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Audited preliminary summarised consolidated financial statements for year ended 31 March 2017
PPC Ltd
(Incorporated in the Republic of South Africa)
(Company registration number 1892/000667/06)
JSE ISIN: ZAE000170049
JSE code: PPC ZSE code: PPC
("PPC" or "Company" or "Group")
Audited preliminary summarised consolidated financial statements
for the twelve months ended 31 March 2017
Salient features
- Group revenue increased 5,0% to R9,6 billion
- Group EBITDA down 13% to R2,1 billion
- Headline earnings per share down 93% to 7 cents
- Normalised (headline) earnings per share down 29% to 47 cents
- Net debt/EBITDA improved from 3,7x to 2,3x as net debt declined from
R8,7 billion to R4,7 billion
- Zimbabwe mill commissioned in the year, with Ethiopia and DRC cement plants
delivered shortly after year-end
- Cement capacity increased by 33% from 8,6mtpa to 11,4mtpa
Commentary
Darryll Castle, CEO, said: "PPC endured a challenging financial year, while still delivering
on a number of key initiatives and projects during the year. Our results were impacted
by a liquidity crisis precipitated by an unexpected S&P debt downgrade, which resulted
in abnormal finance costs being incurred in relation to a liquidity and guarantee facility
put in place to ensure that PPC could meet its financial bond repayment obligations. In
addition, this also resulted in a higher interest charge for the year and a higher effective
tax rate. Subsequently, the company successfully completed a rights offer, which ensured
that PPC was able to reduce its gearing levels to a more sustainable level. The unwind
of components of the BBBEE 1 (broad-based black economic empowerment) transaction
also resulted in a cash inflow, while a corresponding IFRS 2 charge was incurred in this
regard. Operationally volumes were impacted by excessive rainfall in the last quarter of
the financial year. In addition, the domestic cement market remained highly competitive
resulting in a constrained pricing environment. PPC’s tax rate was also significantly
higher than the prior year, mainly attributable to the non-deductibility of IFRS 2 charge
related to the BBBEE 1 transaction and forex losses due to exchange rate movements
and withholding taxes on dividends in foreign jurisdictions. CIMERWA achieved cement
sales volumes of 310 000 tonnes in its first full financial year of operation, contributing
to an improved rest of Africa cement performance. This demonstrated PPC’s ability to
successfully transition from project phase to operational phase. PPC also commissioned
the Harare mill in Zimbabwe, and projects in Ethiopia and DRC were commenced shortly
after year-end. This has resulted in the group’s cement capacity increasing by ~33%
from 8,6mtpa to 11,4mtpa. The 3Q Mahuma Concrete (3Q) acquisition was successfully
consolidated from 1 July 2016".
PPC GROUP PERFORMANCE
The financial performance for the 12-month period ended March 2017 is compared to proforma
financial results for the 12 months to March 2016. In order to give stakeholders better clarity,
PPC has amended its segmental disclosure to reflect southern African cement operations
(which includes Botswana) and the rest of Africa cement operations, which includes
Zimbabwe, Rwanda, DRC, Mozambique and crossborder sales from southern Africa. The materials
division disclosure is unchanged, while a group shared service segment is also disclosed.
Group revenue rose by 5,0% to R9 641 million (March 2016: R9 187 million). The growth was supported by
the rest of Africa cement business which grew revenue by 9% and the aggregates and readymix
segment which grew revenue by 23%. Revenue in southern Africa was flat, with cement volumes
increasing by 2%, offset by lower selling prices. Solid volume growth was achieved in Botswana, however,
selling price pressure resulted in decreased revenue. In the rest of Africa cement segment, volumes in
Rwanda were up significantly, while our gradual ramp-up has ensured minimal disruption to the
prevailing market. In Zimbabwe overall volumes ended down 3% which was better than expected,
reflective of the economic headwinds and liquidity challenges in the market. Revenue in our lime
business ended flat, while revenue growth in our aggregates and readymix operations was supported
by the recently acquired 3Q.
Cost of sales of R7 359 million was 13% higher than the previous year (March 2016: R6 492 million),
primarily due to the inclusion of recently acquired 3Q business and the ramp-up in Rwanda. On a
like-for-like basis cost of sales was up 7%, while on a delivered rand per tonne basis, the
South African cement business was up 5% relative to the prior year.
Administration and other operating expenditure was well controlled, and decreased by 2% to
R1 049 million (March 2016: R1 065 million).
Group EBITDA decreased by 13% to R2 065 million (March 2016: R2 383 million) while the EBITDA
margin achieved was 21,4% (March 2016: 26,0%). The decline was mainly attributable to the southern
Africa cement segment where EBITDA was 19% lower relative to the previous year. EBITDA margins in
this segment declined from 26,9% to 21,6%. This was countered by the rest of Africa cement segment
which saw a 19% rise in EBITDA, and corresponding margins improving from 27,7% to 30,5% with
Rwanda the major contributor to the increase. Lower EBITDA was also realised in the lime and aggregates
and readymix segments.
Finance costs rose by 30% to R741 million, over last year’s R572 million following increased finance costs
and raising fees of R165 million incurred on the R2 billion liquidity and guarantee facility secured in
June 2016 to redeem the outstanding financial bonds. Unfavourable currency movements against
the US dollar in the DRC and Rwanda contributed to losses of R124 million on revaluations of foreign currency
denominated balances.
The effective taxation rate increased to 85% mainly due to withholding tax on dividends declared from
Zimbabwe, the impact of non-deductible finance costs, IFRS 2 charges related to the BBBEE 1
transaction, forex losses adjustments due to exchange rate movements and prior year
adjustments.
Net profit attributable to PPC shareholders declined by 88% to R93 million (March 2016: R793 million).
On a normalised basis net profit declined from R655 million to R512 million for the year. In line with this,
earnings per share was 93% lower at 8 cents (March 2016: 117 cents) and headline earnings per share fell 93%
to 7 cents (March 2016: 107 cents). Normalised earnings per share ended 29% below prior year at
47 cents per share (March 2016: 66 cents per share).
Cash generated from operations decreased by 22% to R1 871 million (March 2016: R2 389 million). Negative
working capital movements amounting to R230 million includes VAT receivable and prepayments, all of which are
non-trade related. The group’s cashconversion ratio reduced marginally from 1,0x to 0,9x.
Capital investments in property, plant and equipment decreased by 32% to R2 058 million (March 2016:
R3 038 million), with R307 million used for the Slurry kiln 9 project in South Africa and the balance
attributable to the DRC and Zimbabwe expansion projects. Group net debt has reduced from
R8 711 million in March 2016 to R4 746 million. This has led to a significant improvement in group net
debt to EBITDA ratio from 3,7x to 2,3x. PPC continues to work on the restructuring of its debt to further
improve its balance sheet structure.
The company’s dividend policy considers its growth aspirations as well as the prudency of its capital
structure. Under the current circumstances, the board deems it prudent to address debt refinancing and
optimisation of the capital structure before dividend payments are considered. In line with this, the
directors have decided not to declare a dividend.
GROUP SERVICES
Group services comprises PPC Ltd, shared services, costs related to BEE, group and intercompany
eliminations. The R575 million loss in group services is mainly attributable to costs incurred at head office
relating to international operations, head office costs and non-chargeable operational costs. Also included
is finance charges which cannot be charged out to operating entities. An IFRS charge of R185 million is
also included in this amount.
SOUTHERN AFRICA CEMENT
South Africa
PPC’s cement sales volumes rose by 2% for the year. The competitive landscape in Gauteng intensified,
forcing cement prices down particularly in the bulk market. Gauteng volumes were also negatively
impacted by excessive rainfall in the first two months of 2017. Inland sales (excluding Gauteng) volumes
rallied well across all segments in a tough market to end flat for the year. All sectors in the coastal
region again performed well, with double-digit volume increases for the year.
Variable delivered cost of sales per ton increased above inflation, while fixed costs increased were well
controlled rising by only 5%. Western Cape volume increases impacted costs adversely due to the running
of less efficient Riebeeck operations and substantially higher incremental coal cost in the Western Cape.
Slurry SK9
Construction of the new 1mtpa clinker production line (SK9) at PPC Slurry is on schedule and within the
budget of R1,7 billion and will be commissioned in the first half of 2018. The overall project progress is
62% complete. PPC has committed 82% of the capex spend, with the majority of the equipment ordering
complete, the last few shipments related to electrical and instrumentation equipment scheduled for June
2017. Eskom has commenced with the extension of the substation and is on schedule for power supply to
PPC by December 2017.
Botswana
The Botswana operations, recorded flat volumes while selling prices were down 9% due to increased
competition from imports from South Africa. Market leadership was maintained by focusing on brand,
operational efficiencies and cost competiveness. EBITDA however dropped significantly in the reporting
year.
REST OF AFRICA CEMENT
Rest of Africa cement contributed R645 million to EBITDA, however it has not contributed to profit after
tax. This is attributable to operational ramp-up, depreciation and tax charges.
Zimbabwe
Our Zimbabwe operations, recorded volume declines of 3% while selling prices, in US dollar, declined 10%.
The rand appreciated by 9% against the US dollar during the year, which also impacted profitability.
The tough operating environment was intensified by the strengthening of the US dollar against regional
currencies, leading to further competition in the market. Importation of cement declined slightly
compared to the previous year mainly due to the introduction of cement import tariffs of US$100 per ton,
which was effective 1 October 2016. PPC Zimbabwe launched Surecast (CEM II 42.5R) cement
to increase the product offering and create value for concrete product manufacturers and concrete
producers due to its improved early strength development. The liquidity challenges in the domestic
market continue to be of concern. The management team is working hard to diversify revenue streams,
increase localised procurement and grow export volumes.
Construction of the US$82 million (previously US$85 million) Harare mill project was been
completed on time, below budget and without any lost time injury incidents. The Harare mill is expected
to reduce outbound logistics costs while increasing accessibility to the northern markets. The company is
well positioned for the expected economic upturn and infrastructural developments and investments in
the medium term. Harare and Bulawayo operations are suitably located to grow exports into neighbouring
countries and this will be given priority. Strong focus on operational efficiencies, development of human
capital, route to market initiatives, product innovation, safety and environmental compliance
will continue being a focus in the next year to cement our position domestically and regionally. The
first biannual debt and interest repayments were made in December 2016.
Rwanda
In this year, the plant sold 310 000 tonnes of cement; increasing its contribution to group sales. CIMERWA’s
priority is to grow volumes so that it can increase its plant capacity utilisation and continues to focus on
venturing into new markets and finding new distribution channels. In support of initiatives to
improve customer service and reduce logistics costs, a route to market strategy was implemented
focusing on developing transport capacity within Rwanda to support growing volumes.
Democratic Republic of the Congo
Construction was completed on schedule, but hot commissioning was delayed to February 2017 due to
the delay in the construction and commissioning of the overhead transmission line to supply power to
the cement plant. The first cement and clinker was produced in March 2017 during the hot
commissioning process and the plant went into production and first sales commenced in April 2017.
The trading environment in the DRC continues to be challenging, due to surplus capacity coupled with
lower pricing levels due to low-cost imports from neighbouring Angola. The local cement producers’
association continues to engage with government on local industry protection as it moves towards selfsufficiency.
The DRC project was financed on a limited recourse basis to PPC. As such, any funding shortfalls prior to
financial completion are for the account of PPC, as first sponsor. Current shortfalls include capital
overruns estimated at US$16 million, start-up trading costs and VAT estimated at US$36 million. In
addition, repayment of funding obligations and interest is expected to begin in the first quarter of
FY18, and are in the order of US$35 million for the full year. To the extent that this amount cannot be
generated from operations PPC will be required to stand behind its first sponsor obligations. The
company has prepared itself to meet these obligations, particularly since project financial completion is not
anticipated in the near term. There is therefore an indicator of impairment. The full impairment exercise
will only be done once the DRC entity has been trading for a reasonable period.
Ethiopia
The US$172 million 1,4mtpa plant was delivered in early February 2017 when the bulk power supply to
the plant was completed. The plant was inaugurated by the prime minister of the Federal Democratic
Republic (FDR) of Ethiopia in April 2017. The first saleable cement happened planned in May 2017.
Cement demand in Ethiopia matches supply and with imports into the country banned, this is expected to
remain unchanged in the short term. Cement sales are expected to grow in line with the factory rampup.
Market demand is driven by the retail and construction segments which account for over 85%
of the market. Habesha’s route to market strategy is designed to leverage these market segments through
product availability and service innovations. PPC increased its holding in Ethiopia via a rights offer
process, with PPC now having a 38% holding in Habesha for an additional US$3,8 million.
MATERIALS BUSINESS
The combined materials business contributed 21% to group revenue and 15% to group EBITDA.
LIME
Revenue in the lime business of R818 million was flat compared to the previous year. The lime sales volumes
were affected by the three-month shutdown at one of its major clients Saldanha Steel, burnt product sales
volumes increased by 6%. EBITDA achieved was R165 million, which was 16% lower than the R196
million achieved previously. Costs were well controlled during the year.
AGGREGATES AND READYMIX
Aggregates and readymix revenues were 23% higher at R1 230 million (March 2016: R1 002 million) mainly
due to the consolidation of 3Q. EBITDA contracted from R187 million to R151 million due to lower
volumes in aggregates and selling price pressure in readymix. In July 2016, PPC successfully concluded
the acquisition of 3Q for R135 million via the issue of 17 565 872 ordinary shares in PPC. 3Q has been
integrated into our materials business as part of Pronto Readymix and contributed favourably to revenue.
BOARD AND SUB-COMMITTEE CHANGES
The board appointed Ms Nonkululeko "Nonku" Gobodo (56) as a non-executive director to the board
of directors of PPC and audit committee member with effect from 8 February 2017. Nonku brings a wealth
of experience from her extensive career in the fields of accounting and business leadership. She was the first
black female to qualify as a chartered accountant in South Africa. Nonku is currently a non-executive
director of Mercedes-Benz SA, chief executive officer of Nkululeko Leadership Consulting and chairwoman
of Mpumelelo Ventures. The PPC board welcomes Nonku and looks forward to her contribution to
board deliberations.
BROAD-BASED BLACK EMPOWERMENT TRANSACTION
To ensure compliance with the Mining Charter, the group implemented two separate BBBEE transactions
in 2008 (the 2008 BBBEE transaction: 15,3% shareholding) and in 2012 (6,5% shareholding) which resulted in
an aggregate BBBEE shareholding of
21,8% at the time in the group, which in turn translated into an effective 26% BBBEE ownership of
the group’s South African operations as required by the Mining Charter, based on the then 80%:20%
revenue contribution split between the group’s South African and non-South African PPC operations.
As a consequence of the completion of the PPC rights offer in September 2016 and following maturity of
the components of the 2008 BBBEE transaction in December 2016, PPC’s BBBEE ownership credentials
have declined to below the effective 26%.
Accordingly, the board has approved a framework for a new BBBEE transaction to ensure that the company
achieves a higher BBBEE shareholding.
FURTHER CAUTIONARY ANNOUNCEMENT
REGARDING THE PROPOSED PPC-AFRISAM MERGER
PPC and Afrisam are currently conducting due diligence work related to a possible merger of the two
entities ("proposed merger"). No definitive conclusions have been reached at this juncture and
the company will continue to inform shareholders of developments in due course.
If the proposed merger is implemented, it may have a material impact on the price of the company’s shares.
Accordingly, shareholders are advised to continue exercising caution when dealing in securities of the
company until such time a further announcement is made.
PROSPECTS
The delivery of key rest of Africa cement projects has increased PPC’s cement capacity and geographic
footprint. PPC remains well positioned for the medium to long term, notwithstanding the current
challenging operating climate. The business will continue to focus on mitigating economic and
market risks in the regions we operate in, while continuing to optimise the group’s capital and cost
structures. This should enable the group to compete efficiently and effectively in all our geographies.
On behalf of the board
PG Nelson
Chairman
DJ Castle
Chief executive officer
MMT Ramano
Chief financial officer
6 June 2017
Audited preliminary summarised consolidated statement of comprehensive income
for the twelve months ended 31 March 2017
Twelve Six Twelve
months months months Twelve
ended ended ended months
31 March 31 March 31 March 2017/
2017 2016 2016 2016
Audited Audited Pro forma* %
Notes Rm Rm Rm change
Revenue 9 641 4 501 9 187 5
Cost of sales 7 359 3 261 6 492 13
Gross profit 2 282 1 240 2 695 (15)
Administrative and other operating expenditure 1 049 489 1 065 (2)
Operating profit before item listed below: 1 233 751 1 630 (24)
Empowerment transactions IFRS 2 charges(a) 206 18 36
Operating profit 1 027 733 1 594 (36)
Foreign exchange (loss)/gain on foreign currency
monetary items 2 (124) (20) 3
Finance costs 3 741 330 572 30
Investment income 27 12 29
Profit before equity-accounted earnings 189 395 1 054 (82)
Earnings/(loss) from equity-accounted investments 1 - (13)
Impairments 4 (10) (5) (43)
Profit on sale of non-core assets - 117 117
Profit before taxation 180 507 1 115 (84)
Taxation 5 153 156 384 (60)
Profit for the year 27 351 731 (96)
Attributable to:
Shareholders of PPC Ltd 93 369 793 (88)
Non-controlling interests (66) (18) (62)
Other comprehensive (loss)/income, net of taxation
Items that will be reclassified to profit or loss (523) 177 706
Cash flow hedges (47) 10 48
Taxation on cash flow hedges 13 (3) (14)
Reclassification of profit on sale of
available-for-sale financial asset to profit or loss - (82) (82)
Taxation impact on reclassification of profit on sale
of available-for-sale financial asset to profit or loss - 15 15
Revaluation of available-for-sale financial asset - - (7)
Taxation on revaluation of available-for-sale
financial asset - - 3
Translation of foreign operations (refer to note 24) (489) 237 743
Total comprehensive (loss)/income (496) 528 1 437
Attributable to:
Shareholders of PPC Ltd (295) 520 1 377
Non-controlling interests (201) 8 60
EARNINGS PER SHARE (CENTS)(b) 6
Basic 8 54 117 (93)
Diluted 8 53 115 (93)
* Refer note 1.
(a)Comprises BBBEE and Zimbabwe indigenisation IFRS 2 charges.
(b) Following the successful rights issue by the company during September 2016, the prior reporting periods’
weighted average number of shares have been adjusted in accordance with IAS 33 Earnings per Share and
accordingly earnings per share has been restated.
Audited preliminary summarised consolidated statement of financial position
at 31 March 2017
31 March 31 March
2017 2016
Audited Audited
Notes Rm Rm
ASSETS
Non-current assets 14 192 13 579
Property, plant and equipment 7 12 531 11 716
Goodwill 8 237 255
Other intangible assets 9 677 766
Equity-accounted investments 225 200
Other non-current assets 10 380 590
Deferred taxation assets 16 142 52
Non-current assets held for sale 11 38 42
Current assets 3 805 2 768
Inventories 1 163 1 121
Trade and other receivables 12 1 652 1 187
Cash and cash equivalents 13 990 460
Total assets 18 035 16 389
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 14 3 919 (1 113)
Other reserves 1 464 1 558
Retained profit 2 668 2 583
Equity attributable to shareholders of PPC Ltd 8 051 3 028
Non-controlling interests 334 535
Total equity 8 385 3 563
Non-current liabilities 5 626 6 729
Provisions 15 545 408
Deferred taxation liabilities 16 1 073 1 178
Long-term borrowings 17 3 555 4 614
Other non-current liabilities 18 453 529
Current liabilities 4 024 6 097
Short-term borrowings 17 2 181 4 557
Trade and other payables 19 1 843 1 540
Total equity and liabilities 18 035 16 389
Audited preliminary summarised consolidated statement of cash flows
for the twelve months ended 31 March 2017
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Pro forma*
Notes Rm Rm Rm
Cash flow from operating activities
Operating cash flows before movements
in working capital 2 101 1 137 2 382
Working capital movements (230) (324) 7
Cash generated from operations 1 871 813 2 389
Finance costs paid (743) (292) (448)
Investment income received 21 8 25
Taxation paid (296) (195) (432)
Cash available from operations 853 334 1 534
Dividends paid (8) (185) (321)
Net cash inflow from operating activities 845 149 1 213
Cash flow from investing activities
Acquisition of additional shares in
equity-accounted investment - (75) (75)
Acquisition of additional shares in subsidiary (18) - (108)
Investments in intangible assets (19) (12) (34)
Investments in property, plant and equipment (2 058) (1 176) (3 038)
Movements in other investing activities - 4 (5)
Movement in other non-current assets - (181) (181)
Proceeds from disposal of property,
plant and equipment 4 4 9
Proceeds on sale of equity-accounted investment
and available-for-sale financial asset - 153 153
Net cash outflow from investing activities (2 091) (1 283) (3 279)
Cash flow from financing activities
Net borrowings (repaid)/raised before the repayment
of the notes 17 (1 370) 1 499 2 663
Proceeds from the issuance of shares following
rights issue (net of transaction costs) 3 722 - -
Proceeds from issuance of shares issued to strategic
black partners through the modification of the
company’s first BBBEE transaction 14 1 041 - -
Proceeds from the sale of nil paid letters by
consolidated BBBEE entities 137 - -
Purchase of PPC Ltd shares in terms of the
FSP share incentive scheme 14 (74) - (24)
Repayment of notes 17 (1 614) (650) (650)
Net cash inflow from financing activities 1 842 849 1 989
Net movement in cash and cash equivalents 596 (285) (77)
Cash and cash equivalents at the beginning
of the period 460 718 464
Cash and cash equivalents acquired on
acquisition of 3Q Mahuma Concrete 20 4 - -
Exchange rate movements on opening cash
and cash equivalents (70) 27 73
Cash and cash equivalents at the end of the period 990 460 460
* Refer note 1.
Audited preliminary summarised consolidated statement of changes in equity
for the twelve months ended 31 March 2017
Other reserves
Foreign Available-
currency for-sale Equity
Stated translation financial Hedging compensation
capital reserve asset reserve reserve
Rm Rm Rm Rm Rm
Balance at 31 March 2015 (unaudited) (1 141) 625 84 - 232
Dividends declared - - - - -
IFRS 2 charges - - - - 23
Non-controlling interest recognised
following investment in subsidiary - - - - -
Put option recognised on non-controlling
shareholder investment in PPC Barnet
DRC Holdings - - - - -
Shares purchased in terms of FSP incentive
scheme treated as treasury shares (24) - - - -
Total comprehensive income/(loss) - 409 (3) 27 -
Transactions with non-controlling
shareholders recognised directly in equity - - - - -
Transfer to retained profit - - - - 5
Balance at 30 September 2015 (audited) (1 165) 1 034 81 27 260
Dividends declared - - - - -
IFRS 2 charges - - - - 31
Issuance of shares to fund an additional
investment in Safika Cement 26 - - - -
Total comprehensive income/(loss) - 211 (67) 7 -
Transactions with non-controlling
shareholders recognised directly in equity - - - - -
Vesting of FSP incentive scheme awards 26 - - - (26)
Balance at 31 March 2016 (audited) (1 113) 1 245 14 34 265
Acquisition of 3Q, settled via the
issue of shares (refer note 20) 135 - - - -
Dividends declared - - - - -
IFRS 2 charges - - - - 245
Increase in stated capital from issuance
of shares following rights issue
(net of transaction costs) 3 805 - - - -
Proceeds from sale of nil paid letters by
consolidated BBBEE entities - - - - 137
Sale of shares, treated as treasury shares,
by consolidated BBBEE entity 37 - - - -
Shares issued to strategic black partners
through the modification of the company’s first
BBBEE transaction(a) 1 041 - - - -
Shares purchased in terms of FSP incentive
scheme treated as treasury shares (74) - - - -
Total comprehensive (loss)/income - (354) - (34) -
Vesting of shares held by certain BBBEE 1 entities 88 - - - (88)
Balance at 31 March 2017 (audited) 3 919 891 14 - 559
(a) In 2008 PPC announced its first broad based black economic transaction for a period of eight years, which resulted
in an effective BBBEE ownership of 15,29%. In terms of the transaction agreements, the 48 557 982 PPC shares held
by the strategic black partners (including community service groups) (SBPs and CSGs) were repurchased by PPC at
R0,10 per share and the SBPs and CSGs were required to subscribe for new PPC shares at R66.84 per share, subject
to their funding position. The SBPs and CSGs subscribed for 15 571 174 new PPC ordinary shares in December 2016.
Audited preliminary summarised consolidated statement of changes in equity (continued)
for the twelve months ended 31 March 2017
Equity
attributable to Non-
Retained shareholders controlling Total
profit of PPC Ltd interests equity
Rm Rm Rm Rm
Balance at 31 March 2015 (unaudited) 2 123 1 923 757 2 680
Dividends declared (129) (129) (7) (136)
IFRS 2 charges - 23 - 23
Non-controlling interest recognised
following investment in subsidiary - - 134 134
Put option recognised on non-controlling
shareholder investment in PPC Barnet
DRC Holdings - - (422) (422)
Shares purchased in terms of FSP incentive
scheme treated as treasury shares - (24) - (24)
Total comprehensive income/(loss) 424 857 52 909
Transactions with non-controlling
shareholders recognised directly in equity (7) (7) 7 -
Transfer to retained profit (5) - - -
Balance at 30 September 2015 (audited) 2 406 2 643 521 3 164
Dividends declared (185) (185) - (185)
IFRS 2 charges - 31 - 31
Issuance of shares to fund an additional
investment in Safika Cement - 26 - 26
Total comprehensive income/(loss) 369 520 8 528
Transactions with non-controlling
shareholders recognised directly in equity (7) (7) 6 (1)
Vesting of FSP incentive scheme awards - - - -
Balance at 31 March 2016 (audited) 2 583 3 028 535 3 563
Acquisition of 3Q, settled via the
issue of shares (refer note 20) - 135 - 135
Dividends declared (8) (8) - (8)
IFRS 2 charges - 245 - 245
Increase in stated capital from issuance
of shares following rights issue
(net of transaction costs) - 3 805 - 3 805
Proceeds from sale of nil paid letters by
consolidated BBBEE entities - 137 - 137
Sale of shares, treated as treasury shares,
by consolidated BBBEE entity - 37 - 37
Shares issued to strategic black partners
through the modification of the company’s first
BBBEE transaction(a) - 1 041 - 1 041
Shares purchased in terms of FSP incentive
scheme treated as treasury shares - (74) - (74)
Total comprehensive (loss)/income 93 (295) (201) (496)
Vesting of shares held by certain BBBEE 1 entities - - - -
Balance at 31 March 2017 (audited) 2 668 8 051 334 8 385
(a) In 2008 PPC announced its first broad based black economic transaction for a period of eight years, which resulted
in an effective BBBEE ownership of 15,29%. In terms of the transaction agreements, the 48 557 982 PPC shares held
by the strategic black partners (including community service groups) (SBPs and CSGs) were repurchased by PPC at
R0,10 per share and the SBPs and CSGs were required to subscribe for new PPC shares at R66.84 per share, subject
to their funding position. The SBPs and CSGs subscribed for 15 571 174 new PPC ordinary shares in December 2016.
Segmental information
for the twelve months ended 31 March 2017
The group discloses its operating segments according to the business units which are reviewed by the group executive
committee. The key segments are southern Africa cement, rest of Africa cement, lime, aggregates and readymix and group
shared services. The reporting segments have been reconsidered during the current reporting period and have been amended
from that shown in the prior period following the internal restructuring process that took place during April 2016. The
prior period comparisons have been amended from that previously reported.
Cement
Consolidated Southern Africa(a) Rest of Africa(b)
31 March 31 March 31 March 31 March 31 March 31 March
2017 2016 2017 2016 2017 2016
Audited Unaudited(d) Audited Unaudited(d) Audited Unaudited(d)
Rm Rm Rm Rm Rm Rm
Revenue
Gross revenue 9 878 9 424 5 712 5 659 2 118 1 946
Inter-segment revenue(e) (237) (237) - - - -
Total revenue 9 641 9 187 5 712 5 659 2 118 1 946
Operating profit before
items listed below 1 233 1 630 861 1 138 347 318
Empowerment transactions
IFRS 2 charges 206 36 16 1 2 2
Operating profit(f) 1 027 1 594 845 1 137 345 316
Fair value (loss)/gain on
foreign currency monetary items (124) 3 (5) 10 (153) (29)
Finance costs 741 572 214 25 168 194
Investment income 27 29 11 8 6 7
Profit before equity-accounted
earnings 189 1 054 637 1 130 30 100
Earnings from equity-accounted
investments 1 (13) - - - -
Impairments and profit on sale
of non-core assets (10) 74 - - (10) (34)
Profit before taxation 180 1 115 637 1 130 20 66
Taxation 153 384 192 318 21 55
Profit/(loss) for the year 27 731 445 812 (1) 11
Depreciation and amortisation 832 755 374 386 298 222
EBITDA(g) 2 065 2 385 1 235 1 524 645 540
EBITDA margin (%) 21,4 26,0 21,6 26,9 30,5 27,7
Assets
Non-current assets 14 192 13 579 4 184 3 506 8 113 8 298
Non-current assets held for sale 38 42 - - 38 42
Current assets 3 805 2 768 1 468 1 484 1 334 1 116
Total assets 18 035 16 389 5 652 4 990 9 485 9 456
Investments in property,
plant and equipment 2 234 3 378 939 689 1 181 2 452
Liabilities
Non-current liabilities 5 626 6 729 2 007 1 310 5 619 5 713
Current liabilities 4 024 6 097 792 510 1 382 945
Total liabilities 9 650 12 826 2 799 1 820 7 001 6 658
Capital commitments
(refer note 21) 1 071 3 283 716 1 409 310 1 730
(a)Southern Africa comprises South Africa and Botswana.
(b)Rest of Africa comprises Zimbabwe, Rwanda, DRC and Mozambique.
(c)Shared services and other comprises group, PPC Ltd, shared services, BEE and group eliminations.
(d)Refer note 1, change in financial year end.
(e)All sales are concluded at an arm’s length.
(f)The recent implementation of the internal restructure of the group has resulted in some incomparable intercompany
operating charges, which will be refined in the subsequent year as the restructuring matures. These have been
adjusted for between the differing segments. There has been no impact on consolidated operating profit, as
presented above.
(g)EBITDA is defined as operating profit before empowerment transactions IFRS 2 charges and depreciation
and amortisation.
No individual customer comprises more than 10% of group revenue.
Materials business
Lime Aggregates and readymix Group services and other(c)
31 March 31 March 31 March 31 March 31 March 31 March
2017 2016 2017 2016 2017 2016
Audited Unaudited(d) Audited Unaudited(d) Audited Unaudited(d)
Rm Rm Rm Rm Rm Rm
Revenue
Gross revenue 818 817 1 230 1 002 - -
Inter-segment revenue(e) - - - - (237) (237)
Total revenue 818 817 1 230 1 002 (237) (237)
Operating profit before
items listed below 119 152 74 122 (168) (100)
Empowerment transactions
IFRS 2 charges 2 - 1 - 185 33
Operating profit(f) 117 152 73 122 (353) (133)
Fair value (loss)/gain on
foreign currency monetary items - - (1) (15) 35 37
Finance costs 4 3 3 2 352 348
Investment income 1 1 1 1 8 12
Profit before equity-accounted
earnings 114 150 70 106 (662) (432)
Earnings from equity-accounted
investments - - - - 1 (13)
Impairments and profit on sale
of non-core assets - - - - - 108
Profit before taxation 114 150 70 106 (661) (337)
Taxation 29 41 6 36 (96) (66)
Profit/(loss) for the year 85 109 64 70 (565) (271)
Depreciation and amortisation 46 44 77 65 37 38
EBITDA(g) 165 196 151 187 (131) (62)
EBITDA margin (%) 20,2 24,0 12,3 18,7 - -
Assets
Non-current assets 319 415 726 680 850 680
Non-current assets held for sale - - - - - -
Current assets 210 187 315 237 478 (256)
Total assets 529 602 1 041 917 1 328 424
Investments in property,
plant and equipment 26 70 57 64 31 103
Liabilities
Non-current liabilities 117 103 215 237 (2 629) (634)
Current liabilities 86 90 176 125 1 588 4 427
Total liabilities 203 193 391 362 (744) 3 793
Capital commitments
(refer note 21) 9 5 9 59 27 80
(a)Southern Africa comprises South Africa and Botswana.
(b)Rest of Africa comprises Zimbabwe, Rwanda, DRC and Mozambique.
(c)Shared services and other comprises group, PPC Ltd, shared services, BEE and group eliminations.
(d)Refer note 1, change in financial year end.
(e)All sales are concluded at an arm’s length.
(f)The recent implementation of the internal restructure of the group has resulted in some incomparable intercompany
operating charges, which will be refined in the subsequent year as the restructuring matures. These have been
adjusted for between the differing segments. There has been no impact on consolidated operating profit, as
presented above.
(g)EBITDA is defined as operating profit before empowerment transactions IFRS 2 charges and depreciation
and amortisation.
No individual customer comprises more than 10% of group revenue.
Key considerations pertaining to the significant individual geographies within the rest of Africa cement segment
Zimbabwe
Market consensus expects the economy to contract by 1,7% in 2017 before expanding by 0,5% in 2018. As a significant
portion of the Zimbabwe economy is driven by tobacco, stronger tobacco harvests will see the start of a recovery in 2017.
The country’s fiscus will however remain under intense pressure as recessionary conditions constrain revenues. Predominant
use of the strong US dollar is expected to continue affecting export competitiveness and remittances, while stimulating
appetite for imports. The deteriorating economic environment and resultant liquidity issues have resulted in challenges
being faced with processing of foreign payments by the banks in Zimbabwe. During the year, both volume and selling price
declines were experienced.
Rwanda
According to the Africa Development Bank Group, Rwandan GDP growth for 2017 is expected to average 7,2% and
recover strongly in 2018 and beyond. Cement growth is expected to follow a similar trend. The gradual ramp-up of
operations and optimisation will continue and the PPC plant should reach full capacity in the next two years, benefiting
from its location to supply cement to Rwanda, eastern DRC and Burundi. Aligned with the government’s national
development plans and a growing middle class, cement demand is expected to grow steadily over the medium term.
The percentage of the population living in urban settlements is expected to rise from 17% at present to 35% by 2020.
This bodes well for cement demand in the country.
DRC
After four years at 7,9% pa GDP growth, this index has since declined to 6,9% in 2015 and is estimated at 2,8% and 4,1%
for 2016 and 2017 respectively. This has significantly affected government spending. The exchange rate is deteriorating
rapidly against the US dollar and CPI is forecast at 33,5% for 2017. Political agreement was reached between major parties
in December 2016 but has not been implemented against the agreed timeframe. If the political environment stabilises, in
conjunction with a recovery in commodity prices, and the local economy improves, cement demand should increase.
Notes to the audited preliminary summarised consolidated financial statements
1. Basis of preparation
The audited preliminary summarised consolidated financial statements are prepared in accordance with the
provisions of the JSE Limited Listings Requirements for reports, and the provisions of the Companies Act
applicable to financial statements. The Listings Requirements require preliminary reports to be prepared in
accordance with, IAS 34 Interim Financial Reporting and the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee and the Financial Pronouncements as issued by the Financial Reporting
Standards Council. The accounting policies applied in the preparation of the preliminary summarised
consolidated interim financial statements were derived in terms of International Financial Reporting
Standards (IFRS) and are consistent with those accounting policies applied in the preparation of the
previous consolidated financial statements. These audited preliminary summarised consolidated financial
statements do not include all the information required for the full annual financial statements and should
be read in conjunction with the consolidated annual financial statements as at and for the twelve months
ended 31 March 2017.
These audited preliminary summarised consolidated financial statements have been prepared under the
supervision of MMT Ramano CA(SA), chief financial officer, and were approved by the board of directors on
6 June 2017.
The accounting policies and methods of computation used are consistent with those used in the preparation
of the consolidated financial statements for the period ended 31 March 2016, except for the revised accounting
standards and interpretations that became effective during the current year, and which did not have a material
impact on the reported results. No amendments or interpretations were adopted during the current year.
A copy of the financial information from which these audited preliminary summarised consolidated financial
statements were derived can be found on the company’s website, www.ppc.co.za.
Change in financial year-end
In the prior year, PPC Ltd changed its financial year-end from September to March. The first year-end to
March 2016 was only for a six-month period, while the second March year-end, being the 2017 financial year,
is for a twelve-month period. As the comparable period results related to a six-month period following the
financial year-end change, for ease of comparison, pro forma financial information reflecting the calculation
of the twelve-month financial information to March 2016 was released on SENS on 9 March 2017 and included in
these results.
The pro forma financial information included within the SENS and subject to a reporting accountant’s report
only included the statements of financial position, comprehensive income and cash flows together with earnings
per share. The composition of the statement of comprehensive income assertions and roll forward of statement of
financial position items included within the notes have therefore not been audited or reviewed.
Going concern
In determining the appropriate basis of preparation of the financial statements, the directors are required to
consider whether the group and company can continue in operational existence for the foreseeable future.
PPC embarked upon an expansion strategy in 2010 to extract value from high-growth economies by expanding its
footprint into the rest of Africa. The result of this expansion strategy is an expected increase in gross
production capacity of approximately three million tonnes per annum giving the group a solid foundation for
further growth. Given the long lead time required to develop greenfield operations, the group has drawn down
on pre-arranged project finance debt (refer note 14) without an immediate concomitant increase in earnings and
resultant cash flow. During the same period of the company’s expansion on the continent, external factors beyond
the group’s control have seen a slowing global economy and significant decline in oil and commodity prices,
which have culminated in downward pressures on selling prices in the regions in which the group operates.
In addition, South Africa, which is currently the major contributor to the group’s earnings, has seen intensified
competition in terms of new entrants and imports into the country despite the economic slowdown, resulting in
overcapacity in the market.
The board and executive management continue to monitor and develop business plans and liquidity models in order
to effectively deal with the effects of a continuation of the current low selling price environment and slowing
economic growth. During the current reporting period, the group successfully completed a R4 billion rights offer
that was 5.8 times oversubscribed. The proceeds of the rights offer were used to reduce local debt and will
also assist in funding future operational requirements. In December 2016 the company received R1,1 billion as
its 2008 BBBEE transaction matured and the strategic partners subscribed for shares in the company, further
strengthening the capital structure. Total borrowings of the group are R5 736 million in comparison to the
R9 171 million at March 2016 and R5 914 million at September 2016. At the end of March 2017, the group’s debt
to EBITDA was 2,8 times (March 2016: 3.8 times), a marked improvement.
At year-end, current liabilities exceed current assets by R219 million mainly due to the short-term portion of
R1 565 million of long-term borrowings being classified under current liabilities. In June 2017, the group
successfully refinanced the R1 565 million debt until June 2018. The directors have complied with the requirements
of IAS 1 paragraph 27 in considering the classification of the funding. With the signing of the refinance agreements
on 2 June we have successfully refinanced and lengthened the term of the R1,56 billion funds originally due on
30 September 2017 to 30 June 2018 and thus subsequent to the year-end, the funding has become noncurrent.
The revised profile of the group’s statement of financial position is presented below, showing a stronger
current assets to current liabilities ratio. Post the refinancing, current assets will exceed current
liabilities by R1 346 million. Refer to note 17 and 23 for further details on the extension.
Based on the expectation that the group’s current trading position and forecasts will be met and taking current
and future banking facilities into consideration, the directors believe that the group will be able to comply
with its financial covenants and be able to meet its obligations as they fall due, and accordingly have concluded
that it is appropriate to prepare the financial statements on a going concern basis.
Restatement of segmental information
In compiling the results for the current year, certain prior year numbers have been restated.
Following the internal restructure effective 1 April 2016, the group’s segments have been amended to align to
the current reporting structures and information presented to the group executive committee. Further details can
be found in the segmental information section in this report.
Auditor’s opinion
These preliminary summarised consolidated financial statements for the year ended 31 March 2017 have been audited
by Deloitte & Touche, who expressed an unmodified opinion thereon. The auditors also expressed an unmodified
opinion on the financial statements from which these preliminary summarised consolidated financial statements
were derived. A copy of the auditor’s reports on the preliminary summarised consolidated financial statements
and financial statements are available for inspection at the company’s registered office. The auditor’s report
does not necessarily report on all of the information contained in this announcement. Shareholders are therefore
advised, that in order to obtain a full understanding of the nature of the auditor’s engagement, they should
obtain a copy of that report together with the accompanying financial information from the company’s registered
office. Any reference to future financial information included in this announcement has not been reviewed or
reported on by the auditors.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
2. Foreign exchange loss/(gain) on foreign currency monetary items
Loss on ineffective portion of cash flow hedge 9 - -
Gain on remeasurement of put option liabilities - (16) (30)
(Gain)/loss on unlisted collective investments (1) - 2
Net loss on translation of foreign-denominated currency
monetary items 116 36 25
124 20 (3)
Included in loss on translation of foreign currency-denominated monetary items, is a loss of R112 million
relating to the remeasurement of the non-current VAT receivable in the DRC following recent devaluations of
the Congolese franc against the US dollar. Further, a remeasurement loss of R53 million has been recorded
against the US dollar denominated project funding in Rwanda. Offsetting these losses are gains made on open
forward exchange contracts held for capital purchases and working capital requirements.
Details on foreign exchange rates can be found in note 24.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
3. Finance costs
Bank and other short-term borrowings(a) 474 49 75
Notes 80 98 192
Long-term loans 345 229 421
899 376 688
Capitalised to plant and equipment (241) (119) (276)
Finance costs before BBBEE transaction
and time value of money adjustments 658 257 412
BBBEE transaction 37 41 104
Dividends on redeemable preference shares 17 19 39
Long-term borrowings 20 22 65
Time value of money adjustments on
rehabilitation and decommissioning
provisions and put option liabilities 46 32 56
741 330 572
Southern Africa 573 258 378
Rest of Africa 168 72 194
(a) Includes liquidity and guarantee facility raising fees of R128 million in the current year which have
been fully amortised to finance costs.
The total finance costs excluding time value of money adjustments, relate to borrowings held at amortised
cost. For details of borrowings refer note 17.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
4. Impairments
Impairment of financial asset - - (2)
Impairment of loans advanced - (1) (2)
Impairment of property, plant and equipment (10) (4) (39)
Gross impairments and other exceptional adjustments (10) (5) (43)
Taxation impact 3 - 12
Net impairments and other exceptional adjustments (7) (5) (31)
Impairment of property, plant and equipment
- In the current year, CIMERWA recognised an impairment of R10 million relating to machinery that will
no longer be utilised in the bagging and packing process.
- In the prior year Zimbabwe recognised an impairment of R27 million relating to a limestone quarry due
to uncertainty of future prospects.
- An impairment of R7 million relating to the old plant at CIMERWA that would not be used post-commissioning
of the new plant was recorded in the period ended March 2016.
- Other minor impairments to property, plant and equipment of R5 million were processed in March 2016.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
5. Taxation
The taxation charge comprises:
Current taxation 284 74 290
Current year 271 67 317
Prior years 13 (14) (48)
Capital gains taxation - 21 21
Deferred taxation (154) 61 71
Current year (177) 61 41
Prior years 23 - 30
Withholding taxation on dividends 23 21 23
153 156 384
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
% % %
5. Taxation continued
Taxation rate reconciliation
A reconciliation of the standard South African
normal taxation rate is shown below:
Profit before taxation (excluding earnings from
equity-accounted investments) 85 31 31
Prior years’ taxation impact (20) 3 (1)
Profit before taxation, including prior years’
taxation adjustments 65 34 30
Adjustment due to the inclusion of dividend income - - 1
Effective rate of taxation 65 34 31
Income taxation effect of: (37) (6) (3)
Disallowable charges, forex revaluations, permanent
differences and impairments (10) (2) (4)
Empowerment transactions and IFRS 2 charges not
taxation deductible (32) (1) -
Finance costs on BBBEE transaction not taxation
deductible (9) (2) -
Foreign taxation rate differential 12 1 2
Capital gains differential on sale of non-core
assets - 2 2
Recognition of deferred taxation on assessed losses
not previously recorded 15 - -
Withholding taxation (13) (4) (3)
South African normal taxation rate 28 28 28
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Cents Cents Cents(a)
6. Earnings and headline earnings
Earnings per share
Basic 8 54 117
Diluted 8 53 115
Basic (normalised)(b) 47 43 111
Diluted (normalised)(b) 47 42 109
Headline earnings per share
Basic 7 41 107
Diluted 7 41 105
Basic (normalised)(b) 47 43 110
Diluted (normalised)(b) 46 42 109
Determination of headline earnings per share
Earnings per share 8 54 117
Adjusted for:
Proceeds from insurance claim (1) -
Impairments and profit on sale of non-core assets - (17) (11)
Taxation impact - 4 1
Headline earnings per share 7 41 107
Rm Rm Rm
Headline earnings
Profit for the year 27 351 731
Impairments and profit on sale of non-core assets 10 (112) (75)
Taxation on impairments and profit on sale of
non-core assets (3) 24 11
Loss on sale of property, plant and equipment 10 - -
Taxation on loss sale of property, plant and equipment (3) - -
Proceeds from insurance claim (27) - -
Taxation on proceeds from insurance 8 - -
Headline earnings 22 263 667
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm(a)
6. Earnings and headline earnings continued
Attributable to:
Shareholders of PPC Ltd 85 281 724
Non-controlling interests (63) (18) (57)
Normalised earnings
Profit for the year 27 351 731
Normalisation adjustments(b) 473 (75) (40)
Normalised profit for the year 500 276 691
Attributable to:
Shareholders of PPC Ltd 527 294 748
Non-controlling interests (27) (18) (57)
Cents Cents Cents
Net asset book value per share 533 573 573
Cash earnings per share(c) 75 49 291
Cash conversion ratio(d) 0,9 0,7 1,0
(a) Following the successful four billion (one billion shares)
rights issue by the company during September 2016, the prior
reporting period weighted average number of shares have been
adjusted by a factor of 1,29 times in accordance with IAS 33
Earnings per Share and accordingly the earnings per share
has been restated.
(b) Normalisation adjustments comprise:
Empowerment transactions IFRS 2 charges 206 18 36
Foreign exchange loss on the DRC VAT receivable (refer note 10) 112 - -
Impairments (refer note 4) 10 4 41
Liquidity and guarantee facility raising fees and related
costs (refer note 3) 163 - -
Loss on sale of property, plant and equipment 10 - -
Prior period taxation adjustments 36 (14) (18)
Proceeds from insurance claim (27) - -
Profit on sale of non-core assets - (117) (117)
Restructuring costs 9 14 14
Taxation impact (excluding prior period taxation adjustments) (46) 19 4
473 (76) (40)
Normalised earnings 485 (76) (40)
(c) Cash earnings per share is calculated using cash available from operations divided by the total weighted
average number of shares in issue for the year. Following the successful rights issue during September 2016,
the prior reporting periods’ weighted average number of shares have been adjusted in accordance with IAS 33
(Earnings Per Share) and accordingly the cash earnings per share has been restated.
(d) Cash conversion ratio is calculated using cash generated from operations divided by EBITDA as defined in
segmental information.
The difference between earnings and diluted earnings per share relates to shares held under the forfeitable
share incentive scheme that have not vested.
For the weighted average number of shares used in the calculation, refer note 14.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
7. Property, plant and equipment
Net carrying value at the beginning of the year 11 716 10 648 8 009
Acquisition of subsidiary company (refer note 20) 98 - -
Additions 2 236 1 122 3 395
Depreciation (740) (348) (667)
Other movements 84 (2) (18)
Impairments (refer note 4) (10) (4) (39)
Transfer to non-current assets held for sale - - (40)
Translation differences (853) 300 1 076
Net carrying value at the end of the year 12 531 11 716 11 716
Comprising:
Freehold and leasehold land, buildings and mineral rights 742 800 800
Decommissioning assets 164 79 79
Plant, vehicles, furniture and equipment 11 624 10 836 10 836
Capitalised leased plant 1 1 1
12 531 11 716 11 716
Assets pledged as security:
DRC 3 269 2 754 2 754
Rwanda 2 072 2 140 2 140
Zimbabwe 1 963 1 959 1 959
7 304 6 853 6 853
Included in plant, vehicles, furniture and equipment are
vehicles with a carrying value of R11 million that have been
used as security for finance lease obligations of R5 million
that were consolidated into the financial statements with the
acquisition of 3Q Mahuma Concrete (refer note 20).
Capital work in progress included in plant, vehicles,
furniture and equipment:
DRC 3 322 2 822 2 822
Rwanda 12 6 6
Zimbabwe 13 817 817
Slurry 1 111 349 349
Other 26 323 323
4 484 4 317 4 317
For details on capital commitments, refer note 21.
Impairment assessments
DRC
PPC, in partnership with the Barnet Group and International Finance Corporation (IFC), are constructing a 1,2mtpa
integrated cement plant for US$280 million in DRC. The plant is near Kimpese in Kongo Central province in western
DRC, 230km south-west of the capital Kinshasa.
The DRC market is facing uncertainty driven by political instability imports from Angola impacting on cement
demand and subdued selling prices. In addition, the competitive landscape has become challenging due to imports
and new capacity in the market. These factors have necessitated an impairment assessment of the company’s
investment in the DRC operations. Management has therefore performed an impairment assessment based on fair
value less costs of disposal. This has been determined as the most accurate current approach to determine a fair
value as management believe the information relating to the costs capitalised to the plant are accurate and should
provide a reasonable assessment of the current fair value. The plant is new thus management believes that the fair
value approximated by the original costs for construction of the plant, which at year-end amounted to R3,4 billion
(2016: R2,3 billion). Management has no intention to dispose of the asset and hence the cost of disposal are
estimated as negligible and in their view will not materially change their estimated fair value. As a result, management
believes there is no impairment charge in relation to property, plant and equipment at the reporting date.
The plant produced its first cement in April 2017 from imported clinker. The first clinker firing was in April 2017 and
the plant should be able to produce its own finished cement around June 2017. The plant Performance Acceptance
Certificate (PAC) is planned to be signed by PPC Barnet and Sinoma (EPC contractor) upon meeting certain technical
requirements. At the next reporting date, management will perform an evaluation of impairment indicators and if
impairment indicators do exist, a full impairment assessment will be performed at 30 September 2017.
Rwanda
The new 600tpa plant was commissioned during September 2015. Targeted performance levels have not been
achieved after commissioning of the new plant as originally anticipated and this below budget performance has
prompted management to carry out an impairment assessment.
In performing the impairment review, a value-in-use methodology was applied. Cash flow projections were based on
financial forecasts approved by management applying a 15% in-country discount rate. The cash flow projections
during the forecast period are based on similar pricing and margins to those currently being achieved by the business.
The values used reflect past experiences while the economic growth rates of approximately 7,5% per annum are
management’s best estimates that have been prepared using leading financial institutions’ forecasts.
Following the impairment assessment review, the recoverable amount of CIMERWA was calculated to be higher than
its carrying amount resulting in no impairment. The valuation achieved reflects headroom of 3% against the current
net asset value of CIMERWA. Management will continue to monitor the position.
Zimbabwe
As a result of the current economic environment and liquidity challenges being experienced in Zimbabwe, an
impairment assessment was undertaken.
In performing the impairment review, a value-in-use methodology was applied. Cash flow projections were based on
financial forecasts approved by management applying a 13% US dollar discount rate. The cash flow projections
during the forecast period are based on similar pricing and margins to those currently being achieved by the business.
The values used reflect past experiences while the economic growth rates of approximately 1% per annum are
management’s best estimates that have been prepared using leading financial institutions’ forecasts.
Following the impairment assessment review, the recoverable amount of PPC Zimbabwe was calculated to be higher
than its carrying amount resulting in no impairment. The valuation achieved reflects a 10% headroom against the
current net asset value of PPC Zimbabwe. Management will continue to monitor the implications of foreign currency
shortages over the next few months and the potential implications on the business forecast.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
8. Goodwill
Net carrying value at the beginning of the year 255 254 249
Translation differences (18) 1 6
Net carrying value at the end of the year 237 255 255
Goodwill, net of impairments, is allocated to
the following cash-generating units:
CIMERWA Limited (Rest of Africa
cement segment) 32 50 50
Safika Cement Holdings (Pty) Ltd (Southern Africa
cement segment) 78 78 78
Pronto Holdings (Pty) Ltd (Aggregates and
readymix segment) 127 127 127
237 255 255
9. Other intangible assets
Balance at the beginning of the year 766 772 774
Acquisition of subsidiary company (refer note 20) 10 - -
Additions 19 12 34
Amortisation (92) (45) (86)
Transfers and other movements - - 3
Translation differences (26) 27 41
677 766 766
Comprising:
Right of use of mineral assets 203 214 214
ERP development and other software 126 140 140
Brand and trademarks and customer relationships 348 412 412
677 766 766
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
10. Other non-current assets
Unlisted collective investment(a) 124 119 119
Derivative asset - 2 2
VAT receivable(b) 210 319 319
334 440 440
Advance payments for plant and equipment(c) 38 142 142
Investment in government bonds(d) 8 8 8
380 590 590
(a) Comprises an investment by the PPC Environmental Trust in local unit trusts. These investments are
held to fund PPC’s South African environmental obligations.
(b) The VAT receivable has been classified as non-current, in line with last year. Management has however
received a letter from the DRC Finance Department which indicates that the VAT needs to be paid to PPC
Barnet DRC on condition that the money is utilised for local suppliers and local salaries. The letter does
not however state when the payments will be made. As a result of the uncertainty of when the instalments
will commence, the receivable has not been reclassified as current but will be assessed in September 2017.
(c) In terms of the construction agreements with the suppliers of the new cement plants in DRC and Zimbabwe,
a portion of the full contract price is required to be paid in advance of the plant construction. The advance
payments will be recycled to property, plant and equipment as the plants are constructed, and are secured by
advance payment bonds.
(d) Represents government of Zimbabwe treasury bills carried at fair value.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
11. Non-current assets held for sale
Property, plant and equipment(a) 38 42 42
(a) In September 2015, the PPC Zimbabwe board approved the disposal of houses at its Colleen Bawn and
Bulawayo factories which was anticipated to be finalised in 12 months. The disposal is now anticipated
to be completed by the second quarter of the 2018 financial year. No impairment loss was recognised
on the initial reclassification as management concluded that the fair value (estimated based on market
prices of similar properties) less costs to sell was higher than the current carrying amount. PPC
Zimbabwe is included under the cement rest of Africa segment in the segmental analysis. The underlying
assets are US dollar denominated and the year on year reduction follows the strengthening of the rand
against the US dollar.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
12. Trade and other receivables
Trade receivables 1 041 982 982
Allowance for doubtful debts (46) (77) (77)
Net trade receivables 995 905 905
Mark to market cash flow hedge - 48 48
Mark to market fair value hedge 27 28 28
Proceeds due from the rights offer shares listed on
the Zimbabwe Stock Exchange(a) 86 - -
Proceeds due from the sale of shares 37 - -
Other financial receivables 179 111 111
Trade and other financial receivables 1 324 1 092 1 092
Prepayments 105 65 65
VAT receivable 99 - -
Tax receivable 124 30 30
1 652 1 187 1 187
Refer note 22 for fair value of trade and other receivables.
Net trade receivables comprise 995 905 905
Trade receivables that are neither past due nor impaired 816 712 712
Trade receivables that would otherwise be impaired whose
terms have been renegotiated 2 6 6
Trade receivables that are past due but not impaired 177 187 187
(a) The proceeds from the rights issue on the Zimbabwe Stock Exchange have not been remitted to PPC as at
the date of this report.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
13. Cash and cash equivalents 990 460 460
Currency analysis:
Botswana pula 32 19 19
Mozambican metical 10 17 17
Rwandan franc 54 126 126
South African rand 422 47 47
United States dollar 472 251 251
990 460 460
Amounts denominated in foreign currencies have been
translated at ruling exchange rates at year-end
(refer note 24).
Cash restricted for use relating to:
PPC Environmental Trust 8 6 6
Consolidated BBBEE entities - 1 1
CIMERWA project finance - 247 247
Zimbabwe(a) 289 - -
297 254 254
(a) Due to the current liquidity constraints in Zimbabwe, the ability to remit funds beyond the country
has become more difficult and as a result the full amount of cash within Zimbabwe has been reflected
as restricted cash. Also included in the PPC Zimbabwe cash and cash equivalents are bond notes. Bond notes
are debt instruments which have been disclosed under cash and cash equivalents since it meets the
definition of cash and cash equivalents and is pegged at 1:1 with the US dollar.
Cash and cash equivalents include cash on hand and cash on deposit, net of outstanding bank overdrafts,
where there is a right of set-off.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Shares (000) Shares (000) Shares (000)
14. Stated capital
Authorised shares
Ordinary shares 10 000 000 000 700 000 000 700 000 000
Preference shares 20 000 000 20 000 000 20 000 000
Number of ordinary shares and weighted average
number of shares
Total shares in issue at the beginning of the year 607 181 605 380 605 380
Shares issued to non-controlling shareholders in
Safika Cement on exercise of put option - 1 801 1 801
Shares issued for the acquisition of 3Q
(refer note 20) 17 566 - -
Shares issued in terms of the rights issue 1 000 000 - -
Shares issued to the SBPs and CSGs following the
maturity of the company’s first BBBEE transaction 15 571 - -
Shares issued to strategic black partners through
the modification of the company's first
BBBEE transaction (48 558) - -
Total shares in issue before adjustments for
treasury shares 1 591 760 607 181 607 181
Shares issued in terms of the second BBBEE
transaction treated as treasury shares (37 382) (37 382) (37 382)
Shares held by consolidated BBBEE trusts and
trust funding SPVs treated as treasury shares (28 929) (34 477) (34 477)
Shares held by consolidated Porthold Trust
(Private) Limited treated as treasury shares (1 285) (1 285) (1 285)
Shares purchased in terms of the FSP share
incentive scheme treated as treasury shares (14 013) (5 563) (5 563)
Total shares in issue (net of treasury shares) 1 510 151 528 474 528 474
Weighted average number of shares, used for:
Earnings and headline earnings per share 1 137 338 680 086 680 086
Dilutive earnings and headline earnings per share 1 148 753 690 377 690 377
Cash earnings per share 1 137 338 680 086 680 086
During September 2016 PPC concluded an oversubscribed rights issue. The weighted average number of
shares used for calculating earnings and headline earnings per share, dilutive earnings and headline
earnings per share and cash earnings per share for the prior reporting periods have been restated and
have been adjusted by a factor of 1,29 in accordance with guidance provided in IAS 33 Earnings per
share. For the current reporting period, the opening weighted average number of shares and share movements
that occurred prior to the rights issue have also been adjusted by the factor of 1,29, while the share
movements post the rights issue have not been adjusted by the factor.
Shares are weighted for the period in which they are entitled to participate in the profits of the group.
Shares held by consolidated participants of the second BBBEE transaction
Shares issued in terms of the second BBBEE transaction which was facilitated by means of a notional
vendor funding (NVF) mechanism, with the transaction concluding on 30 September 2019. These shares
participate in 20% of the dividends declared by PPC during the NVF period. With the exception of
the Bafati Investment Trust, entities participating in this transaction are consolidated into the
PPC group in terms of IFRS 10 Consolidated Financial Statements during the transaction term.
Shares held by consolidated BBBEE trusts and trust funding SPVs
In terms of IFRS 10 Consolidated Financial Statements, certain of the BBBEE trusts and trust funding
SPVs from PPC’s first BBBEE transaction are consolidated, and as a result, shares owned by these
entities are carried as treasury shares on consolidation.
Shares held by consolidated Porthold Trust (Private) Limited
Shares owned by a Zimbabwe employee trust company are treated as treasury shares.
FSP incentive scheme
In terms of the forfeitable share plan (FSP) incentive scheme, 14 013 429 shares (March 2016: 5 563 488
shares) are held in total for participants of this long-term incentive scheme. The shares are treated as
treasury shares during the vesting periods of the awards. During the period, no shares (March 2016:
779 152 shares) vested.
In terms of IFRS requirements, 5% (March 2016: 13%) of the total shares in issue are treated as treasury
shares following the consolidation of the various BBBEE entities, employee trusts and incentive share
schemes.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
Stated capital
Balance at the beginning of the year (1 113) (1 165) (1 141)
Acquisition of 3Q Mahuma Concrete, settled via
the issue of shares (refer note 20) 135 - -
Increase in stated capital from issuance of shares
following rights issue (net of transaction costs) 3 805 - -
Sale of shares, treated as treasury shares, by
consolidated BBBEE entity 37 - -
Shares issued to non-controlling interest in
Safika on exercise of put option - 26 26
Shares issued to strategic black partners through
the modification of the company's first
BBBEE transaction 1 041 - -
Shares purchased in terms of FSP incentive scheme
treated as treasury shares (74) - (24)
Vesting of shares held by certain BBBEE 1 entities 88 - -
Vesting of shares held in terms of the FSP share
incentive scheme - 26 26
Balance at the end of the year 3 919 (1 113) (1 113)
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
15. Provisions
Decommissioning and rehabilitation 509 374 374
Post-retirement healthcare benefits 36 34 34
545 408 408
Group companies are required to restore mining and processing sites at the end of their productive
lives to an acceptable condition consistent with local regulations, and in line with group policy.
PPC has set up an environmental trust in South Africa to administer the local funding requirements
of its decommissioning and rehabilitation obligations. Currently, there are no such regulations in
other jurisdictions in which the group operates for the creation of a rehabilitation trust fund;
however in the DRC bank guarantees are required. The investments in the trust fund are carried at
fair value through profit/loss and amount to R124 million (March 2016: R119 million).
Historically, qualifying employees were granted certain post-retirement healthcare benefits. The
obligation for the employer to pay medical aid contributions after retirement is no longer part of
the conditions of employment for new employees. A number of pensioners remain entitled to this benefit,
the cost of which has been fully provided.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
16. Deferred taxation
Net liability at the end of the year comprises: 931 1 126 1 126
Deferred taxation asset 142 52 52
Deferred taxation liability 1 073 1 178 1 178
Analysis of deferred taxation
Property, plant and equipment 1 416 1 490 1 490
Other non-current assets 120 164 164
Current assets 14 (2) (2)
Non-current liabilities (113) (89) (89)
Current liabilities (66) (38) (38)
Reserves (83) (37) (37)
Taxation losses (357) (362) (362)
931 1 126 1 126
Included in the net deferred taxation balance is a deferred taxation asset of R262 million
(March 2016: R362 million) relating to CIMERWA’s taxation losses. In terms of local legislation,
taxation losses need to be utilised within five years from the initial year of assessment.
This assessment involves significant judgement as it requires management to project available
taxable profits over a five-year period. Management have relied on the same projections used in
assessing impairment of property, plant and equipment (refer note 2). These projections indicate
that the CIMERWA will be in a position to generate sufficient taxable profits to fully utilise the
taxation losses. It is noted that the entity has very thin headroom and if projected sales fall
below target by 2%, an impairment will be triggered.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
17. Long-term borrowings
Terms Security Interest rate
Notes(a) Various, refer below Unsecured Various, refer below 131 1 747 1 747
Long-term loan Interest is payable Unsecured Fixed 10,86% - 1 417 1 417
biannually with a
bullet capital
repayment in
December 2016
Long-term loan(b) Interest is payable Unsecured Variable rates at 1 565 555 555
quarterly with a 575 basis points
bullet capital above JIBAR
repayment in
September 2017
Long-term loan Interest is payable Unsecured Variable rates at - 900 900
monthly with a 125 basis points
bullet capital above JIBAR
repayable 18 months
after notice period
Project funding 3 685 3 372 3 372
Long-term loan US dollar denominated, Secured by Variable at 725 569 806 806
repayable in monthly CIMERWA’s basis points
instalments over a property, above one-month
10-year period, plant and US dollar
starting March 2016 equipment LIBOR
Long-term loan Rwanda franc Secured by Fixed rate of 16% 435 474 474
denominated, CIMERWA’s
repayable in monthly property,
instalments over plant and
a 10-year period, equipment
starting March 2016
Long-term loan US dollar denominated, Secured by Six-month 638 550 550
interest payable PPC Zimbabwe’s US dollar
biannually. Biannual property, plant LIBOR plus
repayments in equal and equipment 700 basis points
instalments over
five years starting
December 2016
Long-term loan US dollar denominated, Secured by PPC Six-month 2 043 1 542 1 542
capital and interest property, Barnet US dollar
payable biannually DRC’s plant and LIBOR plus
starting July 2017 equipment 725 basis points
ending January 2025
BBBEE transaction(c) - 844 844
Preference shares Dividends payable Secured by Variable rates - 33 33
biannually, annual guarantee from at 81,4% of prime
redemptions ended PPC Ltd and fixed rates
December 2016 of 9,24% to 9,37%
Preference shares Dividends payable Secured by Variable rates - 16 16
biannually with PPC shares at 86,9% of
capital redeemable held by the prime
from surplus funds. SPVs
Compulsory annual
redemptions until
December 2016
Preference shares Capital and dividends Secured by Variable rates - 393 393
repayable by guarantee from at 78% of
December 2016, PPC Ltd prime
with capital capped
at R400 million
Long-term loans Capital and Secured by Variable rates - 402 402
interest repayable guarantee from at 285 basis points
by December 2016, PPC Ltd above JIBAR
with capital
capped at
R700 million
Long-term borrowings 5 381 8 835 8 835
Less: Short-term portion of long-term borrowings (1 826) (4 221) (4 221)
3 555 4 614 4 614
Add: Short-term borrowings, bank overdrafts and short-term
portion of long-term borrowings 2 181 4 557 4 557
Total borrowings 5 736 9 171 9 171
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
17. Long-term borrowings continued
Maturity analysis of total borrowings
One year 2 181 4 557 4 557
Two years 570 1 777 1 777
Three years 669 394 394
Four years 568 393 393
Five and more years 1 748 2 050 2 050
5 736 9 171 9 171
Assets encumbered are as follows:
Plant and equipment (refer note 7) 7 304 6 853 6 853
(a)Notes
Comprise unsecured notes, issued under the company’s
R6 billion domestic medium-term note programme,
and are recognised net of capitalised transaction costs:
Note number, term and interest rate Issue date
PPC 002: five years; three-month JIBAR plus 1,5% December 2013 20 750 750
PPC 003: five years; three-month JIBAR plus 1,48% July 2014 111 750 750
PPC 004: seven years; 9,86% July 2014 - 250 250
131 1 750 1 750
Less: Transaction costs capitalised - (3) (3)
131 1 747 1 747
Less: Short-term portion - (1 747) (1 747)
131 - -
(b)Long-term loan
The loan is reflected net of transaction costs of R12 million (March 2016: R35 million) which are
being amortised over the 18-month period of the loan. Post-year-end the company has refinanced the
facility with a maturity date of June 2018. The facility will bear interest at variable rates of
585 basis points above JIBAR.
(c)BBBEE transaction
The funding relating to the BBBEE transaction was settled during the year with the proceeds from
the sale of the nil paid letters by the respective BBBEE entities and proceeds from the rights issue in
September 2016, as PPC guaranteed the debt of the respective BBBEE entities.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
18. Other non-current liabilities
Cash-settled share-based payment liability 1 3 3
Finance lease liabilities(a) 5 - -
Liability to non-controlling shareholder in subsidiary
company(b) 16 17 17
DRC put option liability(c) 434 415 415
Retentions held for plant and equipment(d) - 97 97
456 532 532
Less: Short-term portion of other non-current liabilities (3) (3) (3)
453 529 529
(a)Finance lease obligations acquired via the acquisition of 3Q Mahuma Concrete and are secured by vehicles
(refer note 16).
(b) Relates to US dollar denominated interest payable on initial equity contribution into the DRC group of
companies by a non-controlling shareholder. The accruing of interest ceased in September 2015 and the
amount payable will be repaid once the external funding of the DRC has been settled.
(c) The International Finance Corporation (IFC) was issued a put option in September 2015 in terms of
which PPC is required to purchase all or part of the shares held by the IFC in PPC Barnet DRC Holdings.
The put option may be exercised after six years from when the IFC subscribed for the shares but only for
a five-year period. The value was calculated using the time value of money. In the prior year, the put
option value was based on the DRC’s forecast EBITDA applying a forward multiple less net debt. Forecasted
EBITDA is based on financial forecasts approved by management, with pricing and margins similar to those
currently being achieved by the business unit while selling prices and costs are forecast to increase at
local inflation projections and extrapolated using local GDP growth rates ranging between 5% and 9% taking
cognisance of the plant production ramp-up and adjusted for the impact of competitor activity. The forward
multiple was determined using comparison of publicly available information of other cement businesses
operating in the similar territories. The present value of the put option was calculated at R434 million
(March 2016: R415 million).
(d) Retentions held on the construction of the cement plants. These retentions will be paid over to the
contractors once the plants achieve guaranteed performance targets. These are all now under current as
the plants are either in operation or close to completion at year end.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
19. Trade and other payables
Cash-settled share-based payment liability
(short-term portion) 1 3 3
Capital expenditure payables 171 229 229
Derivative financial instruments - 1 1
Finance lease liabilities acquired through the
acquisition of 3Q
(refer note 18) 2 - -
Other financial payables 49 89 89
Retentions held for plant and equipment 297 67 67
Trade payables and accruals 944 994 994
Trade and other financial payables 1 464 1 383 1 383
Payroll accruals 227 139 139
VAT payable 46 18 18
Taxation payable 106 - -
1 843 1 540 1 540
Trade and other payables, payroll accruals and regulatory
obligations are payable within a 30 to 60-day period.
20. Acquisition of subsidiary company
Fair value of assets and liabilities acquired at date of
acquisition:
Property, plant and equipment 98
Intangible assets 10
Other non-current assets 3
Cash and cash equivalents 4
Other current assets 102
Other non-current liabilities (6)
Current liabilities (76)
Net fair value of assets and liabilities acquired 135
3Q Mahuma Concrete
The fair values presented at interim were provisional and are now final, with no material changes to
the provisional numbers disclosed in September 2016.
On 1 July 2016, all the transaction terms to acquire 100% of 3Q Mahuma Concrete (Pty) Ltd (3Q) were
achieved and 3Q became a wholly owned group subsidiary. The acquisition was settled via the issuance
of 17 565 872 new PPC shares. The fair value of the shares for asset acquisition, using the ruling
share price of R7,68 on the effective date of the transaction, amounted to R135 million.
The commercial rationale for the transaction is to progress the company’s channel management strategy
that serves as a complementary platform for cement growth in South Africa. PPC’s strategic intention
is to be a provider of materials and solutions into the basic services sector. Cementitious distribution
channels, including readymix, is increasingly being utilised as conduit to grow and sustain cement sales
volumes. The acquisition provides PPC with a further complementary platform to grow its service offering
in this market segment. The South African market is evolving towards a concrete delivery model, which
requires complementary building materials including cement, aggregates and readymix. Controlling cement
distribution channels is vital, with customers and end users requiring integrated solutions.
3Q contributed R248 million to revenue. On an earnings and headline earnings per share basis, 3Q subtracted
1,03 cents for the nine months it has been consolidated into the group.
Fair value of intangible assets were valued by an independent specialist and amounted to R11 million,
the significant portion thereof relating to the 3Q brand. These intangible assets will be amortised over
a five year period. The fair value adjustments to property, plant and equipment amounted to R11 million
and relates to trucks, which were valued using insurable replacement values.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Rm Rm Rm
21. Commitments
Contracted capital commitments 549 2 289 2 289
Approved capital commitments 522 994 994
Capital commitments 1 071 3 283 3 283
Operating lease commitments 115 124 124
1 186 3 407 3 407
Capital commitments
Southern Africa 760 1 649 1 649
Rest of Africa 311 1 634 1 634
1 071 3 283 3 283
Capital commitments are anticipated to be incurred:
- Within one year 1 046 2 731 2 731
- Between one and two years 8 543 543
- Beyond two years 17 9 9
1 071 3 283 3 283
Capital expenditure commitments are stated in current values which, together with expected price
escalations, will be financed from surplus cash generated and borrowing facilities available to the
group.
22. Fair values of financial assets and liabilities
The financial assets and liabilities carried at fair value are classified into three categories as
reflected below:
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Audited
Note Level* Rm Rm Rm
Financial assets
Loans and receivables
Derivative financial instruments 2 - 2 2
Mark to market hedges 11 1 27 76 76
At fair value through profit or loss
Unlisted collective investments at fair
value
held for trading) 9 2 124 119 119
Total financial assets 151 197 197
Level 1 27 76 76
Level 2 124 121 121
Financial liabilities
At fair value through profit or loss
Cash-settled share-based payment
liabilities 15 2 1 3 3
Put option liabilities 15 3 434 415 415
Derivatives
Derivative financial instruments 2 1 1 1
Total financial liabilities 436 419 419
Level 2 2 4 4
Level 3 434 415 415
Methods and assumptions used by the group in determining fair values:
*Level 1 - financial assets and liabilities that are valued accordingly to unadjusted market prices
for similar assets and liabilities. Market prices in this instance are readily available and
the price represents regularly occurring transactions which have been concluded on an arm’s
length transaction.
*Level 2 - financial assets and liabilities are valued using observable inputs, other than the market
prices noted in the level 1 methodology, and make reference to pricing of similar assets and
liabilities in an active market or by utilising observable prices and market-related data.
*Level 3 - financial assets and liabilities that are valued using unobservable data, and requires management
judgement in determining the fair value.
This note has been refined from that reported in the prior year to only include financial instruments
held at fair value.
The estimated fair value of financial instruments is determined, at discrete points in time, by reference
to the mid-price in an active market wherever possible. Where no such active market exists for the
particular asset or liability, the group uses valuation techniques to arrive at fair value, including
the use of prices obtained in recent arm’s length transactions, discounted cash flow analysis and other
valuation techniques commonly used by market participants.
Put option liabilities have been calculated using EBITDA forecasts prepared by management and discounted
to present value.
The fair value of derivative financial instruments relating to cash-settled share appreciation rights
is determined with reference to valuation performed by third-party financial institutions at reporting
date, using an actuarial binomial pricing model.
Level 3 sensitivity analysis
Financial instrument Valuation Main Increase/
technique assumptions decrease
(Rm)
Put option liabilities Earnings EBITDA and
multiple net debt 74
If the EBITDA multiple applied in the valuation was one multiple higher/lower while all other variables
were held constant, carrying amount of the PPC Barnet DRC put option liabilities would decrease/increase
by R74 million.
Twelve Six Twelve
months months months
ended ended ended
31 March 31 March 31 March
2017 2016 2016
Audited Audited Unaudited
Rm Rm Rm
Movements in level 3 financial instruments
Financial assets
Balance at the beginning and end of the year - - 95
Remeasurements - - (13)
Transfer to level 2 - - (82)
Balance at the end of the year - - -
Following the sale of the group’s investment in Ciments
de Bourbon in January 2016, the group does not have any
level 3 financial assets.
Financial liabilities
Balance at the beginning of the year 415 464 -
Exercised during the year - (42) -
Put options issued - - 422
Remeasurements - (16) (30)
Time value of money adjustments 19 9 23
Balance at the end of the year 434 415 415
Remeasurements are recorded in fair value adjustments on financial instruments in the income statement.
23. Events after the reporting date
Except for the refinancing of debt in June 2017, there are no events that occurred after the reporting
date that may have a material impact on the consolidated financial position at 31 March 2017.
The directors have complied with the requirements of IAS 1 paragraph 27 in considering the classification
of the funding. With the signing of the refinance agreements on 2 June 2017, the company has successfully
refinanced and lengthened the term of the R1.56 billion funds originally due on 30 September 2017 to
30 June 2018 and thus subsequent to the year-end, the funding has become non-current (refer note 17).
Post-year-end the following key events occurred that the group would like to highlight:
- The one million tonne per annum plant in the DRC was successfully commissioned during April 2017.
- The plant in Ethiopia was also successfully commissioned in April 2017.
Average Closing
Twelve Six Twelve
months months months
2017 2016 2016 2017 2016
24. Currency conversion guide
Approximate value of foreign currencies to the rand:
Botswana pula 1,32 1,36 1,23 1,26 1,36
US dollar 14,08 14,82 11,96 13,43 14,71
Rwandan franc 0,02 0,02 0,02 0,02 0,02
Mozambican metical 0,28 0,32 0,34 0,19 0,29
Administration
Directors
Executive: DJ Castle (chief executive officer) MMT Ramano (chief financial officer)
Non-executive: PG Nelson (chairman)
S Dakile-Hlongwane, N Gobodo, N Goldin, TJ Leaf-Wright, T Mboweni, SK Mhlarhi, T Moyo*, CH Naude, TDA Ross
*Zimbabwean
Registered office
148 Katherine Street, Sandton, South Africa
(PO Box 787416, Sandton 2146, South Africa)
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue, Rosebank, 2196, South Africa
(PO Box 61051, Marshalltown, 2107, South Africa)
Transfer secretaries Zimbabwe
Corpserve (Private) Ltd
4th Floor, Intermarket Centre, Corner 1st Street/Kwame Nkrumah Avenue, Harare Zimbabwe
(PO Box 2208, Harare, Zimbabwe)
Company secretary
JHDLR Snyman
148 Katherine Street, Sandton, South Africa
(PO Box 787416, Sandton 2146, South Africa)
Sponsor
Merrill Lynch South Africa (Pty) Ltd
The Place, 1 Sandton Drive, Sandton, South Africa
(PO Box 651987, Benmore 2010, South Africa)
External auditors
Deloitte & Touche
Deloitte Place, Building 1, The Woodlands
20 Woodlands Drive, Woodmead, 2052, South Africa
(Private Bag X6, Gallo Manor 2052, South Africa)
Disclaimer
This document including, without limitation, those statements concerning the demand outlook, PPC’s
expansion projects and its capital resources and expenditure, contain certain forward-looking
views. By their nature, forward-looking statements involve risk and uncertainty and although PPC
believes that the expectations reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have been correct. Accordingly, results
could differ materially from those set out in the forward-looking statements as a result of, among
other factors, changes in economic and market conditions, success of business and operating initiatives,
changes in the regulatory environment and other government action and business and operational risk
management. While PPC takes reasonable care to ensure the accuracy of the information presented, PPC
accepts no responsibility for any consequential, indirect, specialor incidental damages, whether
foreseeable or unforeseeable, based on claims arising out of misrepresentation or negligence arising
in connection with a forward-looking statement. This document is not intended to contain any profit
forecasts or profit estimates. The historical information published in this report has been audited.
www.ppc.co.za
Date: 07/06/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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