financial highlights - sharedata · • sharpening the group’s diamond focus with the disposal of...

2

FINANCIALHighlights

Group summary 2000 1999 Change

R’000 R’000 %

Turnover – Diamonds 366 476 284 456 28,8

Average US$ exchange rate 6,16 5,81 6,0

Exploration costs 20 163 21 258 (5,2)

Mining income 136 769 102 545 33,4

Net attributable income 77 477 37 258 107,9

Headline income 79 894 57 876 38,0

Earnings per share (cents) *

– Basic 122,3 61,8 97,9

– Diluted 120,6 61,8 95,1

– Headline 126,1 96,0 31,4

Cash equivalent earnings per share (cents) * 232,4 153,4 51,5

Total dividend per share (cents) * 33,0 28,5 15,8

Total assets

– Before acquisition 477 401 359 880 32,7

– After acquisition 638 502 359 880 77,4

Net asset value per share (cents) * 556 424 31,1

* Throughout the financial statements, the 1999 figures have been restated to reflect the 4:1

subdivision of the shares effective 28 June 1999.

FINANCIAL RESULTS

Headline earnings per share experienced a 31% increase - up to 126 cents on diamond sales

of R366 million - due to improved production, a better production mix and significantly higher US$

prices. Cash flow after taxation and replacement capital expenditure amounted to R151,9 million

(1999: R58,3 million). Cash equivalent earnings per share were 232,4 cents - an increase of 52%.

The Group continued its mine development and exploration at high levels during the year : R9,7 million

capitalised on mine development and R20,2 million expensed on exploration.

3

The year heralded a number of significant developments for the Group which included:

• Concluding successful mergers with Gem Diamond Mining Corporation Ltd (Gem) and Benguela

Concessions Ltd (Benco).

• The expansion of the Group’s land resource base by an additional 42 841 km2 including securing

rights in the promising mid Orange River region.

• The dramatic increase in sea concessions stretching from South Africa through to Namibia - a total

area of 19 870km2.

• The decision to proceed with a single new processing plant at Baken.

• Sharpening the Group’s diamond focus with the disposal of the lime division.

• Introducing a number of innovative research and development projects to boost production

including a Shallow-Water Mining Tool and Walking Jack-Up Platform.

• Appointing Tokyo Sexwale to the Board as deputy chairman.

• Appointing André Louw to the Board to head up the marine division and spearhead a long-term

strategy aimed at expanding the Group’s marine diamond activities.

CORPORATE

Highlights

to the

he past year was a landmark in our history. Headline earnings increased by 31% and Trans

Hex entered into a partnership with Mvelaphanda Diamonds which led to the acquisition of

Gem and Benco. These companies bring with them extensive diamond rights in the mid-

Orange River region.

The partnership also brings Tokyo Sexwale’s support and assistance to the diamond industry.

Trans Hex welcomes Tokyo as its deputy chairman.

The acquisition of additional marine diamond rights through Benco will

permit a major initiative in this sector. Furthermore, a number of key staff

additions have been made to bolster this division, and the development of

new marine mining technology has commenced.

The new processing plant at Baken will permit a substantial increase in

production and, by lowering costs, will extend the payable reserve.

Exploration of new holdings in the mid-Orange River will hopefully lead

to the establishment of new, large production units.

There have been significant developments locally concerning mining and diamond legislation

and we continue to monitor, evaluate and provide input as these matters unfold.

On the international front, the relationship between diamond producers, marketers, cutters,

polishers and the retail trade is receiving attention and we will act to remain highly

competitive in any new marketing order which may develop.

International focus has also raised awareness of “conflict diamonds” - those originating in

areas of political turmoil and employed to fund civil strife. It is essential that this issue should

not taint an industry on which the livelihood of many workers and their families in the

developing world depends. We therefore fully support the United Nations’ programme to

contain the problem.

Based on past performance, our defined resource base and future potential, we believe that

the financial markets undervalue the Company. The increased free float, flowing from the

Benco and Gem transactions, should substantially increase the liquidity of Trans Hex stock

and promote a more positive share price.

4

LETTERStakeholders

to the LETTERStakeholders

Trans Hex

welcomes Tokyo

Sexwale as its

deputy chairman

T

4

Through our Toronto-based subsidiary,Trans Hex International

(THI), we are active on the exploration front internationally,

with projects in Brazil and Namibia. These activities will

continue and grow in the coming year.

Our values, our commitment to people and our long-term

vision are encapsulated in the Corporate Charter presented

on the inside front cover and we continue our determination

to transform our business into a more participative and

demographically representative one.

Trans Hex’s future lies in the hands of all our employees. These special people have handled

an extremely busy and in many ways unsettling year with exceptional resolve and maturity.

Our sincere thanks are due to them all.

For our part we are resolved to work with them to realise Trans Hex’s potential, for the

benefit of all our employees, our shareholders and the communities within which we operate.

In conclusion we record our sincere thanks to Niel Hoogenhout for his invaluable

contribution as an executive director over the past 12 years. For personal reasons Niel has

relinquished the group managing director’s post, but remains on the Board.

We also extend a warm welcome to our new directors, André Louw, Yannic Mercier and

Mark Willcox.

Bernard van Rooyen

Chairman

Tokyo Sexwale

Deputy Chairman

to the LETTERStakeholders

The allure ofrun-of-mineproduction from the Orange River never failsto impress.

Bernard van Rooyen

and Tokyo Sexwale

6

FIVE-YEAR Consolidated Financial Review

2000) 1999) 1998) 1997) 1996)

R’000) R’000) R’000) R’000) R’000)

BALANCE SHEET

Assets

Fixed assets 413 655) 243 408) 236 919) 188 366) 135 659)

Investments and loans 36 411) 7 567) 6 806) 6 234) 11 492)

Current assets 188 436) 108 905) 108 740) 110 088) 82 838)

Total assets 638 502) 359 880) 352 465) 304 688) 229 989)

Equity and liabilities

Stated capital 156 291) 11 511) 11 511) 11 511) 11 511)

Reserves 300 123) 243 858) 215 538) 179 908) 144 518)

Outside shareholders’ interest 2 123) 1 459) 4 749) 9 773) -)

Deferred liabilities 92 132) 54 432) 59 694) 45 898) 28 550)

Current liabilities 87 833) 48 620) 60 973) 57 598) 45 410)

Total equity and liabilities 638 502) 359 880) 352 465) 304 688) 229 989)

Net asset value per share (cents) 556) 424) 377) 318) 259)

INCOME STATEMENT

Net operating income 122 241) 84 855) 87 652) 63 261) 52 029)

Interest paid (3 916) (5 578) (3 317) (1 583) (1 070)

Exceptional items (6 072) (29 316) 566) 3 628) (3 054)

Net income before taxation 112 253) 49 961) 84 901) 65 306) 47 905)

Taxation 36 936) 15 709) 39 385) 31 002) 25 190)

Net income after taxation 75 317) 34 252) 45 516) 34 304) 22 715)

Equity adjustment (487) (284) (637) 2 241) (1 602)

74 830) 33 968) 44 879) 36 545) 21 113)

Attributable to other members 2 647) 3 290) 7 288) 7 810) -)

Net income retained 77 477) 37 258) 52 167) 44 355) 21 113)

Earnings per share (cents)

– Basic 122,3) 61,8) 86,6) 73,6) 35,0)

– Diluted 120,6) 61,8) 86,6) 73,6) 35,0)

– Headline 126,1) 96,0) 84,9) 68,9) 38,2)

Dividend per share (cents) 33,0) 28,5) 27,5) 26,25) 20,25)

Dividend cover 3,82) 3,37) 3,09) 2,63) 1,89)

7

FIVE-YEAR Consolidated Financial Review

200 000

250 000

300 000

350 000

400 000

450 000

500 000

150 000

Fixed Assets(R’000)

19971996 1998 1999 2000

100 000

413 6

55

243 4

08

236 9

19

188 3

66

135 6

59

550 000

350

400

450

500

550

600

650

300

Net Asset ValuePer Share (cents)

19971996 1998 1999 2000

700

250

259

318

377

424

556

50

60

70

80

90

100

110

40

Headline EarningsPer Share (cents)

19971996 1998 1999 2000

120

30

38,2

68,9

84,9

130

96,0

126,1

24

26

28

30

32

34

36

22

DividendsPer Share (cents)

19971996 1998 1999 2000

38

20

28,5

27,5

26,2

5

20,2

5

33,0

40

8

Trans Hex Benco Gem Total

R’000 R’000 R’000 R’000

Assets

Non-current assets 334 414 52 101 63 551 450 066

Fixed assets 298 008 52 096 63 551 413 655

Investments 34 874 5 - 34 879

Loan 1 532 - - 1 532

Current assets 142 987 18 589 26 860 188 436

Stocks 46 361 3 969 1 292 51 622

Debtors 10 356 2 139 10 479 22 974

Cash resources 73 817 12 481 15 089 101 387

Taxation 12 453 - - 12 453

Total assets 477 401 70 690 90 411 638 502

Equity and Liabilities

Shareholders’ interest 341 900 54 051 60 463 456 414

Outside shareholders’ interest 2 123 - - 2 123

Non-current liabilities

Deferred liabilities 83 562 - 8 570 92 132

Current liabilities 49 816 16 639 21 378 87 833

Creditors 36 296 16 639 21 378 74 313

Provision for dividend 13 520 - - 13 520

Total Equity and Liabilities 477 401 70 690 90 411 638 502

Number of shares (’000) 64 381 8 580 9 161 82 122

Net asset value per share (cents) 531 630 660 556

RECONCILIATIONConsolidated Balance Sheet Combining Trans Hex Group Ltd (Trans Hex),Benguela Concessions Ltd (Benco) and Gem Diamond Mining Corporation Ltd(Gem) at 31 March 2000

of

10

SUMMARY

The past year has been a successful and exciting one for Trans Hex. Total production from

mining and exploration increased by 19% to 135 751 carats (1999: 114 502 carats). The

disposal of the non-core lime division, a buoyant diamond market and a favourable economic

climate resulted in revenues some five percent higher than estimated.

The increased carat production over last year was lower than budgeted due largely to a

marked deterioration in sea-diving conditions. Marine activities produced 72% of estimated

production while land-based operations achieved 96% of target.

The incorporation of the Gem and Benco properties into the next

financial year will add significantly to our production and brings

with it a number of exciting opportunities.

Our production estimates and diamond prices

are detailed in Table 1. Our ore reserves inventory appears in

Table 2.

LAND-BASED DIAMOND OPERATIONS

Baken once again produced excellent results and in

November 1999, as a result of ongoing exploration

successes in the palaeochannel over the past four years,

the Board decided to proceed with the construction of a

single new Dense Media Separation (DMS) processing plant at

a total estimated cost of R123 million. Bateman Materials

Handling Ltd is

managing this project.

The new plant will replace the four

existing plants and will commence full

production in April 2001. It will increase

production by 32% to the order of 60 000

carats per year and reduce total unit

operating costs by 37%. The net effect of

these factors will be to lower cut-off

grades, increase ore reserves and con-

currently extend mine life, with payback

expected in two to three years.

MANAGING DIRECTOR’SOperational Review

SW

BAKEN MINE PLAN

Mined-out areasProved ore reservesIndicated/inferred mineral resourcesPlanned exploration trenchProcessing plant

NAMIBIA

SOUTH AFRICA

PK

KK

PK 20

PK 19

PK 3

PK 4

PK 34

Exploration TrenchesIn Progress

BOW AREA

SCHIST

GRANITE

SCHIST

GRANITE

Inner Limit O

f

PalaeochannelSWARTWATERAREA

ORANGE RIVER

Terrace 2

Terrace 1

LOW

GRAD

EG

RAVELS

KOESKOPAREA

3

PK 28/1

PK 31

PK 22

SANDY

AREA

0 500 1000

metres

250 750

KEY

PK 28/2

Oute

r Lim

it of

Palaeo

chan

nel

Operating mines

LOCALITY MAP

Cape Town

NAMIBIA

BOTSWANA

ZIMBABWE

MOZAMBIQUE

SWAZILAND

Dwarsberg

Johannesburg

Bloemfontein

Durban

East London

Port Elizabeth

Kimberley

Kameelbult

Saxendrift

Orange River

LESOTHO

ReuningBaken

Hondeklip Bay

Oranjemund

Port NollothAlexander Bay

KEY

SOUTH AFRICA

Baken once

again produced

excellent results

11


At current prices the anticipated mine life following commissioning of the new plant will be at least ten

years, and if current financial trends continue coupled with positive results from the final two mega

trenches (PK 31 and PK 34), a life of up to 22 years is predicted. The capital required for this expansion

will be financed out of our cash flow.

During the year large-scale mining equipment completed mega trenches PK 4 (positive) and PK 28/1

and PK 28/2 (marginal). After completion of PK 31 and PK 34 in mid 2000 this fleet will comprise the

core of the stripping fleet for several years to come.

Table 1: Production Estimates and Diamond Prices

1998/1999 1999/2000 2000/2001

Estimated

Production Prices Production Prices Production

(cts) (US $/ct) (cts) (US $/ct) (cts)

Land - Baken 43 544) 45 669) 45 089)

- Reuning 7 039) 684) 5 929) 734) 8 796)

- Orange R. Exploration* 1 306) 11 852) 6 348)

- Other Exploration -) -) 62) 180) -)

- Komaggas 1 519) 161) -) 495) -)

- Hondeklip Bay 8 130) 92) 21 588) 113) 33 387)

- So Ver 22 840) 39) 26 129) 55) -)

- Saxendrift -) -) -) -) 10 976)

SUBTOTAL (LAND) 84 378) -) 111 229) -) 104 596)

Marine - Port Nolloth 6 120) 282) 2 950) 299) 11 500)

- Hondeklip Bay 1 825) 117) 2 102) 134) 3 000)

- De Punt 22 179) 315) 19 470) 326) 25 830)

- Benco (mid/deep water) -) -) -) -) -)

SUBTOTAL (MARINE) 30 124) -) 24 522) -) 40 330)

TOTALS (GROUP) 114 502) -) 135 751) -) 144 926)

* Nxodap / Jakkalsberg South West / Reuning South / Bloeddrif

Peter Danchin

Mega trenches are adramatic symbol ofthe first phase of the mining process.

12


Table 2: Group Ore Reserves and Mineral Resources

Proved Ore

Average)

Project name Ore) stripping ratio) Grade) Total cts)

(m3 mill) (waste:ore) (cts/100m3)

Baken 12,56) 7,6: 1) 3,36) 422 000)

Reuning: Central and other 0,40) 1,4: 1) 2,07) 8 300)

Jakkalsberg 0,34) -) 2,43) 8 400)

Nxodap 0,75) 1,4: 1) 3,00) 22 400)

Bloeddrif 0,06) 1,7: 1) 5,00) 3 000)

Hondeklip Bay 0,24) 8,8: 1) 36,89) 89 000)

Probable Ore

Average)

Project name Ore) stripping ratio) Grade) Total cts)

(m3 mill) (waste:ore) (cts/100m3)

Baken 5,72) 2,0: 1) 1,38) 79 200)

Reuning: Central and other 0,36) 1,4: 1) 2,20) 7 900)

Jakkalsberg -) -) -) -)

Nxodap -) -) -) -)

Bloeddrif -) -) -) -)

Hondeklip Bay 0,06) 15,3: 1) 34,7) 19 500)

Mineral Resources

Measured Indicated) Inferred)

Project name Resources) Grade) Total cts) (m3 mill) (m3 mill)

(m3 mill) (cts/100m3)

Baken 11,01) 1,22) 134 300) 8,11) 5,74

Reuning: Central and other 5,55) 0,91) 50 800) 3,44) 6,72

Jakkalsberg -) -) -) 0,96) 3,59

Nxodap 0,21) 0,50) 1 000) -) 1,41

Bloeddrif -) -) -) 0,09) 17,20

Hondeklip Bay 0,18) 22,63) 40 700) 0,17) 0,23

In all the above cases the bottom screen size used in the recovery plants is 2mm.

13

Notes to Table 2

• The Group’s ore reserves tabled on the previous page are stated in terms of the South

African Mineral Resource Committee (SAMREC) code formulated under the auspices of

the South African Institute of Mining and Metallurgy (SAIMM).The SAMREC definitions

were modelled on the Australian Code for the Reporting of Mineral Resources and Ore

Reserves, and are consistent with those agreed at the Denver Accord.

• Due to the paucity of geological information and sampling results,Trans Hex prefers not

to assign grades to Indicated and Inferred Resources, with the exception of Hondeklip

Bay, where sufficient sampling results are available for the Indicated Resources. If

predicted grades of 0,50cts/100m3 and 0,25cts/100m3 are allocated to all the Indicated

and Inferred Mineral Resources respectively, an additional ±150 000 carats can be added

to the Group total.

• An estimated additional Mineral Resource of 4,0 million m3 in the lower Orange River

area has also not been included in Table 2. Exploration drilling and sampling are planned

to further evaluate these potential resources in the coming years.

• Table 2 does not include any marine reserves. In the shallow-water areas (less than

25m water depth), the mineralisation is generally sporadic and the paucity of suitable

technology to sample this zone has hitherto prevented definitive ore reserve delineation.

However, in water depths greater than 25m, an independent consultant has estimated an

inferred resource of 1 055 000 carats in the concessions of Benco.

• Gem’s probable reserves at the Saxendrift operation currently total 90 000 carats with

considerable upside potential still to be defined by a planned, concerted exploration

programme.


Emil Bührmann

14

The Reuning and Jakkalsberg processing plants

were taken out of production for four months

each in order to effect modifications and upgrades

required because of abnormally high proportions

of plant feed oversize. They are expected to attain

previous levels of production early in the new

financial year.

The Hondeklip Bay processing plant was

recommissioned in September 1999 after

having been shut down in November

1998. Although difficulties with high clay content ores are

still experienced from time to time, the plant is currently

running at design capacity.

The So Ver kimberlite tailings dumps retreatment plant

near Barkly West ceased production at the end of March

2000 having depleted all available ore reserves. Over its

seven-year life this operation produced 210 250 carats

from 2 734 000 tons of retreated tailings. Various options

regarding the relocation or sale of this plant are in the

process of evaluation.

The incorporation of Gem into the Trans Hex

fold brings with it the highly attractive Saxendrift

properties. Diamonds from this area are of the

highest quality and in the past year have attracted

prices in excess of US$800 per carat run-of-mine.

Investigations are currently underway to identify

additional resources to boost production in line

with the company’s overall goals.


Diamonds from

Saxendrift are

of the highest

quality and

in the past year

have attracted

prices in excess

of US$800

per carat run-

of-mine.

0 10 20 km

Active Mining AreaExploration Area

Namibia

REU

NIN

G

South Africa

TRANS HEXMining Lease 2/9140 000 Hectares

BLO

EDD

RIF

BA

KEN

SwartpoortAaceAirstripReuningMehl

SendelingsdrifSouth Gate

JakkalsbergObip

NxodapDaberas

Bloeddrif B1/B2

AuchasPalaeochannel

AirstripBaken Village

KoeskopBaken Palaeochannel

Terraces 1 & 2Swartwater

Orange River

NA

MD

EB

Atlantic Ocean20km

Xaries North

All phases of the recoveryprocess - including washingand screening on the DMSplants - are subject to strictmonitoring and control.

Thick gravels atSaxendrift dwarf a 3.5m staff.

Orange River Mines and

Exploration Areas

16

MARINE DIAMOND OPERATIONS

All our contractor-diver operations experienced adverse

weather conditions throughout the year and 25% less available

diving days were realised compared with last year (Table 3).

The resulting 24 522 carats produced was 28% below budget

for the division.

The allocation of new diver contracts by Alexkor had a

negative impact on our marine activities. Port Nolloth suffered

most with 50% of its contractors defecting early in the year, while De Punt lost 10% of

its contractors to Alexkor towards the end of the period. However, we now see a reversal

of this trend with a number of divers returning and, in fact, we intend to expand contractor

involvement in the upcoming year.

The merger with Benco has added eleven prospective marine concessions to our resource

base. The poor production levels and high costs previously experienced by Benco utilising

mv Moonstar have caused us to halt all operations with this vessel while we actively

investigate more effective mining alternatives.


50

100

150

200

250 34 000

0

14 000

18 000

22 000

26 000

30 000

10 000

99/0098/9997/9896/9795/96

DIV

ING

DA

YS

Table 3: Diving Days and Diamond Production C

AR

AT

S

Small vesselsare used bycontractor-divers off theWest Coast.

Total Diving Days Sum of available diving days from Port Nolloth,

Average Diving Days Hondeklip Bay and De Punt operating centres.

Diamond Production

Alexander Bay

Cape Agulhas

Cape Town

Lamberts Bay

Hondeklipbaai

Kleinsee

Port Nolloth

Luderitz

2495

2496

Hollandsbird Island

Toscannini

Walvis Bay

9

6

5

1

3

7

4

8

2

20

1615

12

11

1413

1718

19

Cape Fria

10

20South

Trans Hex GroupOther

kms

0 50 100 150

25342535

2536

25372538

25392540

2307

2634

2306

2305

Generalised locality of the various SouthAfrican Marine Diamond Concession types

‘d’Concession

‘c’Concession

‘b’ Concession

‘a’ Concession

Shore Line

Trans Hex Group Concessions(including joint venture projects)

Namibian Concessions Area (km )EPL 2534 Cape Fria 1 000EPL 2535 Cape Fria 1 000EPL 2536 Cape Fria 1 000EPL 2307 Terrace Bay 10EPL 2306 Terrace Bay 22EPL 2305 Terrace Bay 97EPL 2634 Terrace Bay 39EPL 2537 Toscanini 1 000EPL 2538 Toscanini 1 000EPL 2539 Toscanini 1 000EPL 2540 Toscanini 1 000EPL 2496 Block G 1 000EPL 2495 Block F 593

South African Concessions2b 1473b 1205a, 5b 1026a, 6b, 6c 3 8397a 3411a, 11b, 11c 1 77312a 3613a, 13b, 13c 1 15314c 1 10018d 2 805

Total 19 870

2

NAMIBIA

SOUTH AFRICA

ANGOLA

Orange River

Cunene River

18

DIAMOND EXPLORATION

Orange River Activities

We continue to expend considerable sums on aggressive exploration to

ensure the long-term growth and profitability of the Group.

Our Orange River mining lease area remained the focus of attention. At the

Xarries North section of the Bloeddrif prospect the third mega trench

(B - 16) spectacularly produced in excess of 10 000 carats. Overburden

stripping of the first mega trench at the B1/B2 (old mine) area continues

with completion scheduled for August 2000. Both of these Bloeddrif

prospects have considerable lateral extent and the full evaluation of their

promising potential will continue for some years to come.

Bulk sampling of the Nxodap prospect is nearing

completion with the 100 tonne per hour modular

sampling plant scheduled to move to the Reuning

South Gate prospect at mid year. It has been decided

to defer a possible production decision at Nxodap

until exploration of the Reuning South Gate and

Jakkalsberg South West prospects has been

completed in 2001.

Integration of these three promising areas into existing

operations at Jakkalsberg and Reuning at a larger

operating scale will produce economies of scale resulting in longer life and increased

margins for the deposits of this region. This strategy follows the lines of the new Baken

plant and the exploration approach at the various Bloeddrif prospects.

Land-Based Exploration Elsewhere in South Africa

Exploration of kimberlite targets in the North West province continued on a reduced

scale during the year. The tempo of research on alluvial occurrences in the mid-Orange

and Vaal river drainage basins in the Douglas, Prieska and Hopetown areas,

extending beyond the Gem and Benco holdings, was escalated. This is undertaken to

obtain a better understanding of sedimentary transport processes as a first step

towards generating new targets.


The excavator/hauler match is a typical example of the equipmentoperating on theOrange Rivermines.

We continue

to expend

considerable

sums on

aggressive

exploration

19

Marine Exploration

During the year under review Ocean Diamond Mining Holdings Ltd (ODM) completed

a contract reconnaissance geophysical survey over marine

concessions along the north coast of Namibia jointly held by

our subsidiary,Trans Hex International (THI), and its Namibian

partners. It is planned to sample further prospective targets

later in the financial year.

During the same period, Benco, as managers of the Trans Hex/

Benco joint venture, completed geophysical surveys over our

concession areas 11(a), 11(b) and 13(b).Target delineation of

the Trans Hex and Benco concessions is underway and sampling options are being evaluated.

RESEARCH AND DEVELOPMENT

Shallow-Water Mining Tool

A Cape Town company, Petrel Engineering (Pty) Ltd, has been contracted to assist with

the development of a mining and sampling tool to exploit the shallow-water reserves.

The tool is designed to assist the diver-operator to remove boulders for more efficient

recovery of diamondiferous gravels.

It will be deployed and recovered from a vessel equipped with a standard 200mm pumping

unit. The recovered gravel will be screened on board and taken ashore for processing.

Although the first prototype is designed to be moved on the seabed with the assistance of

the vessel, the development of a more advanced, mobile unit is envisaged in the future.

The conceptual design of the prototype unit has been completed and construction will

commence as soon as the engineering drafting has been finalised. A search for a

suitable vessel for this project is in progress and it is expected that the prototype

mining tool will be commissioned by mid October 2000.


André Louw

Accurate datacapture forms anintegral part of theexploration process.

The prototype shallow-watermining tool set to becommissioned later this year.

20

Walking Jack-up Platform

We have entered into a joint venture agreement with

UK-based Seacore Ltd which will facilitate the

development and deployment of a mobile version of a

standard jack-up platform. This exciting development

will enable access to the potentially lucrative shallow-

water concession areas with much larger dredging

equipment than previously possible.

The platform unit will be capable of

operating in water depths up to 30

metres. It will be fitted with dredging equipment and a DMS processing

plant and will operate as a stand-alone mining and sampling unit. The

development of the first unit has commenced in the UK and is scheduled

for assembly in South Africa in January 2001.

Marine Development Strategy

The acquisition of Benco has significantly increased the marine diamond

concessions under our control in both shallow and deeper waters.

Consequently, we have employed the highly experienced André Louw

(at Board level) to drive the development of a long-term strategy to

expand our marine diamond activities in keeping with the Group’s

objectives. This includes the definition of resource requirements and the

research of various sampling methods for eventual credible diamond

resource and reserve determination.

TRANS HEX INTERNATIONAL

In Namibia progress at the Northbank project in concession block 9 at Aussenkehr on the

Orange River continued to be stalled by the dispute with the surface-rights owner. The

Namibian High Court declared the ruling of the Mineral Ancillary Rights Commission to be

null and void on the grounds of a procedural error. A new hearing of the Commission was

scheduled for the week beginning 8 May 2000; however, it has been delayed by further

High Court action.

A marine geophysical survey was completed over a prominent feature in the Skeleton Coast

concession blocks. Sampling of the resulting targets is scheduled for later in the financial year.


The walking

jack-up platform

will enable access

to the potentially

lucrative

shallow-water

concession areas

with much larger

dredging

equipment than

previously

possible

Example of a standardjack-upplatform in use in Europeanwaters.

21

Exploratory drilling of the Barra Grande project in Brazil has outlined

alluvial gravels which are both thick and laterally extensive. Preliminary

environmental and metallurgical studies have been completed and small-

scale sampling at several locations will begin in July 2000.

Early-stage exploration sampling

for kimberlites was initiated in

Botswana and Zimbabwe.

MARKETING

We have continued to market our entire

production independently through regular tender

sales in Cape Town and Johannesburg and have

consequently benefited from a buoyant diamond

market throughout the financial period. This

buoyancy has been underpinned by good

consumer sales of diamond jewellery, most notably in the United States, which accounts

for almost half of all global diamond jewellery sales. The United States market saw retail

growth of 12% in 1999 with global retail growth estimated at about 10%.

Despite strong rough sales by the Central Selling Organisation there have been shortages

of rough, at times, that have translated into our receiving both strong demand and strong

prices for our high-quality production.

A successful 1999, with improved margins throughout the ‘pipeline’, has renewed

confidence within the industry and the fourth quarter realised particularly good sales.

In accordance with a request from the Diamond Board of South Africa, we

successfully marketed a larger number of small parcels at the SA Diamond Bourse

in Johannesburg during the financial year in order to allow more smaller

manufacturers access to original production.


Preliminary diamondsorting is undertakenat Baken.

Early-stage

exploration for

kimberlites

was initiated

in Botswana

and Zimbabwe

Niel Hoogenhout

The industry as a whole is undergoing change

and we remain acutely aware of this and its

implications. Included in possible changes for the

year is the scrapping of the Diamond Act and

we await legislation to be tabled in this regard.

As these changes evolve, we remain committed

to the marketing of our production in a manner

that best serves the interests of our industry and shareholders.

The issue of ‘conflict diamonds’ is one in which the industry as a whole

has to play a responsible role. Although we are not involved with affected

countries, we accept this responsibility and will act accordingly in all

our dealings.

Throughout the financial year we conformed with the requirements of the Government

Diamond Valuator in terms of our Section 59 agreement with the SA Diamond Board.

LIME DIVISION

This division was sold outright in March

2000 for a consideration of R20 million.

The loss making Troe-Troe calcination

facility was closed in December 1999 and

the new owners continue their activities

with the other profitable operations at

Vredendal and Langvlei. While the

rationalisation of the Troe-Troe facility

improved the financial performance of

this division, it was no longer part of the

Company’s long-term business focus.

Therefore divestiture of the non-core operation was the logical business move.

22


... we remain

committed to the

marketing of our

production in a

manner that

best serves the

interests of our

industry and

shareholders

Sealed glove-boxes are used in thefinal stage ofall ‘hands-off ’recoveryprocedures.

Average Diamond Sales: Prices by production area

US$ per carat

1997/98 1998/99 1999/00

Baken 734 703 777

Reuning 571 605 625

Hondeklip 99 92 113

So Ver 54 39 55

5a Marine 285 282 299

7a Marine 140 117 134

12a Marine 349 393 428

23

HUMAN RESOURCES

Our existing staff complement of 728 is expected to

rise to approximately 820 once the Benco and Gem

mergers have been fully assimilated.

It remains our stated policy to ensure the optimum

utilisation of our workforce as part of a constant

drive to reduce unit costs. To this end a task team

comprising senior management and respective trade

unions established during 1998 continued its efforts to

enhance productivity and improve industrial relations.

This task team met on a regular basis to deal with and pre-empt any issues that may

impact on operations. It is pleasing to note the harmonious working relationship that exists

is attributable to the team-based approach this group has taken. Its

activities resulted in the successful introduction of a productivity-based

incentive bonus scheme in September 1999.

Industrial relations are currently conducted on an impressively mature

basis, mainly as a result of consultations and negotiations with the

respective trade unions on a collective basis.

The successful implementation of Employment Equity measures is

managed in full consultation with labour. While training and development

remain the most important mechanism in our approach to equip

employees for future advancement, particular attention is paid to

the recruitment and selection process - with the assistance of labour - to

ensure suitably qualified appointments are made with due regard to

employment equity.

An Employment Equity plan was developed and submitted to the

Department of Labour on 1 June 2000, and full reporting will

occur as required by statute.


... particular

attention is

paid to the

recruitment and

selection process

... to ensure

suitably

qualified

appointments

are made with

due regard to

employment

equity

Edwin Hertzog

The diamond securitycontrol centre atBaken monitorsremote-controlledcameras strategicallylocated throughoutthe operation.

24

We continued with extensive training programmes for

our employees and the equivalent of 3,5% of the Group’s

annual payroll was spent on training and development.

All training is aligned with the National Qualifications

Framework. A total of 371 employees underwent training

during the reporting year - this figure represents 2 604

training hours over 372 working days.

In terms of the provisions of the Skills Development Act

and the Skills Development Levies Act, a Skills Development Facilitator has been

appointed. A training committee has been instituted to develop a Workplace Skills

Plan for the Group. Ongoing liaison is taking place with the Mining and Minerals

Sectoral Education and Training Authority in this regard.

The equivalent of 4,5% of our annual payroll had been budgeted for training in the 2000/01

financial year, a figure far in excess of industry standards which serves to underscore our

commitment to a highly trained and motivated workforce.

Remuneration practices remain subject to constant scrutiny to ensure competitive, market-

related remuneration and to attract and retain the most suitably qualified employees for

positions available. All employees enjoy membership of fixed-contribution retirement

schemes and receive medical assistance.

In a continued effort to vest home-ownership in employees, interest-free loans to the value

of R1 737 707 were granted during the year in terms of the Group Housing Assistance

Scheme. Some 137 employees currently receive housing assistance. The scheme also

provides for the payment of subsidies and the provision of mortgage guarantees.

HEALTH AND SAFETY

Regular audits are conducted to ensure compliance

with the Mine Health and Safety Act, and a medical

practitioner and occupational health officer have been

appointed. We are pleased to report that no fatal

accidents occurred during the year under review.


All staff undergoregular medicalcheck-ups.

A comprehensivesupermarket facilityfor both staff andthe community wasestablished by TransHex at Baken.

25

SOCIAL INVESTMENT

Our contribution to the Namaqualand Diamond

Fund Trust (NDFT) amounted to R12,3 million

during the year. This fund serves to provide for

education, training and social upliftment of the local

inhabitants of the Group’s mining and adjoining areas

in Namaqualand.

Our contribution to the Trust represents 5% of sales

revenue generated by mining activities at Baken,

Bloeddrif and Reuning. Of the total R99 million

allotment, to date almost R50 million has been directed to education and training and

infrastructural additions and improvements in the seven Namaqualand subregions benefiting

from the Trust in the last six years.

The Trust Fund’s capital reserve stands at R46 million

which, together with our future contributions, is

invested to ensure the ongoing functioning of the

NDFT.

In the year under review, we contributed an

additional amount of R1 052 000 directly to various

local communities in Namaqualand for other

educational and community-development needs.

We have undertaken to provide both financial and material support to the Nama

Culture Group based in Kuboes near Baken.The Nama people are making

every effort to ensure their traditions and language survive with a

cultural initiative through the conventional school system. This includes

studies in the Nama language, music and dance. The Kuboes School

Nama choir has already achieved acclaim with appearances at a

number of local and international events.


The Kuboes school’sNama choir hasperformed at anumber of local andinternational events.

Trans Hex sponsorscommunity handicraftactivities at Reuning.

Alwyn Martin

26

We continue to assist ‘small miners’

within the Bloeddrif mining-lease area

by joint ventures and profit-sharing

programmes established in 1992. An

amount of R5 million has been budgeted

for a new recovery plant which is the

first project of its kind to be initiated

in Namaqualand. A similar venture has

recently commenced on the Xheis terrace at Baken to the value of R250 000. ‘Small miners’

are also encouraged to become beach and shallow-water marine contractors.

ENVIRONMENTAL MANAGEMENT

We recognise the global, national and regional significance of environmental

protection and are committed to meeting today’s growing need for

mineral-based products in an environmentally sustainable manner.

As manifested in our Environmental Management Policy Statement on the

inside back cover, we are committed to excellence in environmental

management, openness and accountability and have formally undertaken to

comply with all relevant statutory requirements.

To this end we subscribe to a proactive and balanced approach to

environmental management and have recently expanded our internal

management structure. There is an increasing awareness among our

employees that economic benefits are to be gained through improved

environmental management strategies.

Onshore

In line with the requirements of the Minerals

Act of 1991, Environmental Management

Programme Reports (EMPRs) for all our mines in

Namaqualand and at So Ver have been approved

by the relevant authorities and are being used

by the respective operations managers as

guidelines for day-to-day rehabilitation.


The towns ofBaken andSanddrifalongside theOrange River.

We continue

to assist ‘small

miners’ within

the Bloeddrif

mining-lease

area by way of

joint ventures

and profit-

sharing

programmes

Expectation, excitement and,hopefully, exhilarationaccompanies final hand-sorting of small miners’concentrates at Bloeddrif.

27

The Baken and Reuning EMPRs are being

upgraded in preparation for the bi-annual

environmental audit, the first of which is

to be conducted towards the end of

2000. In addition, EMPRs for prospecting

in the Wolmaransstad and Richtersveld

areas have been drafted.

In order to comply with the latest requirements of the National Water Act, a civil engineering

consulting group has been appointed to advise on the design and management of the ten

slimes dams operated by the various mines.

Marine activities

Trans Hex, as one of the founder members of the Marine Diamond Mines Association

(MDMA), was instrumental in the appointment of a specialist marine environmental

consultant to draft a Generic Environmental Management Programme Report (G-EMPR) in

respect of all offshore diamond-mining activities. In addition to essential baseline information,

the document provides a comprehensive list of measures aimed at managing the impacts

of diamond mining and associated activities in the admiralty strip, the surf zone and the

shallow-, mid- and deep-water concession areas.

Four supplementary project-specific EMPRs, pertaining to groups of concessions with similar

physiographic and technical characteristics, are being compiled. A series of three scoping

meetings at different localities along the West Coast have paved the way for public

participation in the process of defining aspects and impacts.

Cessation of activities

To comply with the requirements of Section 12 of the Minerals Act, application has

been made for closure of the now-defunct Komaggas Mine (Trans Hex’s first mine).

Application for final closure will be submitted after the stabilisation of slimes

dams and watercourses.

At the So Ver mine, where retreatment of tailings ceased in March

2000, nine of the eleven dumps have been rehabilitated and

closure certificates have been issued in respect of these areas.


Yannic Mercier

The West Coast isrenowned for itsdesolate beauty andrugged coastline.

28

At the New Elands mine, where retreatment of tailings

was done during the period 1988-1996, extensive

rehabilitation has been conducted. The open pit still needs

to be made safe before a closure certificate will be issued.

Rehabilitation Trust Fund

Financial provision for mine closure is a requirement of

the Minerals Act. To this end the Trans Hex Group

Rehabilitation Trust Fund has been established and is annually supplemented for

eventual mine-closure expenditures.The fund currently stands at R5 712 213.

Community interaction

Trans Hex strives towards maintaining sound relations with the management of the

Richtersveld National Park and the rural community. Broader environmental issues

are continuously being addressed, eg the possible declaration of a Trans Frontier

Peace Park combining the South African Richtersveld National Park and the Fish River

Park in Namibia into a declared wilderness area.

We recently commissioned the Archaeology Contracts Office at the University of Cape Town

to assess the heritage resources of the Baken-Reuning concession in the Richtersveld. It

was suggested that, where there is the potential for damage to heritage sites (not by mining

but by natural weathering processes), those sites be identified and protected or removed

by systematic archaeological excavations.

This exercise, as well as phase one of an archaeological assessment of our onshore

concession areas at Hondeklip Bay and De Punt, is to be conducted during the next

financial year.


Peter Danchin(chairman of theMDMA) handed the G-EMPR to the Director of MineralDevelopment -Northern Cape,Louis Selekane.

29


We have recently embarked on a systematic clean-up of those surf zones and admiralty

strips linked to our West Coast concession areas.This has attracted favourable response from

Government officials and members of the community alike. As a follow-up Trans Hex,

together with other marine diamond-mining companies and the Department of Environment

and Tourism (Marine and Coastal Management), plan to participate in the International

Coastal Clean-up Campaign on 16 September 2000.

CONCLUSION

The refocus on core activities, acquisition of new mining and exploration properties, and

streamlining of various production facilities, together with ground-breaking

research and development projects, will ensure the forthcoming year

continues to be a period of growth and innovation for the Group.

Our commitment to training has been rewarded by raised levels of job

competency. Combined with our team-based approach to labour issues,

this has resulted in a more effective and efficient workforce. We continue

to be a model in the communities in which we operate.

To our loyal, dedicated and hardworking employees at all levels, our

continued sincere thanks. Without your ongoing determination in some

of the most remote and climatically challenging regions of South Africa, Trans Hex would

simply not exist.

Peter Danchin

Managing Director : Operations

... the

forthcoming year

continues to be a

period of growth

and innovation

for the Group

Mark Willcox

30

DIRECTORSManagement Profiles

DIRECTORS

Bernard van Rooyen – Chairman BA LLB (Wits)

A former executive director of Gold Fields SA Ltd and representative on the boards of

numerous mining, banking and utility companies, Bernard (66) has served as a Trans Hex

director since 1993.

Tokyo Sexwale – Deputy Chairman Phd Hon.Caus., (Nott)

Tokyo (47) has brought a diversity of experiences to the Group gleaned from his

directorship of various companies in the natural-resources sector and a prominent political

career. He is also executive chairman of Mvelaphanda Holdings.

Peter Danchin – Managing Director: Operations BSc (Hons) (Wits)

With over 30 years’ experience in mining and exploration, Peter (54) joined Trans Hex in

1990. He was appointed to the Board in 1993 and assumed the title of Managing Director :

Operations in 1995.

André Louw – Executive Director: Marine BSc (Hons) MBA (Stell)

Since starting his career as an exploration geologist, André (51) has established himself as

one of the country’s marine diamond mining experts.

Emil Bührmann – Non-Executive Director BComm (OFS), CA (SA)

Representing the Rembrandt Group on various of its Boards, Emil (45) has been a Trans

Hex director since 1994.

Edwin Hertzog – Non-Executive Director MB, ChB, Mmed (Stell), FFA (SA)

Currently deputy chairman of the Rembrandt Group and chairman of Medi-Clinic

Corporation, Edwin (50) has been a Board member of Trans Hex for the past ten years.

Niel Hoogenhout – Non-Executive Director BComm, LLB (Stell), CA (SA)

As the director with the longest history with the Group - 18 years in total - Niel (46)

served as Group Managing Director until earlier this year.

Alwyn Martin – Non-Executive Director BComm (UCT), CA (SA)

With a solid financial background and substantial experience in the field of

telecommunications - he is currently CEO of Siemens Telecommunications (Pty) Ltd and

executive director of Siemens Ltd - Alwyn (62) officially entered the mining arena in 1997

when he was appointed to the Board of Trans Hex.

Yannic Mercier – Non-Executive Director BA (Hobart College)

A graduate of the New York Institute of Finance,Yannic (66) has over 30 years’ experience

at board level with companies active in investment banking, mining exploration and

corporate management worldwide.

Mark Willcox – Non-Executive Director BA LLB Post Grad Dip.Tax (UCT)

Mark (30) is a specialist in mining corporate finance with experience in South Africa and

North America and is also managing director of Mvelaphanda Holdings and its associated

companies.

and

31

AUDIT COMMITTEE

Alwyn Martin (Chairman), Bernard van Rooyen and Emil Bührmann

REMUNERATION COMMITTEE

Edwin Hertzog (Chairman), Bernard van Rooyen and Peter Danchin

EXECUTIVE COMMITTEE

Bernard van Rooyen (Chairman), Tokyo Sexwale, Peter Danchin, Emil Bührmann and

André Louw

SENIOR MANAGEMENT

Danie Claassen (53) Group Metallurgist

BSc (Eng) (Pretoria)

Hennie Coetzee (42) Group Manager : Personnel

BA (Hons) (Stell)

Altie Krige (45) Group Production Manager : Land Diamonds

BSc (Hons) (Stell)

Tim Lee (34) Group Manager : Marketing

MBA (Newcastle)

Magda Loubser (40) Group Manager : Finance

BAcc (Hons) (Stell), CA (SA) (Public Officer)

Keith McCulloch (51) Group Mining Engineer

BSc (Eng) (Wits)

Martin Pool (48) General Manager : Baken

NHTD T4

Phillip Schreuder (54) Group Manager : Mineral Rights and

BSc Hons, MSc, D Comm (RAU) Environmental Management

Assie van der Westhuizen (57) Manager : Namaqualand Exploration

MSc (OFS)

Peter Walker (53) Group Manager : Exploration

BSc (Hons) MBA (UCT)

Steve West (46) Group Manager : Marine

NHTD T4 (Wits)

George Zacharias (42) Group Secretary

BA, LLB (Rhodes)

DIRECTORSManagement Profiles and

REPORTBoard of Directors

The Board has pleasure in reporting on the activities and financial results of the Group for the year

under review.

NATURE OF ACTIVITIES

Trans Hex Group Ltd (‘Trans Hex’ or the ‘Group’) is an integrated, international company engaged

directly and through joint-venture agreements with others in the exploration for, and mining and

marketing of, high-quality diamonds from alluvial and marine deposits.

GENERAL REVIEW

Operating Results

Year ended 31 March: 2000 1999

Net attributable income (R’000) 77 477 37 258

– Basic earnings per share (cents) 122,3 61,8

– Diluted earnings per share (cents) 120,6 61,8

Headline income (R’000) 79 894 57 876

– Headline earnings per share (cents) 126,1 96,0

Dividends (R’000) 21 246 17 177

– Dividend per share (cents) 33,0 28,5

CORPORATE ACTIVITIES

Acquisitions

Benguela Concessions Ltd (Benco)

On 1 February 2000, it was announced that Trans Hex intended to propose a scheme of arrangement

in terms of Section 311 of the Companies Act, 1973 (‘the scheme’) between Benco and its ordinary

shareholders (‘scheme members’), effective 31 March 2000.

In terms of the scheme, members received 4,791649 ordinary Trans Hex shares for every 100 Benco

shares held on the scheme record date, 20 April 2000. In addition to the shares issued to Benco

shareholders, 3 416 451 Trans Hex shares have been issued to Lambeth Trading Pte Ltd (‘Lambeth’)

in payment of outstanding amounts due by Benco to Lambeth in respect of the mv Moonstar.

of the

32

33

Following shareholder approval on 10 April 2000 and sanctioning by the court on 18 April 2000,

the scheme was implemented on 25 April 2000, resulting in Benco becoming a wholly-owned

subsidiary of Trans Hex and the delisting of Benco shares on the Johannesburg Stock Exchange.

Gem Diamond Mining Corporation Ltd (Gem)

On 14 December 1999, it was announced that Trans Hex intended to propose a scheme of arrange-

ment in terms of Section 311 of the Companies Act, 1973 (‘the scheme’) between Gem and its

ordinary shareholders (‘scheme members’), effective 31 March 2000.

In terms of the scheme, members received 9,7 ordinary Trans Hex shares for every 100 Gem

shares held plus a cash consideration of 16 cents per Gem share held on the scheme record date,

12 May 2000.

Following shareholders’ approval on 25 April 2000 and sanctioning by the court on 9 May 2000,

the scheme was implemented on 15 May 2000, which resulted in Gem becoming a wholly-owned

subsidiary of Trans Hex and the delisting of Gem shares on the Johannesburg Stock Exchange.

The balance sheets at 31 March 2000 of both Benco and Gem are incorporated herein. The income

statements do not include any items from either company for the year ended 31 March 2000.

Other Activities

Diamond Fields International (DFI)

In terms of an agreement entered into between Trans Hex and Mvelaphanda Diamonds (Pty) Ltd,

Trans Hex acquired 3 880 000 shares (7,5%) in DFI, for a total consideration of R29 million, effective

20 August 1999. DFI is a public exploration company listed on the Toronto Stock Exchange which holds

prospective marine diamond concessions off the Namibian coast.


of the

34

Ocean Diamond Mining Holdings Ltd (ODM)

On 26 October 1999 Trans Hex accepted the offer by Namibian Minerals Corporation (Namco)

to the minority shareholders of ODM of R8,25 per share payable in cash, in respect of Trans Hex’s

15 254 538 (32,9%) shareholding in ODM.

On 9 May 2000 the Securities Regulation Panel ruled (on appeal) that Namco did not act in concert

with a third party and that Namco’s R8,25 offer price to minority shareholders of ODM need not be

increased. Reasons for the ruling are awaited.

Trans Hex International Ltd (THI)

The Board of Directors resolved that the outstanding inter-company loan between Trans Hex

Diamonds Ltd, a wholly-owned subsidiary of Trans Hex, and Trans Hex’s Toronto Stock Exchange-listed

subsidiary THI should be capitalised. Trans Hex Diamonds Ltd has accordingly acquired 713 136 THI

common shares, being the amount of shares derived by dividing the outstanding balance of the inter-

company loan between Trans Hex Diamonds Ltd and THI as at 31 March 2000, by Canadian $4,00

per common share.Trans Hex’s shareholding in THI has accordingly increased from 72,84% to 73,22%.

Lime Division

In order to focus on its diamond activities, Trans Hex disposed of its lime division to a Western

Cape-based company in a R20 million transaction on 13 March 2000.


of the

35

GROUP FINANCIAL REVIEW

Balance Sheet

Shareholders’ interest at book value on 31 March 2000 amounted to R456,4 million or R5,56 per share

(1999: R255,4 million or R4,24 per share).

Utilisation of net assets:

2000) 1999)

R’000) R’000)

Diamonds 452 386) 193 393)

Lime -) 57 810)

Other 4 028) 4 166)

456 414) 255 369)

Income Statement

The consolidated headline income for the year ended

31 March 2000 amounted to R79,9 million or 126,1 cents

per share (1999: R57,9 million or 96,0 cents per share).

Source:

2000) 1999)

R’000) R’000)

Diamonds 79 425) 60 277)

Lime -) (2 120)

Other 469) (281)

79 894) 57 876)

Composition:

Subsidiary companies

Profits 80 374) 58 147)

Associated companies

Share of net deficit (487) (284)

The Company

Excluding intergroup dividends 7) 13)

79 894) 57 876)


of the

36

2000 1999

R’000 R’000

DIVIDENDS

The following dividends were declared during

the year ended 31 March:

Interim dividend No 38 of 12c per share paid in

January 2000 (1999: 11c) 7 726 6 630

Final dividend No 39 of 21c per share payable in

May 2000 (1999: 17,5c) 13 520 10 547

21 246 17 177

SUBSIDIARIES AND INVESTMENTS

Details of subsidiaries, associated companies and other investments are set out in Annexure A.

DIRECTORS

The names of the directors appear on page 30.

The following directors were appointed during the period 1 April 1999 to date of this report:

Name Date of appointment

André Louw 29 February 2000

Tokyo Sexwale 29 February 2000

Yannic Mercier 26 April 2000

Mark Willcox 15 May 2000

In terms of the provisions of the Company’s Articles of Association, one third of the directors retire

annually. Directors appointed during the year retain office only until the next Annual General Meeting

of the Group. Accordingly Messrs Louw, Sexwale, Mercier and Willcox retire by rotation at the

forthcoming Annual General Meeting and are eligible for re-election.

SECRETARY

Mr G J Zacharias was appointed as secretary with effect from 1 May 1999. The registered address of

the Company appears on page 72.

DIRECTORS’ INTEREST

As at 31 March 2000 the directors were, directly and indirectly, the beneficial owners of 0,2%

(1999: 0,2%) and non-beneficial owners of 0,3% (1999: 0,3%) of the issued share capital of the

Company. Indirect interests, through listed public companies, have not been taken into account.

Since the end of the financial year and following the implementation of the Benco and Gem transactions

the directors were at date of this report, the beneficial owners of 2,2% and non-beneficial owners

of 0,3% of the issued share capital of the company.


of the

37

DIRECTORS’ FEES

The Board recommends that non-executive directors’ fees for services rendered during the past

financial year be fixed at R91 000 (1999: R90 000).

YEAR 2000 COMPLIANCE

As predicted, the Group experienced no Y2K problems.

POST-BALANCE SHEET EVENTS

Issue of Shares

Benguela Concessions Ltd (Benco)

Following the implementation of the Benco scheme of arrangement on 25 April 2000,Trans Hex issued

8 579 499 ordinary shares of no par value which were listed on the Johannesburg and Namibian Stock

Exchanges on the same day.

Gem Diamond Mining Corporation Ltd (Gem)

Following the implementation of the Gem scheme of arrangement on 12 May 2000,Trans Hex issued

9 161 082 ordinary shares of no par value which were listed on the Johannesburg and Namibian Stock

Exchanges on 15 May 2000.

The issue of these shares was included in the Balance Sheets as at 31 March 2000.

APPROVAL OF THE FINANCIAL STATEMENTS

The annual financial statements were approved by the Board of Directors on 22 May 2000 and are

signed on their behalf by:

Bernard van Rooyen

Chairman

Peter Danchin

Managing Director : Operations

Parow

22 May 2000


of the

38

ACCOUNTINGPolicies

SIGNIFICANT ACCOUNTING POLICIES

The annual financial statements are prepared on the historical cost basis and are consistent

with those of the previous year. They incorporate the following accounting policies which

conform with International Accounting Standards and South African Generally Accepted

Accounting Practice.

Consolidation

The consolidated financial information includes the financial statements of the Company

and its subsidiaries. A Company in which the Group has the power to exercise control, either

directly or indirectly, through other subsidiary undertakings, is classified as a subsidiary

undertaking. Any excess or deficit of the purchase price, when compared to the fair value of

the subsidiary acquired, is attributed to mining assets and amortised in terms of the Group’s

accounting policies. Inter-company accounts and transactions are eliminated on consolidation.

Accounting for investments in associates

Companies in which the Group holds a long-term interest, and over whose financial and

operating policies a significant influence can be exercised, are accounted for as associated

companies according to the equity method.

Joint ventures

The Group’s interest in a jointly controlled entity is accounted for by proportionate

consolidation: the Group includes its share of the joint venture’s individual income and

expenses, assets and liabilities in the relevant components of the financial statements.

Foreign currency

For self-sustaining foreign entities, assets and liabilities are translated using the closing rates

of exchange, while revenues and expenses are translated at average rates of exchange.

Differences arising on translation are taken directly to shareholders’ equity. For integrated

foreign operations, monetary items are translated at the closing rates of exchange and

non-monetary items are translated at the rates of exchange prevailing on the date of the

transactions. Exchange differences are recognised in income.

Use of estimates

The preparation of the consolidated financial statements, in conformity with generally

accepted accounting principles, requires management to make estimates and assumptions

that affect the reporting amounts of assets and liabilities, the disclosure of contingent assets

and liabilities at the date of the financial statements, and the reported amounts of revenues

and expenses during the reporting period. Actual results could differ from those estimates.

Cash and short-term investments

Cash and short-term investments include all highly-liquid investments with a maturity of six

months or less at the date of purchase. The Group minimises its credit risk by investing its

cash and cash equivalents with major banks and financial institutions located principally in

South Africa, Belgium and Canada. The Group believes that no concentration of credit risk

exists with respect to investment of its cash and cash equivalents.

Inventories

Inventories, which include rough diamonds, are stated at the lower of cost of production on

the weighted average basis or estimated net realisable value. Cost price includes a portion

of overheads. Consumable stores are stated at the lower of cost on the weighted average

basis or estimated replacement value.

Investments

Investments are stated at cost and are only written down where the directors are of the

opinion that there has been a permanent diminution in value. Where there has been a

permanent diminution in value of an investment, it is recognised as an expense in the period

in which the diminution is recognised.

On disposal of an investment, the difference between the net disposal proceeds and the

carrying amount is charged or credited to the income statement.

ACCOUNTINGPolicies

39

40

ACCOUNTINGPolicies

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a

result of past events and it is probable that an outflow of resources embodying economic

benefits will be required to settle the obligation of which a reliable estimate can be made.

Employee entitlements to annual leave are recognised on an ongoing basis. A provision is

made for the estimated liability for annual leave as a result of services rendered by employees

up to the balance sheet date.

Deferred organisation expenses

Deferred organisation expenses, comprising the costs of establishing and organising Trans

Hex International Ltd and its subsidiaries, have been capitalised and are being amortised on

a straight-line basis over a period of five years.

Exploration costs

Exploration costs are expensed until such time as a favourable feasibility study is completed.

Revenue earned from the discovery of diamonds during the exploration phase is included in

sales revenue in the income statement.The estimated costs of production of diamonds sold,

not exceeding related revenue, are credited against exploration expenditure and included in

cost of sales.

Mine-development costs

Mine-development costs, relating to major programmes at existing mines, are capitalised.

Development costs consist primarily of expenditure to expand the capacity of operating

mines. Day-to-day mine-development costs to maintain production are expensed as incurred.

Following completion of a favourable feasibility study, initial development and preproduction

costs relating to a new ore body, including interest on borrowed funds used to develop the

ore body, are capitalised until the ore body is brought into commercial levels of production,

at which time the costs are amortised as set out below. Revenue from discovery of diamonds

during the mine-development phase is included in sales revenue in the income statement.The

estimated costs of production of diamonds sold, not exceeding related revenue, are credited

against mine-development costs and included in costs of sales.

Deferred stripping costs

Where stripping costs have been incurred in excess of the expected pit life average

stripping ratio, these costs are deferred and charged to production when the exposed

reserves are mined.

41

Depreciation and amortisation

Depreciation and amortisation of alluvial mining properties, mine-development costs and

mine plant facilities are computed principally by the units-of-production method based on

estimated quantities of proven and probable ore reserves. Proven and probable ore reserves

reflect quantities of economically recoverable reserves which can be recovered in the future

from known mineral deposits. Such estimates are based on current and projected costs and

prices. Earthmoving equipment is depreciated based on hours worked. Depreciation and

amortisation of marine mining properties, mine-development costs and mine plant facilities

are computed by the units-of-production method over the estimated useful life of 20 years.

Other fixed assets are depreciated principally on a straight-line basis over their estimated

useful lives of three to ten years. Fixed assets awaiting installation on site are not depreciated

until they are commissioned.

Property evaluation

Long-life assets of the Group, including development and deferred stripping costs, are

reviewed for impairment whenever events or changes in circumstances indicate that the

carrying amount of an asset may not be recoverable. If deemed impaired, an impairment loss

is measured and recorded based on the fair value of the asset generally computed using

discounted cash flows.

Estimated future net cash flows from each mine are calculated using estimates of production,

future sales prices (considering historical and current prices, price trends and related factors),

production and rehabilitation costs plus capital.

Management’s estimates of future cash flows are subject to risks and uncertainties.Therefore,

it is possible that changes could occur which may affect recoverability of the Group’s

investments in mineral properties and other assets.

Undeveloped properties and mineral rights upon which the Group has not performed

sufficient exploration work to determine whether significant mineralisation exists are carried

at original acquisition cost. If it is subsequently determined that significant mineralisation

does not exist, the property will be written down to estimated net realisable value at the

time of such determination.

ACCOUNTINGPolicies

42

ACCOUNTINGPolicies

Rehabilitation costs

Rehabilitation costs and related accrued liabilities, based on the Group’s assessment of

current environmental and regulatory requirements, are accrued and expensed principally

using the units-of-production method on estimated quantities of proven and probable ore

reserves. Remediation liabilities, other than rehabilitation costs, which relate to liabilities

arising from specific events, are expensed when they are known, probable and may be

reasonably estimated.

The Group’s estimated future rehabilitation liability is funded by way of annual payments

to the Trans Hex Rehabilitation Trust Fund. This Fund was established with the approval of

the South African Revenue Service. Interest earned on monies paid to the Rehabilitation

Fund is accrued on an annual basis. It is reasonably possible that the Group’s estimate of

its ultimate rehabilitation liabilities could change as a result of changes in regulations or

cost estimates.

Provident funds

Provident funds, consisting of two defined contribution plans, are funded through monthly

contributions and administered independently of the finances of the Group by financial

institutions. The Group’s contributions are charged against income. Both funds are governed

by the South African Pension Fund Act of 1956.

Post-retirement medical benefits

The present value of the liability of the Group in respect of future contributions is

determined annually by independent actuaries.

The future medical benefits for employees retiring after 1 April 1995 are funded on an

actuarially determined basis uniformly over the service period of each active member.

An actuarially determined amount will be contributed to a separate benefit fund over a

period of 20 years as funding for this liability. In respect of service after 1 April 1995, annual

contributions are made to the same benefit fund equal to the value of the liability arising in

respect of that year.

43

ACCOUNTINGPolicies

Revenue recognition

Product sales are recognised when title passes at the shipment or delivery point.

Other revenue earned by the Group is recognised on the following basis:

– Interest income - as it accrues, taking into account the effective yield of the asset, unless

collectability is in doubt.

– Dividend income - when the shareholder’s right to receive payment is established,

recognised at the last date of registration.

Income taxes

The Group follows the fully comprehensive liability method of accounting for income taxes,

prior to taking State lease consideration into account, whereby deferred income taxes are

recognised for the tax consequences of temporary differences. This translates into applying

the currently enacted tax rates applicable to future years to differences between the financial

statement carrying amounts and the tax bases of certain assets and liabilities. Changes in

deferred tax assets and liabilities include the impact of any tax rate change enacted during

the year. No provision is made for deferred State lease consideration since the rate,

according to the applicable formula, is not determinable in advance.

Earnings per share

Basic earnings per share is computed by dividing the net income attributable to shareholders

by the weighted average number of ordinary shares in issue during the year. The Group’s

basic and diluted earnings per share differ as a result of shares issued and options granted

to employees during this year.

Preparation of financial statements

Certain amounts for the prior years have been reclassified to further conform with

International Accounting Standards. All amounts are in South African Rands, unless otherwise

indicated.

44

INCOMEStatements

COMPANY) CONSOLIDATED)

2000) 1999) 2000) 1999)

Notes) R’000) R’000) R’000) R’000)

Sales revenue 1) ) 366 476) 315 743)

Cost of sales ) 229 707) 213 198)

Stripping, mining and hauling 2) ) 114 350) 95 121)

Recovery operation 3) ) 42 927) 51 030)

Depreciation of mining assets ) 33 256) 30 293)

Royalties: Namaqualand

Diamond Fund Trust ) 12 451) 9 269)

Selling and administration costs ) 32 206) 24 489)

Decrease/(increase) in inventories ) (5 483) 2 996)

Mining income ) 136 769) 102 545)

Other income 10) 21) -) -)

Net financial income/(costs) 4) 21 246) 17 177) 1 719) (2 010)

Exploration costs ) (20 163) (21 258)

Exceptional items 5) ) (6 072) (29 316)

Net income before taxation 6 & 7) 21 256) 17 198) 112 253) 49 961)

Taxation 8) 3) 8) 36 936) 15 709)

Net income after taxation 21 253) 17 190) 75 317) 34 252)

Outside shareholders’ interest ) 2 647) 3 290)

21 253) 17 190) 77 964) 37 542)

Equity adjustment: Share in net

deficit of associated companies ) (487) (284)

Attributable income 21 253) 17 190) 77 477) 37 258)

Earnings per share 9) Cents) Cents)

– Basic 122,3) 61,8)

– Diluted 120,6) 61,8)

– Headline 126,1) 96,0)

Dividends per share 33,0) 28,5)

45

SheetsBALANCE


2000) 1999) 2000) 1999)

Notes) R’000) R’000) R’000) R’000)

Assets

Non-current assets 181 480) 24 374) 450 066) 250 975)

Fixed assets 10) -) -) 413 655) 243 408)

Investments 11) 179 948) 22 343) 34 879) 5 536)

Loan 12) 1 532) 2 031) 1 532) 2 031)

Current assets 1 632) 9 592) 188 436) 108 905)

Stocks 13) -) -) 51 622) 40 580)

Debtors 14) 1 463) 738) 22 974) 23 259)

Cash resources 169) 163) 101 387) 42 994)

Taxation -) 8) 12 453) 2 072)

Provision for dividend receivable -) 8 683) -) -)

Total Assets 183 112) 33 966) 638 502) 359 880)

Equity and Liabilities

Capital and Reserves 167 950) 23 163) 456 414) 255 369)

Stated capital 15) 156 291) 11 511) 156 291) 11 511)

Other reserves -) -) -) 26 435)

Translation reserves -) -) 10 461) 10 373)

Retained earnings 11 659) 11 652) 289 662) 207 050)

Outside shareholders’ interest -) -) 2 123) 1 459)

Non-current liabilities

Deferred liabilities 16) -) -) 92 132) 54 432)

Current liabilities 15 162) 10 803) 87 833) 48 620)

Creditors 1 642) 256) 74 313) 38 073)

Provision for dividend 13 520) 10 547) 13 520) 10 547)

Total Equity and Liabilities 183 112) 33 966) 638 502) 359 880)

46

STATEMENTSChanges in Equity

Net reserve)arising on)

Share) Translation) consoli-) Retained)Capital) Reserves) dation) earnings) Total)

GROUP R’000) R’000) R’000) R’000) R’000)

Balance at 1 April 1998 11 511) 5 820) 24 595) 185 123) 227 049)

Net profit attributable to

ordinary shareholders 37 258) 37 258)

Dividends paid and provided (17 177) (17 177)

Translation differences on

foreign subsidiaries 4 553) 3 678) 8 231)

Transfer to non-distributable

reserves (1 832) (1 832)

Change of interest in subsidiary

companies 1 840) 1 840)

Balance at 31 March 1999 11 511) 10 373) 26 435) 207 050) 255 369)




Translation differences on

foreign subsidiaries 88) (52) 36)

Transfer to distributable reserves (26 435) 26 433) (2)

Issue of share capital 144 780) 144 780)

Balance at 31 March 2000 156 291) 10 461) -) 289 662) 456 414)

COMPANY

Balance at 1 April 1998 11 511) -) -) 11 639) 23 150)




Balance at 31 March 1999 11 511) -) -) 11 652) 23 163)




Issue of share capital 144 780) 144 780)

Balance at 31 March 2000 156 291) -) -) 11 659) 167 950)

of

47

CASH FLOWStatements


2000) 1999) 2000) 1999)

Notes) R’000) R’000) R’000) R’000)

Cash received from customers 740) 387) 386 417) 322 822)

Cash paid to suppliers and employees (69) (1 314) (221 354) (213 621)

Cash generated by activities 17) 671) (927) 165 063) 109 201)

Investment income 29 929) 17 177) 800) 400)

Interest paid -) -) (3 916) (5 578)

Taxation paid 18) 5) (4) (20 747) (26 097)

Cash available from activities 30 605) 16 246) 141 200) 77 926)

Dividend paid 19) (18 273) (16 574) (18 273) (16 574)

Cash retained from operating activities 12 332) (328) 122 927) 61 352)

Cash effects of investment activities -) -) (59 998) (60 282)

Proceeds from disposal of fixed assets -) -) 15 248) 2 114)

Replacement of fixed assets -) -) (4 525) (21 739)

Addition to fixed assets 20) -) -) (113 453) (40 657)

Subsidiaries acquired 21) -) -) 27 570) -)

Investment in listed company -) -) (29 000) -)

Net proceeds from disposal

of investment in listed company -) -) 44 162) -)

Cash effects of financing activities (12 326) 344) (4 536) (720)

Loan to associated company -) -) 2) 35)

Funding to Trans Hex

Rehabilitation Trust Fund -) -) (920) (855)

Loan 499) 100) 499) 100)

Cost related to issue of shares (4 117) -) (4 117) -)

Loans to subsidiary companies (8 708) 244) -) -)

Net increase in cash resources 6) 16) 58 393) 350)

Cash resources at beginning of year 163) 147) 42 994) 42 644)

Cash resources at end of year 169) 163) 101 387) 42 994)

48

Financial Statements

2000) 1999)

R’000) R’000)

1. SALES REVENUE

Sales revenue consisting of the net rand

value of sales, after elimination of intergroup

transactions and excluding investment income,

amounts to:

Diamonds – Mining 307 150) 271 700)

– Exploration 59 326) 12 756)

Lime -) 31 287)

366 476) 315 743)

Due to the nature and composition of the Group, financial ratios

based on turnover are not considered to be meaningful.

2. STRIPPING, MINING AND HAULING

Stripping, mining and hauling costs exclude depreciation and

consist mainly of the following principal categories:

Labour 34 497) 33 266)

Maintenance and materials 49 826) 39 467)

Other mining costs 30 027) 22 388)

114 350) 95 121)

3. RECOVERY OPERATION

Recovery operation costs exclude depreciation

and consist mainly of the following principal categories:

Labour 18 921) 23 313)

Maintenance and materials 16 100) 24 252)

Other mining costs 7 906) 3 465)

42 927) 51 030)

NOTES to the

49



2000) 1999) 2000) 1999)

R’000) R’000) R’000) R’000)

4. NET FINANCIAL INCOME/(COSTS)

Net financial income consists mainly of the

following principal categories:

– Dividend received 21 246) 17 177) 800) 400)

– Interest received -) -) 4 690) 2 228)

– Interest paid -) -) (3 916) (5 578)

– Net foreign exchange gain -) -) 145) 940)

21 246) 17 177) 1 719) (2 010)

5. EXCEPTIONAL ITEMS Amount) Amount)Amount per) after) after)

income) taxation) taxation)statement) Taxation) 2000) 1999)

R’000) R’000) R’000) R’000)

Rationalisation of lime division

and related interests* (15 246) (3 655) (11 591) (19 178)

Provision for write-off of fixed assets

to net realisable value -) -) -) (2 000)

Profit on sale of investments 9 174) -) 9 174) -)

(6 072) (3 655) (2 417) (21 178)

Attributable to other members -) -) -) 560)

(6 072) (3 655) (2 417) (20 618)

* (Including depreciation of R3 433 000)

NOTES to the

50



2000) 1999) 2000) 1999)

R’000) R’000) R’000) R’000)

6. NET INCOME BEFORE TAXATION

The following items have been charged in

arriving at income before taxation:

Income

Income from subsidiary companies:

Administration fees 740) 620) -) -)

Surplus on sale of fixed assets -) -) -) 181)

Expenses

Auditors’ remuneration – Audit 26) 24) 747) 565)

– Other services -) -) 219) 49)

Loss of sale of fixed assets -) -) 11 768) -)

Company contributions to

retirement benefits -) -) 6 017) 6 547)

7. DIRECTORS’ EMOLUMENTS )

Executive directors

Salaries 1 364) 1 160)

Pension, medical and other benefits 419) 399)

1 783) 1 559)

Non-executive directors

Directors’ fees for services as directors 91) 90)

Directors’ fees for managerial services 124) -)

1 998) 1 649)

Less: Paid by subsidiary companies 1 907) 1 559)

91) 90)

Peter Danchin is the only director whose service contract contains predetermined compensation

for termination of service.This exceeds one year’s salary and benefits and is a condition to retain

his expertise.

NOTES to the

51


2000) 1999)

R’000) R’000)

8. TAXATION - CONSOLIDATED

8.1 Taxation per income statement

Foreign taxation 466) 91)

RSA taxation

Current 7 483) 19 484)

Current year 7 483) 19 484)

Over-provision prior years -) -)

Secondary taxation on companies

Current year 2 417) 1 914)

Deferred 27 042) (4 375)

Current year 27 042) 3 705

Rate change on 1 April -) (8 080)

37 408) 17 114)

Portion attributable to exchange rate

differences on intergroup transactions (472) (1 405)

36 936) 15 709)

Taxation losses and unredeemed capital of certian subsidiaries at

the end of the financial year available for utilisation against future

taxable income of those companies are estimated at R120 million.

8.2 Reconciliation of effective tax rate with standard rate 2000) 1999)

%) %)

Tax for the current year as a percentage of

income before taxation 32,9) 31,4)

Increase/(decrease) in rate as a result of:

Permanent differences 1,9) (3,2)

Foreign taxation (0,4) (0,2)

Secondary taxation on companies (2,2) (3,8)

Exchange rate differences 0,4) 2,8)

Rate change -) 16,2)

Losses not utilised (2,6) (8,2)

Standard rate 30,0) 35,0)

NOTES to the

52


2000) 1999)

9. EARNINGS PER SHARE

Basic earnings per share:

Net attributable income to shareholders (R’000) 77 477) 37 258)

Weighted average number of ordinary shares in issue

(thousands) 63 354) 60 270)

Basic earnings per share (cents) 122,3) 61,8)

Diluted earnings per share:

Weighted average number of ordinary shares in issue

(thousands) 63 354) 60 270)

Adjusted for share options (thousands) 877) -)

Weighted average number of ordinary shares for diluted

earnings per share (thousands) 64 231) 60 270)

Diluted earnings per share (cents) 120,6) 61,8)

Headline earnings per share: R’000) R’000)

Net attributable income to shareholders 77 477) 37 258)

Exceptional items (Note 5) 2 417) 20 618)

Headline earnings 79 894) 57 876)

Headline earnings per share (cents) 126,1) 96,0)

10. FIXED ASSETS Accumulated) Net)

Cost) depreciation) Value)2000 R’000) R’000) R’000)

Land and buildings 44 434) 16 706) 27 728)

Mining rights 121 789) 45 552) 76 237)

Deferred organisation expenses 2 309) 1 914) 395)

Mine-development costs 73 728) 30 150) 43 578)

Mining plant and equipment 492 072) 226 355) 265 717)

734 332) 320 677) 413 655)

NOTES to the

53


10. FIXED ASSETS (continued)

Accumulated NetCost depreciation value

1999 R’000 R’000 R’000

Land and buildings 47 924 16 116 31 808

Mining rights 54 234 41 607 12 627

Trade marks 1 950 1 950 -

Deferred organisation expenses 1 984 1 208 776

Mine-development costs 57 413 24 022 33 391

Mining plant and equipment 267 868 117 643 150 225

Manufacturing equipment 57 942 43 361 14 581

489 315 245 907 243 408

Reconciliation of net value at the beginning and end of the year

Exchange- Movement

Subsidiaries rate Depre- for the

acquired Additions Disposals differences ciation year

2000 R’000 R’000 R’000 R’000 R’000 R’000

Land and buildings 2 819) 3 198) (7 529) -) (2 568) (4 080)

Mining rights 64 427) -) (198) -) (619) 63 610)

Deferred organisation

expenses -) -) -) 47) (428) (381)

Mine-development costs -) 19 579) (2 644) -) (6 748) 10 187)

Mining plant and equipment 48 401) 95 190) (4 767) 280) (23 612) 115 492)

Manufacturing equipment -) 11) (11 878) -) (2 714) (14 581)

115 647) 117 978) (27 016) 327) (36 689) 170 247)

1999 -) 62 396) (1 933) -) (53 974) 6 489)

Fixed buildings and water supply equipment erected on leasehold mining property with a book

value of R4 810 000 (1999: R5 148 000) will, on termination of the mining rights, become the

property of the respective transitional council without payment of compensation.

The registers containing details of land and buildings are available for inspection by members or

their authorised representatives at the registered offices of the companies owning the relevant

properties.The directors are of the opinion that the market value of buildings which are not

depreciated exceeds the book value.

NOTES to the

54

Financial Statements NOTES to the

2000) 1999)

R’000) R’000)

11. INVESTMENTS

(Annexure A)

11.1 COMPANY

Unlisted subsidiary companies:

Shares at book value 3 777) 3 777)

Advances and loans 176 171) 18 566)

179 948) 22 343)

11.2 CONSOLIDATED

Long-term investments

Associated companies: 164) 651)

Shares at book value -) -)

Equity adjustment 164) 651)

Loans at book value (2) -)

162) 651)

Directors’ valuation of unlisted

investments (including loans) 162) 651)

Listed investments at cost

Shares

Diamond Fields International Ltd (7,5%) 29 005) -)

Ocean Diamond Mining Holdings Ltd (3%) -) 605)

29 005) 605)

Market value 27 512) 4 950)

Cash and cash equivalents )

Trans Hex Rehabilitation Trust Fund 5 712) 4 280)

Market value 5 712) 4 280)

Total long-term investments 34 879) 5 536)

12. LOAN

Loan to Trans Hex Group Trust to finance the share

purchase scheme for senior employees 1 532) 2 031)

13. STOCKS

Diamonds 41 825) 30 130)

Lime -) 2 233)

Consumables 9 797) 8 217)

51 622) 40 580)

55


14. DEBTORS

The South African Revenue Service issued tax assessments for the amount of R917 000

(1999: R738 000) against the Company. These additional assessments were raised on the non-

allowance of certain expenditure which is disputed by the Company. This amount has been

paid and is included in debtors. An appeal has been lodged on the strength of expert opinion.

15. STATED CAPITAL 2000) 1999)

R’000) R’000)

Authorised:

300 000 000 ordinary shares of no par value

(1999: 120 000 000 ordinary shares of no par value)

Issued:

82 122 189 ordinary shares of no par value 156 291) 11 511)

(1999: 60 270 000 ordinary shares of no par value)

Included in the above, 17 740 581 ordinary shares of no par value were issued after

31 March 2000 in terms of the schemes of arrangement detailed in the directors’ report.

The unissued shares were placed under the control of the Board of Directors until the

forthcoming Annual General Meeting.

SHARE PURCHASE SCHEME

Details of ordinary issued shares subject to the provisions of the share purchase scheme for

senior employees: 2000) 1999)

Balance of number of shares taken up on 1 April 332 040) 357 640)

Number of shares taken up during the year -) -)

Number of shares released during the year (122 600) (25 600)

Balance of number of shares taken up on 31 March 209 440) 332 040)

Indebtedness by employees in terms of the scheme

(R’000) 963) 1 389)

At 31 March 2000 there were no invitations not taken up.

In terms of the Trust Deed, the number of shares subject to the scheme is limited to 5% of the

number of issued shares.

SHARE OPTION SCHEME

During the year, share options was granted to eligible directors and employees. Outstanding

options at 31 March 2000 were as follows:

Price Outstanding

Expiry date Recipient (cents) options

22 July 2004 Directors 570,5 680 800

22 July 2004 Employees 570,5 2 696 700

1 December 2004 Directors 657,0 182 800

1 December 2004 Employees 657,0 337 900

3 898 200

NOTES to the

56


2000) 1999)

R’000) R’000)

16. DEFERRED LIABILITIES

Deferred taxation

– comprised mainly of capital allowances 81 557) 47 442)

Provision for post-retirement medical benefits 5 431) 3 105)

Provision for rehabilitation liabilities 5 144) 3 885)

92 132) 54 432)

17. RECONCILIATION OF NET INCOME

BEFORE TAXATION WITH CASH

GENERATED BY ACTIVITIES COMPANY) CONSOLIDATED)

2000) 1999) 2000) 1999)

R’000) R’000) R’000) R’000)

Net income before taxation 21 256) 17 198) 112 253) 49 961)

Adjusted for :

Depreciation -) -) 36 689) 53 974)

Loss/(profit) on sale of assets

and investments -) -) 2 594) (181)

Exchange rate adjustments -) -) 3 493) 9 643)

Increase/(decrease) for

post-retirement medical benefit -) -) 2 326) (1 360)

Increase/(decrease) in

rehabilitation liabilities -) -) (241) 473)

Income from Trans Hex

Rehabilitation Trust Fund -) -) (512) (324)

Investment income (29 929) (17 177) (800) (400)

Interest paid -) -) 3 916) 5 578)

Operating income before movements

in working capital (8 673) 21) 159 718) 117 364)

Movement in working capital 9 344) (948) 5 345) (8 163)

Stocks -) -) (5 781) 1 777)

Debtors (725) (676) 12 903) 480)

Creditors 1 386) (39) (1 777) (10 420)

Provision of dividend receivable 8 683) (233) -) -)

Cash generated by activities 671) (927) 165 063) 109 201)

NOTES to the

57



2000) 1999) 2000) 1999)

R’000) R’000) R’000) R’000)

18. RECONCILIATION OF TAXATION

PAID WITH AMOUNT DISCLOSED

IN THE INCOME STATEMENT

Amount (prepaid)/unpaid at

beginning of year (8) (12) (2 072) 2 536)

Amount per income statement 3) 8) 10 366) 21 489)

Account prepaid at end of year -) 8) 12 453) 2 072)

Amount paid (5) 4) 20 747) 26 097)

19. RECONCILIATION OF DIVIDENDS

PAID WITH AMOUNT DISCLOSED

IN THE INCOME STATEMENT

Amount unpaid at beginning of year 10 547) 9 944) 10 547) 9 944)

Amount per income statement 21 246) 17 177) 21 246) 17 177)

Amount unpaid at end of year (13 520) (10 547) (13 520) (10 547)

Amount paid 18 273) 16 574) 18 273) 16 574)

20. ADDITION TO FIXED ASSETS

Water purification lime plant -) 1 113)

Additions to earthmoving equipment 49 967) 341)

Plant extensions 38 345) 14 032)

Housing and personnel benefits 3 005) 921)

Mine-development capitalised 19 579) 20 285)

Operational buildings 235) 819)

Other 2 322) 3 146)

113 453) 40 657)

NOTES to the

58


R’000)

21. SUBSIDIARIES ACQUIRED

On 31 March 2000, the Group acquired Benguela Concessions

Ltd and Gem Diamond Mining Corporation Ltd. The fair value

of assets acquired and liabilities assumed were as follows:

Cash resources 27 570)

Stocks 5 261)

Debtors 12 618)

Fixed assets 115 647)

Investments 5)

Deferred liabilities (8 570)

Creditors (22 906)

129 625)

Paid for by non-cash means (129 625)

Cash acquired 27 570)

Cash on acquisition 27 570)

22. CASH

Cash resources comprise cash on hand and bank balances. The amounts in the cash flow

statement correspond with those in the balance sheet.

23. JOINT VENTURES

The Group holds a 50% interest in the Northbank and Barra Grande joint ventures via its Canadian

subsidiary, Trans Hex International Ltd. These investments are accounted for using the

proportionate consolidation method. The Group’s interest in the Barra Grande Property is

contingent on it completing a US$2 million spending commitment. The Group’s share of the

assets, liabilities and expenses of the joint venture are as follows:

2000) 1999)

R’000) R’000)

Expenses and loss for the year 284) 516)

Assets 16 548) 10 059)

Liabilities 27) 254)

16 521) 9 805)

Outside shareholders’ interest (4 425) (2 745)

Net investment 12 096) 7 060)

NOTES to the

59


24. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Risk management

Financial instruments consist of investments and loans, cash resources, accounts receivable and

accounts payable resulting from normal business transactions. Except for the total exposure

represented by the respective balance sheet items, no other exceptional concentration of risk

exists. Funds are invested only at banks with acceptable credit ratings.

Because of the nature of its business, the Group is not exposed to exceptional levels of interest

rate risk, currency risk or illiquidity. From time to time the Group enters into forward exchange

contracts to preserve and enhance its revenue streams and to limit its exposure for capital

purchases and other expenditure denominated in foreign currencies. No open positions exist at

year end.

Fair values

The carrying amounts of financial assets and liabilities as described in the group accounting policies

approximate fair values, except for investments (detailed in note 11).

25. RELATED PARTY TRANSACTIONS

Controlling entities

The Company’s major shareholder is Tegniese Mynbeleggings Bpk. (a wholly-owned subsidiary of

Rembrandt Group Ltd) which holds 43% (1999: 50%) of the Company’s shares.

The following transactions were carried out with related parties:

2000) 1999)

R’000) R’000)

Management fee paid to Rupert International Finance

and Services (Pty) Ltd (a fellow subsidiary of the Company’s

major shareholder)

1 236) 1 150)

Directors and director-related entities

No transaction other than directors’ emoluments disclosed in note 7 were entered into during

the year.

Share option transactions with directors and their director-related entities

The aggregate number of share options held by directors of the Company and their director-

related entities during the year is disclosed in note 15. All issues were made on terms and

conditions no more favourable than those offered to other option holders.

NOTES to the

60

26. GUARANTEES

The Company guarantees:

– Staff housing loans amounting to R43 000 (1999: R67 000).

– Certain bank overdrafts and other loan facilities, supply and delivery contracts of certain

subsidiary companies.

27. CAPITAL COMMITMENTS 2000 1999

R’000 R’000

Incomplete contracts for capital expenditure 123 187 6 363

Capital expenditure authorised but not yet contracted for 67 129 33 067

190 316 39 430

These commitments of the Group will be financed from its own resources or borrowed funds.

28. TRANS HEX REHABILITATION TRUST FUND

This fund was established with the approval of the South African Revenue Service. On

31 March 2000 the Group’s estimated future rehabilitation liability amounted to R7 906 000

(1999: R10 456 000) of which R5 712 000 (1999: R4 280 000) has been funded by way of

payments to the Trust Fund.

29. BORROWING POWERS

In terms of the Articles of Association, the Group has unlimited borrowing powers.

Financial Statements NOTES to the

62

NAME OF COMPANY Issued share Effective Held by the Company

Incorporated in South Africa capital interest

(unless stated otherwise)

Shares Loan

2000 1999 2000 1999 2000 1999 2000 1999

R R % % R’000 R’000 R’000 R’000

COMPANY

Buffelsbank Diamante Bpk 50 50 100 100 1 481 1 481 176 171 18 566

Trans Hex Finansiering Bpk 10 10 100 100 2 294 2 294 - -

Trans Hex Dienste Bpk 200 200 100 100 2 2 - -

3 777 3 777 176 171 18 566

NAME OF COMPANY Issued share Effective



2000 1999 2000 1999

R R % %

GROUP (unless stated otherwise)

Bellsbank Mining Number One (Pty) Ltd 4 000 4 000 100 100

Benguela Concessions (Namibia) (Pty) Ltd 100 - 100 -

Benguela Exploration Company (Pty) Ltd 500 - 49 -

Benguela Mining Company (Pty) Ltd 12 - 100 -

Benguela Nominees (Pty) Ltd 4 - 100 -

Benguela Operations (Pty) Ltd 12 768 - 100 -

Bitterfontein Granite Works (Pty) Ltd 200 000 200 000 100 100

Broadacres Diamonds (Pty) Ltd 52 52 100 100

Cape Lime Company Ltd 200 000 200 000 100 100

Cape Lime Holdings Ltd 927 500 927 500 100 100

Cape Lime Ltd 93 912 93 912 100 100

Daisey Street Investments No 27 (Pty) Ltd 2 - 100 -

De Bruyn’s Bellsbank Mine (Pty) Ltd 40 000 40 000 100 100

De Punt Plase (Edms) Bpk 50 000 50 000 100 100

De Punt Plase Diamant Maatskappy (Edms) Bpk 100 100 100 100

Diamond Fields International Ltd 51 588 000 - 8 -

Dokolwayo Diamond Mines (Pty) Ltd

- Swaziland (E) 15 008 15 008 50 50

Gem Diamond Mining Corporation Ltd 94 444 138 - 100 -

Hoanib Diamonds (Pty) Ltd

- Namibia (N$) 1 000 400 66 65

Laritza Investments 13 (Pty) Ltd 100 - 100 -

Lüderitz Ocean Diamonds (Pty) Ltd 1 - 100 -

Marine West (Pty) Ltd 1 355 000 - 100 -

Marine West Diamond

Concession Holders (Pty) Ltd 1 562 - 100 -

Mineracao Barra Grande Limitada

- Brazil (R$) 1 000 1 000 73 72

Moonstone Diamond (Namibia) (Pty) Ltd 4 000 - 100 -

Moonstone Diamond (South Africa) (Pty) Ltd 7 - 100 -

ANNEXURE AInvestments

63

NAME OF COMPANY Issued share Effective



2000 1999 2000 1999

R R % %

GROUP (unless stated otherwise)

Namex (Edms) Bpk 120 900 120 900 100 100

Newdico (Pty) Ltd - Botswana (Pula) 100 100 100 100

North Bay Mining (Pty) Ltd 1 000 1 000 100 100

Northbank Diamonds Ltd - Namibia (N$) 8 8 37 36

Northern Cape Diamond Mining &

Exploration (Pty) Ltd 100 - 100 -

Ocean Diamond Mining 14C (Pty) Ltd 100 - 49 -

Ocean Diamond Mining 6C (Pty) Ltd 100 - 49 -

Ocean Diamond Mining

Holdings Ltd (listed) - 1 337 858 - 3

Oranje-Kunene Diamante Bpk 57 57 100 100

Samada Diamond (Pty) Ltd 120 - 100 -

Samada Diamonds (1987) (Pty) Ltd 37 800 - 100 -

See-Diamantkonsessie 2B (Edms) Bpk 200 - 49 -

Six Fourteen Sea Mines (Pty) Ltd 1 - 100 -

So Ver Mine (Pty) Ltd 40 000 40 000 100 100

Strandfontein Minerale (Edms) Bpk 40 000 40 000 100 100

Strykloof Diamante (Edms) Bpk 100 100 100 100

Strykpunt Beleggings Bpk 257 504 257 504 100 100

Thirteen Sea Concession (Pty) Ltd 1 000 - 100 -

Trans Hex (Bermuda) Ltd

- Bermuda (USA$) 12 000 12 000 73 72

Trans Hex (Swaziland) (Pty) Ltd

- Swaziland (E) 3 3 100 100

Trans Hex (Zimbabwe) Ltd

- Zimbabwe (Z$) 30 000 30 000 73 72

Trans Hex België N V

- Belgium (BF) 1 250 000 1 250 000 100 100

Trans Hex Bemarking Bpk 100 100 100 100

Trans Hex Brasil Limitada - Brazil (R$) 3 568 601 2 427 971 73 72

Trans Hex Diamante Bpk 4 000 4 000 100 100

Trans Hex International Ltd

- Canada (C$) (listed) 32 171 895 31 915 166 73 72

Trans Hex Minerale Bpk 4 000 4 000 100 100

Trans Hex Mynbou Bpk 500 000 500 000 100 100

Trans Hex Namibia (Pty) Ltd

- Namibia (N$) 5 1 73 72

Trans Hex Ondernemings Bpk 100 100 100 100

Trans Tropic Trading Incorporated

- British Virgin Islands (USA$) 250 000 250 000 100 100

Whitewater Diamond Mining (Pty) Ltd 300 - 100 -

ANNEXURE AInvestments

64

Trans Hex Group Ltd and its directors are committed to the principles of openness, honesty, integrity

and accountability which forms the foundation of corporate governance.

The directors believe that Trans Hex Group Ltd has, in all material aspects, complied with the Code of

Corporate Practices and Conduct as set out in the King Committee Report. Comments on key aspects

of Trans Hex Group Ltd corporate governance are set out below.

Board of Directors

The Group has a unitary board structure.The Board meets regularly, retains full and effective control

over the Group and monitors the executive management. The Board itself takes key decisions to ensure

it retains proper direction and control of the Group.

The roles of the chairman and managing director do not vest in the same person and the chairman is

a non-executive director. The chairman and managing director (operations) provide leadership and

guidance to the Group Board and encourage proper deliberation of all matters requiring its attention,

with optimum input from the other directors.

Non-executive Directors

The Board has eight non-executive directors who are appointed for specific terms. Re-appointment is

not automatic.

Executive Directors

There are two executive directors on the Board of Directors of the Group.

Company Secretary and Professional Advice

All directors have access to the advice and services of the company secretary, who is responsible to

the Board for ensuring Board procedures are followed.

All directors are entitled to seek independent professional advice about the affairs of the Group.

Audit Committee

The audit committee members and chairman are non-executive directors. Both the internal and

external auditors have unrestricted access to the audit committee which ensures that their

independence is in no way impaired. Meetings are held regularly and are attended by representatives

of external and internal auditors. The managing director (operations) and the group manager (finance)

attend as representatives of the Group’s management. The audit committee functions within a specific

written mandate and provides a forum for communication between the Board of Directors and the

internal and external auditors.

CORPORATEGovernance Statement

65

Management Reporting

The Group has comprehensive management reporting disciplines in place which include the

preparation of annual budgets by all operating units. The Boards of Directors of the operating

companies and the holding Company approve individual operational budgets. Monthly results and the

financial status of operating units are reported against approved budgets and compared to the prior

year. Profit projections and forecast cash flows are updated monthly while working capital and

borrowing levels are monitored on an ongoing basis.

Remuneration Committee

The Group has a remuneration committee chaired by, and consisting mainly of, non-executive directors.

The committee reviews and approves the remuneration and terms of employment of executive

directors and senior employees of the Group.

No non-executive directors have service contracts in excess of one year. The remuneration paid to

executive and non-executive directors of Trans Hex is disclosed, in total, in Note 7 to the annual

financial statements.

Worker Participation

The Group employs a variety of participative structures to deal with issues affecting employees directly

and materially. These include collective bargaining mechanisms, structures to drive productivity

improvements, safety committees and other participative forums. These structures, set up with trade

unions and other employee representatives, are designed to achieve good employer/employee relations

through effective sharing of relevant information, consultation and the early identification and resolution

of conflict.

Equal Opportunities

The Group believes in creating a stimulating work environment whereby employees enjoy equal rights.

Actions taken to bring about changes necessary to reflect the composition of the South African

population include identifying and removing all discriminatory provisions.

Share Transactions by Directors and Senior Personnel

In accordance with the recommendations incorporated in the King Committee Report on corporate

governance, it is expected that the Group’s directors and senior personnel adhere to the Group’s Code

of Conduct with regard to dealing in shares of the Group during periods of price sensitivity.


66

by the

Internal Control and Audit

The Group maintains systems of internal control over financial reporting and the safeguarding of assets

against unauthorised acquisition, use or disposition. These systems are designed to provide reasonable

assurance to the Company’s management and Board of Directors regarding the preparation of reliable

published financial statements. They include a documented organisational structure and division of

responsibility and established policies and procedures including a Code of Conduct to foster a strong

ethical climate, all of which are communicated to all personnel. Internal auditors monitor the operation

of internal control systems and report findings and recommendations to management and the Board

of Directors. Corrective actions are taken to address control deficiencies and opportunities for

improving the system are constantly sought. The Board, operating through its audit committee,

supervises the financial reporting process.

The Group assessed its internal control system as at 31 March 2000 in relation to the criteria for

effective internal control over financial reporting. Based on its assessment, the Group is satisfied that its

systems met those criteria.

Code of Conduct

The Group is committed to the highest standards of integrity, behaviour and ethics in dealing with all

shareholders.

I, George John Zacharias, being the Company Secretary of Trans Hex Group Ltd, hereby certify in

terms of the Companies Act, that all returns required of a public company have, in respect of the

year under review, been lodged with the Registrar of Companies and that all such returns are true,

correct and up-to-date.

George Zacharias

Company Secretary

22 May 2000

62



CERTIFICATECompany Secretary

68

We have audited the annual financial statements and Group financial statements of Trans Hex Group

Ltd set out on pages 32 to 63 for the year ended 31 March 2000. These financial statements are the

responsibility of the Company directors. Our responsibility is to express an opinion on these financial

statements based on our audit.

Scope

We conducted our audit in accordance with South African Auditing Standards.Those standards require

that we plan and perform the audit to obtain reasonable assurance that the financial statements are

free of 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 the

Company and the Group at 31 March 2000, and the results of their operations, changes in owners’

equity and cash flows for the year then ended, in accordance with international accounting standards

and in the manner required by the Companies Act in South Africa.

Pricewaterhouse Coopers Inc.

Registered Accountants and Auditors

Chartered Accountants (SA)

Stellenbosch

22 May 2000

REPORTIndependent Auditors

of the

70

Stock Exchange listings

Trans Hex’s ordinary shares are quoted on the Johannesburg and Namibian Stock Exchanges, and are

traded in the USA Over The Counter in the form of American Depository Shares (ADS). Each ADS

represents one ordinary share and is evidenced by an American Depository Receipt (ADR).The Bank

of New York acts as the Sponsored Depository Bank.

Share trading information

At 31 March 2000 prior to the share issues relating to the Benco and Gem transactions, there were

64 381 608 ordinary shares of no par value in issue. Share trading information for the year ended

31 March 2000 is as follows:

Monthly highs and lows for the financial year 1999/2000

Shareholders’ spread as at 31 March 2000 prior to the share issues before the two mergers

Category of shareholder Number of shareholders Number of shares

Holding Company 1 35 215 000

(Tegniese Mynbeleggings Bpk

- a wholly owned subsidiary of

Rembrandt Group Ltd)

Individuals 554 5 075 889

Nominee Companies 46 23 283 639

Companies and other Corporate 31 709 820

Bodies and Pension Funds

Investment Trusts (not held 8 79 260

via Nominee Company)

640 64 381 608

SHAREHOLDERInformation

450

500

550

600

650

700

750

800

850

900

950

1000

1999 2000

501

688

April May

675

755

July

545

720

Aug

950

750

Sept

700

840

Oct

700

775

Nov

649

780

Dec

660

1000

Jan

950

800

Feb

800

960

March

770

850

1000

565

June

Monthly volume traded

April ’99 471 152

May ’99 1 508 156

June ’99 531 032

July ’99 439 974

August ’99 4 495 537

September ’99 197 944

October ’99 547 874

November ’99 352 552

December ’99 5 742 938

January 2000 332 074

February 2000 1 121 307

March 2000 608 859

Cents

Monthly highMonthly low

Shareholding analysis as at 31 March 2000

Holdings Number of % Number of %

shareholders shares

1 - 5 000 472 73,8 734 610 1,1

5 001 - 10 000 71 11,1 482 320 0,7

10 001 - 100 000 72 11,3 2 172 572 3,4

100 001 - 500 000 16 2,5 3 866 138 6,0

500 001 - 1 000 000 5 0,7 3 068 084 4,8

Over 1 000 000 4 0,6 54 057 884 84,0

640 100,0 64 381 608 100,0

Non-public/public shareholders

Pursuant to the listing requirements of the Johannesburg Stock

Exchange, with the best knowledge of the directors after reasonable

enquiry, the spread of shareholders at 22 May 2000 after the share

issues of the two mergers, was as follows:

Major shareholders as at 22 May 2000

According to information available to the directors, shareholders beneficially holding (either directly

or via nominee companies) in excess of 5% of the issued share capital, were as follows:

Shareholder Number of shares held %

Tegniese Mynbeleggings Bpk 35 215 000 42,88

RMB Asset Management 9 161 400 11,15

Gensec Asset Management 4 513 198 5,49

71


42,88%

54,38%

2,74%

Tegniese Mynbeleggings

Bpk

Publicshareholders

Directors and share trust

72

Other statistics and ratios for the financial year ended 31 March 2000

Total shares traded 16 349 399

Volume traded as % of shares in issue 25,39%

Closing price as at 31 March 2000 770 cents

Average market price per share 751 cents

Price earnings ratio 6,11

Earnings yield 16,38%

Dividend yield 4,29%

Shareholders’ diary

Financial year-end 31 March 2000

Annual General Meeting 14 August 2000

Financial reports:

– Half-year interim report November

– Announcement of annual results May

– Annual financial statements June

Interim dividend

– Declared November

– Paid January

Final dividend

– Declared May

– Paid July

Shareholder information

Shareholders, or interested parties, are invited to contact the Company Secretary for general

information concerning Trans Hex. Share transfers, dividend payments, change of address and similar

queries should also be addressed to the Company Secretary or Transfer Secretaries, at:

COMPANY SECRETARY: TRANSFER SECRETARIES:

Trans Hex Group Ltd South Africa:

P O Box 723 Computershare Services Ltd

Parow, Cape Town 7499 P O Box 61051

Telephone: +27 21 939-1105 Marshalltown 2107

Fax: +27 21 939-0711 Telephone: +27 11 370-7700

[email protected] Fax: +27 11 836-6145

FOR HOLDERS OF TRANS HEX Namibia:

ADR’S IN THE UNITED STATES: Transfer Secretaries (Pty) Ltd

The Bank of New York P O Box 2401

Shareholder Relations Windhoek

P O Box 11258 Telephone: +264 61 22-7647

Church Street Station Fax: +264 61 24-8531

New York, NY 10286-1258, USA

Telephone: 1-888-BNY-ADRS

1-888-269-2377


73

NOTICEShareholders

to

Notice is hereby given that the twentieth Annual General Meeting of shareholders of Trans Hex

Group Ltd will be held on Monday, 14 August 2000 at 16:30 at the Company’s registered office,

405 Voortrekker Road, Parow, for the following purposes:

1. To consider and adopt the annual financial statements for the year ended 31 March 2000.

2. To determine and approve directors’ fees for the past financial year.

3. To elect the following retiring directors who retire by rotation in accordance with the Company’s

articles of association and being eligible, offer themselves for re-election, namely André Louw,

Tokyo Sexwale, Yannic Mercier and Mark Willcox.

4. To consider and, if deemed fit, to pass, with or without modifications, the following resolutions:

Ordinary Resolution Number One

“Resolved that all the authorised but unissued ordinary shares in the capital of the Company (other

than the ordinary shares previously placed under the control of the directors of the Company for

the specific purpose of the Company’s share incentive scheme) be, and they are hereby placed,

under the control of the Directors of the Company as a general authority to them to allot or issue

the same at their discretion in terms of and subject to the provisions of section 221 of the

Companies Act and the Johannesburg Stock Exchange Listing Requirements.”

Ordinary Resolution Number Two

“Resolved that, subject to:

• the passing of ordinary resolution number one above; and

• not less than 75 % of those shareholders of the Company present in person or by proxy and

entitled to vote at the meeting at which this resolution is proposed, voting in favour of this

resolution;

• the Directors of the Company are hereby authorised and empowered, by way of a general

authority, to allot and issue for cash, without restriction, all or any of the authorised but unissued

ordinary shares in the capital of the Company placed under their control as they in their

discretion may deem fit, subject to the provisions of the Johannesburg Stock Exchange Listing

Requirements.”

74

The restrictions placed by the Johannesburg Stock Exchange on such general authority for

allotments and issues for cash are as follows:

• The authority is valid until the next Annual General Meeting of the Company;

• Any such issue must be of a class of share already in issue and can only be made to public

shareholders as defined in the Listing Requirements;

• Issues in the aggregate in any one financial year will not exceed ten per cent of the number of

shares of the Company’s issued capital and shall not in aggregate in any three-year period

exceed 15% of the Company’s issued share capital;

• A paid press announcement giving full details, including the impact on net asset value and

earnings per share, will be published at the time of any issue representing on a cumulative basis

within a financial year, 5% or more of the number of shares in issue prior to the issue;

• In determining the price at which the issue of shares will be made, the maximum discount

permitted will be 10% of the average closing price of the shares as determined over the 30

days prior to either the date of the paid press announcement or, where no announcement is

required and none has been made, the date of issue of such shares.

5. Transact such other business as may be transacted at an Annual General Meeting.

Any member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies

to attend, speak and vote there in his stead. The proxy so appointed need not be a member of

the Company. Proxy forms should be forwarded to reach the registered office of the Company

or the Transfer Secretaries at least 48 hours, excluding Saturdays, Sundays and public holidays,

before the time appointed for the meeting.

By Order of the Board

G Zacharias

Company Secretary

Parow

22 May 2000

NOTICEShareholders

to

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