An introduction to GRI

This report has been prepared with reference to

the Global Reporting Initiative (GRI)

Value based management is the framework for

our approach to creating an enduring company.

GRI is an international framework for providing

comprehensive information to stakeholders of a
company on its economic, social and environmental
performance – the triple bottom line. The Initiative was
founded in 1997 and is endorsed by the United Nations.
Its goal is to enhance the quality, rigour and utility of
sustainability reporting.

For further information on GRI refer to

www.globalreporting.org

2
Financial highlights
%
2002 2001* change

Revenue (Rm) (continuing operations) 2 570,2 2 047,9 26

Operating profit (Rm) (continuing operations) 612,2 441,1 39
Operating profit from continuing operations including
income from associate companies (Rm) 645,8 464,7 39
Net profit (Rm)
– before exceptional items 441,5 356,0 24
– after exceptional items 600,3 413,2 45
Earnings per share before exceptional items (cents) 824,5 711,8 16
Headline earnings per share (cents) 829,5 709,7 17
Dividends per ordinary share (cents)
– ordinary 535 460 16
– special 600 500 20
Net asset value per share including investments
at market value (cents) 4 299,9 4 200,9 2
Total assets (Rm) 3 713,9 3 046,6 22

* Restated

Revenue per employee Operating margin Return on total assets

(R’000) (%) (%)

778,5
684,5 25,1 21,6
23,0 19,7
597,4
547,7 16,8
485,6 17,4 18,4 15,2
13,3
14,8

98 99 00 01 02 98 99 00 01 02 98 99 00 01 02

3
Chairman’s review

“Our people are the

key to PPC’s future success”

Another pleasing year for PPC our local market share. South African
Revenue rose by 26% to R2 570,2 million based exports increased 39% with
(2001: R2 047,9 million), and operating improved tonnages to the rapidly
Challenging global best growing markets of West Africa,
profits including income from
associate companies rose by 39% to Mozambique and the Indian Ocean
practices, applying VBM and islands. In Zimbabwe, our cement sales
R645,8 million (2001: R464,7 million).
These results include Portland Holdings volumes rose by 12% and exports to
achieving success in all our Limited of Zimbabwe (Porthold) which is neighbouring territories rose by 18%.
being consolidated for the first time. They The lime division experienced a
businesses reflect the continued improvement made decline of 3% in lime and burnt dolomite
by all our business units, the successful sales following the planned Corex plant
application of VBM and the benefits of shutdown at Saldanha Steel. Notably,
embracing and challenging global best volumes have since come back strongly
practices. This is in spite of selling price following a very successful start up
Chairman: Warren Clewlow controls, hyperinflationary input costs at Saldanha. Progress was made in
(first picture left) and inadequate operating margins in addressing lime prices which are currently
Parktown Award Winners Zimbabwe. still 40% below international levels. The
Domestic cement sales volumes rose packaging division continued to show
(refer page 98)
by 5% reflecting a small increase in improvement.

4
 Net profit per share Return on shareholders’ interest Share price on 30 September
(cents) (%) (cents)

1 121 28,3

22,8 7 800
826 19,7
6 200
15,5 5 100
520 506 13,2 4 150
393 3 400

98 99 00 01 02 98 99 00 01 02 98 99 00 01 02

Capital expenditure remained at low amounting to R250,5 million. No major 400 cents and a special dividend of
levels and continued below the annual capital projects were undertaken in 600 cents per share bringing total
depreciation charge as it has done for the year. dividends declared for the year to
the last few years. At the same time, Dividends paid during the year 1 135 cents, an 18% increase over
operational cash flows have increased in amounted to R523,9 million (2001: last year.
line with operating profits with the R172,5 million) which included the special
result that operational cash flows rose dividend of R5,00 per share declared last International economies
by 26% to R792,2 million (2001: November. At the same time, and as a are a concern
R628,8 million). These cash flows were direct result of these higher dividends, the While the recession experienced in the
further bolstered by proceeds from the taxation charge by way of secondary tax United States and the downturn
sale of PPC Logistics (Pty) Limited, Natal on companies increased to R55,6 million experienced by other global economies
Portland Cement Company (Pty) Limited (2001: R16,6 million). have ended, these economies remain
(NPC) and Ash Resources (Pty) Limited The continuing strong cash flow from vulnerable. At the same time, the
(Ash Resources) which amounted operations, and the proceeds from the continued fall in international equity
to R504,3 million in total. The acqui- sale of NPC and Ash Resources, has built markets is indicative of the high level of
sition cost of Porthold amounting to the group’s cash resources. As this cash uncertainty that currently prevails in
R435,7 million comprised net cash can currently be more efficiently invested international markets and could delay any
payments amounting to R185,2 million by our shareholders, the directors real economic growth.
and the issue of 3 719 327 PPC shares have declared a final cash dividend of

5
Chairman’s review continued

Locally economic growth The levels of service from the rail The three major South African cement
is showing promise but a infrastructure has systematically declined companies (including PPC) had been
number of concerning in recent years. There is an enormous shareholders in Slagment and Ash
fundamentals are returning shortage in the availability of railway Resources for many years and PPC had
The anticipated improvement in gross rolling stock and consequently manu- management responsibility for Slagment.
fixed capital formation (GFCF) began to facturing companies and exporters While the company maintains a co-
materialise in 2002 with real GFCF rising have missed scheduled deliveries and operative stance towards the resolution
by 7,5% in the second quarter of 2002. shipments to local and export customers. of such matters, the circumstances in this
Pleasingly, private business, public This has resulted in South African instance were such that it had no option
corporations and general government all companies increasingly being regarded as but to also vigorously defend its
increased their levels of infrastructural unreliable suppliers, which is not corporate integrity and longstanding
spend. After 13 quarters of almost conducive to building up long-term reputation.
uninterrupted decline, expenditure by relationships with local and export Whereas the High Court initially ruled
public corporations increased by a customers. I am pleased to say that it in favour of the Competition Commission
seasonally adjusted rate of 6,5%. The appears likely that the backlog in in September 2000, I am pleased to
positive impact of the Coega harbour replenishing railway rolling stock is being advise that the Supreme Court of Appeal
project and industrial development zone addressed and that we expect to see an unanimously ruled in favour of PPC and
near Port Elizabeth is still to be felt. improved situation in the next few years. Slagment in May 2002 and so vindicated
Government expenditure also grew by Disappointingly, the better perform- the company’s position.
over 6% largely as a result of the spending ance of the economy over the last three
related to improving the road network, years has done little to reverse the Minerals and Petroleum
urban renewal and on improving the downward trend in formal sector Resources Development Bill
infrastructure ahead of the World Summit employment or to relieve poverty. The PPC strongly supports the vision of a
on Sustainable Development. Expenditure recent increases in interest rates, driven globally competitive mining industry that
by the private sector grew at between by the relatively weak rand and rapid rise draws on the human and financial
7% and 9% with strong growth in in consumer and producer prices are resources of all South Africa’s people and
platinum mining infrastructure and in placing strains on the economy. The offers real benefits to all South Africans.
developments aimed at the growing weaker rand has driven up inflation in The company is already well advanced
tourist market. Pleasingly there was a 2002 and, while it is possible that interest with regard to a number of the
significant increase in expenditure on rates might increase further in the short requirements of the new Bill and its
much needed residential housing. term, we expect that interest rates and related charter including procurement,
We welcome these developments as inflation will turn favourably in 2003 and community and human resources
expenditure on long-term infrastructure that the economy will once again move development, details of which are set out
projects creates jobs, reflects confidence towards targeted levels. later in this report.
to the international investor community
and ultimately provides the country with Appeal Court ruling Board changes
competitive logistical and societal support in favour of PPC I am pleased to announce that
services. The capability of government to The company has always maintained John Blackbeard was appointed as
provide both the finance and that the search and seizure oper- chief operating officer of PPC with effect
organisational capability to deliberate, ation conducted by the Competition from 1 August 2002. His contribution to
prioritise and deliver on important Commission on the premises of PPC and the success of PPC Cement over six years
infrastructure projects has improved Slagment (Pty) Limited (Slagment) in is clearly evident and his experience and
significantly. It is also an important August 2000 was unwarranted. The expertise will be of great value to the
element of the New Partnership for company was co-operating with the wider group in this new role.
Africa’s Development (NEPAD) initiative in Commission at the time with regard to a At the same time I would like to thank
that it signals confidence in the region. pricing complaint against Ash Resources. Paul Stuiver who resigned as a director

6
with effect from 1 August 2002 following dolomite sales should also reflect similar any market conditions and opportunities
his appointment as chief executive officer growth, bearing in mind that the Corex that may arise. The strong cash flows
of Barloworld Logistics earlier in the plant at Saldanha Steel was shut down should continue and no major capital
year. His valuable contribution to PPC for nine weeks in 2002 for refurbishment. expenditure is envisaged in 2003.
over 19 years is sincerely appreciated. Our packaging business will benefit from
increased sales and higher capacity Appreciation
Prospects utilisation. PPC has enjoyed another outstanding
It remains difficult to predict our southern In Zimbabwe, Porthold is unlikely to year and I would like to take this
African markets with any confidence. meaningfully contribute to earnings in opportunity of thanking John Gomersall,
Recent increases in interest rates and 2003 as hyperinflation, price controls and the PPC executive team and all our
inflation are of major concern to PPC and the shortage of foreign currency are employees for their continued contri-
our customers. At the same time, the expected to continue for some time. In bution and dedication. Their embracing
economy is enjoying the benefits of the medium term, this business remains of VBM through the Kambuku project,
export orientated growth supported by well positioned to benefit from any and their hard work and loyalty has been
a weaker rand which is not necessarily economic improvement in Zimbabwe and and remains the key to PPC’s future
sustainable in the medium to long term from exports. success.
as the economy reverts to targeted levels The share of associate companies’
of inflation and interest rates. Also, the profits will fall in 2003 following the sale
threat of a US/Iraq war is causing a of NPC and Ash Resources. Operating
rise in fuel prices and inhibiting global costs will be negatively affected as the
economies. full impact of the weaker rand and
Notably, increasing trends in GFCF are higher producer inflation comes through.
evident in all sectors of the South African Notwithstanding these developments,
economy and consequently the company improved operating profits are expected Warren Clewlow
is expecting continued growth in cement in all our businesses and the group Chairman
sales in the year ahead. Lime and burnt remains well poised to benefit from 6 November 2002

Gross fixed capital formation by type of asset

(R’000)
6 000
5 000
4 000
3 000
2 000
1 000
0
’98/3 ’98/4 ’99/1 ’99/2 ’99/3 ’99/4 ’00/1 ’00/2 ’00/3 ’00/4 ’01/1 ’01/2 ’01/3 ’01/4 ’02/1 ’02/2
Year/Quarter
Residential buildings Non-residential buildings Construction works Source: SARB Quarterly Bulletin September 2002

7
The Kambuku process

Challenging employees at every level in the organisation, developing internal talent

The Kambuku process, now in its third employees report a clear understanding We see no end in sight and are
year of implementation, has embedded of the targets of the organisation, the delighted with the returns on this
the principles and processes of operation and their own team. The same investment.
organisational performance management number of employees report that Our employees have added value for
deeply into the everyday routines and workplace communication methods are all stakeholders, and as a result have
behaviours of the organisation. Daily, our effective in assisting them to achieve their been rewarded by the company
employees meet, pool their strength targets, and are satisfied with a whole gainshare scheme for their contribution
and pursue the goal of improving range of issues pertaining to climate in to performance improvement.
performance and exceeding targets. By the organisation. The Department of Trade and
their own reports, they thrive on the These results do not surprise us. They Industry’s Competitiveness Fund has also
challenge. are the result of three years of deliberate endorsed the Kambuku process and
The implementation of this integrated daily effort and coaching at each granted it financial support.
set of systems to coach, enhance operation. These efforts have now We enter the new financial year
and encourage superior employee become the PPC way of doing business confident of the solid foundation we have
performance has delivered measurable and, most importantly, this is one of our built, and keenly focused on achieving
and lasting benefits. At the same time, ways of creating sustainable competitive new heights as we strive to be southern
our pool of internal talent is being advantage. Africa’s nation-building company.
developed into a highly participative,
committed and globally competitive
team. These internal skills represent the
future of the company.
The winner of this year’s PPC
Achievers Award is a man with only five
years formal education. He was,
nevertheless, sufficiently motivated and
supported to propose an eloquent
Kambuku is rewarding
engineering solution to an unsolved
production problem. His assistance will
employees through a
result in savings of a million rand per gainshare programme for
annum. This example, and there are many their contribution to
more, confirms that if we continue to performance improvement.
apply the formula for the creation of a
fertile environment, employees at every
1
level of the organisation will rise to the
challenge of adding value.
Our employee perception monitor
reveals that more than 90% of our

2 3

8
 1

Kambuku delivers
measurable and lasting
benefits in both value
and customer service.

2 3 4

Targeting global competitiveness and achieving better

6 7 8

9
CEO’s report

Market capitalisation Cash generated from operations Wealth created

(Rm) (Rm) (Rm)

4 192 1 504
792,2

3 101 628,8 1 148

2 550 481,5 884

2 074 415,4 405,2 776 756
1 600

98 99 00 01 02 98 99 00 01 02 98 99 00 01 02

The company’s strategies can be as core investments and we had planned

summarised as follows: to exit them as they played no role in our
• Focus on core businesses future strategy and absorbed too much of
• Generate superior cash flow returns management’s time and attention. During
• Achieve global competitiveness the year we were finally successful in

Challenging our strategies to • Practice sound corporate, environmental realising acceptable value in disposing of
and social governance our stakes in Natal Portland Cement and
ensure business sustainability • Build on our strengths through Ash Resources. Our stake in Slagment is
synergistic growth currently also under consideration.
and growth Apart from unlocking value for our
Focus on core businesses shareholders, this will allow management
The historical structure of the cement to search for future growth opportunities
industry in place over many decades, where we have a direct involvement in
resulted in PPC being invested in value creation.
Executive directors minority stakes in several businesses
(from left to right) John Blackbeard, such as Natal Portland Cement, Ash Generate superior cash flow
Harley Dent, Peter Nelson, Resources and Slagment. Since the returns on investment (CFROI)
John Gomersall, Rod Burn (refer page 24) demise of the cement cartel in 1996, these All three divisions made further progress
investments could no longer be regarded in improving their CFROI this year. Both

10
“The human intellect is the only
sustainable competitive advantage”

Cement’s and Afripack’s CFROI exceeded support for the re-investment required. take up other opportunities due to railage
the cost of capital and Lime is expected This issue is not unique to PPC but is a capacity constraints.
to do so in the year ahead. problem that faces many of the capital While much debate has recently taken
Maintaining returns above the cost of intensive industries in the country. place in the media over the rising prices of
capital will become more difficult, as the Approximately 40 – 45% of our locally produced commodities, many
impact of the weaker rand and the high delivered cement cost is similarly either observers fail to recognise that the
level of producer inflation will have a directly or indirectly tied to the fortunes of economy is more open to international
somewhat delayed impact on our the rand. Delivery costs of cement over influences than ever before. The weaker
operating costs and the replacement cost the vast distances of our country currency, high international fuel prices and
of plant and equipment. Approximately account for almost 25% of total cost. The sharply rising costs of other imported
40% of the cost of a new production line deterioration in the competitiveness of our inputs continue to impact on operating
is directly or indirectly linked to the harbour and rail infrastructure is a matter costs. In spite of this, South African cement
exchange rate. The company will need to for grave concern. The inability of Spoornet prices in US dollar terms have declined and
start replacing and rationalising cement to provide a competitive and reliable service are now lower than in 1998 and are still in
production lines within a few years has resulted in increasing volumes having to the lowest quartile globally. The impact of
and it is imperative that acceptable returns be transported by road at greater cost and increased transport costs, imported inputs
are generated in the interim to convince a burden to our road infrastructure. During and replacement capital equipment costs,
our shareholders that the business is this past year the company had to cancel will necessitate real price increases in future
sustainable and to encourage their some export contracts and was not able to to generate appropriate returns.

11
CEO’s report continued

Achieve global black economic empowerment plans in reasons that the company achieved its
competitiveness an integrated and natural way. 110th anniversary this year.
Progress achieved during the year in
our global competitiveness programme, Practice sound corporate, Build on our strengths through
which commenced six years ago, has environmental and social synergistic growth
helped alleviate some of the cost increase governance Your company has not only prospered
pressures referred to above. For many years the company has been at and grown for more than a century, but
Our activities and successes can be the forefront of sound practices which are importantly has demonstrated in the last
summarised into the following areas: increasingly being demanded in terms of few years that it can hold its own in an
• Equipment operating efficiencies and good corporate and social governance. extremely competitive industry competing
benchmarking Policies and control systems for manag- against major international players.
• Reduction in operating costs ing risk, our environment, business Future growth in the domestic economy
• Reduction in overheads and opti- ethics, black economic empowerment, and an economic recovery in Zimbabwe
misation of information systems affirmative procurement, occupational will present the opportunity for organic
• Reduction of energy costs through safe safety, health and hygiene, HIV/Aids, growth for which the company is well
recycling of waste materials product quality and many others are positioned.
• Optimisation of logistics costs firmly entrenched as a way of daily We believe that the company has
• Creating globally competitive people operational life in the company. developed an international competitive
and implementing best operating Where relevant international ability through its processes and people
practices standards exist, the company has been that can be judiciously expanded
The implementation of our VBM and certificated to those standards. In all cases internationally to generate further
Kambuku programme continues as it is the company’s value of caring for the growth. We continue to look for
the cornerstone of creating globally communities and the environment in opportunities that will enhance value
competitive people. which we operate is paramount. Where creation, expand our geographic
In the modern rapidly changing our moral responsibilities indicate that footprint and meet our criteria for
world, the human intellect is the only merely satisfying legislation or standards affordability, risk profile, potential
sustainable competitive advantage. is inadequate, we will go beyond those competitiveness and sustainability.
Attracting the best people, motivating parameters and act according to what we
and retaining them, developing them, believe is right.
releasing their energy and intellect to out- In line with this philosophy, the
compete your competitors, is the real company has taken the first step
key to success. This is particularly true toward reporting in terms of the Global
in South Africa where sadly so many Reporting Initiative’s Sustainability
of our people start this race for Reporting Guidelines on economic, John Gomersall
global competitiveness with historical environmental and social performance. Chief executive officer
disadvantages. This structured approach will incorporate 6 November 2002
Kambuku is therefore focused on annual reporting on the management of
developing and releasing the human these issues.
intellect of all our people to continuously Many of the company’s strategies
enhance their value creation for the have to be extremely long term in nature,
benefit of our customers and shareholders, and consequently our environmental and
while creating value for themselves, their social practices have become a natural
families and their communities, thereby part of our everyday business life. We
improving their quality of life. believe they are part of our corporate and
At the same time, the programme social responsibility and are important to
addresses our requirements for future long-term business sustainability and
staffing and our employment equity and success. This is perhaps one of the

12
 1 2

3 4 5

Developing human intellect and sharing knowledge

Kambuku develops and

releases the human
intellect of all our
people to enhance
value creation.

6 8

13
Organisational profile

Pretoria Portland Cement Company Limited Kgale Quarries (50% owned) in refining and the manufacture of industrial
was established in 1892 as De Eerste Gaborone supplies aggregate to PPC chemicals.
Cement Fabrieken Beperkt and listed on Readymix and the construction industry in Hydrated lime is used primarily for
the Johannesburg Stock Exchange in 1910. Botswana. water purification and soil stabilisation.
At year-end it was a 66,2%-owned The company’s cementitious brands Graded and crushed limestone products
subsidiary of Barloworld Limited. include the market-leading “Surebuild” are sold to the water treatment and
PPC Cement (100% owned) is the brand in South Africa and “Unicem” in metallurgical industries.
leading supplier of cement in southern Zimbabwe. In addition to serving the Dolomite products are sold primarily
Africa. Its eight manufacturing facilities in southern African domestic markets, to the metallurgical industries.
South Africa, Zimbabwe and Botswana
cement is exported to other African PPC Saldanha (100% owned) is a
have capacity to produce 6,4 million tons
countries and the Indian Ocean islands. specialised bulk materials handling facility.
of cementitious products per annum. The
PPC Lime (100% owned) is the It handles raw materials and waste
company’s distribution network supplies
leading supplier of metallurgical grade products as an outsourced service to
quality branded cements to the building
lime, burnt dolomite, limestone and Saldanha Steel in the Western Cape
and construction industry, concrete
related products in southern Africa. It province, South Africa, and is a world first.
product manufacturers and retail outlets
such as builders, merchants, hardware operates one of the largest lime plants in Afripack (100% owned) manufactures
stores and DIY centres. the world at Lime Acres in the Northern paper sacks for the cement industry; paper
Related products include aggregates Cape province of South Africa. bags for the manufacturing and food
from the company’s quarries in Botswana Lime is one of the world’s most widely sectors as well as laminated wrapping
and Suremix dry mortar mixes and used chemicals. Its major applications materials at its factory in Durban, South
application systems. include its use as a flux in pyro- Africa. It has been a major supplier of
Slagment (33,3% owned) processes metallurgical industries (eg steelmaking) flexible paper packaging products to the
and sells slag by-products from and as a neutraliser, coagulant or South African and export markets since
steelmaking operations in Gauteng, chemical catalyst in gold extraction, water 1933 and has the most modern plant of its
South Africa. purification, effluent treatment, sugar kind in South Africa.

Cement plants
Limestone quarries
Aggregate quarries
Lime quarries
Lime plant 9
16
Gypsum quarry 8
Head office

22 11
4 10
12 21
1. Hercules 12. Slurry quarry 1
3 20
2. Jupiter 13. Zoutkloof quarry 2
3. Slurry 14. Riebeeck quarry
18
4. Dwaalboom 15. Grassridge quarry
5. De Hoek 16. Colleen Bawn quarry 17
6. Riebeeck 17. Lime Acres
7. Port Elizabeth 18. Lime Acres quarry
8. Colleen Bawn 19. Mount Stewart quarry
9. Bulawayo 20. Laezonia quarry 13
10. Beestekraal quarry 21. Mooiplaas quarry 6
14
11. Dwaalboom quarry 22. Kgale quarry 5 19
15
7

14
 Barloworld

66,2%

PPC

100% 100%

PPC Cement* PPC Lime Afripack

100% 100%

Mooiplaas Dolomite PPC Saldanha

33,3% 100%

Slagment PPC Slag

100%

Porthold^ * PPC Cement is a division of PPC

100%
^ Registered in Zimbabwe
~ Registered in Botswana
PPC Botswana~
50%

Kgale Quarries~

Kambuku is developing
our internal resources
pics to be
in a natural way.
placed

1 2 3

15
 1 2

Our code of ethics

These simple phrases will
guide the way we behave
both inside and outside
our organisation:

• Obey the law

• Be fair
• Be honest
• Respect others
• Protect the
environment
3 4

Governance structure and

management systems

Corporate governance be obliged to comply with the Code Disclosures in this report relate to the:
The company is listed on the JSE Securities of Corporate Practices and Conduct • adoption of business principles and
Exchange South Africa (JSE) and has a contained in the King Report on codes of practice, verified by board
secondary listing on the Zimbabwe Stock Corporate Governance in South minutes, established policies, standards
Exchange. By virtue of its JSE listing, the Africa published in March 2002 (King II and other documentation;
company currently complies with the Code Report). In terms of non-financial aspects, • implementation of these principles
of Corporate Practices and Conduct the company will complement these through review of procedures and
forming part of the King Report on expanded reporting requirements by practices that evaluate adherence to
Corporate Governance issued in 1994. adopting the Global Reporting Initiative’s these principles, evidenced by actions of
In respect of its financial year ending Sustainability Reporting Guidelines on the executive directors, designated
30 September 2003 and thereafter, the economic, environmental and social policies and directives and supported by
company will, under the rules of the JSE performance. appropriate monitoring systems.

16
 The company has raised corporate affairs of the company. The board has The agenda and supporting papers
accountability to a level of compliance also created audit, compliance and are distributed to all directors prior to
this year that will enable the company to remuneration committees to enable it each board meeting. Explanations and
achieve full compliance with the King II to properly discharge its duties and motivations for items of business
Report by 30 September 2003. responsibilities and to effectively fulfil requiring decision are given in the
A philosophy of balancing disclosures its decision-making process. meeting by the appropriate executive
to achieve the most meaningful Each committee acts within written director. This ensures that relevant facts
overall understanding of the company’s terms of reference, whereby certain and circumstances are brought to the
corporate governance structures, as functions of the board are delegated attention of directors who, in any event,
well as economic (including financial), with clearly defined purposes, have unrestricted access to all company
environmental and social performance membership requirements, duties and property, information and records.
has been adopted. reporting procedures. Board committees Four board meetings were held during
Observance of the law in all of the may take independent professional the financial year. All of the directors
countries in which the company operates advice at the company’s expense when attended these meetings except as
is a minimum requirement. necessary. The committees are subject to indicated in the table below:
regular evaluation by the board in regard
Board accountability and to performance and effectiveness. Date Apologies tendered
delegated functions Chairmen of the board committees are 08.11.2001 W A M Clewlow
As a unitary body, the board of directors of required to attend annual general 15.02.2002 R K J Chambers
PPC seeks equilibrium between enterprise meetings to answer any questions raised 30.04.2002 R J Burn, R H Dent,
and governance constraints. In addition, by shareowners. E P Theron
the directors believe that the governance 16.08.2002 W A M Clewlow
principles and practices adopted are Board of directors
appropriate to the company’s operations Five executive and seven non-executive The company arranges an induction
directors, of whom the majority programme for new directors. This
for the benefit of shareowners and are also
are independent, collectively determine includes visits to the main operations and
in the interests of relevant stakeholders.
major strategies and policies. Of discussions with management in order to
Specifically, the board has reserved to
the non-executive directors, Messrs facilitate an understanding of the group.
itself the following responsibilities:
W A M Clewlow and R K J Chambers Directors are appraised, whenever
• approval of the strategic plan and rolling
having retired from executive service to
forecasts of the group, the setting of relevant, of any new legislation and
Barloworld Limited in 1999, are regarded
objectives and review of key risks and changing commercial risks that may
by the company as independent directors,
performance areas, especially in respect affect the affairs of the company.
as are Messrs M J Shaw and E P Theron.
of technology and systems; In certain circumstances it may
Effective control is exercised through
• appointment of the chief executive become necessary for a non-executive
the executive directors. They are held
officer and maintenance of a succession director to obtain independent pro-
accountable through regular reports
plan; fessional advice in order to act in the best
to the board and are measured against
• determination of overall policies and agreed performance criteria and interests of the company. Such a director
processes to ensure the integrity of the objectives appropriate to the current has unhindered access to the chairman,
company’s management of risk and stage of the business cycle and the executive directors and the group
internal control; and prospects in each business unit. secretary. Where a non-executive director
• against a background of economic, The non-executive directors are takes reasonable action and costs are
environmental and social issues relevant considered to have the skill and incurred, these are borne by the
to the company, monitoring the experience to bring unrestrained company.
implementation of board plans and judgement to bear on issues of strategy, Each director is elected by members in
strategies, as well as the mitigation of resources, transformation, diversity and a general meeting and must retire by
risks by management. employment equity, standards of conduct rotation every three years.
While retaining overall accountability and evaluation of results. In a rapidly Executive directors retire from the
and subject to matters reserved to it, changing world, the mix of experience board at 63 years of age whilst non-
the board has delegated to the chief and ability of the directorate is still executive directors retire at the next
executive officer and other executive believed to meet the present and future annual general meeting following
directors authority to run day-to-day requirements of the company. the director’s 70th birthday. Fees

17
Governance structure and
management systems continued
payable to non-executive directors are The group secretary is responsible for Audit committee
recommended by the board and fixed by ensuring that the proceedings and affairs D C Arnold (Chairman), W A M Clewlow,
the shareowners in general meeting. of the directorate, its subcommittees R K J Chambers, M J Shaw, A J Phillips
The curriculum vitae of each director of and, where appropriate, members of The audit committee comprises a
PPC is published on pages 24 and 25. the company are properly administered. The majority of independent non-executive
There are no contracts of service group secretary also administers the directors. The quorum for a meeting is
between any directors and the company statutory requirements of the company and two independent directors.
or any of its subsidiaries that are its subsidiaries in South Africa. Directors The head of internal audit and the
terminable at periods of notice exceeding have direct access to the group secretary senior audit partner in charge of the
one year and requiring payment of at all times. Dealings in shares of the external audit attend all meetings. They
compensation. company by directors and officers are have unrestricted access to the chairman
Details of remuneration, fees or other advised to him and a report is tabled at each and other members of the audit
benefits earned by directors in the past board meeting. committee. The financial director and any
year are given on pages 87 and 88. other executives may, at the discretion of
Ten meetings of the executive directors Insider trading the chairman of the audit committee, be
and senior executives were also held No employee may deal either directly or invited to attend and be heard. No
during the year in order to assist the chief indirectly in the company’s shares without attendee has voting rights.
executive officer to guide and control the the permission of the chief executive The audit committee assists the board
overall direction of the business of the officer or on the basis of unpublished in discharging its duties relating to the
group, monitor business performance and price-sensitive information regarding its safeguarding of assets, the identification
to act as a medium of communication and of and exposure to significant risks, the
business or affairs. No director or officer
co-ordination between business units, operation of adequate systems and
of the company may trade in the
group companies and the board. internal control processes and the
company’s shares during the embargo
presentation of accurate and balanced
period determined by the board in terms
Chairman and chief executive officer financial statements and reports. It
of a formal policy implemented by the
A key aspect of the company’s ensures that these comply with all
group secretary. A list of persons regarded
governance philosophy is that no one relevant corporate governance disclosure
as officers for this purpose has been
individual has unfettered powers of requirements and accounting standards.
approved by the board and is revised from
decision. Accordingly, responsibility for The board places strong emphasis on
time to time. Periods of embargo are
running the board and executive maintaining appropriate systems of
from the end of the interim and annual
responsibility for conduct of the business internal control. An Internal Control
reporting periods to the announcement
are differentiated. The roles of the Scoreboard is reported to the audit
of financial and operating results for the committee for each business operation
chairman of the board and of the chief
executive officer are separate. respective periods. A register of directors annually. All defalcations above R1 000
The chairman is regarded by the and officers is available for inspection are also reported.
company as an independent non-executive at the company’s registered office in During the year under review two
director, having retired from executive Sandton, South Africa. meetings were held. In particular, the
service to Barloworld Limited in 1999. group risk assessment process was
Accounting and reporting considered and assurance obtained
The group secretary The board places strong emphasis on from both the internal and external
The group secretary provides the board achieving the highest level of financial auditors that adequate internal controls
as a whole and directors individually management, accounting and reporting and accounting records are being
with detailed guidance as to how to shareowners. Successful harmonisation maintained.
their responsibilities should be properly with International Financial Reporting Parameters of the audit and of
discharged in the best interests of the Standards has been achieved, whilst internal controls are discussed between
company. He is also a central source of maintaining full compliance with South the audit committee and the external
guidance and advice to the board and African Generally Accepted Accounting auditors as part of the process of each
within the company on matters of ethics Practice. PPC’s annual report for 2001 audit. The company requires the external
and good governance. Appointment earned a second consecutive award from auditors to carry out their audit with due
and removal of the group secretary are Ernst & Young for “Excellence in Financial regard for the findings and work of the
matters for the board as a whole. Reporting”. internal audit function. To this end the

18
 1 2 3 4

Building world-class teams the Kambuku way

Kambuku is ensuring
that all employees have
a clear understanding of
performance targets.

6 7

8 9 10

19
Governance structure and
management systems continued
audit committee encourages consultation The audit committee has set principles Other than for external audit, the
between the external and internal for the use of the external audit firm for group has merged its auditing activities
auditors and ensures that meetings are non-audit services and approves the under one umbrella referred to as the
held periodically to discuss matters of relevant fees above certain materiality “Joint Audit Process” (JAP) with the
mutual interest and that working papers, limits. Fees paid to the external audit firm objective of:
management letters and reports are for non-audit services are disclosed in the • fostering audit methodologies and
exchanged so that there is a common notes to the annual financial statements recommendations and avoiding
understanding of audit techniques, and the nature thereof is described. duplication;
methods and terminology. All members attended the committee • developing a holistic view of the
The audit committee requires that the meetings during the year under business and its related risks;
interim and final results are subjected to review except Mr W A M Clewlow who • involving internal and external line
an independent review by the external was unable to attend the meeting on specialists, thereby sharing knowledge
auditors. The chairman of the audit 7 November 2001 and tendered his across the group; and
committee presents a report on the apologies accordingly. • encouraging continuous improvement
interim and final results at the board The board has determined that the and adherence to group policies.
meeting held to adopt those results. If an audit committee has satisfied its All of the committee members
independent review is not conducted the responsibilities for the year under review attended the meetings during the year
audit committee would table the reasons in compliance with its terms of reference. under review.
at the board meeting. The committee also The board and the audit committee
considers the assessment, at the previous Compliance committee have determined that the compliance
year-end, of the company’s ability to R K J Chambers (Chairman), D C Arnold, committee has satisfied its responsibilities
continue as a going concern and P J Blackbeard, J E Gomersall, P Stuiver for the year under review in accordance
determine whether or not any of the (resigned with effect from 1 August with its terms of reference.
significant factors in the assessment have 2002), G T Heyns (appointed with effect
changed to such an extent that the from 1 August 2002). Nominations committee
appropriateness of the going concern The primary function of the Previously the board as a whole considered
assumption has been affected. compliance committee is to assist the any new appointment of a director. In
The audit committee, with the audit committee and the board in November 2002 a nominations com-
auditors present, reviews the audited assessing risk, legal compliance and their mittee, consisting of Messrs R K J Chambers,
preliminary profit statement and the related management and audit processes W A M Clewlow, M J Shaw, and E P Theron
annual financial statements before they in order to ensure that these are was constituted in line with the recom-
are submitted to the board. The facts being adequately identified, evaluated mendations of the King II Report.
and assumptions used in the assessment and addressed at the appropriate
of the going-concern status of the organisational level. It primarily addresses Remuneration committee
company are presented to the board at health and safety, human capital A J Phillips (Chairman), R K J Chambers,
the meeting approving the annual development, employment equity, black W A M Clewlow
financial statements and are minuted economic empowerment, environment, Composed entirely of non-executive
accordingly. mining, production and engineering directors, this committee makes
The audit committee draws up a issues. During 2002 this committee recommendations to the board, within
recommendation to the board on an reviewed the proposed new Minerals and agreed terms of reference, regarding the
annual basis for submission to the Petroleum Resources Bill and a range of remuneration of executive directors and
shareowners at the annual general legislation applicable to PPC including senior executives as well as fees proposed
meeting for consideration and accept- commercial property, labour, financial to be paid to each non-executive director.
ance of the reappointment of the external and transportation legislation. The Proposed fees, adopted by the board,
auditors. compliance committee is a sub- are submitted to the shareowners in
It is a function of the audit committee committee of the audit committee. general meeting for approval prior to
to ensure that the external auditors The terms of reference are governed implementation and payment.
observe the highest level of business and by a compliance committee charter The company’s philosophy is to set
professional ethics and, in particular, that approved by the board and the audit remuneration at realistic levels in order to
their independence is not impaired in any committee. The chairman is an attract and retain the directors and
way. independent non-executive director. executives needed to run the company

20
successfully. A proportion of executive • ascertaining the extent of compliance executive officer and endorsed by the
directors’ remuneration is structured with established policies, procedures board, the company is committed to
so as to link corporate and individual and instructions; managing its risks and opportunities in
performance. • recommending improvements in the interests of all stakeholders. Every
In keeping with modern corporate procedures and systems to prevent employee has a responsibility to act in
governance practices, the chief executive waste and fraud; this manner.
officer, Mr J E Gomersall, has resigned • advising on appropriate systems of An ongoing systematic, multi-tiered
from the remuneration committee. He controls and accounting and and enterprise-wide risk assessment
attends meetings but is not entitled to operational matters; process supports the group’s risk
vote. The chief executive officer does not • drawing appropriate attention to any management philosophy. The process
participate in discussions regarding his failure to take remedial action; ensures that risks and opportunities are
remuneration. • carrying out any other appraisals, identified and evaluated in terms of
The board has determined that the inspections, investigations, exam- materiality and probability, whereafter
remuneration committee has satisfied inations or reviews required by the these are managed at the appropriate
its responsibilities for the year under review board or management; and level in the organisation. Risk registers are
in compliance with its terms of reference. • co-ordinating with the external auditors maintained as part of this process.
and the risk management and As the company expands into new
Strategic and business risks compliance functions to ensure that the markets and territories, it is faced with
and internal audit audit programmes are complementary. increasingly complex and changing
An internal audit charter defining the The group internal auditor co- environments. By applying the PPC
function, responsibility and authority of
ordinates the internal audit function risk management processes, and the
the group internal audit activity has been
throughout the PPC group. His duties principles of VBM, the risk-return trade-
adopted by the audit committee.
include, inter alia, liaison with the off is optimised by focusing on identified
Internal audit is an appraisal function
relevant businesses and their external risks and ensuring that these risks are
established within the group to
auditors in order to monitor the systematically managed.
independently and objectively examine
performance and recommend improve- Divisional boards and senior managers
and evaluate the activities of the group as
ment of internal audit. He reports to have carried out an annual self-
a service to the board in particular and to
the main audit committee on the assessment of risk. This process has
management in general. The board
effectiveness of internal audit. He has identified the critical business,
requires that the internal audit process
unrestricted access to the audit operational, financial and compliance
takes account of significant strategic and
business risks thus ensuring that internal committee and its chairman. Subordinate exposures facing the group and the
audit plans are appropriately risk focused. internal audit reports are submitted to the adequacy and effectiveness of control
Group internal audit is responsible for: audit committees of the respective factors at all levels. Verification of the
• appraising the procedures and business units. Any major issues arising process is undertaken in alternate years
management controls of business units are referred to the main audit committee. by the risk management department at
throughout the group; Audit plans are drawn up annually Barloworld Limited corporate office in
• assisting the board and management in and take account of changing business Sandton and by the outside consultancy
the monitoring of the risk management needs. Follow-up audits are planned in firm, Marsh Inc. The audit and
process; areas where weaknesses are found. compliance committees have reviewed
• reviewing systems and operations Internal audit plans are based on risk the risks and risk management processes
to assess the extent to which assessment as well as on issues and advised the board accordingly.
organisational objectives are achieved highlighted by the audit committee and
and the adequacy of controls over management and are of an ongoing Third party management
activities leading to such achievement; nature so as to identify not only residual No part of the company’s business was
• evaluating the reliability and integrity of or existing, but also emerging risks. managed during the year by any third
management and financial information; The audit committee approves the party in which any director had an
• appraising the utilisation of resources internal audit plan. interest.
with regard to economy, efficiency and
effectiveness; Risk management Minerals and Petroleum Resources Bill
• assessing the means of safeguarding In terms of a written risk management The charter for the SA mining industry
assets and verifying their existence; philosophy statement issued by the chief sets guidelines for empowerment and

21
Governance structure and
management systems continued
upliftment within the context of the new Communication or risky behaviour. Such reports can be
Minerals and Petroleum Resources Bill. A The company subscribes to the principles submitted to:
target of 26% involvement of historically of objective, honest, timeous, balanced,
disadvantaged South Africans in ten years relevant and understandable com- South Africa
time has been set. The overall objective KPMG Ethics Line
munication, of both its financial and non-
Telephone: +27 12 543-5300
is the expansion of opportunities for financial matters, focused on substance Fax: +27 12 543-1547
historically disadvantaged persons to not form and communicates sensitively Address: KPMG Ethics Line
enter the mining and minerals industry or and systematically with stakeholders Free post: PO Box 14671
benefit from the exploitation of the having a legitimate interest in the Sinoville
nation’s mineral resources. At the same 0129
company’s affairs. The company regularly
South Africa
time, it is government’s stated policy that enters into dialogue with institutional E-mail: [email protected]
it will allow the market to play a key role investors having due regard for
in achieving this end. statutory, regulatory and other directives or
The processing of licences will in future prohibiting the dissemination of un-
be facilitated by a score card approach Zimbabwe
published price-sensitive information by
Deloitte & Touche Tip-offs Anonymous
which takes into account the applicants’ the company and its directors and Telephone: 0800 4100
progress with regard to level of ownership, officers. Fax: +263 91 8240 921
management diversity, employment equity, In October 2001, PPC commenced Address: The Call Centre
human resource development, procure- non-certificated dealings under the Share Freepost: PO Box HG 883
ment and beneficiation. While PPC is Highlands
Transactions Totally Electronic programme
Harare
already well progressed (refer page 34) on the JSE. In line with our vision to Zimbabwe
with regard to a number of these constantly improve our service to all E-mail: [email protected]
requirements, the full implications and our stakeholders, all shareowners
measurement requirements of the Bill and were assisted with the implementation Ethics Line is an independent body
its associate charter were still under review processes of the new system. within the KPMG South Africa organi-
at the time of this report. sation. Tip-offs Anonymous is an
Code of ethics independent body within the Deloitte &
Employee participation A Corporate Code of Ethics, which Touche Zimbabwe organisation. Contact
Encouragement of employee participation outlines the ethical and professional with either of these organisations provides
is a high priority. The company’s diverse management practices that the group an opportunity to anyone to report
nature, allied to its philosophy of upholds, was adopted in March 2000. unethical activities, fraudulent or dishonest
operational decentralisation, makes it Individuals and entities dealing with the behaviour affecting the PPC group and at
desirable that each business unit executes group are expected to demonstrate the same time to preserve total anonymity.
this in a manner best suited to its own the same level of commitment to The group enforces the code with
circumstances. organisational integrity. appropriate discipline on a consistent
A process of improved communication The integrity of new appointees to the basis and responds to offences to prevent
throughout the Barloworld and PPC group group is assessed in the group’s selection a re-occurrence.
has increased employee awareness of the and promotion procedures. Due care is
group’s worldwide business activities and exercised in delegating discretionary
improved personal networking with local authority to individuals in the group.
and international counterparts. Good All employees are advised regarding
progress has been made with the the group’s values, standards and
Kambuku project introduced during the compliance procedures.
2000 financial year, further details of The group has provided a safe system
which are set on page 8. by which employees can report unethical

22
 Kambuku has become
the PPC way of doing
business and is one of
our ways of creating
sustainable competitive
advantage.

1 2

3 4 5 5
6

Uncompromising ethical and environmental standards

7 8

9 10 11

23
Board of directors

Executive directors He previously worked for John & Non-executive directors

Kernick Attorneys, specialising in
J E Gomersall (56) (British) trademark law before accepting a D C Arnold (62)
Chief executive officer position as industrial relations manager at CA(SA), FCMA, AMP (Wharton)
CA(SA) Eskom. He also held a number of Des Arnold was appointed a director
John Gomersall was appointed to the industrial relations positions within the of PPC in 1994. He joined Barloworld
PPC board in 1992. He joined Barloworld Barloworld group including that of group Limited in 1967 and held a number of
Limited in 1971 and has completed human resources director of Barloworld senior financial positions within the
30 years in capital intensive commodity Motor Investments (Pty) Limited. company culminating in his appointment
businesses. He started his career in the to the Barloworld Limited board in 1993.
stainless steel and ferrochrome industry R H Dent (51) He has been a leading light in the
ultimately being appointed group Director, Strategic Projects accountancy profession in South Africa
managing director of Middelburg Steel & BSc (Hons), BCom, Dip Datametrics for many years, is a past president of
Alloys (Pty) Limited in 1986. He joined the Harley Dent was appointed to the the South African Institute of Chartered
Barloworld Limited board in 1989 and PPC board in 1993 as director, Strategic Accountants (SAICA), and has been
moved into the cement and lime business Projects. He joined Cape Portland Cement awarded honorary life membership in
segment as group managing director in Company Limited, a subsidiary of PPC, recognition of his services to the
1992. In 1990 he led the business team in 1978 and has been with the group profession. Internationally, he has
that created the Middelburg Peace Forum, for 24 years. He is a fellow of the represented SAICA on the Financial and
which was the role model for the National South African Chemical Institute, the Management Accounting Committee
Peace Accord in South Africa. He is a past South African Institute of Mining and of the International Federation of
deputy president of the International Metallurgy and the Institute of Quarrying Accountants and is past president
Chrome Development Association which of Southern Africa. He is a director of the East, Central and Southern African
is headquartered in Paris as well as past and past chairman of the Institute of Federation of Accountants.
chairman of the South African Cement Quarrying of Southern Africa and is
and Concrete Institute. currently chairman of the Aggregate A J Lamprecht (50)
& Sand Producers Association of BCom, LLB, PED-IMD
P J Blackbeard (45) South Africa. André Lamprecht was appointed to
Chief operating officer the PPC board in 1997. He practised as an
BSc (Mech) Eng (Hons), Dip Bus Man P G Nelson (48) advocate of the High Court of South
John Blackbeard was appointed to the Director, Finance and Administration Africa prior to being invited to join the
PPC board in 1996 and as chief operating BCom, BCompt (Hons), CA(SA) Barlow group in 1981. From 1983, he
officer in August 2002. He was previously Peter Nelson was appointed to the played a leading role in steering the
a senior general manager at Eskom and PPC board in 2000 as director, Finance group through a turbulent decade of
joined PPC in 1996 as group technical and Administration, having joined PPC political transition into a post-apartheid
director. He is also a member of the South that year. Prior to joining PPC he held South Africa. He was appointed to the
African Institute of Mechanical Engineers, senior executive positions and director- Barloworld Limited board in 1993,
a member of the Professional Engineers ships in a number of large international assuming responsibility for the company’s
Association and a director of the South companies including BMW (South Africa) interests in Namibia and Botswana in
African Cement and Concrete Institute. (Pty) Limited, Mondi Limited and several addition to human resources, social
of the Barloworld Limited subsidiaries investment and other responsibilities.
R J Burn (48) including Middelburg Steel & Alloys (Pty) He has served on behalf of Barloworld on
Director, Organisational Performance Limited and Imperial Cold Storage numerous public bodies and is a past
BProc, BA (Hons) Psych Limited. He has over 13 years collective chairman of Business South Africa,
Rod Burn was appointed to the PPC service with the Barloworld group and immediate past president of the AHI, a
board in 2000 as director, Organisational extensive experience in international member of the Standing Committee on
Performance. capital intensive industries. Economic Policy and chairman of the AHI

24
Board of Trustees and Standing also a director of Comparex Holdings He is also a director of Illovo Sugar
Committee on Corporate and Public Limited, Old Mutual plc, Sasol Limited Limited, JD Group Limited, Reunert
Governance. He is also a director of the and Nedcor Limited. He joined Barloworld Limited and Liberty Group Limited.
National Business Initiative (NBI), trustee Limited in 1963 and was appointed to
of the Business Trust and business the board in 1974. He was appointed E P Theron (61)
convenor of the Trade and Industry chief executive officer in 1983, deputy BCom, LLB, FIBSA
Chamber of the National Economic chairman in 1985 and chairman in 1991. Eddie Theron was appointed to the
Development and Labour Advisory He retired as an executive director in July PPC board in 1996. Formerly group chief
Council (NEDLAC), member of its 1999. He is a past chairman of the State executive of Standard Bank Investment
executive council and a member of the President’s Economic Advisory Council, Corporation Limited he remains a director
Retirement Funds Advisory Committee of chairman of the Carl and Emily Fuchs of that company. He is also on the board
the Minister of Finance. He is also a Foundation, honorary treasurer for the of The Standard Bank of South Africa
longstanding senior member of the African Children’s Feeding Scheme and Limited, Mutual & Federal Insurance
Standards Committee of the International a member of the Nelson Mandela Company Limited and Barloworld Limited.
Labour Organisation (ILO). Children’s Fund. He is a fellow of the
Duke of Edinburgh’s Award World Audit committee
A J Phillips (56) (British) Fellowship and chairman of the Duke of D C Arnold (Chairman)
BSc (Eng) Edinburgh’s South African Foundation. R K J Chambers
Tony Phillips was appointed a director W A M Clewlow
of PPC in 1998. He joined Barloworld R K J Chambers (63) A J Phillips
Limited in 1968 and has spent most of his FCIS M J Shaw
career in the capital equipment business, Russell Chambers was appointed to
initially in Africa and then in Spain. the PPC board in 1994. He joined Compliance committee
He was appointed to the Barloworld Barloworld Limited in 1957 and was R K J Chambers (Chairman)
Limited board in 1995 and became chief appointed managing director of Imperial D C Arnold
executive officer on 1 August 1998. He is Cold Storage Limited in 1987. He was P J Blackbeard
a trustee of the Jane Goodall Institute appointed an executive director of J E Gomersall
(South Africa), the Bright Kid Foundation Barloworld Limited in 1989 with G T Heyns
(Edutainers), Business Against Crime, a responsibility for group administration,
member of the Advisory Council of the human resources, public affairs and social Remuneration committee
University of the Witwatersrand School of investments. He was chief operations A J Phillips (Chairman)
Civil Engineering and is a director of director from 1994 until his retirement as R K J Chambers
NOAH (Nurturing Orphans of AIDS for an executive director in 1999. W A M Clewlow
Humanity).
M J Shaw (64) Nominations committee
Independent non-executive CA(SA) W A M Clewlow (Chairman)
directors Martin Shaw was appointed to the PPC R K J Chambers
board in 2001. He is the global chairman M J Shaw
W A M Clewlow (66) of Deloitte Consulting, previously having E P Theron
Chairman served as managing partner, chief execu-
OMSG, CA(SA), DEcon (hc) tive and chairman of Deloitte & Touche in
Warren Clewlow was appointed to South Africa until his retirement from the
the PPC board in 1983 and as chairman in firm in 2001. He served as president of the
1993. He is chairman of Barloworld Natal Society of Chartered Accountants
Limited and Iscor Limited, deputy from 1977 to 1978 and president of the
chairman of Old Mutual Life Assurance South African Institute of Chartered
Company (South Africa) Limited and is Accountants from 1982 to 1983.

25
Management

Divisional executive team: Divisional executive team: Divisional executive team:

Cement Lime Packaging
John Blackbeard (45) Deon Heyns (46) Arnold Vermaak (43)
Managing director Managing director Managing director
BSc (Mech) Eng (Hons), Dip Bus Man BEng (Mech) BCom (Mark), MBL

Rod Burn (48) Schalk Marais (43) Patrick Doekes (33)

Director, Organisational performance General manager PPC Saldanha Financial director
BProc, BA (Hons) Psych BA (Hons) CA(SA), ACMA

Orrie Fenn (48) Hannes Meyer (43) Eben Kloppers (43)

Operations director General manager Lime Acres Operations director
BSc (Hons) Eng, MPhil Eng, Dr Eng BSc (Hons), MSc (Chem), HED NHD Ind Eng, CPIM
(Appointed sales and marketing director
effective 1 November 2002) Jacques van Jaarsveld (36) Mthokozisi Mchunu (40)
Financial manager Manager, Operational performance
Brian Graumann (39) BAcc, BCom (Hons), AGA (SA) and risk
Financial director BSc (Hons)
BCom (Law), BAcc, CA(SA) Simon Willmott (44)
General manager marketing
Colin Jones (49) MSc (Met), MBA
Sales and marketing director
BSc (Hons), BCom
(Appointed managing director of
Portland Holdings Limited effective
1 November 2002)

Pepe Meijer (42)

Operations director
BEng (Mech), MBA
(Appointed with effect
from 1 November 2002)

Tony Parry (42)

Chief information officer
BA (Hons), MBA

Dave Scott (60)

Technical director
BSc, MBA, Diploma Labour Relations

26
 1 2 3

Kambuku has been

endorsed by the
Department of Trade
and Industry.

4 5

Encouraging superior performance and delivering benefits

6 7 8

9 10 11 12

27
 1 2 3

4 5 6 7

Environmental
performance indicators

PPC’s impact report for the year an integrated proactive systems approach PPC’s business does not only focus on
ended 30 September 2002 to environmental management. As the economic prosperity. Our contribution
Mining itself cannot be sustainable, but company proceeds further down the to the other two legs of sustainable
the mining industry can and should environmental management continuum, development – the environment and
become more engaged in sustainable it increasingly broadens the scope of society – is also essential. After all,
development in the areas where it its efforts to include social as well as sustainable business is good business.
operates and where its products are environmental and economic consid- PPC considers it imperative to reduce
consumed. erations. PPC is in the process of building the negative impacts of its business
Sustainable development is about a culture of sustainability to improve activities on employees, the environment
ensuring a better quality of life for every- competitiveness, increase internal effi- and society at large.
one, now, and for generations to come. ciencies, gain regulatory advantage and
PPC has committed itself to greater enhance stakeholder relationships, and,
sustainability by the implementation of of course, build a better life for all.

28
Sustainable use of non- programme and maintenance of With the introduction of each
renewable resources buildings and infrastructure required in secondary material, extensive trials are
Mining can make a contribution to, but terms of the end-use plan. End uses for conducted to ascertain the nature of the
not deliver sustainable development. PPC the land are continually being environmental impacts and to ensure the
constantly strives to create wealth from assessed and monitored. Financial quality of products is not negatively
mining and processing of minerals whilst and environmental consultants have affected. Authorisations for the use of
minimising the environmental footprint been commissioned to formulate a secondary materials are obtained after
along the entire value chain. By adopting sustainable end-use and business plan significant input from stakeholders.
a responsible materials management for the site after closure. Application for
approach, including avoiding waste and closure is envisaged for June 2003. Health and safety in the
finding ways of recycling, we strive to Loerie has been nominated for an workplace
preserve the ability of future generations “Excellence in Mining Environmental PPC’s facilities operate in the framework
to also meet their needs. Various Management Award” (EMEM) in the of either the Mine Health and Safety
objectives set in 2001 – 2002 have been category of mines in the de- Act or the Occupational Health and
met, including: commissioning and closure phase. Safety Act. The minimum standard of
• The Environmental Management performance for all operations is legal
Programme Report (EMPR) amend- Energy efficiencies and recycling compliance, associated regulations and
ments for mining extensions at Energy efficiency is essentially using less standards, and company operating
Riebeeck and Dwaalboom have been energy for the same production volumes. requirements. An in-house Joint Audit
approved by the Department of Improvements in energy efficiency Process (JAP), carried out annually,
Minerals and Energy (DME). EMPRs are produce direct and indirect environmental ensures this compliance. Baseline health
constantly reviewed, amended and all benefits. The use of secondary materials and safety risk assessments have been
such amendments are approved by the from other industries has enabled PPC to conducted and are reviewed annually.
DME, with a view to better meeting considerably reduce its reliance on mining Health and safety agreements are in place
closure rehabilitation commitments and to reach its production targets. For with representative labour bodies.
end-use objectives. instance: All health and safety programmes in
• The closure rehabilitation commitments • During 2001 – 2002 PPC utilised some PPC Cement are based on the National
and end-use objectives for the Pienaars 60 000 tons of secondary materials, Occupational Safety Association (NOSA)
River operation have been met. This which would have been landfilled as management system. PPC Lime Acres has
included making safe and rehabilitating waste, to fuel kilns at various locations. been accredited with Occupational
the mining areas, demolition of mining This resulted in removal of these waste Health and Safety Assessment Series
infrastructure, upgrading the residential streams from the environment, and a (OHSAS) 18001, and it is planned to
infrastructure and application for the reduction in the coal consumption at implement the OHSAS 18001 standard
proclamation of the village. A closure the operations. The environmental for health and safety management
certificate has been issued to PPC in benefits included CO2 emission throughout the company within the next
terms of section 12 of the Minerals Act. reductions. four years. All programmes encourage
• An extensive re-design and upgrade • Alternative raw materials and extenders employee participation at all levels.
of the fresh water dam wall and have continued to be introduced into Employees receive regular training on
spillway at Laezonia was done to ensure the manufacturing process to reduce their legal responsibilities by accredited
dam safety and to protect an asset for the quantity of limestone used to service providers. In addition:
the community after the life of the produce the required tons of finished • Regular occupational health surveys
mine. product. Some 55 000 tons of are conducted to identify the health
• Closure and decommissioning of the alternative raw materials have been risks to which employees may be
Loerie operation is progressing well. used to replace limestone as a raw exposed. These include surveys for
Closure rehabilitation is 90% complete. material in the manufacturing process. noise, heat stress, ventilation and
This includes demolition of the mining The use of extenders such as fly ash and illumination levels. Identified risks
infrastructure, combating invasive slag continue to add value whilst are engineered out where possible, as
vegetation, site rehabilitation, drainage contributing to extending the life of the the first choice. Should this not be
and runoff control, riverbank mines and absorbing industrial wastes possible, management controls are
protection, an extensive re-vegetation from the environment. implemented and the use of personal

29
Environmental performance indicators continued

protective equipment becomes man- are members of medical aid schemes diesel, which is itself a positive step
datory. that provide antiretroviral medication. forward from the previous national
• Clinics at all the operations have trained • Condoms are distributed free of charge. standard of 0,55% sulphur content.
occupational health practitioners and Awareness initiatives include talks – Improved performance resulting
occupational medical practitioners in by “people living with Aids” and from cleaner and more efficient
attendance. These clinics provide experts in the field. Annual medical combustion. Ultra-low sulphur diesel
occupational health care, but also have examinations include optional voluntary has a typical cetane number of
primary health care programmes in HIV/Aids testing. between 47 and 50, in comparison
place for the local communities. with normal (0,03%) diesel cetane
Employees undergo annual medical Accountability for number of 45.
examinations to ensure their health is environmental performance – Longer engine life through reduced
not adversely affected by their working Much of our effort during the past two wear.
conditions. Exit medical examinations years centred on the development – Longer intervals between oil drainage
are also conducted should an employee and implementation of environmental made possible by reduced soot
resign or retire from service. Contractors management systems, which could be formation and lubricant-oil break-
working for the company are also able certified to International Standards down.
to make use of the clinic facilities. Organisation (ISO) 14001. All the cement PPC’s Mooiplaas quarry operation
• Employees belong to medical aid manufacturing operations and both PPC became the first fully functional ultra-
schemes, with a few exceptions. In Lime operations have acquired ISO 14001 low sulphur diesel operation utilising
these cases PPC contributes to their certification, thus achieving our objective. Sasol’s TurboDieselTM, and is being followed
medical care. Once we received ISO 14001 certification, shortly by other PPC quarrying operations.
• PPC has implemented an Employee we did not relax our efforts towards • PPC Hercules set itself a target for
Assistance Programme for employees improvement. For instance: stack emissions in excess of its permit
and members of their direct family. • With the introduction of low and ultra- requirements viz to not exceed
• There have been no fatalities in the low sulphur diesel during 2002 and the 120 mg/Nm3 for more than 4% of its
workforce during this reporting period. pending de-regulation of the fuel operating time. In order to achieve this
Injury frequency rates are low. industry in 2003, PPC has forged further stringent target in a plant with old
ahead in its strategic relationships with technology many engineering changes
The fight to beat HIV/Aids its fuel and lubricant suppliers Engen, were implemented. The emission
PPC has for many years implemented Sasol and Shell. In particular, PPC has monitoring results of 0,69% for
initiatives that are aimed at minimising the embarked on a programme together 120 mg/Nm3 for the past three months
social, economic and developmental with Sasol and Engen to systematically has demonstrated the effectiveness of
consequences of HIV/Aids to its businesses introduce ultra-low sulphur diesel into this initiative.
and its employees and, where practical, to cement distribution transport (in • PPC Slurry experienced problems with
the communities where we operate. conjunction with Barloworld Logistics) the de-dusting of a clinker bin. The
Initiatives and performance to date and at its northern operations’ drop of the clinker from a conveyor into
include: quarrying activities. Furthermore, PPC is the bin caused the rapid displacement
• Anonymous prevalence studies have planning, together with its fuel and of large quantities of air, which caused
been conducted at a number of sites lubricant suppliers, to further expand its dust to be released from all openings.
with trade union support. Prevalence empowerment procurement of fuels By fitting dust collectors to the
rates range from 6 – 11%. These rates and lubricants. openings on top of the clinker bin, the
are lower than that expected for the Primary considerations for introducing dust is captured inside the bin and
regions. ultra-low sulphur diesel into PPC are as cleaner air can now escape.
• Nearly 50 peer educators were trained follows: • PPC De Hoek has set the example to the
during the past two years and disseminate – Environmental gains from a reduced rest of the operations by importing
information both to employees and the level of harmful exhaust emissions. maintenance information from the
local community. A number of our Ultra-low sulphur diesel contains BaaNTM maintenance management
occupational health nurses are also 0,05% sulphur content (by mass) programme into the environmental
actively involved in local communities. compared to the 0,3% sulphur management system. In this way
• 75% of our employees in South Africa content of standard low-sulphur scheduled maintenance activities, as

30
 1 2 3

4 5

Supporting the advancement of our people

7 8

Kambuku is building
a highly participative,
committed and globally
competitive team.

6 9

31
 1 2

3 4 5

well as maintenance non-conformances, • Continuous monitoring of dust facturing process extensive baseline
can be monitored as part of environ- emissions takes place from kiln stacks assessments of releases to the
mental performance. throughout the group. The CODELTM environment, prior to the introduction
All operations regularly set monitors are calibrated at regular of secondary materials, are completed
improvement objectives and initiate intervals to ensure their efficient and for the relevant operation. Independent
new projects to continually improve accurate operation. Emission data external consultants are used to
efficiencies and environmental perform- reveals that all operations in the cement determine the nature and extent of
ance to demonstrate their commitment division have complied with and even health, safety, quality and environ-
to the corporate environmental policy. exceeded their permit conditions. mental impacts by introducing
• Phased concurrent rehabilitation targets secondary materials, during a permitted
Measuring and monitoring were set to complete previously trial period. Once these results
Formal measuring and monitoring neglected rehabilitation by 2006. The have been reviewed by government
management processes are an essential last aerial survey showed that every authorities in all spheres of govern-
element of any successful environmental mine has exceeded the targets set for ment, application is made for their
programme and in this regard: 2001 – 2002 as well as completing the continued use and for amendments to
• Consumption of resources is monitored rehabilitation required for current operating permits of the various plants.
and reported to management monthly. mining activities. In this way PPC has Even after the use of secondary
Raw materials, coal and water been able to reduce its environmental materials has been permitted by
consumption have all shown a down- footprint. government, the performance of the
ward trend for the current reporting • With the introduction of each operation continues to be carefully
period. secondary material into the manu- measured and monitored.

32
• All the management systems at all tortoises and even the rare Albany adders 2002 water consumption
operations are externally assessed at are preserved. Mining activities involve
least annually during surveillance the removal of sensitive vegetation from
21%
audits. PPC is proud of its record from areas to be mined to nurseries and their
35%
surveillance audits. It is clear that the translocation to rehabilitated areas
management systems, which have afterwards. Fences have been erected to
been developed and implemented prevent electrocution of tortoises 44%

throughout the organisation, are venturing towards the secured crushing

effective and sustainable. plant area. Anthills are relocated to
• Environmental awareness continues to ensure the biodiversity of invertebrate Water from water courses
Water from boreholes
be the cornerstone for improved species, which are dependent on the Water from utilities
performance. Awareness audits are anthills for their survival, remains intact.
carried out both internally and during The Albany adder, which was last sited Tons coal/ton product as % of
1996
JAP audits, the results of which are some 60 years ago, has been sited three
110
used to influence future training times in the past year. It is envisaged that
programmes. PPC endeavours to build a breeding programme be established on 105
environmental awareness not only the Grassridge property, where sited
100
amongst employees but also in the specimens would be tracked and
communities in which we operate. monitored using microchips. The 95
Stakeholder forums ensure constant Grassridge quarry has been nominated
90
feedback on performance and for an EMEM award in the small mining
awareness of the company’s drive to category. 85
improve the quality of life and to provide • At Loerie the fynbos vegetation, which 96 97 98 99 00 01 02

lasting benefits for our communities. remained undisturbed during mining

MWh electricity/ton product as
activities, formed an integral part of the % of 1996

Preserving biodiversity end-use objectives for the mine. 110

PPC, with the exception of Loerie, The PPC Lime Acres facilities have
105
Grassridge and Riebeeck, does not have been successfully recertified to ISO 14001
operations in ecologically sensitive areas. in 2002. This is a clear demonstration of 100
Where the biodiversity of the area on commitment to the policy of continual
mining ground has been identified improvement. 95

as sensitive or threatened, PPC has Plans are being developed to replace 90

preserved this biodiversity as evidenced by: the electrostatic precipitator on Kiln 7
• The Renosterveld biome in the Western with a bag filter with the objective of 85
96 97 98 99 00 01 02
Cape occupies less than 8% of its bringing the stack emission levels within
The rise in electricity consumption can be attributed to
original area. Some of this renosterveld or even better than legal requirements.
finer grinding of materials in the mills to meet quality
is found at the Riebeeck factory. The
requirements and customer expectations.
mine plan for Riebeeck has been Contact person
modified, and the overburden dump The contact person on environmental
positions shifted, in order to preserve matters within PPC is: CO2 emissions from coal/ton
product as % of 1996
the two hectares of renosterveld found Naomi Williams
on site. PPC Riebeeck has been Group risk and environmental manager 105

nominated for an EMEM award in the Pretoria Portland Cement Company

category for large open-cast mines. Limited 100

• PPC Grassridge quarry was opened in PO Box 3811

95
the Bonteveld biome of the Eastern Johannesburg
Cape. A demanding environmental 2000
90
management programme at Grassridge
ensures that anthills, threatened Tel: +27 11 488-1880
85
succulents, bonteveld bush clumps, E-mail: [email protected] 96 97 98 99 00 01 02

33
Social performance indicators

Empowerment procurement BEE organisations best capable of Umsobomvu Youth Fund (UYF), with
initiatives meeting PPC’s exacting quality standards, project facilitation undertaken by Gestalt
Affirmative procurement policy service and financial requirements. Corporate Engineers. The main aims
PPC’s commitment to procurement from Some notable achievements in the of this project are to benchmark
small, medium and micro enterprises area of empowerment procurement empowerment procurement practices and
(SMMEs) and black economic empower- management include the following: policies and to strengthen programmes
ment (BEE) businesses is reflected in the • The appointment in May 2001 of aimed at providing financing and capacity
continued growth achieved during this Polipak as PPC’s sole provider of woven building for SMME supply side linkages.
past year. PPC’s commitment to SMMEs polypropylene cement sacks. The project is also aimed at identifying
and BEEs is supported by values which • The appointment in June 2001 of ways in which the role of facilitating and
include, inter alia, respect for the Seekers-Lesedi as sole service provider brokering business linkages can be
individual, non-discriminatory practices for PPC’s travel management portfolio. established on a sustainable basis.
and care for the communities in which PPC • The appointment in May 2002
operates. PPC further encourages business of Sasol’s empowerment partner, Contributing to upliftment
relationships with SMMEs and BEEs that Exel, to provide ultra-low sulphur PPC remains committed to government’s
support its drive to satisfy customer needs TurboDieselTM. programme of transformation and has
by supplying quality products and reliable • The appointment in July 2002 of Ilanga continued to implement its nation-
services. PPC is determined to promote, Printing to provide all of PPC’s corporate building and affirmative empowerment
develop, and source from SMMEs and stationery. policies in many ways during the course
BEEs in a manner that adds lasting value of the year.
to the partnership, as underlined by Developing the broader PPC regards the empowering of
its affirmative procurement policies. SMME community employees to be homeowners as a
Monitoring is ongoing with the group PPC remains an active board member business imperative. Where practical, the
commercial services manager responsible of the Corporate SMME Development ownership of PPC villages and residences
for reporting to the PPC executive every six Forum (CSDF) which is supported by has been transferred to employees who
months in this respect. many blue-chip South African corporate previously occupied these homes. To
companies. The purpose of the forum date over 200 homes have been
Empowerment procurement spend is to procure goods and services transferred to employees in this fashion.
PPC continues to expand its empower- from historically disadvantaged small At Riebeeck the village is now
ment procurement base and expenditure businesses and to bring them into the effectively part of the Riebeeck West
through the committed efforts of all mainstream of the economy. Business council. The Pienaars River village was
its operations. PPC procures services transactions between the corporate upgraded in so far as utilities and services,
and commodities ranging from the members of the forum and SMMEs is whereafter it was transferred to the Bella
traditional outsourcing of cleaning and expected to run into several hundreds of Bella municipality in terms of an end-use
security services to engineering million rand for the current year. All the plan approved by the DME.
spares and services, production goods, above initiatives are supported by focused The Lime Acres village was transferred
health care, information technology and policies on corporate social investment to the employees who were given
printing. and development, affirmative empower- the opportunity to purchase homes. A
Total empowerment procurement ment and SMME development. Homeowners Association is now well
expenditure has increased by 28% from established and several small businesses
R62 million to R80 million, a pleasing Benchmarking and business have been established in activities such as
result considering that the empowerment linkages initiative maintenance and garden services.
procurement contribution of PPC PPC is one of a number of high-profile Following the cessation of mining
Logistics is no longer included, following corporates currently participating in a activities at Loerie in the Eastern Cape, it
the sale of that business to Barloworld benchmarking and business linkages is proposed that the end-use will include
Limited. At the same time, the supplier project sponsored by the Africa Project a business and social plan in terms of
base has shown a corresponding increase Development Facility (APDF), GTZ, Ntsika which the infrastructure ownership will
of 158% with an emphasis on SMME and Enterprise Promotion Agency (NEPA) and be transferred to the community.

34
Support to emerging contractors Mangoedi Products & Project Managers, Progress towards target is encouraging at
PPC facilitated and sponsored training in owned by Ms Mangoedi Kgathi. Since our the lower levels, but slower at the more
contractor development for 36 members previous report, cement sales through senior levels, where labour turnover is
of South African Women in Construction SMMEs and historically disadvantaged much lower and skill and experience
(SAWIC). The training was conducted by South Africans increased by 18% to requirements far greater.
an empowerment training company – R220 million per annum. The group has retained its technical
Milcorp Construction Management – training school, although it is fashionable
and covered topics such as contract Human resources in other industries to outsource this
documentation, tendering, costing, At PPC we regard human intellect, as the function. From 1972 to 2002, 471 artisans
pricing, managing materials and using most critical success factor in growing have been trained by PPC, many of which
cement in construction. competitive advantage in all our are still employed. The services of this
In co-operation with the government businesses, more particularly our ability to facility are being extended to a limited
agency, NEPA, PPC co-sponsored sustain this by: number of non-employees.
the training of 63 emerging building • attracting, motivating and retaining the PPC has invested extensively in the
contractors from the North West province very best people; implementation and coaching of a model
in contractor entrepreneurial skills. These • capturing our unique know-how and which improves climate, workplace
business and life skills will assist these culture and transferring these to new communication and performance. The
employees; model is designed to coach the
building entrepreneurs to successfully
• developing the full potential of all our organisation towards improved under-
tender and manage building projects in
standing of work processes and to foster
the future. Participants were awarded employees;
greater empowerment at all levels of
Construction Development Programme • guiding the organisation to future
the organisation. The number of
certificates which are accredited by success.
implemented suggestions made by
the Construction Education and Training Each of the above require a healthily
employees is evidence that the process is
Authority (CETA). functioning set of organisational systems.
resulting in continuous improvement.
Policies, training systems, study assistance
A significant investment has been
Sponsored workshops for Women schemes, bursary schemes, recruitment
made in management and supervisory
for Housing drives, succession planning, employment
training and development, and mentorship
PPC joined forces with the Women for equity plans, work place skills plans and
programs for more senior managers.
Housing organisation to facilitate a series mentorship programs are only some of
Remuneration is regularly researched
of 12 workshops covering topics related the vital elements which play a part in
in relation to market benchmarks as PPC
to the building and construction industry. building for the future.
attempts to develop its employees into
These workshops provided women PPC has in the past two years invested top quartile performers. PPC maintains an
contractors with valuable information in the development of competency appropriate balance between fixed
about developing construction businesses models, which allow for the assessment remuneration and performance based
within the housing sector and provided of nearly every job in the organisation. incentives which is measured against
newcomers with an opportunity to These models underpin our training and specific scorecards and objectives. Top
develop an idea of what is entailed in the development initiatives. In support of performers are rewarded with top
sector. this programme 172 assessors and quartile pay.
five moderators have been trained. PPC constantly reviews the benefits it
Business opportunities for Succession plans and employment provides relative to industry and market
emerging entrepreneurs equity plans are given regular place. Both the range of benefits and the
PPC continues to grow the role of consideration. Approximately half the degree of company subsidisation of these
affirmable cement retailers to supply individuals on the succession plan are benefits are considered competitive by
cement to projects at every opportunity. from the designated groups. The any standard. Considerable attention is
As an example, we successfully company has appointed responsible paid to educating and assisting
implemented this approach with the managers in respect of employment employees in respect of medical aid funds
Luvuvhu Dam in the Limpopo province equity, and has submitted the required and retirement funds as their futures are
utilising the services of a black company, plans to the Department of Manpower. affected by both.

35
Contents

36 Certificate by secretaries 54 Balance sheets

37 Approval of annual financial 55 Income statements
statements 56 Statements of changes in
37 Report of the independent auditors shareholders’ interest
38 Report of the directors 58 Cash flow statements
41 Value added statement 59 Notes to the cash flow statements
42 Operational review: Cement 61 Notes to the financial statements
44 Operational review: Lime 90 Annexure 1 (Interest in subsidiary
45 Operational review: Packaging and unlisted associate companies)
46 Seven-year review 92 Share performance
49 Definitions 93 Notice of annual general meeting
50 Accounting policies 95 Form of proxy

Certificate by secretaries

In terms of section 268G(d) of the Companies Act, 1973, as amended (the Act), we certify that Pretoria Portland Cement Company
Limited has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Act. Further, that
such returns are true, correct and up to date.

Barloworld Trust Company Limited

Secretaries
Per A R Holt

36 PPC Annual Report 2002

Approval of annual financial statements

The directors of the company are responsible for the integrity and objectivity of the annual financial statements and other information
contained in this annual report, which have been prepared in accordance with International Financial Reporting Standards and South
African Statements of Generally Accepted Accounting Practice.
In discharging this responsibility, the group maintains suitable internal control systems designed to provide reasonable assurance that
assets are safeguarded and that transactions are executed and recorded in accordance with group policies.
The directors, supported by the audit committee, are satisfied that such controls, systems and procedures are in place to minimise the
possibility of material loss or misstatement. The group’s external auditors concur with this statement.
The directors believe that the group has adequate resources to continue in operation for the foreseeable future and the financial
statements appearing on pages 38 to 40 and 50 to 91 have, therefore, been prepared on a going-concern basis. The group’s external
auditors concur with this statement.
The annual financial statements were approved by the board of directors on 6 November 2002 and are signed on its behalf by:

W A M Clewlow J E Gomersall
Chairman Chief executive officer

Report of the independent auditors

To the members of Pretoria Portland Cement Company Limited

We have audited the annual financial statements and group annual financial statements of Pretoria Portland Cement Company Limited
set out on pages 38 to 40 and 50 to 91 for the year ended 30 September 2002. These financial statements are the responsibility of the
company's directors. Our responsibility is to express an opinion on these financial statements based on our audit.

Scope
We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes:
• examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;
• assessing the accounting principles used and significant estimates made by management; and
• evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Audit opinion
In our opinion, the financial statements fairly present, in all material respects, the financial position of the company and of the group at
30 September 2002 and the results of their operations and cash flows for the year then ended in accordance with International Financial
Reporting Standards and South African Statements of Generally Accepted Accounting Practice, and in the manner required by the
Companies Act in South Africa.

Deloitte & Touche

Registered Accountants and Auditors
Chartered Accountants (SA)

Johannesburg
6 November 2002

PPC Annual Report 2002 37

Report of the directors

The directors have pleasure in presenting their report on the annual financial statements of the company and of the group for the year
ended 30 September 2002.

BUSINESS ACTIVITIES
Pretoria Portland Cement Company Limited, its subsidiaries and associate companies, operate in southern Africa as manufacturers of
cementitious products, lime and limestone. Afripack Limited manufactures paper sacks and bags as well as printed and laminated
wrapping materials. As previously reported, the company has reviewed its strategy with regard to associate companies in South Africa,
and disposed of its:
• 32,8% interest in Natal Portland Cement Company (Pty) Limited to Cimpor-Cimentos de Portugal SPGS, S.A. for R328,0 million; and
• 25% interest in Ash Resources (Pty) Limited to Lafarge South Africa for R7,6 million.
Both of these disposals became effective from 31 August 2002 once the respective conditions precedent had been met. Except for
the above disposals, the principal activities of the company and its subsidiaries remained unchanged from the previous year.

GENERAL REVIEW OF OPERATIONS

Consolidated net profit attributable to shareholders increased by 45% to R600,3 million (2001: R413,2 million). The results of Portland
Holdings Limited of Zimbabwe are consolidated for the first time. Net profit per share was 1 121,1 cents (2001: 826,2 cents) on a fully
diluted basis. Headline earnings per share were 829,5 cents (2001: 709,7 cents). These results are comprehensively covered in the reviews
of the chairman, chief executive officer and operational executives.
Exceptional items of R158,9 million includes:
• The profit on sale of Natal Portland Cement Company (Pty) Limited and Ash Resources (Pty) Limited amounting to R262,7 million and
R0,6 million respectively;
• The impairment of R101,9 million goodwill relating to Portland Holdings Limited of Zimbabwe.
Despite significant savings in variable production costs and strong levels of domestic and export sales from Zimbabwe, Porthold has
struggled to break even since the regulation of cement prices in November 2001. The position has been exacerbated by
hyperinflationary (143%) cost pressures. Under difficult circumstances Porthold reported an operating loss of R8,7 million.
While Porthold generated positive cash flows, these were lower than anticipated and accordingly PPC has revised the carrying value
of Porthold by impairing the remaining goodwill of R101,9 million. Notwithstanding these extraordinary circumstances, the expansion
of our market presence continues to have significant medium to long-term value for PPC; and
• The impairment of R12,9 million relating to the Laezonia quarry which is unlikely to report profits until such time as there is an
improvement in our sales of aggregate.
Full details of exceptional items are set out in note 18 to the financial statements.

ACCOUNTING POLICIES
A subsidiary company, Portland Holdings Limited of Zimbabwe, applies International Accounting Standard 29 (Financial Reporting in
Hyperinflationary Economies). Where appropriate, the inflated value of property, plant and equipment is adjusted so as not to exceed its
fair market value.
Whereas the loan from the PPC group to Saldanha Steel (Pty) Limited, and the capitalised lease liability relating to the PPC Saldanha
material handling facility were previously netted off, these are reported separately in 2002. The financial statements for 2001 have been
restated accordingly. Notably this has no effect on net profit or earnings per share. The changes are in accordance with International
Financial Reporting Standards and improve the level of disclosure to shareholders.

SHARE CAPITAL AND PREMIUM

The authorised share capital remains unchanged at 60 000 000 ordinary shares of R1 each. On 30 September 2002 the issued share
capital of the company was 53 743 539 (2001: 50 012 712) shares of R1 each and the share premium stood at R812,1 million (2001:
R564,9 million).
Details of shares authorised, issued, unissued and shares under option at 30 September 2002 are given in note 8 to the financial
statements.

38 PPC Annual Report 2002

ACQUISITION BY THE COMPANY OF ISSUED SHARES
The company did not exercise its authority to buy back shares from its issued share capital.

PLACEMENT OF SHARES FOR CASH

The ordinary resolution proposed at the annual general meeting held on 25 January 2002, authorising the directors to issue shares in the
capital of the company for cash was withdrawn at the request of the directors.

POST-BALANCE SHEET EVENTS

There are no post-balance sheet events.

DIRECTORS’ INTEREST IN SHARE CAPITAL

At 30 September 2002 the beneficial holdings of directors of the company and their families in the ordinary shares of the company were
as follows:
R H Dent 26 535 (2001: 26 535) shares
There has been no change in the directors’ interest in share capital since year-end.

REGISTER OF MEMBERS
The register of members of the company is open for inspection to members and the public, during normal office hours, at the offices of
the company’s transfer secretaries, Computershare Investor Services Limited (South Africa) or at Corpserve (Private) Limited (Zimbabwe).

BORROWINGS
The company’s borrowing powers are unlimited. At 30 September 2002 borrowings and guarantees amounted to R410,9 million (2001:
R404,6 million). The borrowing powers of its subsidiary, Portland Holdings Limited of Zimbabwe, is limited by its articles of association to
twice the amount of shareholders’ equity. At 30 September 2002 the level of borrowings did not exceed the limit.

PROPERTY, PLANT AND EQUIPMENT

At 30 September 2002 the group investment in property, plant and equipment amounted to R1 811,4 million (2001: R1 390,0 million)
details of which are set out in note 1 to the financial statements. Capital commitments at the year-end amounted to R86,1 million. There
has been no change in the nature of the property, plant and equipment or to the policy relating to the use thereof during the year.

MANAGEMENT BY A THIRD PARTY

None of the business of the company or that of any of its subsidiaries was managed under contract by any third party during the year.

DIVIDENDS
Cents per share
Number Description Declaration date Record date Payment date 2002 2001

193 Special 6 November 2002 10 January 2003 13 January 2003 600 500
192 Final 6 November 2002 10 January 2003 13 January 2003 400 340
191 Interim 30 April 2002 5 July 2002 8 July 2002 135 120

1 135 960

PPC Annual Report 2002 39

Report of the directors

HOLDING AND SUBSIDIARY COMPANIES

Pretoria Portland Cement Company Limited is a subsidiary company of Barloworld Limited, which held 66,2% of the issued share capital
at 30 September 2002. With the exception of two nominee holdings, there are no other recorded members in the company’s share
register holding in excess of 5% of the total issued share capital of the company.
The names and country of registration, as well as the amount of their share capital, percentage holding and interest held by PPC in
each of its principal subsidiary companies are set out in Annexure 1 on page 90 of the report. All subsidiary companies share the same
financial year-end as PPC.

SPECIAL RESOLUTIONS
A special resolution authorising the directors to acquire issued shares in the ordinary share capital of the company was passed at the
annual general meeting held on 25 January 2002. No special resolutions were passed by the company’s subsidiary companies during the
year under review.

DIRECTORS AND SECRETARIES

The directors in office at the date of this report appear on pages 24 and 25. Details relating to the secretaries to the company, including
their business and postal addresses, appear in the administration section on page 97.
At the annual general meeting held on 25 January 2002, Messrs D C Arnold, P J Blackbeard, W A M Clewlow, A J Phillips, M J Shaw
and P Stuiver were re-elected directors of the company.
Changes to the directorate since the last annual general meeting were:
• Mr P Stuiver resigned with effect from 1 August 2002.
• Mr P J Blackbeard was appointed chief operating officer of PPC with effect from 1 August 2002, and retains the position of managing
director of PPC Cement (Pty) Limited.
In terms of the company’s articles of association Messrs R H Dent, J E Gomersall and P G Nelson retire by rotation at the forthcoming
annual general meeting. All are eligible and have offered themselves for re-election.

AUDITORS
Deloitte & Touche, the worldwide auditors of Barloworld Limited, were appointed as auditors to the company at the annual general
meeting held on 25 January 2002, in place of KPMG who did not stand for re-appointment.

40 PPC Annual Report 2002

Value added statement
for the year ended 30 September 2002

A measure of the wealth created by the group is the amount of value added to the cost of raw materials, products and services purchased.
This statement shows the total wealth created and how it was distributed.

2002 2001*
Notes Rm Rm

Revenue 2 570,2 2 071,2

Paid to suppliers for materials and services 1 (1 344,5) (1 085,3)
Value added 1 225,7 985,9
Exceptional items 158,9 57,7
Income from investments† 119,0 103,9
Total wealth created 1 503,6 1 147,5
Wealth distribution:
Salaries, wages and other benefits 2 418,2 358,3
Providers of capital 581,3 239,8
Finance costs 57,4 67,3
Dividends 523,9 172,5
Ordinary dividends 255,2 172,5
Special dividends 268,7 –

Government 3 255,1 147,1

Reinvested in the group to maintain and develop operations 249,0 402,3
Depreciation 188,1 165,0
Retained profit 76,4 240,7
Deferred tax release (15,5) (3,4)

1 503,6 1 147,5
Value added ratios
Number of employees (30 September) 3 300 3 004
Revenue per employee (R’000) 788,8 689,5
Wealth created per employee (R’000) 455,6 382,0
NOTES
1. Paid to suppliers for materials and services
Spoornet is the only supplier of services exceeding 10% of total amount paid.
All contracts are paid in accordance with agreed terms.
2. Salaries, wages and other benefits
Salaries, wages, overtime payments, commissions,
bonuses and allowances 363,7 310,4
Employer contributions§ 54,5 47,9
418,2 358,3
3. Government
Central and local government:
Tax – SA normal, foreign and STC 244,7 138,0
Regional services council levies 4,7 4,3
Rates and taxes paid to local authorities 3,0 3,1
Customs duties, import surcharges and excise taxes 0,2 0,5
Skills development levy 2,5 1,2
Gross contribution to central and local government 255,1 147,1
* Restated
†
Includes interest received, dividend income and share of associate companies’ retained profit
§
In respect of pension funds, retirement annuities, provident funds, medical aid and insurance

PPC Annual Report 2002 41

Operational review: Cement

Challenging structures and best operating practices, achieving record value creation

MARKET CONDITIONS
South Africa
Local cement sales improved strongly in the second half of the year. PPC volumes increased by 5% whereas industry sales were 4,3% up.
The main areas of growth have been in Botswana, Namibia and the North West and Gauteng provinces. Volumes in the Western Cape
improved for the first time in three years. The southern Cape is buoyant on the back of residential and tourism growth and the Eastern
Cape is showing signs of improvement now that the Coega project has finally been launched. Suremix, the dry mortar mix launched last
year, showed steady growth.
Export cement sales were boosted by strong growth in PPC’s existing markets and the penetration into new markets. The weaker
rand/dollar in the early part of the year increased export competitiveness.

Zimbabwe
Despite the serious economic decline in Zimbabwe, local sales increased by 10% and exports to neighbouring territories enjoyed a
resurgence following the rapid decline in the local currency and a drive by companies to increase foreign currency revenues. Portland
Holdings Limited maintained the major share of the domestic and export market despite the entry into the market by a slag-blending
competitor in the form of Midlands Portland Cement.

OPERATIONS
The VBM and Kambuku “way” of life has been adopted at all levels throughout the organisation. It continues to yield impressive
improvements in customer service, environmental performance, efficiencies and cost savings.
A logistics optimisation project has been introduced in the Western and Eastern Cape markets and is already showing benefits in
customer service and cost reductions. This will be rolled out to the remainder of the PPC market by March 2003.
Certain kilns at De Hoek, Hercules and Dwaalboom set new production records during the year. Many of the facilities in the group
are capable of performing above their design specifications (refer graphs on page 43). Engineering and maintenance programmes
introduced to optimise running efficiencies and reduce costs are beginning to deliver results and offer significant further savings. The
company continues to apply innovative waste utilisation solutions with a view to reducing energy costs per ton and maximising other
environmental benefits.
All South African production facilities are accredited to ISO 14001 for environmental performance. The De Hoek quarry won an
“Excellence in Mining Environmental Management” Silver Award during the year, the first such award for a cement quarry. The Riebeeck
and De Hoek operations were both awarded the newly launched NOSA 5 Star Platinum safety grading.
All South African factories have been restructured to a world-class blueprint which has yielded both quality and cost benefits. An
extensive programme in documenting and inculcating best operating practices has added further to efficiency and effectiveness. Central
technical services have also re-defined their role to offer selected and better services at lower cost.
Spoornet’s service levels have unfortunately deteriorated to the point where additional costs are being incurred and domestic and
export sales are being negatively impacted. Potential solutions are being explored with Spoornet; however, no significant improvement is
expected in the short term.

FINANCIAL RESULTS
The programme to improve the quality of the customer base and grow new revenue streams continued into 2002. Overall turnover grew by
30% to R2 064,9 million boosted by a 39% growth in South African exports and the inclusion of Portland Holdings Limited for the first time.
The ongoing programmes, to add value by improving operating efficiencies and reducing costs, continue to deliver results. Despite
the fact that Portland Holdings Limited returned an operating loss of R8,7 million for the year, PPC Cement produced an excellent result,
increasing operating profit (including income from associate companies) by 39% to R561,4 million.

42 PPC Annual Report 2002

 Profitability in Zimbabwe was severely constrained by the imposition in November 2001 of regulated prices at both factory and retail
level. Prices were set at a 30% discount to the then ruling market price. Since then only one price increase of 50% has been granted in
April 2002, whereas inflation in Zimbabwe has been running at over 143%. Notwithstanding these inflationary pressures, Portland
Holdings Limited has mitigated its losses by focused attention on cost management and the implementation of PPC’s best operating
practices.

PROSPECTS
The clear indications of increased government spending on gross fixed capital formation and the launch of the long-awaited Coega
project bode well for an increase in RSA demand. The situation in Zimbabwe is likely to remain difficult for some time.
Kambuku is expected to yield further cost reductions, as will the roll-out of the programmes referred to above such as logistics
management, engineering and maintenance, and waste utilisation.

2002 2001* %
Rm Rm change

Revenue# 2 064,9 1 593,8 30

Operating profit§ 561,4 404,0 39
Operating margin (%) 27,2 25,3
Net operating assets 1 407,7 1 205,9 17
Number of employees 2 399 1 757
Cement capacity (tons 000) 6 400 5 700

* Restated
#
Prior to elimination of inter-segment revenue
§
Including income from associate companies

Kilns Despatch plant Quarries

79,9
101,1 77,5 78,2
98,5 90,4
96,8 96,9 96,8 96,4 87,3 75,5
84,8 74,3 74,6
81,6 81,2
75,7

Averages Averages Averages Averages Averages Averages Averages Averages Averages

FY 2000 FY 2001 FY 2002 FY 2000 FY 2001 FY 2002 FY 2000 FY 2001 FY 2002

Reliability Reliability Reliability

Performance index Performance index Performance index

PPC Annual Report 2002 43

Operational review: Lime

Challenging our energy consumption and CO2 emissions, burning more waste in our plants

MARKET CONDITIONS
While the steel sector, which is the largest user of lime in South Africa, experienced a strengthening in steel output, this did not flow
through to PPC. This was due to a combination of the planned Corex plant shutdown at Saldanha Steel and lower consumption by
customers who either experienced production problems or improved efficiencies.

OPERATIONS AND FINANCIAL RESULTS

The significantly improved financial performance in 2002 is the result of a strong VBM focus on revenues and cost efficiencies. The bulk
of our business continues to be conducted under long-term agreements and a number of these were re-negotiated at improved prices
during the year.
The launch of our 2002 Kambuku project has aligned objectives and targets in the workplace. Arising from this, we are experiencing
new levels of energy, participation and commitment from all our employees. Their continued focus on energy consumption, productivity-
driven initiatives and overhead costs has contributed strongly to improving operating margins in the year.
At our Lime Acres factory in the Northern Cape, we achieved the lowest ever level of annual energy consumption through the burning
of waste and the improved utilisation of energy efficient kilns. This reduced both energy costs and CO2 emissions. The rationalisation of
our mining operation and the introduction of 24-hour mining, which commenced during the previous year, improved asset utilisation and
successfully reduced our capital investment in mining assets.
Following extensive repair work at the Corex plant at Saldanha Steel, output from the steel plant reached design levels during the
latter part of the year, consequently the PPC Saldanha material handling facility is now operating at similar levels.
Our value proposition to our customers is “Our reliability is our strength”. Poor service and unreliability from Spoornet have impacted
negatively on our ability to deliver on our promise. While this has resulted in increased costs, it has also resulted in both customers, and
PPC Lime, operating at critically low stock levels for extended periods of time.
In the drive to improve cost competitiveness and returns, excess capacity was reduced through the permanent retirement of an older
and less efficient rotary kiln at Lime Acres, reducing the lime production capacity from 1,8 to 1,5 million tons per annum.
The Lime Acres factory is also the first division in PPC to be awarded the OHSAS 18001 certification.

PROSPECTS
The South African steel and metallurgical industries remain the main consumers of our lime products. Whilst speculation regarding
the future structure of the South African steel industry continues, expectations are that we will not see any major negative impact on the
medium term demand for our lime products. Indications are that all major customers are planning to operate at full capacity for
the foreseeable future.
Efforts to improve the profitability of the business will continue in a number of areas. We expect to incorporate all the elements of a
“performing organisation” into our business through the Kambuku initiative. In order for the business to achieve the required cost of
capital returns, further reductions in excess capacity may be effected through the retirement of another rotary kiln at Lime Acres.
Environmental applications for lime in the areas of waste treatment are being pursued, as it is likely that these will increase the South
African lime demand in the medium term.

2002 2001* %
Rm Rm change

Revenue# 389,4 368,2 6

Operating profit 66,8 49,9 34
Operating margin (%) 17,2 13,6
Net operating assets 434,7 448,2 (3)
Number of employees 499 501
Lime capacity (tons 000) 1 492 1 821

* Restated
#
Prior to elimination of inter-segment revenue

44 PPC Annual Report 2002

Operational review: Packaging

Challenging the status quo, seeking further market diversification

Afripack (100% owned) has been a leading player in the South African flexible packaging market since 1933. From its Durban factory, it
produces paper sacks for the cement industry; paper bags for the manufacturing and food sectors as well as printed and laminated
wrapping materials. Afripack has a diversified market presence with PPC Cement currently comprising approximately 25% of revenues.
Despite a relatively flat market, volume and revenue rose strongly in 2002. Notably, business conditions improved markedly during the
second half of the financial year. The weaker rand improved our export competitiveness contributing to a doubling of export revenues.
The company continued to expand its presence in the market for self-opening bags and build on its strategy to improve customer and
product mix. It increasingly offers supply chain solutions to customers and seeks to differentiate itself based on service, quality and
flexibility. In line with its strategy, the company is steadily reducing its reliance on PPC Cement and growing market share in other markets.
A continued focus on VBM and key value drivers has resulted in further significant improvements in productivity and quality. These,
together with continued waste and overhead cost reduction, improved maintenance practices and tight working capital management,
contributed to strongly improved operating margins in 2002. The Kambuku VBM project has aligned all objectives and targets within the
company and it has created a climate of continuous improvement to challenge the organisation.
Further improvements are targeted in the year ahead. In addition, Afripack intends embarking on a R40 million modernisation
programme aimed at further market diversification, improving product quality, customer flexibility and on further improving operating
efficiencies and reducing wastage. These additional benefits are only likely to arise towards the end of 2003.

2002 2001* %
Rm Rm change

Revenue# 189,9 161,6 18

Operating profit 17,6 10,8 63
Operating margin (%) 9,3 6,7
Net operating assets 39,8 31,6 26
Number of employees 224 230

* Restated
#
Prior to elimination of inter-segment revenue

PPC Annual Report 2002 45

Seven-year review

2002 2001* 2000* 1999* 1998* 1997 1996

Rm Rm Rm Rm Rm Rm Rm

CONSOLIDATED BALANCE SHEETS

Assets
Non-current assets
Property, plant and equipment 1 811 1 390 1 542 1 543 1 438 1 136 837
Goodwill and intangible assets 1 2 2 – – – –
Negative goodwill (1) – – – – – –
Other non-current assets and
investments in associate companies 401 457 417 371 365 82 70
Deferred tax assets 12 12 13 12 – – –

2 224 1 861 1 974 1 926 1 803 1 218 907

Current assets 1 490 1 186 661 542 502 557 597

Inventories and receivables 618 679 504 468 477 457 452
Cash and cash equivalents 872 507 157 74 25 100 145

Total assets 3 714 3 047 2 635 2 468 2 305 1 775 1 504

Equity and liabilities

Capital and reserves
Share capital and premium 866 615 615 614 506 395 272
Reserves and retained profit 1 445 1 324 1 062 983 828 741 689

Shareholders’ interest 2 311 1 939 1 677 1 597 1 334 1 136 961

Non-current liabilities 860 728 687 611 627 257 135

Deferred tax liabilities 353 208 220 210 202 154 134
Other non-current liabilities 507 520 467 401 425 103 1

Current liabilities 543 380 271 260 344 382 408

Total equity and liabilities 3 714 3 047 2 635 2 468 2 305 1 775 1 504

* Restated
Figures from 1996 to 1999 have not been restated for IAS effects

46 PPC Annual Report 2002

 2002 2001* 2000* 1999* 1998* 1997 1996
Rm Rm Rm Rm Rm Rm Rm

CONSOLIDATED INCOME STATEMENTS

Revenue 2 570 2 071 1 778 1 741 1 804 1 658 1 408

Operating profit 612 454 311 252 304 286 252

Finance costs 57 67 75 94 21 7 7
Income from investments 92 85 66 59 35 24 30
Goodwill amortisation 3 – – – – – –

Profit before exceptional items 644 472 302 217 318 303 275
Exceptional items 158 57 10 (13) – 18 (9)

Profit before tax 802 529 312 204 318 321 266
Tax 229 135 70 14 84 103 81

Net profit after tax 573 394 242 190 234 218 185
Share of associate companies’
retained profit 27 19 11 4 9 8 9

Net profit attributable to shareholders 600 413 253 194 243 226 194

Attributable net profit excluding

exceptional items 442 356 244 203 243 217 200

CONSOLIDATED CASH FLOW

STATEMENTS
Cash available from operations 638 632 400 373 374 230 161
Dividends paid (524) (173) (138) (43) (59) (39) (37)

Net cash inflow from operating activities 114 459 262 330 315 191 124
Net cash inflow/(outflow) from
investing activities 252 (92) (188) (294) (515) (393) (208)
Net cash (outflow)/inflow from
financing activities (7) (18) 5 12 126 156 (25)

Net increase/(decrease) in cash and

cash equivalents 359 349 79 48 (74) (46) (109)

* Restated
Figures from 1996 to 1999 have not been restated for IAS effects

PPC Annual Report 2002 47

Seven-year review

2002 2001* 2000* 1999* 1998* 1997 1996

STATISTICS
Ordinary share performance
Weighted average number of
ordinary shares in issue
during the year (000) 53 551 50 011 49 999 49 496 46 681 44 719 43 051
Net profit per share (cents) 1 121 826 506 393 520 505 450
Earnings per share before
exceptional items (cents) 825 712 488 411 519 486 465
Headline earnings per share (cents) 830 710 521 403 601 520 506
Cash equivalent earnings
per share (cents) 1 456 1 186 861 662 849 725 650
Attributable cash flow per share (cents) 1 191 1 264 800 753 802 514 374
Dividends per share (cents) 535 460 315 270 325 305 290
Dividend cover (times) 1,5 1,5 1,5 1,5 1,6 1,6 1,6
Net asset value per share (cents) 4 300 3 877 3 353 3 194 2 835 2 518 2 219

Profitability and asset management

EBITDA (Rm) 801 619 463 384 402 363 313
EBITDA to revenue (%) 31,2 29,9 26,0 22,1 22,3 21,9 22,2
Operating margin (%) 25,1 23,0 18,4 14,8 17,4 17,9 18,8
Net operating asset turn (times) 1,5 1,3 1,0 1,0 1,0 1,3 1,6
Return on net operating assets (%) 35,4 27,8 18,1 14,6 21,9 26,2 32,6
Return on total assets (%) 21,6 19,7 15,2 13,3 16,8 19,4 19,7
Return on shareholders’ interest (%) 28,3 22,8 15,5 13,2 19,7 21,6 21,8
Replacement capex to depreciation (%) 58,4 48,8 90,0 69,3 66,1 103,3 107,4
Effective rate of tax (%) 29,9 28,6 31,7 9,3 27,8 33,1 32,7

Liquidity and leverage

Total liabilities to shareholders’
interest (%) 45 46 44 42 58 43 43
Total borrowings to shareholders’
interest (%) 17 21 23 24 32 14 3
Current ratio 2,7:1 3,1:1 2,4:1 2,1:1 1,5:1 1,5:1 1,4:1
Quick ratio 2,3:1 2,6:1 1,7:1 1,3:1 0,9:1 1,0:1 1,0:1
Interest cover (times) 12 8 5 3 9 26 40
Number of years to repay
interest-bearing debt – gross 1 1 1 1 1 1 –

Productivity
Number of employees 3 300 3 004 2 977 3 179 3 715 3 951 3 990
Revenue per employee (R’000) 778,8 689,5 597,4 547,4 485,6 419,6 352,9
Wealth created per employee (R’000) 455,6 382,0 296,9 237,6 209,0 184,2 165,3

* Restated
Figures from 1996 to 1999 have not been restated for IAS effects

48 PPC Annual Report 2002

Definitions

NET ASSET VALUE PER SHARE

Shareholders’ interest divided by the total number of ordinary shares.

OPERATING MARGIN
Operating profit including income from associate companies expressed as a percentage of revenue.

TOTAL ASSETS
Property, plant and equipment, intangible assets, non-current assets and current assets.

RETURN ON TOTAL ASSETS

Profit before finance costs and tax (including income from investments and income from associate companies) expressed as a percentage
of average total assets.

RETURN ON SHAREHOLDERS’ INTEREST

Net profit attributable to shareholders expressed as a percentage of average shareholders’ interest.

EFFECTIVE RATE OF TAX

Tax (excluding prior year tax) expressed as a percentage of profit before tax, excluding dividend income.

TOTAL LIABILITIES
Current liabilities and non-current liabilities. Deferred tax liabilities are excluded.

TOTAL BORROWINGS
Total liabilities less non-interest-bearing liabilities, trade and other payables, provisions and shareholders for dividends.

INTEREST COVER
Profit before finance costs and tax divided by finance costs including interest capitalised. Profit includes income from investments, but
excludes share of associate companies’ retained profit.

DIVIDEND COVER
Earnings per share excluding exceptional items divided by dividends per share.

CURRENT RATIO
Current assets divided by current liabilities.

NET OPERATING ASSET TURN

Revenue divided by average net operating assets.

NET OPERATING ASSETS

Total assets (excluding investments and loans, deferred tax assets and cash) less deferred tax liabilities, non-interest-bearing liabilities, trade
and other payables, provisions and shareholders for dividends.

RETURN ON NET OPERATING ASSETS

Profit before finance costs and tax expressed as a percentage of average net operating assets.

CASH EQUIVALENT EARNINGS PER SHARE

Net profit attributable to shareholders adjusted for non-cash flow items in attributable earnings and equity accounted retained profits,
divided by the weighted average number of ordinary shares in issue during the year.

ATTRIBUTABLE CASH FLOW PER SHARE

Attributable cash flow from operations divided by the weighted average number of shares in issue during the year.

PPC Annual Report 2002 49

Accounting policies

ACCOUNTING POLICIES AND BASIS OF PRESENTATION

The financial statements are prepared under the historical cost convention modified by the restatement of financial instruments to fair value and
the restatement to current cost for those subsidiaries operating in hyperinflationary economies.
The financial statements are prepared in accordance with International Financial Reporting Standards and with South African Statements
of Generally Accepted Accounting Practice on a basis consistent with previous financial statements, except for the adoption of IAS 39
(Financial Instruments: Recognition and Measurement) applied for the first time during the year under review.
The principal accounting policies adopted are set out below.

PRINCIPAL ACCOUNTING POLICIES

Basis of consolidation
The consolidated financial statements incorporate the financial statements of the company and enterprises controlled by the company up
to 30 September each year. Control is achieved where the company has the power to govern the financial and operating policies of
an investee enterprise so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
All significant intercompany transactions and balances between group enterprises are eliminated on consolidation.
On acquisition of a subsidiary, minorities’ interest is measured at the proportion of the pre-acquisition carrying amounts of the
identifiable assets and liabilities.

Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of
time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready
for their intended use or sale.
All other borrowing costs are dealt with in the income statement in the period in which they are incurred.

Comparative figures
When an accounting policy is altered, comparative figures are restated in accordance with the new policy where material.

Decommissioning and quarry rehabilitation costs

Group companies are generally required to restore mine and processing sites at the end of their producing lives to a condition acceptable
to the relevant authorities and consistent with the group’s environmental policies.
The expected cost of any committed decommissioning or restoration programme, discounted to its net present value, is provided and
capitalised at the beginning of each project. The capitalised cost is depreciated over the life of the asset and the increase or decrease in
the net present value of the provision for the expected cost is included with finance costs.
The cost of ongoing programmes to prevent and control pollution and to rehabilitate the environment is charged to the income
statement as incurred.
Annual contributions are made to the group’s Environmental Rehabilitation Trust Fund, created in accordance with statutory
requirements, to provide for the estimated cost of pollution control, decommissioning and rehabilitation during and to the end of the life
of the related asset.

Discontinuing operations
Discontinuing operations are significant, distinguishable components of an enterprise that have been sold, abandoned or are the subject
of formal plans for disposal or discontinuance.
Once an operation has been identified as discontinuing, or is reclassified as continuing, the comparative information is restated.

Equity compensation plans

Executive directors and senior executives have been granted share options in terms of the Barloworld Share Option Scheme. After the
date on which the options are exercisable and before the expiry date they can either be:
• purchased for cash or through a loan from the Barloworld Share Purchase Trust; or
• ceded to an approved financial institution.

Exceptional items
Exceptional items cover those amounts, which are not considered to be typical of the ongoing business, and generally include profit and
loss on disposal of property, investments, other non-current assets, and impairment losses.

Financial instruments
Measurement
Financial instruments are recognised at the date the group becomes party to the contractual arrangements and are initially measured at
cost, which includes transaction costs. Subsequent to initial recognition these instruments are measured as set out below.

Investments
Investments in securities are recognised on a trade-date basis.

50 PPC Annual Report 2002

 Investments are classified as either held for trading or available-for-sale. Investments are shown at fair value which is determined by
using appropriate valuation models.

Trade and other receivables

Trade and other receivables originated by the group are stated at cost less provision for doubtful debts.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at balance sheet date.

Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Derivative instruments
Derivative instruments are measured at fair value.

Gains and losses on subsequent measurements

Unrealised gains and losses on available-for-sale investments are recognised directly in equity until the disposal or impairment of the
relevant investment, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the
period.
Other gains and losses from a change in the fair value of financial instruments that are not part of a hedging relationship are included
in net profit or loss in the period in which the change arises.
For the purposes of hedge accounting, hedges are classified into two categories: (a) fair value hedges which hedge the exposure to
changes in fair value of a recognised asset or liability; and (b) cash flow hedges, which hedge exposure to variability in cash flows that is
either attributable to a particular risk associated with a recognised asset or liability or a forecasted transaction.
In relation to cash flow hedges which meet the conditions for hedge accounting, the portion of the gain or loss on the hedging
instrument that is determined to be an effective hedge is recognised directly in shareholders’ equity and the ineffective portion is
recognised against income. For cash flow hedges affecting future transactions, the gains or losses which are recognised in shareholders’
equity are transferred to income in the same period in which the hedge transaction affects income. Where the hedge transaction results
in the recognition of an asset or liability, the associated gains or losses that had previously been recognised in shareholders’ equity are
included in the initial measurement of the acquisition cost or other carrying amount of the asset or liability.

Foreign currencies
Transactions in currencies other than South African rand are recorded at the rates of exchange applicable on the transaction date.
Monetary assets and liabilities denominated in such currencies are retranslated at the rates applicable on the balance sheet date. Profits
and losses arising on exchange are dealt with in the income statement.
In the case of foreign entities the financial statements of the group’s non-South African operations are translated as follows on
consolidation: assets and liabilities, at exchange rates applicable on the balance sheet date, income and expense items at the average
exchange rates for the period and goodwill arising on acquisition at exchange rates applicable on the dates of the transactions. Exchange
differences arising, if any, are classified as equity and transferred to the group’s translation reserve. Such translation differences are
recognised as income or as expenses in the period in which the operation is disposed of.
The financial statements of the foreign entity, Portland Holdings Limited, that reports in the currency of a hyperinflationary economy
are restated in terms of Zimbabwe dollars at the balance sheet date before they are translated into South African rand.

Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the group’s interest in the fair value of the
identifiable assets and liabilities of a subsidiary or associate company at the date of acquisition. Goodwill is recognised as an asset and
amortised on a systematic basis over its estimated useful life subject to a maximum of 20 years.
Any negative goodwill that arises where the fair value of the group’s interest in the identifiable assets and liabilities of the subsidiary
exceeds the cost of acquisition is taken to profit immediately:
• where there is no expectation of future losses;
• in respect of non-monetary assets to the extent whereby the negative goodwill exceeds the fair value of acquired identifiable assets;
• in respect of monetary assets.
To the extent that negative goodwill relates to depreciable assets, it is recognised as profit over the useful life of those assets.
Goodwill arising on the acquisition of subsidiaries and associate companies is presented separately in the balance sheet.
On disposal of a subsidiary or associate company, the attributable amount of unamortised goodwill is included in the determination
of the profit or loss on disposal.

Government grants
Government grants towards staff re-training costs are recognised as income over the periods necessary to match them with the related
costs and are deducted in reporting the related expense. Income is not recognised until there is reasonable assurance that the grants will
be received.

PPC Annual Report 2002 51

Accounting policies

Impairment
At each balance sheet date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an
individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, its carrying amount is
reduced to its recoverable amount. Impairment losses are recognised as an expense immediately and are treated as exceptional items.
Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised
estimate of its recoverable amount. This is done so that the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised in prior years. A reversal of an impairment loss is recognised as income
immediately and treated as an exceptional item.

Intangible assets
Intangible assets are measured initially at cost and amortised on a straight-line basis over their estimated useful lives.

Internally generated intangible assets – exploration and research expenditure

Exploration and research costs are expensed in the year in which they are incurred.

Inventories
Inventories are stated at the lower of cost and net realisable value.
Finished goods and process materials are valued at average cost, which includes overheads directly related to production.
Maintenance stores are valued at cost determined on the weighted average basis after making full allowance for obsolete and slow-
moving items.
Packaging inventories are valued at cost determined on the first-in first-out basis.
Contracts in progress are valued at the cost of materials and appropriate overheads.
Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing,
selling and distribution.

Investments
Investments, which exclude those that are accounted for as subsidiaries and associate companies, are stated at fair value.
Income from investments is brought to account only to the extent of dividends received or declared. Interest income is recognised on
an accrual basis.

Investments in associate companies

An associate company is an enterprise over which the group is in a position to exercise significant influence, through participation in the
financial and operating policy decisions of the investee.
The results and assets and liabilities of associate companies, taken from the most recent unaudited management accounts, are
incorporated in these financial statements using the equity method of accounting. The carrying amount of such investments is reduced
to recognise any decline, other than a temporary decline, in the value of individual investments.
Where a group enterprise transacts with an associate company of the group, unrealised profits and losses are eliminated to the extent
of the group’s interest in the relevant associate company.

Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the
lessee. All other leases are classified as operating leases.

The group as lessor

Amounts due from lessees under finance leases are recorded as receivables at the amount of the group’s net investment in the leases.
Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the group’s net investment
outstanding in respect of the leases.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

The group as lessee

Assets held under finance leases are recognised as assets of the group at their fair value at the date of acquisition. The corresponding
liability to the lessor is disclosed as a finance lease obligation. Finance costs represent the difference between the total leasing
commitments and the fair value of the assets acquired. They are charged to the income statement over the term of the relevant lease and
at interest rates applicable to the lease on the remaining balance of the obligations for each accounting period.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation.

52 PPC Annual Report 2002

 Depreciation is charged so as to write off the depreciable value of the assets, other than land, over their estimated useful lives, using
the straight-line method, on the following basis:
Buildings 30 years
Plant 5 to 35 years
Vehicles 5 to 10 years
Furniture and equipment 3 to 6 years
Certain costs of development and installation of major information systems (including packaged software) are capitalised and
amortised over their expected useful lives.
Assets held under finance leases are depreciated over their expected useful lives or the term of the relevant lease, where shorter.
The gain or loss arising on the disposal or scrapping of an asset is recognised in the income statement.

Provisions
Provisions are recognised when the group has a present legal or constructive obligation, as a result of past events, for which it is probable
that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made for the amount of the
obligation. Where the effect of discounting to present value is material, provisions are adjusted to reflect the time value of money.

Retirement benefit costs

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to industry-
managed retirement benefit schemes are dealt with as defined contribution plans where the group’s obligations under the schemes are
equivalent to those arising in a defined contribution retirement benefit plan.
For defined benefit plans the cost of providing the benefits is determined using the projected unit credit method. Actuarial valuations
are conducted on a triennial basis with interim valuations performed on an annual basis on a date which does not coincide with the
balance sheet date. Consideration is given to any event that could impact the funds up to balance sheet date.
Actuarial gains and losses which exceed 10% of the greater of the present value of the group’s pension obligations and the fair value
of plan assets are amortised over the expected average remaining working lives of the participating employees. Past service cost is
recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the
average period until the amended benefits become vested.
The amount recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for
unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value of plan assets. Any asset is
limited to unrecognised actuarial losses, plus the present value of available refunds and reductions in future contributions to the plan.
To the extent that there is uncertainty as to the entitlement to the surplus, no asset is recorded.

Revenue recognition
Included in revenue are net invoiced sales to customers for goods and services. Sales of goods are recognised when goods are delivered
and title has passed. Revenue arising from services, royalties and rebates is recognised on the accrual basis in accordance with the
substance of the relevant agreements. Revenue excludes indirect taxes.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable.
Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

Segmental reporting
Segment accounting policies are consistent with those adopted for the preparation of the financial statements of the consolidated group.
The primary basis for reporting segment information is business segments and the secondary basis is by significant geographical region,
which is based on the location of assets. The basis is consistent with internal reporting for management purposes as well as the source
and nature of business risks and returns.
Segment result represents operating profit plus any other items that can be allocated to segments including fair value adjustments on
financial instruments of specific segments. Interest costs are excluded due to the centralised nature of the group’s treasury operations.

Tax
The charge for current tax is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated
using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences
between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation
of taxable profit. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill, negative goodwill nor from the
acquisition of an asset, which does not affect either taxable or accounting income.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associate companies,
except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which
case the deferred tax is also dealt with in equity.

PPC Annual Report 2002 53

Balance sheets
at 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
Notes Rm Rm Rm Rm

ASSETS
Non-current assets 2 224,5 1 860,5 1 337,6 1 067,0

Property, plant and equipment 1 1 811,4 1 390,0 807,3 837,3

Goodwill and intangible assets 2 1,1 2,2 – –
Negative goodwill 2 (1,2) – – –
Other non-current assets 3 378,9 381,3 523,8 196,6
Investment in associate companies 4 22,2 74,7 6,5 33,1
Deferred tax assets 9 12,1 12,3 – –

Current assets 1 489,4 1 186,1 1 137,9 945,6

Inventories 5 230,2 194,0 149,6 150,2

Trade and other receivables 6 387,6 484,9 254,0 386,9
Cash and cash equivalents 7 871,6 507,2 734,3 408,5

Total assets 3 713,9 3 046,6 2 475,5 2 012,6

EQUITY AND LIABILITIES

Capital and reserves
Share capital and premium 8 865,8 614,9 865,8 614,9
Non-distributable reserves 109,8 69,4 11,8 16,7
Retained profit 1 335,1 1 254,9 1 022,7 921,8

Interest of shareholders of PPC 2 310,7 1 939,2 1 900,3 1 553,4

Minority interest 0,1 – – –

Interest of all shareholders 2 310,8 1 939,2 1 900,3 1 553,4

Non-current liabilities 859,6 727,8 199,8 204,0

Deferred tax liabilities 9 352,7 208,2 111,0 111,7

Interest-bearing 10 387,5 399,5 – –
Non-interest-bearing 10 119,4 120,1 88,8 92,3

Current liabilities 543,5 379,6 375,4 255,2

Short-term borrowings 11 14,2 – – –

Tax 163,3 96,9 128,5 64,4
Trade and other payables 12 360,7 278,9 241,9 187,3
Provisions 13 5,3 3,8 5,0 3,5

Total equity and liabilities 3 713,9 3 046,6 2 475,5 2 012,6

* Restated

54 PPC Annual Report 2002

Income statements
for the year ended 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
Notes Rm Rm Rm Rm

Revenue 14 2 570,2 2 071,2 1 767,1 1 496,7

– continuing operations 2 570,2 2 047,9 1 767,1 1 496,7

– discontinued operation – 23,3 – –

Operating profit 15 612,2 453,6 602,3 359,0

– continuing operations 612,2 441,1 602,3 359,0

– discontinued operation – 12,5 – –

Finance costs 16 57,4 67,3 35,9 47,5

Income from investments 17 92,2 85,3 52,7 39,3
Goodwill amortisation 2 3,1 0,1 – –

Profit before exceptional items 643,9 471,5 619,1 350,8

Exceptional items 18 158,9 57,7 203,8 95,3

Profit before tax 802,8 529,2 822,9 446,1

Tax 19 229,2 134,6 198,1 95,2

Net profit after tax 573,6 394,6 624,8 350,9

Share of associate companies’ retained profit 4 26,8 18,6 – –
Minority interest 0,1 – – –

Net profit attributable to shareholders 600,3 413,2 624,8 350,9

Net profit per share (cents)

– basic 20.1 1 121,1 826,3
– fully diluted 20.2 1 121,1 826,2

Earnings per share before exceptional items (cents)

– basic 20.3 824,5 711,8
– fully diluted 20.4 824,5 711,8

Headline earnings per share (cents)

– basic 20.5 829,5 709,7
– fully diluted 20.6 829,5 709,6

Dividends per share (cents) 21 1 135 960

* Restated

PPC Annual Report 2002 55

Statements of changes in shareholders’ interest
for the year ended 30 September 2002

Non-distributable reserves
Capital Unrealised
re- surplus on Foreign Available-
demption reclassifi- currency for-sale
Share Share reserve cation trans- financial Hedging Retained
capital premium fund of plant lation assets reserves profit Total
Rm Rm Rm Rm Rm Rm Rm Rm Rm

GROUP
Balance at
1 October 2000 50,0 564,8 0,8 50,2 3,7 – – 1 007,2 1 676,7
Increase in share capital
and premium – 0,1 – – – – – – 0,1
Exchange gains on
translation of financial
statements of foreign
operations – – – – 5,0 – – – 5,0
Movement in derivative
hedging position – – – – – – 16,7 – 16,7
Other reserve movements – – – (7,0) – – – 7,0 –

Net profit attributable to

shareholders – – – – – – – 413,2 413,2
Dividends – – – – – – – (172,5) (172,5)

Balance at
30 September 2001* 50,0 564,9 0,8 43,2 8,7 – 16,7 1 254,9 1 939,2
Opening adjustment for
revaluation of investment – – – – – 9,1 – – 9,1
Increase in share capital
and premium 3,7 247,2 – – – – – – 250,9
Exchange gains on
translation of financial
statements of foreign
operations – – – – 49,1 – – – 49,1
Movement in
cash flow hedge – – – – – – 4,2 – 4,2
Amount recognised in cost
of acquisition – – – – – – (20,9) – (20,9)
Revaluation of investment – – – – – 3,1 – – 3,1
Deferred tax on revaluation – – – – – (0,4) – – (0,4)
Other reserve movements – – – (3,8) – – – 3,8 –

Net profit attributable

to shareholders – – – – – – – 600,3 600,3
Dividends – – – – – – – (523,9) (523,9)

Balance at
30 September 2002 53,7 812,1 0,8 39,4 57,8 11,8 – 1 335,1 2 310,7

* Restated

56 PPC Annual Report 2002

 Non-distributable
reserves
Available-
for-sale
Share Share Hedging financial Retained
capital premium reserves assets profit Total
Rm Rm Rm Rm Rm Rm

COMPANY
Balance at 1 October 2000 50,0 564,8 – – 743,4 1 358,2
Increase in share capital and premium – 0,1 – – – 0,1
Movement in derivative hedging position – – 16,7 – – 16,7

Net profit attributable to shareholders – – – – 350,9 350,9

Dividends – – – – (172,5) (172,5)

Balance at 30 September 2001* 50,0 564,9 16,7 – 921,8 1 553,4

Opening adjustment
for revaluation of investment – – – 9,1 – 9,1
Increase in share capital and premium 3,7 247,2 – – – 250,9
Movement in cash flow hedge – – 4,2 – – 4,2
Amount recognised in cost of acquisition – – (20,9) – – (20,9)
Revaluation of investment – – – 3,1 – 3,1
Deferred tax on revaluation – – – (0,4) – (0,4)

Net profit attributable to shareholders – – – – 624,8 624,8

Dividends – – – – (523,9) (523,9)

Balance at 30 September 2002 53,7 812,1 – 11,8 1 022,7 1 900,3

* Restated

PPC Annual Report 2002 57

Cash flow statements
for the year ended 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
Notes Rm Rm Rm Rm

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 1 792,2 628,8 555,5 382,8
Finance costs paid (67,2) (73,0) (45,7) (47,5)
Dividends received 35,1 35,7 22,9 15,8
Interest received 57,1 49,6 29,8 23,5
Income from subsidiary companies 163,3 81,7
Tax (paid)/refunded 2 (179,2) (9,2) (135,1) 9,7

Cash available from operations 638,0 631,9 590,7 466,0

Dividends paid (523,9) (172,5) (523,9) (172,5)

Net cash inflow from operating activities 114,1 459,4 66,8 293,5

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of subsidiary 3 (183,1) (24,1) (191,1) –
Acquisition of property, plant and equipment (109,8) (90,6) (72,5) (43,9)

Replacement capital expenditure (109,8) (80,6) (72,5) (42,4)

Expansion capital expenditure – (10,0) – (1,5)

Acquisition of investments – – – (1,2)

Total proceeds (net) 513,3 (6,9) 512,0 6,8

Proceeds from the disposal of associate companies (net) 4 324,4 – 324,4 –

Proceeds received/(cash surrendered) on disposal
of subsidiary 5 168,7 (23,7) 168,7 –
Proceeds from the disposal of property,
plant and equipment 20,2 16,8 18,9 6,8

Movements in investments and loans 17,0 21,7 0,7 7,3

Decrease/(increase) in net amounts owing by subsidiary

and associate companies 4,0 (2,4) 9,5 71,1
Receipt of instalment on long-term loan 10,2 10,2 – –

Net cash inflow/(outflow) from investing activities 251,6 (92,1) 258,6 40,1

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of share capital 0,4 0,1 0,4 0,1
Long-term borrowings raised 0,5 – – –
Long-term borrowings repaid (3,8) – – –
Short-term borrowings repaid (3,9) (18,7) – (3,6)

Net cash (outflow)/inflow from financing activities (6,8) (18,6) 0,4 (3,5)

Net increase in cash and cash equivalents 358,9 348,7 325,8 330,1
Cash and cash equivalents at beginning of year 507,2 157,1 408,5 78,4
Effects of exchange rates on cash 5,5 1,4 – –

Cash and cash equivalents at end of year 871,6 507,2 734,3 408,5

* Restated

58 PPC Annual Report 2002

Notes to the cash flow statements
for the year ended 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

1. Cash generated from operations is

calculated as follows:
Profit before exceptional items 643,9 471,5 619,1 350,8
Adjustments for:
– Depreciation 188,1 165,0 94,3 96,0
– Amortisation of goodwill and intangible assets 3,6 0,5 – –
– (Profit)/loss on disposal of plant and equipment (0,8) (2,2) (0,9) 0,3
– Dividends received (35,1) (35,7) (22,9) (15,8)
– Income from subsidiary companies (163,3) (81,7)
– Interest received (57,1) (49,6) (29,8) (23,5)
– Finance costs 57,4 67,3 35,9 47,5
– Other non-cash flow items 3,4 17,6 5,3 9,9
Operating cash flows before movements in working capital 803,4 634,4 537,7 383,5
– (Increase)/decrease in inventories (20,8) (4,3) 0,6 (4,2)
– Increase in receivables (61,6) (46,0) (46,4) (23,3)
– Increase in payables 71,2 44,7 63,6 26,8
Cash generated from operations 792,2 628,8 555,5 382,8
2. Tax paid/(refunded) is reconciled to amounts
disclosed in the income statements as follows:
Net amounts outstanding/(prepaid) at beginning of year 96,9 (30,3) 64,4 (43,5)
Charge per income statement (excluding deferred tax) 244,7 138,0 199,2 98,2
Adjustment in respect of subsidiaries acquired and sold
including translation differences 0,9 (1,6) – –
Net amounts outstanding at end of year (163,3) (96,9) (128,5) (64,4)
Cash amounts paid/(refunded) 179,2 9,2 135,1 (9,7)
3. Acquisition of subsidiary
Property, plant and equipment and non-current assets 466,0 38,0
Goodwill 105,3 –
Inventories 15,3 1,2
Receivables 18,0 10,5
Payables, tax and deferred tax (175,4) (25,6)
Cash and cash equivalents 8,0 0,9
Pre-acquisition dividend (1,5) –
Net asset value of subsidiary acquired 435,7 25,0

Total consideration 435,7 25,0 435,7 –

Shares issued (250,5) – (250,5) –
185,2 25,0 185,2 –
Foreign exchange gain 5,9 – 5,9 –
Cash and cash equivalents of subsidiary acquired (8,0) (0,9) – –
Net cash outflow on acquisition of subsidiary 183,1 24,1 191,1 –
* Restated

PPC Annual Report 2002 59

Notes to the cash flow statements
for the year ended 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

4. Disposal of associate companies

Cost of investments 25,1 – 25,1 –
Equity accounted retained profit to date of disposal 36,0 – – –
Profit on disposal of associate companies 263,3 – 299,3 –
Proceeds from disposal of associate companies (net) 324,4 – 324,4 –
Being:
– Total consideration 335,6 – 335,6 –
– Disposal costs (11,2) – (11,2) –
324,4 – 324,4 –
5. Disposal of subsidiary
Property, plant and equipment and non-current assets – 104,0
Inventories – 0,7
Receivables – 19,9
Payables, tax and deferred tax – (36,3)
Cash and cash equivalents – 23,7
Net asset value – 112,0
Investment in subsidiary and disposal costs – 0,3 – 73,6
Profit on disposal – 56,4 – 95,1
Disposal consideration – 168,7 – 168,7
Cash and cash equivalents – (23,7) – –
– 145,0 – 168,7
Less: Proceeds received/(receivable) at year-end (note 24) 168,7 (168,7) 168,7 (168,7)
Proceeds received/(cash surrendered) on disposal
of subsidiary 168,7 (23,7) 168,7 –
* Restated

60 PPC Annual Report 2002

Notes to the financial statements
for the year ended 30 September 2002

2002 2001*
Accumulated Net book Accumulated Net book
Cost depreciation value Cost depreciation value
Rm Rm Rm Rm Rm Rm

1. PROPERTY, PLANT
AND EQUIPMENT
GROUP
Freehold and leasehold land
and buildings and mineral
rights 383,0 118,2 264,8 369,8 107,5 262,3
Decommissioning and quarry
rehabilitation assets 39,6 14,7 24,9 40,1 13,9 26,2
Plant, vehicles, furniture
and equipment 2 247,8 947,2 1 300,6 1 698,3 837,9 860,4
Capitalised leased plant 302,2 81,1 221,1 302,2 61,1 241,1

2 972,6 1 161,2 1 811,4 2 410,4 1 020,4 1 390,0

COMPANY
Freehold and leasehold land
and buildings and mineral
rights 298,4 98,6 199,8 298,7 90,6 208,1
Decommissioning and quarry
rehabilitation assets 34,9 13,0 21,9 34,9 11,8 23,1
Plant, vehicles, furniture
and equipment 1 094,2 614,2 480,0 1 061,1 568,9 492,2
Capitalised leased plant 149,6 44,0 105,6 149,6 35,7 113,9

1 577,1 769,8 807,3 1 544,3 707,0 837,3

Plant and equipment with a net book value of R221,1 million (2001: R241,1 million) are encumbered as reflected in note 10.
The registers of land and buildings are open for inspection at the registered offices of the company and its subsidiaries.
The insurable value of the group’s property, plant and equipment as at 30 September 2002 amounted to R10 703 million
(2001: R8 995 million). This is based on the cost of replacement of such assets, except for motor vehicles and certain selected
assets which are included at estimated retail value.

* Restated

PPC Annual Report 2002 61

Notes to the financial statements
for the year ended 30 September 2002

Freehold and Decom-

leasehold missioning
land and and Plant,
buildings quarry vehicles, Capitalised
and mineral rehabilitation furniture and leased
rights assets equipment plant Total
Rm Rm Rm Rm Rm

1. PROPERTY, PLANT
AND EQUIPMENT (continued)
GROUP
Movement of property, plant and equipment
2002
Net book value at beginning of year 262,3 26,2 860,4 241,1 1 390,0
Acquisition of subsidiary 17,4 0,7 447,9 – 466,0
Additions 10,2 – 99,6 – 109,8
Translation differences (net)^ 4,0 (0,7) 52,4 – 55,7

293,9 26,2 1 460,3 241,1 2 021,5

Disposals (1,8) – (7,3) – (9,1)
Impairment (12,9) – – – (12,9)
Depreciation (14,4) (1,3) (152,4) (20,0) (188,1)

264,8 24,9 1 300,6 221,1 1 811,4

^
The translation differences are made
up as follows:
Cost 69,9
Accumulated depreciation (14,2)

55,7

GROUP
Movement of property, plant and equipment
2001*
Net book value at beginning of year 267,6 27,5 986,5 260,3 1 541,9
Acquisition of subsidiary 0,5 – 35,2 – 35,7
Additions 7,0 – 83,6 – 90,6
Translation differences (net)^ 1,0 – 2,5 – 3,5

276,1 27,5 1 107,8 260,3 1 671,7

Disposal of subsidiary (1,2) – (102,3) – (103,5)
Disposals (0,2) – (12,6) – (12,8)
Impairment (0,4) – – – (0,4)
Depreciation (12,0) (1,3) (132,5) (19,2) (165,0)

262,3 26,2 860,4 241,1 1 390,0

^
The translation differences are made
up as follows:
Cost 4,4
Accumulated depreciation (0,9)

3,5

* Restated

62 PPC Annual Report 2002

 Freehold and Decom-
leasehold missioning
land and and Plant,
buildings quarry vehicles, Capitalised
and mineral rehabilitation furniture and leased
rights assets equipment plant Total
Rm Rm Rm Rm Rm

1. PROPERTY, PLANT
AND EQUIPMENT (continued)
COMPANY
Movement of property, plant and equipment
2002
Net book value at beginning of year 208,1 23,1 492,2 113,9 837,3
Additions 4,5 – 68,0 – 72,5

212,6 23,1 560,2 113,9 909,8

Disposals (1,4) – (6,8) – (8,2)
Depreciation (11,4) (1,2) (73,4) (8,3) (94,3)

199,8 21,9 480,0 105,6 807,3

COMPANY
Movement of property, plant and equipment
2001*
Net book value at beginning of year 214,0 24,3 536,0 122,0 896,3
Additions 4,3 – 39,6 – 43,9

218,3 24,3 575,6 122,0 940,2

Disposals (0,1) – (6,8) – (6,9)
Depreciation (10,1) (1,2) (76,6) (8,1) (96,0)

208,1 23,1 492,2 113,9 837,3

* Restated

PPC Annual Report 2002 63

Notes to the financial statements
for the year ended 30 September 2002

GROUP
Restraint Negative
Goodwill of trade Total goodwill
Rm Rm Rm Rm

2. GOODWILL AND INTANGIBLE ASSETS

2002
Cost
At 1 October 2001 0,8 2,4 3,2 –
Subsequent change in value of prior year acquisition (0,8) – (0,8) (1,5)
Acquisition of subsidiary 105,3 – 105,3 –
Translation differences – 0,2 0,2 –
Impairment (105,3) – (105,3) –

At 30 September 2002 – 2,6 2,6 (1,5)

Accumulated amortisation
At 1 October 2001 0,1 0,9 1,0 –
Amortisation 3,4 0,5 3,9 (0,3)
Subsequent change in value of prior year acquisition (0,1) – (0,1) –
Translation differences – 0,1 0,1 –
Impairment (3,4) – (3,4) –

At 30 September 2002 – 1,5 1,5 (0,3)

Carrying amount
At 30 September 2002 – 1,1 1,1 (1,2)

2001*
Cost
At 1 October 2000 – 2,2 2,2 –
Additions 0,8 – 0,8 –
Translation differences – 0,2 0,2 –

At 30 September 2001 0,8 2,4 3,2 –

Accumulated amortisation
At 1 October 2000 – 0,4 0,4 –
Amortisation 0,1 0,4 0,5 –
Translation differences – 0,1 0,1 –

At 30 September 2001 0,1 0,9 1,0 –

Carrying amount
At 30 September 2001 0,7 1,5 2,2 –
* Restated

64 PPC Annual Report 2002

 GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

3. OTHER NON-CURRENT ASSETS

Financial assets
Interest in subsidiaries 483,8 168,0
Unlisted investments‡ 259,1 247,0 21,9 8,5
Unlisted investments (2002: fair value; 2001: cost)§ 12,2 0,1 12,1 0,1
Unlisted preference shares at cost^ 246,9 246,9 – –
Contributions to PPC Environmental Trust 9,8 8,4
Guaranteed loan in respect of railway line 16,0 17,7 16,0 17,7
Other non-current loans and deposits 1,9 4,2 1,9 1,9
PPC 1988 Share Purchase Trust# 0,2 0,5 0,2 0,5
Long-term loan to Saldanha Steel (Pty) Limited0 101,7 111,9 – –
378,9 381,3 523,8 196,6
Interest in subsidiaries (Annexure 1)
Shares at cost 507,5 71,8
Less: Amounts written off 106,3 1,0
401,2 70,8
Add: Amounts owing by subsidiaries 146,6 144,7
547,8 215,5
Less: Amounts owing to subsidiaries 64,0 47,5
483,8 168,0
§
Unlisted investments
Available-for-sale
Unlisted investments at cost less amounts written off 0,1 0,1 0,1 0,1
Additions 0,1 – – –
Fair value adjustment 12,0 – 12,0 –
12,2 0,1 12,1 0,1
‡
Directors’ valuation of unlisted investments 259,1 256,0 21,9 17,6

Classification of financial assets

Available-for-sale 12,2 0,1 12,1 0,1
Originated loans and receivables 366,7 381,2 18,1 20,1
Scope exclusions from IAS 39 – – 493,6 176,4
378,9 381,3 523,8 196,6

^
The unlisted preference shares earn dividends at an
average rate of 10,5% per annum (2001: 11,7% per
annum) and are redeemable at the option of the
company as follows:
3 November 2001 48,9
30 September 2002 31,7
1 October 2002 82,2 82,2
30 September 2003 49,1 49,1
31 March 2004 48,9 –
30 September 2004 35,0 35,0
1 October 2005 31,7 –
246,9 246,9
* Restated

PPC Annual Report 2002 65

Notes to the financial statements
for the year ended 30 September 2002

3. OTHER NON-CURRENT ASSETS (continued)

0
The long-term loan is repayable in annual capital instalments of R10,2 million payable on 30 June each year, ending 30 June 2013
and bears interest at 16% per annum (2001: 16% per annum).
#
PPC 1988 Share Purchase Trust
Included are loans to executive directors for the purchase of shares amounting to R0,2 million (2001: R0,3 million). The loans are
secured by pledge of the shares and are repayable within ten years of granting of the options or within nine months of death or
immediately on ceasing to be an employee, except in the case of retirement. Interest rates vary in accordance with the terms and
provisions of the trust deed and range from 7,5% to 8,03% (2001: 7,5% to 8,03%).

GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

4. INVESTMENT IN ASSOCIATE COMPANIES (ANNEXURE 1)

Unlisted shares at cost 12,9 38,0 3,8 28,9
Less: Amounts written off – – 3,8 3,8

12,9 38,0 – 25,1

Share of retained profit^ 2,8 28,7
Amount owing 6,5 8,0 6,5 8,0

Carrying value including amount owing 22,2 74,7 6,5 33,1

Made up as follows:
Investments in associate companies at carrying value
Kgale Quarries (Pty) Limited 11,8 11,7 – –
Slagment (Pty) Limited 3,9 – – –
Ash Resources (Pty) Limited – 6,1 – 2,1
Natal Portland Cement Co (Pty) Limited – 48,9 – 23,0
Amount owing
Slagment (Pty) Limited 6,5 8,0 6,5 8,0

22,2 74,7 6,5 33,1

^
Share of retained profit
Beginning of the year 28,7 21,1
Increase for the year 26,8 18,6

– Profit for the year 33,6 23,6

– Dividends received (6,8) (5,0)

Other movements (8,9) (11,0)

Disposals (43,8) –

2,8 28,7

Valuation of interest in associate companies

Directors’ valuation of unlisted associate companies
including amount owing 22,2 227,2
* Restated

66 PPC Annual Report 2002

 GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

5. INVENTORIES
Raw materials 62,1 37,6 32,1 24,8
Work in progress 25,7 37,1 24,2 37,1
Finished goods 43,6 38,5 28,1 27,4
Maintenance stores 98,8 80,8 65,2 60,9

230,2 194,0 149,6 150,2

The value of inventories has been determined

on the following cost formula bases:
First-in first-out 24,9 8,8 – –
Average 205,3 185,2 149,6 150,2

230,2 194,0 149,6 150,2

No finished goods inventories were required to be

written down to net realisable value.

6. TRADE AND OTHER RECEIVABLES

Trade receivables∆ 344,3 295,4 237,2 210,8
Less: Provision for doubtful debts (16,0) (32,3) (8,6) (26,8)
Other receivables and prepayments 57,4 42,8 25,4 23,9
Dividends receivable 1,7 – – –
Derivative financial instruments at fair value° 0,2 10,3 – 10,3
Proceeds receivable – discontinued operation – 168,7 – 168,7

387,6 484,9 254,0 386,9

7. CASH AND CASH EQUIVALENTS

Cash on deposit∆ 871,6 505,7 734,3 408,5
Short-dated liquid instruments – 1,5 – –

871,6 507,2 734,3 408,5

* Restated
∆
Treated as an ‘originated loans and receivables’ financial asset
° Treated as a ‘held for trading’ financial asset

PPC Annual Report 2002 67

Notes to the financial statements
for the year ended 30 September 2002

GROUP AND COMPANY

2002 2001*
Rm Rm

8. SHARE CAPITAL AND PREMIUM

Authorised share capital
60 000 000 ordinary shares of R1 each 60,0 60,0

Issued share capital

53 743 539 (2001: 50 012 712) ordinary shares of R1 each 53,7 50,0

Share premium 812,1 564,9

Balance at beginning of year 564,9 564,8

Premium on shares issued 247,2 0,1

Total issued share capital and premium 865,8 614,9

In terms of the PPC 1985 Share Option Scheme, 11 500 new shares were allotted and issued during the year.

In terms of the acquisition of Portland Holdings Limited, incorporated in Zimbabwe, 3 719 327 shares were issued to its former
shareholders.

In terms of the JSE Securities Exchange South Africa listing requirements, Pretoria Portland Cement Company Limited had a public
shareholder spread as defined in the regulations of 33,4% at year-end.

Unissued shares
Unissued share capital comprises 6 256 461 (2001: 9 987 288) shares of R1 each. Of these 1 577 600 (2001: 1 589 100) shares
are reserved to meet the requirements of the PPC 1985 Share Option Scheme and the PPC 1988 Share Purchase Trust.

PPC 1985 Share Option Scheme

At 30 September 2002 the following options granted to directors and executives were unexercised:

Date
Number of shares Option price from which Expiry
Directors Executives R exercisable date

– 17 700 100,00 2 December 1997 2 December 2004

GROUP AND COMPANY

2002 2001*
Rm Rm

Movement for the year

Options at the beginning of the year 29 200 35 600
Less: Options exercised 11 500 6 400

Options unexercised at year-end 17 700 29 200

The scheme is now closed and no further options will be granted. The existing uncancelled options will continue until their expiry
dates.

* Restated

68 PPC Annual Report 2002

 GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

9. DEFERRED TAX
Movement of deferred tax liabilities
Balance at beginning of year 208,2 219,7 111,7 114,7
Acquisition of subsidiary 143,6 8,6 – –
Disposal of subsidiary – (16,1) – –
Reduction in the rate of foreign tax – (2,3) – –
Subsequent change in value of prior year acquisition 1,0 – – –
Charged directly in equity 0,4 – 0,4 –
Income statement credit (15,7) (2,0) (1,1) (3,0)
Translation differences 15,2 0,3 – –

352,7 208,2 111,0 111,7

Analysis of deferred tax liabilities

Capital allowances 386,0 251,2 142,7 145,6
Provisions (37,6) (44,7) (33,2) (34,9)
Prepayments 2,4 1,7 1,1 1,0
Capital gains tax 0,4 – 0,4 –
Other temporary differences 1,5 – – –

352,7 208,2 111,0 111,7

Movement of deferred tax assets

Balance at beginning of year 12,3 13,2
Transferred this year (0,2) (0,9)

12,1 12,3

Analysis of deferred tax assets

Capital allowances 10,5 12,3
Provisions 1,6 –

12,1 12,3

10. NON-CURRENT LIABILITIES

Interest-bearing∞ 401,1 399,5 – –
Less: Current portion repayable within one year (note 11) 13,6 – – –

387,5 399,5 – –
Non-interest-bearing 119,4 120,1 88,8 92,3

Non-current provisions (note 13) 117,6 120,1 88,8 92,3

Other payables 1,8 – – –

Deferred tax liabilities (note 9) 352,7 208,2 111,0 111,7

Total non-current liabilities 859,6 727,8 199,8 204,0

* Restated
∞
Treated as a ‘non-trading’ financial liability

PPC Annual Report 2002 69

Notes to the financial statements
for the year ended 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

10. NON-CURRENT LIABILITIES (continued)

Debt secured
Net book value of plant and equipment encumbered 221,1 241,1 – –

Secured debts
Liabilities under capitalised finance leases 387,5 399,5 – –

Interest-bearing debt is repayable as follows:

During the years ending 30 September
2003 12,0
2004 13,7 13,0
2005 13,8 13,8
2006 13,9 13,9
2007 and onwards 346,1 346,8

387,5 399,5
Current portion repayable within one year 13,6 –

401,1 399,5

Details of interest rates are set out in note 30.

11. SHORT-TERM BORROWINGS

Short-term loans∞ 0,6 – – –
Current portion of long-term borrowings (note 10)∞ 13,6 – – –

14,2 – – –

12. TRADE AND OTHER PAYABLES

Trade and other payables∞ 349,0 278,9 230,2 187,3
Liability on acquisition of Porthold∞ 11,7 – 11,7 –

360,7 278,9 241,9 187,3

The group has a foreign currency denominated liability

of US$1,1 million to former shareholders of
Portland Holdings Limited being claims outstanding
in respect of the scheme of arrangement.

13. PROVISIONS
Non-current (note 10) 117,6 120,1 88,8 92,3
Current 5,3 3,8 5,0 3,5

122,9 123,9 93,8 95,8

* Restated
∞
Treated as a ‘non-trading’ financial liability

70 PPC Annual Report 2002

 Decom- Retirement
missioning and post-
and quarry retirement
Total rehabilitation benefits
Rm Rm Rm

13. PROVISIONS (continued)

GROUP
Movement of provisions
2002
Balance at beginning of year 123,9 95,4 28,5
Acquisition of subsidiary 4,8 3,6 1,2
Amounts added 19,9 9,7 10,2
Amounts utilised (16,4) – (16,4)
Amounts reversed unutilised (2,6) – (2,6)
Other movements (7,2) (5,7) (1,5)
Translation differences 0,5 0,4 0,1

Balance at 30 September 2002 122,9 103,4 19,5

Incurred:
Within one year 5,3 2,1 3,2
Between two to five years 7,6 6,6 1,0
More than five years 110,0 94,7 15,3

122,9 103,4 19,5

Movement of provisions
2001*
Balance at beginning of year 107,4 81,7 25,7
Acquisition of subsidiary 5,2 4,5 0,7
Amounts added 12,3 9,2 3,1
Amounts utilised (0,3) – (0,3)
Amounts reversed unutilised (0,3) – (0,3)
Disposal of subsidiary (0,4) – (0,4)

Balance at 30 September 2001 123,9 95,4 28,5

* Restated

PPC Annual Report 2002 71

Notes to the financial statements
for the year ended 30 September 2002

Decom- Retirement
missioning and post-
and quarry retirement
Total rehabilitation benefits
Rm Rm Rm

13. PROVISIONS (continued)

COMPANY
Movement of provisions
2002
Balance at beginning of year 95,8 74,1 21,7
Amounts added 13,1 4,8 8,3
Amounts utilised (14,1) – (14,1)
Amounts reversed unutilised (1,0) – (1,0)

Balance at 30 September 2002 93,8 78,9 14,9

Incurred:
Within one year 5,0 2,1 2,9
Between two to five years 6,6 6,6 –
More than five years 82,2 70,2 12,0

93,8 78,9 14,9

Movement of provisions
2001*
Balance at beginning of year 85,6 66,5 19,1
Amounts added 10,2 7,6 2,6

Balance at 30 September 2001 95,8 74,1 21,7

Decommissioning and quarry rehabilitation

Provision is raised for decommissioning and quarry rehabilitation costs where a legal or constructive obligation exists as a result of
a past event.

Retirement and post-retirement benefits

The group has recognised a liability in respect of post-retirement medical benefits and benefits payable on retirement.
* Restated

72 PPC Annual Report 2002

14. BUSINESS AND GEOGRAPHICAL SEGMENTS
The primary segments have been determined on the basis by which the directors manage the business.
The secondary segments have been determined by the geographical location of the businesses.

Consolidated Cement Lime Packaging

2002 2001* 2002 2001* 2002 2001* 2002 2001*

GROUP (Rm)
Revenue
South Africa 2 299,6 1 959,6 1 720,3 1 429,8 389,4 368,2 189,9 161,6
Other Africa 344,6 164,0 344,6 164,0 – – – –
Revenue from
continuing
operations 2 644,2 2 123,6 2 064,9 1 593,8 389,4 368,2 189,9 161,6
Revenue from
discontinued
operation – 23,3
Inter-segment revenue (74,0) (75,7)
Total revenue 2 570,2 2 071,2
Segment result
South Africa 569,3 403,4 484,9 342,7 66,8 49,9 17,6 10,8
Other Africa 42,9 37,7 42,9 37,7 – – – –
Operating profit
from continuing
operations 612,2 441,1 527,8 380,4 66,8 49,9 17,6 10,8
Dividends from
associate companies 6,8 5,0 6,8 5,0 – – – –
Share of associate
companies’ retained
profit 26,8 18,6 26,8 18,6 – – – –
Continuing operations 645,8 464,7 561,4 404,0 66,8 49,9 17,6 10,8
Operating profit
from discontinued
operation – 12,5
Total operating profit
including income
from associate
companies 645,8 477,2
Finance costs 57,4 67,3
Income from other
investments 85,4 80,3
Goodwill amortisation 3,1 0,1
Exceptional items 158,9 57,7
829,6 547,8
Tax 229,2 134,6
Minority interest 0,1 –
Net profit attributable
to shareholders 600,3 413,2
* Restated

PPC Annual Report 2002 73

Notes to the financial statements
for the year ended 30 September 2002

14. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued)

Consolidated Cement Lime Packaging

2002 2001* 2002 2001* 2002 2001* 2002 2001*

GROUP (Rm)
Operating margin
– continuing
operations (%) 25,1# 22,7# 27,2 25,3 17,2 13,6 9,3 6,7
Non-cash expenses
per segment
Depreciation
South Africa 148,8 147,5 106,3 106,1 37,8 35,5 4,7 5,9
Other Africa 39,3 4,1 39,3 4,1 – – – –
Depreciation
– continuing
operations 188,1 151,6 145,6 110,2 37,8 35,5 4,7 5,9
Depreciation
– discontinued
operation – 13,4
Total depreciation 188,1 165,0
Amortisation of
goodwill and
intangible assets 3,6 0,5 3,6 0,5 – – – –
Capital additions
South Africa 106,3 59,8 74,2 43,8 27,3 14,9 4,8 1,1
Other Africa 3,5 0,4 3,5 0,4 – – – –
Capital additions
– continuing
operations 109,8 60,2 77,7 44,2 27,3 14,9 4,8 1,1
Capital additions
– discontinued
operation – 30,4
Total capital additions 109,8 90,6
Total assets
Operating assets 2 530,9 2 185,4 1 913,9 1 583,4 526,8 538,4 90,2 63,6
South Africa 1 949,3 2 123,9 1 332,3 1 521,9~ 526,8 538,4 90,2 63,6
Other Africa 581,6 61,5 581,6 61,5 – – – –
Non-operating assets 1 183,0 861,2 1 144,2 819,4 34,3 39,9 4,5 1,9
South Africa 1 089,4 805,2 1 050,6 763,4 34,3 39,9 4,5 1,9
Other Africa 93,6 56,0 93,6 56,0 – – – –

Total assets 3 713,9 3 046,6 3 058,1 2 402,8 561,1 578,3 94,7 65,5
Total liabilities
Operating liabilities 648,7 499,7 506,2 377,5 92,1 90,2 50,4 32,0
South Africa 596,0 473,2 453,5 351,0 92,1 90,2 50,4 32,0
Other Africa 52,7 26,5 52,7 26,5 – – – –
Non-operating liabilities 754,4 607,7 602,3 455,3 145,7 145,2 6,4 7,2
South Africa 599,8 604,0 447,7 451,6 145,7 145,2 6,4 7,2
Other Africa 154,6 3,7 154,6 3,7 – – – –

Total liabilities 1 403,1 1 107,4 1 108,5 832,8 237,8 235,4 56,8 39,2
* Restated
#
Net of inter-segment revenue
~ Includes proceeds receivable – discontinued operation R168,7 million

74 PPC Annual Report 2002

 GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

15. OPERATING PROFIT

Operating profit is arrived at after taking into
account the items detailed below:
Cost of sales 1 717,3 1 349,1 1 132,4 1 019,5
Income from subsidiary companies
– Fees 17,4 23,7
– Interest 0,5 1,0
– Dividends 145,4 57,0
163,3 81,7
Amortisation – goodwill and intangible assets (note 2) 3,9 0,5 – –
– negative goodwill (note 2) (0,3) – – –
Depreciation (note 1):
– Cost of sales 170,4 132,3 78,3 79,4
– Operating costs 17,7 32,7 16,0 16,6
188,1 165,0 94,3 96,0
Distribution costs:
– Cost of sales 281,9 115,1 252,6 222,8
– Operating costs 5,6 3,5 – –
287,5 118,6 252,6 222,8
Operating lease charges:
– Land and buildings 2,3 2,9 2,3 2,1
– Plant, vehicles and equipment 1,5 2,0 1,4 1,4
3,8 4,9 3,7 3,5
Exploration and research costs 1,6 1,0 1,6 1,0
Administration and management fees paid 1,8 5,4 1,4 5,0
Fees paid to holding company 9,4 5,1 6,4 4,7
Technical fees paid 4,3 5,7 4,0 5,5
Auditors’ remuneration:
– Audit fees 2,4 2,0 1,3 1,3
– Fees for other services 0,3 – 0,2 –
2,7 2,0 1,5 1,3
Staff costs
– South Africa 379,2 384,2 272,7 282,0
– Other Africa 22,1 9,2 – –
401,3 393,4 272,7 282,0
Retirement benefit contributions 25,0 8,3 19,1 4,8
(Profit)/loss on disposal of plant and equipment (0,8) (2,2) (0,9) 0,3
Operating expenses by function
Administrative costs 18,2 18,2 13,3 16,5
Operating costs 223,1 250,9 183,0 184,0
Other operating income (0,6) (0,6) (163,9) (82,3)
240,7 268,5 32,4 118,2
* Restated

PPC Annual Report 2002 75

Notes to the financial statements
for the year ended 30 September 2002

COMPANY
2002 2001*
Rm Rm

15. OPERATING PROFIT (continued)

Directors’ emoluments (note 31)

Executive directors
Salary 4,0 4,7
Benefits 1,7 2,1
Bonuses 2,9 3,3
Share option gains in Barloworld Limited (see below) 1,7 2,7

10,3 12,8

Non-executive directors
Fees 0,3 0,2

Total directors’ emoluments 10,6 13,0

Benefits include company vehicles, housing and share purchase trust loans, company
contributions to retirement funds and medical aid. Bonuses are performance-related.

Share option gains in Barloworld Limited 2002 2002 2002

Options Option price Gain
excercised/ceded R Rm

Executive directors 11 333 23,25 0,5

15 000 41,00 0,4
20 000 43,00 0,5
13 333 47,76 0,3

59 666 1,7

GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

16. FINANCE COSTS

Bank and other borrowings 6,7 2,3 1,8 1,9
Finance lease interest 57,0 61,8 34,6 40,2
Subsidiary companies 8,3 3,8
Monetary loss on hyperinflation 4,4 – – –
Unwinding of discount on provisions 10,0 8,9 6,8 7,3

78,1 73,0 51,5 53,2

Gains on forward exchange contracts (15,7) (5,7) (15,6) (5,7)
Gains on translation of foreign currency
monetary items (5,0) – – –

57,4 67,3 35,9 47,5

* Restated

76 PPC Annual Report 2002

 GROUP COMPANY
2002 2001* 2002 2001*
Rm Rm Rm Rm

17. INCOME FROM INVESTMENTS

Dividends:
– Unlisted investments 28,3 30,7 2,4 1,9
– Associate companies 6,8 5,0 20,5 13,9
Interest received 57,1 49,6 29,8 23,5

92,2 85,3 52,7 39,3

18. EXCEPTIONAL ITEMS

Impairment in the value of property (12,9) (0,4) – –
Impairment of goodwill (101,9) – – –
Impairment of investment in subsidiary company – – (105,3) –
Profit on disposal of associate companies 263,3 – 299,3 –
Profit on disposal of property 10,4 1,7 9,8 0,2
Profit on disposal of logistics division (note 24) – 56,4 – 95,1

158,9 57,7 203,8 95,3

Tax – current (0,2) (0,5) – –
– deferred 0,1 – – –

158,8 57,2 203,8 95,3

19. TAX
South African normal tax
– current year 176,3 113,0 139,5 83,2
– prior year 0,5 0,2 0,5 –

176,8 113,2 140,0 83,2

Foreign tax
– current year 13,0 8,3 5,7 (0,2)
– prior year (0,7) (0,1) – –

12,3 8,2 5,7 (0,2)

Deferred tax
– current year (15,5) 5,0 (1,1) 4,1
– prior year – (6,1) – (7,1)
– attributable to a reduction in the rate of foreign tax – (2,3) – –

(15,5) (3,4) (1,1) (3,0)

Secondary tax on companies 55,6 16,6 53,5 15,2

Tax attributable to the company and its subsidiaries 229,2 134,6 198,1 95,2

Incurred:
– South Africa 226,9 128,3 198,1 95,2
– Other Africa 2,3 6,3 – –

229,2 134,6 198,1 95,2

* Restated

PPC Annual Report 2002 77

Notes to the financial statements
for the year ended 30 September 2002

GROUP COMPANY
2002 2001* 2002 2001*
% % % %

19. TAX (continued)

Reconciliation of rate of tax
Tax as a percentage of profit before tax
(excluding prior year tax) 28,6 26,6 24,0 22,9
Adjustment due to the inclusion of dividend income 1,3 2,0 6,1 4,9

Effective rate of tax 29,9 28,6 30,1 27,8

Reduction in rate of tax 7,6 5,1 7,5 6,5

Permanent differences 6,9 4,0 7,5 6,4

Reduction in rate of foreign tax – 0,4 – –
Withholding taxes recovered – 0,1 – 0,1
Foreign tax differential 0,7 0,6 – –

Increase in rate of tax (7,5) (3,7) (7,6) (4,3)

Disallowable charges (0,2) (0,6) – (0,9)

Withholding taxes – – (0,7) –
Secondary tax on companies (6,9) (3,1) (6,5) (3,4)
Tax on foreign dividend received (0,4) – (0,4) –

South African normal tax rate 30,0 30,0 30,0 30,0

As at 30 September 2002, the group had unutilised credits in respect of secondary tax on companies of R4,4 million
(2001: R1,8 million), which have not been recognised as deferred tax assets.

A subsidiary, PPC Slag (Pty) Limited, qualifies for a tax holiday in terms of section 37H of the Income Tax Act, until 30 September 2003.

GROUP
2002 2001*

20. NET PROFIT, EARNINGS AND CASH FLOW PER SHARE

20.1 Net profit per share (basic)
Net profit attributable to shareholders (Rm) 600,3 413,2
Weighted average number of ordinary shares 53 551 189 50 011 350
Net profit per share (basic) (cents) 1 121,1 826,3

Account is taken of the number of shares in issue for

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

20.2 Net profit per share (fully diluted)

Net profit attributable to shareholders (Rm) 600,3 413,2
Fully converted weighted average number of
ordinary shares 53 551 189 50 015 709
Net profit per share (fully diluted) (cents) 1 121,1 826,2

The number of shares in issue for this calculation has been increased by the number of unexercised options.
* Restated

78 PPC Annual Report 2002

 GROUP
2002 2001*

20. NET PROFIT, EARNINGS AND CASH FLOW PER SHARE (continued)
20.3 Earnings per share before exceptional items (basic)
Net profit attributable to shareholders (Rm) 600,3 413,2
Adjusted for:
Exceptional items net of tax (158,8) (57,2)

Earnings before exceptional items 441,5 356,0

Weighted average number of ordinary shares 53 551 189 50 011 350

Earnings per share before exceptional items (cents) 824,5 711,8

20.4 Earnings per share before exceptional items

(fully diluted)
Earnings as calculated in 20.3 above (Rm) 441,5 356,0
Fully converted weighted average number of
ordinary shares 53 551 189 50 015 709
Earnings per share before exceptional items
(fully diluted) (cents) 824,5 711,8

20.5 Headline earnings per share (basic)

Earnings as calculated in 20.3 above (Rm) 441,5 356,0
Adjusted for:
Goodwill amortisation 3,1 –
Profit on disposal of plant and equipment net of tax (0,4) (1,1)

Headline earnings 444,2 354,9

Weighted average number of ordinary shares 53 551 189 50 011 350

Headline earnings per share (cents) 829,5 709,7

20.6 Headline earnings per share (fully diluted)

Earnings as calculated in 20.5 above (Rm) 444,2 354,9
Fully converted weighted average number of
ordinary shares 53 551 189 50 015 709
Headline earnings per share (fully diluted) (cents) 829,5 709,6

20.7 Cash equivalent earnings per share

Net profit attributable to shareholders (Rm) 600,3 413,2
Adjusted for:
Amortisation and depreciation 191,7 165,5
Deferred tax (15,5) (3,4)
Other non-cash items 3,4 17,6

Cash equivalent earnings 779,9 592,9

Weighted average number of ordinary shares 53 551 189 50 011 350

Cash equivalent earnings per share (cents) 1 456,4 1 185,5

* Restated

PPC Annual Report 2002 79

Notes to the financial statements
for the year ended 30 September 2002

GROUP
2002 2001*

20. NET PROFIT, EARNINGS AND CASH FLOW

PER SHARE (continued)
20.8 Attributable cash flow per share
Cash available from operations (Rm) 638,0 631,9
Weighted average number of ordinary shares 53 551 189 50 011 350
Attributable cash flow per share (cents) 1 191,4 1 263,5

GROUP
2002 2001*
Rm Rm

21. DIVIDENDS
Ordinary shares
Final No 189 – 340 cents per share (2001: 225 cents) 182,7 112,5
Special No 190 – 500 cents per share 268,7 –
Interim No 191 – 135 cents per share (2001: 120 cents) 72,5 60,0
523,9 172,5
Dividends per share (cents)
Interim No 191 – declared 30 April 2002 135 120
Final No 192 – declared 6 November 2002 400 340
Special No 193 – declared 6 November 2002 600 500

1 135 960

22. ATTRIBUTABLE INTEREST IN SUBSIDIARIES

Attributable interest in the aggregate amount of profits
and losses of subsidiaries, after tax, including associate
companies:
Profits 129,4 150,9
Losses 12,3 –

23. ACQUISITION OF SUBSIDIARY

On 18 October 2001, PPC acquired Portland Holdings
Limited. The cost of the acquisition was determined
as follows:
– Cash payment to shareholders
(US$21,75 million at US$1 = R9,25) 201,2
– Shares issued to Portland Holdings Limited shareholders
(3 719 327 at R67,35 per share) 250,5
– Direct costs of acquisition 6,4
– Amounts credited to cost of equity (20,9)
– Pre-acquisition dividend received (1,5)
435,7
Due to the above acquisition, forward exchange contracts were entered into to hedge the foreign exchange risk on the purchase price.
These forward exchange contracts were treated as cash flow hedges in accordance with IAS 39 (Financial Instruments: Recognition
and Measurement), and exchange gains were deferred in equity. When the underlying transaction was recognised the exchange gains
were released to the cost of the acquisition.

* Restated

80 PPC Annual Report 2002

 GROUP
2002 2001
Rm Rm

24. DISCONTINUED OPERATION

On 7 August 2001, the group decided to exit the logistics segment.
PPC Logistics (Pty) Limited was sold on 30 September 2001 and was
reported as a discontinued operation in the prior year.

The revenue, results and net cash flows of the logistics division
for the period to date of disposal were as follows:
Revenue 135,4

Operating profit 12,5

Finance costs 0,2
Income from investments 2,2

Profit before exceptional items 14,5

Exceptional items (0,4)

Profit before tax 14,1

Tax 4,7

Net profit after tax 9,4

Operating cash flows 28,7

Investing cash flows (22,4)
Financing cash flows (11,9)

Net cash utilised (5,6)

The assets and liabilities of the logistics division

disposed of were as follows:
Property, plant and equipment 103,5
Non-current assets 0,5
Current assets 44,3

Total assets 148,3

Total liabilities (excluding equity loan) 36,3

Net assets 112,0

Disposal consideration 168,7

Shares at cost (0,1)
Net assets (112,0)
Costs (0,2)

Profit on disposal 56,4

PPC Annual Report 2002 81

Notes to the financial statements
for the year ended 30 September 2002

GROUP
2002 2001
Rm Rm

25. COMMITMENTS
Capital expenditure commitments to be incurred:
– Contracted 48,7 11,9
– Approved 37,4 0,2
– Acquisition of Portland Holdings Limited – 432,4
86,1 444,5

2007 and Total Total

thereafter 2006 2005 2004 2003 2002 2001
Rm Rm Rm Rm Rm Rm Rm

Operating lease commitments

Land and buildings – – – – 0,1 0,1 4,4
Motor vehicles 0,2 0,2 0,4 1,7 1,8 4,3 5,1
Other 0,3 0,4 0,7 0,9 2,9 5,2 5,5
0,5 0,6 1,1 2,6 4,8 9,6 15,0
Finance lease commitments
Plant 346,1 13,9 13,8 13,7 12,0 399,5 399,5

GROUP COMPANY
2002 2001 2002 2001
Rm Rm Rm Rm

26. CONTINGENT LIABILITIES

Guarantees for loans, banking facilities and other
obligations to third parties 9,2 5,1 9,2 5,1

Secondary tax on companies is payable on dividends declared at a rate of 12,5%.

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

27. RETIREMENT BENEFIT INFORMATION

It is the policy of the group to encourage, facilitate and contribute to the provision of retirement benefits for all permanent
employees. To this end the group’s permanent employees are usually required to be members of either a pension or provident
fund, depending on local legal requirements.
All employees belong to one of 12 defined contribution retirement funds, with the exception of 11 active members of the defined
benefit section of the PPC Retirement Fund. Group employment is a prerequisite for membership of these funds. All of the local
funds are subject to the provisions of the Pension Funds Act of 1956.
The defined benefit section of the PPC Retirement Fund is valued at intervals of not more than three years. This section was last
valued by an independent consulting actuary as at 28 February 2001 and was certified to be in a sound financial condition.
On 1 May 2002 the PPC Retirement Fund purchased non-GN18 Platinum annuities from the Old Mutual Life Assurance Company
(South Africa) Limited for existing pensioners of the defined benefit section of the PPC Retirement Fund.
Historically, qualifying employees were granted certain post-retirement medical benefits. The obligation for the employer to pay
medical aid contributions after retirement is not part of the conditions of employment for new employees. A number of pensioners
and employees in the group remain entitled to this benefit, the cost of which has been fully provided.
Defined contribution plan
The total cost charge to the income statement of R25,0 million (2001: R8,3 million after taking into account a contribution holiday
of R13,7 million) represents contributions payable to these schemes by the group at rates specified in the rules of the schemes.
At 30 September 2002, all contributions due in respect of the current reporting period had been paid over to the schemes.

82 PPC Annual Report 2002

 GROUP
2002 2001

27. RETIREMENT BENEFIT INFORMATION (continued)

Defined benefit plan
Number of members:
Active 13 14
Pensioners 931 966
% %
Key assumptions used:
Discount rate 11,5 12,5
Expected return on plan assets 10,5 11,5
Rate of increase in future compensation levels 8,0 9,0
Funded status
The funded status of the defined benefit fund at 28 February 2002 was as follows:

GROUP
Estimated Certified
2002 2001
Rm Rm

Fair value of plan assets 117,9 119,8

Present value of funded obligation (101,5) (99,9)
16,4 19,9
Unrecognised actuarial losses (7,8) (7,8)
Pension surplus 8,6 12,1
Less: Portion not recognised (8,6) (12,1)
– –
Amounts recognised in respect of these
schemes are as follows:
Current service cost 18,6 18,3
Interest costs 11,0 12,0
Expected return on plan assets (11,9) (14,2)
17,7 16,1
Less: Portion not recognised (17,7) (16,1)
– –

28. PRIOR YEAR RESTATEMENT

The financial statements have been restated to reflect the long-term loan made by the PPC group to Saldanha Steel (Pty) Limited
separately from the capitalised lease liability relating to leased facilities at Saldanha. Previously the loan and the liability were
subject to set-off with only the net liability being disclosed. The effect of the 2001 restatement resulted in an increase in non-
current assets of R111,9 million and a corresponding increase in non-current liabilities.
Interest paid and interest received have been restated accordingly. The restatement achieves a higher level of reporting and is
consistent with International Financial Reporting Standards. There is no impact on earnings per share.

29. HYPERINFLATIONARY REPORTING

The financial statements of Portland Holdings Limited, a wholly owned Zimbabwean subsidiary, have been restated for the decrease
in the general purchasing power of the Zimbabwe dollar, using the current cost approach in accordance with IAS 29 (Financial
Reporting in Hyperinflation Economies). The change in the producer price index in the year has been 143%.

PPC Annual Report 2002 83

Notes to the financial statements
for the year ended 30 September 2002

30. FINANCIAL RISK MANAGEMENT

The group’s financial instruments consist mainly of deposits with banks, local money market instruments, accounts receivable and
payable, loans to and from subsidiaries and associate companies and leases.
In respect of all financial instruments mentioned above, book value approximates fair value.
Derivative instruments are used by the group for hedging purposes. Such instruments used by the group are forward exchange contracts
and fixed-interest rate agreements. The group does not speculate in the trading of derivative instruments.
Treasury risk management
A treasury committee consisting of senior executives of the Barloworld and PPC group, meets on a regular basis to analyse currency
and interest rate exposure and to re-evaluate treasury management strategies against revised economic forecasts.
The Barloworld group’s various treasury operations provide the group with access to local money markets and provide group
subsidiaries with the benefit of bulk financing and depositing.
Foreign currency management
Loans
In terms of group policy, all material foreign loans are covered under forward exchange contracts (except where a natural hedge
against underlying assets exists).
Trade exposure
The group’s policy is to cover forward all trade commitments. Each division manages its own trade exposure.
All forward currency exchange contracts and options are valued at fair value with the resultant gain or loss (with the exception of
effective cash flow hedges) included in finance costs for the year. The gains or losses on effective cash flow hedges are recorded
directly in equity and transferred to income when the hedged transaction affects income or included in the initial measurement
of the acquisition cost of the hedged assets or liabilities. The amounts below represent the net rand equivalents of commitments
to purchase and sell foreign currencies. The contracts will be utilised during the next twelve months. Accordingly, the average rates
shown include the cost of forward cover for periods up to twelve months. Details of these contracts are as follows:

Foreign amount Rand amount

million Average rate million
2002 2001 2002 2001 2002 2001
FOREIGN CURRENCY
Trade
Sold: Danish krone – 0,1 – 1,0600 – 0,1
Euro 0,2 0,1 10,2470 8,0919 1,7 1,0
Pound sterling 0,0 – 16,6216 – 0,1 –
Swedish krona – 0,1 – 0,8511 – 0,1
US dollars 0,2 – 10,3765 – 1,7 –
Bought: Danish krone 0,2 – 1,4219 – 0,3 –
Euro 0,7 0,0 10,5873 8,2998 7,0 0,4
French francs – 0,8 – 0,8890 – 0,7
Irish pounds – 0,0 – 10,5530 – 0,1
Pound sterling – 0,0 – 13,2501 – 0,1
US dollars 0,0 – 11,8500 – 0,4 –
FOREIGN CURRENCY
Non-trade
Bought: US dollars 1,3 20,0 10,9048 8,1710 13,7 163,4

84 PPC Annual Report 2002

30. FINANCIAL RISK MANAGEMENT (continued)
Interest rate management
As part of the process of managing the group’s fixed and floating rate borrowings mix, the interest rate characteristics of new
borrowings and the refinancing of existing borrowings are positioned according to expected movements in interest rates. The
interest rate profile of total borrowings is as follows:

Year of 2002 2001*

Description repayment Rm Rm

Liabilities in foreign currencies

Unsecured loans – Zimbabwe dollar 2003 2,2 –
SA rand liabilities
Liabilities under capitalised finance leases 2003 – 2013 399,5 399,5

401,7 399,5

All of the above loans are at fixed rates of interest.

The Zimbabwe unsecured loan bears interest at 30% per annum.

The South African finance leases bear interest at rates varying between 10,16% and 16% per annum. The weighted average
interest rate paid for the 2002 financial year was 15,12% (2001: 15,93%).

Maturity profile of financial instruments

The maturity profile of the financial instruments are summarised as follows:

<1 2–4 >4

year years years Total
Rm Rm Rm Rm

Financial assets
Cash and cash equivalents 871,6 – – 871,6
Trade and other receivables 387,6 – – 387,6
Long-term loan 10,2 30,6 60,9 101,7

Financial liabilities
Interest-bearing liabilities 14,2 41,4 346,1 401,7
Trade and other payables 360,7 – – 360,7

Fair value of financial assets and liabilities

Certain financial assets and liabilities, which are accounted for at historical cost, may differ from their fair value. The estimated fair
values have been determined using available market information and approximate valuation methodologies, as detailed below.

Book value Fair value

2002 2002
Rm Rm

Financial assets
Cash and cash equivalents 871,6 871,6
Trade and other receivables 387,6 387,6
Long-term loan 101,7 104,1

Financial liabilities
Interest-bearing 401,7 404,6
Trade and other payables 360,7 360,7

* Restated

PPC Annual Report 2002 85

Notes to the financial statements
for the year ended 30 September 2002

30. FINANCIAL RISK MANAGEMENT (continued)

The following methods and assumptions were used by the group in determining fair values:

Financial assets
The book value of cash and cash equivalents, trade and other receivables approximates the fair value.

Unlisted investments are carried at fair value determined on a dividend yield basis. In the current year a yield of five times dividend
was applied.

Financial liabilities
The book value of short-term borrowings and trade and other payables approximates the fair value.

The carrying value of non-current borrowings is calculated by discounting cash flow analyses using the applicable yield curve for the
duration of the borrowings.

Credit risk management

Potential areas of credit risk consist of trade accounts receivable and short-term cash investments.

Trade accounts receivable consist mainly of a large, widespread customer base. Group companies monitor the financial position of
their customers on an ongoing basis. Where considered appropriate, use is made of credit guarantee insurance. The granting of
credit is controlled by application and account limits. Provision is made for both specific and general bad debts, and at the year-
end management did not consider there to be any material credit risk exposure that was not already covered by credit guarantee
or a bad debt provision.

It is group policy to deposit short-term cash investments with its holding company and major banks.

The following table highlights the split of credit exposure:

GROUP
2002 2001
% %

Per industry
Wholesale/retail 47 43
Construction 17 19
Concrete product manufacturers 11 17
Steel and alloys 11 13
Readymix 5 –
Other industries with less than 5% exposure 9 8

100 100

Per geographical segment

South Africa 81 93
Other Africa 19 7

100 100

Liquidity risk management

The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are
maintained.

The company’s borrowing powers are unlimited.

The group does not have any other material financial instruments that are not based in the currency in which the entity operates.

86 PPC Annual Report 2002

31. DIRECTORS’ REMUNERATION AND INTEREST
The directors’ remuneration for the year ended 30 September 2002 was as follows:

Barloworld
share
Retirement options
Incentive and medical exercised/ Other
Salary bonus contributions ceded benefits Total
Name R’000 R’000 R’000 R’000 R’000 R’000

Executive directors
J E Gomersall 975 725 295 – 272 2 267
P J Blackbeard 1 010 734 159 994 188 3 085
R J Burn 620 427 101 702 160 2 010
R H Dent 630 434 111 – 164 1 339
P G Nelson 760 523 136 – 157 1 576

3 995 2 843 802 1 696 941 10 277

Remune-
Audit Compliance ration
Fees committee committee committee Total
R’000 R’000 R’000 R’000 R’000

Non-executive directors
W A M Clewlow 53 9 – 4 66
D C Arnold 35 9 9 – 53
R K J Chambers 35 9 9 4 57
A J Lamprecht 35 – – – 35
A J Phillips 35 9 – 4 48
M J Shaw 35 9 – – 44
E P Theron 35 – – – 35

263 45 18 12 338

Total 10 615

PPC Annual Report 2002 87

Notes to the financial statements
for the year ended 30 September 2002

31. DIRECTORS’ REMUNERATION AND INTEREST (continued)

The directors’ remuneration for the year ended 30 September 2001 was as follows:

Barloworld
share
Retirement options
Incentive and medical exercised/ Other
Salary bonus contributions ceded benefits Total
Name R’000 R’000 R’000 R’000 R’000 R’000

Executive directors
J E Gomersall 1 130 652 254 1 784 265 4 085
P J Blackbeard 925 790 149 148 164 2 176
R J Burn 572 398 93 – 143 1 206
R H Dent 572 444 102 – 152 1 270
P G Nelson 681 526 120 – 148 1 475
P Stuiver 677 449 116 725 220 2 187
R S Tennant
(resigned 31 December 2000) 128 45 23 – 156 352

4 685 3 304 857 2 657 1 248 12 751

Remune-
Audit Compliance ration
Fees committee committee committee Total
R’000 R’000 R’000 R’000 R’000

Non-executive directors
W A M Clewlow 30 8 – 3 41
D C Arnold 30 8 8 – 46
R K J Chambers 30 8 8 3 49
A J Lamprecht 30 – – – 30
A J Phillips 30 8 – 3 41
M J Shaw 8 – – – 8
E P Theron 30 – – – 30

188 32 16 9 245

Total 12 996

Interest of directors in contracts

The directors have certified that they were not materially interested in any transaction of any significance with the company or any
of its subsidiaries. Accordingly, a conflict of interest with regard to directors’ interest in contracts does not exist.

Interest of directors of the company in share capital

The aggregate beneficial holdings as at 30 September 2002 of the directors of the company and their immediate families (none of
which has a holding in excess of 1%) in the issued ordinary shares of the company are detailed below. There have been no material
changes in these shareholdings since that date.

88 PPC Annual Report 2002

 2002 2001
Direct Indirect Direct Indirect

31. DIRECTORS’ REMUNERATION AND INTEREST (continued)

Executive director
R H Dent 26 535 – 26 535 –

A register detailing directors’ and officers’ interests in the company is available for inspection at the company’s registered office.

Refer to note 8 for information regarding the unexercised options granted to directors and executives.

32. RELATED PARTY TRANSACTIONS

During the year fees paid to Barloworld Limited amounted to R9,4 million (2001: R5,1 million).

During the year the group, in the ordinary course of business, entered into various sale and purchase transactions with fellow
Barloworld subsidiary companies. These transactions are no more or less favourable than those arranged with third parties.

During the year the company and its subsidiary companies, in the ordinary course of business, entered into various sale and purchase
transactions with associate companies. These transactions are no more or less favourable than those arranged with third parties.

Associate companies
Details of investments in associate companies are disclosed in note 4 and Annexure 1. Dividend income is disclosed in note 17.
Fee income from associate companies amounted to R0,6 million (2001: R0,6 million). The group purchased goods to the value of
R2,5 million (2001: R4,1 million) from, and sold goods to the value of R nil (2001: R9,5 million) to associate companies.

The outstanding balances at year-end are as follows:

Included in accounts receivable (note 6) R nil (2001: R1,2 million)
Included in accounts payable (note 12) R0,2 million (2001: R0,4 million)
Included as investments in associate companies (note 4) R6,5 million (2001: R8,0 million)

PPC Annual Report 2002 89

Annexure 1
Interest in subsidiary and unlisted associate companies
30 September 2002
SUBSIDIARY COMPANIES

Issued Percentage Indebtedness

share held Shares (due to)/due by
capital 2002 2001 2002 2001 2002 2001
Name of company R % % Rm Rm Rm Rm

Afripack Limited 567 000A 100 100 25,3 25,3 (3,4) (19,3)
693 000B 100 100 0,8 0,8
Cape Portland Cement
Co Limited 5 264 000 100 100 1,6 1,6 (5,4) (5,4)
Cooper & Cooper
Holdings (Pty) Limited 100 000 100 100 0,8 0,8 3,8 3,8
Eastern Province Cement
Co Limited 800 000 100 100 1,3 1,3 (1,5) (1,5)
Mooiplaas Dolomite
(Pty) Limited 100 100 100 20,2 20,4
PPC Botswana (Pty)
Limited† 6 000 000A# 100 100 12,0 12,0 (2,0) 1,0
6 000 000B# 100 100
Portland Holdings Limited§ 83 920 148^ 100 435,7 0,7
PPC Lime Limited 4 207 965 100 100 17,7 17,7 (33,0) (9,4)
PPC Saldanha (Pty) Limited 100 100 100 115,6 119,9
Property Cats (Pty) Limited 100 100 100 12,0 12,0 1,1 1,1
Other minor subsidiary
companies 0,3 0,3 (11,9) (11,6)
507,5 71,8 84,2 99,0
Less: Provision for loss 106,3 1,0 1,6 1,8
401,2 70,8 82,6 97,2
ASSOCIATE COMPANIES

Issued Percentage Indebtedness

share held Shares due by
capital 2002 2001 2002 2001 2002 2001
Name of company Principal activity R % % Rm Rm Rm Rm

Amanzi Lime Services

(Pty) Limited Lime supply 4 000 50 50
Ash Resources
(Pty) Limited Ash distribution – 25 – 2,1
Kgale Quarries
(Pty) Limited† Aggregate mining 3 643 000# 50 50 9,1 9,1
Natal Portland Cement Co Cement
(Pty) Limited manufacturing – 32,8 – 23,0
Slagment (Pty) Limited Slag milling 11 600 001 33,3 33,3 3,8 3,8 6,5 10,5
12,9 38,0 6,5 10,5
Less: Provision for loss 3,8 3,8 – 2,5
9,1 34,2 6,5 8,0

All subsidiary and associate companies are incorporated in the Republic of South Africa, except as indicated.
A full list of subsidiary and unlisted associate companies is available for inspection at the registered office of the company.
†
Registered in Botswana
#
Botswana pula
§
Registered in Zimbabwe
^
Zimbabwe dollar

90 PPC Annual Report 2002

Interest in associate companies
30 September 2002

GROUP
2002 2001
Rm Rm

Included below is PPC’s portion of its associate companies’ assets, liabilities, results and cash flows:
BALANCE SHEET
Property, plant and equipment 13,2 85,7
Current assets 17,2 46,3
Total assets 30,4 132,0
Less:
Non-current liabilities 6,4 13,1
Deferred tax 8,0 14,6
Current liabilities 0,3 40,1
Interest in associate companies 15,7 64,2
Amount written off against loan – 2,5
15,7 66,7
INCOME STATEMENT
Revenue 185,4 168,7
Operating profit 47,7 36,2
Finance costs 1,4 1,6
Income from investments 0,2 0,5
Profit before tax 46,5 35,1
Tax 12,9 11,5
Net profit after tax 33,6 23,6
CASH FLOW STATEMENT
Cash flows from operating activities:
Cash receipts from customers 184,1 165,9
Cash paid to suppliers and employees (126,7) (129,9)

Cash generated from operations 57,4 36,0

Finance costs (1,4) (1,6)
Dividends paid (21,1) (15,4)
Tax paid (18,3) (9,8)
Net cash inflow from operating activities 16,6 9,2
Cash flows from investing activities:
Replacement of capital expenditure (6,3) (4,4)
Other cash flows 1,2 5,8
Net cash (outflow)/inflow from investing activities (5,1) 1,4
Cash flows from financing activities:
Net loans repaid (10,0) (8,8)
Net cash outflow from financing activities (10,0) (8,8)
Net increase in cash and cash equivalents 1,5 1,8
Cash and cash equivalents at beginning of year 2,9 1,1
Cash and cash equivalents at end of year 4,4 2,9
The financial year-end of Kgale Quarries (Pty) Limited and Amanzi Lime Services (Pty) Limited is 30 June and 30 September respectively.
The financial year-end of all other companies is 31 December. The financial information above has been obtained from the latest available
unaudited management accounts.

PPC Annual Report 2002 91

Share performance
SHARE STATISTICS

Performance on the
JSE Securities Exchange South Africa 2002 2001 2000 1999 1998

Number of shares in issue (millions) 53,7 50,0 50,0 50,0 47,1

Volume of shares traded (millions) 5,9 7,2 7,9 8,5 7,5
Market price (cents)
– high 8 200 7 200 6 010 5 400 7 400
– low 5 874 4 800 4 150 3 200 3 050
– at year-end 7 800 6 200 5 100 4 150 3 400
Value of shares traded (Rm) 410,9 453,4 392,9 328,1 401,3
Volume of shares traded as a percentage of
total issued shares (%) 11,0 14,4 15,8 17,1 16,0
Number of transactions 2 668 1 977 1 463 2 161 2 336

Earnings yield (%) 10,6 11,5 9,6 9,9 15,3

Dividend yield (%) 14,6 15,5 6,2 6,5 9,6
Price-earnings ratio 9,5 8,7 10,5 10,1 6,5
JSE actuaries’ industrial index at 30 September 5 825 6 670 8 955 6 879 5 711
Market capitalisation at 30 September (Rm) 4 192,0 3 100,8 2 550,3 2 074,2 1 600,2

SHARE OWNERSHIP

Number of % of issued
Number of shareholders Category shares held capital

2 229 1 – 1 000 535 880 1,00

385 1 001 – 5 000 885 762 1,65
95 5 001 – 10 000 709 601 1,32
59 10 001 – 20 000 875 192 1,63
46 20 001 – 50 000 1 420 588 2,64
30 50 001 – 100 000 2 246 669 4,18
22 100 001 – 500 000 4 075 322 7,58
10 over 500 000 42 994 525 80,00
2 876 53 743 539 100,00
Barloworld group 35 555 164 66,16
Institutional investors 9 310 312 17,32
Nominee companies^ 4 320 965 8,04
Pension/provident funds 2 480 665 4,62
Individuals and others 2 076 433 3,86
53 743 539 100,00
^ The majority of the shares held by the nominee companies are on behalf of institutional investors.

PPC share price performance

1 October 2001 to 30 September 2002
150
140
130
120
110
100
90
80
Oct ’01 Nov ’01 Dec’01 Jan ’02 Feb ’02 Mar ’02 Apr ’02 May ’02 Jun ’02 Jul ’02 Aug ’02 Sep ’02

PPC FTSE/JSE Construction and Building Materials Index FTSE/JSE All Share Index

92 PPC Annual Report 2002

Notice of annual general meeting

The one hundred and seventh annual general meeting of Pretoria Portland Cement Company Limited will be held in The Auditorium,
Ground Floor, 11 Sherborne Road, Parktown, Johannesburg, on Monday, 27 January 2003, at 12:30 for the following business:

1. To receive and adopt the annual financial statements for the year ended 30 September 2002.
2. To elect directors in accordance with the provisions of the company’s articles of association.
3. To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolution:

“That with effect from 1 October 2002 and in terms of article 12.5 of the company’s articles of association, the fees payable to:

(a) non-executive directors (other than the chairman) for their services be increased by R15 000 per person per annum from R35 000
to R50 000;
(b) non-executive members of the audit committee be increased by R6 500 per person per annum from R8 500 to R15 000;
(c) non-executive members of the compliance committee be increased by R6 500 per person per annum from R8 500 to R15 000;
(d) non-executive members of the remuneration committee be increased by R500 per person per annum from R3 500 to R4 000;
(e) non-executive members of the nominations committee be set at R4 000 per person per annum; and
(f) the chairman for services rendered be increased by R47 500 per annum from R52 500 to R100 000.

4. To consider and, if deemed fit, to pass, with or without modification, the following special resolution:

That:
(a) The directors of the company be authorised from time to time to acquire issued shares in the ordinary share capital of the company
on the JSE Securities Exchange South Africa “open market” at a price no greater than 10% above the weighted average of the
market value for the securities for the five previous business days immediately preceding the date on which the transaction was
agreed or at a bid price no greater than the current trading price of the share; and the purchase by any of the company’s
subsidiaries of shares in the company in the manner contemplated by and in accordance with the provisions of section 89 of the
Companies Act, 1973, and other provisions which may be applicable.

(b) The authorisation granted in terms of (a) above shall remain in force from the date of registration of these special resolutions by
the Registrar of Companies until the conclusion of the next annual general meeting of the company and, in any event, no later
than 15 months from the date on which they were passed.

(c) The repurchase by the company or by any one of the company’s subsidiaries of its own securities in terms of (a) above may not
exceed 10% of the company’s issued ordinary share capital in the aggregate in any one financial year.

(d) The company’s intention regarding the utilisation of the authority, which is sought in terms of (a) above, is to utilise surplus cash
available from time to time to repurchase shares in the company with the aim of increasing shareholder value.

(e) In the event that the directors are granted general authority to buy back a maximum of 10% of the issued share capital of PPC,
in the aggregate, it is the opinion of the directors that following such maximum repurchase of shares:

• the company and the group will be able in the ordinary course of business to pay its debts for a period of 12 months after the
date of notice issued in respect of the annual general meeting;
• the assets of the company and the group will be in excess of the liabilities of the company and the group for a period of
12 months after the date of notice issued in respect of the annual general meeting. For this purpose, the assets and liabilities
will be recognised and measured in accordance with the accounting policies used in the latest audited group annual financial
statements;
• the ordinary capital and reserves of the company and the group will be adequate for a period of 12 months after the date of
notice issued in respect of the annual general meeting; and
• the working capital of the company and the group will be adequate for a period of 12 months after the date of notice issued
in respect of the annual general meeting.

PPC Annual Report 2002 93

Notice of annual general meeting

The reason for proposing the special resolution is to permit and authorise PPC to acquire its own shares. The effect will be to
authorise the directors to purchase shares in PPC.

5. To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolution:

“That 1 559 900 unissued ordinary shares of R1 each reserved to meet the requirements of the PPC 1985 Share Option Scheme and
the PPC Share Purchase Scheme (“the schemes”) be and are hereby released from that restriction and returned to the balance of
unissued ordinary shares.”

The two schemes are now closed and only 17 700 options granted to directors and executives remain unexercised and after the
transfer of the 1 559 900 reserved ordinary shares back to the balance of unissued shares only 17 700 will remain reserved to meet
the requirements of the schemes.

6. To transact such other business as may be transacted at an annual general meeting including the appointment of auditors.

A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies (who need not be a member of the
company) to attend and speak and, on a poll, to vote in his/her stead.

Should members who have already dematerialised their PPC shares wish to attend the meeting in person, then they will need to request
their CSDP or broker to provide them with the necessary authority in terms of the custody agreement entered into between the
dematerialised shareholder and the CSDP or broker.

A form of proxy is enclosed for the use of members who wish to be represented at the meeting or may be obtained on application to
the secretaries at the company’s registered address or telephone +27 11 445-1000. The attention of members is drawn to the fact that
if it is to be effective, the completed form of proxy must reach the company’s transfer secretaries or the registered office of the company
by no later than 12:30 on 23 January 2003.

A form of proxy is only to be completed by the shareholders that are holding shares in certified form or recorded on sub-register electronic
form in “own name”.

By order of the board

Barloworld Trust Company Limited

Secretaries
Per A R Holt

6 November 2002

94 PPC Annual Report 2002

Administration

PRETORIA PORTLAND CEMENT COMPANY LIMITED

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

Auditors Transfer secretaries

Deloitte & Touche Computershare Investor Services Limited
Deloitte & Touche Place 70 Marshall Street
The Woodlands Johannesburg, South Africa
Woodlands Drive PO Box 61051, Marshalltown 2107
Woodmead, Sandton, South Africa South Africa
Private Bag X6 Telephone +27 11 370-5000
Gallo Manor 2052, South Africa Telefax +27 11 370-5487
Telephone +27 11 806-5000
Telefax +27 11 806-5111

Secretaries and registered office Transfer secretaries Zimbabwe

Barloworld Trust Company Limited Corpserve (Private) Limited
180 Katherine Street, Sandton, South Africa 4th Floor, Intermarket Centre
PO Box 782248 Corner 1st Street/Kwame Nkruma Avenue
Sandton 2146, South Africa Harare, Zimbabwe
Telephone +27 11 445-1000 PO Box 2208
Telefax +27 11 444-4170 Harare, Zimbabwe
Telephone +263 4 758193/751559
Telefax +263 4 752629

Sponsoring brokers Sponsoring brokers Zimbabwe

Cazenove South Africa (Pty) Limited Sagit Stockbrokers (Private) Limited
1st Floor, Moorgate, Dunkeld Park 14th Floor, Intermarket Life Towers
6 North Road 77 Jason Moyo Avenue
Dunkeld West, South Africa Harare, Zimbabwe
PO Box 412468 PO Box 21
Craighall 2024, South Africa Harare, Zimbabwe
Telephone +27 11 280-7900 Telephone +263 4 735602
Telefax +27 11 325-8040 Telefax +263 4 735292

Financial calendar

Financial year-end 30 September

Annual general meeting 27 January 2003
Reports
• Interim results for half-year to March Published May
• Preliminary announcement of annual results Published November
• Annual financial statements Published November
Dividends
• Interim Declared May
Paid July
• Final Declared November
Paid January

PPC Annual Report 2002 97

Award winners

PAGE 1 6 • Jannie Brenkman, Employee of PAGE 19

PPC Achievers Award the Year Award, Dwaalboom 1 • LAB Team – Themba Nkayi, Ivan
1 • Johan Claassen, Dwaalboom 7 • Marius Bornman, Janine Jansen, Departmental Service
2 • Giel Visser, Parktown Carmichael, Trevor Sawyer, Award – Quality Assurance, PE
3 • Johnny Carolus, Riebeeck West Thank You Awards, Jupiter 2 • Riaan Coetzer, Excellence Award –
4 • Brian Booys, De Hoek 8 • Percy Malebye, Sandra Swart, External Customer Service, Hercules
5 • Jan Riekert, Hercules Development Employee of the Year, 3 • Phineas Phadu, Excellence Award
6 • Reuben Thomane, Employee Dwaalboom – Self Development, Hercules
of the Year, Slurry 4 • Elaine Kemp, Lime Employee
7 • Bruce Lange, Parktown PAGE 13 of the Year, Lime Acres
8 • Piet Booysen, Riebeeck West 5 • Zacharia Pheelwane, Excellence
1 • Johannes Motsosi, Quarry Team
9 • Awie Theart, Saldanha Award – Maintenance Assistant,
Member of the Year, Slurry
10 • Jan Jansen, Lime Acres Hercules
2 • Mike Motsusi, Production Team
11 • Neville Frewin, Parktown 6 • Johan Struwig, Continuous
Member of the Year, Slurry
12 • Sguntsu Stemela, PE Improvement Award and
3 • Karen Joubert, Positive Attitude
13 • Manny Da Silva, Jupiter Management Representative
and Enthusiasm Award, Saldanha
4 • Willie Prins, Engineering Team Award, Saldanha
PAGE 4 7 • Lydia Mokoena, Excellence Award
• Warren Clewlow (Chairman) Member of the Year, Slurry
5 • William Leotoane, Thomas – Kambuku, Hercules
• Arthur Shirley, Naomi Williams,
8 • De Wet Snyders, Best InvoCom
Shadrack Njobeni, Keshnee Matlhola, Bushy Motshwarateu,
Award, Riebeeck West
Harilal, Pagel Futha, Thank You Despatch Team of the Year, Slurry
9 • Loerie Rehab Team – Patrick Laufs,
Awards, Parktown 6 • Rudi van Dyk, Best Suggestion of
Johnson Mange, Hermans
the Year, Slurry
Grootboom, George Petse,
PAGE 8 7 • Jonny Niewenhuizen, Petrus
Departmental Service Award –
1 • GUS Team – Alfred Kubang, Khoboko, Departmental Employee
Quarry, PE
Samuel Mayete, Benjamin of the Year, Lime Acres
10 • Tienie Schoeman, General
Gouws, Johannes Mabokwane, 8 • Fitter workshop, InvoCom of the
Manager’s Award, Hercules
Wessel Victor, Team of the Year, Year, Slurry
Lime Acres
PAGE 23
2 • George Bendini, Departmental PAGE 15
1 • Gerda Botha, Excellence Award –
Award – Quarry, De Hoek 1 • Michiel Maarman, Departmental
3 • Niru Govender, Bheki Mthembu, Kambuku, Hercules
Award – Production, De Hoek 2 • Jeffery Pietersen, Risk/Admin/OP
William Burtone, Thank You 2 • Sydney Pieterson, Departmental
Award, Jupiter Excellence Award, Riebeeck West
Award – Services Department, 3 • Frikkie van Zyl, General Managers
De Hoek Award, Riebeeck West
PAGE 9
3 • Pieter van den Heever, Kambuku 4 • Derek Galvin, Thank You Award,
1 • Corrie Vos, Dirk Lubbe,
Spirit Award – Engineering, Montague Gardens
Victor Jaabosigo, Customer
De Hoek 5 • Norma Addinall, Bonnie
Service Employee of the Year,
Dwaalboom Clementson, Thank You Awards,
PAGE 16 Montague Gardens
2 • Yobert Mathonsi, Excellence
Award – Innovation, Hercules 1 • Nhlanhla Mekoa, Thank You 6 • Isak Afrika, Quarry Excellence
3 • Deon Jansen, Thank You Award, Award, Jupiter Award, Riebeeck West
Nelspruit 2 • James Maleke, Health and Safety 7 • Pannie Solomon, Production
4 • Godfrey Jaabosigo, Development Employee of the Year, Slurry Excellence Award, Riebeeck West
Employee of the Year, Dwaalboom 3 • Karen Joubert, Sampie van 8 • Sophia Steynberg, Employee of
5 • George Miyambo, Christian Rooyen, Riaan Loubscher, the Year Award, Saldanha
Mhana, Fabian Stuart, Joseph Allan Beerwinkle, Team of the 9 • Alpheus Kwenane, Health and
Mkhwebane, Joy Foster, Thank Year Award, Saldanha Safety Employee of the Year
You Awards, Jupiter 4 • Des Arnold and Russell Chambers Award, Dwaalboom

98 PPC Annual Report 2002

10 • LAB Team – Humphrey Tyala, 5 • Dust collector, De Hoek 2 • Donovan Floris, Engineering
Lindi Malatsi, Departmental 6 • ISO 14001 Certification – Excellence Award, Riebeeck West
Service Award – Quality Assurance, Kerneels Grundling (GM) and 3 • Willem Willems, Departmental
PE Daniel Prinsloo (RCM), PE Award – Engineering, De Hoek
11 • Theo Simpson, Departmental 7 • Vegetable farming, Loerie 4 • Louis Fouché, Thank You Award,
Service Award – Maintenance, PE Parktown
PAGE 31 5 • Lab Team – Mlamli Nozwane,
PAGE 27 1 • Herman Guestyn, Innovation Hermanus Potgieter, Rayman
1 • Sugnee van der Vyver, Award, Riebeeck West Vuma, Nelson Guga, Xolile
HR/Admin/Risk Departmental 2 • Lesley Smith, Toolbox Ompi, Departmental Service Award
Service Award, PE Competition, Lime Acres – Quality Assurance, PE
2 • Cindy Boumeester, Kambuku 3 • Anil Singh, Employee of the Year, 6 • Tessa Mutrie, Thank You Award,
Spirit Award – Services Department, Afripack Jupiter
De Hoek 4 • Basil Makhata, Safety 7 • Frikkie Thiart, Best Housekeeping
3 • Deon Bronner, Excellence Award – Representative of the Year, Lime Section Award, Riebeeck West
Internal Customer Service, Hercules Acres 8 • LAB Team – Vusani Ntombana,
Rose Chellew, Departmental
4 • Emnick Booise, Departmental 5 • Brian Booys, GM’s Award Winner,
Service Award – Quality Assurance,
Award – Customer Services, De Hoek
PE
De Hoek 6 • Sarel Pedro, Kambuku Spirit
9 • Marius Joubert, Thank You
5 • Dawid Fortuin, Kambuku Spirit Award – Quarry, De Hoek
Award, Rustenberg
Award – Customer Services, 7 • Nols Viljoen, Anton Moller,
10 • Sharon Butler, Linda Gxara,
De Hoek Schalk Victor, Manager’s Award,
Jessica Quinn, Melanie Koning,
6 • Zolile Ompi, LAB Team – Lime Acres
Thank You Awards, Montague
Departmental Service Award – 8 • Lucas Booys, Kambuku Spirit
Gardens
Quality Assurance, PE Award – Production, De Hoek
7 • Harrington Masinda, 9 • Colin Barker, Apprentice of the
OTHER AWARD WINNERS
Development Award, PE Year, Lime Acres
• Freddie Pos, Best Suggestion
8 • Sanita Lochner, Departmental
Award, Lime Acres
Award – Services Departments, PAGE 32
• Bongani Mdingi, Managers
De Hoek 1 • Petrus Bareetseng, Quality Team
Award, Lime Acres
9 • Mac Naidoo, Employee for Member of the Year, Slurry
• Corlia Mulder, Managers Award,
Period 1, Afripack 2 • Tommy Phelwane, Admin/HR/Risk
Lime Acres
10 • Claude Alexander, Best Health Team Member of the Year, Slurry
• Llewellyn Manzana,
and Safety Representative Award, 3 • Les Prinsloo, Employee for
Departmental Employee of the
Riebeeck West Period 3, Afripack
Year, Lime Acres
11 • Njabulo Gumbo and William 4 • William Marima, Excellence
• Heather de Bruyn, Thank You
Phiri, Innovative Idea Award, Award – Production Assistant,
Award, Pietersburg
Porthold Hercules
12 • Elford Ngxangashe, Customer 5 • Despatch Team – Mbuyiseli
Services Excellence Award, Richard Mpambani, Xola David
Riebeeck West Mtsatse, Kelem Manyonga,
Thembinkosi Lloyd, Mpumelelo
PAGE 28 Ngadlela, Butini Peter Mene,
1 • Removal of invasive species, Lucas Maswana, InvoCom of the
Montague Gardens Year, PE
2 • Rehab of the screening dump,
Loerie INSIDE BACK COVER
3 • Chicken farming, Loerie 1 • Maria Carreira, Thank You Award,
4 • Hercules Gardens Parktown

PPC Annual Report 2002 99

GRI content index
This page provides a cross-reference between this report and the guidelines set out in Section C of the Global Reporting Initiative’s
(GRI) Sustainability Reporting Guidelines. Where there is no page reference we have not addressed the guideline in this report.

VISION AND STRATEGY ECONOMIC PERFORMANCE SOCIAL PERFORMANCE INDICATORS

Page INDICATORS Core Non-core
1.1 IFC Core Non-core Employment
1.2 10 Customers LA1 Pg 43, 44, 45
EC1 Pg 73 LA2 –
EC2 Pg 73 LA12 –
PROFILE Suppliers Labour/management relations
Page EC3 Pg 41 LA3 –
2.1 97 EC4 Pg 41 LA4 –
2.2 14 EC11 Pg 41 LA13 –
2.3 15 Employees Health and safety
2.4 14 EC5 Pg 41, 75 LA5 Pg 30
2.5 14 Providers of capital LA6 –
2.6 14 EC6 Pg 41 LA7 Pg 30
2.7 14 EC7 Pg 41, 56 LA8 Pg 30
2.8 41 Public sector LA14 –
2.9 28, 34, 35, 41 EC8 Pg 41, 77 LA15 –
2.10 IFC, 33 EC9 – Training and education
2.11 28 EC10 – LA9 –
2.12 – EC12 – LA16 Pg 35
2.13 – Indirect economic impacts LA17 Pg 35
EC13 – Diversity and opportunity
2.14 10
LA10 Pg 35
2.15 52
LA11 –
2.16 83 ENVIRONMENTAL Strategy and management
2.17 – PERFORMANCE INDICATORS HR1 –
2.18 50 HR2 Pg 34
2.19 – Core Non-core
Materials HR3 Pg 34
2.20 32 HR8 Pg 8
2.21 33 EN1 Pg 33
EN2 Pg 29 Non-discrimination
2.22 – HR4 Pg 34
Energy
EN3 Pg 33 Freedom of association
GOVERNANCE STRUCTURE EN4 Pg 33 and collective bargaining
AND MANAGEMENT SYSTEMS EN17 Pg 29 HR5 –
Child labour
Page EN18 –
HR6 –
3.1 17, 18, 20 EN19 –
Forced and compulsory labour
3.2 24, 25 Water
HR7 –
3.3 17 EN5 – Disciplinary practices
3.4 20, 21 EN20 Pg 33 HR9 –
3.5 20, 21 EN21 – HR10 –
3.6 17, 18, 20, 21, 26 EN22 – Security practices
3.7 IFC, 22 Biodiversity HR11 –
3.8 17 EN6 Pg 33 Indigenous rights
3.9 – EN7 Pg 33 HR12 –
3.10 – EN23 – HR13 –
3.11 – EN24 – HR14 –
3.12 – EN25 Pg 33 Community
3.13 – EN26 Pg 33 SO1 Pg 32
3.14 16, 18 EN27 Pg 33 SO4 Pg 18, 29, 30
3.15 – EN28 – Bribery and corruption
3.16 32 EN29 Pg 33 SO2 Pg 22
3.17 28 Emissions, effluent and waste Political contributions
3.18 10 EN8 Pg 30 SO3 –
3.19 8, 21, 32 EN9 – SO5 –
3.20 30 EN10 – Competition and pricing
EN11 – SO6 Pg 6
EN12 – SO7 –
EN13 – Customer health and safety
EN30 Pg 29, 33 PR1 –
EN31 – PR4 –
EN32 – PR5 –
Suppliers PR6 –
EN33 – Products and services
Products and services PR2 –
EN14 – PR7 –
EN15 – PR8 –
Compliance Advertising
EN16 – PR9 –
Transport PR10 –
EN34 Pg 30 Respect for privacy
Overall PR3 –
100 PPC Annual Report 2002 EN35 – PR11 –