Murray & Roberts

19-12--05

IMPLICATIONS OF IFRS 2 ON THE MURRAY & ROBERTS BROAD-BASED BLACK ECONOMIC EMPOWERMENT TRANSACTION

Murray & Roberts Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1948/029826/06
Share code: MUR ISIN: ZAE0000073441
(“Murray & Roberts” of “the Group”)

Implications of IFRS 2 on the Murray & Roberts Broad-Based Black Economic Empowerment (BBBEE) Transaction

Introduction
Shareholders are referred to the announcement on 29 November 2005 relating to the sanctioning by the High Court of the Murray & Roberts BBBEE transaction which will result in the introduction of broad-based direct black ownership into the Murray & Roberts shareholding structure from Monday 19 December 2005.

Murray & Roberts has adopted International Financial Reporting Standards (IFRS) for the year ended 30 June 2006 and will report its half year to 31 December 2005 in this context.

Shareholders are advised that earnings per share and headline earnings per share of Murray & Roberts for the six months period ending 31 December 2005 and for the year ending 30 June 2006 will be affected by the IFRS impact on the BBBEE transaction. The percentage impact on earnings per share and headline earnings per share of Murray & Roberts for this financial year will be notified to shareholders once earnings have been finalised.

Implications of IFRS 2
The International Accounting Standards Board has issued International Financial Reporting Standard 2 - Share Based Payment (IFRS 2) that requires share-based payments to be recognised as an expense under IFRS. This expense is measured at the fair value of the equity instruments issued at the date of grant.

Murray & Roberts has considered the potential impact of IFRS 2, together with the recently issued exposure draft ED 199. It should be noted that the interpretation issued by the International Financial Reporting Interpretations Committee regarding the accounting application of IFRS 2 is still in draft form. Based on these documents and the recently issued Codes of Good Practice relating to the Broad-Based Black Economic Empowerment Act, the future effect of IFRS 2 on the Murray & Roberts BBBEE transaction is as follows:

Letsema Bokamoso General Staff Trust
The estimated once-off expense is R94.6 million (excluding UST). This is based on the closing share price of R19.00 per share on 29 November 2005, the date on which the High Court sanctioned the scheme. This will be reflected in the income statement as an expense for financial year 2006.

Letsema Vulindlela Black Executives Trust
Once selected black executives become vested beneficiaries of the Letsema Vulindlela Black Executives Trust and are granted Murray & Roberts shares in terms of their vesting rights, the fair value of these equity instruments, valued at the various dates on which the grants take place, will be expensed over the related vesting periods. It is estimated that approximately 40% of the shares will be allocated in the 2006 financial year and that the indicative expense will be R3.6 million in the income statement for financial year 2006.

Letsema Khanyisa Black Employee Benefits Trust and Letsema Sizwe Community Trust
These trusts are established as 100-year trusts. However, after the lock-in period ending 31 December 2015, they may, at the discretion of the trustees, be dissolved in which event any surplus in these trusts after the satisfaction of all the liabilities in these trusts will be transferred to organisations which engage in similar public benefit activities to these trusts, which may include the beneficiaries of these trusts. An IFRS 2 expense will have to be recognised at such point in time when this surplus is distributed to an independent public benefit organisation.

The forecast financial information on which this statement is based has not been reviewed and reported on by Deloitte & Touche, the Group’s external auditors.

Johannesburg
19 December 2005

Sponsor
Merrill Lynch South Africa (Pty) Limited