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DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2010

NATURE OF BUSINESS
Assore Limited, which was incorporated in 1950, is a mining holding company principally engaged in ventures involving base minerals and metals. The company’s shares are listed on the JSE Limited (the JSE) under “Assore” in the general mining sector and its ultimate holding company is Oresteel Investments (Proprietary) Limited.

The group’s principal investment is a 50% (2009: 50%) interest in Assmang Limited (Assmang) which it controls jointly with African Rainbow Minerals Limited (ARM). Assmang mines iron, manganese and chrome ores and produces manganese and chrome alloys.

In addition, the group mines chrome ore and Wonderstone (a type of pyrophyllite), a portion of which is beneficiated to produce high-precision components, and wear- and acid-resistant tiles.

The group, through its wholly owned subsidiary, Ore & Metal Company Limited, is responsible for marketing all products produced by its joint-venture entities and subsidiary companies, the bulk of which is exported and the remainder either used in the group’s beneficiation processes or sold locally. Details of the group’s activities are set out, by activity, in the review of operations.

FINANCIAL RESULTS
The financial position of the group and company and their results for the year ended 30 June 2010 are set out in the annual financial statements of the group (refer page) and company (refer page) included in this report (the financial statements).
The results of the group for the year are summarised below:

	Year ended 30 June
	2010		2009
	R’000		R’000
Turnover	7 085 669		8 818 655
Profit for the year	1 511 497		3 267 387
Attributable to:
Shareholders of the holding company	1 479 524		3 241 452
Non-controlling interests	31 973		25 935
As above	1 511 497		3 267 387
Profit attributable to the shareholders of the holding company as above	1 479 524		3 241 452
Dividends relating to the group’s activities for the year under review (refer dividends below)	406 883		478 687
Interim dividend No 106 of 500 cents (2009: 1 000 cents) per share
- declared on 27 March 2010	139 607		275 717
Final dividend No 107 of 1 200 cents (2009: 1 000 cents) per share
- declared on 1 September 2010	335 057		275 717
Less: Dividends attributable to treasury shares	(67 781)		(72 747)
Profit for the year after dividends	1 072 641		2 762 765
The attributable interest of the company in the aggregate net profit
and losses after taxation of group companies was as follows:
Jointly controlled entity - 50% (2009: 50%) share
- Profit for the year	853 489		995 740
Subsidiary companies
- Profit	308 971		1 040 116
- Losses	47 880		115 504

CONTROL OVER FINANCIAL REPORTING
The directors of the company are responsible for the preparation and fair presentation of the financial statements and related
financial information included in this report. The external auditors, Ernst & Young Inc., whose report appears within this report,
are responsible for expressing an opinion on the financial statements based on their audit.

The financial statements included in this report are based on judgements and estimates which are intended to be both reasonable
and prudent and have been prepared by management in accordance with International Financial Reporting Standards (IFRS) based
on appropriate accounting policies which, unless otherwise indicated, have been applied consistently with the previous year.

The financial statements have been prepared on a going-concern basis and the directors have no reason to believe that any of the businesses in the group, except for the synthetic diamond operation, Xertech (refer page), in the group will not be a going concern in the year ahead. With regard to the valuation of assets, the directors are of the opinion that the carrying amounts of all assets included on the statement of financial position are appropriately valued.

In order to discharge their responsibilities with regard to the financial statements, the directors ensure, through the group’s duly appointed Audit and Risk Committee, that management maintains adequate accounting records and systems of internal control which are developed and reviewed for effectiveness on an ongoing basis. The systems of internal control are based on established organisational structures, policies and procedures, including budgeting and forecasting disciplines and are managed and controlled by suitably trained personnel who are organised in structures with appropriate segregation of authorities and duties. While internal controls are intended to adequately safeguard the group’s assets and prevent and detect material misstatement and loss, these systems can only be expected to provide reasonable, and not absolute, assurance as to the reliability of the financial information included in this report.

JOINTLY CONTROLLED ENTITY
The group owns 50% (2009: 50%) of the ordinary share capital of Assmang. In accordance with IFRS, the results of Assmang are accounted for by Assore using the proportionate consolidation method and the financial information set out below has been extracted from the audited financial statements of Assmang and its subsidiary companies for the year ended 30 June 2010.

The calculation of profit for consolidation purposes was based on the profit of Assmang for the year ended 30 June 2010 and dividends declared during that period, which are summarised as follows:

	Year ended 30 June
	2010	2009
	R’000	R’000
Abridged consolidated income statement of Assmang
Turnover	12 869 713	15 263 603
Profit before taxation and State’s share of profit	4 161 748	9 923 181
Taxation and State’s share of profit	1 429 526	3 604 023
Earnings	2 732 222	6 319 158
Dividends declared during the year	1 000 297	4 302 732
Profit for the year after dividends paid	1 731 925	2 016 426
	At 30 June
	2010	2009
	R’000	R’000
Abridged consolidated statement of financial position of Assmang
Assets
Non-current assets	11 707 434	9 265 451
Current assets	7 864 229	7 627 763
Total assets	19 571 663	16 893 214
Equity and liabilities
Total equity	13 720 518	11 988 594
Non-current liabilities	3 540 775	2 816 757
Current liabilities
- interest bearing	7 224	14 807
- non-interest bearing	2 303 146	2 073 056
Total equity and liabilities	19 571 663	16 893 214
Capital expenditure (R million)	3 336	2 780
Capital commitments (R million)	5 874	7 175

DIRECTORS’ EMOLUMENTS
Emoluments paid to the directors for theyear under review are as follows:
				Contri-	Other
	Directors’			butions	fringe
	fees		Bonuses	to pension	benefits
	(refer note 1)	Salary	(refer note 2)	scheme	(refer note 3)	Total
	R’000	R’000	R’000	R’000	R’000	R’000
2010
Executive
Desmond Sacco (Chairman)	110	3 806	317	-	508	4 741
R J Carpenter (Deputy Chairman)	96	3 800	11 363	863	228	16 350
C J Cory (Chief Executive Officer)	96	3 469	11 244	788	248	15 845
P C Crous (Technical and Operations)	96	3 048	11 093	692	217	15 146
Non-executive
B M Hawksworth	175	-	-	-	-	175
M C Ramaphosa*	150	-	-	-	-	150
E M Southey	150	-	-	-	-	150
Dr J C van der Horst	150	-	-	-	-	150
Alternate
J W Lewis (resigned 31 August 2009)	-	231	-	53	35	319
N G Sacco	-	883	36	86	45	1 050
P E Sacco	36	432	36	90	115	709
R Smith	-	-	-	-	-	-
	1 059	15 669	34 089	2 572	1 396	54 785
2009
Executive
Desmond Sacco (Chairman)	110	3 806	317	-	463	4 696
R J Carpenter (Deputy Chairman)	96	3 619	11 636	822	233	16 406
C J Cory (Chief Executive Officer)	96	3 305	11 494	750	251	15 896
P C Crous (Technical and Operations)	96	2 904	11 313	659	211	15 183
Non-executive
P N Boynton* (resigned 2 January 2009)	60	-	-	-	-	60
B M Hawksworth	150	-	-	-	-	150
M C Ramaphosa*	120	-	-	-	-	120
E M Southey (appointed 2 January 2009)	60	-	-	-	-	60
Dr J C van der Horst	120	-	-	-	-	120
Alternate
J W Lewis	-	1 321	5 597	300	223	7 441
N G Sacco	-	1 338	72	84	34	1 528
P E Sacco	36	432	72	88	118	746
R Smith	-	-	-	-	-	-
	944	16 725	40 501	2 703	1 533	62 406
* Fees paid to employer

Notes
1	Directors’ fees paid to executive directors include fees received from Assmang Limited.
2	Due to the shareholding structure, the company is unable to offer directors’ remuneration by way of share incentive or
	option arrangements and bonuses are determined based on results for the year. Directors owning shares in the group do so
	in their own right and disclosure thereof is made in this report.
3	Other fringe benefits include medical aid contributions, car scheme allowances, life insurance contributions, leave paid out,
	study loan benefits, use of assets and unemployment insurance fund contributions.
4	None of the directors or their immediate families holds any options to acquire shares in the company nor are they entitled
	to any gains by way of commissions, profit-sharing arrangements or contracts entered into with group companies.

DIRECTORS’ INTERESTS IN SHARES OF THE COMPANY
Interests of the directors in the ordinary shares of the company at 30June 2010 were as follows, and the company is unaware
of any material change in these interests between year-end and the date of this report:
	Direct beneficial		Indirectbeneficial
	Number of shares		Numberof shares
	2010	2009	2010	2009
Executive directors
Desmond Sacco	167 500	167 500	6 486 098	6 486 098
R J Carpenter	22 400	22 400	-	-
C J Cory	10 000	10 000	-	-
P C Crous	3 000	3 000	-	-
Non-executive directors
B M Hawksworth	1 000	1 000	-	-
M C Ramaphosa	-	-	1 010 917	1 106 000
E M Southey (appointed 2 January 2009)	-	-	-	-
Dr J C van der Horst	-	-	-	-
Alternate directors
J W Lewis (resigned 31 August 2009)	2 500	2 500	-	-
N G Sacco	34 050	34 050	-	-
P E Sacco	35 350	35 350	-	-
R Smith	-	-	-	-
	275 800	275 800	7 497 015	7 592 098
ANALYSIS OF SHAREHOLDING
The following analysis of shareholders, in accordance with the JSE Listings Requirements, has been established, based on an
examination of the company’s share register at 30 June 2010. The directors are not aware of any material changes to this
analysis between the year-end and the date of this report:
			2010	2009
			%	%
Shareholder spread
Shares held by the public/non-public
Non-public*
- Holders in excess of 10% of the share capital			75,23	74,91
- Directors of the company			0,98	1,00
			76,21	75,91
Public 1 008 (2009: 677) shareholders			23,79	24,09
			100,00	100,00
* As defined by Rule 4.25 of the JSE Listings Requirements
Major shareholders
Oresteel Investments (Proprietary) Limited			52,43	53,09
Main Street 460 (Proprietary) Limited			11,01	9,88
Main Street 343 (Proprietary) Limited (a wholly owned subsidiary
of Shanduka Resources (Proprietary) Limited)			11,79	11,94
			75,23	74,91
Others - less than 5%			24,77	25,09
			100,00	100,00

SPECIAL RESOLUTIONS
The following special resolutions were passed during the year under review:
•	On 27 November 2009, the directors at Assore and its subsidiaries were granted general authority to purchase Assore’s
	issued ordinary share capital, in accordance with the provisions of the Companies Act.
•	On 19 January 2010, in order to effect the second empowerment transaction (refer to “Black economic empowerment” report):
	-	authority was granted to Assore’s directors to execute and implement agreements in order to provide financial assistance
		to a subsidiary company; and
	-	Assore was granted specific authority to repurchase any of its issued shares from certain of its subsidiary companies.

DIVIDENDS
In accordance with the group’s accounting policy for dividends, only dividends which are declared during the financial year are
recorded in the financial statements and are summarised as follows:
	2010	2009
	R’000	R’000
Dividends declared during the year:
Final dividend No 105 of 1 000 cents (2009: 1 000 cents) per share
- declared on 26 August 2009	275 717	280 000
Interim dividend No 106 of 500 cents (2009: 1 000 cents) per share
- declared on 27 March 2010	139 607	275 717
Less: Dividends attributable to treasury shares	56 309	76 311
	359 015	479 406
Dividends relating to activities for the year:
Interim dividend No 106 of 500 cents (2009: 1 000 cents) per share
- declared on 27 March 2010	139 607	275 717
Final dividend No 107 of 1 200 cents (2009: 1 000 cents) per share
- declared on 1 September 2010	335 057	275 717
Less: Dividends attributable to treasury shares	67 781	72 747
	406 883	478 687

EVENTS AFTER THE REPORTING PERIOD
The following significant corporate events occurred subsequent to the year-end but, in the opinion of the board of directors, do not require any adjustments to the financial statements at 30 June 2010:

• On 27 August 2010, Mr B M Hawksworth stood down as a director due to ill health.

• On 1 September 2010, the board declared a final dividend of 1 200 cents per share amounting to R335,1 million, which was paid to
   shareholders on 27 September 2010.

• On 10 September 2010, shareholders approved the proposed subdivision of Assore’s ordinary share capital, on a five-forone basis.
  All previously reported financial results for earnings per share information will be divided by a factor of five in future reporting periods.

• On 1 October 2010, Mr W F Urmson was appointed as an independent non-executive director.

HOLDING COMPANY
The company’s holding company is Oresteel Investments (Proprietary) Limited.

DIRECTORATE AND SECRETARY
The names of the directors at the year-end are set out on pages 8 and 9 of this report. Details of the company secretary, including its business and postal addresses, are set out on the inside back cover of this report. Changes subsequent to the yearend are recorded in “Events after the reporting period” (refer above).

In terms of the company’s Articles of Association, Messrs Carpenter, Cory and Urmson are required to retire by rotation at the forthcoming Annual General Meeting. All of the aforementioned directors, being eligible, offer themselves for re-election. (refer page 142 for a brief curriculum vitae for each of these directors.)


Johannesburg
22 October 2010