ANNUAL REPORT 2002
   
   
Annual financial statements
 
 
Consolidated
 
 
 
 
 
   
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
FOR THE FIFTEEN MONTHS ENDED 30 JUNE 2002
   
 
1.
PROPERTY, PLANT AND EQUIPMENT    
       
2002
2001
Accumulated
Net
Accumulated
Net
Cost
depreciation
value
Cost
depreciation
value
R million
R million
R million
R million
R million
R million
   
Leasehold      
 improvements 1 * 1 1 * 1
Machinery and      
 equipment 2 2 * 2 2 *
 
3 2 1 3 2 1
 
     
* Amounts smaller than R500 000
        
           
        2002 2001
Depreciation rates are as follows:
     % %
         
Leasehold improvements
     5 ­ 10 5 ­ 10
Machinery and equipment
     162/3 ­ 331/3 162/3 ­ 331/3
           
 
           
2. GOODWILL AND PATENTS
 
2002
2001
Cost or
Accumulated
Net
Cost or
Accumulated
Net
valuation
amortisation
value
valuation
amortisation
value
R million
R million
R million
R million
R million
R million
   
Goodwill 162 25 137 136 4 132
Patents * * * * * *
 
162 25 137 136 4 132
 
   
 
  2002 2001

Amotisation periods are as follows:

Years Years
   
Goodwill 7 20
Patents 10 10
   
  Existing goodwill is amortised over its estimated useful life of seven years. This represents a change in accounting estimate as goodwill was previously amortised over twenty years. This change in accounting estimate increased the amortisation expense by R21 million for the period under review. It had no effect on taxable income or headline earnings.
   
 
Reconciliation of carrying value at the        
beginning and end of the period
Goodwill 
Patents
2002 
2001 
R million 
R million
R million 
R million 
 
Balances at the beginning of the period 132  * 132  * 
Additions 71  * 71  136 
Disposals (14) ­ (14) ­ 
Impairment (21) ­ (21) ­ 
Amortisation (31) * (31) (4)
 
Balances at the end of the period 137  * 137 132 
 
   
  * Amounts smaller than R500 000
 
   
3. INVESTMENTS ­ ASSOCIATED COMPANIES
  (Annexures B & C)
 
2002   2001  
Listed Unlisted Total Listed Unlisted Total
R million R million R million R million R million R million
 
Shares – at cost after
     allowing for goodwill 54 5 097 5 151 12 3 241 3 253
Equity adjustment 78 1 077 1 155 1 864 865
 
Carrying value 132 6 174 6 306 13 4 105 4 118
Long-term loans ­ 145 145 ­ 145 145
132 6 319 6 451 13 4 250 4 263
 
Market value of        
     listed investments 107 107 107 107
Directors' valuation of
     unlisted investments 10 189 10 189 9 934 9 934
 
Market value and
     directors' valuation 107 10 189 10 296 107 9 934 10 041
 
Excess of market value and            
     directors'valuation over the            
     book value of investments            
     and appropriate goodwill:            
    – attributable to own      members    

3 718

    5 659
     
   
  In prior years the valuations of the unlisted investments were done internally on a conservative basis. The 30 June 2002 valuations of some of those investments were however based on the opinions of independent professional experts who were also used to perform capital gains tax valuations.
   
  R16 million (31 March 2001: RNil) of the long-term loans referred to above, is subordinated for the benefit of third parties.
 
     
  2002  2001
  R million  R million
 
Reconciliation of carrying value at the beginning and    
end of the period    
Carrying value at the beginning of the period 4118  1245 
Prior year adjustment –   2 337 
Exchange rate differences on translation of carrying value     at the beginning of the period to year-end rate on:  
    Net cost 1 845   – 
    Equity adjustment 73   76 
Equity of associated companies retained 314   413 
    Share of net profit of associated companies 386   466 
    Dividends (85) (66)
    Exchange rate differences on translation between  
    average rate and year-end rates 13   13 
Equity accounted movements on reserves (97) ­ 
Additions to investments 65   36 
Disposals (18) ­ 
Impairments (2) ­ 
Other movements 8   11 
 
Carrying value at the end of the period 6 306   4 118 
 
Amount of the share in net profit after exceptional items    
     and amortisation, retained by associated companies    
     that has been accounted for from unaudited interim    
     reports and management reports 61   1 
 
     
  The accounting policies of associated companies do not necessarily correspond with those of the Company. No adjustments are made as the effect is not material.
 
   
4. INVESTMENTS ­ OTHER
  (Annexure B)
 
2002   2001  
Listed Unlisted Total Listed Unlisted Total
R million R million R million R million R million R million
 
Shares ­ at cost less amounts
    written off 1 403 30 1 433 1 197 32 1 229
Loans 303 149 452 ­ 206 206
1 706 179 1 885 1 197 238 1 435
 
Market value of listed
            
     investments
 2 606 2 606 1 808   1 808
Directors' valuation of unlisted
     
     investments and loans 179 179 238 238
 
Market value and directors'
     valuation 2 606 179 2 785 1 808 238 2 046
 
Excess of market value and      
     directors' valuation over            
     the book value of      
     investments and            
     appropriate goodwill:      

     - attributable to own
       members

900     611
     
   
 
   
5. INVENTORIES
 
  2002 2001
  R million R million
 
Raw materials 1 1
Finished products 2 1
Work in progress 1 *
 
  4 2
 
* Amount smaller than R500 000    
     
  A notarial bond of R1 million (31 March 2001: R1 million) over inventory serves
as security for the bank overdrafts. (Refer to note 9)
   
 
   
6. TRADE AND OTHER RECEIVABLES
 
     
Trade and other receivables 50 240
 
  Trade debtors to the amount of R4 million (31 March 2001: R4 million)
are ceded to the bank as security for the bank overdrafts.
(Refer to note 9)
   
 
   
7. SHARE CAPITAL
   
 
Authorised    
512 493 650 Ordinary shares of 1 cent each 5.1 5.1
 40 506 352  B ordinary shares of 10 cents each 4.1 4.1
 
  9.2 9.2
 
Issued    
486 493 650 Ordinary shares of 1 cent each 4.9 4.9
 35 506 352  B ordinary shares of 10 cents each 3.5 3.5
 
  8.4 8.4
 
Each ordinary share has one vote.    
Each B ordinary share has ten votes.    
  Number  Number
  of shares  of shares
 
Shares in issue    
– Ordinary shares of 1 cent each 486 493 650  486 493 650
– Unlisted B ordinary shares of 10 cents each 35 506 352  35 506 352
 
Total shares in issue 522 000 002  522 000 002
– Shares held in treasury (ordinary shares of 1 cent each) (7 400 000) ­
 
  514 600 002  522 000 002
 
     
The unissued capital of the Company consists of 26 000 000 ordinary shares and
5 000 000 B ordinary shares that have both been reserved for the VenFin Share Scheme. At a general meeting, the Company has placed these shares under the control of the Board of Directors of the Company as a general authority in terms of section 221(2) of the Companies Act, 1973 (Act 61 of 1973), as amended (the Act), subject to the provisions of the Act and the Rules and Requirements of the JSE until the next Annual General Meeting of the Company, for allotment and issue to such persons and on such conditions as the directors may deem fit.
     
The present position of the VenFin Share Scheme    
is as follows:    
  Average offer Number
  price (Rand) of shares
 
Ordinary shares offered and accepted:    
Previous financial year 20.25 1 007 407
Current financial period 16.10 6 627 272
 
Total accepted on 30 June 2002 16.64 7 634 679
 
     
Details in respect of the share scheme and the current year's offers are disclosed in the Report of the Board of Directors.
     
Treasury shares    
During the period under review VenFin's wholly-owned subsidiary, VenFin Securities (Proprietary) Limited, acquired 7 400 000 ordinary shares of VenFin for a total amount of R137 million.
   
8. RESERVES
 
  2002 2001
  R million R million
 
(Also refer to the statement of changes in equity)  
   
8.1 Reserves
 
  Included in general capital reserves are:
   
       Statutory non-distributable reserves
72 50
 
8.2 Included in the respective reserves are reserves arising on
      exchange rate translation.
 
  Composition:
 
General Equity Unappro-
capital accounted priated 2002 2001
reserves reserves profit Total Total
R million R million R million R million R million
 
Balances at 1 April 297  101 236  634 399
Exchange rate adjustments
     during the period 2 107  73 116  2 296 235
Transfer of equity adjustments 13 (13) ­ ­
 
Balances at 30 June 2 404  187 339  2 930 634