Arazá (Eugenia stipitata)

PPC Ltd, its subsidiaries and associates, operate in Africa as manufacturers of cementitious, aggregate products and readymix, lime and limestone.

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

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

sUBsiDiaRies anD associates

As part of the group’s African expansion strategy, PPC acquired three aggregate quarries from Quarries of Botswana in October 2011. This acquisition makes PPC Aggregates the largest aggregate producer in Botswana and the quarries situated in Gaborone, Francistown and Selebi-Phikwe expand PPC’s existing portfolio in Botswana to meet the local market demand for aggregate, which is a complementary product to cement.

The transaction value amounted to R52 million, of which R42 million was paid during the 2012 financial year. The purchase consideration outstanding is payable in equal instalments on the first and second anniversaries of the transaction.

associates

Pronto Holdings (Pty) Limited (Pronto)

During June 2012, the company acquired a 25% stake in Pronto. Through this acquisition, PPC will become a supplier to the Gauteng markets for readymix concrete and fly ash. Fly ash is used as an extender in the manufacture of cement and concrete.

The purchase consideration is calculated as 5,6 times Pronto’s EBITDA less net debt. A first tranche of 25% amounting to approximately R70 million was paid at initiation of the transaction, with the second tranche of 25% and the remaining 50% to be paid on the first and second anniversaries of the transaction respectively. Although subsequent payments are planned to increase, the total purchase consideration is not expected to exceed R400 million.

FoRFeitaBle sHaRe Plan (FsP)

In terms of the newly implemented long-term employee incentive scheme, 3 079 853 shares were purchased on the JSE Limited. The shares purchased for settlement to employees are treated as treasury shares on a group level while vesting conditions are in place. For further details of the scheme, refer to the remuneration review.

Bee 2 tRansaction

In terms of the company’s second BEE transaction, approved by shareholders in September 2012, 39,3 million new PPC shares were issued to participants of the transaction in October 2012 and facilitated through a Notional Vendor Funding (NVF) mechanism.

The participants of the transaction are the PPC Employees Share Trust, established for the benefit of all South African permanent employees, Strategic Black Partners and the Bafati Investment Trust.

In terms of IFRS, the shares issued to the participants will be treated as treasury shares during the NVF period, and these shareholders will be entitled to 20% of the dividend declared by PPC with the balance being utilised to reduce the NVF.

ReGisteR oF 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, Link Market Services South Africa (Pty) Limited, or at Corpserve (Private) Limited (Zimbabwe).

DiRectoRs’ inteRest in tHe issUeD

sHaRes oF tHe GRoUP

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.

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

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

HolDinG anD sUBsiDiaRY comPanies

Details relating to the beneficial shareholders owning more than 5% of the stated capital of the company appear in the “PPC in the stock market” section on page 140.

acQUisition BY tHe comPanY oF issUeD sHaRes

Except for the share buy-back as discussed under “Share repurchase” above, the company did not exercise its authority to buy back shares in the current financial year.

sPecial ResolUtions

The following special resolutions for PPC Ltd were passed during the year under review:

A special resolution granting authority for the company to provide at any time and from time to time during the period of two years commencing on 30 January 2012, direct or indirect financial assistance as contemplated in section 44 of the Companies Act to executive directors or  prescribed officers participating in the company’s forfeitable share plan, was passed at the annual general meeting on 30 January 2012:

At a special general meeting held on 18 September 2012 the following special resolutions were passed:

 Permit the company to repurchase treasury shares held by PPC Cement (Pty) Limited

 Approve the conversion of par value shares to no par value shares and that the whole of the amounts of the ordinary share capital account and the share premium account of the company be transferred to the stated capital account of the company

 Approve the increase of the authorised ordinary shares from 600 000 000 to 700 000 000 shares

 Permit the company name change from Pretoria Portland Cement Company Limited to PPC Ltd

 Approve the adoption of the new memorandum of incorporation

 Permit the company to provide financial assistance to the Employee Share Trust and directors or prescribed officers of the company or of a related or inter-related company, that are or will be beneficiaries of the Employee Share Trust, for the purpose of enabling the trust to subscribe for the initial employee shares

 Permit the company to provide financial assistance in relation to the BEE transaction, to the SBP vehicle, the PPC Bafati Investment Trust and persons referred to in terms of section 42(2) of the Companies Act

 In line with the BEE transaction, permit the company to repurchase the Employee Share Trust, SBP vehicle and the PPC Bafati Investment Trust repurchase shares at the end date.

sPecial ResolUtions PasseD BY

sUBsiDiaRY comPanies

No special resolutions were passed by subsidiaries of the company.

for the year ended 30 September 2012

DiViDenDs

cents per share

no Description Declaration date Record date Payment date 2012 2011 2010

218 Final 12 November 2012 11 January 2013 14 January 2013 108 95 130 217 Interim 17 May 2012 8 June 2012 11 June 2012 38 35 45

PRoPeRtY, Plant anD eQUiPment

At 30 September 2012, the group’s net investment in property, plant and equipment amounted to R4 483 million (2011: R4 287 million; 2010: R4 175 million), details of which are set out in note 1 to the group financial statements. Capital commitments at the year end amounted to R317 million (2011: R639 million; 2010: R493 million). There has been no change in the nature of the property, plant and equipment or to the policy relating to the use thereof during the year.

In terms of the Constitution of Zimbabwe, land with a value of R26 million (2011: R25 million; 2010: R22 million) is exposed to the risk of expropriation by the Zimbabwean government without compensation, however the land has been fully impaired.

Certain of the company’s properties are the subject of land claims. The company is in the process of discussion with the Land Claims Commissioner and awaiting the outcome of claims referred to the Land Claims Court. The claims are not expected to have a material impact on the company’s operations. Furthermore, some of the company’s properties have been illegally invaded and the  company is following legal processes to resolve the invasion. This is not expected to have a material impact on the operations of the group.

BoRRoWinGs

The company’s borrowing powers are unlimited. At 30 September 2012, borrowings amounted to R3 585 million (2011: R3 510 million; 2010: R3 521 million), and remain within the board’s stated target debt levels. Excluding the consolidated debt of the BEE funding transaction, group debt is R2 345 million (2011: R2 327 million; 2010: R2 378 million). Further details can be found in note 11 to the group financial statements.

The borrowing powers of Portland Holdings Limited, a wholly-owned subsidiary company, incorporated in Zimbabwe, are limited by its articles of association to twice the amount of shareholders’ interest. At 30  September 2012 Portland Holdings Limited did not have any borrowings.

DiRectoRs’ RePoRt continued