REPORT OF THE BOARD OF DIRECTORS

FOR THE YEAR ENDED 31 MARCH 2001

The Board has pleasure in reporting on the activities and financial results of your group for the year under review.

   
VenFin was listed in its present composition for the first time on the JSE Securities Exchange South Africa (JSE) on 26 September 2000. The consolidated annual financial report for the year ended 31 March 2001 represents its maiden financial year.

The restructuring of Rembrandt Group Limited (Rembrandt) was approved by the shareholders at an Annual General Meeting of Rembrandt held on 21 September 2000.

In terms of the restructuring Rembrandt's underlying interests were re-organised into two separate companies, namely VenFin and Remgro, with effect from 1 April 2000. VenFin consists mainly of Rembrandt's telecommunication and technology interests. The share capital of VenFin has been restructured to include a new class of unlisted B ordinary shares, which were issued to Rembrandt Trust (Pty) Limited.

VenFin Limited is an investment holding company. The group derives its income mainly from equity accounted income of associated companies in which VenFin invested. Interest is also earned on cash resources.

The associated companies' operating activities are mainly spread over the telecommunications and technology interests. The biggest portion of the individual investments are in South Africa, but a substantial investment which is held abroad, is the one-third interest in R&V Holdings Limited (R&V). The other two-thirds are held by Compagnie Financière Richemont (Richemont).

The pro forma comparative figures in the income statement and balance sheet for the year ended
31 March 2000, represent the figures of Rembrandt after adjustments have been made for investments transferred to Remgro in terms of the restructuring and are based on the audited annual financial statements of Rembrandt. Pro forma comparative figures are not available in every instance as VenFin in its present form only came into being on 1 April 2000.

Changes in accounting policy

The accounting policy in respect of accounting for goodwill has been changed to comply with the amended South African Statement of Generally Accepted Accounting Practice in respect of amortisation of goodwill
(AC 131).

Goodwill is being accounted for in the balance sheet since 1 April 2000 and amortised over not more than
20 years using the straight-line method. The carrying value of goodwill is reviewed annually and written down in respect of a permanent impairment if deemed necessary. All goodwill that arose prior to 1 April 2000, was fully written off against reserves and the pro forma comparative figures for the year ended 31 March 2000 have therefore not been restated.

VenFin is party to shareholders' agreements in respect of almost all its investments. These agreements regulate the important business aspects of the investments.

VenFin is continually involved in evaluating potential investments and acquisitions, both within South Africa and abroad. VenFin focuses on high growth technology investments which possess proprietary intellectual property with international potential.

Luna Corporation Limited (Luna)

VenFin made a further investment of R70.9 million in Luna during April 2000. On 31 March 2001 the interest was 35.9%. Luna is the holding company of Southern African Investments Limited (SAIL), which is listed on the JSE. Luna holds 83.4% of SAIL's shares.

ETV is the only independent free-to-air television broadcaster in South Africa. During April 2000 VenFin made an indirect loan of R281.8 million to Sabido (Proprietary) Limited (Sabido). If this loan had been converted into equity in Sabido, the holding company of ETV, VenFin's indirect interest in ETV would have been 26% and would have been accounted for as an investment in an associated company. On this basis, VenFin's attributable share of the loss of ETV for the year to 31 March 2001 would have amounted to R77.1 million. Since the intended conversion of this loan to equity is subject to the approval of the Independent Communication Authority of South Africa, this amount has been provided against the loan as an exceptional item.

During the year VenFin acquired an interest of 17.1% in Intervid SA at a cost of R57 million.

Tracker issued further shares during December 2000 to a third party for cash, resulting in VenFin's interest being diluted from 42.9% to 32.1%.

Further investments were made in Inala during the year at a cost of R6 million. On 31 March 2001 the interest was 22.9%.

On 2 July 2000 VenFin acquired an interest of 14.1% in eCompany at a cost of R25 million.

VenFin acquired a 32.4% interest in Fundamo at a cost of R14 million during October 2000.

R&V Holdings Limited (R&V)

R&V made the following investments during the year:

  During June 2000 a 5% interest was acquired in Camus at a cost of £1.5 million with the option of
  increasing it to 50% at no cost provided that R&V, with the initiative of VenFin, succeeds in increasing the   value of Camus to certain agreed levels by exploiting the   technology and its application.

  Further interests, independent of the above-mentioned, were acquired, 5% at a cost of $5.2 million during
  July 2000 and 8.6% at a cost of $10.3 million during September 2000.

  The discussions with third parties regarding the use of the technology developed by Camus has been   suspended due to the inability of Camus to apply the technology in its current format on a broad
  commercial basis. Further work is now being conducted to validate and develop the technology in order to
  find wide commercial applications for it.

RGH, which is a wholly-owned subsidiary, made the following investments during the year:
  

  During December 2000 a loan of $1.5 million was made to Certus, which is convertible
  into equity based on certain capitalisation events.

Subsequent to the year-end:

During June 2001 VenFin acquired a further 1 000 000 shares in Intervid SA at a cost of R6 million.
.

During the year the trustees of the VenFin Share Scheme offered to participants non-issued ordinary shares which were reserved for the scheme.

The details of the offer are as follows:

Participants have no right to delivery, voting or dividends on shares before payment has been made. Participants have the option to pay on a later date with the resultant deferment of rights. Payment must, however, be made within ten years.

Some adjustments to the scheme are proposed and are included in an alternative set of rules which will be available for perusal before and at the Annual General Meeting.

Resolutions to implement these amendments are included in the notice of the Annual General Meeting.

An agreement has been reached with a service company, M&I Management Services (Pty) Limited (M&I), to render management and support services to VenFin. The shareholders of M&I are employees who own all the issued ordinary shares. Rembrandt Trust (Pty) Limited owns all the "A" ordinary shares of M&I. The "A" ordinary shares have only voting rights but they have no rights to the income or assets of M&I.

   
VenFin pays fees to M&I which cover the costs of the management of VenFin. These fees are calculated at a maximum of 0.463% per year of the market capitalisation of VenFin, calculated on a monthly average basis. This percentage may not be exceeded without the approval of 75% of all classes of shareholders of VenFin. The fees are payable at the end of each month. For the past year, the fees amounted to R31.9 million, or 0.307% of the average market capitalisation, and are explained in note 12 to the annual financial statements.

Rembrandt Trust (Proprietary) Limited holds all the issued unlisted B ordinary shares of the Company and is entitled to 42.2% of the total votes.

Particulars of subsidiary companies, associated companies and other investments are disclosed in
Annexures A and B.

After the implementation of the restructuring of the former Rembrandt Group, the Board of Directors was reconstituted in accordance with the announcement contained in the restructuring circular to shareholders dated 30 August 2000.

Refer to Directors for the names of the directors.

   
In terms of the provisions of the Articles of Association, Messrs P E Beyers and J W Dreyer retire from the Board. These directors are eligible and offer themselves for re-election.

In order to align the interests of Management with that of the Company in respect of risk taken during investment decisions by Management, VenFin decided to implement a co-investment policy. In terms thereof Management is forced to co-invest with the Company in any investment made after 26 September 2000 or where the interest in any investment made before that date is increased.

   
The CO-investment policy requires that Management contribute 2.5% of the total investment, subject to a minimum contribution of R100 000 and a maximum contribution of R5 million. During the year under review the policy was followed in each instance.

At 31 March 2001 the aggregate of the direct and indirect interests of the Directors in the issued share capital of the Company amounted to 0.08%.

Refer to the analysis of shareholders for an analysis of the directors' interests in the issued share capital of the Company.

The Board recommends that directors' fees for services rendered during the past financial year be fixed at
R150 000.

It is recommended that a general authority be granted to the Board for it to acquire, should circumstances warrant it, the Company's own shares and to approve the acquisition of shares in the Company by any of its subsidiaries, subject to the provisions of the Companies Act 61 of 1973, as amended, and the Listing Requirements of the JSE.

Special resolutions to this effect are incorporated in the notice of the Annual General Meeting.

The Board of Directors recommends that the end of the financial year of the Company should be changed from 31 March to 30 June.

  
The Company is an investment company with investments in various companies in predominantly the technology and telecommunications sectors. The change is necessary to align the financial year-end of the Company with that of its various underlying investments to ensure that the Company's results are a more accurate and reliable reflection of the results of its underlying investments.

An ordinary resolution to this effect is incorporated in the notice of the Annual General Meeting.

No dividend is proposed for the year to 31 March 2001.

Chairman                                                                  Chief Executive Officer/Deputy Chairman

20 June 2001