2015 at a glance Our business Strategic and operational...

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PPC Ltd Integrated report 2015 51

52 PPC Ltd Integrated report 2015

CORPORATE GOVERNANCE REVIEW

ChairmanKey objectives:

Board leadership and performance, custodian of the corporate

governance processes.

More on page 53.

The PPC boardKey objectives:

Strategic planning, setting objectives, appointing CEO, monitoring

implementation of board plans and strategies.

More on page 54.

The investment committeeKey objectives:

Evaluation investment in or divestment from other enterprises

for purposes of enhancing the

sustainable income of the group.

See page 61 for more details.

Social, ethics and

transformation committeeKey objectives:

Monitor company activities on social, transformation and

economic development, stakeholder

relationships, good corporate citizenship, environment, labour

and employment.


Audit committeeKey objectives:

Provide governance and compliance

oversight over the financial results, performance of

internal and external

audit and the group’s system

of internal control.


Remuneration committeeKey objectives:

Establish a remuneration policy, monitor

executive remuneration and

ensure the mix of salary and incentives

supports achieving PPC’s targets.


Nominations committeeKey objectives:

Ensure appropriate board composition

induction and training of directors

and succession plans.


Risk and compliance committeeKey objectives:

Oversee implementation of an effective policy and plan for risk

management and disclosure on

risk that is comprehensive and

relevant.


GOVERNANCEOur governance report is structured in two parts in line with the latest practice in governance reporting. The first part tells the governance storyof PPC, while the second focuses on compliance with applicable governance and regulatory standards.

PART 1High level overview of governance in the PPC group

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The chairman of our board is Bheki Sibiya who has been annually reappointed since 2008. He was an independent non-executive director for most of the review period. As chairman, he is responsible for board leadership and board governance, assisted by the company secretary. Together, they are responsible for the board’s annual work plan and ensuring the performance of the board is annually reviewed against performance standards.

In executing his responsibilities and those of the board, Bheki is assisted by a very capable team of directors. On 17 November 2015, 13 directors served on the group board. The majority were non-executive directors, with an independent majority when classified against JSE listings requirements.

More information on board composition and activities follows in this report. Most notable was the appointment of a new CEO, Darryll Castle, in January 2015 and the appointment of six new non-executive directors at the AGM in January 2015. The board also confirmed the appointed of Tim Ross as lead independent director.

During the year the following resignations were received:Joe Shibambo (January 2015)Ntombi Langa-Royds (January 2015)Dr Daniel Ufitikirezi (September 2015)

Key roles and responsibilitiesKey roles in the corporate governance of PPC lie mainly in the responsibilities of three functionaries:

The chairman: Bheki SibiyaThe role of the chairman is set out in a document approved by the board:

Lead the board, not the companySafeguard the integrity of corporate governance processes and actions as determined collectively by the boardBe the link between the board and management, particularly the CEOBe the main link between the board and shareholders, and the public at large

The CEO: Darryll CastleThe role of the CEO is determined by the board, formalised in the board charter and managed through his annual scorecard:

The CEO leads the company and the management team. He is responsible for the day-to-day operations of the company and is its principal spokesperson, while the chairman is the leader of the board

The company secretary: Jaco SnymanThe role of the company secretary is largely determined in section 88 the Companies Act 2008 (the Act):

Guiding PPC’s directors collectively and individually on their duties, responsibilities and powersMaking directors aware of any law affecting the companyReporting to the board any failure by the company or a director to comply with the memorandum of incorporation, rules of the company or the ActEnsuring minutes of all shareholders’ meetings, board meetings and the meetings of any committees of the directors are properly recordedCertifying in the annual financial statements whether the company has filed required returns and notices in terms of this Act, and whether all returns and notices appear to be true, correct and up to dateEnsuring a copy of the company’s annual financial statements is sent to every person who is entitled to it

The group company secretary provides the board as a whole and directors individually with guidance on discharging their responsibilities. He is a central source of information and advice to the board and in the company on matters of ethics and good governance. He also ensures the proceedings and affairs of the board, its committees, the company itself and, where appropriate, owners of securities in the company are properly administered in line with pertinent laws. Details of his qualifications and experience appear on page 24. The board evaluates the company secretary’s performance as part of its annual board evaluation.

He is responsible for compliance with the rules and listings requirements of the JSE and the Zimbabwe Stock Exchange on which the company’s securities are listed and administers the statutory requirements of the company and its subsidiaries in South Africa.

The company secretary is satisfied that he is able to effectively perform the role as gatekeeper of good governance in the company and to carry out his role and responsibilities as company secretary.



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

Bridgette Modise

Todd Moyo

Executive directors Non-executive directors Independent non-executive directors

Bheki Sibiya

Tim Ross

Tim Leaf-

WrightNicky Goldin

Charles Naude

Peter Nelson

Peter Malungani

Sydney Mhlarhi

Tito Mboweni

Tryphosa Ramano

Darryll Castle

The nominations committee annually evaluates whether the board’s size, diversity and demographics make it effective. A number of studies have shown that the composition of the board can have a significant impact on company performance. Early studies on board composition focused on factors such as independence of directors, with the impact of cognitive diversity in decision-making gaining recognition only in recent years. Recent diversity studies have focused on gender diversity with interesting, but mixed, results.

At year-end, the board comprised an independent non-executive chairman, two executives and 11 non-executive directors. At its meeting in November 2015, the nominations committee evaluated the independence of non-executive directors and concluded that the following directors are independent as defined in King III (the code) and the JSE listings requirement directors:

The board has made notable progress in transformation and compliance with the code as reflected in the following graphs.

Balance between executives and non-executivesDuring the review period, the balance on the PPC board between executive and non-executive directors moved further in favour of non-executive directors after the appointment of additional non-executives while the number of executives remained at two.

CORPORATE GOVERNANCE REVIEW CONTINUED

BALANCE BETWEEN EXECUTIVES AND NON-EXECUTIVES

10

12 12 12

14 14

1211

13

15

12

9

0

3

6

2007 2008

Executive directors Non-executive directors

2009 2010 2011 2012 2013 2014 2015

Gender balanceAt PPC, 23% of board members are women, and the chairperson of the risk committee is female.

GENDER BALANCE

10

12 12 12

14 14

12 1213

15

12

9

0

3

6

2007 2008

Women Men

2009 2010 2011 2012 2013 2014 2015

Racial balanceAt 17 November 2015, 53% of directors were black.

RACIAL BALANCE

10

12 12 12

14 14

1211

13

15

12

9

0

3

6

2007 2008

Black directors White directors

2009 2010 2011 2012 2013 2014 2015

Age analysisAge diversity is considered when the nominations committee evaluates board composition. The average age of directors is 54.


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Board tenureAll major ratings agencies include an assessment of board tenure as one of their criteria for evaluating board effectiveness, with longer tenure potentially leading to lower scores. The average tenure on our board is three years.

BOARD TENURE

2,64

4,54

3,0

5

4

3

2

1

02013 2014 2015

Directors are appointed through a formal process and the nominations committee assists in identifying suitable candidates to propose to shareholders. This process is detailed in the company’s selection and appointment policy. The primary objective of this policy is to provide a transparent framework and set standards for the selection and appointment of high-calibre executive directors and non-executive directors with the capacity and ability to lead the company towards sustainable value creation and long-term growth. The nominations committee oversees this policy.

A formal induction programme is in place for new directors, and directors with less experience are developed through training programmes. For continuing development, PPC encourages directors to attend the professional development programmes of the Institute of Directors in Southern Africa (IoDSA).

While no limitations are imposed by the board charter, or otherwise, on the number of other appointments directors can have, approval must be obtained from the chairman prior to accepting additional commitments that may affect the time directors can devote to the group.

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

BOARD MEMBERS*

BOARD STRATEGY

SESSION BOARD AGM AUDIT

RISK AND

COM-PLIANCE

NOMI-NATIONS

REMUNE-RATION

SOCIAL, ETHICS

ANDTRANSFOR-

MATIONINVEST-

MENTATTEND-

ANCE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

J Shibambo^ 1/1 1 2/2

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



Annual board evaluationThe code requires annual board performance evaluations by the chairman or an independent service provider and that the results of these evaluations should identify training needs for directors. This year, the nominations committee appointed the IoDSA to conduct the annual evaluation. Key findings included:

Board members would appreciate more interaction with line managementThe board was of the view that succession planning must be made a priority in future. The experience with the last CEO left PPC exposedBoard members believed there was not enough flow of information from management to the board between board meetingsRound-robin resolutions are circulated with insufficient informationMore can be done to keep stakeholders informed of major issues as they ariseThe late delivery of certain sections of board packs was also mentioned

The findings of this assessment have been shared with both the 2014 and current board members at two separate events. As a result, most findings have been addressed by the CEO, chairman and company secretary.

Strategic planningAs a key performance area of the board, group strategy is mapped by the board in consultation with PPC’s executive committee (exco). The board appreciates the fact that strategy, risk, performance and sustainability are inseparable and annually reviews the strategy at its meeting in July.

Internal controlReporting in the company is structured so that key issues are escalated through the management team and ultimately to the board, if appropriate.

The board has delegated to the audit committee responsibility for reviewing, in detail, the effectiveness of the company’s system of internal controls. After completing these reviews, the committee reports to the board on its findings so that the board can take a view on this matter. This has been subject to regular review over a number of years, resulting in several refinements.

DelegationThe board delegates certain functions to committees and management, without abdicating its own responsibilities. Delegation is formal and involves:

Approved and documented terms of reference for each committee of the boardTerms of reference are reviewed once a yearThe committees are appropriately constituted with due regard to the skills requiredThe board has a framework for delegating authority to management

How board committees operateThe board has six standing committees through which it operates. Committees play an important role in enhancing good corporate governance, improving internal controls and thus the sustainable performance of the company. The current board committees and their chairpersons are:

Bheki Sibiya

Tim Ross

Bridgette Modise

Tito Mboweni

Peter Malungani

Peter Nelson

Board committees

BOARD COMMITTEE:Nominations

BOARD COMMITTEE:

Audit

BOARD COMMITTEE:

Risk and compliance

BOARD COMMITTEE:

Social, ethics and transformation

BOARD COMMITTEE:

Remuneration

BOARD COMMITTEE:Investment

The chairpersons of these committees are independent non-executive directors, except for the investment committee. Although Peter Malungani is not an independent director, the board has appointed him as chairperson based on his experience and skills.

In the interest of free information flow and good oversight, full or summary minutes of all committee meetings are included in document packs for board meetings. In addition, each chairperson is required to present an annual report on the activities of that committee at the board’s meeting in November.

Based on these reports and minutes of the committees, their performance and conformance to terms of reference are annually evaluated by the board.

At its meeting in November 2015, the board concluded that all committees had executed their responsibilities within the scope of their respective terms of reference in the review period.

All the committees may obtain, at PPC’s expense, independent professional advice on any matters covered by its terms of reference.


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

NAME QUALIFICATION STATUS

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

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

Todd Moyo and Peter Nelson were appointed to the committee in February 2015. Darryll Castle resigned as a member of the committee on his appointment as CEO.

Tim Ross has chaired the committee since 2009. He was a partner with Deloitte for 36 years and retired in May 2008. Tim is a member of the South African Institute of Chartered Accountants.

Members of the executive team, including the CEO and CFO, attend committee meetings by invitation. Similarly, external and internal auditors attend meetings by invitation and have no voting rights. The chairperson reports to the board on the committee’s activities and recommendations. The chief audit executive reports to the chairperson of the committee and to the CEO on day-to-day matters. The latest minutes of committee meetings are included in board packs.

The audit committee has adopted formal terms of reference that have been approved by the board, and has executed its duties in the past financial year in line with these terms of reference. Among others, the committee’s terms of reference include the following responsibilities:

Financial statementsThe committee reviews the annual financial statements, interim and preliminary announcements, accompanying reports to shareholders and any other announcements on the company’s results or other financial information to be made public, prior to submission and approval by the board.

Integrated reportingThe committee oversees integrated reporting, particularly:

All factors and risks that may affect the integrity of the integrated report, including factors that may predispose management to present a misleading picture, significant judgements and reporting decisions made, monitoring or enforcement actions by a regulatory body, any evidence that brings into question previously published information, forward-looking statements or information

Reviews the annual financial statements, interim reports, preliminary or provisional result announcements, summarised integrated information, any other intended release of price-sensitive information and prospectuses, trading statements and similar documentsComments in the annual financial statements on the financial statements, accounting practices and effectiveness of internal financial controlsReviews disclosure of sustainability issues in the integrated report to ensure this is reliable and does not conflict with the financial informationRecommends to the board whether or not to engage an external assurance provider on material sustainability issuesReviews the content of summarised information for whether it provides a balanced viewEngages the external auditors to provide assurance on summarised financial informationPrepares a report for inclusion in the integrated report and annual financial statements for the financial year (page 64): – Describing how the audit committee carried out its functions – Stating whether the committee is satisfied that the auditor was

independent of the company – Commenting in any way it considers appropriate on the

financial statements, accounting practices and the internal financial control of the company

Recommends the integrated report for approval by the board

Internal auditThe committee is responsible for overseeing the internal audit function, in particular:

The appointment, performance assessment and/or dismissal of the chief audit executiveReviewing the internal audit charterThe appointment, performance assessment and/or dismissal of any outsourced/company’s internal audit service providerApproving the internal audit plan and any significant changes, and satisfying itself that this plan will effectively address critical risk areas of the businessEnsuring the internal audit function is subject to an independent quality review, as the committee determines it appropriateReviewing internal audit’s compliance with its charter as approved by the audit committee and considering whether the internal audit function has the necessary resources, budget and standing in PPC to enable it to discharge its functions

Risk managementThe committee is an integral component of the risk management process. Specifically, the committee must oversee:

Financial riskFinancial reporting risksInternal financial controlsFraud risks as these relate to financial reportingIT governance and risks as these relate to financial reporting



External auditThe committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process. In this regard, the committee must:

Nominate an independent external auditor for appointment by shareholdersDetermine the fees to be paid and terms of engagement of the auditor Ensure the appointment of the auditor complies with the Act and other relevant legislationMonitor and report on the independence of the external auditor in the annual financial statementsDefine a policy for non-audit services provided by the external auditorPre-approve contracts for non-audit services to be rendered by the external auditorEnsure there is a process for the committee to be informed of any reportable irregularities (as identified in the Auditing Profession Act 2005) identified and reported by the external auditorReview the quality and effectiveness of the external audit process

Financial directorThe audit committee must annually consider and satisfy itself of the appropriateness of the expertise and experience of the financial director and must confirm this to shareholders in its annual report.

Financial functionThe committee reviews the expertise, resources and experience of the company’s finance function, and discloses the results in the integrated report and to shareholders.

Internal controlsThe chief audit executive has completed a report to the board on the effectiveness of controls and risk management, which was tabled at the board meeting in November 2015. In this report, he concluded that he is satisfied that the governance, risk management and internal controls are adequate to identify any breakdowns that would result in material loss to the group. He confirmed that nothing has come to his attention to cause him to believe that PPC’s system of internal control is not generally effective to sufficiently mitigate key risks. He also concluded that he was not aware of anything that would cause him to believe that controls over financial processes do not provide a sound basis for preparing reliable financial statements.

IT governanceIn recent years, PPC has made appropriate investments to ensure its information technology (IT) systems and governance processes comply with the recommendations of King III. This is detailed in the King III application table on our website. Specific developments during the year included:

The IT charter, framework and policy documents were reviewed and approved by the audit committee, and implemented

The IT strategy was approved by the board and is aligned to the business strategy and objectives by focusing on robust infrastructure, an enabling platform and solid governance processesInitiating an information security management system to ensure the integrity, confidentiality and availability of information

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


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

CFA Executive

T Leaf-Wright Chartered Institute of Secretaries

Independent

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

The CEO, Darryll Castle, was appointed to the committee to align it with the best practice recommendations of the code during the year. All other members of the committee are non-executive directors.

Members of the executive team responsible for risk and compliance management attend committee meetings by invitation. Similarly, external and internal auditors attend meetings by invitation but have no voting rights. The chairperson reports to the board on activities and recommendations made by the committee and the latest minutes of committee meetings are included in board packs.

The committee has its own terms of reference approved by the board, to assist its members to understand their roles and enable them to add value in discharging their duties. The committee’s terms of reference are reviewed annually. Among other issues, the committee’s terms of reference include responsibility to:

Oversee the development and annual review of a policy and plan for risk management to recommend for approval to the boardMonitor implementation of the policy and plan for risk management through related systems and processesMake recommendations to the board on the levels of risk tolerance and appetite, and monitor that risks are managed within these levels as approved by the boardApprove the company’s compliance policy and oversee that the policy is disseminated through the companyOversee that the risk management plan is disseminated throughout the company and integrated in its day-to-day activitiesEnsure risk assessments are performed continuouslyEnsure compliance management assessments are continuously performedEnsure frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks


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The committee performs all the functions necessary to fulfil its role as stated in its terms of reference including:

Ensuring the establishment of a formal process for appointing directors, including: – Identifying suitable members for the board – Performing reference and background checks of candidates

prior to nomination – Formalising the appointment of directors through an agreement

between the company and the directorOverseeing the development of a formal induction programme for new directorsEnsuring inexperienced directors are developed through a mentorship programmeOverseeing the development and implementation of continuing professional development programmes for directorsEnsuring directors receive regular briefings on changes in risks, laws and the environment in which the company operatesConsidering the performance of directors and taking steps to remove directors who do not make an appropriate contributionFinding and recommending to the board a replacement for the CEO when necessaryEnsuring formal succession plans for the board, CEO and senior management appointments are developed and implementedProviding input on senior management appointments as proposed by the CEO

The committee reported on its activities for the review period at the board meeting in November 2015. At this meeting, the board confirmed that the committee has complied with its terms of reference.

About the remuneration committeeThe members of the remuneration committee are:


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

During the year, Mr Nelson was appointed as chairman of this committee. Ms Goldin, Mr Naude and Mr Sibiya were appointed as new members. All members are non-executive directors. PwC, appointed by the company, acted as remuneration advisers to the committee and provided detailed information on market trends and the competitive positioning of remuneration.

Ensure management considers and implements appropriate risk responsesEnsure continuous risk monitoring by management takes placeLiaise closely with the audit committee and other board committees to exchange information relevant to riskExpress a formal opinion to the board on the effectiveness of the system and process of risk managementReview reporting on risk management and compliance in the integrated report in terms of being timely, comprehensive and relevant

For a more detailed review on risk, refer to page 66. The report on compliance appears on page 68.


About the nominations committeeThe members of the nominations committee are:


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

Mr Ross (lead independent director) stepped down as chairman and member of the committee after Mr Castle was appointed as CEO in January 2015 and Mr Sibiya could step down as executive chairman of PPC. Mr Mboweni and Dr Ufitikirezi were appointed as new members of this committee in February 2015. Dr Ufitikirezi resigned as a director of the board during the year and was not replaced on the nominations committee.

The committee normally asks the CEO to attend its meetings, but he has no voting rights.

The committee has its own terms of reference, approved by the board, which are reviewed annually. The chairperson reports to the board on activities and recommendations made by the committee and the latest minutes of committee meetings are included in board packs.


The committee normally asks the CEO to attend its meetings but he has no voting rights. He does not participate in discussions on his own remuneration, which is set by the committee.

The committee performs all functions necessary to fulfil the role stated in its terms of reference, including:

Overseeing the establishment of a remuneration policy that will promote achieving strategic objectives and encourage individual performanceEnsuring the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders once every yearReviewing the outcomes of implementing the remuneration policy against set objectivesEnsuring the mix of fixed and variable pay, in cash, shares and other elements, meets the company’s needs and strategic objectivesSatisfying itself on the accuracy of recorded performance measures that govern the vesting of incentivesEnsuring all benefits, including retirement benefits and other financial arrangements, are justified and correctly valuedConsidering the results of the performance evaluation of the CEO and other executive directors, both as directors and as executives in determining remunerationSelecting an appropriate comparative group when comparing remuneration levelsRegularly reviewing incentive and retention schemes to ensure continued contribution to shareholder value and that these are administered in terms of the rulesConsidering the appropriateness of early vesting of share-based schemes at the end of employmentAdvising on the remuneration of non-executive directorsOverseeing the preparation of the remuneration report and recommending to the board this be included in the integrated report

The remuneration policy of the company is annually presented to shareholders. PPC’s remuneration policy appears on page 70 and shareholders will be requested to pass a non-binding advisory to indicate support for this policy at the annual general meeting.

The committee has reviewed group remuneration policies to ensure these are aligned with the company’s strategy and linked to individual performance.


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


T Mboweni (chair)

BA, MA, CD(SA) Independent

MP Malungani BCom Non-executiveT Leaf-Wright Chartered Institute

of SecretariesIndependent

During the year Mr Mboweni was appointed as the chairman of this committee and Mr Leaf-Wright as a new member. All members are non-executive directors.

The committee has its own terms of reference approved by the board and reviewed annually. The chairperson reports to the board on activities and recommendations made by the committee and the latest minutes of committee meetings are included in board packs.

In line with its terms of reference, the committee’s objectives are to assist the board in monitoring PPC’s activities – against relevant legislation, other legal requirements or prevailing codes of best practice – on matters relating to:

Social and economic developmentCorporate citizenshipTransformationThe environmentHealth and public safetyStakeholder relationshipsLabour and employment



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Operational investments (business unit growth objectives)Approve investment decisions above threshold levelsConsider and evaluate the merits of investment proposals, impact of the proposal on operational strategy and the likelihood of achieving the targeted return from that investment Monitor the performance of the group relative to the investment objectives of managementApprove proposed divestments of assets in the operational portfolio, terms of divestment transactions to be considered and exit strategies

Other initiatives (improve efficiencies in a cost-effective way)Approve initiatives with a total cost above threshold (total cost will include all cost elements and should be calculated over the total project lifespan)Consider the strategic impact of the proposed initiative Evaluate the financial merits in initiative business cases

PART IICorporate governance complianceThis section deals with disclosure on compliance with relevant and prescribed corporate governance principles. For the convenience of shareholders, all King III disclosures are made in one place to give the reader a complete picture.

Compliance with King III on corporate governanceIn the year ended 30 September 2015 and to the date of this document, we complied with the practices and applied the principles of the King Report on Corporate Governance known as King III (the code) unless indicated otherwise. The full review is available on the company’s website at http://www.ppc.co.za/media/104058/2015-report-on-the-application-of-the-king-iii-principles-vers-4.pdf.

We describe how we have applied those principles in this report, notably, in the following section, together with the sections on risk management, IT governance and directors’ remuneration.

About the investment committeeDuring the year, the board established the investment committee. This replaces the ad hoc deal committee and has an extended responsibility. See the details below.

The members of the Investment committee are:


MP Malungani (chair)

BCom Non-executive

N Goldin BCom, MBA IndependentT Leaf-Wright Chartered Institute

of SecretariesIndependent

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

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

The committee has its own terms of reference approved by the board and performs all functions necessary to fulfil the role stated in its terms of reference, including:Strategic investments (to enhance long-term sustainable income)

Consider prospective acquisitions for their ability to enhance the long-term sustainable income of the groupEvaluate the merits of investment proposals within strategic guidelines, potential financial returns and risk of the investmentEvaluate/monitor the performance of strategic investments included in the strategic investment portfolio, relative to the original business plan Approve proposed divestments from identified investments and the terms of divestment transactions

Strategic alliances (to position PPC strategically for future markets/benefits)

Consider prospective strategic alliancesEvaluate the merits of alliance proposals to consider the benefits that could derive from the proposed positioning relative to the imposed risks (especially reputation risk)Evaluate/monitor the performance of strategic alliances relative to original objectivesApproval to exit strategic alliances as well as associated conditions for divestment



Compliance with mandatory principles for JSE main board issuersParagraph 3.84 of the JSE listings requirements stipulates that issuers must comply with specific requirements on corporate governance and issuers do not have the option of explaining any non-compliance. PPC has complied with all mandatory principles to the extent indicated below.

PARAGRAPH REQUIRED PRACTICE COMPLIANCE

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

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

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

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

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

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

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

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

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

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

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

The nominations committee annually evaluates the independence of all directors.

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

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

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

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


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PARAGRAPH REQUIRED PRACTICE COMPLIANCE

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

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

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

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

Compliance with non-mandatory principlesParagraph 8.63(a) of the listings requirements deal with principles of the code that are not mandatory, and the King committee issued a practice note on reporting in terms of this paragraph in 2013.

The King committee recommends that this assessment be documented and reported in the form of a register. The register should cover all 75 King III principles and include detail on how each principle is applied. This register should be a living document and be continually updated.

The King committee, after consulting with the JSE, has recommended that JSE issuers publish their complete King III application register on their websites. The company’s register is published on its website http://www.ppc.co.za/media/104058/2015-report-on-the-application-of-the-king-iii-principles-vers-4.pdf.


AUDIT COMMITTEE REPORTReport to shareholders on the activities of the audit committee for the year ended 30 September 2015The audit committee is a committee of the board of directors and in addition to having specific statutory responsibilities to shareholders in terms of the Companies Act, it assists the board by advising and making submissions on financial reporting, oversight of the risk management process and internal financial controls, external and internal audit functions and statutory and regulatory compliance of the company.

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

CompositionThe committee consists of four independent non-executive directors:

NAME QUALIFICATION

PERIOD SERVED (YEARS)

TDA Ross (chairman) CA(SA) 7

B Modise CA(SA) 4

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

PG Nelson CA(SA) 1

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

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

31 March 2015 All present

11 May 2015 All present

2 October 2015 All present

9 November 2015 All present

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

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

Nominated Mr Nyembe, from the audit firm, Deloitte & Touche (Deloitte), for appointment. In the opinion of the committee, Mr Nyembe was independent of the companyDetermined Deloitte’s terms of engagementBelieves that the appointment of Deloitte complies with the relevant provisions of the Companies Act, JSE listings requirements and King IIIDeveloped and implemented a policy setting out the extent of any non-audit services the external auditors may provide to the company or which the external auditors may not providePre-approved all non-audit service contracts with DeloitteReceived no complaints on the accounting practices and internal audit of the company, the auditing of its financial statements, internal financial controls, or other related matters; however, a letter was received from the JSE in terms of its proactive monitoring process whereby it requested information around disclosures in the 2014 annual financial statements. The query was satisfactorily addressed

Delegated dutiesIn executing its delegated duties and making its assessments (as reflected in its terms of reference), the audit committee obtained feedback from external and internal audit, and based on the processes and assurances obtained, believes the accounting practices are effective. Accordingly, the committee fulfilled all its obligations including:

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

Integrated reportingRecommended to the board to engage an external assurance provider on material sustainability issuesReviewed the disclosure of sustainability issues in the integrated report to ensure it is reliable and does not conflict with the financial informationRecommended the integrated report for approval by the board

COMMITTEE REPORTS


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Financial functionThe committee has reviewed the expertise, resources and experience of the company’s finance function, and confirms this to shareholdersIn making these assessments, we have obtained feedback from both external and internal auditBased on the processes and assurances obtained, we believe the accounting practices are effective

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

Internal financial controlsReviewed the effectiveness of the company’s system of internal financial controls, including receiving assurance from management and internal auditReviewed material issues raised by the internal and external audit processBased on the processes and assurances obtained, we believe material internal financial controls are effective

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

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

On behalf of the audit committee

Tim Ross (chairman)17 November 2015

Internal auditTook responsibility for the performance assessment of Mr Semenya, chief audit executiveApproved 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 businessReviewed internal audit’s compliance with its charter (which was updated during the year and approved by the committee) and considered whether the internal audit function has the necessary resources, budget and standing within PPC to enable it to discharge its functions

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

Financial risksFinancial reporting risksInternal financial controlsFraud risks as they relate to financial reportingIT governance

External auditEvaluated and reported on the independence of the external auditorReviewed the quality and effectiveness of the external audit processBased on our satisfaction with the results of activities outlined above, recommended to the board that Deloitte should be reappointed for 2015, with Mr Nyembe nominated as the registered auditorDetermined the fees to be paid and the terms of engagement of the auditorEnsured the appointment of the auditor complies with the Companies Act and other relevant legislation

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


COMMITTEE REPORTS CONTINUED

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

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

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

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

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

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

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

ESTABLISHING CONTEXT

COMMUNICATION AND CONSULTATIONMONITOR AND

REVIEW

RISK MITIGATION

RISK ASSESSMENT

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

RESPONSIBILITIES AND REPORTING

BUSINESS UNITGeneral managers, country managers

and project managers

EXECUTIVE COMMITTEEFunctional and

operational executives

BOARDRisk and compliance

committee

UNIT-SPECIFIC RISK Develop business unit risk registers

and profilesMonitor risk responsesGeneral risk awareness

RISK MANAGEMENTDevelop annual risk plans

Consolidate the business and functional risk registers

Review the corporate risk exposure

Monitor risk management

RISK GOVERNANCEApprove risk policy

Approve risk frameworkApprove annual risk management plans

Monitor progress on risk Review effectiveness of risk

assessments


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

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

2016 TARGET

CURRENT

MATURITY MODEL

INITIAL

management strategy

standards, tools and techniques

INFORMAL

“risk-specific”

integration

an event with negative consequences

techniques without formal application of standards

between “risks” and “hazards”

GOVERNANCE-DRIVEN

framework, programme statement and policy

assessments

all risk types not approached uniformly

INTEGRATED AND CHANGE-DRIVEN

management approach to risk

management across all units

managed in a uniform system

uncertainty and linked to objectives

performance-based standards

INTELLIGENT AND OPTIMISED

approach

and informed decision-making

systems integrated

embedded in culture

understanding of standards, tools and techniques

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

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

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

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

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

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


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

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

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

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

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

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

PPC CODE OF ETHICS, POLICIES, GUIDELINES AND GOVERNANCE

COMMUNICATION AND REPORTING

PREVENTION

board

compliance officers

compliance

short-term incentive scheme of the group

DETECTION

compliance risks

procedures

random audits both internal and external

RESPONSE

findings

compliance performance

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

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



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Legislation watchlist

CURRENT WATCHLIST OF PPC SA

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

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

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

Draft National Environmental Laws Amendment Bill 2015.

Draft National Greenhouse Gas Emission Reporting Regulations.

Carbon Budgets and Desired Emission Reduction Objective (Deros).

Employment Equity Amendment Act.

Draft Carbon Tax bill.

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

The following compliance initiatives are worth mentioning:

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

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

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

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

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

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

Bridgette ModiseChairman of the risk and compliance committee17 November 2015


PPC REMUNERATION REPORT

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

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

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

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

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

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

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

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

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

Peter NelsonChairman of the remuneration committee17 November 2015



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PART 1: REMUNERATION POLICYGovernance and the remuneration committeeRole of the remuneration committeeAs a committee of the board, the remuneration committee assists in setting the company’s remuneration policy and directors’ and prescribed officers’ remuneration. The remuneration committee operates according to its terms of reference, which are published on the company’s website.

Members of remuneration committeeMembers are non-executive directors, and the majority are independent as defined by King III. The committee held four meetings in 2015, with attendance shown on page 55.

The chief executive, chief financial officer and head of human resources attend meetings by invitation, to assist the committee in executing its mandate. Other members of executive management can be invited when appropriate. No executives participate in the vote process or are present at committee meetings when their own remuneration is discussed or considered.

The remuneration committee uses the services of PwC as standing independent advisers.

Remuneration committee terms of referencePlease refer to page 60 for the remuneration committee’s terms of reference

OUR REMUNERATION POLICY

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

Ensure employees are rewarded fairly and appropriately

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

FIXED PAY

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

for performance

SHORT-TERM INCENTIVES

Aligned to financial performance and strategic

priorities

LONG-TERM INCENTIVES

Aligned to shareholder returns

Key principles of the remuneration policyPPC recognises that one of its competitive sources of value is its employees, and believes that in order to meet business objectives, the remuneration and reward policies and practices must be based on the following principles:

Encourage organisational, team and individual performanceDesigned to drive a high-performance cultureBased on the premise that employees should share in the success of the companyBe designed to attract and retain high-calibre individuals with the optimum mixture of competenciesTakes 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 strategyTotal rewards are set at levels that are competitive in the relevant marketIncentive-based rewards are earned by achieving demanding performance conditions consistent with shareholder interests over the short, medium and long termIncentive plans, performance measures and targets are structured to operate effectively throughout the business cycleThe design of long-term incentives is prudent and does not expose shareholders to unreasonable financial risk



Remuneration of executive directors and prescribed officersElements of remuneration

ELEMENT DEFINITION

Fixed Total guaranteed pay (TGP)

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

Variable Short-term incentives (STIs)

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

Long-term incentives (LTIs)

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

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

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

The total remuneration for the CEO, CFO and other prescribed officers (on average) in three different performance scenarios is depicted in the graphs below. A graph of the actual remuneration outcomes for the year appears on page 78 of Part 2 of this report.

BELOW EXPECTED PERFORMANCE (R000)7 000

6 000

5 000

4 000

3 000

2 000

1 000

0Prescribed officers Chief financial officer Chief executive officer

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

AT EXPECTED PERFORMANCE (R000)15 000

12 000

9 000

6 000

3 000


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

TGP

MAXIMUM PERFORMANCE (R000)18 000

16 000

14 000

12 000

10 000

8 000

6 000

4 000

2 000


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


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

Monthly pay and benefits are targeted to be competitive for comparable roles in companies of similar complexity and size, taking cognisance of the performance of the employee concerned. Market data is used to benchmark salary and benefits and to inform decisions on salary adjustments. Salary increases are not guaranteed and are adjusted annually at financial year-end based on market benchmarks, market inflation, and company affordability, performance and to address market anomalies.

Professional advisers appointed by the remuneration committee provide benchmark information.

In the reporting period, a new listed comparator group was selected to benchmark executive remuneration. The grouping was based on the basic materials, industrials and consumer goods sectors on the JSE. In addition, market capitalisation and companies with an African and international reach were also considered. The selected peer group selected comprises: Omnia Holdings Limited, Lonmin plc,

AECI Limited, KAP Industrial Limited, RCI Foods Limited, Tongaat Hulett Limited, Sibanye Gold Limited, African Rainbow Minerals Limited, Northam Platinum Limited, Barloworld Limited, Sappi Limited, Nampak Limited, AVI Limited, Gold Fields Limited and Exxaro Resources Limited.

BenefitsThe following benefits are provided as part of TGP:

Participation in the PPC Retirement Fund is compulsory for all permanent employees. The fund is an in-house defined contribution fund and also provides risk cover for death and disabilityAll employees are required to belong to a choice of company-sponsored external medical aids or to be a member of their spouse/life partner’s medical aidAll employees are covered for death, medical and disability expenses as a result of an accidentEmployees who need to use their motor vehicle in their duties can elect to allocate an appropriate portion of their TGP as a car allowance

Short-term incentives (STIs)

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

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

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

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

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

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

Company performance measures and percentages

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

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

No bonus is payable below threshold performance.

Personal performance measures and percentages

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

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

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


Long-term incentives (LTIs)The company introduced the forfeitable share plan (FSP) in 2011/2012 with awards to executive directors comprising both performance shares (75%) and retention shares (25%).

Prior to that, the company operated a cash settled share appreciation right (SAR) scheme, under which SARs were granted. As leveraged instruments, the SARs provided employees with the right to receive the appreciation in the share price between grant and exercise price.

The company reviewed its LTIs during the course of 2014/2015. The outcome of the review indicated that the FSP in isolation did not provide adequate incentive or leverage to participants, and it was consequently decided to use an equity settled SAR scheme alongside the FSP.

This revised approach recognises the company’s robust business plans and growth opportunities and the importance of delivering on these plans for the long-term benefits of all shareholders. The policy applicable to both instruments is explained below.

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

Operation and instruments

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

Performance versus retention instruments

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

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

PERFORMANCE % (SARs)

RETENTION % (FSPs)

Executive directors 75 25

Prescribed officers 50 50

Performance measurement

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

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

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

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

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

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



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Summary of main changes to the remuneration policyIn 2015, the following material changes were made to the remuneration policy:

STI parameters have been updated to improve alignment to shareholders, and now include strategic non-financial elementsThe LTI was reviewed in detail and an equity settled SAR scheme introduced to be used alongside the FSPLTI performance conditions were reviewed and now include a combination of earnings, cash, return and strategic measuresThe company is moving to the Paterson grading system and the process is expected to be completed by December 2016

PART 2: IMPLEMENTATION OF POLICIES FOR THE REVIEW PERIOD

during the yearThe main issues considered and approved by the remuneration committee for 2015 were:

Review of the remuneration policy Approval of the remuneration committee work plan for 2015Review of best practice relating to executive remunerationApproval of the remuneration reportReview of shareholder feedback following the annual general meetingAnnual salary review and job grading for executive directors and prescribed officers and ratification of the overall salary increase percentage for other staffApproval of the short-term incentive targets for executive directors and prescribed officers and all other staffApproval of the short-term incentive outcomes for 2015 In-depth review of the LTLTI award for the incoming CEOApproval of the 2015 LTI awards for all participants and performance conditions to ensure shareholder alignmentReview of benefits offered to all employeesReview of executive employment agreementsReview of fees payable to non-executive directors

2015 total guaranteed pay (TGP) adjustmentsExecutive directors and prescribed officers received on average a 6% adjustment to TGP. This compares to an increase percentage range of between 6% and 7% for all other employees.

BEE schemesSouth African employees participated in a BBBEE scheme in 2008 and a second scheme in 2012. Certain directors and prescribed officers also participated in these schemes as detailed on page 81.

Employment contracts – executive directorsThe remuneration committee, subject to circumstances, will maintain the following policy for executive directors’ employment contracts:

All agreements should contain a restraint of trade clause Contracts should not commit the company to pay on termination arising from the director’s failure to perform agreed dutiesEmployment contracts should not contain balloon paymentsIf a director is dismissed because of a disciplinary procedure, a shorter notice period should apply without entitlement for compensation for the shorter notice periodContracts should not compensate directors for severance because of change of control. The newly appointed CEO is an exception having an optional six-month compensation in the event that he decides to resign post the change in control

Appointment of non-executive directorsNon-executive directors appointed during the year are subject to election by shareholders at the first annual general meeting following their appointment, after which they must retire according to the board rotation plan.

Non-executive director feesThe chief executive officer recommends the non-executive director fee structures to the remuneration committee for onward approval by the board, after obtaining input from its independent advisers regarding benchmark studies based on the same comparator group used for executive directors’ remuneration.

As suggested by King III, board fees comprise both a base fee and an attendance fee which, in the remuneration committee’s view, are sufficient to attract board members with the appropriate level of skill and expertise. Fees are not automatically increased, but as a principle, are aimed at the median of the selected comparator group.

Non-binding advisory voteThe remuneration policy contained in Part 1 will be subject to a non-binding, advisory vote at the annual general meeting to be held in January 2016. The remuneration policy is reviewed annually as the company strives to achieve the highest levels of alignment and performance and accordingly shareholder views are central to these reviews.


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

PERFORMANCE MEASURE WEIGHTING ACHIEVEMENT

OUTCOMEDJ

CASTLEMMT

RAMANOPRESCRIBED

OFFICERS1

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

Safety (LTIFR) 10% 0 0 0 0

Company performance 55% 55% 55%x x x

Personal performance 70% 66% 61%

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

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

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

Annual TGP (R000) 3 9943 4 149 2 477

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

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

STI R000

PERCENTAGE OF TGP

Executive directors

DJ Castle 1 853 35MMT Ramano 1 821 44

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



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2015 LTIs awarded In 2015 the company granted a combination of SARs and FSP shares to executive directors and prescribed officers. The FSP shares were granted as retention awards with continued employment as the vesting criteria, while the SARs were granted as performance awards, subject to company performance conditions and continued employment. The usual vesting period of three years was reduced by three months in recognition of the delays in issuing awards which arose when the company was under a JSE cautionary due to corporate action and was not able to make the awards.

The SAR awards were subject to the following performance conditions:

CONDITIONWEIGHTING

%

THRESHOLD (30%

VESTING)

TARGET (100%

VESTING)

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

The company is facing many challenges and opportunities and has several major local and international investments to bring on stream. The successful delivery of these key strategic initiatives is important to both the long-term success and value of the company. The CEO is the driver of these strategies and integral to success thereof. The remuneration committee was of the view that it would be beneficial to further incentivise and secure the retention of the newly appointed CEO by way of granting additional SARs and FSP shares with a combined value of R6 million, split 75%, 25% respectively. These awards are subject to the same performance and vesting conditions as the 2015 SAR and FSP awards.

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

BASIS OF AWARD

(EXPECTED VALUE

AS A % OF TGP)

PERFORMANCEAWARDS %

(SARs)1

RETENTIONAWARDS%

(FSPs)1

NUMBER OF PERFORMANCE AWARDS (SAR)

NUMBER OF RETENTION

AWARDS (FSP)

INDICATIVE EXPECTED VALUE ON

GRANT DATE R000

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

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



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

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

ACTUAL PERFORMANCE10 000

9 000

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0

STI LTI***

Prescribed officers* Chief financial officer Chief executive officer**

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

TGP

Remuneration paid to executive directors and prescribed officers in 2015

SALARYR000

RETIRE-MENT

AND MEDICAL CONTRI-

BUTIONSR000

CAR ALLOW-

ANCER000

STIR000

LTI REALISED

R000OTHER

R000TOTAL

R000

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

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


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

SALARYR000

TGPRETIRE-

MENT AND

MEDICAL CONTRI-

BUTIONSR000

CARALLOW-

ANCER000

STIR000

LTI REALISED

VALUER0001

OTHERR000

DISCRE-TIONARY

BONUSR000

TOTALR000

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

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

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

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

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



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

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

COMMITTEE

BOARD FEESR000

CHAIR-MAN FEESR000

NOMI-NATIONS

R000AUDIT

R000

RISK AND COM-

PLIANCER000

REMU-NERATION

R000

SOCIAL, ETHICS

ANDTRANSFOR-

MATIONR000

INVEST-MENTR000

SPECIAL MEETINGS

R000TOTAL

R000

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

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

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

COMMITTEE

BOARD FEESR000

CHAIR-MANFEESR000

NOMIN-ATIONS

R000AUDIT

R000

RISK AND COM-

PLIANCER000

REMUNE-RATION

R000

SOCIAL, ETHICS

ANDTRANSFOR-

MATIONR000

SPECIALMEETINGS

R000

INVEST-MENTR000

OTHER4

R000TOTAL

R000

ZJ Kganyago 226 – – 105 18 – – 123 30 502NB Langa-Royds 226 – 51 – – 171 204 268 – 30 950AJ Lamprecht1 56 – 21 – – – 30 – 17 – 124 MP Malungani 246 – – – – – 62 86 180 – 574 SK Mhlarhi 246 – – – – 94 – 89 53 – 482 B Modise 226 – – 118 140 – – 90 – 30 604T Moyo2 189 – 15 – 18 – – 72 – – 294 TDA Ross 244 – – 254 89 – – 107 35 – 729 J Shibambo 246 – 59 – 107 115 100 107 – – 734 BL Sibiya3 – 1 120 – – 18 – – 251 35 – 1 424

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


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

NAME

NUMBER OF SHARES

AS AT 30 SEPTEMBER

2015

NUMBER OF SHARES

AS AT 30 SEPTEMBER

2014

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

Interests of directors and prescribed officers in BBBEE schemesIn 2008, in terms of the company’s first BBBEE transaction, certain executive directors and prescribed officers were granted participation rights in the loan-funded Black Managers Trust which owns shares that are subject to vesting conditions and a lock-in period restricting transferability which expires on 15 December 2016. In addition, during the 2012 financial year, they each received rights to 2 541 shares in a trust owning donated shares which 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 and expiring on 15 December 2014.

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

PARTICIPATION RIGHTS BEE 1 BEE 2

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

*Rights will be forfeited on date of resignation

Shareholder engagement

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

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

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

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

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

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

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

The CEO’s discretionary bonus pool has been discontinued

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



Value of long-term incentives

AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)

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

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

340 000 581 300 170 000 – 751 300 5 152

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

304 200 – – 96 800 207 400 2 201

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

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

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

23 200 18 400 6 500 – 35 100 600

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

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

All instruments are equity settled, unless otherwise indicated.

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


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AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)

Prescribed officers continuedHN ButheleziShare appreciation rights2015/05/29 – 151 200 – – 151 200 19,71 4,11 621 Forfeitable shares – no performance conditions2014/02/18 12 400 – – – 12 400 – 17,10 212 2015/05/29 – 24 300 – – 24 300 – 17,10 416

12 400 24 300 – – 36 700 628

Forfeitable shares – with performance conditions2014/02/18 20 700 – – – 20 700 – 17,10 354 Total – 1 603 JT ClaassenShare appreciation rights2007/08/08 cash settled 40 000 – – – 40 000 43,00 0,09 4 2008/09/17 cash settled 24 000 – – – 24 000 31,80 0,80 19 2009/09/25 cash settled 26 000 – – – 26 000 35,35 0,77 20 2015/05/29 – 148 800 – – 148 800 19,71 4,11 612

90 000 148 800 – – 238 800 655

Forfeitable shares – no performance conditions2012/02/16 10 200 – 10 200 – – – 21,08 2152013/03/15 10 400 – – – 10 400 – 17,10 178 2014/02/18 33 353 – – – 33 353 – 17,10 570 2015/05/29 – 23 900 – – 23 900 – 17,10 409

53 953 23 900 10 200 – 67 653 1 157


51 500 – – 12 700 38 800 368 Total 215 2 180

AC LowanShare appreciation rights2015/05/29 – 103 000 – – 103 000 19,71 4,11 423 Forfeitable shares – no performance conditions2013/03/15 4 800 – – – 4 800 – 17,10 82 2014/02/18 6 500 – – – 6 500 – 17,10 111 2015/05/29 – 16 600 – – 16 600 – 17,10 284

11 300 16 600 – – 27 900 477

Forfeitable shares – with performance conditions2013/03/15 5 400 – – – 5 400 – – – 2014/02/18 10 800 – – – 10 800 – 17,10 185

16 200 – – – 16 200 185 Total – 1 085

All instruments are equity settled, unless otherwise indicated.* Instruments subject to a future performance condition have been reflected as if the performance condition will be fully satisfied, although circumstances may result in a

different outcome.



AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)

Prescribed officers continued

KPP Meijer (leaves

Share appreciation rights2015/05/29 – 170 500 – – 170 500 19,71 4,11 701 Forfeitable shares – no performance conditions2012/02/16 11 200 – 11 200 – – – 18,00 202 2013/03/15 12 300 – – – 12 300 – 17,10 210 2014/02/18 13 300 – – – 13 300 – 17,10 227 2015/05/29 – 27 400 – – 27 400 – 17,10 469

36 800 27 400 11 200 – 53 000 906


56 700 – – 14 000 42 700 380

Total 202 1 987

FK MolefeShare appreciation rights2015/05/29 – 114 400 – – 114 400 19,71 4,11 470 Forfeitable shares – no performance conditions2014/02/18 9 900 – – – 9 900 – 17,10 169 2015/05/29 – 18 400 – – 18 400 – 17,10 315

9 900 18 400 – – 28 300 484

Forfeitable shares – with performance conditions2014/02/18 16 600 – – – 16 600 – 17,10 284

Total – 1 238


different outcome.


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AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)


TR Sibisi (resigned

Share appreciation rights2015/05/29 – 125 900 – – 125 900 19,71 4,11 517 Forfeitable shares – no performance conditions2014/02/18 10 900 – – – 10 900 – 17,10 186 2015/05/29 – 20 300 – – 20 300 – 17,10 347

10 900 20 300 – – 31 200 533

Forfeitable shares – with performance conditions2014/02/18 18 200 – – – 18 200 – 17,10 311

Total – 1 361

JHDLR SnymanShare appreciation rights2007/08/08 cash settled 25 000 – – – 25 000 47,36 0,09 2 2008/09/17 cash settled 27 000 – – – 27 000 31,80 0,80 22 2009/09/25 cash settled 23 000 – – – 23 000 35,35 0,77 18 2015/05/29 – 114 400 – – 114 400 19,71 4,11 470

75 000 114 400 – – 189 400 513

Forfeitable shares – no performance conditions2012/02/16 15 500 – 15 500 – – – 18,95 294 2013/03/15 8 400 – – – 8 400 – 17,10 144 2014/02/18 9 000 – – – 9 000 – 17,10 154 2015/05/29 – 18 400 – – 18 400 – 17,10 315

32 900 18 400 15 500 – 35 800 613

Forfeitable shares – with performance conditions2012/02/16 19 500 – 19 500 – – 2013/03/15 13 900 – – – 13 900 – – – 2014/02/18 15 100 – – – 15 100 – 17,10 258

48 500 – – 19 500 29 000 258

Total 294 1 383

All instruments are equity settled, unless otherwise indicated. * Instruments subject to a future performance condition have been reflected as if the performance condition will be fully satisfied, although circumstances may result in a

different outcome.** Instruments subsequently forfeited on date of resignation.



AWARD DATE

NUMBER ALLOCATED

IN PRIOR

YEARS

NUMBER ALLOCATED

IN CURRENT

YEAR

NUMBER

VESTED IN

CURRENT YEAR

NUMBER FORFEITED

IN CURRENT

YEARCLOSING NUMBER

GRANT PRICE

(R)

PRICE ON EXERCISE

VESTING PRICE

(R)

VESTING GAIN

(R’000)

CURRENT UNIT

VALUE(R)*

VALUE AT YEAR-

END (R000)


JJ TaljaardShare appreciation rights2015/05/29 – 151 000 – – 151 000 19,71 4,11 621 Forfeitable shares – no performance conditions2012/02/16 11 500 – 11 500 – – – 18,00 207 2013/03/15 11 800 – – – 11 800 – 17,10 202 2014/02/18 13 100 – – – 13 100 – 17,10 224 2015/05/29 – 24 300 – – 24 300 – 17,10 416

36 400 24 300 11 500 – 49 200 842

Forfeitable shares – with performance conditions2012/02/16 14 300 – – 14 300 – – 2013/03/15 19 700 – – – 19 700 – – –

2014/02/18 21 900 – – – 21 900 – 17,10 374

55 900 – – 14 300 41 600 374

Total 207 1 837

RS Tomes (resigned

Share appreciation rights2007/08/08 cash settled 33 000 – – 33 000 – 43,00 Forfeitable shares – no performance conditions2012/02/16 9 100 – – 9 100 – – 2013/03/15 9 200 – – 9 200 – – 2014/02/18 12 500 – – 12 500 – –

30 800 – – 30 800 –

Forfeitable shares – with performance conditions2012/02/16 11 300 – – 11 300 – – 2013/03/15 15 400 – – 15 400 – – 2014/02/18 20 800 – – 20 800 – –

47 500 – – 47 500 –

Total

Retired directorsSG Helepi (resigned 14 February 2013)Share appreciation rights2007/08/08 cash settled 18 000 – – – 18 000 43,00 0,09 2

Total – 2


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INFORMATIONTECHNOLOGY

The group information technology (IT) team’s main focus is to facilitate PPC’s strategy and provide the platforms to exploit related technology developments that can enhance the value to the business. One of the key areas of focus is to ensure that IT risks are managed to ensure the long-term sustainability of the business. The IT team is responsible for ensuring PPC’s information assets are protected amid rising security threats in the operating environment.

The group IT strategy has been revised to align with the corporate strategy, and is based on five pillars:

Doing business easier – ensuring all stakeholders (customers, business partners, shareholders, employees, and communities where we operate) find it easier to do business with PPC. As such, we explore new technology platforms like mobility and social media to ensure PPC reaches its stakeholders in the manner they prefer.World-class connectivity and infrastructure – as PPC grows into other geographies, group IT will ensure the necessary infrastructure and connectivity is in place to support the business in achieving its growth requirements. We continue to monitor connectivity initiatives and technology developments throughout the regions in which we operate to establish how best to position PPC to take advantage of developments.Fit for purpose – given the current global operating environment, it is imperative that the group is more prudent in deploying its resources. IT is no exception. We choose simplicity over complexity while ensuring that business requirements are met accordingly. The demand side is managed closely through the IT steering committee where prioritisation and the business fit are determined. Realising value is managed through different executive committees.Monetising the data – to deliver value to our stakeholders, it is imperative to understand the business environment in which we operate. Analytics have been identified as a key area to unlock value from data owned by PPC.Integration of IT and operations technology – technology developments have blurred the lines between IT and operating technology. In capitalising on new trends such as smart metering, radio frequency identification (RFI), and others, it is important that these two environments are integrated to achieve a factory floor to corporate floor view of the business.

IT governanceThe IT environment is governed according to King III. The board has delegated authority to ensure implementation of the IT governance framework to the audit committee. The IT governance framework is supported by COBIT 5 processes. The audit committee receives regular updates (at least quarterly) from the management team on the status of material IT projects. Group internal audit together with the external auditors provide assurance on IT general controls and internal financial controls affected by IT projects. Findings and updates on remedial actions are reported to the executive committee and the audit committee.

The design, implementation and execution of the IT governance framework have been assigned to the group chief information officer, who reports to the chief executive. The group finance executive committee – a sub-committee of the group executive committee – provides oversight on IT governance, with support from the IT steering committee and other management committees. The IT steering committee is responsible for ensuring alignment between IT initiatives and the group’s strategic objectives. It is also responsible for prioritising projects and allocating appropriate resources to execute these.

IT is an integral part of PPC’s risk management. The group compliance division ensures that enterprise IT risks are properly understood and effective mitigation strategies are in place to reduce the impact. IT complies with the group enterprise risk management framework and is intimately involved in risk management processes. The board, through the risk committee and audit committee, receives reports on any IT risks from the compliance division and internal audit. The IT team is the custodian of PPC’s information assets and responsible for ensuring compliance. As the group expands to other geographies, IT ensures compliance with in-country telecommunications laws and other regulations.

TA K I N G A S T R AT E G I C A P P R O A C H

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

Defensive strategies are as important as offensive strategies

88 PPC Ltd Abridged integrated report 2015

2015 at a glance Our business Strategic and operational...

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