Basil Read : ‐ ANNOUNCEMENT REGARDING THE SETTLEMENT AGREEMENT CONCLUDED WITH THE SOUTH AFRICAN GOVERNMENT

Basil Read Holdings Limited

(Incorporated in the Republic of South Africa) Registration Number 1984/007758/06

Share Code: BSR ISIN: ZAE000029781

("Basil Read" or "the Company")

ANNOUNCEMENT REGARDING THE SETTLEMENT AGREEMENT CONCLUDED WITH THE SOUTH AFRICAN GOVERNMENT

Shareholders are advised that Basil Read entered into a settlement agreement (the "Settlement Agreement") with the government of the Republic of South Africa (the "Government"), together with five other construction companies (collectively, the "Construction Companies"), in an effort to address the Construction Companies' exposure to potential claims for damages from certain identified public entities (the "Claims") arising primarily from the fast track settlement process launched by the South African Competition Authorities in February 2011 (the "Fast Track Settlement Process"), as well as to significantly advance the transformation of the South African construction sector.

SETTLEMENT AGREEMENT WITH THE SOUTH AFRICAN GOVERNMENT

Following an extensive period of negotiation, the Government and the Construction Companies have concluded the Settlement Agreement which addresses outstanding legacy issues and commits to a plan which will ensure the repositioning of the South African construction sector. All parties to the Settlement Agreement acknowledge the need to foster a better relationship between the Government and the construction industry going forward.

1. The Settlement Agreement

2. In summary, the Settlement Agreement stipulates that:

3. Payments:

   Over the next 12 years, the Construction Companies will be required to make a collective, annual payment of R103 750 million into a fund (the "Fund"). The Fund will be constituted as a trust (the "Trust"). Basil Read's annual contribution amounts are (all years stated inclusively) -

   • R2,000,000 in each of the years 2016 to 2018;

      R8,000,000 in each of 2019 and 2020;

      R10,000,000 in 2021;

   • R14,000,000 in each of the years 2022 to 2025

      R16,000,000 in each of 2026 and 2027.

4. Application of payments to Fund:

   The Trust will use the payments made to the Fund to (i) implement initiatives to develop and enhance the construction industry, in

   line with the Government's transformation objectives; and (ii) promote the development of emerging contractors and suppliers in South Africa. The Trust shall be governed by a Board of Trustees appointed by the Government, the Construction Companies and the South African Forum of Civil Engineering Contractors.

5. Settlement of Claims:

   Any Claims or potential claims for damages that certain, identified public entities have made, or may be entitled to make, against the Construction Companies, in relation to projects primarily arising from the Fast Track Settlement Process, will be fully and finally settled.

6. Development initiatives or disposal of the construction business to an emerging contractor:

   The Construction Companies have each also undertaken to either:

7. launch development initiatives with the aim of identifying, developing and mentoring up to two emerging contractors ("Emerging Contractors"), to ensure that the Emerging Contractors will have the necessary skills and quantity of work required to generate a cumulative combined annual turnover equal to at least 25% of the South African civil engineering and general building annual construction works turnover of the relevant Construction Company within seven years. Aligned to this obligation, are fixed interim period transformation targets on each Construction Company as well as penalties calculated in accordance with a formula, for a failure to meet such targets; or

8. to dispose of not less than a 40% economic interest in their South African civil engineering and general building construction business, to an enterprise that is more than 51% black owned, managed and controlled, in which case it is released from (i) above.

9. Limitation of liability:

10. The aggregate liability of a Construction Company arising from

11. its annual contribution payments in 1.1(a) above; and (ii) from any potential penalties in 1.1(d)(i) above, shall not exceed 29% of the Construction Company's market capitalisation as at the signature date of the Settlement Agreement.

12. Basil Read's liability in terms of the Settlement Agreement is as set out in 1.1(a) above.

13. All Construction Companies commit to an integrity undertaking, in terms of which sound ethical and legal principles are adopted.

14. Benefits of concluding the Settlement Agreement

15. Enhancing transformation in the South African construction sector, ensuring a positive future relationship with the Government and State Owned Enterprises.

16. Allowing Construction Companies to focus on its business as opposed to engaging in lengthy, costly and protracted litigation.

17. Creating and promoting black-owned and managed construction companies through Enterprise Development.

18. Enhancing innovation in the sector

19. Provides certainty to stakeholders that any existing or potential Claims from identified public entities, as well as the associated litigation costs and disruptions to operations are avoided. Importantly, by committing to the critical transformation initiatives, of this Settlement Agreement, the construction sector in South Africa will be a more sustainable and competitive industry, ready to partner with the Government for the advancement of infrastructure development in South Africa and for all South Africans.

20. Any successful Claims (or settlement thereof) brought against the Construction Companies following signature date, in relation to those public entities specifically identified in the Settlement Agreement will be deducted from the aforementioned annual payments made by the Construction Companies to the Fund.

1.4 Outstanding civil claims

The Settlement Agreement settles all Claims and pending Claims by identified public entities.

In conclusion, this settlement signifies the Government and Construction Companies' commitment in promoting sustainability, transformation and development in the construction sector.

Johannesburg

11 October 2016

Company Secretary Andiswa T Ndoni

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