INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2003 (UNAUDITED)
   
   
   
   
 
  COMMENTS
   
  ACCOUNTING POLICIES
  The interim results have been prepared in accordance with accounting statement AC 127 (Interim financial reporting), the Listing Requirements of the JSE Securities Exchange South Africa and the South African Companies Act.
   
  The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 30 June 2002, with the exception of accounting for financial instruments, and conform with South African Statements of Generally Accepted Accounting Practice.
   
  CHANGE IN ACCOUNTING POLICIES
  With effect from 1 July 2002 VenFin adopted AC 133 (Financial Instruments: Recognition and Measurement). In accordance with the transitional provisions of AC 133, VenFin recorded a cumulative adjustment gain of R808 million as an opening balance adjustment to retained earnings in order to recognise the difference between the carrying values and fair values of financial instruments at 1 July 2002.
   
  Due to the fact that the comparative figures are not restated under the transitional provisions of AC 133, certain items are not directly comparable on a line-for-line basis with that of prior financial periods.
   
  CHANGE IN YEAR-END
  As previously reported, VenFin changed its year-end from 31 March to 30 June. Therefore the results for the comparative six months period ended 30 September 2001 are not directly comparable with that for the six months ended 31 December 2002.
   
  PRO FORMA HEADLINE EARNINGS
  In order to achieve a more meaningful comparison with the prior periods, pro forma headline earnings are presented for the current period.
   
  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 of South Africa (ICASA) 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.
   
  Due to the implementation of AC 133, and the fact that ICASA has not yet approved the conversion of the loan to equity, VenFin has valued the loan in accordance with the provisions of AC 133 and included the adjustment in headline earnings. Due to this change in the accounting treatment of the loan to e-tv, the headline earnings for the period under review corresponds with the pro forma headline earnings.
   
  FINANCIAL REVIEW OF INVESTMENTS
  The headline earnings per share for the six months increased by 26.0% from 46.6 cents to 58.7 cents, although it is not directly comparable due to the change in year-end. The pro forma headline earnings per share for the six months increased by
39.8% from 42.0 cents to 58.7 cents.
   
  The group's main sources of earnings were: Vodacom Group (Proprietary) Limited (Vodacom) (13.5% interest for the full period), which contributed approximately 55% to group headline earnings, the associated company R&V Holdings Limited (R&V) (33.3% interest), which contributed over 31% to headline earnings, and interest received from other cash resources.
   
  Net interest received on cash in South Africa and abroad amounted to R53 million
(30 September 2001: R44 million) in the six months under review.
   
  Other investments performed as expected in difficult market conditions, with a headline loss of
R5 million (30 September 2001: R3 million profit). The majority of these investments is in an early development stage and expected to contribute to the group's earnings over the medium to long term.
   
  EXCHANGE RATE DIFFERENCES
  Negative exchange rate differences arising on the translation of offshore interests to SA rand at 31 December 2002 amounted to R807 million and were debited directly to reserves.
   
  INVESTMENTS
  The most significant changes to VenFin's investment portfolio for the six months ended
31 December 2002 were:
   
  FRS Financial Reporting Solutions (Proprietary) Limited (FRS)
During November 2002, VenFin invested a further R3 million in FRS. At 31 December 2002, the interest in FRS was 42.9%.
   
Fibalogic (Proprietary) Limited (Fibalogic)
VenFin sold its interest in Fibalogic on 30 September 2002. A capital surplus of R1 million was realised and is accounted for as an exceptional item.
   
Compagnie Financière Richemont AG (Richemont)
On 31 December 2002, VenFin exercised the put option acquired from Merrill Lynch International in respect of 51 858 000 Richemont depositary receipts held by VenFin ("the Richemont transaction"). The total cash proceeds realised by VenFin as a result of exercising the put option amounted to R945.2 million. A capital surplus of R348 million was realised and is accounted for as an exceptional item.
   
Vodacom
VenFin acquired from Hosken Consolidated Investments Limited (HCI) an additional 1.5% interest in Vodacom with effect from 31 December 2002 for a total consideration of R450 million.
The proceeds from the Richemont transaction were in part used to settle this amount.
At 31 December 2002, VenFin's interest in Vodacom was 15.0%.
   
Midi TV (Proprietary) Limited (e-tv)
During April 2000 VenFin granted an indirect, interest-free loan of R281.8 million to Sabido (Proprietary) Limited (Sabido), the holding company of e-tv. An additional R38.6 million was advanced to HCI for e-tv during the 2002 financial period. During January 2002, VenFin advanced a further loan of R280 million to HCI. This loan was interest-bearing and fully secured.
   
  During September 2002 R199.4 million of this interest-bearing loan was converted into an interest-free loan to HCI for e-tv. The balance of the loan was repaid on 31 December 2002.
If the interest-free loans to Sabido and HCI were to be converted into equity in Sabido on
31 December 2002, VenFin's indirect interest in e-tv would be 33.1%.
   
Idion Technology Holdings Limited (Idion)
During November 2002 VenFin invested R2.5 million in Idion. At 31 December 2002, VenFin's effective interest in Idion was 2.2%.
 
GenuOne Incorporated (GenuOne)
During the period under review an additional investment of $4 million was made in GenuOne.
At 31 December 2002, VenFin's effective interest in GenuOne was 37.8%.
   
Veritas Venture Partners (Cayman) L.P. (Veritas)
VenFin approved an investment of $1.5 million in VVP Fund II, L.P. of which $150 000 had been drawn at 30 June 2002. During the period under review an additional $150 000 was drawn.
   
  R&V
R&V, an associated company of VenFin, made the following investment during the period under review:
   
Dimension Data Holdings plc (Didata)
On 31 December 2002, R&V Technology Holdings Limited, a wholly-owned subsidiary of R&V, subscribed for a $100 million seven-year convertible bond issued by Didata. If converted, R&V will hold an equity interest of approximately 12.3% of the fully diluted share capital of Didata.
 
  Buy-back of VenFin shares
  During the period under review, VenFin's wholly-owned subsidiary, VenFin Securities (Proprietary) Limited, acquired an additional 750 000 ordinary VenFin shares for a total amount of R13.9 million. These shares, together with the 7 400 000 shares bought during the fifteen months ended 30 June 2002, are held as treasury shares. The 8 150 000 shares bought to date represent 1.7% of the issued ordinary shares of 1 cent each.
   
   
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