Group annual results for the year ended 31 March 2002.

The following are the audited results of the group for the year ended 31 March 2002 together with comparative figures:


Year ended 31 March 2002 2001 R`000 R`000

Revenue 390,266 258,318

Operating loss (341,221) (312,727)

Net investment income 34,061 16,503

Share of associated companies profits 34,410 20,609

Investment surplus 18,813 10,946

Impairment of goodwill and investments (296,324) –

Loss before taxation (550,261) (264,669) Taxation 5,469 11,153

Loss before preference dividends (555,730) (275,822)

Preference dividends (45,561) (75,647)

Attributable to minorities 166,398 148,041

Loss attributable to ordinary shareholders (434,893) (203,428)

Reconciliation of headline loss

Loss attributable to ordinary shareholders (434,893) (203,428)

Adjusted for:

Investment surplus (18,813) (10,946)

Amortisation of goodwill 14,615 4,975

Profit on sale of assets (21)

Impairment of goodwill and investments 296,324 –

Headline loss (142,788) (209,399)

Loss per share (cents) Basic (115.9) (53.3)

Headline (38.0) (54.9)

Weighted average number of shares in issue (`000) 375,294 381,724

Actual number of shares in issue at end of year (`000) –

adjusted for treasury shares 367,530 389,588


31 March 2002 2001 R`000 R`000


Non current assets 2,618,524 3,113,070

Property, plant and equipment 84,484 67,931

Goodwill – 116,692

Deferred tax 49 –

Investments 2,533,991 2,928,447

Current assets 663,145 411,503

Total assets 3,281,669 3,524,573


Ordinary shareholders` equity 2,051,852 2,865,181

Minority shareholder interest 15,844 117,459

Non current liabilities and 743,903 114,455

preference shares Current liabilities 470,070 427,478

Total equity and liabilities 3,281,669 3,524,573

Net asset value per share 5.58 7.35


Year ended 31 March 2002 2001 R`000 R`000

Cash flows from operating activities (396,623) (28,948)

Cash flows from investing activities (20,876) (82,945)

Cash flows from financing activities. 541,779 114,013

Increase in cash and cash equivalents 124,280 2,120

Cash and cash equivalents

At beginning of year (24,988) (27,108)

At end of year 99,292 (24,988)


Share Share Accumulated Capital Premium NDR Loss Total R`000 R`000 R`000 R`000 R`000

Balances 1 April 2000 92,760 1,015,356 2,344,249 (52,976) 3,399,389

Share capital and premium Shares issued 4,637 94,131 98,768

Issue costs (324) (324)

Current Operations

Loss attributable to ordinary share holders (203,428) (203,428)

Transfer on realisation of investments 10,946 (10,946) –

Revaluation Current revaluation deficit (429,224) (429,224)

Balances 31 March 2001 97,397 1,109,163 1,925,971 (267,350) 2,865,181

Share capital and premium Shares issued 200 2,040 2,240

Shares repurchased and cancelled (3,205) (41,665) (44,870)

Share issue & cancellation costs (2,178) (2,178)

Treasury shares acquired by subsidiary (2,510) (30,934) (33,444)

Current Operations Loss attributable to ordinary shareholders (434,893) (434,893)

Transfer on realisation of investments 18,813 (18,813)

Revaluation Current revaluation deficit (300,184) (300,184)

Balances 31 March 2002 91,882 1,036,426 1,644,600 (721,056) 2,051,852


The preliminary report to shareholders is prepared on the historical cost basis modified by the revaluation of investments and conforms with Statements of South African Generally Accepted Accounting Practice. The accounting policies of the group have been consistently applied.

RESTATEMENT OF COMPARATIVE FIGURES Certain subsidiaries that were previously considered to be held for sale or subject to potential dilution have been reclassified, resulting in the full consolidation of their assets, liabilities and results of operations with those of the rest of the group. To aid comparability, the prior year figures have been restated. This has no effect on earnings per share for the prior year as the group`s share of losses had previously been accounted for.

REVIEW OF INVESTMENTS Telecommunications Vodacom Group (Pty) Ltd The group`s 5% interest in unlisted Vodacom Group (Pty) Ltd (“Vodacom”) remained unchanged during the year. Vodacom continued its exceptional performance showing strong growth in headline earnings of 37% to R 2,438m. Despite the entry of Cell-C into the local cellular market the company`s subscriber base continues to grow making Vodacom the leading cellular network operator on the African continent Media and Broadcasting Midi TV (Pty) Ltd (“e-TV”) 5p.m. – 11p.m. audience share of the channel has grown by an average of 45% for the year. Revenues over the same period increased some 58% bringing the ratio of revenue to audience more in line with expectations. The growth in general television adspend over the year was disappointing particularly after the September 11th events. The rapid decline of the rand against the US Dollar also adversely affected the station`s performance. Financial year 2003 ought to see audience share climb to an average of close to 20% and the accompanying growth in revenue should substantially reduce the operating losses of the station in the coming year. The station is expected to be cash positive from May 2003. e-TV has successfully negotiated the exit of Warner Bros. from the station subject to ICASA approval and has also suitably adjusted its program licencing arrangements for the period until October 2004. As previously announced this is not expected to have any negative effect on the station. HCI anticipates committing further resources to e-TV until its turnaround is effected. Regulatory difficulties in relation to ICASA remain outstanding and HCI remains committed to resolving the matter amicably with ICASA. Gaming Progress towards the commencement of business in the route business was delayed by litigation. This litigation has been settled / determined and the business is again advancing slowly. We anticipate the roll out will only effectively commence towards the end of this financial year. The group has converted about half of it debts with On-line Gaming Systems Ltd (“OGAM”) to ordinary equity. This conversion has given the group 81% of the ordinary equity. The investment remains speculative and the company continues to lose money. Nevertheless your directors believe there is great potential in internet gaming and that this company has reasonable prospects of concluding contracts which over time will make OGAM profitable. Financial services Mettle Limited Despite the adverse market conditions in which Mettle Ltd (“Mettle”) operated during the year the company has performed well with growth in headline earnings of 37%. The company`s return on equity remains in excess of 30% and we believe this ratio can be sustained going forward. Your directors are confident of Mettle`s ability to respond to changes in the small cap sector and to deliver long-term growth to investors. This view was supported by the actions of institutional investors who rejected the proposed delisting of Mettle.


The business operations of HCI include the making of investments in opportunities as identified by the board of directors and to add value to these investments over time. As such HCI has consciously established itself and pursued an investment policy in terms of which it has endeavoured to maintain significant equity and capital participation in entrepreneurially-run companies with significant growth potential. The investments are constantly reviewed and new ones sought to complement them. Your directors are confident that the group will deliver satisfactory growth in the future. The group reported a headline loss per share of 38 cents compared with the headline loss per share of 54.9 cents for the prior year which represents an improvement of 31%. The largest contributor to the headline loss per share is the group`s share of the losses of e-TV after adjusting for minorities. Income from the group`s investment in associate companies contributed R34,4m. The investment surplus arose from the sale of certain non- core investments. The impairment of goodwill and investments relates principally to goodwill arising on e-TV and the provision for the diminution in the value of the group`s offshore gaming interests. In terms of a specific buyback, the company repurchased and cancelled 12 820 000 shares during the year under review. Details of this transaction were included in a circular to shareholders dated 7 August 2001.

DISTRIBUTIONS TO SHAREHOLDERS The directors have decided not to declare a dividend for the year ended 31 March 2002. The company requires its cash for further investments.


Messrs Arnold Jack Shapiro and Amon Malencane Ntuli have been appointed as non-executive directors of the company with effect from 19 June 2002.

PROSPECTS FOR THE FUTURE The prospects for the group over the next year remain concentrated on consolidating and extracting value from its interests in the various sectors invested. The group has invested in certain start-up businesses that have significant potential. Your directors are confident that the group will deliver satisfactory returns in the near future.

For and behalf on the board of directors

MA Golding Chairman

JA Copelyn Chief Executive Officer

24 June 2002