The roots of Pretoria Portland Cement Company · The roots of Pretoria Portland Cement Company Limited (PPC) stretch back well over a century to 1892 when it established the ﬁ rst

PPC’s Slurry plant in the North West Province

For PPC, our icon, the elephant, symbolises strength, stature and dependability. This, combined with its wisdom, maturity, family orientation and loyalty, encapsulates the essence of PPC

The roots of Pretoria Portland Cement Company

Limited (PPC) stretch back well over a century to

1892 when it established the fi rst cement plant in

South Africa. PPC listed on the then Johannesburg

Stock Exchange in 1910.

Today, PPC is the leading supplier of cement in

southern Africa. Collectively, eight manufacturing

facilities and three milling depots in South

Africa, Botswana and Zimbabwe are capable of

producing almost eight million tons of cement

products each year.

PPC’s established distribution network supplies

quality branded cement to the building

and construction industry, concrete product

manufacturers, hardware stores and DIY centres.

The group’s product range spans all applications,

supported by a technical services team known for

developing innovative industry solutions.

Related products include aggregates from PPC’s

Gauteng quarries at Mooiplaas and Laezonia,

and in Botswana.

PPC Lime is the leading supplier of metallurgical-

grade lime, burnt dolomite, limestone and related

products in southern Africa. It operates one of

the largest lime plants in the world at Lime Acres

in the Northern Cape, South Africa.

A vital element in maintaining its market

leadership in the region is PPC’s unwavering

commitment to excellence in satisfying customers’

needs and striving for total quality across its

operations.

Fast facts Profi le

Our strategy

• Focus on core businesses

• Generate superior cash fl ow returns

• Achieve global competitiveness

• Develop globally competitive people

• Practise sound corporate, environmental and social governance

• Build on our strengths through synergistic growth

Accreditedas BBBEE level

3

9Group

revenue

-17Energy consumed

per ton of product

Reader note:Given its broad stakeholder base, PPC has elected to publish separate annual financial and sustainability reports in 2009 to enable wider but cost-effective dissemination of its sustainability practices and progress. We also believe a stand-alone sustainability report will enable the group to elicit pertinent feedback from stakeholders that will be incorporated into future strategies and initiatives.

These reports should be read together for a fuller understanding of the group’s performance, strategies and objectives.Where reference is made to other sections in this report, readers are given the page number.

Where reference is made to the companion volume to this report, readers are guided by the icon and page number.

Business objectives

Economic

• Ensure cash fl ow returns that allow for continued reinvestment in and replacement of capacity

• Continuously explore ways to reduce costs and improve effi ciency of operations

Operational

• Reduce energy cost

• Increase manufacturing capacity to meet the country’s needs

Environmental

• Reduce energy consumption

• Rehabilitate and obtain closure certifi cates for all worked-out mining areas

• Meet all legislated emission level requirements and further reduce emissions

• Reduce non-renewable resource requirements by optimising the level of extenders in the fi nal product

Social

• Assist with uplifting disadvantaged communities by investing in and using resources from the communities in which PPC operates

• Skills transfer in disadvantaged communities for sustainable empowerment

• Continue to develop BBBEE in line with applicable guidelines and legislation

Moving forward

Page 1

Pretoria Portland Cement Company Limited Annual Report 2009

Financial highlights

Operating profit

Operating profi t up 4% to R2 418 million

(2008: R2 323 million)

* Excluding impact of the BBBEE IFRS 2 charges and the take-on gain arising from the

consolidation of Porthold

Cash earnings

Cash earnings per share up 6% to 329 cents (2008: 311 cents per share)

0

2 000

4 000

6 000

8 000

2006 2007 2008 2009

4 68

6 5 56

6 6 24

8 6 78

3

Revenue (R million)

0

50

100

150

200

250

300

226

263 28

3

257

Headline earningsper share (cents)

2006 2007 2008 2009

0

1 000

2 000

3 000

2 03

0 2 37

0 2 54

1 2 73

3

EBITDA (R million)

2006 2007 2008 2009

0

500

1 000

1 500

2 000

1 43

7

1 46

0 1 64

4

1 72

8

Cash available from operations (R million)

2006 2007 2008 2009

*

Page 2


Financial summary

• Over 7% of payroll spent on employee

training and development

• Behaviour-based safety campaign results

in 1,5 million accident-free hours for the

Ntšhafatso project

• 15% reduction in CO2 emissions per ton

cement, lime and dolomite from 1990

to 2009

• 17% reduction in energy consumption

per ton cement, lime and dolomite from

2000 to 2009

Sustainability highlights

2009 2008 2007

Financial results (R million)Revenue 6 783 6 248 5 566

Operating profi t* 2 418 2 323 2 174

Property, plant and equipment 3 941 2 813 2 178

Total assets 5 819 4 534 4 882

Cash generated from operations 2 602 2 546 2 192

Ordinary share analysis (cents per share) Headline earnings per share (cents)* 256,8 282,6 263,1

Earnings per share (cents)* 257,3 283,5 265,8

Dividends per share (cents) 200,0 225,0 265,5

Number of employees# 3 234 3 164 3 097

* Excluding BBBEE IFRS 2 charges and take-on gain on consolidation of Porthold# Includes employees in Botswana and Zimbabwe

PPC’s sustainability performance for 2009 is

summarised on pages 58 to 65. A separate sustainable

development report accompanies this annual report.

It can also be accessed on www.ppc.co.za

Page 3

Investment proposition

Operations and locationsp

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1 Hercules 2 Jupiter 3 Slurry 4 Dwaalboom 5 Riebeeck 6 De Hoek 7 Port Elizabeth 8 Colleen Bawn (Zimbabwe) 9 Bulawayo (Zimbabwe) 10 Beestekraal quarry 11 Dwaalboom quarry 12 Slurry quarry 13 Zoutkloof quarry

▲ Cement plants

▼ Limestone quarries

❍ Aggregate quarries

■ Lime quarries

◗ Lime plant

❋ Gypsum quarry

❖ Head offi ce

* Materials handling facility

14 Riebeeck quarry15 Grassridge quarry16 Colleen Bawn quarry (Zimbabwe)17 Lime Acres18 Lime Acres quarry19 Mount Stewart quarry20 Laezonia quarry21 Mooiplaas quarry22 Kgale quarry (Botswana)23 Gaborone (Botswana)24 Head offi ce (Sandton)25 Saldanha

• Leading producer with best geographic spread

• Strong infrastructural demand outlook to 2014

• New capacity available

• Cash generative

• Excellent dividend yield history

• Strong balance sheet

• Financial strength to explore expansion opportunities

• Experienced management team

Page 4


Group at a glance

R million 2009 2008 Change

Revenue 5 948 5 368 11%

EBITDA 2 536 2 281 11%

EBITDA margin (%) 42,6 42,5

Total assets* 5 227 3 944 33%

*Includes Porthold assets of R675 million in 2009

OverviewPPC was established 118 years ago as De Eerste Cement Fabrieken Beperkt and is today the acknowledged market leader in South Africa. The history of PPC is closely linked to the growth and development of South Africa – PPC has produced cement for many of the country’s most famous landmarks and construction projects, including the Union Buildings, Gariep Dam, Van Staden’s River Bridge, new Greenpoint Stadium and much of the rest of southern Africa’s infrastructure.

The company’s cementitious brands in South Africa include the market-leading Surebuild and specialist cement brands Rapo and OPC. In addition to serving southern African markets, cement is exported to other African countries and the Indian Ocean islands.

PPC International Trading is responsible for exports of PPC cement from South Africa, and trading cement sourced elsewhere into various other markets.

Cement

PortholdRegistered in Zimbabwe, Porthold’s core product is Unicem, a trusted cement made at the Bulawayo factory from high-quality raw materials.

PPC BotswanaPPC Botswana has been operational for over 50 years. From its sales offi ce and cement-blending operation in Gaborone, it supplies cement throughout Botswana.

Page 5

Group at a glance continued

OverviewPPC Lime has grown from small beginnings in 1907 at Uitloop in Limpopo producing lime for the burgeoning gold mining industry, into one of the largest lime producers in the southern hemisphere, supplying almost 60% of the lime consumed in southern Africa.

PPC Lime is certifi ed to ISO 9001, 14001 and OHSAS 18001 (safety management) standards. Together with SANS 1841 and a fi ve-star Dekra rating, customers are continually assured of superior quality products.

Lime

Lime productsUnslaked lime, hydrated lime and limestone.

PPC LimePPC Lime is the leading supplier of metallurgical-grade lime, burnt dolomite and related products in southern Africa.


Revenue 544 599 (9%)

EBITDA 121 167 (28%)


Total assets 392 404 (3%)

Page 6


Overview PPC Aggregates supplies quality construction aggregates to the civil construction sector as well as products for the chemical, metallurgical and agricultural industries. Mooiplaas, Laezonia and Kgale quarries are ISO 9001:2000 certifi ed and members of the Aggregate and Sand Producers Association of South Africa (ASPASA). All operations are committed to producing quality products to meet customers’ requirements in the most cost-effective manner.

Aggregates

Aggregate productsConcrete stone, road stone, crusher sand, river sand, building sand, plaster sand, Magalies silica, natural base, sub-base, fi ll material, dolomite and agricultural lime.

PPC Aggregate QuarriesMooiplaas dolomite mine and Laezonia quarry produce quality aggregates and sands to meet diverse customer requirements.

Kgale Quarries At this quarry in Kgale Hills, Botswana, granite is processed into quality aggregates and sands.


Revenue 296 281 5%

EBITDA 84 93 (10%)


Total assets 196 186 5%

Page 7

Directorate

Note: Directors’ CVs can be found on page 56 in the corporate governance section of this annual report.

Page 8

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1 Bheki Lindinkosi Sibiya Chairman

2 Paul Stuiver Chief executive offi cer

3 Salim Abdul Kader Executive director, organisational performance and transformation

4 Robert Harley Dent Executive director, lime, aggregates and strategic projects

5 Peter Esterhuysen Chief fi nancial offi cer

6 Zibusiso Janice Kganyago Independent non-executive director

7 André Jacobus Lamprecht Independent non-executive director

8 Nomalizo Beryl Langa-Royds Independent non-executive director

9 Mangalani Pieter Malungani Non-executive director

10 Timothy Dacre Aird Ross Independent non-executive director

11 Joe Shibambo Independent non-executive director

12 Jerry Siklulumi Vilakazi Non-executive director

IFC Profile

2 Financial highlights

3 Financial summary and sustainability highlights

4 Investment proposition

4 Operations and locations

5 Group at a glance

8 Directorate in brief

12 Chairman’s report

18 Chief executive officer’s report

24 Chief financial officer’s report

28 Porthold review

34 Operational review: Cement

37 Operational review: Lime and Aggregates

38 Corporate governance structure and management systems

56 Board of directors – full CVs

58 Sustainability review

69 Report of the independent auditors

70 Directors’ report

89 Accounting policies

100 Group financial results

154 Company financial results

181 Administration

182 Notice of annual general meeting

185 Form of proxy

187 Index to Global Reporting Initiative indicators

Page 9

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Documents

The roots of Pretoria Portland Cement Company · The roots of Pretoria Portland Cement Company Limited (PPC) stretch back well over a century to 1892 when it established the ﬁ rst