DIRECTORS' REPORT

NATURE OF BUSINESS

The company is listed on the securities exchange operated by JSE Limited and is the holding company of a number of subsidiary companies principally engaged in civil engineering and building contracting activities in the Republic of South Africa and internationally.

GROUP RESULTS

Gross revenue increased by 3% to R15,2 billion (2009: R14,8 billion) as the group achieved an operating profit before non-trading items of R1,27 million (2009: R1,05 million). This equates to an increase of 21,4% over the previous year. Headline earnings for the year amounted to R965 million (2009: R882 million). The consolidated statement of financial performance set out on page 81 gives further details.

INTERESTS IN SUBSIDIARIES

Details of principal subsidiary companies are disclosed in Annexure 1. A full list of subsidiary companies is available on request from the company secretary.

The holding company is an investment company and consequently all profits recognised in the consolidated statements of financial performance were earned by subsidiary companies.

In October 2009 the group acquired an additional 40% interest in the issued share capital of Roadspan Holdings (Proprietary) Limited (Roadspan) at a cost of R65 million thereby increasing its holding to 70%. Roadspan’s activities include road surfacing and the operation of a number of asphalt plants.

The group increased its holding in its Australian subsidiary, Probuild Constructions (Aust) Proprietary Limited from 62,6% to 69,4%.

LOSSES IN SUBSIDIARIES

Roadspan Holdings (Proprietary) Limited incurred losses of R45,3 million before tax.

DIVIDENDS

Dependent upon profits earned and the availability of cash, the policy of the company is to pay an interim dividend in April and a final dividend in October of each year. The final dividend is approximately twice the value of the interim dividend. A final dividend of 220 cents per share in respect of the 2010 year was declared on 3 September 2010 which together with the interim dividend of 110 cents per share results in a total payment to shareholders for the year of 330 cents per share (2009: 300 cents).

SHARE CAPITAL

The company’s issued share capital is 66 000 000 ordinary shares.

Subject to the regulations of the JSE, 10% of the unissued ordinary shares are under the control of the directors subject to the regulations, until the next annual general meeting (AGM) to be held on 27 October 2010. At this meeting, shareholders will be requested to grant the directors the same authority until the next annual general meeting in 2011.

Permission, by way of special resolution, will be sought from the shareholders at the AGM for the company to repurchase a maximum of 20% of its issued share capital during any one year. Details of the resolution are disclosed on page 137.

SHARE SCHEMES

A summary of transactions undertaken by the WBHO Share Trust, the WBHO Management Trust and Akani Investment Holdings (Proprietary) Limited and the Broad-Based Employee Share Incentive Trust during the year appear on pages 122 and 124.

In terms of the trust deeds a further 5 548 750 shares could be issued to eligible employees.

There have been no changes to the trustees of the share schemes for the year under review.

Participants in the schemes were advanced interest free loans by the trust to enable them to purchase the shares offered.

The trusts are consolidated for the purposes of the consolidated annual financial statements.

Details of the company’s black empowerment share scheme for its employees and certain selected black partners are disclosed on page 123 of the notes to the financial statements.

BORROWING POWERS

The articles of association place no restrictions on the directors concerning the amount of money the company may borrow.

DIRECTORATE

Details concerning the company’s directors, secretary, business and postal addresses are set out on pages 12 and 141.

In terms of the company’s articles of association, Messrs Wylie, McCulloch and Ngobeni retire at the forthcoming annual general meeting and are eligible for re-election.

DIRECTORS’ SHAREHOLDING

The interests of the directors and those of their families appear on page 110.

There have been no material changes to directors’ shareholdings between the balance sheet date and the date of this report. The composition of the board is disclosed on page 12.

RELATED PARTY TRANSACTIONS

Related party transactions are disclosed under note 25.

PROPERTY, PLANT AND EQUIPMENT

Full details of the property, plant and equipment are reflected on note 2.

POST-BALANCE SHEET EVENTS

In July of this year the group entered into an agreement to purchase the remaining 30% of Insitu Pipelines (Proprietary) Limited as well as a further 1,6% of the equity of Probuild Constructions Proprietary Limited.

SPECIAL RESOLUTIONS

There were no special resolutions passed during the year.