INTERIM REPORT FOR THE TWELVE MONTHS ENDED 31 MARCH 2002 (UNAUDITED)
   
   
   
   
  COMMENTS
 
 
ACCOUNTING POLICIES
  The interim report is prepared on the historical cost basis in accordance with South African Statements of Generally Accepted Accounting Practice and incorporates policies which have been consistently applied and correspond with those of the previous financial report in all material respects.
   
  CHANGE IN YEAR-END
  The results for the twelve months, which ended on 31 March 2002, have not been audited as the Group changed its year-end from 31 March to 30 June. The change was necessary to enable the Group's service company, M&I Group Services (Pty) Limited, to deal with both VenFin Limited's and Remgro Limited's financial year-ends without incurring additional management costs by appointing additional financial staff.
   
  The Group will release audited results for the fifteen month period ended 30 June 2002.
   
  PRO FORMA HEADLINE EARNINGS
  Due to the material effect that the equity accounted results of e-tv will have on the results of VenFin if the Independent Communication Authority approves the conversion of the loan to equity, the pro forma headline earnings are presented on the basis that the attributable portion of e-tv's loss is accounted for as a loss in an associated company and not as an exceptional item.
   
  FINANCIAL REVIEW OF INVESTMENTS
  The headline earnings of the Group on a pro forma basis for the twelve months increased by 9.2% from 97.5 cents to 106.5 cents per share.
   
  The increase in earnings must be assessed taking the composition of the Group's earnings into account. This is discussed more fully below.
   
  The most important source of the Group's headline earnings for the past twelve months consists of the Group's share of the net income of Vodacom Group (Pty) Limited (Vodacom) (13.5% interest), income from R&V Holdings Limited (R&V) (33.3% interest) and interest received from other cash resources.
   
  Associated companies
 
Vodacom
  Vodacom again performed very well with a 36.9% increase in headline earnings to R2 447.9 million and an EBITDA margin (earnings before interest, tax, depreciation and amortisation) of 34.9%. The subscriber base on 31 March 2002 was as follows:
   
 
South Africa
6 556 820 
Tanzania
228 491 
Lesotho
56 549 
DRC
21 116 
 
 
6 862 976 
 
  R&V
  The income of R&V consists mainly of interest earned on cash and on the Alexander Forbes Limited bond.
   
  The decrease in the earnings of R&V is mainly attributable to lower interest received due to lower interest rates, less cash and non-recurring income earned in the previous year of R77 million.
   
  Cash resources
  The other main source of headline earnings consists of net interest received on cash in South Africa and abroad and amounted to R89.0 million (2001: R60.0 million) in the twelve months under review, in spite of lower average interest rates in South Africa and the redeployment of cash into new investments.
   
  Other investments
  The other investments performed satisfactorily in difficult market conditions, with a headline loss of R38.7 million (2001: R75.9 million). The majority of these investments are still in a development phase and will only contribute to the Group's earnings over the medium to long term.
   
  An analysis and detailed composition of the performance of the various investments appears in Annexures A and B.
   
  Exchange rate differences
  Positive exchange rate differences arising on translation of offshore assets to SA rand at 31 March 2002 amounted to R2 072 million and was credited directly to reserves. Based on current exchange rates at 29 May 2002 this would have only amounted to approximately R1 900 million increase in net asset value.
   
  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.
   
  A total of R1 007.5 million was invested during the twelve months, of which R377.1 million was invested in South Africa and R630.4 million abroad.
   
  The most important changes in VenFin's investment portfolio for the twelve months under review were as follows:
   
  GenuOne Incorporated (GenuOne)
  During the twelve months under review a further loan of $2.2 million was granted to Certus International Société Anonyme (Certus) in addition to an original loan of $1.5 million. The total amount was convertible into equity based on certain capitalisation events. A 30% interest in Certus was also bought from a third party for $1.5 million.
   
  During November 2001, Certus was acquired by GenuOne for shares in GenuOne. VenFin's total loan of $3.7 million in Certus was also converted into equity in GenuOne and an additional $2.5 million was invested in the newly merged entity. VenFin also holds warrants to invest a further $2.5 million in the merged entity, exercisable over three years. At 31 March 2002, VenFin's effective interest in GenuOne was 25%.
   
  GenuOne is an innovative provider of comprehensive brand security solutions and offers a fully integrated approach to the protection of intellectual property. Its technology and integration services maximise brand dominance and minimise counterfeiting, product diversion, licensing/royalty fraud and intellectual property theft in the physical world and, through the acquisition of Certus, on the Internet. GenuOne's authentication, tracking and control technologies combined with its integration services allow companies to monitor products throughout the world.
   
  ETV
  ETV is the only independent free-to-air television broadcaster in South Africa. During April 2000 VenFin granted an indirect, interest-free loan of R281.8 million to Sabido, the holding company of 
ETV An additional R38.6 million was advanced to Hosken Consolidated Investments Limited (HCI) for ETV during the twelve months under review. If these loans had been converted into equity in Sabido, VenFin's indirect interest in ETV would have been 26% and would have been accounted for as an investment in an associated company. Pro forma headline earnings are presented to account for the earnings after conversion to an associate. VenFin also advanced a further loan to HCI for R280 million on 7 January 2002 to buy Warner Brothers' interest in ETV and to meet other funding requirements of ETV This loan is interest-bearing and fully secured by HCI's interest in Vodacom.
   
  Psitek (Proprietary) Limited (Psitek)
  During December 2001, VenFin acquired an additional 12.4% of Psitek for R27.0 million. At 31 March 2002, the interest was 33.1%.
   
  Southern African Investments Limited (SAIL)
  VenFin had an interest of 35.9% in Luna Corporation Limited (Luna) at 31 March 2001. Luna was the holding company of SAIL which is listed on the JSE Securities Exchange South Africa. Luna's holding in SAIL was unbundled on 26 September 2001 and after the unbundling, VenFin held a direct interest of 30% in SAIL. SAIL acquired Vodacom Sport and Entertainment (Pty) Limited (VSE) from Vodacom during the twelve months and issued new shares to the management of VSE. SAIL, in co-operation with VenFin, also entered into an empowerment transaction with AKA Capital on 22 February 2002 in terms of which VenFin sold 20 million of its SAIL shares to AKA Capital. On 31 March 2002 VenFin held an interest of 19.5% in SAIL.
   
  Intervid Limited (Intervid RSA)
  During June 2001 VenFin acquired a further 1 000 000 shares in Intervid RSA at a cost of R6 million. At 31 March 2002, the interest in Intervid RSA was 17.5%.
   
  FRS Financial Reporting Solutions (Proprietary) Limited (FRS)
  The VenFin Board approved an investment of R20 million to acquire a 33.33% shareholding in FRS on 28 March 2001. This investment will be made in tranches when certain milestones are met by FRS. During July 2001 an investment of R6 million was made for an effective 18.4% interest. During October 2001, an additional R2 million was invested in FRS which brought VenFin's interest to 21.3%. Another R2 million was invested in January 2002. At 31 March 2002, the interest was 24.0%.
   
  FRS provides high quality financial reporting software solutions that are compliant with International Accounting Standards and industry-specific legislation governing financial reporting. FRS is actively involved in the development of XBRL® (eXtensible Business Reporting Language) which is a global initiative for the standardisation of electronic business reporting, and is the appointed representative of the XBRL® organisation in Africa.
   
  Veritas Venture Partners (Cayman) L.P. (Veritas)
  VenFin has approved the acquisition of an interest in V V P Fund II, LP for the sum of $1.5 million of which $150 000 has already been paid. V V P Fund II, LP is based in Israel and is a venture capital fund managed by Veritas. The fund invests in technology opportunities which originate in Israel.
   
  Fundamo (Proprietary) Limited (Fundamo)
  Through a further investment of R5.0 million, VenFin increased its interest in Fundamo to 41.6% during the twelve months under review.
   
  R&V
  R&V made the following investment during the twelve months under review:
 
   
Intervid International AG
  RFS Holdings Limited Jersey, a wholly-owned subsidiary of R&V, funded Intervid International during April 2001 in the sum of $50 million. The funding was effected by way of a loan which is compulsorily convertible into equity in Intervid International or Intervid RSA within four to six years from the date of advance. The percentage interest in Intervid International will depend on the performance of Intervid International (minimum interest of 30% and maximum interest of 50%).
   
  Buy-back of VenFin shares
  During March, VenFin's wholly-owned subsidiary, VenFin Securities (Pty) Limited, acquired 3 800 000 ordinary shares of VenFin for a total amount of R69.8 million. This transaction did not have a material effect on earnings or earnings per share.