PRELIMINARY REPORT TO SHAREHOLDERS FOR THE YEAR ENDED 31 MARCH 1999 THE FOLLOWING ARE THE AUDITED RESULTS OF THE GROUP FOR THE YEAR ENDED 31 MARCH 1999 TOGETHER WITH THE COMPARATIVE FIGURES: SUMMARISED GROUP INCOME STATEMENT YEAR ENDED 31 MARCH 1999 1998 R’000 R’000 OPERATING (LOSS) INCOME (5 297) 2 935 INVESTMENT INCOME 20 617 11 049 INCOME BEFORE TAXATION 15 320 13 984 TAXATION 10 633 3 066 NET INCOME 4 687 10 918 SHARE OF ASSOCIATED COMPANIES’ (LOSS) INCOME (1 145) 16 562 PREFERENCE DIVIDENDS ACCRUED (33 381) – (LOSS) INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS BEFORE NON-RECURRING ITEMS (29 839) 27 480 NON-RECURRING ITEMS 67 637 2 666 INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 37 798 30 146 ATTRIBUTABLE (LOSS) EARNINGS PER SHARE (CENTS) BEFORE NON-RECURRING ITEMS (8,4) 9,1 AFTER NON-RECURRING ITEMS 10,6 9,9 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES ON WHICH THE ATTRIBUTABLE EARNINGS PER SHARE HAS BEEN CALCULATED (‘000) 355 892 303 441 ACTUAL NUMBER OF ORDINARY SHARES IN ISSUE AT END OF YEAR (‘000) 365 321 346 961 SUMMARISED GROUP BALANCE SHEET 31 MARCH 31 MARCH 1999 1998 R’000 R’000 FUNDS EMPLOYED ORDINARY SHAREHOLDERS’ INTEREST 1 178 084 1 074 828 OUTSIDE SHAREHOLDERS’ INTEREST AND PREFERENCE SHARES 271 068 50 068 LOANS PAYABLE 82 285 92 635 CURRENT LIABILITIES 275 414 13 901 1 806 851 1 231 432 EMPLOYMENT OF FUNDS FIXED ASSETS 151 64 INVESTMENTS 1 801 512 1 229 014 – ASSOCIATED COMPANIES 1 266 654 404 226 – NON-CONSOLIDATED SUBSIDIARY 106 039 116 461 – OTHER INVESTMENTS 428 819 708 327 CURRENT ASSETS 5 188 2 354 1 806 851 1 231 432 NET ASSET VALUE PER SHARE (CENTS) INVESTMENTS AT COST 322 310 INVESTMENTS AT MARKET/DIRECTORS’ VALUATION AT 28 JUNE 1999 930 910 NOTES 1. EVENTS AND DEVELOPMENTS THE GROUP HAS HAD AN EXTREMELY SUCCESSFUL YEAR, WITH THE MAJOR INVESTMENTS FLOURISHING. THE GROUP’S INVESTMENTS HAVE PERFORMED EXTREMELY WELL DURING THE YEAR UNDER REVIEW DESPITE THE TURBULENT ECONOMIC AND MARKET CONDITIONS PREVAILING DURING THE SECOND HALF OF THE YEAR. DURING THE YEAR THE GROUP HAD INCREASED ITS INVESTMENT IN UNIBANK GROUP LTD TO 46,17%. THIS INVESTMENT WAS THEN REVERSED INTO THE LISTED UNIBANK INVESTMENT HOLDINGS LTD (PREVIOUSLY NAMED CREDITSURE HOLDINGS LTD). SUBSEQUENT TO THE YEAR END, THE GROUP HAS DISPOSED OF ITS INVESTMENT IN DATATEC LIMITED AND HAS UTILISED THE PROCEEDS TO LIQUIDATE THE DEBT IN THE GROUP, RECAPITALISE CURRENT INVESTMENTS AND FACILITATE FURTHER ACQUISITIONS WHEN APPROPRIATE OPPORTUNITIES ARISE. THE GROUP IS IN THE PROCESS OF UNBUNDLING THE INVESTMENTS IN UNIBANK INVESTMENT HOLDINGS LTD AND SOFTLINE LTD AND DISTRIBUTING THESE SHARES TO THE GROUP SHAREHOLDERS. A CIRCULAR IN THIS REGARD WILL BE ISSUED SHORTLY. THE GROUP’S INTEREST IN CAPITAL ALLIANCE HOLDINGS LTD, AS WELL AS THE MAJORITY OF THE SHARES RECEIVED THROUGH THE UNBUNDLING OF CAPITAL ALLIANCE HOLDINGS LTD AND SAFLIFE LTD, WERE DISPOSED OF DURING THE YEAR. 2. UNLISTED INVESTMENTS THE GROUP’S MAJOR UNLISTED INVESTMENT, BEING ITS 5% INTEREST IN VODACOM GROUP (PTY) LTD, CONTINUES TO PERFORM BEYOND EXPECTATION. CELLULAR TELEPHONY CONTINUES TO BE A RAPIDLY EXPANDING INDUSTRY IN SOUTHERN AFRICA. THE GROUP INCREASED ITS STAKE IN MIDI TV (PTY) LTD TO 34,14% DURING THE YEAR. THE E TV STATION WAS SUCCESSFULLY LAUNCHED DURING THE YEAR AND MOST OF THE TEETHING PROBLEMS HAVE NOW BEEN RESOLVED. ADVERTISING REVENUE CONTINUES TO GROW IN ACCORDANCE WITH THE INCREASE IN MONTHLY VIEWERSHIP. IT IS ENVISAGED THAT MIDI TV (PTY) LTD WILL INCUR LOSSES OVER THE NEXT THREE YEARS. THE CURRENT YEAR LOSSES, WHICH INCLUDES THE START-UP COSTS THAT WERE WRITTEN OFF, HAVE BEEN EQUITY ACCOUNTED IN THE RESULTS OF THE GROUP. YOUR DIRECTORS ARE ADOPTING A HANDS-ON APPROACH TO ENSURE THAT THIS COMPANY’S PERFORMANCE LIVES UP TO EXPECTATIONS AND CONTRIBUTES HANDSOMELY TO GROUP PROFITS IN FUTURE YEARS. THE GROUP ACQUIRED A 30% INTEREST IN METTLE LTD (PREVIOUSLY BFS CAPITAL LTD) FOR R72 MILLION. THIS FINANCIAL SERVICES COMPANY HAS PERFORMED EXCEPTIONALLY AND IS PLANNING ON LISTING LATER IN THE YEAR. THE RADIO STATION, 94.7 HIGHVELD STEREO, OWNED BY AFRICA-ON-AIR (PTY) LTD, IN WHICH THE GROUP HAS AN INDIRECT 51% INTEREST, CONTINUED TO BE DOMINANT IN ITS MARKET DURING THE YEAR. THE STATION HAS A LARGE AND GROWING LISTENERSHIP AND CONTINUES TO ATTRACT SIGNIFICANT ADVERTISING REVENUE. DETAILS OF OTHER INVESTMENTS WILL BE SET OUT IN THE ANNUAL FINANCIAL STATEMENTS TO BE RELEASED SHORTLY. 3. OPERATIONS AND RESULTS FOR THE YEAR THE COMPANIES IN WHICH THE GROUP HAS INVESTED CONTINUE TO OFFER EXCITING PROSPECTS IN THEIR FIELDS. THE INVESTMENTS ARE CONSTANTLY REVIEWED AND NEW ONES SOUGHT TO COMPLEMENT THEM. THE DIRECTORS ARE CONFIDENT THAT THE GROUP WILL CONTINUE TO DELIVER SATISFACTORY GROWTH. EARNINGS PER SHARE INCORPORATES ONLY THE RESULTS OF THOSE COMPANIES’ EQUITY ACCOUNTED TOGETHER WITH INTEREST AND DIVIDENDS RECEIVED FROM INVESTMENTS. ACCORDINGLY, EARNINGS PER SHARE IS NOT INDICATIVE OF THE PERFORMANCE OF ALL THE UNDERLYING COMPANIES IN WHICH INVESTMENTS ARE HELD. THE NON-RECURRING ITEMS ARE ATTRIBUTABLE TO THE UNBUNDLING OF SAFLIFE AND THE SALE OF CERTAIN NON-CORE ASSETS UNBUNDLED FROM SAFLIFE. YOUR DIRECTORS ARE SATISFIED THAT THE COMPANIES IN WHICH THE GROUP OWNS STRATEGIC STAKES WILL PROSPER IN THE YEARS AHEAD. 4. DIVIDENDS THE DIRECTORS HAVE DECIDED NOT TO DECLARE A DIVIDEND FOR THE YEAR ENDED 31 MARCH 1999. THE COMPANY REQUIRES ITS CASH RESOURCES FOR FURTHER INVESTMENTS. PAYMENT OF A DIVIDEND WILL BE CONSIDERED IN FUTURE YEARS OUT OF DIVIDENDS RECEIVED BY THE COMPANY FROM ITS INVESTMENTS WHEN CIRCUMSTANCES WARRANT. 5. PROSPECTS FOR THE FUTURE THE PROSPECTS FOR THE GROUP OVER THE COMING MONTHS REMAIN PROMISING. THE KEY FOCUS OF THE GROUP REMAINS CONCENTRATED ON THE EXPANSION AND CONSOLIDATION OF ITS INTERESTS IN THE MEDIA, BROADCASTING, INFORMATION TECHNOLOGY, FINANCIAL SERVICES AS WELL AS GAMING AND ENTERTAINMENT SECTORS. WITH PROSPECTS FOR GROWTH IN THE ECONOMY LOOKING BETTER, THE GROUP REMAINS CONFIDENT THAT INVESTMENT OPPORTUNITIES THAT MEET ITS INVESTMENT CRITERIA WILL CONTINUE TO PRESENT THEMSELVES.

Source: HCI