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PROPOSED DELISTING AND OFFER FROM MANAGEMENT CONSORTIUM AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1. BACKGROUND
1.1 HCI shareholders are referred to the cautionary announcement published in
the press on 25 February 2003 (“the cautionary announcement”) in which it was
indicated that the board of directors of the Company (“the Board”) was
considering the proposed delisting of the Company together with an offer for all
the shares in the Company that would be made by a consortium comprising members
of HCI”s management, led by JA Copelyn and MJA Golding (“the Consortium”).

1.2 HCI shareholders are informed that the Board has now resolved that the
Company should be delisted from the JSE Securities Exchange South Africa (“the
JSE”).

1.3 The Consortium intends to make an offer to all the shareholders of the
Company (“the Minorities”) to purchase all or any of their shares at a price of
350 cents per HCI share (“the Offer consideration”).

2. THE PROPOSED DELISTING

2.1 The Board will convene a meeting of the shareholders of the Company (“the
Delisting Meeting”) to propose that it be authorised to apply to the JSE for the
listing of the Company to be voluntarily terminated (“the Delisting”).
Sactwu Investments Group (Pty) Ltd, Southern African Clothing & Textile Workers
Union and Sactwu Educational Trust (“Sactwu”) has under its control,
approximately 46% of all the issued shares in the capital of the Company.

2.2 Sactwu has been made aware that the rules of the JSE are to be amended in
the future such that it would be precluded from voting at the Delisting Meeting.
As such and in the interests of good corporate governance, it has informed the
Board that it shall not exercise the votes under its control at the Delisting
Meeting.

2.3 In accordance with the current JSE rules the Consortium is permitted to
vote at the Delisting Meeting, however the JSE has indicated that it would
prefer the Consortium not to vote. The Consortium is still in the process of
considering this request.

3. THE OFFER

3.1 In order to facilitate the exit of the Minorities that do not wish to
remain invested in the Company following its delisting, the Consortium intends
to make an offer to the Minorities to purchase all or any of their shares in the
issued capital of the Company for a cash amount of 350 cents per HCI share (“the
Offer”).

3.2 Investec Bank Limited has agreed to provide the requisite funding to the
Consortium to pay the consideration due under the Offer. Such agreement is
subject to the conclusion of the relevant funding agreements which are currently
in the course of being prepared.

3.3 Sactwu has, in respect of the shares in the Company under its control,
furnished to the Consortium an irrevocable undertaking to decline to accept the
Offer.

3.4 HCI shareholders will not be obliged to accept the Offer. HCI shareholders
that wish to remain invested in the Company following the Delisting will be
entitled to do so.

3.5 Insofar as it may be reasonable and practical for it to do so, HCI will
endeavour to facilitate a mechanism for the acquisition and sale of its shares
in the unlisted environment.

4. RATIONALE FOR THE DELISTING

4.1 Following the pro rata specific repurchase offer that was concluded by the
Company in January 2003, the Company”s issued share capital was reduced by
approximately 73%. Almost all the institutional shareholders in the Company
exited completely.

4.2 The market sentiment towards small and medium capitalisation companies
listed on the JSE, particularly investment trusts like HCI is unfavourable and
is not expected to improve.

4.3 The Company has not enjoyed a favourable rating for its shares on the JSE
and it is considered unlikely that the rating afforded the Company by the market
will improve significantly in the short to medium term. The Company has no
foreseeable need to raise equity capital.

4.4 The Board has considered the rationale for the listing of the Company and
has come to the view that there are no material benefits for retaining the
listing.

4.5 The Offer affords the Minorities an opportunity to exit the Company at a
price that is a premium of 25% to the weighted average share price over the 30
traded days preceding the date of the publication of the cautionary
announcement.

5. CONDITIONS PRECEDENT

5.1 The Delisting is subject to the fulfillment of the following conditions
precedent:

5.1.1 the passing by the requisite majority of HCI shareholders at the
Delisting Meeting of the ordinary resolution required to implement the
Delisting;

5.1.2 the furnishing by the JSE and the Securities Regulation Panel (“the
SRP”) of all regulatory approvals required to implement the Delisting either
unconditionally or subject to provisions acceptable to the Board.

5.2 The Offer is subject to the fulfillment of the following conditions
precedent:

5.2.1 the fulfillment of the conditions precedent applicable to the
Delisting;

5.2.2 the furnishing by the JSE, the SRP, the South African Reserve Bank and
any other relevant regulatory bodies having jurisdiction over the Offer of all
regulatory approvals required to implement the Offer either unconditionally or
subject to provisions acceptable to the Consortium.

6. OPINIONS

6.1 The Board has appointed Moores Rowland Chartered Accountants (SA) (“Moores
Rowland”) as independent advisor to consider and advise whether the Offer is
fair and reasonable to the Minorities.

6.2 Moores Rowland has advised that the Offer is fair and reasonable to the
Minorities

6.3 The opinion of Moores Rowland will be included in the circular to HCI
shareholders referred to in paragraph 10 below.

6.4 An independent committee has been constituted by the Board to consider and
advise whether the Offer is fair and reasonable to the Minorities.

6.5 The independent committee has advised that it is of the view that the Offer
is fair and reasonable to the Minorities.

6.6 The views of the independent committee will be included in the circular to
HCI shareholders referred to in paragraph 10 below.

7. FINANCIAL EFFECTS

7.1 Pro forma financial effects on HCI shareholders

The table below sets out the unaudited pro forma financial effects of the offer
on HCI shareholders, based on the published unaudited interim financial results
of HCI for the six months ended 30 September 2002. The financial effects
detailed below are for illustrative purposes only, and therefore may not give a
true reflection of the effect of the Offer on a HCI shareholder.

Remain a Accept
Shareholder Offer Change

Notes (cents) (cents) (%)
Headline (loss)
/earnings per
share 1 (14.42) 13.46 N/A
Market value per
share 2 330 350 6.06
Market value per
share 3 280 350 25
Tangible net
asset value per
share 4 349 350 0.29

Notes:

1. The “Remain a shareholder” column represents the un-audited headline
earnings per HCI share for the six months ended 30 September 2002. The “Accept
Offer” column represents the after tax interest income, at a tax rate of 30%,
that a HCI shareholder would have earned had the offer consideration been
invested at a before tax interest rate of 10.96% per annum for the six month
period ended 30 September 2002.

2. The market value in the “Remain a shareholder” column is the closing price
of HCI shares on the last trading day prior to the publication of the first
cautionary announcement on 25 February 2003. The “Accept Offer” column shows
the offer consideration.

3. The market value in the “Remain a shareholder” column is the weighted
average traded price of HCI shares over the 30 days prior to the publication of
the first cautionary announcement. The “Accept Offer” column shows the Offer
consideration.

4. The “Remain a shareholder” column is the tangible net asset value per HCI
share at 30 September 2002. The “Accept Offer” column shows the Offer
consideration.

5. The above excludes the effects of capital gains tax on HCI shareholders.

7.2 Pro forma financial effects on HCI

As the proposed Offer is at shareholder level, there are no financial effects on
the published unaudited interim results of HCI for the six months ended 30
September 2002.

8. SALIENT DATES AND TIMES

2003

Last day to lodge forms of proxy for
the Delisting Meeting by 11:00 on Tuesday, 27 May
Delisting Meeting to be held at 11:00 Wednesday, 28 May
on
Results of Delisting Meeting released Wednesday, 28 May
on SENS on
Results of Delisting Meeting published Thursday 29 May
in the press on
Offer opens at 09:00 on Friday, 30 May
Last day to trade in order to Thursday 12 June
participate in the Offer
Suspension of listing from Friday 13 June
commencement of business on
Payment to shareholders (See Note 1
below)
Offer closes at 14:00 on (See Note 2 Friday, 20 June
below)
Results of Offer announcement released Monday, 23 June
on SENS on
Results of Offer announcement Tuesday, 24 June
published in the press on
Delisting of HCI with effect from the
commencement of business on Tuesday, 24 June

Notes:

1. Once the Offer has become unconditional, consideration cheques will be
posted to HCI certificated shareholders and HCI dematerialised shareholders”
safe custody accounts updated and accounts credited within five business days of
receipt of acceptance of the Offer.

2. Dematerialised shareholders are required to notify their duly appointed
Central Securities Depository Participants (“CSDP”) or broker of their
acceptance of the offer in the manner and time stipulated in the agreement
governing the relationship between the shareholder and his CSDP or broker.

3. Share certificates may not be dematerialised after Thursday 12 June 2003.

4. The dates and times provided for in this announcement are subject to
amendment. Any such amendment will be published in the press and on SENS.

5. Shareholders who do not accept the Offer will remain as shareholders in the
unlisted company.

9. CASH CONFIRMATION

Investec Bank Limited has provided the SRP with a facility letter, in an
acceptable format, that the Consortium has sufficient resources available to it
to discharge its obligations under the Offer.

10. DELISTING MEETING AND FURTHER DOCUMENTATION

A circular to HCI shareholders convening the Delisting Meeting and providing
full details of the Delisting and the Offer, will be posted to HCI shareholders
on or about Friday 2 May 2003.

11. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

HCI shareholders are advised that as further information has now been made
available, caution is no longer required when dealing in their HCI shares.