This report represented by the directors is a constituent document of the group financial statements at 30 June 2006. Except where otherwise stated, all amounts set out in tabular form are expressed in millions of Rand. NATURE OF BUSINESS Murray & Roberts Holdings Limited is an investment holdings company with interests in the construction & engineering, construction services & materials and fabrication & manufacture sectors. The company does not trade and all of its activities are undertaken through a number of subsidiaries, joint ventures and associates. Details of the major operating subsidiaries and associate companies are disclosed in Annexure 1 to the annual financial statements. GROUP FINANCIAL RESULTS Group earnings for the year ended 30 June 2006 were R561,3 million (2005: R492,6 million), representing diluted earnings per share of 165 cents (2005: 143 cents). Diluted headline earnings per share were 162 cents (2005: 146 cents). Full details of the financial position and results of the Group are set out in these financial statements. SHARE CAPITAL Full details of the authorised, and issued capital of the company at 30 June 2006 are contained in note 11 of the financial statements. There were no changes to the authorised and issued share capital during the year under review. Share Scheme Particulars relating to The Murray & Roberts Trust (the Trust) are set out in note 11 of the financial statements. During the year, the Trust granted an aggregate total of 2 135 000 ordinary shares (2005: 2 480 000 ordinary shares) to senior executives, including executive directors. At June 2006, the Trust held 9 965 386 ordinary shares (2005: 13 924 893 ordinary shares) against the commitment of 11 074 000 ordinary shares (2005: 12 222 315 ordinary shares). The total number of ordinary shares that may be utilised for purposes of the Share Scheme is limited to 10% of the total issued share capital of the company from time to time, currently 33 189 262 ordinary shares (2005: 33 189 262 ordinary shares). 30 000 000 unissued ordinary shares are the subject of a general authority granted to directors, in terms of Section 221 of the Companies Act, 1973, as amended, which authority remains valid until the next annual general meeting to be held on 25 October 2006. At that meeting, shareholders will be asked to place 30 000 000 unissued ordinary shares under the control of the directors. Purchase of own shares In terms of the general authority obtained at the last annual general meeting, the company or its subsidiaries may repurchase ordinary shares to a maximum of 20% of the issued ordinary shares. 675 644 ordinary shares were repurchased during the year in terms of this general authority. Approval will be sought at the forthcoming annual general meeting on 25 October 2006 to renew this general authority. A further 33 189 403 ordinary shares were repurchased during the year pursuant to the Group’s broad based black economic empowerment transaction which was effected by way of a scheme of arrangement which is more fully reported below. DIVIDEND The following dividends were declared in respect of the year ended 30 June 2006: Interim dividend number 108 of 20 cents per ordinary share (2005: 15 cents) Final dividend number 109 of 40 cents per ordinary shares (2005: 30 cents) SUBSIDIARIES Acquisition of a further interest in Clough Limited (Clough) The Group increased its shareholding in Clough from 30,3% to 46,1% in November 2005. This represented 90 million Clough shares at a cost of A$45 million. The Group has secured the rights to a further 30 million Clough shares to be issued by Clough within two years in return for a convertible loan credit facility of A$15 million which was also granted in November 2005. Acquisition of 100% of Concor Limited Shareholders are referred to the announcement published on 26 April 2005 where the Group announced its firm intention to make an offer for the entire issued share capital in Concor Limited, excluding those shares already held by Mexican Wave Investments (Pty) Limited (Mexican Wave), a subsidiary of Murray & Roberts. The Group’s firm intention to make an offer was subject to a due diligence investigation and approval by the regulatory authorities including the Competition authorities. On 14 October 2005 Murray & Roberts Limited proposed a scheme of arrangement in terms of Section 311 of the Companies Act, 1973, as amended, between Concor and its shareholders other than Mexican Wave in terms of which Murray & Roberts would acquire all the issued share capital of Concor other than those shares held by Mexican Wave. In terms of the scheme, Hochtief Aktiengesellshaft (Hochtief) would receive a consideration of 1977 cents per Concor share Report of the directors