OVERVIEW OF THE YEAR TO 31 MARCH 2004

During the year under review, e.tv encountered tough trading conditions in a very competitive market. e.tv consolidated its market position as the second largest free-to-air television broadcaster in South Africa.

Its 24-hour audience market share is about 25% on average and its prime time market share is between 20% and 22% on average. Continued revenue growth and the curtailment of operating expenses have enabled e.tv to record its first operating profit since inception.

Revenue increased by a satisfying 26% year-on-year.

e.tv had sufficient cash funds at its financial year-end on 31 March 2004 and no further shareholder funding is envisaged.

THE FUTURE

In an ever-increasing competitive market, e.tv’s key challenge will be to increase revenue market share, whilst maintaining an efficient cost-effective infrastructure.

e.tv has strengthened its forthcoming programme schedule and increased its news capacity. More new programming, with a strong local bias, will be introduced during the course of the year.

The strengthening of the programming schedule is expected to impact positively on audience numbers and commercial performance during the latter half of 2004.

SAIL Group Limited (SAIL) operates as two business units: SAIL Sport and Entertainment (SSE), which creates and manages sponsorships and events on behalf of South African corporates, and Sports Rights and Brands Commercialisation, which focuses on adding value to sports franchises and, in some cases, invests in them.

This follows on its 2003 restructuring, when the company divested of non-core activities and started focusing on local opportunities. SAIL delivered on both its strategic objectives – to generate profits and to increase its client base.

OVERVIEW OF THE YEAR TO 31 DECEMBER 2003

The 2003 results demonstrated both a return to profitability and a reduction in gearing. Revenue increased by only 1%, mainly as a result of SAIL’s disposal of non-core operations. Earnings before finance costs increased by 91% to R17.3 million.

Resultant headline earnings of R9.8 million (2002: loss of R13.4 million) translated into headline earnings per share of 3.52 cents (2002: loss of 4.91 cents per share).

R41.2 million of borrowings were repaid and SAIL closed the financial year to 31 December 2003 with net positive cash of R0.2 million compared to a net overdraft of R8.7 million in 2002. Net cash generated by operations increased by 223% to R39.0 million (2002: R12.1 million) as the restructuring paid off.

On a comparable basis, SSE delivered 21% revenue growth: the result of increased business with existing clients as well as the recruitment of new clients. The investments in sports brands started to contribute positive cash flows exceeding R8.7 million in 2003. The bulk of these were from Western Province and the Blue Bulls, whose revenue increased by 45% in 2003.

In a black economic empowerment transaction 50% plus one share of SSE was sold to the investment arm of SACTWU. The underlying structures of the transaction will enable SACTWU to convert, within five years, its shareholding to a 25% stake in SAIL.

INTERIM RESULTS TO 30 JUNE 2004

The interim results reflect that the benefits of the restructuring implemented during 2003 have materialised. Earnings before net finance costs increased by 171% to R9.3 million on revenues, which increased by only 3.8%. The net cash position has improved to R12.4 million, compared to a cash neutral position at 31 December 2003.

THE FUTURE

SAIL’s focus is on maintaining the benefits of the restructuring, retaining and attracting new clients, and a further strengthening of its financial position.