rebhold ann report acro - sharedata

C O N T E N T S

1 Profile and Mission

2 Financial Highlights

4 Group Structure

6 Board of Directors

7 Directorate and Administration

8 Executive Chairman’s Review

12 Chief Executive’s Review

14 Financial Review

16 Review of Operations

29 Human Resources

30 Corporate Governance

32 Value Added Statement

33 Report of the Independent Auditors

33 Directors’ Approval

34 Directors’ Report

36 Accounting Policies

38 Income Statements

39 Balance Sheets

40 Cash Flow Statements

41 Statements of Changes in Equity

42 Notes to the Financial Statements

56 Principal Subsidiaries

58 Notice to Members

Analysis of Shareholders

Proxy Form - Loose Leaf

P R O F I L E A N D M I S S I O N

Rebhold Limited is an investment holding companylisted on the JSE Securities Exchange South Africa

in the Industrial-Services sector.The strategy of the group is to be invested in businesses

covering a range of services, and wholesale anddistribution activities, extending country wide.

MISSIONRebhold’s mission is to enhance shareholder wealth bybuilding an integrated, niche-based, services, wholesale anddistribution group by:

• adding value and achieving rationalisation and otherbenefits through the integration of existing and acquiredoperations;

• acquiring businesses which dominate their niche markets,realise strong cash flows and have dynamic entrepreneurialmanagement who are willing to commit themselves on along term basis to the achievement of the group’sobjectives; and

• taking advantage of new opportunities in the group’schosen areas of activity.

1

Tu r n o v e r

96 97 98 99 00

5 000

4 000

3 000

2 000

1 000

0

R’m

illi

ons

P r o f i t f r o m o p e r a t i o n s300

240

180

120

60

0

R’m

illi

ons

Headline earnings per share

96 97 98 99 00

150

120

90

60

30

0

cen

ts

D i v i d e n d s p e r s h a r e25

20

15

10

5

0

cen

ts

96 97 98 99 00

96 97 98 99 00

A p p l i c a t i o n o f v a l u e a d d e d(Year ended 30 June 2000)

Employee s 39%

P rovider s o f

capita l 2%

Reinvested in the g roup 34%

Government 25%

Employees 39%

Providers of capital 2%

Reinvested in the group 34%

A p p l i c a t i o n o f v a l u e a d d e d(Year ended 30 June 1999)

Government 15%Employee s 20%

P rovider s o f

capita l 3%

Reinvested in the g roup 62%

Government 15%

Employees 20%

Providers of capital 3%

Reinvested in the group 62%

Government 25%

H e a d l i n e a t t r i b u t a b l ei n c o m e

96 97 98 99 00

300

240

180

120

60

0

R’m

illi

ons

H e a d l i n e n e t i n c o m ea f t e r t a x a t i o n

R’m

illi

ons

96 97 98 99 00

300

240

180

120

60

0

F I N A N C I A L H I G H L I G H T S

2

F I N A N C I A L H I G H L I G H T S( c o n t i n u e d )

2000 1999 1998 1997 1996

Turnover (R’000) 4 741 490 3 374 182 1 471 250 870 025 532 033

Profit from operations (R’000) 307 241 190 036 96 241 50 107 24 801

Net income after taxation (R’000) 292 203 520 292 95 762 38 105 20 814

Headline net income after taxation (R’000) 292 203 211 673 95 762 38 105 20 814

Headline attributable income (R’000) 261 273 191 500 95 508 37 852 20 561

Headline earnings per share (cents) 144,6 110,2 64,9 33,1 17,1

Dividend per share (cents) 20,0 17,0 13,0 8,0 -

Net tangible asset value per share (cents) (Note 2) 215,9 326,4 172,9 102,0 59,5

Number of employees 30 521 5 579 3 243 2 152 1 166

Number of shares in issue (’000) 180 630 173 818 163 070 133 215 120 000

Market capitalisation (30 June) (R’000) 2 890 080 3 389 451 3 995 215 1 478 686 264 000

Annual compound growth rate in headline

earnings per share since 1995 79% 94% 103% 106% 119%

Operating margin 6,5% 5,6% 6,5% 5,8% 4,7%

Notes1 Results for 1996 are the pro forma results contained in the Rebhold Limited Prospectus dated 4 October 1996.

2 Net tangible asset value per share is calculated on the basis that amounts due to vendors will be settled by the issue of Rebhold shares in terms of existing acquisition agreements.

3

(Note 1)

G R O U P S T R U C T U R E

SERVICES DIVISION

Facilities Management

Management of a wide range of technical and support services on an

outsourced basis and in a joint venture with WS Atkins plc.

Security Services

A comprehensive range of security solutions provided nationally.

Mining and Related Services

Provision of non-core services to the mining industry on an

outsourced basis.

Food Services

Catering and allied services to the corporate and public sectors,

including franchising.

Freight Forwarding Services

Freight forwarding and clearing agents based in Johannesburg,

Cape Town and Durban.

Whole sa le /Dist r ibut ion 76%Ser vice s 24%

Whole sa le /Dist r ibut ion Ser vi ce s

Tu r n ov e r(Year ended 30 June 2000)


Whole sa le /Dist r ibut ionSer vi ce s

Tu r n ov e r(Year ended 30 June 1999)

4

Cash and Carry

Wholesale cash and carry operating under the names Jumbo,

Browns and Weirs, supplying a range of fast-moving consumer goods

to the retail and informal sectors in urban and rural areas.

Distribution

Distribution of a wide range of products to the hospitality, catering

and retail markets.

Beverages

Distribution and processing of a range of alcoholic and non-alcoholic

beverages.

WHOLESALE/DISTRIB U T ION DIVISION


Whole sa le /Dist r ibut ion

Ser vi ce s

Pro f i t f ro m O p e r a t i o n s(Year ended 30 June 1999)


Whole sa le /Dist r ibut ion

Ser vi ce s

Pro f i t f ro m O p e r a t i o n s(Year ended 30 June 2000)

G R O U P S T R U C T U R E( c o n t i n u e d )

5

B O A R D O F D I R E C T O R S

From left to rightStanding:

Farrel Cohen

Executive Director

Cash and Carry

Brian McIntyre

Executive Director

Beverages

Anthony Haggie

Executive Director

Beverages

Carl Stein † #

Non-Executive Director

Senior partner at Werksmans Attorneys

John Bishop

Executive Director

Security Services

Steve Seetha

Executive Director

Cash and Carry

Paul Nkuna


Chairman of the Mineworkers

Investment Company (Proprietary) Limited

Seated:

Brett Till

Financial Director

Mackie Brodie † #


Cyril Ramaphosa

Executive Director

Executive Chairman of Rebserve Limited

Stephen Levenberg #

Executive Chairman

Jacques Kempen †

Chief Executive

† member of the audit committee

# member of the remuneration committee

6

D I R E C T O R A T E A N D A D M I N I S T R A T I O N

ADMINISTRATION

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3rd Floor

3 Merchant Place

1 Fredman Drive

Sandton, 2146

P O Box 1639

Rivonia, 2128

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AUDITORS

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ATTORNEYS

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COMPANY SECRETARY

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3rd Floor

3 Merchant Place

1 Fredman Drive

Sandton, 2146

TRANSFER SECRETARIES

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2nd Floor

Edura House

41 Fox Street

Johannesburg, 2001

P O Box 61051

Marshalltown, 2107

BANKERS

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SHAREHOLDERS’ DIARY

•••• Annual general meeting

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•••• Interim results announcement

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DIRECTORS

S M Levenberg (Executive Chairman)

J G Kempen (Chief Executive)

J E Bishop

M H Brodie

F Cohen

A S Haggie

B D McIntyre

A P Nkuna

M C Ramaphosa

D Seetha

C D Stein

B C Till

7

E X E C U T I V E C H A I R M A N ’ S R E V I E W

Continued real earnings growth can be expected

from internally generated organic growth

and further selective strategic acquisitions

in the services sector.

STEPHEN LEVENBERG

8

In a year characterised by extremely harsh trading and economic conditions, the

group achieved a satisfactory overall performance. Strong acquisitive growth in the

services division combined with organic growth generally, enabled the group to over-

come certain negative factors, including widespread floods, reduced consumer demand

and depressed economic conditions, particularly in the KwaZulu Natal region.

MACROECONOMIC ENVIRONMENT

The South African business environment remained turbulent for most of the year,

despite a relatively smooth transition to the year 2000. The devastating rains and floods

in early 2000, political and social turmoil in Zimbabwe, rising inflation and soaring oil

and petroleum costs in the latter part of the financial year resulted in a sharp decline in

consumer demand, a loss of business confidence and depressed economic conditions.

Strong fiscal and monetary discipline by government and the Reserve Bank has seen

interest rates remain at lower levels for some time. Disappointingly, there has been no

resultant increase in consumer spending. The continual growth in the cellular tele-

phone market, the proliferation of casinos and the introduction of the national lottery

have all had a negative impact on consumer spending, which was already adversely

affected by high levels of unemployment and HIV/AIDS.

The Rand tested new record lows against the US Dollar and British Pound during the

year, increasing the cost of imported products, including petroleum, which in turn reduced

consumer spending. These negative trends have continued unabated into the new

financial year.

Of major ongoing concern to all South Africans is the high rate of HIV/AIDS amongst

most sectors of the population. The pandemic is particularly prevalent in KwaZulu

Natal and is adding further stresses to the already weak economy of the region. The

rapid growth of the virus in the 20 to 40 year age groups will have a significant neg-

ative impact on the labour pool and skills base in South Africa.

COMPANY OPERATIONS

Against the above background, Rebhold maintained its strategic focus and concentrated on

its ability to operate, as well as to proactively identify and acquire, companies that have

common interests and are able to grow in niche, profitable areas of activity.

Turnover for the year increased by 41% to R4,7 billion, producing net income before

taxation of R361 million. Headline net income attributable to shareholders of R261 million

was up by 36% on the previous year’s R192 million. Headline earnings per share increased

by 31% to 145 cents for the year, despite the higher number of shares in issue and a 34%

reduction in net investment income as a result of lower interest rates and reduced group

cash balances. This translates into an annual compound growth rate in headline earnings

per share since 1995 of 79%.

Considerable progress has been made in the refocusing of the group’s operations into its

two major divisions, namely services and wholesale/distribution.

ServicesRebhold has targeted the high growth services sector for expansion. Factors motivating

this decision include the relatively high operating margins achievable in this sector,

management’s experience and skills in this area, and the fact that this sector is in a consolidation

phase and accordingly acquisition opportunities abound. In line with this strategy, the group

has aggressively expanded its services operations – firstly with the acquisition of the Coin

Security Group, and secondly with the acquisition of the profitable services businesses of

Molope Group Limited. Further organic and acquisitive expansion can be expected in

these areas.

The conclusion and implementation of these significant acquisitions has given the group

critical mass and depth in the services value chain. Operational implementation of the

acquisitions of the Coin Security Group, JIC Mining Services, Protea Security Group and

Trollope Mining Services (the latter three businesses having been acquired from Molope)

has been completed and good upside potential exists for these businesses.

The positive impact of the acquisition by Rebhold of the profitable services businesses of

Molope was unfortunately temporarily obfuscated by litigation between Molope and a

disgruntled Molope minority shareholder. At no time was Rebhold a party to such litigation.

Molope has now been placed in liquidation and these events are hopefully behind us. The

businesses acquired have been fully integrated into Rebserve and are trading well.

E X E C U T I V E C H A I R M A N ’ S R E V I E W( c o n t i n u e d )

9


The group’s services subsidiary, Rebserve, has rapidly established itself as the leading services,

outsourcing and facilities management operator in South Africa. Through its various divisions,

Rebserve now participates at all levels of the hierarchy of outsourced services and facilities

management in the country, from support and technical services, through to facilities and

strategic management services.

These activities were given a major boost subsequent to the year end by the conclusion of a

strategic joint venture between UK-based WS Atkins plc and Rebserve. The joint venture,

ATREB, will provide high-end integrated facilities management solutions in the South

African market. The focus on facilities management places Rebserve at the leading edge of

outsourcing in South Africa.

Although recognised as a major

growth area internationally, facilities

management is still in its infancy in

South Africa and is expected to

become a major area of organic

growth in the group.

The Rebserve-WS Atkins joint venture

has, through ATREB’s subsidiary

TFMC (Telecommunications Facilities

Management Company) concluded a

ten year facilities management contract

with Telkom Limited, the largest ever of its kind in South Africa, which will generate

R1,5 billion per annum in turnover. Rebserve’s effective interest in TFMC is 46,75%.

The transaction is a significant step forward for Rebserve which will use the contract to

provide a model for future operations of this nature.

Wholesale/DistributionThe mainstay of the wholesale division, Jumbo Cash and Carry, performed satisfactorily in a

highly competitive trading environment. This was achieved despite the impact of a poor

performance from the Browns chain which bore the brunt of extremely adverse economic

conditions in KwaZulu Natal during the period under review. Specific action has been taken to

manage the effect of this region on the business. The roll-out of the Jumbo brand primarily

into certain Weirs stores assisted Weirs in the Eastern Cape region.

Although there are limited acquisition opportunities in the wholesale sector, this division

has continued to deliver steady profits. The profits and cash flows generated by this division

will be utilised to fund further growth in the services area.

Cyril Ramaphosa, Sizwe Nxasana (Telkom CEO), Stephen Levenberg

10

PROSPECTS

The group has successfully navigated its way through a turbulent 2000 financial year

characterised by difficult trading and economic conditions, and is well positioned to benefit

from improved operating conditions as and when these occur.

In the absence of unforeseen circumstances, real earnings growth can be expected in the

ensuing year from internally generated organic growth, including new contracts. The services

division in particular has good organic growth prospects and is likely to be the largest

contributor to group profits in the new financial year, while TFMC will earn positive

returns from inception.

Continued growth in the cash and carry operations will in the short term depend on there

being no further material deterioration in retail conditions generally.

The group remains in a good position to make further strategic acquisitions in the services

sector where appropriate, notwithstanding the difficult economic environment and weak

financial markets.

THE BOARD

Following the acquisition of the Coin Security Group, John Bishop was appointed a

director of Rebhold with Yvonne Bishop as his alternate.

During the year Cyril Ramaphosa was appointed as executive chairman of Rebserve and as a

director of Rebhold. Likewise Carl Stein, a senior partner at Werksmans Attorneys, joined the

board as a non-executive director. We welcome them and look forward to the contributions

and vast experience they will bring to the group.

ACKNOWLEDGEMENTS

My thanks go to the members of the board for their support and advice, and to our

shareholders for their continued loyalty. I also record my appreciation for the contribution

made by our strategic black empowerment partner, the Mineworkers Investment Company.

My thanks also go to all Rebhold executives, management and employees who through their

hard work and dedication have enabled us to attain our present heights.

Stephen Levenberg


11

C H I E F E X E C U T I V E ’ S R E V I E W

Following the expansion of the group’s services division it was considered appropriate to

consolidate the wholesale and the food and beverage operations into one division –

wholesale/distribution.

Several factors contributed to the adverse trading environment - rising inflation and

unemployment, soaring oil prices, a weaker Rand exchange rate and the political and social

turmoil in Zimbabwe. The impact of these factors led to reduced consumer spending and

general business confidence.

The introduction of a national lottery and legalised gaming has altered spending patterns

considerably, as has the growing cellular telephone market. These changes in spending

patterns may take several years to normalise.

Despite the vagaries of the economy, the group achieved strong organic growth, which was

boosted by significant acquisitions in the services division.

Notwithstanding the weaker Rand, the freight forwarding operations continued to deliver

good growth. Contract Forwarding’s new branch in Durban contributed positively in its

first year of operations and prospects for this division remain good.

Contract caterer Royal Food Services performed satisfactorily. The merger of Royal Foods

and King Pie has been successful and further benefits are anticipated in the ensuing year.

The launch by Royal of its retail brands has been well received. These are aimed at upmarket

corporate sector clients.

The Coin Security Group, which was acquired in July 1999, performed in line with

expectations, confirming its status as one of the leading providers of security services in

South Africa. As one of the few full service security companies in South Africa, it is well

positioned to benefit from the expected high growth in the security market (and possible

further consolidation in this sector).

JIC Mining Services delivered a good performance in line with expectations and is already a

major facilities management player in its own right, with specific emphasis on the mining sector.

Despite adverse trading conditions the group achieved

strong organic growth.

JACQUES KEMPEN

12

Results for Trollope Mining Services were adversely affected by the heavy rains in January

to March 2000 and were below expectations. Restructuring at Protea Security Services was

completed shortly after its acquisition by Rebhold, and results have shown a steady

improvement. Treated Timber Products, although a small contributor to group profitability,

had a disappointing year.

Jumbo Cash and Carry once again proved its status as the leading wholesaler of toiletries

and cosmetics in southern Africa. Performance at Browns and Weirs was less rewarding,

particularly in KwaZulu Natal where economic conditions were extremely depressed.

The overall performance of the distribution services businesses, Stamford Sales and Bakers

World, was good. Stamford Sales, in particular, delivered strong growth.

With the consolidation of the group’s beverage operations in 1999, synergies continued to be

explored. The greater emphasis placed on quality control and brand management is starting

to show increased profitability in this area.

Increased competition and pressure on margins in the highly competitive liquor industry

continues to mitigate against growth in this area. New products were launched and marketing

was increased to counter this trend. The retail liquor market remains highly competitive.

A more detailed review of individual operations is contained in the review of operations.

My thanks go to my fellow directors for their continuing support in what has been a very

challenging trading environment. During the year, Stephen Levenberg, previously the executive

deputy chairman of the group, assumed the position of executive chairman. Mackie Brodie,

formerly the non-executive chairman, will remain on the board as a non-executive director.

We thank him for the role which he fulfilled as Rebhold’s first chairman.

Acknowledgement must also go to the operational management and staff of the group who

have once again risen to the challenges presented to them and found new and innovative

ways to continue to grow our businesses profitably.

Rebhold is fortunate to have amongst its management some of the finest entrepreneurs

and operational executives in their chosen fields. It is testimony to their abilities that the

group has maintained its strong organic growth and profitability record, despite such

adverse trading conditions.

Our thanks and appreciation go to our customers and suppliers who continue to support

the Rebhold group. We will continue to deliver high standards of service in everything we do.

Jacques Kempen

C H I E F E X E C U T I V E ’ S R E V I E W( c o n t i n u e d )

13

F I N A N C I A L R E V I E W

Turnover for the year increased by 41% to R4,7 billion, producing profit from operations of

R307 million, up by 62% on the prior year. The group’s operating margin increased from

5,6% to 6,5%, largely as a result of the increased contribution from the higher margin

services division.

Net investment income decreased by 34% to R53 million as a result of lower interest rates

and reduced group cash balances.

The effective tax rate of 19% is due to investment and other allowances and non-taxable

income. The group’s effective tax rate is expected to increase to above the 20% level in future

as further acquisitions are made and the group’s tax base increases.

Headline attributable income before exceptional items increased by 36% to R261 million

from R192 million in the previous year. Headline earnings per share increased by 31%

to 144,6 cents for the year despite the higher number of shares in issue. Diluted headline

earnings per share increased by 33% from 105,6 cents to 140,6 cents.

The results reflect good organic growth in the year complemented by acquisitions.

As a result of the acquisitions concluded in the services division, operating profit of the

services division increased from 21% of total group operating profit to 44% in the current

year. The services division is likely to be the largest contributor to group profitability in the

ensuing year.

Had the group changed its accounting policy with regard to deferred tax in order to

recognise deferred tax assets, such change would have resulted in a reduction in headline

earnings per share for the 2000 financial year from 144,6 cents to 137,0 cents (for 1999

headline earnings per share of 110,2 cents would have been reduced to 104,2 cents).

Headline attributable income increased by 36% to

R261 million and headline earnings per share

increased by 31% to 144,6 cents for the year.

BRETT TILL

14

The effective tax rate for the 2000 year would have increased from 19% to 24%. In accordance

with the new accounting standards, the group’s accounting policy will be changed in the

new financial year to recognise deferred tax assets. The results for the 2000 financial year

will be restated accordingly.

Cash generated from operations of R240 million was satisfactory given the poor trading

environment and the group’s increased investment in services businesses. As a general

rule, high-growth services businesses utilise relatively large amounts of cash to fund their

growth as a result of the limited funding available from trade creditors. Notwithstanding

this, cash flow and working capital management remain a high priority for the group.

Existing cash resources amounted to R571 million at year end.

Cash available from operations was utilised in the payment of amounts due to vendors,

thereby reducing the number of shares to be issued to vendors. This resulted in a greater

percentage increase in diluted headline earnings per share compared with the increase in

headline earnings per share.

The annualised return on average shareholders funds, after adjusting for goodwill and trademarks

that have been written off, was 18% (1999: 17%). The group’s weighted average cost of

capital remains relatively high due to the low level of gearing. Future acquisitions are likely

to be funded with a combination of cash, debt and equity to optimise the group's capital

structure. This would have a positive effect on returns to shareholders.

Brett Till

F I N A N C I A L R E V I E W( c o n t i n u e d )

15

R E V I E W O F O P E R A T I O N S

Will Paskins Jan du Preez Raoul Gamsu

SERVICES DIVISIONThe group’s services subsidiary, Rebserve, has rapidly established itself as the leadingservices, outsourcing and facilities management operator in South Africa. Through itsvarious divisions, Rebserve now participates at all levels of the hierarchy of outsourcedservices and facilities management in South Africa, from support and technical servicesthrough to facilities and strategic management services.

The activities within the services division and its facilities management capabilities werebolstered in the year under review by the acquisition of the profitable services businessesof Molope, which operate in areas that are complementary to the existing Rebhold servicesbusinesses and have accordingly expanded the group’s range of services.

FACILITIES MANAGEMENTFacilities management is the management of a wide range of technical and support functions,within a single contract, to create an operational environment which enhances the abilityof a client to concentrate on their core business.

Rebserve has entered into a strategic joint venture with UK-based WS Atkins plc to provide theSouth African market with high-end integrated facilities management solutions. The focusof the joint venture, ATREB, is in the telecommunications, transport, military, utilities, leisureand selected industrial environments, as well as large-scale residential and industrial estates.

National Networks Operations Centre building managed by TFMC

16

These areas represent excellent high growth opportunities,particularly when Rebserve's skills base and empowermentcredentials are taken into consideration.

WS Atkins is listed on the London Stock Exchange and isone of the world’s leading providers of professional and technology-based facilities management services. Its operationsare based in the UK, Europe, Middle East, Asia Pacific, andthe Americas.

Outsourcing in South Africa is in its initial stages ofdevelopment. South African companies are increasinglyrecognising the need to focus on core activities, the cost savingswhich can be achieved from outsourcing, and the resultant flexibility and improved servicelevels. In addition, privatisation and government restructuring will accelerate the growthin outsourcing. Outsourcing is the primary driver of facilities management.

It is these factors which make facilities management an exciting and high growthopportunity for Rebhold, as more companies turn towards outsourcing as a way of reducingoperating costs, and concentrate their management expertise on the delivery of core products.Facilities management contracts also offer the benefit of long term, contractually committedannuity income.

The joint venture has, through ATREB’s subsidiary TFMC, concluded a ten year facilitiesmanagement contract with Telkom Limited, the largest yet of its kind in South Africa,which will generate R1,5 billion per annum in turnover, escalating annually. Rebserve’seffective interest in TFMC is 46,75%.

TFMC’s contract with Telkom covers maintenance, repair and support services, includingthe maintenance of masts and towers and uninterrupted power supply systems, real estatemanagement and facility development.

Cyril RamaphosaChairman of Rebserve

Telkom satellite communications site managed by TFMC

R E V I E W O F O P E R A T I O N S( c o n t i n u e d )

17


Yvonne Bishop Christo Terblanche Danie Jordaan Edwin Atkins Theuns Botha Jorge Ferreira

A total of 1 461 full-time Telkom employees have been transferred to TFMC and will benefitfrom skills transfer, training and development within the new company. Will Paskins, a senioroperations executive at WS Atkins, has been appointed as Chief Executive Officer of TFMC.

Rebserve will concentrate its efforts on creating a seamless structure able to service the entirespectrum of outsourcing requirements and facilities management projects. These range incomplexity from basic support functions, such as security, catering, cleaning and freightservices, to the outsourcing of professional services such as engineering, consulting and humanresources management.

Currently the services division is well placed to service many ofthe day-to-day operations required by larger parastatals andcorporations. ATREB has provided the key to servicing larger,more complex and therefore more profitable contracts.

Although negotiation and development of such facilities managementcontracts is a lengthy process, the long-term duration of these contractsensures a consistent flow of annuity income to Rebserve andprovides a strong base for future organic and acquisitive growth. Coin Security control room

Coin Security assets-in-transit division

18

SECURI T Y SERVICESCoin Security, which was acquired in July 1999, made its maiden contribution to groupprofits during the year and reinforced its standing as one of the country’s leading suppliersof security services. In October 1999 the operations of Coin were complemented by theacquisition of Protea Security.

Established by John and Yvonne Bishop 21 years ago, the Coin Security Group provides acomprehensive range of security solutions, including the provision of armed and unarmedsecurity officers, security systems, cargo escorts, aviation, retail, domestic and industrial security,transportation of cash, bullion, and other valuables, storage of cash and other valuables invaults, armed response and the provision of trained security dogs and security training.

Coin has its headquarters in Pretoria and operates through 21 centres in South Africa.New branches were opened in the KwaZulu Natal midlands as well as on the north andsouth coasts as a result of increased business in these areas.

Financial results for the year were in line with expectations. Strong growth in the customerbase, particularly in the assets-in-transit division, has established a solid foundation forfuture growth. Coin provides assets-in-transit and guarding services to a wide range ofclients including many of South Africa’s major entities in the corporate, industrial andparastatal environments.

As the leader in the South African security industry, Coin utilises world-class technologyin providing its services. Coin designs and manufactures state of the art armoured vehiclesand utilises specialised electronic technology, including live video monitoring of armouredvehicles, vehicle crews and their immediate surroundings from central control rooms.This unique monitoring technology is a world first.

Protea Security aviation division


19


Fourie du Preez Hilton Chapman Peter Trollope

The Protea Security Group operates mainly in the guarding sector of the security market,focusing on the parastatal, retail, mining and public sectors. Branches are located inGauteng’s major cities, Rustenburg, Cape Town and Richards Bay.

The company provides a complete range of guarding services including the movement ofassets, riot control, illegal strike control, fraud and shrinkage investigation, electronicsurveillance and VIP protection.

Protea Security also offers a reaction unit with its own extensive fleet of armoured vehiclesand trucks which are used during riots. The Protea Security equestrian unit has proved itseffectiveness at major sporting and other international events.

At the time the business was acquired Protea Security was undergoing a majorrestructuring. This process has now been completed and profitability levels are increasing.By continuing to work closely with other group companies, notably Coin and JICMining, good future growth can be expected.

John Trollope

Trollope Mining services – earthmoving equipment

Jabu Mabena

20

MINING AND RELATED SERVICESJIC Mining Services is the leading provider of specialised non-core services to the SouthAfrican mining sector, on an outsourced basis. Its range of services includes facilities andmine management, residential, catering, cleaning and underground services.

Established in 1989, the business has grown exponentially with major new contracts beingawarded regularly. Today, JIC counts amongst its clients most of the mining houses inSouth Africa and has a reputation for quality management and high levels of productivity.Its safety record is comparable to the best in the industry, with the company achievingone million fatality-free shifts at many of its contract sites.

One of JIC’s major strengths is the quality and depth of its management team. Chief executive,Fourie du Preez, and managing director, Hilton Chapman, both founding shareholders, aresupported by a team of approximately 50 professionals, mainly engineers and accountants. Alldecision-making is decentralised and delegated to the management team and individual projectleaders. This creates operational flexibility and facilitates effective decision making.

The business produced good results for the year which were in line with expectations.Significant resources have been dedicated to developing new contracts for the future.This, combined with the growing international trend to outsource non-core services inthe mining sector, will provide good opportunities for future growth, particularly whenSouth Africa follows this international trend.

Trollope Mining Services was established 25 years ago, by Peter and John Trollope.The business provides specialised services toopen-cast mining and earthmoving operations.Based in Thabazimbi, most of the operationsare in the Northern Province on chrome, ironore and andalusite mines.

Financial results for Trollope Mining Serviceswere below expectations due to heavy rains inJanuary to March 2000 which disruptedoperations and made working conditionsextremely difficult and costly. Since then,operations have returned to normal andvarious new contracts have been undertaken.Prospects for the business remain good.

Treated Timber Products has been in existence for more than 40 years and is the largestsupplier of treated timber transmission and telephone poles in South Africa. It isalso the largest contractor in its field to Eskom and Telkom.

Financial results for Treated Timber Products were disappointing with a notable decline involumes compared to the previous year, mainly as a result of changes in the buying patternsof its major customers. As a result of the decline in the local market, new opportunities arebeing sought to export timber products to overseas markets.

Also included in the mining and related services division is Rebserve’s MineResidential Services, MRS. MRS operates within JIC structures and continues togrow its market share.

JIC Mining Services


21


Butch Hornby Rob Strachan Kobus Nieuwoudt Joe Boyle

FOOD SERVICES

Royal Food Services, a supplier of specialised contract catering services to a wide range ofcompanies and organisations, had a satisfactory year, signing a number of major contractsand further enhancing its working relationship with King Pie. This entailed a number ofstructural changes within the company and the appointment of Kobus Nieuwoudt,formerly the chief executive of King Pie, as managing director for Royal’s inland region.

Diversification away from government and tender business continuedduring the year, thereby reducing Royal’s overall reliance on thissector of the market. Royal has simultaneously established itself asa leading player in the private healthcare sector, providing cateringservices to 22 Medi-Clinic hospitals.

As part of its initiative to broaden the appeal of Royal’s services,the company launched five new retail brands which offer clients awide range of new services. These range from deli-style sandwichand salad bars to fast food outlets, coffee shops and conveniencestores. The services are offered throughout the working day andinclude breakfasts, lunches and coffee shop services.

Royal Food Services

Royal Foods Deli

Chris Waterson

22

Collaboration with MRS, which provides catering and accommodation services mainly tomines, will provide new opportunities for Royal to harness greater buying power andbroaden the management base while accessing new contracts in both businesses.

King Pie, which produced satisfactory results for the year, continued to benefit from itsstrong market position and established brand. With more than 300 outlets throughoutthe country, it has firmly established itself as one of the leading franchise operations inSouth Africa. This was confirmed by its achieving second place in a national franchisingsurvey conducted by one of South Africa’s leading financial publications. King Pie recentlybroadened its horizons by opening its first store in Mozambique, this being its first ventureinto a neighbouring country.

FREIGHT FORWARDING SERVICES

The freight forwarding services businesses, Contract Forwarding and Trans Global

Freight, produced another strong set of results as natural ties between the businesses

were fully exploited. Chris Waterson, previously the managing director of Contract

Forwarding, was appointed managing director of the freight forwarding division with

responsibility for all freight operations.

The division signed two further exclusive agency agreements with international partners

covering their three major routes, namely the UK, Germany and the USA.

TransFair Inc, with offices in the USA, and ITG, operating in Germany, have added

greater buying power and improved service levels to the international forwarding network

in which these businesses operate. The full benefit of the agency agreements will accrue to

the group and its clients in the 2001 financial year.


23

Contract Forwarding head office


Suru Bhawan Emil De Beer

WHOLESALE / DISTRIB U T ION DIVISIONFollowing the expansion of the group’s services division it was considered appropriate to

consolidate the wholesale and food and beverage divisions into one division – wholesale/

distribution. This division includes the cash and carry operations as well as those

businesses involved in distribution.

CASH AND CARRY

The cash and carry operations comprise Jumbo Cash and Carry, and the Browns

and Weirs chains.

Jumbo Cash and Carry operates in the urban areas of Gauteng, KwaZulu Natal, the

Northern Province and Free State, while Browns (21 stores) and Weirs (22 stores) operate

in the predominantly rural areas of KwaZulu Natal and the Eastern Cape respectively.

The division as a whole performed satisfactorily in a highly competitive environment.

Individually, Jumbo performed well, maintaining its position as the leading wholesaler of

toiletries, cosmetics and health and beauty aids in southern Africa. Performance at Browns,

which trades primarily in the KwaZulu Natal region, was below expectations as a result

of the extremely adverse trading conditions in the region. The widespread flooding in

Jumbo Cash and Carry – Isipingo

24

February and March 2000 also impacted

negatively on results. The rollout of the Jumbo

brand primarily into certain major Weirs stores

located in the Eastern Cape continued, with

five stores being converted to the Jumbo format.

Improved results from the converted stores

have been encouraging.

The acquisition of Browns and Weirs in 1999 has

benefited Jumbo, giving the operation additional

outlets for its products and simultaneously

broadening the range of products available to

Browns and Weirs customers through existing

stores. The cash and carry operations of Rebhold now extend over 46 stores with a total

trading space of some 140 000 square metres.

Emphasis in the future will be to roll out major Jumbo stores in urban areas. In line with

this strategy, a new Jumbo store was developed and opened in October 2000 at Isipingo,

a strategically located industrial park near the Durban International Airport.

The store, covering 8 000 square metres of trading space and 2 000 square metres of

administration area, incorporates the newest technology available in the industry, with a

proven design and product mix.

In addition to Jumbo’s traditional cosmetic and health care product lines the store will

offer a one-stop shopping experience with comprehensive food and grocery sections,

hardware and cigarettes.

Jumbo Cash and Carry

Jumbo Cash and Carry – Isipingo


25

Peter Hone


Garth JonesGreg de Villiers

Trading conditions in the wholesale/retail sector are expected to remain extremely difficult

in the coming year. Steps have been taken to reduce the group’s exposure to the rural areas

(particularly KwaZulu Natal) by identifying stores to be rationalised. The Jumbo brand

will continue to be expanded nationally.

DISTRIBUTION SERVICES

Stamford Sales, a distributor of dry goods and provider of services in relation to these and

related products, delivered strong growth. Continued growth in the customer base and

product range contributed positively.

Operating from Johannesburg, Cape Town, Durban, Port Elizabeth and Bloemfontein,

Stamford Sales services predominantly the hospitality, catering and retail markets.

During the year Stamford Sales moved its distribution centre and head office on the

East Rand to accommodate the rapid growth. The new premises provide additional

warehousing space, enabling the company to improve its distribution service.

Bakers World, a distributor of products into the catering, baking and retail markets,

serves the market with specialised branded pre-mixed products used in the production of

bread, pastries and other confectionery items.

The company had a satisfactory year, signing food distribution agreements with Bromor

Foods and Cadburys. These contracts will have a positive effect on turnover in the ensuing

financial year.

The distribution functions within UniClinecor and Instant Foodpak were fully integrated

into Stamford Sales and Bakers World during the year.

The group is evaluating the possibility of extracting further synergies by consolidating the

operations of Stamford Sales and Bakers World within the existing food services division.

In July 1999 Rebhold exchanged its interests in M&D Catering Distributors and Knights

Food Services for a 32% stake in Fridge Foods Group (Proprietary) Limited which

operates three distribution centres and five cash and carry outlets, known as Exclusively

Frozen, in the Eastern and Western Cape. Performance was in line with expectations.

26

BEVERAGES

Beverage operations comprise the Rebhold businesses involved in the distribution and

processing of a range of alcoholic and non-alcoholic beverages.

The consolidation of the non-alcoholic beverage operations continues to reap benefits

for the group and trading volumes increased in all markets. The beverage manufacturing

operations of UniClinecor were incorporated with those of the other beverage operations

during the year to maximise production efficiencies and rationalise the sales and marketing

efforts. The keys to continued expansion in this competitive industry are quality control,

product development and the addition of new brands.

Volumes at Frucon Foods, the Bloemfontein-based fruit juice processor, grew

substantially during the year.

Accounting and administration functions for the beverages division have been centralised.

This has resulted in reduced administration costs and allows production units to concentrate

on maximising plant utilisation and quality control.

Increased competition saw a slowing in the growth of Boland Wine. A new range of

wines, Calypso, was introduced. This range comprises a late harvest, premier grand cru

and a dry white wine.

Production of group liquor house brands, formerly the responsibility of Picardi Rebel,

has now been incorporated into Boland Wine’s operations.

Stamford Sales


27


Performance of the Picardi Rebel retail liquor stores was reasonable despite difficult

trading conditions. Collaboration between Picardi Rebel and the liquor operations in the

Browns and Weirs chains has added to the group’s overall liquor buying power, improved

rebates and enhanced the group’s ability to compete in the market.

TECHNOLOGY

Technology continues to play a major role in the operation of Rebhold’s businesses.

During the year considerable time and expense was incurred to ensure a smooth transition

to the year 2000. No operational or technical problems were experienced as a result of the

advent of the year 2000.

The group took advantage of the demands of the year 2000 process to audit its

present systems across the group.

As a result of this process the group was able to institute changes across the operational

spectrum to ensure a smoother flow of information between businesses and head

office functions.

As the evolution of e-commerce continues, the group is challenged to find new ways

to communicate and transact with both suppliers and customers. Much of this change

will result in more efficient businesses and improved customer service.

The growth of businesses continues to place new demands on software systems and

hardware. The group’s information technology department has been tasked with ensuring

that the group’s operating systems are appropriate in all circumstance and do not retard

this growth. To this end extensive research has been carried out into new systems that

will form the basis for standardised information systems in the future.

The group has also launched its website - www.rebhold.com. This website provides on-line

access to information about the group, and contact details for relevant key personnel. Allied

to this has been the development of a nationwide area network which allows different business

units to communicate more effectively. It is intended to expand these activities to include

on-line trading in the foreseeable future.

28

As the leading services group in South Africa, the group recognises the importance of its

human resources.

Rebhold is fortunate to have amongst its operational management some of South Africa’s

leading entrepreneurs in their chosen fields. It is their experience and ability, in good and

difficult times, which has contributed to the success of the group. It is gratifying to note

that the majority of the vendors of businesses acquired by Rebhold have remained with

the group after their required warranty periods have ended, and demonstrate a continued

commitment to the group.

The group recognises the need to identify successors to these managers

and has a well-balanced succession plan in place. The group favours a

policy of promotion from within the businesses and selects potential

managers on the basis of merit only.

Rebhold is committed to empowerment at all levels of its operations

and is proud of its empowerment credentials. Previously disadvantaged

persons, including the Mineworkers Investment Company, own

approximately 20% of Rebhold’s issued share capital. The group has

also entered into ventures with other empowerment groups in its wholesale, food services,

mining services, security and facilities management operations.

Cyril Ramaphosa, the executive chairman of Rebserve and of the Black Economic

Empowerment Commission, leads a management consortium of approximately 70

Rebserve employees. This consortium includes employees from previously disadvantaged

backgrounds which will acquire a minority stake in Rebserve.

Rebhold is committed to building a non-racial,

non-sexist South Africa through human

resource development. This refers to the

training and development of all employees to

enable them to acquire appropriate knowledge

and skills to maximise their competence,

commitment and performance to meet the

business needs of the group.

Formalised training programmes are undertaken to

train and equip employees with the necessary skills

to perform their duties. The group’s security and mining services businesses in particular operate

independent training facilities, which are accredited by industry regulatory bodies.

H U M A N R E S O U R C E S

Gijima – Coin Security training facility

Jumbo Cash and Carry - Christmas partyhosted for underprivileged children

Aninka Durand Wendy NewtonDeon Ferrier

29

C O R P O R A T E G O V E R N A N C E

The board of directors endorses the Code of Corporate Practices and Conduct recommended in the King Report.

The board recognises that corporate governance is a developing process. Accordingly it reviews the degree of

compliance with the Code on an ongoing basis and implements procedures to ensure further compliance

where appropriate.

Directorate

The board comprises an executive chairman, a chief executive, seven executive directors and three non-executive

directors. It meets periodically together with senior management to examine the results of the group, to

ensure that the delegated responsibilities are duly executed by management, and to consider important issues.

Human Resources

The group is an equal opportunity employer and there is no discrimination on any grounds. The group supports

the principles and objectives contained in the new Employment Equity Act. Existing policies, structures and

procedures are reviewed regularly to ensure compliance within the time limits prescribed by such Act.

Ethics and Communication

The board strives to ensure that the group conducts its business with the utmost integrity towards all its stakeholders,

including its shareholders, employees, customers, suppliers and society at large. The group supports a policy of

open communication with all stakeholders on matters of both a financial and non-financial nature.

Going Concern

The company has sufficient resources to continue in operational existence for the year ahead. Accordingly,

the directors have adopted the going concern basis in preparing the annual financial statements.

Audit Committee

Rebhold has an independent audit committee comprising two non-executive directors (one of whom serves

as its chairman) and an executive director. It has terms of reference which clearly set out its scope and

objectives. The external auditors have unrestricted access to this committee. The audit committee reviews

the effectiveness of internal controls in the group with reference to the findings of the external auditors.

Other areas covered include the review of important accounting issues, specific disclosures in the financial

statements and a review of major audit recommendations.

30

C O R P O R A T E G O V E R N A N C E( c o n t i n u e d )

Remuneration Committee

The remuneration committee comprises two non-executive directors (one of whom serves as its chairman) and an

executive director. The committee is responsible for determining the conditions of employment and remuneration

packages, including the allocation of shares and options in terms of the Rebhold Share Incentive Scheme, to

executive directors and senior executives.

Management Reporting

There are comprehensive management reporting disciplines in place which include the preparation of annual

budgets by all operating divisions. Individual operational budgets are approved by the boards of directors of

the relevant companies. The group budget is reviewed by the Rebhold board of directors. Monthly results

are reported against budgets. Budgets and profit projections are reviewed and updated regularly during the

financial year. Working capital and cash flow management are monitored on an ongoing basis.

Internal Audit

The group has established internal audit departments in certain divisions. These functions are performed by

appropriately qualified and experienced personnel. In divisions where no internal audit department exists,

internal audit functions have been outsourced to specialists independent of the external auditors who are

engaged to review and report on systems of internal controls.

Year 2000 Compliance

The group did not experience any operational or technical problems as a result of the advent of the year 2000.

S TA T E M E N T O F C O M P L I A N C E B Y T H E C O M P A N Y S E C R E TA R Y

The company has lodged with the Registrar of Companies all such returns as are required of a public company

in terms of the Companies Act No. 61 of 1973, and all such returns are true, correct and up to date.

for: Rebhold Management Services (Proprietary) Limited

31

V A L U E A D D E D S T A T E M E N TYear ended 30 June 2000

Group

2000 1999

R ’000 R ’000

Turnover 4 741 490 3 374 182

Cost of materials and services (3 833 129) (2 931 895)

Value added 908 361 442 287

Net investment income 62 719 83 432

Exceptional items - 308 619

Total value added 971 080 834 338

Applied as follows:

Employees

Salaries, wages, bonuses, pension, medical aid and other benefits 387 706 164 362

Providers of capital 14 902 23 977

Lenders 9 359 2 723

Dividend to ordinary shareholders 5 543 21 254

Government

Taxation 238 397 127 906

Re-invested in the group 330 075 518 093

Depreciation 43 415 19 055

Outside shareholders 30 930 20 173

Retained profit 255 730 478 865

971 080 834 338

Money exchanges with the Government

Taxation on profit 68 398 59 072

PAYE 50 445 25 226

VAT 84 747 30 398

RSC levies 7 514 5 099

Rates and licences 3 331 4 403

Skills development levy 388 -

UIF and WCA 12 941 2 178

Other 10 633 1 530

238 397 127 906

32

R E P O R T O F T H E I N D E P E N D E N T A U D I T O R S

To the members of Rebhold Limited

We have audited the annual financial statements and group annual financial statements set out on pages 33to 57. These financial statements are the responsibility of the company’s directors. Our responsibility is toexpress an opinion on these financial statements based on our audit.

ScopeWe conducted our audit in accordance with statements of South African Auditing Standards. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance that the financial statements are freeof material misstatement. An audit includes:

• examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements;• assessing the accounting principles used and significant estimates made by management; and• evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Audit opinion In our opinion, the financial statements fairly present, in all material respects, the financial position of thecompany and group at 30 June 2000 and the results of their operations and cash flows for the financial yearthen ended in accordance with generally accepted accounting practice, and in the manner required by theCompanies Act.

CHARTERED ACCOUNTANTS (SA) JOHANNESBURGREGISTERED ACCOUNTANTS AND AUDITORS 28 August 2000

D I R E C T O R S ’ A P P R O V A L

The directors of the company are responsible for the maintenance of adequate accounting records and thepreparation and integrity of the financial statements, group financial statements and related financialinformation included in this report.

The annual financial statements are prepared in accordance with generally accepted accounting practice andincorporate full and responsible disclosure in line with the accounting philosophy of the group.

The directors are also responsible for the group’s systems of internal control and believe that these controls providereasonable, but not absolute, assurance as to the reliability of the financial statements, adequately safeguard,verify and maintain accountability of assets, and prevent and detect material misstatements and loss.

These financial statements have been prepared on the going concern basis, were approved by the board ofdirectors on 28 August 2000, and are signed on its behalf by:

S M LEVENBERG J G KEMPENExecutive Chairman Chief Executive

33

D I R E C T O R S ’ R E P O R T

The directors have pleasure in submitting the financial statements of the company and the group for theyear ended 30 June 2000.

NATURE OF BUSINESS

Rebhold Limited is a holding company whose businesses cover a range of services, and wholesale and distributionactivities, extending country wide.

The following acquisitions became effective during the year:

Coin Security Group Provider of a comprehensive range of security solutions includingguarding, assets-in-transit and technology-based security.

JIC Mining Services Provides over 700 non-core services to the mining sector on an outsourced basis.Trollope Mining Services Open-cast mining services.Protea Security Services Security guarding services aimed primarily at the corporate and mining sectors.Treated Timber Products Supplier of treated timber poles.

FINANCIAL RESULTS

The results of the company and the group are set out in the financial statements.The consolidated net income after taxation attributable to ordinary shareholders amounted toR261 273 000 (1999: R500 119 000).Headline consolidated net income after taxation attributable to ordinary shareholders amounted toR261 273 000 (1999: R191 500 000).

SHARE CAPITAL

The following shares were issued during the year under review:

Effective date Number Issue price Considerationof shares (cents)

In Issue at 30 June 1999 173 817 888

6 October 1999 1 099 000 975 R 10 715 250

6 October 1999 1 807 993 1 375 Capitalisation issue

out of share premium

6 January 2000 3 905 016 515 R 20 110 832

In issue at 30 June 2000 180 629 897

REBHOLD SHARE INCENTIVE SCHEME

On 30 June 2000 the Scheme held no Rebhold shares. Pursuant to the exercise of options granted duringthe previous year, 1 921 780 Rebhold shares were issued to the Scheme on 12 September 2000. Optionsover 710 000 shares were granted to the Scheme and exercised by directors and employees during the year atprices ranging between 1 380 and 1 500 cents per share.

EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

Subsequent to 30 June 2000, 2 957 045 ordinary shares have been issued in part consideration for theacquisition of various businesses.

On 12 September 2000, 1 921 780 ordinary shares were issued to the Rebhold Share Incentive Scheme pursuantto the exercise of options previously granted to the Scheme.

34

D I R E C T O R S ’ R E P O R T( c o n t i n u e d )

DIRECTORATE AND SECRETARY

The name and address of the company secretary and the names of the directors appear on page 7.

Mr King resigned on 24 August 1999 in the context of his proposed emigration from South Africa.

Mr Bishop was appointed on 1 November 1999. Messrs Ramaphosa and Stein were appointed on 8 March 2000.

Mrs Bishop was appointed as an alternate director to Mr Bishop on 1 November 1999.

In terms of clause 53.2 of the articles of association Messrs Kempen, Haggie and Seetha retire at theforthcoming annual general meeting but, being eligible, offer themselves for re-election. In terms of clause53.3 of the articles of association Messrs Bishop, Ramaphosa and Stein retire at the forthcoming annualgeneral meeting but, being eligible, offer themselves for re-election.

On 30 June 2000 the directors of Rebhold held beneficially, directly or indirectly, in aggregate 10 027 946Rebhold shares. A register of interests of directors in the capital of the company is available for inspection atthe registered office.

SUBSIDIARIES

Details of the company’s principal subsidiaries and changes therein are set out on pages 56 and 57 to thefinancial statements. The aggregate profit after taxation of subsidiaries attributable to the companyamounted to R193 712 000 (1999: R173 500 000).

CAPITALISATION SHARE AWARDS AND DIVIDENDS

It is the policy of Rebhold to declare and pay a single annual dividend.

Notice was given that shareholders will be awarded capitalisation shares, based on the ratio that 20 centsmultiplied by 1,05 bears to the weighted average price of Rebhold shares traded on the JSE SecuritiesExchange South Africa for the three days ending on 12 October 2000, provided that shareholders wereentitled to elect, in respect of all or part of their shareholding, to receive a cash dividend of 20 cents pershare. The last day to register for the capitalisation share award and cash dividend was 15 September 2000.

BORROWING LIMITATION

In terms of the articles of association, the directors may exercise all powers of the company to borrowmoney as they consider appropriate. The borrowing powers of the directors are unlimited.

SPECIAL RESOLUTIONS

Certain of the subsidiaries adopted new articles of association during the year in compliance with therequirements of the JSE Securities Exchange South Africa.

35

A C C O U N T I N G P O L I C I E S

The financial statements have been prepared on the historical cost basis and incorporate the following principal

accounting policies, which have been consistently applied in all material respects.

Basis of Consolidation

The group’s annual financial statements incorporate the financial position of the company and its subsidiaries from

the effective date of acquisition. Fixed properties owned by subsidiaries are stated at the value attributed to them

on acquisition by the group. The excess of the cost of shares in other subsidiary companies over the tangible net

asset value at the date of acquisition is attributed to liquor licences, trade marks and goodwill.

Liquor licences, trade marks and goodwill are written off in the year the transaction takes place, firstly against

share premium, and secondly, directly to retained income.

Material inter-group transactions are eliminated on consolidation.

Turnover

Turnover, which excludes value added tax, comprises the net amounts invoiced to customers, before discounts for

goods supplied and services rendered.

Revenue Recognition

Revenue from the sale of merchandise and finished goods is brought to account when the risk in the goods passes

to the customer. Revenue from service-based activities is recognised when the service is completed. Interest earned

is accrued on a time proportion basis. Dividends are recognised when the right to receive payment is established.

Property, Plant and Equipment

Furniture, fittings, computer equipment, plant and equipment, improvements to leasehold premises, office equipment

and motor vehicles are stated at cost less depreciation calculated on a straight line basis at rates considered appropriate

to write off the cost over the estimated useful lives of the assets. The depreciation rates used are:

Furniture and fittings 15%

Computer equipment 33%

Plant and equipment 20%

Improvements to leasehold premises period of lease

Office equipment 15%

Motor vehicles - passenger 20%

Motor vehicles - commercial 25%

Liquor licences and trade marks are stated at cost and are written down only where there is a permanent

diminution in value. On consolidation liquor licences and trade marks are written off as indicated above.

Land and buildings, which are regarded as investment properties, are not depreciated.

36

A C C O U N T I N G P O L I C I E S( c o n t i n u e d )

Development Costs

Development costs comprise start-up and development costs in relation to new contracts. These costs are capitalised

and written off in the year that the contract commences operation.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis.

The cost of finished goods includes direct expenditure and production overheads.

Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rate ruling on the transaction dates. Assets and liabilities

designated in foreign currencies are translated at rates of exchange ruling at the balance sheet date. Exchange

differences are taken to income in the year in which they arise.

Deferred Taxation

Deferred taxation is provided for on the liability method using the comprehensive basis.

Bank

The bank balances are stated in accordance with the bank statement balances.

Leased Assets

Fixed assets acquired under financial leases are capitalised at their cash cost equivalent and are depreciated as

indicated above. Finance costs are expensed using the effective interest rate method. All other leases are treated

as operating leases and are charged against income as incurred.

Associated Companies

Associates are those companies in which the group has a long term interest and over which it exercises significant

influence, but not control. The group’s share of post-acquisition results of associates are included in the consolidated

financial statements using the equity method where material.

Investments

Investments, other than in associated companies, are stated at cost and are written down only when there is a

permanent diminution in value.

Retirement Benefits

The group provides for retirement benefits for the majority of employees by payments to independently administered

pension and provident funds. Current contributions are charged against income as incurred. The cost of providing

for any deficit is charged against income when determined.

37

Group Company

2000 1999 2000 1999

Notes R ’000 R ’000 R ’000 R ’000

Turnover 1 4 741 490 3 374 182 - -

Cost of sales (3 899 948) (2 854 689) - -

Gross profit 841 542 519 493 - -

Other operating income 60 223 26 940 3 204 2 900

Operating expenses (594 524) (356 397) (50) (50)

Profit from operations 2 307 241 190 036 3 154 2 850

Net interest received 3 28 409 58 892 4 758 34 036

Dividends received 24 951 21 817 62 022 21 817

Exceptional items 4 - 308 619 - 277 783

Net income before taxation 360 601 579 364 69 934 336 486

Taxation 5 (68 398) (59 072) (2 373) (9 867)

Net income after taxation 292 203 520 292 67 561 326 619

Net income attributable to outside shareholders (30 930) (20 173) - -

Net income attributable to ordinary shareholders 261 273 500 119 67 561 326 619

Earnings per share (cents) 6 144,6 287,7 - -

Headline earnings per share (cents) 6 144,6 110,2 - -

Diluted headline earnings per share (cents) 6 140,6 105,6 - -

Dividend per share (cents) 20,0 17,0 - -

I N C O M E S T A T E M E N T SYear ended 30 June 2000

38

B A L A N C E S H E E T Sat 30 June 2000

Group Company

2000 1999 2000 1999

Notes R ’000 R ’000 R ’000 R ’000

ASSETS

Non-current assets 436 993 229 593 406 561 249 082

Property, plant and equipment 7 274 936 127 151 - -

Development costs 7 354 - - -

Investments in subsidiaries 8.1 - - 312 164 150 640

Investments in associates 8.2 7 954 3 185 122 122

Other investments 8.3 146 749 99 257 94 275 98 320

Current assets 1 259 008 1 068 041 279 184 359 952

Inventories 9 314 886 251 042 - -

Trade and other receivables 373 082 170 480 - -

Liquid funds 10 571 040 646 519 279 184 359 952

TOTAL ASSETS 1 696 001 1 297 634 685 745 609 034

EQUITY AND LIABILITIES

Capital and reserves 469 883 649 828 642 349 558 128

Share capital 11 181 174 181 174

Share premium 12 - - 30 680 -

Distributable reserves 13 231 881 406 543 378 267 316 249

Amounts due to vendors 14 237 821 243 111 233 221 241 705

Outside shareholders’ interest 79 781 50 080 - -

Non-current liabilities 25 617 5 062 - -

Interest bearing liabilities 15 22 187 4 549 - -

Deferred taxation 16 3 430 513 - -

Current liabilities 1 120 720 592 664 43 396 50 906

Trade and other payables 713 693 522 446 25 526 25 219

Interest bearing liabilities 39 346 3 204 - -

Non-interest bearing liabilities 272 500 80 - -

Shareholders for dividends 14 450 14 774 14 450 14 774

Bank overdrafts 14 926 - - -

Taxation owing 65 805 52 160 3 420 10 913

TOTAL EQUITY AND LIABILITIES 1 696 001 1 297 634 685 745 609 034

39

C A S H F L O W S T A T E M E N T SYear ended 30 June 2000

Group Company

2000 1999 2000 1999

Notes R ’000 R ’000 R ’000 R ’000

CASH FLOWS FROM OPERATING

ACTIVITIES 214 733 192 322 54 508 46 879

Cash received from customers 17 4 712 518 3 370 963 - -

Cash paid to suppliers and employees 18 (4 472 400) (3 201 596) - -

Cash generated from operations 19 240 118 169 367 3 461 5 344

Net interest received 3 28 409 58 892 4 758 34 036

Dividends received 24 951 21 817 62 022 21 817

Taxation paid 21 (72 878) (47 233) (9 866) (3 797)

Dividends paid 22 (5 867) (10 521) (5 867) (10 521)

CASH FLOWS FROM INVESTING ACTIVITIES (189 984) 29 558 (60 749) 107 403

Acquisition of subsidiaries and businesses as going concerns 23 (72 527) (14 971) - -

Additions to fixed assets (103 821) (31 716) - -

Proceeds from disposal of fixed assets and investments 22 021 164 033 - 280 508

Increase in investments (35 657) (87 788) (60 749) (173 105)

CASH FLOWS FROM FINANCING ACTIVITIES (90 382) 2 454 (74 527) 16 843

Decrease in long term borrowings (51 513) (4 252) - -

Increase in short term borrowings 23 488 714 - -

Increase/(decrease) in outside shareholders 12 170 (10 851) - -

Decrease in amounts due to vendors (105 214) (46 172) (105 214) (46 172)

Proceeds of share issues 30 687 63 015 30 687 63 015

NET MOVEMENT IN LIQUID FUNDS (65 633) 224 334 (80 768) 171 125

NET LIQUID FUNDS AT THE BEGINNING OF

THE YEAR AND ACQUIRED 636 673 422 185 359 952 188 827

NET LIQUID FUNDS AT THE END OF THE YEAR 571 040 646 519 279 184 359 952

40

S T A T E M E N T S O F C H A N G E S I N E Q U I T YYear ended 30 June 2000

Amounts Share Share due to Distributable

capital premium vendors reserves TotalR ’000 R ’000 R ’000 R ’000 R ’000

GROUPBalance at 30 June 1998 163 484 658 274 899 137 145 896 865New shares issued 11 68 219 (46 172) - 22 058Capitalisation share award - (5 116) - - (5 116)Share issue expenses - (99) - - (99)Acquisition of subsidiaries and businesses as going concerns - - 14 384 - 14 384Net income attributable to ordinary shareholders - - - 500 119 500 119Dividends (21 254) (21 254)Goodwill and trade marks written off - (547 662) - (209 467) (757 129)Balance at 30 June 1999 174 - 243 111 406 543 649 828New shares issued 7 55 679 (30 826) - 24 860Capitalisation share award - (24 860) - - (24 860)Share issue expenses - (139) - - (139)Acquisition of subsidiaries and businesses as going concerns - - 99 924 - 99 924Cash amounts paid to vendors - - (74 388) - (74 388)Net income attributable to ordinary shareholders - - - 261 273 261 273Dividends - - - (5 543) (5 543)Goodwill and trade marks written off - (30 680) - (430 392) (461 072)

Balance at 30 June 2000 181 - 237 821 231 881 469 883

COMPANYBalance at 30 June 1998 163 484 658 274 899 10 884 770 604New shares issued 11 68 219 (46 172) - 22 058Capitalisation share award - (5 116) - - (5 116)Share issue expenses - (99) - - (99)Acquisition of subsidiaries and businesses as going concerns - - 12 978 - 12 978Net income attributable to ordinary shareholders - - - 326 619 326 619Dividends (21 254) (21 254)Goodwill and trade marks written off - (547 662) - - (547 662)Balance at 30 June 1999 174 - 241 705 316 249 558 128New shares issued 7 55 679 (30 826) - 24 860Capitalisation share award - (24 860) - - (24 860)Share issue expenses - (139) - - (139)Acquisition of subsidiaries and businesses as going concerns - - 96 730 - 96 730Cash amounts paid to vendors - - (74 388) - (74 388)Net income attributable to ordinary shareholders - - - 67 561 67 561Dividends - - - (5 543) (5 543)

Balance at 30 June 2000 181 30 680 233 221 378 267 642 349

41

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

1. TURNOVER

Sale of goods 3 595 619 2 960 233 - -

Rendering of services 1 145 871 413 949 - -

4 741 490 3 374 182 - -

2. PROFIT FROM OPERATIONS

Sale of goods 172 102 149 772 - -

Rendering of services 135 139 40 264 - -

307 241 190 036 - -

Profit from operations is stated after charging:

Auditors’ remuneration

Audit fees 2 648 1 509 50 50

- current year 2 494 1 473 50 50

- underprovision prior years 154 36 - -

Other services 689 65 -

3 337 1 574 50 50Depreciation

Plant and equipment 19 181 5 319 - -

Office equipment 2 043 1 571 - -

Computer equipment 7 514 4 372 - -

Furniture and fittings 2 531 1 961 - -

Motor vehicles 11 700 5 692 - -

Improvements to leasehold premises 446 140 - -

43 415 19 055 - -

Directors' emoluments paid by subsidiaries

For services as directors 226 52 - -

Salaries and bonuses 6 615 3 494 - -

Fringe benefits 186 228 - -

Pension / provident fund contributions 957 617 - -

7 984 4 391 - -

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

42

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S( c o n t i n u e d )

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

Employee costs

Salaries and bonuses 410 401 171 849 -

Fringe benefits 11 304 2 785 -

Pension / provident fund contributions 21 403 12 741 -

443 108 187 375 -

Remuneration other than to employees for

Managerial services 563 276 - -

Technical services 533 - - -

Secretarial services - 2 - -

1 096 278 -

Rentals under operating leases

Land and buildings 50 644 33 430 - -

Computer equipment 3 117 17 - -

Plant and equipment 763 158 - -

Motor vehicles 7 688 967 - -

Other 1 004 798 - -

63 216 35 370 - -

Foreign currency losses 120 52 - -

Losses on disposal of fixed assets 639 - - -

Research and development expenditure - 34 - -

And after crediting:

Administration fees received - - 3 100 2 900

Profit on disposal of fixed assets 6 988 539 - -

3. NET INTEREST RECEIVED

Interest received 37 768 61 615 4 758 34 261

Interest paid (970) (2 668) - (225)

Finance charges (8 389) (55) - -

28 409 58 892 4 758 34 036

43

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

4. EXCEPTIONAL ITEMS

Capital profit on transfer of investment in subsidiary - 253 483 - 277 783

Capital profit on restructuring intangible assets - 55 136 - -

- 308 619 - 277 783

5. TAXATION

South African normal tax 64 466 57 799 2 373 9 867

- Current 64 955 56 789 2 373 9 867

- (Over)/underprovision prior years (489) 1 010 - -

Deferred tax 2 917 463 - -

Secondary tax on companies 619 171 - -

Foreign tax 396 639 - -

68 398 59 072 2 373 9 867

Reconciliation of taxation amount:

South African normal tax amount 108 180 173 809 20 980 100 946

Adjusted for: (40 457) (115 018) (18 607) (91 079)

- Disallowable expenditure 491 198 - -

- Exempt income and exceptional items (21 757) (100 034) (18 607) (90 390)

- Investment and other special allowances (16 466) (13 306) - -

- Utilisation of assessed losses (1 397) (840) - -

- Other (1 328) (1 036) - (689)

Secondary tax on companies 619 171 - -

Foreign tax 56 110 - -

Effective amount 68 398 59 072 2 373 9 867

Gross estimated tax losses available for utilisation

against future taxable income 28 902 16 187 - -

Tax relief at current tax rates 8 670 4 856 - -

Secondary tax on companies credits available for set-off

by the company against future dividends amounted

to R2 751 000 (1999: R535 000).


44


6. EARNINGS PER SHARE

Earnings per share is based on the consolidated net income attributable to ordinary shareholders of R261 273 000

(1999: R500 119 000) and is calculated using the weighted average number of 180 629 897 (1999: 173 817 888)

shares in issue during the year.

Headline earnings per share is based on the consolidated headline net income attributable to ordinary shareholders of

R261 273 000 (1999: R191 500 000) and is calculated using the weighted average number of 180 629 897

(1999: 173 817 888) shares in issue during the year.

Diluted headline earnings per share is based on the consolidated headline net income attributable to ordinary shareholders

of R261 273 000 (1999: R191 500 000) and is calculated using the weighted average number of 185 827 169

(1999: 181 344 700) shares in issue, being the weighted average number of shares in issue during the year plus the

number of shares to be issued after the year end in respect of profit warranties achieved by vendors during the year.

The issue of further shares to vendors in terms of acquisition agreements is dependent on the achievement of

future profit warranties. If such future profit warranties are achieved the earnings per share will also increase.

In terms of AC 104 paragraph 23, this increase is not disclosed.

The dilutionary effect of options granted to directors and employees to subscribe for shares via the Rebhold Share

Incentive Scheme is not material.

Group

2000 1999

R ’000 R ’000

Reconciliation between earnings and headline earnings

Net income attributable to ordinary shareholders 261 273 500 119

Exceptional items - (308 619)

Headline net income attributable to ordinary shareholders 261 273 191 500

45

Accumulated Net book Net book

Cost depreciation value value 1999

R ’000 R ’000 R ’000 R ’000

7. PROPERTY, PLANT AND EQUIPMENT

Group

Land and buildings 80 089 - 80 089 64 525

Plant and equipment 149 944 28 744 121 200 19 893

Office equipment 13 623 7 331 6 292 4 792

Computer equipment 28 496 14 426 14 070 10 458

Furniture and fittings 19 484 8 999 10 485 7 709

Motor vehicles 59 321 19 206 40 115 17 756

Improvements to leasehold premises 7 057 4 372 2 685 2 018

358 014 83 078 274 936 127 151

Net book Net book

value value

Reconciliation of carrying value 30 June Additions Disposals Depreciation 30 June

1999 2000

R ’000 R ’000 R ’000 R ’000 R ’000

Land and buildings 64 525 15 564 - - 80 089

Plant and equipment 19 893 129 564 (9 076) (19 181) 121 200

Office equipment 4 792 4 018 (475) (2 043) 6 292

Computer equipment 10 458 11 907 (781) (7 514) 14 070

Furniture and fittings 7 709 5 859 (552) (2 531) 10 485

Motor vehicles 17 756 38 686 (4 627) (11 700) 40 115

Improvements to leasehold premises 2 018 1 274 (161) (446) 2 685

127 151 206 872 (15 672) (43 415) 274 936

Details of land and buildings are available for inspection by members or their nominees at the company’s registered office.

In addition to those fixed assets encumbered by instalment sale agreements and capitalised finance leases as described in

note 15, certain of the group’s fixed assets are secured by a negative pledge for banking facilities.


46


Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

8. INVESTMENTS

8.1 Investments in subsidiaries

Shares at cost - - 107 039 134 455

Loans - - 752 787 563 847

Goodwill and trade marks written off - - (547 662) (547 662)

- - 312 164 150 640

8.2 Investments in associates

(i) 32% shareholding in Fridge Foods Group

(Proprietary) Limited

(ii) 49% shareholding in Telesafe (Proprietary) Limited

Shares at cost 123 267 122 122

Group's share of post-acquisition reserves 570 142 - -

Loans 7 261 2 776 - -

7 954 3 185 122 122

Directors’ valuation of shares 693 409 - -

Summarised financial information of associates

Property, plant and equipment 7 489 339

Current assets 17 574 5 706

Total assets 25 063 6 045

Shareholders’ funds 13 258 1 807

Deferred taxation (64) -

Long term liabilities 2 839 -

Current liabilities 9 030 4 238

Total equity and liabilities 25 063 6 045

Revenue 85 277 23 970

Net income before taxation 1 336 631

Taxation (256) -

Net income attributable to ordinary shareholders 1 080 631

8.3 Other investments

(i) Unlisted cumulative, redeemable preference

shares at cost 80 000 80 000 80 000 80 000

(ii) Loans receivable 66 749 19 257 14 275 18 320

146 749 99 257 94 275 98 320

Directors’ valuation of shares 80 000 80 000 80 000 80 000

Total investments at cost 154 703 102 442 406 561 249 082

47

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

9. INVENTORIES

Raw materials 16 761 7 700 - -

Work in progress 6 546 516 - -

Consumables 14 563 4 060 - -

Merchandise 267 102 232 184 - -

Finished goods 9 914 6 582 - -

314 886 251 042 - -

The value of inventories carried at net realisable value

is not material.

10. LIQUID FUNDS

Bank balances 346 040 421 519 54 184 134 952

Liquid investments 225 000 225 000 225 000 225 000

571 040 646 519 279 184 359 952

11. SHARE CAPITAL

Authorised:

300 000 000 (1999: 300 000 000) ordinary

shares of 0,1 cent each 300 300 300 300

Issued:

180 629 897 (1999: 173 817 888) ordinary

shares of 0,1 cent each 181 174 181 174

Details of changes in the issued share capital are given

in the directors’ report. The unissued shares are under the

control of directors until the next annual general meeting.

12. SHARE PREMIUM

Balance at the beginning of the year - 484 658 - 484 658

Movement for the year

Arising on new shares issued 55 679 68 219 55 679 68 219

Capitalisation share award (24 860) (5 116) (24 860) (5 116)

Share issue expenses (139) (99) (139) (99)

30 680 547 662 30 680 547 662

Goodwill and trade marks written off (30 680) (547 662) - (547 662)

- - 30 680 -


48


Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

13. DISTRIBUTABLE RESERVES

Balance at the beginning of the year 406 543 137 145 316 249 10 884

Movement for the year

Net income attributable to ordinary shareholders 261 273 500 119 67 561 326 619

Dividends (5 543) (21 254) (5 543) (21 254)

Goodwill and trade marks written off (430 392) (209 467) - -

231 881 406 543 378 267 316 249

14. AMOUNTS DUE TO VENDORS

Amounts due to vendors in terms of existing

acquisition agreements 237 821 243 111 233 221 241 705

The amounts are expected to be converted into

fully paid ordinary shares of 0,1 cent each at

varying prices upon the achievement of future

profit warranties as specified in the relevant

acquisition agreements.

15. INTEREST BEARING LIABILITIES

Secured

Capitalised finance leases and instalment sale creditors 20 784 3 275 - -

Total amount owing 59 459 5 808 - -

Current portion included in current liabilities (38 675) (2 533) - -

Secured by fixed assets with a net book value

of R71 529 000 (1999: R5 859 000). The

liabilities bear interest at rates linked to the

prime overdraft rate and are repayable in

monthly instalments of R3 270 000 (1999: R256 000).

Unsecured

Loan 603 1 274 - -

Total amount owing 1 274 1 945 - -

Current portion included in current liabilities (671) (671) - -

The loan bears interest at 15,06% p.a. and is

repayable in semi-annual instalments of R335 500.

Term loan 800 - - -

The loan is unsecured, interest free and has no fixed

repayment terms.

22 187 4 549 - -

49

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

16. DEFERRED TAXATION

Balance at the beginning of the year 513 50 - -

Wear and tear (347) (347) - -

Doubtful debts (125) (125) - -

Prepayments 303 136 - -

Special taxation allowances 1 578 1 578 - -

Other (896) (1 192) - -

Charged to income 2 917 463 - -

Wear and tear 3 446 - - -

Doubtful debts (178) - - -


Special taxation allowances - - - -

Other (514) 296 - -

Balance at the end of the year 3 430 513 - -

Wear and tear 3 099 (347) - -

Doubtful debts (303) (125) - -


Special taxation allowances 1 578 1 578 - -

Other (1 410) (896) - -

As at 30 June 2000 the group had not changed its accounting policy with regard to deferred tax to recognise deferred tax

assets in accordance with the new accounting standard AC102. Had this change been effected as at 30 June 2000 a

deferred tax asset of R135 564 000 (1999: R123 499 000) would have been raised and amortised over the remaining life of

the deferred tax asset.

This would have resulted in a reduction in headline net income attributable to ordinary shareholders for the 2000 financial

year from R261 273 000 (1999: R191 500 000) to R247 467 000 (1999: R180 992 000) and a decrease in headline

earnings per share from 144,6 cents (1999: 110,2 cents) to 137,0 cents (1999: 104,2 cents). Diluted headline earnings per

share would have decreased from 140,6 cents (1999: 105,6 cents) to 133,0 cents (1999: 99,6 cents). The net asset value

per share would have increased from 215,9 cents (1999: 326,4 cents) to 269,4 cents (1999: 374,1 cents).


50


Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

17. CASH RECEIVED FROM CUSTOMERS

Turnover 4 741 490 3 374 182 - -

Movement in trade and other receivables (28 972) (3 219) - -

4 712 518 3 370 963 - -

18. CASH PAID TO SUPPLIERS AND EMPLOYEES

Turnover 4 741 490 3 374 182 - -

Profit from operations (307 241) (190 036) - -

4 434 249 3 184 146 - -

Depreciation (43 415) (19 055) - -

Profit on disposal of fixed assets 6 349 539 - -

Movement in inventory 15 936 (6 216) - -

Movement in trade and other payables 59 281 42 182 - -

4 472 400 3 201 596 - -

19. CASH GENERATED FROM OPERATIONS

Profit from operations 307 241 190 036 3 154 2 850

Depreciation 43 415 19 055 - -

Profit on disposal of fixed assets (6 349) (539) - -

Working capital changes (104 189) (39 185) 307 2 494

240 118 169 367 3 461 5 344

20. WORKING CAPITAL CHANGES

Inventory (15 936) 6 216 - -

Trade and other receivables (28 972) (3 219) - 50

Trade and other payables (59 281) (42 182) 307 2 444

(104 189) (39 185) 307 2 494

21. TAXATION PAID

Unpaid at the beginning of the year and on acquisition

of subsidiaries and businesses 73 203 40 784 10 913 4 843

Charged in the income statement 65 480 58 609 2 373 9 867

Unpaid at the end of the year (65 805) (52 160) (3 420) (10 913)

72 878 47 233 9 866 3 797

22. DIVIDENDS PAID

Unpaid at the beginning of the year 14 774 4 041 14 774 4 041

Charged for the year 5 543 21 254 5 543 21 254

Unpaid at the end of the year (14 450) (14 774) (14 450) (14 774)

5 867 10 521 5 867 10 521

51

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

23. ACQUISITION OF SUBSIDIARIES AND

BUSINESSES AS GOING CONCERNS

Property, plant and equipment 110 405 67 910 - -

Trade marks and trade names 103 230 196 520 - -

Investments 16 604 145 - -

Non-cash portion of working capital (28 990) (98 463) - -

Net cash and short term funds (9 846) 60 220 - -

Non-current liabilities (69 151) (3 585) - -

Deferred taxation - (49) - -

Taxation payable (21 043) (10 490) - -

Net assets acquired 101 209 212 208 - -

Goodwill 371 242 189 540 - -

Minority interest - (4 526) - -

Total purchase price 472 451 397 222 - -

Satisfied by:

Cash 72 527 14 971 - -

Amounts due to vendors 99 924 14 384 - -

Short term loans 300 000 - - -

Loans from outside shareholders - 367 867 - -

472 451 397 222 - -

24. RELATED PARTY TRANSACTIONS

Related party relationships exist with the associated

companies recorded in note 8. All purchase and sales

transactions are concluded at arms length. The value

of transactions concluded during the year is not

material to the group.

Various property leases have been entered into with

related parties. The leases were transacted on an arms

length basis at market related rates at the time of

the transactions.


52


Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

25. CAPITAL COMMITMENTS

Capital expenditure

Commitments in respect of capital expenditure

approved by the directors

Contracted for 2 498 893 - -

Not contracted for 3 175 3 700 - -

5 673 4 593 - -

The above commitments are to be financed

from liquid funds.

Operating leases

The minimum commitments are:

Immovable property 165 786 150 639 - -

Equipment 7 962 83 - -

Vehicles 6 414 - - -

Other 905 2 291 - -

181 067 153 013 - -

Due in year one 38 172 35 838 - -

Due in year two 32 882 30 406 - -

Due in year three 26 003 19 880 - -

Due in year four 17 359 17 917 - -

Thereafter 66 651 48 972 - -

181 067 153 013 - -

Material lease commitments relate mainly to immovable

property. Specific details and terms of the leases vary

between different contracts. Renewal options, where these

exist, are for between 1 and 5 years. Rentals on leases escalate

annually. The majority of rentals under lease renewal options

are determined with reference to market rentals at the time

of renewal. There are no contingent rental payments.

26. INTEREST BEARING BORROWINGS

Current 54 272 3 204 - -

Non-current 22 187 4 549 - -

76 459 7 753 - -

53

Group Company

2000 1999 2000 1999

R ’000 R ’000 R ’000 R ’000

27. CONTINGENT LIABILITIES

Bank facilities:

Bank facilities of certain subsidiaries are secured by a negative

pledge over certain fixed assets and a cession of book debts of

R34 535 000 (1999: R20 962 000).

Bank facilities of certain subsidiary companies

have been guaranteed by Rebhold Limited.

Other guarantees:

Bank guarantees to clients 2 586 731 - -

Bank guarantees to suppliers 6 367 4 458 - -

Secondary tax on companies:

In the event that the company were to declare a dividend

equal to its distributable reserves, it would be liable for

secondary tax on companies amounting to

R42 030 000 (1999:R11 864 000).

Forward exchange contracts:

Commitments under forward exchange contracts not

represented by liabilities at year end:

US Dollars (’000) 133 118 - -

Rand Value (’000) 920 735 - -

28. UNCOVERED FOREIGN LIABILITIES

Foreign currency amounts (’000)

US Dollars 91 79 - -

Sterling 48 49 - -

Deutschmark 40 4 - -

French Francs 50 37 - -

Other (Rand equivalent) (R’000) 689 552 - -

29. FINANCIAL INSTRUMENTS

Business and credit concentration

Financial instruments which potentially subject the group to concentrations of credit risk are primarily cash, liquid

investments, long term investments and trade receivables. As regards cash, liquid investments and long term

investments the group deals primarily with major financial institutions in South Africa. The group’s customers are

concentrated almost entirely in South Africa. The group establishes an allowance for doubtful accounts based upon

factors surrounding the credit risk of specific customers, historical trends and other information.


54


Foreign currency riskThe group conducts certain transactions in various foreign currencies. As a result, it is subject to the transactionexposure that arises from foreign exchange rate movements between the dates that foreign currency transactions arerecorded (foreign sales and purchases) and the dates they are consummated (cash receipts and cash disbursements inforeign currencies). Where considered appropriate, the group hedges its foreign currency exposure for either purchaseor sale transactions using forward exchange contracts or other similar products. In other instances the risk arising fromforeign exchange rate movements is priced into the cost of goods or services and recovered directly from customers.

Interest rate riskThe group is exposed to interest rate risk through its cash, liquid investments, long term investments and interest-bearingborrowings. The group does not hedge its interest exposure as its debt is limited to finance leases and instalment saleagreements entered into for underlying assets. Other than finance leases and instalment sale agreements the group islong term debt-free. Short term interest rate exposure is monitored and managed by corporate treasury.

The exposure to interest rate risk at the balance sheet date is:

Floating Fixed interest rate maturinginterest 1 to 5 Over 5 Non-interest

rate years years bearingR ’000 R ’000 R ’000 R ’000

AssetsBank balances 346 040 - - -Liquid investments 175 000 50 000 - -Other investments 66 749 - 80 000 -

587 789 50 000 80 000 -LiabilitiesCapitalised finance leases andinstalment sale creditors 59 459 - - -Other loans - 1 274 - 800

59 459 1 274 - 800

30. RETIREMENT BENEFITSApproximately 65% of group employees are members of various pension and provident funds. These funds includethe Rebhold Pension Fund, a defined benefit fund, the Rebhold Provident Fund, a defined contribution fund, andvarious independently administered defined contribution funds of the operating companies. Where practical theindividual funds of the operating companies are being merged with the Rebhold Pension or Rebhold Provident Funds.An actuarial valuation will be carried out once the merger of the various funds is complete. The directors of Rebholdanticipate an actuarial surplus in the funds subsequent to consolidation thereof.The group’s contributions to all retirement funds are charged against income when incurred. The group contributedR19 949 000 to defined contribution plans and R1 454 000 to defined benefit plans during the year.

55

P R I N C I P A L S U B S I D I A R I E SDetails of principal subsidiary companies30 June 2000

Nature of Issued Shares

Business capital at cost Loans

(refer note) R ’000 R ’000 R ’000

Wholesale/Distribution Division

Directly held

Boland Wine and Brandy (Proprietary) Limited 6 # 994 41 308

Coffee Tea & Chocolate Company (Proprietary) Limited 3 # - 18 000

Galdor Investments (Proprietary) Limited 1 4 26 856 2 417

Instant Foodpak (Proprietary) Limited 2 # 4 931 630

Jumbo Cash & Carry (Proprietary) Limited 2 # 6 357 407 452

Rebhold Distribution Services (Proprietary) Limited 2 # 1 850 -

Southern Super Foods (Proprietary) Limited 3 # 15 791 776

Uni Clinecor (Proprietary) Limited 3 # 4 843 3 061

Indirectly held

Browns Cash and Carry (Proprietary) Limited 2 # - 2 206

Picardi Hotels (Proprietary) Limited 5 5 352 - -

Picardi Liquors (Proprietary) Limited 5 # - 10 000

Radue Weir Holdings (Proprietary) Limited 2 # - 2 206

Rebel Discount Liquor Group (Proprietary) Limited 5 # - -

Services Division

Directly held

Rebserve Limited 1 # 5 455 204 530

Contract Forwarding Holdings (Proprietary) Limited 1 # 27 931 4 156

Trans Global Freight (Proprietary) Limited 4 # 12 031 8 361

Indirectly held

Coin Security Group (Proprietary) Limited 9 # - -

Contract Forwarding (Proprietary) Limited 4 61 - -

JIC Mining Services (2000) (Proprietary) Limited 10 # - -

King Pie Holdings (Proprietary) Limited 8 # - 5 718

Protea Security Services (2000) (Proprietary) Limited 9 # - -

Rebserve Cleaning and Residential Services (2000) (Proprietary) Limited 10 # - -

Royal Food Services (Proprietary) Limited 7 1 - 10 843

Treated Timber Products (2000) (Proprietary) Limited 10 # - -

Trollope Mining Services (2000) (Proprietary) Limited 10 # - -

Other

Directly held

Jenbrooke Investments (Proprietary) Limited 12 # - 10 650

Lexshell 172 Property Holdings (Proprietary) Limited 12 # - 17 580

Lexshell 175 Property Holdings (Proprietary) Limited 12 # - 1 513

Rebhold Management Services (Proprietary) Limited 11 # - 1 380

107 039 752 787

56

P R I N C I P A L S U B S I D I A R I E S( c o n t i n u e d )

The above details are given in respect of interests in subsidiaries, where material. A full list of subsidiaries is available to shareholders,

on request, at the registered office of the company. All subsidiaries are wholly-owned, except for Jumbo Cash & Carry (Proprietary)

Limited, which is 70% held by the group.

Pursuant to the acquisition of the profitable services businesses of Molope and Coin Security Group, options to subscribe for and/or to

receive Rebserve Limited shares by way of exchange were granted to certain Rebserve executives and to certain banks and financial

institutions. The total value and quantum of Rebserve shares to be subscribed for, and/or exchanged, is dependent on inter alia the

final liquidation dividend paid by Molope to Molope’s shareholders as well as the performance of certain of the Rebserve businesses.

Accordingly the extent of the dilution of Rebhold’s interest in Rebserve cannot at this stage be quantified.

Note:

1 Intermediate holding company

2 Wholesaling and distribution of consumer goods

3 Distribution and processing of food and related consumables

4 Freight forwarding

5 Retailing and distribution of liquor and beverages

6 Wine bottler and wholesaler

7 Contract catering

8 Franchising

9 Security services

10 Outsourced technical, support and facilities management services

11 Management services

12 Property investment

# Less than R1 000

57

Notice is hereby given that the fifth annual general meeting of members of Rebhold Limited will be held in the boardroom, 3rd floor, 3Merchant Place, 1 Fredman Drive, Sandton at 11:00 on Friday 12 January 2001 to conduct the following business:

1. To receive and consider the annual financial statements for the year ended 30 June 2000.

2. Re-election of directors who retire in accordance with the provisions of the company’s articles of association.

3. To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolution:

Ordinary Resolution number 1

“Resolved that the authorised but unissued shares in the capital of the company be placed under the control of the directors of thecompany to allot or issue such shares at their discretion, subject to the provisions of the Companies Act No. 61 of 1973, asamended, and the Listings Requirements of the JSE Securities Exchange South Africa.

4. To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolution:


“Resolved that the directors of the company be and they are hereby authorised by way of a general authority to issue all or any ofthe authorised but unissued shares in the capital of the company for cash, as and when they in their discretion deem fit subject tothe Listings Requirements of the JSE Securities Exchange South Africa, which currently provide, inter alia:

– that this authority shall be valid until the next annual general meeting of the company, provided it shall not extend beyondfifteen months from the date that this authority is given;

– that a paid press announcement giving full details, including the impact on net asset value and earnings per share, will be publishedat the time of any issue of shares representing, on a cumulative basis within one year, 5% or more of the number of the company’sshares in issue prior to any such issue;

– that issues in the aggregate in any one year shall not exceed 15% of the number of shares in the company’s issued share capital;

– that, in determining the price at which an issue of shares may be made in terms of this authority, the maximum discountpermitted will be 10% of the weighted average traded price determined over the 30 business days prior to the date that theprice of the issue is determined or agreed by the directors. Issues at a discount greater than 10% may be undertaken subject tospecific shareholder consent; and

– that any such issue will only be made to public shareholders as defined by the JSE Securities Exchange South Africa.”

The approval of a 75% majority of the votes cast by shareholders present or represented by proxy at this annual general meetingis required for the authority in 4 above to become effective.

5. To consider and, if deemed fit, to pass, with or without modification, the following special resolution:

Special Resolution number 1

"Resolved that the articles of association of Rebhold Limited be amended by the deletion of article 13.2 and the insertion of thefollowing new articles 13A, 13B, 13C, 13D and 13E after the existing article 13.

"ACQUISITION OF SHARES ISSUED BY THE COMPANY

13A Subject to the provisions of the Act and the requirements of the JSE Securities Exchange South Africa, the company may, withthe prior approval by way of a special resolution of its shareholders in general meeting, acquire any shares issued by the companyon the basis that -

13A.1 all or a portion of the price payable on such acquisition may be paid out of the funds of or available to the companywhether or not such payment results in a reduction of the issued share capital, share premium, reserves, stated capital, anycapital redemption reserve fund or any other account of the company;

13A.2 the shares so acquired shall be cancelled as issued shares and the authorised share capital of the company shall remainunaltered.

N O T I C E T O M E M B E R S

58

ACQUISITION OF SHARES IN HOLDING COMPANY AND ACQUISITION OF SHARES BY SUBSIDIARY COMPANY/IES

13B The company may -

13B.1 subject to the provisions of the Act and the requirements of the JSE Securities Exchange South Africa, with the prior approval byway of a special resolution of its shareholders in general meeting, acquire any shares issued by any of its holding companies;

13B.2 subject to the provisions of, and in the manner required by, the Act and the requirements of the JSE Securities Exchange SouthAfrica, authorise any subsidiary of the company to acquire shares in the company.

UNCERTIFICATED SECURITIES

13C Notwithstanding any other provision of these articles, the provisions of section 91A of the Act, the requirements of the JSESecurities Exchange South Africa and the provisions of any other relevant legislation shall apply in respect of uncertificatedsecurities.

REDUCTIONS OF CAPITAL

13D Subject to the provisions of the Act and the requirements of the JSE Securities Exchange South Africa, the company may reduceits issued share capital, share premium, reserves, stated capital, and/or capital redemption reserve fund with the approval of -

13D.1 an ordinary resolution of shareholders in general meeting; and

13D.2 a resolution of directors.

Without limiting the generality of this article, it shall be competent in any reduction of capital not to make a payment to share-holders but to transfer the reduced capital to a non-distributable reserve.

PAYMENTS TO SHAREHOLDERS

13E Subject to the provisions of the Act and the requirements of the JSE Securities Exchange South Africa, the company may, withthe prior approval of an ordinary resolution of shareholders in general meeting and a resolution of directors, make payments to itsshareholders whether or not such payments result in a reduction of the issued share capital, share premium, reserves, stated capitaland/or capital redemption reserve fund, provided that the provisions of articles 54, 55 and 56 (and not this 13E) shall apply inrelation to the payment of dividends." "

The effect of this special resolution is to amend the articles of association of the company to give effect to the recent amendments to theCompanies Act and the Listings Requirements of the JSE Securities Exchange South Africa and the reason therefore is to:

– enable the company to, and to establish the manner by which the company may -

• acquire shares issued by the company and its holding company and permit a subsidiary of the company to acquire shares in the company;

• reduce its share capital, share premium, stated capital, reserves and/or capital redemption reserve; and

• make payments to its shareholders.

– provide for the dematerialisation of shares in terms of the Share Transactions Totally Electronic initiative of the JSE SecuritiesExchange South Africa.

6. To consider and, if deemed fit, to pass, with or without modification, the following special resolution:

Special Resolution number 2

"Resolved that, subject to the passing of the special resolution which relates, inter alia, to the amendment of Rebhold Limited's("Rebhold") articles of association to provide for acquisitions of shares issued by Rebhold and reductions of capital and which is to beproposed at the annual general meeting at which this special resolution is proposed and the registration thereof by the Registrar ofCompanies, the directors of Rebhold be and are hereby authorised, by way of a general approval pursuant, inter alia, to articles 13A and13B of Rebhold's articles of association to facilitate, inter alia, the acquisition by Rebhold, or a subsidiary of Rebhold, from time to timeof the issued shares of Rebhold upon such terms and conditions and in such numbers as the directors of Rebhold may from time to timedecide, but subject to the provisions of the Companies Act No 61 of 1973, as amended, and the Listings Requirements of the JSE

N O T I C E T O M E M B E R S( c o n t i n u e d )

59

60

N O T I C E T O M E M B E R S( c o n t i n u e d )

Securities Exchange South Africa ("Listings Requirements") from time to time, which general approval shall endure until the next annualgeneral meeting of Rebhold; provided that it shall not extend beyond fifteen months from the date of the annual general meeting atwhich this special resolution is passed, it being recorded that the Listings Requirements currently require, inter alia, in relation to a generalapproval of shareholders that:

1 acquisitions of securities be implemented on the JSE Securities Exchange South Africa "open market";

2 acquisitions in any one financial year are limited to a maximum of 20% of Rebhold's issued share capital of the relevant class; pro-vided that acquisitions by subsidiaries of Rebhold are limited to a maximum of 10% of Rebhold's issued share capital of the relevantclass;

3 an acquisition may not be made at a price more than 10% above the weighted average of the market value for the shares in questionfor the five business days immediately preceding the date on which the acquisition is agreed;

4 an acquisition may not be made at a bid price greater than the current trading price of the shares concerned;

5 a paid press announcement containing details of such acquisitions must be published as soon as Rebhold and/or any of its subsidiarieshas/have acquired shares constituting, on a cumulative basis, 3% of the number of shares of the relevant class in issue at the date ofthe annual general meeting at which this special resolution is passed ("initial number") and for each 3% in aggregate of the initialnumber acquired thereafter".

The reason for this special resolution is to obtain, and the effect thereof is to grant the company, a general approval in terms of the Companies Act No 61 of 1973, as amended for the acquisition by the company, or a subsidiary of the company, of shares in the capital ofthe company, which general approval shall be valid until the next annual general meeting of the company; provided that the general authority shall not extend beyond fifteen months from the date of the annual general meeting at which this special resolution is passed.

The board of directors ("board") of Rebhold Limited ("Rebhold"), as at the date of this notice, has no definite intention of purchasing shares. It is, however, proposed, and the board believes it to be in the best interests of Rebhold, that shareholders pass a special resolutiongranting Rebhold and its subsidiaries a general authority to acquire Rebhold shares. Such general authority will provide Rebhold and its subsidiaries with the flexibility, subject to the requirements of the Companies Act and the JSE Securities Exchange South Africa, to purchase shares should it be in the interests of Rebhold and/or its subsidiaries at any time while the general authority subsists.

After considering the effect of a purchase of the maximum number of shares which may be purchased, and subject to any significant changes in market conditions, the board is satisfied that for a period of twelve months from the date of this notice:

- Rebhold and the group will be able in the ordinary course of business to pay its debts;

- the assets of Rebhold and the group will be in excess of the liabilities of Rebhold and the group;

- Rebhold and the group will have sufficient capital and reserves;

- Rebhold and the group will have sufficient working capital.

7. To consider and, if deemed fit, to pass with or without modification, the following ordinary resolution:


"Resolved that any director of Rebhold Limited be and is hereby authorised to do all such things, sign all such documents and take allsuch actions as are necessary to give effect to the special and ordinary resolutions proposed at the annual general meeting at which thisordinary resolution is proposed, if it/they is/are passed (in the case of ordinary and special resolutions) and registered by the Registrar ofCompanies (in the case of special resolutions)."

By order of the board

Rebhold Management Services (Proprietary) Limited

Secretary

1 December 2000

A N A L Y S I S O F S H A R E H O L D E R Sat 30 June 2000

No. of % No. of %

shareholders of total shares of total

Size of holding

1 - 10 000 893 90,2 839 616 0,5

10 001 - 50 000 54 5,5 1 160 681 0,6

50 001 - 100 000 6 0,6 480 221 0,3

Over 100 000 shares 37 3,7 178 149 379 98,6

990 100,0 180 629 897 100,0

Analysis of holdings

Insurance companies, pension

funds, corporate bodies and

nominee companies 138 13,9 179 312 427 99,3

Individuals 852 86,1 1 317 470 0,7

990 100,0 180 629 897 100,0

Shareholders holding more than 5% of share capital %

Nominee Shareholders

Republic Nominees (Proprietary) Limited 40,7

Standard Bank (Tvl) Nominees (Proprietary) Limited 26,1

Nedcor Bank Nominees Limited 9,8

First National Nominees (Proprietary) Limited 6,6

Beneficial Shareholders (Included in nominee shareholders)

Coolbay Investments (Proprietary) Limited 17,3

Corpinvest 14 (Proprietary) Limited 8,2

Liberty Life Association of South Africa 5,0

Produced by Twin Cities Communications.Printed by Ultra Litho.

rebhold ann report acro - sharedata

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