PPC has a strong ethos of corporate governance, which it has maintained since its formation in 1892. This ethos remains an important consideration in the company's day-to-day operations. PPC and its subsidiaries are fully committed to the principles of fairness, discipline, independence, accountability, transparency and social responsibility associated with good corporate governance.

The company is incorporated in South Africa under the provisions of the Companies Act, 1973, as amended. It accepts the principles and firm recommendations set out in the Code of Corporate Practices and Conduct in the Report on Corporate Governance for South Africa 2002 (King II), and complies with the additional governance requirements of the JSE Limited and the Public Investment Corporation Limited's (PIC) principles, policies and practical application regarding corporate governance. The instances of non-compliance are noted and reasons are supplied.

In terms of non-financial aspects, PPC complements these extended reporting requirements by adopting the Global Reporting Initiative's (GRI) sustainability reporting guidelines on economic, environmental and social performance. The company has also continued to meet the criteria of the JSE Limited's Social Responsibility Investment Index since its inception in 2004.

The company's systems of corporate governance continue to evolve in pursuit of best practice and as the needs and expectations of stakeholders develop.

The board is responsible to shareholders for creating and sustaining shareholder value through the management of the group's businesses. It is also responsible for ensuring that management maintains an effective system of internal control.

The board has formally reserved for itself the following functions:

Approving and monitoring the implementation of the strategic and annual business plans, setting objectives and reviewing key risks
and performance areas, especially in respect of technology and systems, environmental issues and transformation;

Appointing the chief executive officer and maintaining a succession plan;

Appointing directors; and

Determination of overall policies and processes to ensure the integrity of the company's risk management and internal control.

While retaining overall accountability and subject to matters reserved for its domain, the board has delegated to the chief executive officer and executive directors the authority to run the day-to-day affairs of the company.

Specific responsibilities have been delegated to the board's committees, which have access to independent advice at the group's expense. Audit, risk management and compliance, black economic empowerment and transformation, and nominations and remuneration committees assist the board in the discharge of its duties and report to the board on their activities.

Each committee acts within its written terms of reference, under which certain functions of the board are delegated with clearly defined purposes and membership requirements. The performance and effectiveness of the committees are evaluated during an annual evaluation by the board, and the committees' chairpersons are required to attend annual general meetings to answer shareholders' questions.

The aim is to have a board with an appropriate balance of skills and experience to support the company's strategy and meet the requirements to lead it effectively. The nominations committee is responsible for overseeing the process for appointing new directors to the board. The selection and nomination of directors take place according to well-defined procedures and any proposed new appointment of a director is considered by the board, as a whole, on the recommendation of the nominations committee. In line with best practice around the globe, more than half of the board's members are independent, non-executive directors.

To ensure the effective functioning of the board, the board agenda and supporting papers are usually distributed to all directors a week prior to each board meeting. The appropriate executive director supplies further explanations and motivations for items of business that require decisions during the meeting. When necessary, decisions are taken by the directors between meetings by written resolution as provided for in the company's articles of association. Directors have unrestricted access to all company property, information and records.

All new directors undergo a comprehensive induction process arranged by the company secretary. It includes a detailed information pack, an explanation of their fiduciary duties and responsibilities, meetings with the executives of the company, director development programmes arranged through the Institute of Directors, and visits to the main operations where discussions with management facilitate an understanding of the company's affairs and operations. The company secretary facilitates additional training and updates for directors on particular issues, such as competition and mining legislation, on a continuing basis.

In certain circumstances it may become necessary for a non-executive or independent director, acting in the best interests of the company, to obtain independent professional advice. Such a director has unrestricted access to the chairman, executive directors and the group company secretary. If a non-executive or independent director takes reasonable action and incurs costs, the company carries these.

Conventionally, executive directors retire from the board at 63, while non-executive and independent directors retire at the next annual general meeting after their 70th birthday.

In terms of the company's articles of association, at every annual general meeting at least one-third of the directors retire from the board. In addition, a director appointed by the board must retire from this office at the next annual general meeting. Directors who retire in this manner may make themselves available for election or re-election, as the case may be, subject to recommendation from the nominations committee.

Fees payable to non-executive and independent directors are proposed by the remuneration committee, recommended by the board and fixed by the shareholders at the annual general meeting.

No individual board member has unfettered powers of decision-making. The responsibility for running the board and executive responsibility for the conduct of business are differentiated. Accordingly, the roles of the chairman of the board and chief executive officer are separate.

The group company secretary provides the board as a whole, and directors individually, with detailed guidance on the discharge of their responsibilities. He is a central source of information and advice to the board and within the company on matters of ethics and good governance.

He also ensures that the proceedings and affairs of the board, its committees, the company itself and, where appropriate, owners of securities in the company are properly administered in accordance with the pertinent laws. He is responsible for compliance with the rules and listings requirements of the JSE Limited and the Zimbabwe Stock Exchange on which the company's securities are listed, and administers the statutory requirements of the company and its subsidiaries in South Africa.

All directors have direct access to the group company secretary at all times and the directors and officers of the company keep him advised of all their dealings in company securities.

The Securities Services Act regulates transactions by directors and officers in securities issued by the company, and the company has issued a set of guidelines and rules for its directors, officers and employees.

Mr TDA Ross (chairman)
Ms ZJ Kganyago, Mr J Shibambo

The audit committee comprises three independent directors as required by the Companies Act and the PIC's principles, policies and practical application regarding corporate governance.

Internal audit services are provided by Ernst & Young, who have been appointed for the 2008 and 2009 financial years.

The head of the internal audit team and the designated auditor in charge of the external audit are invited to attend all meetings. They had unrestricted access to the chairman and other members of the audit committee. The chief financial officer and other relevant executives are also invited to attend the meetings of the audit committee. No invited attendee has voting rights.

Mr J Shibambo (chairman)
Mr TDA Ross and Mr MJ Shaw

The primary function of the committee is to assist the board in the assessment and management of risk and legal compliance across the PPC group, to ensure the requisite risk management culture, practices, policies, resources, systems and controls are in place, and to function effectively in providing reasonable assurance that the company is in compliance with the laws and regulations to which it is subject. The committee primarily addresses health, safety, statutory, legal, environmental, mining, production and engineering risks.

The company has merged its internal auditing activities under one umbrella, known as the joint audit process (JAP), with the overall objective of fostering in the group:

Common audit methodologies and the avoidance of duplication;
A holistic view of the business and its related risks;
The involvement of internal and external line specialists;
The sharing of operational best practice and knowledge;
Encouraging continual improvement;
Adherence to company policies; and
Compliance with legislation.

The head of JAP is invited to attend all meetings and has unrestricted access to the chairman and other members of the risk management and compliance committee. At the discretion of the chairman other executives may also be invited to attend and give input, but no attendee so invited has voting rights.

Ms NB Langa-Royds (chairman)
Mr AJ Lamprecht, Mr J Shibambo

This committee is composed of independent nonexecutive directors only and assists the board in adopting a holistic approach to transformation and compliance with all relevant legislation and charters.

In accordance with its delegated authority, the committee's objectives are to:

Ensure management embraces the principles of transformation across all facets of the group's activities;
Develop and implement an appropriate transformation strategy;
Ensure that equity ownership of PPC conforms to the requirements of the Mining Charter;
Design, implement and regularly review policies, plans and processes aimed at facilitating transformation in the group;
Implement integrated annual reporting to stakeholders on aspects of transformation; and
Provide an objective forum that is dedicated to policy recommendations to the board and guide significant matters in terms of
transformation within the group.

Mr BL Sibiya (chairman)
Ms NB Langa-Royds, Mr J Shibambo, Mr AJ Lamprecht

The committee is composed entirely of independent, non-executive directors and makes recommendations to the board on the composition of the board and the balance between executive and non-executive directors. Skill, experience and diversity are considered in this process.

The committee must identify and nominate for approval by the board candidates for additional directors, or to fill any board vacancies when they arise, in terms of a policy detailing the procedures for such appointments that requires this process to be formal and transparent. It also advises the board on succession planning, especially in respect of the positions of chairman of the board and chief executive officer.

The committee also recommends for re-election, as it considers appropriate, directors who retire in terms of the company's articles of association.

Ms NB Langa-Royds (chairman)
Mr J Shibambo

This committee is composed entirely of independent, nonexecutive directors. It is mandated, within agreed terms of reference, to deal with the remuneration policy in general and approve the salaries and benefits of the executive directors and senior management. The committee also makes recommendations to the board, for onward recommendation to shareholders at the annual general meeting, on non-executive directors' fees and fees for directors who are members of board committees.

The company's philosophy is to set remuneration that is appropriate, taking into account levels of responsibility and the need to attract, motivate and retain directors, executives and other individuals of high caliber.

Guaranteed packages are normally reviewed once a year and take into account external market practices and conditions as well as the achievement of individual performance targets. Annual salary increases are not guaranteed.

The committee appointed PricewaterhouseCoopers to provide advice and recommendations and assist in meeting the increasingly onerous corporate governance requirements in respect of executive remuneration.

The company continues to review the balance between fixed and variable components of remuneration with the aim of increasing the variable component, which is then subject to company and individual performance. The proposed change is motivated by the need to sustain superior performance and increase shareholder value in the long term.

The chief executive officer, Mr Paul Stuiver, attends the committee meetings ex officio. He does not participate in discussions regarding his own remuneration, which is set by the committee.

Non-executive directors are remunerated for their membership of PPC's board and its committees. These fees are benchmarked annually against companies of similar size and complexity and take into account the increasing level of responsibilities and risks associated with directorships. Executive directors of PPC are not entitled to fees.

Internal audit activities principally determine, at each of the business units of the company, whether the PPC network of risk management, control and governance processes are adequate and function in a manner to ensure that:

Risks are appropriately identified and managed;
Interaction with various governance groups within the organisation occurs appropriately;
Significant financial, managerial and operating information is accurate, reliable and timely;
Employees' actions are in compliance with policies, procedures and applicable laws and regulations;
Resources are acquired in an economical manner, used efficiently and safeguarded adequately;
Company objectives and plans are achieved;
Continual improvement in quality of the internal control processes as well as the risk management framework is fostered across
the PPC group; and
Significant legislative and regulatory issues that have an impact on the group are recognised and addressed appropriately.

The internal audit function reports to the audit committee on its findings and has unrestricted access to the committee and its chairman.
Audit plans are drawn up annually and take into account changing business needs and risk assessments. Issues highlighted by the audit committee and management are considered and follow-up audits are planned in areas in which weaknesses have been identified. The audit committee approves the internal audit plan.

Risk Management

In terms of a written risk management philosophy statement issued by the chief executive officer and endorsed by the directorate, the company is committed to manage its risks and opportunities in the interests of all stakeholders. Every business unit and each employee has a responsibility to act proactively in this manner.

An ongoing systematic, multi-tiered and enterprise wide risk assessment process supports the company's risk management philosophy. This ensures that risks are adequately identified, evaluated and managed at the appropriate level in the business units, and that their individual and joint impact on the company as a whole is taken into consideration.

Risk registers are maintained as part of the risk management process. Where appropriate, internal, external and JAP auditors adapt their audit procedures to include coverage of these risks in their reviews and compliance audits. During the year under review, the risk management process was subject to review by internal audit.

Divisional boards and senior managers carry out detailed annual self-assessments of risk. This process identifies the critical business, operational, financial and compliance exposures facing the company, and the adequacy and effectiveness of control factors are reviewed and updated on a six-monthly basis. External risk advisers Marsh Vikela undertake facilitation of the process in alternate years.

Business recovery plans have been compiled for each operation and are subject to regular testing.

The audit and risk management and compliance committees regularly review the main risks and risk management processes and advise the board accordingly.

No part of the company's business is managed by any third party in which any director has an interest

The company subscribes to the principles of objective, honest, prompt, balanced, relevant and clear communication of both its financial and non- financial matters. The focus is on substance rather than form, and communication with stakeholders with a legitimate interest in the company's affairs is sensitive and systematic. The company regularly meets with institutional investors with due regard for statutory, regulatory and other directives that prohibit the dissemination of unpublished, price-sensitive information by the company and its directors and officers.

In accordance with the Promotion of Access to Information Act, 2000, the company has prepared and published the required manual. This is available on the company website (www.ppc.co.za) and explains how information must be requested as well as the nature of available information.

The board has also approved a disclosure policy with regard to external communications of the financial and operational performance of the company. The policy notes the requirements of the JSE Limited and global best practice for disclosure by public companies.

The group's disclosure policy is not only in respect of information disclosed to the investment community and the financial media, but applies to communication with anyone who would not normally be privy to that information, including suppliers, customers and employees within the group.

Earnings press releases will be released via SENS and posted on the corporate website as soon as possible thereafter, prior to the commencement of any discussions or meetings about the results.

All earnings presentations will be posted on the PPC website at the time the presentation commences. There may also be a live broadcast on a South African business television channel and the event will be recorded and subsequently posted on PPC's website. These broadcasts assist with fair and timely disclosure to all investors and act as a record of events.

All employees must adhere to the company's code of ethics as well as its published equal opportunity and anti-discrimination policies. These policies provide steps to be taken if an employee feels the policies' letter or intent has been breached. No retaliation may be taken against an employee who files a complaint.

The integrity of new employees is assessed in the company's selection and promotion procedures.

Due care is exercised in delegating discretionary authority to individuals in the company. All new employees are advised, at the time of their induction, about the company's values, standards and compliance procedures.

All employees are consulted on, and trained in, policies and practices with regard to human rights in the workplace. Furthermore, contractors to PPC are entitled to the same privileges and treatment as permanent employees.

As a company that aims to provide fair and equal employment opportunities, PPC continually strives to subscribe to the legislative frameworks and guidelines that address the needs of indigenous people in the countries in which it operates, and employment practices are aligned accordingly.

Freedom of association is another right enshrined and protected by the PPC ethics policy. The company has a long-standing tradition of recognising and dealing with trade unions that represent employees at its business units.

The company's procurement policy ensures that outsourced service providers have policies and procedures to protect the human rights of their employees. Contractor services are secured according to legal compliance practices in individual countries.

The code of ethics is enforced with appropriate discipline on a consistent basis and action is taken to prevent the recurrence of an offence.

The PPC ethics policy prohibits child, compulsory or forced labour and is enforced throughout the company. The hiring of labour is aligned with the relevant legislation and standards of the countries in which PPC operates.

The ethics policy outlines the principles for relationships with political parties and no contributions are made to fund political parties, election campaigns or electoral candidates. The company has no affiliations with any political parties.

The ethics policy also governs bribery and corruption and PPC applies a zero-tolerance stance on this issue. An employee found guilty of such practices is dismissed. A register of gifts received by employees and permissible guidelines is maintained.

The company provides an independent, confidential and safe system by which employees or other parties can report unethical or dishonest behaviour. Such reports can be submitted to the PPC Ethics Line, the details of which are set out below.

South Africa
PPC Ethics Line
Deloitte & Touche
Tip-offs Anonymous
Telephone: 0800 00 67 05
Free fax: 0800 00 77 88
Address: PPC Ethics Line
Free post: c/o Tip-offs Anonymous, Free Post KZN 138, Umhlanga Rocks, 4320, South Africa
E-mail: ppc@ethics-line.com
International: +27 31 571 5493

Zimbabwe
Deloitte & Touche
Tip-offs Anonymous
Telephone: 0800 4100
Fax: +263 91 8240 921
Address: The Call Centre
Freepost: PO Box HG 883, Highlands, Harare, Zimbabwe
E-mail: reportszw@tip-offs.com

Tip-offs Anonymous is an independent body within Deloitte & Touche that provides an opportunity to anyone who wishes to report unethical activities or dishonest behaviour affecting the PPC group. If desired, total anonymity is assured.

Each incident reported through the PPC Ethics Line is fully investigated at the highest level and the risk and compliance and audit committees are appraised of the outcome and actions required to address shortcomings, if any.