Raubex : Announcement regarding the settlement agreement concluded with the South African Government

(Incorporated in the Republic of South Africa) (Registration number 2006/023666/06)

JSE Share code: RBX ISIN: ZAE000093183

("Raubex" or "the Company")

Shareholders are advised that Raubex entered into a settlement agreement (the Settlement Agreement) with the government of the Republic of South Africa (the Government), together with 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.

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 into a fund (Fund). In the case of Raubex, the annual payment amounts to R15 million. The Fund will be constituted as a trust (Trust). The first of such annual payments by Raubex of R15 million will be structured so that 25% thereof is payable within five (5) business days following the effective date of the Settlement Agreement and the remainder shall be paid no later than 90 days following the effective date. Thereafter, each subsequent instalment will be payable annually on 1 July.

4. Application of payments to Fund:

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

6. Development initiatives or disposal of a meaningful interest in the construction business to an emerging contractor:

   The Construction Companies have also individually undertaken to either:

7. launch development initiatives with the aim of identifying, developing and mentoring up to three 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 annual South African civil engineering and general building construction works turnover of the relevant Construction Company within 7 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 its 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.

   It is the intention of Raubex to launch development initiatives as set out in (i) above. Raubex believes that the fixed transformation targets are achievable.

9. Limitation of liability:

10. The aggregate liability of a Construction Company arising from (i) its annual contribution payments in 1.1(a) above; and (ii) from any potential penalties in 1.1(d)(i) above, shall not exceed the lower of R1,2 billion or 29% of the Construction Company's market capitalisation as at the time that the securities exchange operated by the JSE Limited closes for trading on the business day preceding the signature date of the agreement.

11. Integrity undertaking:

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

12. Benefits of concluding the Settlement Agreement

13. Enhancing transformation in the South African construction sector.

14. Allowing Construction Companies to focus on their businesses as opposed to engaging in lengthy, costly and protracted litigation.

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

16. Enhancing innovation in the sector

17. Providing closure for Construction Companies on the legacy matters dealt with by the competition authorities, and giving 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.

18. 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.

19. Settlement with the Construction Industry Development Board (CIDB) and avoiding possible black listing of the Construction Company which would result in a suspension of public sector work.

20. Ensuring a positive future relationship with Government and State Owned Enterprises.

21. Outstanding civil claims

22. The Settlement Agreement settles all Claims and pending Claims by identified public entities. With respect to Raubex this includes the claim received on 19 April 2016 from the South African National Roads Agency SOC Limited ("SANRAL"). The Construction Companies will still be exposed to any claims brought by state-owned enterprises and public departments that are not listed in the Settlement Agreement.

    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

    Sponsor

    Investec Bank Limited