale was R7 million which was lower than its fair value less costs to sell of R70 million (which represented the estimated selling price per the sales agreement less estimated transaction costs).
5.	INVENTORIES Raw materials 50 Work in progress 121 Finished goods 124 Maintenance stores 312 Inventory obsolescence (100)		79 120 78 311 (99)
	507		489
	Amount of inventories recognised as an expense during the period 1 341		2 810

Inventories are determined on the weighted average formula bases.

During the period, an amount of R10 million (September 2015: R4 million) for critical spares was reclassified to property, plant and equipment (refer note 1).

No inventories have been pledged as security.

page 82

		31 March 2016 Rm	30 September 2015 Rm
6.	TRADE AND OTHER RECEIVABLES Trade receivables Allowances for doubtful debts	542 (10)	579 (16)
	Net trade receivables Mark to market cash fow hedge Other fnancial receivables	532 68 32	563 38 27
	Trade and other fnancial receivables Prepayments	632 21	628 30
		653	658
	Normal credit terms vary between 30 and 60 days. Allowance for doubtful debt is generally determined by the ageing on an account, fnancial 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. No receivables have been pledged as security. Net trade receivables comprise 532 Trade receivables that are neither past due nor impaired^ 458 Trade receivables that are past due but not impaired 74 ^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 74 1 – 30 days 41 31 – 60 days 18 61 – 90 days – More than 180 days 15 Fair value of collateral held 20 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 the beginning of the period 16 Allowance raised through proft or loss (6)		563
		458 74	488 75
		74	75
		41 18 – 15	68 2 2 3
		20 16 (6)	31 7 9
	Balance at the end of the period	10	16

PPC Ltd Annual financial statements 2016 page 83

continued Notes to the company financial statements

for the period ended 31 March 2016

		31 March 2016 Shares	30 September 2015 Shares
7.	STATED CAPITAL Authorised shares Issued ordinary shares Total shares in issue at the beginning of the period Shared issued to non-controlling shareholders in Safka Cement on exercise of put option	700 000 000 605 379 648 1 801 242	700 000 000 605 379 648 –
	Total shares in issued at the end of the period Adjustments for shares treated as treasury shares Shares purchased in terms of the FSP incentive scheme Shares held by consolidated BBBEE trusts and trust funding SPVs	607 180 890 (5 563 488) (26 480 950)	605 379 648 (6 342 640) (26 480 950)
	Total shares in issue (net of treasury shares)	575 136 432	572 556 058
	Authorised preference shares Twenty million preference shares of R1 000 each. No preference shares have been issued.	20 000 000	20 000 000
	Rm		Rm
	Stated capital Balance at the beginning of the period (730) Shares issued to non-controlling shareholders in Safka Cement on exercise of put option 26 Shares purchased in terms of the FSP incentive scheme treated as treasury shares – Vesting of shares held in terms of the FSP incentive scheme 26		(729) – (24) 23
	Balance at the end of the period (678)		(730)

	Rm	Rm
Stated capital
Balance at the beginning of the period	(730)	(729)
Shares issued to non-controlling shareholders in Safka Cement on exercise of put option	26	–
Shares purchased in terms of the FSP incentive scheme treated as treasury shares	–	(24)
Vesting of shares held in terms of the FSP incentive scheme	26	23
Balance at the end of the period	(678)	(730)

Shares issued to non-controlling shareholders in Safika Cement on exercise of put option

At the annual general meeting held on 25 January 2016, shareholders approved the early settlement of the remaining put option held by management of Safika Cement Holdings (Pty) Ltd for R44 million, to be settled by issue of new shares of R26 million and cash for R18 million. The shares were issued on 31 March 2016.

Shares held by consolidated 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 were raised (refer note 9).

FSP incentive scheme

In terms of the forfeitable share plan (FSP) incentive scheme, 5 583 488 shares (September 2015: 6 342 640 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 779 152 shares (September 2015: 531 179 shares) vested during the period and are no longer treated as treasury shares.

page 84

		31 March 2016 Shares	30 September 2015 Shares
7.	STATED CAPITALcontinued Unissued shares Ordinary shares Preference shares	92 819 110 20 000 000	94 620 352 20 000 000
	Of the unissued ordinary shares at the end of the period, the directors have the authority until the next annual general meeting to allot a maximum of 30 250 000 shares subject to the provisions of the Companies Act and JSE Listings Requirements.
8.	Rm		Rm
	DEFERRED TAXATION LIABILITIES Movement Balance at the beginning of the period 555 (Released from)/charged directly to equity (12) Charged/(released) to income statement 48 Prior year tax adjustment 50		571 8 (24) –
	Balance at the end of the period 641		555
	Analysis of deferred taxation Property, plant and equipment 695 Other non-current assets 4 Current assets 15 Non-current liabilities (64) Current liabilities (21) Reserves(a) 12		629 32 5 (66) (54) 9
	641		555

(a) In 2015, reserves included an amount of R49 million relating to property, plant and equipment and has now been included in property, plant and equipment which reduced the previously reported R678 million to R629 million reflected above. Management believes this change provides improved disclosure for users of the financial statements.

PPC Ltd Annual financial statements 2016 page 85

continued Notes to the company financial statements for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
9.	LONG-TERM BORROWINGS Borrowings Terms Security Interest rate Notes(a) Various, refer below Unsecured Various, refer below Long-term loan(b) Interest is payable quarterly with a bullet capital repayment in September 2017 Unsecured Variable rated at 400 basis points above JIBAR Long-term loan Interest is payable bi-annually with a bullet capital repayment in December 2016 Unsecured Fixed 10.86% Long-term loan Interest is payable monthly with the capital amount being payable 18 months after notice period Unsecured Variable rated at 125 basis points above JIBAR BBBEE funding transaction A preference shares Dividends are payable bi-annually with capital redeemable from surplus cash. Compulsory annual redemptions are effective until December 2016 Secured by guarantee from PPC Variable rates at 81.4% of prime B 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	1 747 555 1 417 900 828	2 398 – 1 520 – 1 115
		33 393 402	24 395 696
	Long-term borrowings _Less:_Short-term portion of long-term borrowings (refer note 12)	5 447 (3 993)	5 033 (649)
		1 454	4 384
	Maturity analysis of obligations: One year Two years Three years Four years Five and more years	3 993 1 454 – – –	649 2 637 – 749 998
		5 447	5 033

page 86

PPC Ltd Annual financial statements 2016 page 87

continued Notes to the company financial statements

for the period ended 31 March 2016

	Factory decommissioning and quarry rehabilitation Rm Post-retirement healthcare Rm Total Rm
10.	PROVISIONScontinued March 2016 Balance at the beginning of the period 221 31 252 Amounts added – 1 1 Amounts reversed/utilised (9) (5) (14) Time value of money adjustments 16 – 16
	Balance at the end of the period 228 27 255
	To be incurred: Between two and fve years 7 7 14 More than fve years 221 20 241
	228 27 255
	September 2015 Balance at the beginning of the period 213 28 241 Amounts added – 3 3 Amounts reversed/utilised (4) – (4) Other movements (6) – (6) Time value of money adjustments 18 – 18
	Balance at the end of the period 221 31 252
	To be incurred: Between two and fve years 6 – 6 More than fve years 215 31 246
	221 31 252

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 local regulations and in line with group policy. 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 (September 2015: R44 million) has been contributed to the PPC Environmental Trust. Refer note 3.

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 PPC’s proportionate share of the post-employment healthcare benefits in respect of former employees of the Cement and Concrete Institute and amounted to R16 million (September 2015: R10 million). The liability was last revalued during February 2013 and will be revalued during the next reporting period. 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 R10 million (September 2015: R21 million). The liability is revalued every three years and was last actuarially valued during February 2016. The liability has been determined using the projected unit credit method.

page 88

		31 March 2016 Rm	30 September 2015 Rm
11.	OTHER NON-CURRENT LIABILITIES Cash-settled share-based payment liability Put option liabilities	3 416	5 464
	_Less:_Short-term portion	419 (3)	469 (47)
		416	422
	For further details on the cash-settled share-based payment liability, refer note 34 in the consolidated results. Movement in put option liabilities Balance at the beginning of the period Fair value adjustments on remeasurements Put options exercised Put options granted Time value of money adjustments	422 (16) – – 10	145 (14) (108) 422 19
	Balance at the end of the period	416	464
	Comprising: Safka Cement PPC Barnet DRC Holdings	– 416	42 422
		416	464

Put option liabilities

Safika Cement

With the purchase of the initial 69.3% equity stake in Safika Cement, 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 was exercised during the 2015 financial year for R108 million. The remaining put option, was anticipated to be exercised on the fifth anniversary of the transaction, but in September 2015, this was classified as a current liability as it was the intention to early settle the remaining put option. In January 2016, shareholders approved the early settlement of the remaining put option with the combination of a fresh share issue and cash payment. At March 2016, the put option liability (refer note 16) was Rnil (September 2015: R42 million). The put option liability was calculated using the company’s forecast EBITDA applying an earnings multiple dependent on the level of EBITDA achieved less net debt.

PPC Barnet DRC

The International Finance Corporation (IFC) was issued a put option in 2015 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 a forward 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 forward multiple of eight was determined using comparison of publicly available information of other cement businesses operating in similar territories. The present value of the put option was calculated at R415 million (September 2015: R422 million).

PPC Ltd Annual financial statements 2016 page 89

continued Notes to the company financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
12.	SHORT-TERM BORROWINGS Short-term loans and bank overdraft Short-term portion of long-term borrowings (refer note 9)	266 3 993	625 649
		4 259	1 274
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	3 1 54 128 – 442	5 1 49 95 42 473
	Trade and other fnancial payables Payroll accruals VAT payable	628 70 16	665 195 28
		714	888
	Trade and other payables are payable within the normal trade terms of a 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 Loss on disposal of plant and equipment Staff costs Equity-settled share incentive scheme charge Cash-settled share incentive scheme charge(a) Directors’ remuneration(b) Employees’ remuneration Restructuring costs paid to employees Retirement beneft contributions	12 6	22 7
		4 2	6 1
		177	395
		166 11	361 34
		360 1 315	767 1 419
		38 1 276	64 94 261
		6 (1) 20 (2) 10 395 – 36	18 – 13 7 26 721 8 71
	_Less:_Costs capitalised to plant and equipment and intangibles	459 (3)	846 (8)
		456	838
	(a)Refer note 33 of group fnancial statements. (b)For further details, refer to the abridged remuneration report on pages 97 to 99.
15.	FAIR VALUE ADJUSTMENTS ON FINANCIAL INSTRUMENTS Gain on remeasurement of put option liabilities (refer note 11) Gain on derivatives designated as economic hedging instruments Gain on translation of foreign currency-denominated monetary items	16 – 4	14 14 4
		20	32

page 90

		31 March 2016 Rm	30 September 2015 Rm
16.	FINANCE COSTS Bank and other short-term borrowings Notes Long-term loans	46 98 84	41 186 166
	Capitalised to plant and equipment and intangible assets	228 (13)	393 (3)
	Finance costs before BBBEE transaction, subsidiary companies and time value of money adjustments BBBEE transaction Dividends on redeemable preference shares Long-term borrowings Subsidiary companies Time value of money adjustments On rehabilitation provisions On the put-option	215 39	390 96
		17 22	34 62
		5 27	12 37
		16 11	18 19
		286	535
17.	INVESTMENT INCOME Dividends on unlisted investments Interest on deposits and non-current assets	– 7	5 11
		7	16
18.	IMPAIRMENTS AND OTHER EXCEPTIONAL ADJUSTMENTS Impairment of other non-current assets (refer note 3) Impairment of intercompany loans Impairment of property, plant and equipment (refer note 1) Proft on sale of investments (refer note 3 and 4)	(79) (87) (4) 146	– – (16) –
		(24)	(16)
19.	TAXATION Current taxation Current period Prior year Capital gains taxation Deferred taxation Current period Prior year Withholding taxation	13	209
		6 (14) 21	231 (22) –
		48	(24)
		48 –	(5) (19)
		21	12
	Total taxation charge	82	197
		%	%
	Reconciliation of taxation rate: Proft before taxation Prior year taxation impact	19.4 3.3	23.5 4.9
	Proft before taxation, excluding prior year taxation adjustments Adjustment due to the inclusion of dividend income	22.7 –	28.4 8.9
	Effective rate of taxation Income taxation effect of: Disallowable charges, permanent differences and impairments Empowerment transactions and IFRS 2 charges not taxation deductible Capital gains differential on sale of non-core assets Withholding taxation	22.7 5.3	37.3 (9.3)
		(0.6) (1.1) 12 (5.0)	(6.2) (1.7) – (1.4)
	South African normal taxation rate	28.0	28.0

PPC Ltd Annual financial statements 2016 page 91

continued Notes to the company financial statements

for the period ended 31 March 2016

		31 March 2016 Rm	30 September 2015 Rm
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 funding transaction fnance costs capitalised Redeemable preference share dividends capitalised Interest on long-term borrowings capitalised	286 13 (27) (39)	535 3 (37) (96)
		(17) (22)	(34) (62)
		233	405
21.	TAXATION PAID Net amounts payable/(receivable) at the beginning of the period Charge per income statement excluding deferred taxation (refer note 19) Net amounts payable at the end of the period	64 34 44	(33) 221 (64)
		142	124
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)	7 237	18 639
		244	657
23.	MOVEMENTS IN INVESTMENTS AND LOANS Net movement Revaluation of available-for-sale fnancial assets directly in equity Disposal of investment held for sale Investment in subsidiary companies Impairment of fnancial investment	117 – (82) 44 (79)	(95) (13) – 108 –
		–	–
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) Ltd, 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 and PPC Aggregate Quarries (Pty) Ltd in aggregate of R900 million.

For details on guarantees provided by PPC Ltd in terms of the BBBEE transaction, refer note 9.

page 92

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.

Note	March 2016 Carrying amount Rm Fair value Rm	September 2015 Carrying amount Rm Fair value Rm	September 2015 Carrying amount Rm Fair value Rm
Financial assets Unlisted investment at fair value 3 Trade and other fnancial receivables 6 Cash fow hedge 6 Amounts owing by subsidiary companies 3 Cash and cash equivalents Financial liabilities Long-term borrowings 9 Short-term borrowings 12 Amounts owing to subsidiary companies 3 Trade and other fnancial payables 13 Put option liabilities 11/13 Derivative instruments – current (cash fow hedge) 11/13	– – 564 564 68 68 1 967 1 967 – – 1 454 1 454 4 259 4 258 183 183 627 627 415 415 1 1	82 590 38 1 970 4 4 384 1 274 275 622 464 1	82 590 38 1 970 4 4 384 1 274 275 622 464 1
		March 2016 Rm	September 2015 Rm
Credit risk management Maximum credit risk exposure^		2 620	2 632

^ Maximum credit risk exposure includes long-term receivables, trade and other receivables and cash and cash equivalents.

PPC Ltd Annual financial statements 2016 page 93

continued Notes to the company financial statements for the period ended 31 March 2016

25. FINANCIAL RISK MANAGEMENT continued Fair value hierarchy disclosures

FINANCIAL RISK MANAGEMENTcontinued Fair value hierarchy disclosures
	Valuation with
	reference to	Valuation	Valuation
	prices quoted	based on	based on
	in an active	observable	unobservable
	market	inputs	inputs
	Level 1	Level 2	Level 3	Total
	Rm	Rm	Rm	Rm
March 2016
Financial assets
Loans and receivables
Amounts owing by subsidiary companies	–	1 967	–	1 967
Trade and other fnancial receivables	–	564	–	564
Derivative fnancial instruments	–	68	–	68
Total fnancial assets	–	2 599	–	2 599
Financial liabilities
Amounts owing to subsidiary companies	–	183	–	183
Long-term borrowings	1 161	293	–	1 454
Short-term borrowings	–	3 993	–	3 993
Put option liabilities	–	–	415	415
Trade and other fnancial payables	–	627	–	627
Derivative fnancial instruments – current (cash
fow hedge)	–	1	–	1
Total fnancial liabilities	1 161	5 097	415	6 673
For movements and disclosure of level 3 items, refer
note 35 in the consolidated fnancial statements.
September 2015
Financial assets
Available for sale
Unlisted investments at fair value	–	82	–	82
Loans and receivables
Amounts owing by subsidiaries	–	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 subsidiaries	–	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 – current (cash
fow hedge)	–	1	–	1
Total fnancial liabilities	2 396	4 160	464	7 020

Level 1 – financial assets and liabilities that are valued accordingly to unadjusted market prices for similar assets and liabilities. Marketprices 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.

page 94

	31 March 2016 Rm	30 September 2015 Rm
26. RELATED-PARTY TRANSACTIONS In addition to the related-party transactions disclosed in the consolidated results, the company had the following related-party transactions: Goods sold to PPC Barnet DRC Trading Company SA PPC Botswana (Pty) Ltd PPC Zimbabwe Limited PPC Lime Limited PPC Mozambique SA Pronto Building Materials (Pty) Ltd Safka Cement Holdings (Pty) Ltd Goods purchased from PPC Lime Limited Afripack Limited PPC Zimbabwe Limited Technical services provided to PPC Lime Limited Kgale Quarries (Pty) Ltd PPC Botswana (Pty) Ltd PPC Aggregate Quarries (Pty) Ltd PPC Zimbabwe Limited PPC Barnet DRC Trading Company SA CIMERWA Limited Interest received from PPC International Holdings Interest paid to PPC Aggregate Quarries (Pty) Ltd PPC Ntsika Fund (Pty) Ltd Community Service Groups and Strategic Black Partners Pronto Holdings (Pty) Ltd Safka Cement Holdings (Pty) Ltd PPC Lime Limited Dividends received from PPC Lime Limited PPC Aggregate Quarries (Pty) Ltd PPC Zimbabwe Limited Safka Cement Holdings (Pty) Ltd Pronto Holdings (Pty) Ltd Slurrylink (Pty) Ltd	17 151 30 4 – 68 306 18 22 – 17 1 1 5 3 10 2 – 1 – 79 2 – 2 60 26 127 – 40 –	60 343 61 8 1 150 645 40 87 21 8 1 2 2 6 11 5 94 3 1 166 3 1 4 43 16 62 86 50 4

PPC Ltd Annual financial statements 2016 page 95

continued Notes to the company financial statements

for the period ended 31 March 2016

	31 March 2016 Rm	30 September 2015 Rm
26. RELATED-PARTY TRANSACTIONScontinued Dividends paid Porthold Trust (Pty) Limited In terms of the frst BBBEE transaction 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 Botswana (Pty) Ltd Slurrylink (Pty) Ltd PPC International Holdings (Pty) Ltd Pronto Holdings (Pty) Ltd Safka Cement Holdings (Pty) Ltd Community Service Groups and Strategic Black Partners Long-term loan (refer note 9) Interest capitalised	– 3 – 3 1 1 16 1 – – 7 24 23 3 – 13 13 (28) (92) 2 – 1 919 (34) (27) (1 429)	1 10 3 11 6 4 49 5 1 2 19 35 19 3 1 9 16 (63) (121) 2 5 1 846 (55) (12) (1 532)
	(1 417) (12)	(1 520) (12)
The terms and conditions of these transactions are determined on an arm’s length basis.

27.	ADDITIONAL DISCLOSURE
	Refer to the consolidated fnancial statements for additional disclosure on the following:
	– Accounting policies
	– Commitments
	– Directors’ remuneration and interest
	– Events after reporting date
	– Financial risk management
	– Foreign exchange gains and losses
	– Related-party transactions
	– Retirement beneft information
	– Share-based payments.

page 96

Abridged remuneration report

for the period ended 31 March 2016

KEY PRINCIPLES OF THE REMUNERATION POLICY

PPC recognises that one of its competitive sources of value is its employees. To meet our business objectives, therefore, remuneration and reward policies and practices must be based on the following principles:

• Encourage organisational, team and individual performance

• Be designed to drive a high-performance culture

• Be based on the premise that employees should share in the success of the company

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

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

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

• Remuneration practices are aligned with corporate strategy

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

• Incentive-based rewards are earned by achieving demanding performance conditions consistent with shareholder interests over the short, medium and long term

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

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

Further details on the group’s remuneration policy can be found in the company’s integrated report.

Remuneration paid to executive directors and prescribed officers for the six months ended March 2016

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

TGP
retirement
and medical
contri- Car LTI [9]
R000 Salary butions allowance STI [10] realised Other [11] Total
----- End of picture text -----

R000	Salary	TGP retirement and medical contri- butions	Car allowance	STI10	LTI9 realised	Other11	Total
Executive directors DJ Castle MMT Ramano	2 546 1 605	305 475	– 98	– –	– –	8 4	2 859 2 182
Prescribed offcers8 PL Booysen1 HN Buthelezi12 N Caldwell2 JT Claassen EJ de Beer13 AC Lowan NL Lekula3 KPP Meijer4 FK Molefe NF Nepfumbada5 RM Rein T Sibisi6 JHDLR Snyman JJ Taljaard7	374 1 303 224 1 275 152 912 863 388 924 306 1 202 525 936 543	102 152 53 240 40 90 115 116 189 54 195 92 118 97	81 – – 150 16 – – 39 – – 168 – 59 73	– – – – – – – – – – – – – –	– – – 143 – 66 140 – – – – – 116 –	1 4 1 5 – – 1 4 353 – 1 2 84 1 1	558 1 459 278 1 813 208 1 068 1 119 4 896 1 113 361 1 567 701 1 230 714
	14 078	2 433	684	–	465	4 466	22 126

1 Following an internal restructure, December 2015 was the last month as a member on the group exco.

• 2 Appointed February 2016.

3 Appointed December 2015.

• 4 Resigned effective December 2015. Other comprises negotiated mutual separation package made up as follows: Annual leave pay – R127 000. Negotiated separation package – R2.5 million. Notice pay – R813 000. Balance of restraint of trade – R813 000.

5 Appointed February 2016.

6 Resigned effective December 2015. Other comprises encashed leave.

7 Following an internal restructure, December 2015 was the last month as a member on the group exco.

• 8 Following remuneration committee deliberation, going forward prescribed officers will be reduced to core decision-makers only, in line with the Companies Act.

9 LTI realised refers to: FSP retention shares that vested in February 2016.

10 No STI paid in the period.

• 11 Other represents sundry expenses relating to medical aid gap cover, executive holiday accommodation expenses, etc. except in the instance of T Sibisi and KPP Meijer (see note 4 and 6).

12 Resigned effective 31 July 2016.

• 13 Appointed to group exco in March 2016.

PPC Ltd Annual financial statements 2016 page 97

continued Abridged remuneration report

for the period ended 31 March 2016

Remuneration paid to executive directors and prescribed officers for the 12 months ended September 2015

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

Retirement
and medical
contri- Car LTI
R000 Salary butions allowance STI realised Other Total
----- End of picture text -----

R000	Salary	Retirement and medical contri- butions	Car allowance	STI	LTI realised	Other	Total
Executive directors DJ Castle1 MMT Ramano BL Sibiya3	3 520 3 026 862	420 881 –	– 240 –	1 853 1 821 –	– 3 2482 –	2 11 –	5 795 9 227 862
Prescribed offcers PL Booysen HN Buthelezi JT Claassen AC Lowan KPP Meijer FK Molefe RM Rein7 T Sibisi JHDLR Snyman JJ Taljaard RS Tomes8	1 386 2 434 2 137 1 812 2 235 1 832 1 605 2 315 1 766 2 076 299	390 291 424 162 663 268 96 310 217 375 53	324 50 360 – 232 – 214 – 117 320 38	854 1 140 1 289 782 1 244 789 – 1 000 869 1 047 –	1374 – 2154 – 2024 – – – 2944 2074 –	6 7015 1 0216 87 7895 – 378 – 5 2 288	3 097 4 616 5 446 2 627 5 365 2 889 2 293 3 195 3 268 4 027 678
	27 305	4 550	1 895	12 688	4 303	3 290	54 031

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.

NON-EXECUTIVE DIRECTORS’ FEES

Non-executive directors’ fees are as approved at the previous annual general meeting (AGM) and valid from that date until the next AGM.

Total emoluments to non-executive directors for the six months ended 31 March 2016

			Committee	Committee	Committee	Committee	Committee	Committee	Committee	Committee
R000 S Dakile- Hlongwane1 N Goldin ZJ Kganyago2 TJ Leaf-Wright MP Malungani2 T Mboweni SK Mhlarhi B Modise T Moyo CH Naude PG Nelson TDA Ross BL Sibiya2	Board fees	Chair- man fees	Nomina- tions	Audit	Risk and com- pliance	Remune- ration	Social, ethics and transfor- mation	Invest- ment	Special meetings	Total
	51 137 82 137 104 137 137 137 137 137 137 179 –	– – – – – – – – – – – – 431	– – – – – 98 – – 89 – – – 187	– – – – – – – 87 87 – 87 174 –	– – – 38 – – – 77 – 38 – 38 –	– 73 – – – – 92 – – 92 187 – 53	– – – 45 45 77 – – – – – – –	– 31 – 31 62 – 31 – – – – 43 31	40 40 – 79 – 140 59 80 60 119 238 196 40	91 281 82 330 211 452 319 381 373 386 649 630 742
	1 512	431	374	435	191	497	167	229	1 091	4 927

1 Appointed January 2016.

2 Resigned January 2016.

page 98

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

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

Committee
Social,
Risk ethics
Chair- and and
Board man Nomi- com- Remune- transfor- Invest- Special
R000 fees fees nations Audit pliance ration mation ment meetings Total
----- End of picture text -----

R000	Board fees	Chair- man fees	Nomi- nations	Audit	Risk and com- pliance	Remune- ration	Social, ethics and transfor- mation	Invest- ment	Special meetings	Total
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.

INTERESTS OF EXECUTIVE DIRECTORS AND PRESCRIBED OFFICERS IN SHARE CAPITAL

The aggregate direct beneficial holdings of directors and their immediate families (none of whom holds 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.

that date.
Name	Number of shares at 31 March 2016	Number of shares at 30 Sept 2015
Current directors MMT Ramano	134 143	134 143
Prescribed offcer JHDLR Snyman	24 100	24 100

Interests of directors and prescribed officers in BBBEE schemes

In 2008, in terms of the company’s first BBBEE transaction, certain executive directors and prescribed officers were granted participation rights in the loan-funded Black Managers Trust which owns shares that are subject to vesting conditions and a lock-in period restricting transferability which expires on 15 December 2016. In addition, in 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 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 to 15 December 2014.

In the 2013 financial year, after implementation of the company’s second BBBEE transaction, executive directors and prescribed officers were included among South African employees granted participation rights in a notional loan-funded trust owning shares that are subject to vesting conditions and a lock-in period restricting transferability which expires in September 2019.

As at 31 March 2016

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

Participation rights BEE 1 BEE 2
----- End of picture text -----

Participation rights	BEE 1	BEE 2
Executive directors MMT Ramano	335 249	372 737
Prescribed offcers1 PL Booysen2 HN Buthelezi4 JT Claassen AC Lowan KPP Meijer3 FK Molefe JHDLR Snyman JJ Taljaard NL Lekula EJ de Beer	– – – – – – – – 109 531 –	16 322 218 676 22 501 118 850 28 488 171 490 18 167 25 384 220 634 20 235

1 Following remuneration committee deliberations, going forward prescribed officers will be reduced to core decision-makers only, in line with the Companies Act.

2 No longer a prescribed officer following internal restructure.

3 Paid out 10% of market value at date of separation, in lieu of forfeiting 100% full value of participation at vesting date in 2019.

4 Resigned effective 31 July 2016.

PPC Ltd Annual financial statements 2016 page 99

PPC Ltd shareholder analysis

as at 31 March 2016

Issued share capital: 607 180 890 shares

Issued share capital: 607 180 890 shares
	Number of		Number
SHAREHOLDER SPREAD	shareholders	%	of shares	%
1 – 1 000 shares	6 878	55,85	2 780 264	0,46
1 001 – 10 000 shares	4 374	35,51	14 200 125	2,34
10 001 – 100 000 shares	750	6,09	21 524 784	3,55
100 001 – 1 000 000 shares	232	1,88	74 248 109	12,23
1 000 001 shares and over	82	0,67	494 427 608	81,43
Total	12 316	100	607 180 890	100
DISTRIBUTION OF SHAREHOLDERS
Banks	100	0,81	149 765 657	24,67
Broad-based black ownership	17	0,14	144 839 159	23,85
Brokers	63	0,51	24 338 848	4,01
Close corporations	113	0,92	826 547	0,14
Endowment funds	35	0,28	1 464 919	0,24
Individuals	9 859	80,05	26 485 076	4,36
Insurance companies	65	0,53	10 107 530	1,66
Investment companies	9	0,07	253 441	0,04
Medical aid schemes	8	0,06	356 062	0,06
Mutual funds	183	1,49	95 075 475	15,66
Nominees and trusts	1 340	10,88	7 550 469	1,24
Other corporations	73	0,59	884 701	0,15
Pension funds	197	1,60	131 235 966	21,61
Private companies	253	2,05	13 966 190	2,30
Sovereign wealth fund	1	0,01	30 850	0,01
Total	12 316	100	607 180 890	100
PUBLIC/NON-PUBLIC SHAREHOLDERS
Non-public shareholders	21	0,17	230 439 694	37,95
Directors’ holdings	3	0,02	163 243	0,03
Broad-based black ownership	17	0,14	144 839 159	23,85
Strategic holdings (10% or more)	1	0,01	85 437 292	14,07
Public shareholders	12 295	99,83	376 741 196	62,05
Total	12 316	100	607 180 890	100
			Number of
			shares in	%
			September	September
BENEFICIAL SHAREHOLDERS HOLDING 3% OR MORE OF THE ISSUED SHARE CAPITAL			2015	2015
Public Investment Corporation Limited			85 437 292	14,07
PPC SBP Consortium Funding SPV (Pty) Limited.			39 988 926	6,59
PPC Masakhane Employee Share Trust			26 757 780	4,41

page 100

Corporate information

PPC LTD

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

DIRECTORS

Executive: DJ Castle (chief executive officer), MMT Ramano (chief financial officer)

Non-executive: PG Nelson (interim chairman), S Dakile-Hlongwane, N Goldin, TJ Leaf-Wright, MP Malungani, T Mboweni, SK Mhlarhi, B Modise, T Moyo*, CH Naude, 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 jaco.snyman@ppc.co.za

SPONSOR: SOUTH AFRICA

Merrill Lynch SA (Pty) Ltd The Place 1 Sandton Drive, 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 web.queries@computershare.co.za

TRANSFER SECRETARIES: ZIMBABWE

Corpserve (Pvt) Ltd 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) Ltd 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

The company changed its year end to March with effect from the 2016 fnancial year Financial year end Annual general meeting
	31 March
	31 October 2016
Reports Interim results for half year to September Preliminary announcement of annual results Annual fnancial statements
	Publish November
	Publish June
	Publish July
Dividends Interim Final
	If declared November
	If declared June

BASTION GRAPHICS

www.ppc.co.za