Dynamic Cables is a wholesale distributor of ...

Review of operations

Dynamic Cables is a group's excellent empowerment credentials and to expand

its range of service and product offerings to various IT and

Telecom companies, including the parastatals.wholesale distributor of telecommunications

SUSPENSION OF LISTING

With the exception of two vendors, the group has settledinfrastructure and cabling. with all other vendors relating to the tainted share issue and

we are hoping to finally resolve this issue in the near future

to restore the listing of the company.

On behalf of the board

The year ended 31 December 2003 was the turnaround year

for the group. Turnover levels were dramatically down as a

result of the loss-making Dynatech having been liquidated

and the discontinuing of many unprofitable lines. The effects

thereof are fully reflected in the financial statements.

Notwithstanding the drop in turnover, the results from Shaun Rai

operating activities indicated that the group is now Acting chairman

trading profitably with the resultant turnaround being some

R21 million.

We are pleased to report that all subsidiaries are now

trading profitably and that plans are under way to exploit the

DYNAMIC CABLES RSA LTD — ANNUAL REPORT 1

Directorate As at 31 December 2003 the board comprised:

Shaun Louis Rai * (43) Haroon Takolia (53) CA(SA) BComm (Hons), BCompt CA(SA), MBA (Wits) (UCT) Deputy chairman Non-executive director Appointed 10 May 2000

COMPANY SECRETARY Allen Frederick Pheiffer * (41) Rorden John McGregor CA(SA), CAIB (SA), AIAC Appointed 12 October 2001 Non-executive director Appointed 10 May 2000

Michael Joseph Ignatius Brown * (60) Dip Ed Non-executive director Appointed 1 October 2000

Theodore Dominic Rai (45) MBChB (UCT) Executive director Appointed 1 March 2001 * non-executive

2 DYNAMIC CABLES RSA LTD — ANNUAL REPORT

Directors' responsibilities and approval of the

annual financial statements

The annual financial statements set out on pages 5 to 28 are foreseeable future and have continued to adopt the going

the responsibility of the directors. concern basis in preparing the financial statements.

The directors are responsible for selecting and adopting The annual financial statements were approved by the

sound accounting practices, for maintaining an adequate and directors on 18 June 2004 and are signed on their behalf by:

effective system of accounting records, for the safeguarding

of assets, and for developing and maintaining a system of

internal control that, among other things, will ensure the

preparation of financial statements that achieve fair

presentation.

After conducting appropriate procedures the directors are MJI Brown SL Rai

satisfied that the company will be a going concern for the

Certificate by the company secretary

In terms of Section 268G(d) of the Companies Act 1973, as amended, I certify that the company has lodged with the Registrar

all such returns as are required by the Companies Act and all such returns are true, correct and up-to-date.

RJ McGregor


Report of the independent auditorsAs at 31 December 2003

TO THE MEMBERS OF DYNAMIC CABLES RSA LIMITED

AND ITS SUBSIDIARIES

We have audited the annual financial statements and group

annual financial statements of Dynamic Cables RSA Limited

set out on pages 5 to 28 for the year ended 31 December

2003. These financial statements are the responsibility of the

group's directors. Our responsibility is to express an opinion

on these financial statements based on our audit.

Scope

Except as discussed in the following paragraphs, we

conducted our audit in accordance with Statements of 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.

Qualification

An uncertainty exists in respect of the financial effects of the

"tainted" shares referred to in note 9. No adjustment has

been made to the consolidated balance sheet and related

statements of income and cash flows for the year ended

31 December 2003, to reflect the possible financial impact

thereof.

The results of Dynatech Telecoms (Proprietary) Limited

(in liquidation) to the date of liquidation have not been

audited. The effect of the liquidation on the group has been

reflected, as shown in note 20, as a composite item. This

represents a departure from the South African Statements of

Generally Accepted Accounting Practice. It is impracticable to

quantify the possible effects of this departure in the annual

financial statements.

As stated in note 5, the company has a loan to Dynatech

Telecoms (Proprietary) Limited (in liquidation). The recover-

able amount of this loan has been ascertained by the directors

to be eight million rand. We have been unable to verify this

amount.

Qualified audit opinion

In our opinion, except for the possible effects on the financial

statements of the matters referred to in the preceding

paragraph, the financial statements fairly present, in all

material respects, the financial position of the group at

31 December 2003 and the results of their operations and

cash flows for the year then ended in accordance with South

African Statements of Generally Accepted Accounting

Practice, and in the manner required by the Companies Act in

South Africa.

Grant Thornton

Registered Accountants and Auditors

Chartered Accountants (SA)

Durban

18 June 2004

DYNAMIC CABLES RSA LTD - ANNUAL REPORT4

Corporate governance For the year ended 31 December 2003

CODE OF CORPORATE PRACTICES AND CONDUCT

The directors fully support the principles of good corporate

governance established by the Code of Corporate Practices

and Conduct ("the Code") of the King Report. The group

complies with the major requirements of the Code. Its

position on various aspects of corporate governance is

summarised below.

FINANCIAL STATEMENTS

The directors are responsible for the preparation of annual

financial statements that fairly present the financial position

of the company and the group as at the end of the financial

year and their profit or loss and cash flow information for

the period then ended. The auditors, Grant Thornton are

responsible for independently auditing and reporting on these

financial statements.

In preparing financial statements, the directors, in their

opinion, consistently applied appropriate accounting policies,

supported by reasonable and prudent judgement and

estimates, and adhered to generally accepted accounting

practice, except as described in note 32.

The directors have no reason to believe that the company

and the group will not be going concerns in the year ahead.

Accordingly, they continue to adopt the going concern basis

in preparing the financial statements.

FINANCIAL CONTROL

The group has an established system of controls and

procedures to ensure the accuracy and integrity of the

accounting records and to effectively monitor the group's

business and performance. The system encompasses

checks and balances, which include:

• A detailed budgeting system

• The preparation of forecasts which are regularly reviewed

and updated

• Regular reporting of income statements and balance

sheets together with regular written reports

The following committees have been established under

the Code:

Board structure

Dynamic Cables RSA Limited's board currently comprises

two executive and three non-executive directors in a unitary

board structure. During the last year the board met regularly

to review strategy and significant group operational matters

and to monitor group performance against predetermined

goals.

Remuneration committee

The group has a remuneration committee comprising one

executive and two non-executive directors. This committee

reviews and approves the remuneration and terms of

employment of the executive directors and senior

employees.

Audit committee

The audit committee is chaired by a non-executive director

and has one other non-executive and an executive director as

members. It meets to discuss financial information which

is to be published. The external auditors have unrestricted

access to these committee meetings.

Employment equity committee

The group is committed to providing equal opportunities to all

its employees regardless of their ethnic origin or gender.

DYNAMIC CABLES RSA LTD – ANNUAL REPORT 5

Balance sheet As at 31 December 2003

Note

2003

R

Group

2002

R

2003

Company

R

2002

R

ASSETS

Non-current assets 26 416 391 26 184 388 24 907 854 30 374 611

Property, plant and equipment

Intangible assets

Investment in subsidiaries

Other financial assets

Deferred taxation

2

3

4, 5

6

7

4 101 666

10 618 584

8 000 000

3 696 141

-

9 365 484

11 610 699

727 396

3 696 141

784 668

-

-

24 180 758

727 096

-

-

-

29 647 515

727 096

-

Current assets 28 060 097 34 820 186 5 511 231 213 251

Inventory

Trade and other receivables

Short-term loans

Prepayments

Cash and cash equivalents

8 7 065 479

13 899 105

583 130

139 353

6 373 030

13 725 284

13 284 538

-

135 864

7 674 500

-

1 800 563

583 130

-

3 127 538

-

-

-

-

213 251

Total assets 54 476 488 61 004 574 30 419 085 30 587 862

EQUITY AND LIABILITIES

Equity capital and reserves 9 584 925 7 112 035 8 320 629 8 532 329

Share capital and premium

Accumulated loss

9

10

92 198 803

(82 613 878)

92 198 803

(85 086 768)

109 132 803

(100 812 174)

109 132 803

(100 600 474)

Non-current liabilities 23 445 465 22 311 989 20 545 879 20 545 879

Long-term borrowings

Vendor loan

Deferred taxation

11

12

13

1 336 420

20 545 879

1 563 166

1 766 110

20 545 879

-

-

20 545 879

-

-

20 545 879

-

Current liabilities 21 446 098 31 580 550 1 552 577 1 509 654

Trade and other payables

Short-term borrowings

Taxation

Bank overdraft

Other financial liabilities 14

12 273 868

736 882

8 209 431

203 830

22 087

22 261 788

1 008 466

7 830 570

126 834

352 892

862 992

-

689 585

-

-

850 135

-

659 519

-

-

Total equity and liabilities 54 476 488 61 004 574 30 419 085 30 587 862

6 DYNAMIC CABLES RSA LTD - ANNUAL REPORT

Income statementFor the year ended 31 December 2003

Group Company

2003 2002 2003 2002

Note R R R R

Turnover 17 65 628 459 101 094 696 - -

Cost of sales (44 471 539) (75 837 946) - -

Gross profit 21 156 920 25 256 750 - -

Other operating costs (16 604 403) (18 994 173) 753 460 867 520

Operating profit 18 4 552 517 6 262 577 753 460 867 520

Net gain on liquidation of subsidiary 20 1 553 929 - 133 535 -

Fair value adjustment of investments 21 (1 758 498) (23 369 814) (1 069 130) (18 013 316)

Results from operating activities 4 347 948 (17 107 237) (182 135) (17 145 796)

Income from investments 22 244 573 483 382 501 47 394

Finance charges 23 (1 198 139) (1 597 564) - -

Profit/(loss) before taxation 3 394 382 (18 221 419) (181 634) (17 098 402)

Taxation 24 (921 492) (2 124 194) (30 066) (745 155)

Net profit/floss) for the year 2 472 890 (20 345 613) (211 700) (17 843 557)

Basic earnings/(loss) per share 25 5,3 (43,5) - -

Headline earnings/(loss) per share 26 6,2 (8,8) - -

Fully diluted earnings/(loss) per share 27 3,4 (29,8) - -

Fully diluted headline earnings/(loss) per share 27 4,0 (6,0) - -


Statement of changes in equity For the year ended 31 December 2003

Share

capital

R

Share

premium

R

Accumulated

loss

R

Total

R

GROUP

Balance at 1 January 2002

Net loss for the year

2 336 712 89 862 091 (64 741 155)

(20 345 613)

27 457 648

(20 345 613)


Net profit for the year

2 336 712 89 862 091 (85 086 768)

2 472 890

7 112 035

2 472 890

Balance at 31 December 2003 2 336 712 89 862 091 (82 613 878) 9 584 925

COMPANY



2 336 712 106 796 091 (82 756 917)

(17 843 557)

26 375 886

(17 843 557)



2 336 712 106 796 091 (100 600 474)

(211 700)

8 532 329

(211 700)

Balance at 31 December 2003 2 336 712 106 796 091 (100 812 174) 8 320 629

DYNAMIC CABLES RSA LTD - ANNUAL REPORT8

Cash flow statementFor the year ended 31 December 2003

2003

Group

2002

Company

2003 2002

Note R R R R

Cash flows from operating activities 2 204 515 5 234 716 (1 616 875) (5 979 315)

Cash receipts from customers

Cash paid to suppliers and employees

71 730 755

(68 572 674)

99 447 000

(93 098 102)

-

(1 617 376)

-

(6 026 709)

Cash operations

Interest received

Finance charges

33.2 3 158 081

244 573

(1 198 139)

6 348 898

483 382

(1 597 564)

(1 617 376)

501

-

(6 026 709)

47 394

-

Cash flows from investing activities (3 153 291) (5 416 649) 4 531 162 2 829 000

Purchase of property, plant and equipment

Additions:

Proceeds on disposal of property,

plant and equipment

Purchase of intangible assets

Purchase of financial assets

Proceeds on disposal of financial assets

Proceeds on disposal of investments

Loans to subsidiary

33.4

(1 968 905)

1 620 192

(11 448)

-

-

(2 793 130)

-

(4 615 843)

1 055 014

(39 820)

(1 816 000)

-

-

-

-

-

-

-

4 531 162

-

-

-

-

-

(965 317)

-

-

3 794 317

Cash flows from financing activities (429 690) (584 512) - 965 096

Proceeds from long-term borrowings

Payment of long-term borrowings

-

(429 690)

-

(584 512)

-

-

965 096

-

Net increase/Idecrease) in cash and

cash equivalents

Cash and cash equivalents at the beginning

of the year 33.5

(1 378 466)

7 547 666

(766 445)

8 314 111

2 914 287

213 251

(2 185 219)

2 398 470

Cash and cash equivalents at the end

of the year 33.5 6 169 200 7 547 666 3 127 538 213 251


Notes to the financial statements For the year ended 31 December 2003

1. ACCOUNTING POLICIES

The financial statements are prepared on the historic

cost basis and incorporate the principal accounting

policies, set out below, which are consistent with those

of the previous year. These policies comply with South

African Statements of Generally Accepted Accounting

Practice. The financial statements are prepared on a

going concern basis.

1.1 Consolidation

The group financial statements include those of the

holding company and its subsidiaries. The results of

subsidiaries are included from the effective dates of their

acquisition until the effective dates of their disposal.

Intergroup balances and intergroup transactions and

resulting profits are eliminated in full.

1.2 Property, plant and equipment

Property, plant and equipment are stated at cost less

depreciation and any accumulated impairment losses.

Property, plant and equipment held under instalment

sales and finance leases are capitalised. At the

commencement of the leases these assets are reflected

at the lower of fair value and the present value of the

minimum lease payments. The related liability is

recognised at an equivalent amount. Finance charges are

allocated to periods during the lease term so as to

produce a constant periodic rate of interest on the

remaining balance of the liability for each period.

Depreciation is provided on all property, plant and

equipment other than freehold land, to write down the

cost by equal instalments over their useful lives as

follows:

Plant and equipment 4 – 6 years

Motor vehicles 4 – 5 years

Furniture and fittings 6 – 10 years

Office equipment 5 – 6 years

Computer hardware 2 – 3 years

Fibre lab equipment 5 years

Improvements to leased premises are written off

over the period of the lease.

1.3 Intangible assets

Intangible assets are recognised only when the cost can

be measured reliably and the future expected benefits

attributable to the asset are assured.

Intangible assets are carried at cost less amortisation

and any accumulated impairment losses.

Amortisation is provided on all intangible assets to

write down the cost on the straight-line basis over their

estimated economic lives as follows:


Goodwill 10 years

Trademarks 10 years

Other intangible assets 2 years

Intangible assets are further written down to the

extent that the unamortised balances will in all

probability no longer be recovered from expected future

economic benefits.

Negative goodwill is recognised as income on a

systematic basis over the remaining weighted average

useful life of the identifiable acquired depreciable

assets.

1.4 Investments

Non-trading investments are classified as financial

assets and stated at fair value (cost, except where there

is a decline in value that is other than temporary, in

which case they are written down to fair value).

1.5 Inventory

Inventory is valued at the lower of cost and estimated

net realisable value. Cost is determined on the following

bases:

Raw materials and consumable stores are valued at

average cost.

Finished goods and work in progress are valued at

raw material cost plus labour cost and a proportion of

manufacturing overhead expenses based on normal

capacity.

Merchandise is valued at invoice cost on the

weighted average cost basis.

1.6 Manufacturing contracts

Where the outcome of a manufacturing contract can be

estimated reliably, revenue and costs are recognised by

reference to the stage of completion of the contract

activity at the balance sheet date, as measured by the

percentage of services performed to date to the

estimated total services for each contract. Variations in

contract work, claims and incentive payments are

included to the extent that they have been agreed with

the customer.

Where the outcome of a manufacturing contract

cannot be estimated reliably, contract revenue is

recognised to the extent of contract costs incurred that

it is probable will be recoverable. Contract costs are

recognised as expenses in the period in which they are

incurred.

When it is probable that total contract costs will

exceed total contract revenue, the expected loss is

recognised as an expense immediately.

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1.7 Taxation taxation authority and the group intends to settle its

The charge for current tax is based on the results for the current tax assets and liabilities on a net basis).

year as adjusted for items which are non-assessable or A deferred taxation asset is recognised for all

disallowed. It is calculated using tax rates that have deductible temporary differences arising from invest-

been enacted or substantively enacted by the balance ments in subsidiaries, joint ventures and associates, only

sheet date. to the extent that it is probable that:

Deferred tax is accounted for using the balance – the temporary difference will reverse in the foreseeable

sheet liability method in respect of temporary future; and

differences arising from differences between the – taxable profit will be available against which the

carrying amount of assets and liabilities in the financial temporary difference can be utilised.

statements and the corresponding tax basis used in the

computation of taxable profit. In principle, deferred tax 1.8 Provisions

assets are recognised to the extent that it is probable Provisions are recognised when the group has a present

that taxable profits will be available against which obligation as a result of a past event which it is probable

deductible temporary differences can be utilised. Such will result in an outflow of economic benefits that can be

assets and liabilities are not recognised if the temporary reasonably estimated.

difference arises from goodwill (or negative goodwill) or

from the initial recognition (other than in a business 1.9 Turnover

combination) of other assets and liabilities in a Turnover comprises revenue from the sale of goods and

transaction which affects neither the tax profit nor the excludes value added taxation.

accounting profit.

Deferred tax liabilities are recognised for taxable 1.10 Cost of sales

temporary differences arising on investments in Cost of sales consists of the cost of inventories sold

subsidiaries and associates, and interest in joint ventures, during the period, including costs of conversion and

except where the group is able to control the reversal of other costs incurred in bringing the inventories to their

the temporary difference and it is probable that the present location and condition.

temporary difference will not reverse in the foreseeable

future. 1.11 Employee benefits

Deferred taxation assets are the amounts of income Contributions to a defined contribution plan in respect of

taxes recoverable in future periods in respect of: service in a particular period are recognised as an

• deductible temporary differences; or expense in that period.

• the carry forward of unused tax losses.

A deferred taxation liability is recognised for all taxable 1.12 Cash and cash equivalents

temporary differences, unless the deferred taxation Cash and cash equivalents consist of cash on hand and

liability arises from: balances with banks and other financial institutions.

• goodwill for which amortisation is not deductible for tax

purposes; or 1.13 Impairment

• the initial recognition of an asset or liability in a At each balance sheet date, the group reviews the

transaction which: carrying amounts of its tangible and intangible assets to

– is not a business combination; and determine whether there is any indication that those

– at the time of the transaction, affects neither assets have suffered an impairment loss. If any such

accounting profit nor taxable profit. indication exists, the recoverable amount of the asset is

A deferred taxation asset is recognised to the extent estimated in order to determine the extent of

that it is probable that future taxable profit will be available impairment loss. Where it is not possible to estimate

against which the unused tax losses (and unused tax the recoverable amount of an individual asset, the group

credits) can be utilised. estimates the recoverable amount of the cash-

Deferred tax is calculated at the tax rates that are generating unit to which the asset belongs.

expected to apply to the period when the asset is realised

or the liability is settled. Deferred tax is charged or credited 1.14 Foreign exchange contracts

in the income statement, except when it relates to items Foreign exchange contracts are revalued to fair value at

credited or charged directly to equity, in which case the the balance sheet date and both realised and unrealised

deferred tax is also dealt with in equity. profits and losses are accounted for in the income

Deferred tax assets and liabilities are not offset (except statement for the period.

when they relate to income taxes levied by the same


Notes to the financial statementsFor the year ended 31 December 2003

2. PROPERTY, PLANT AND EQUIPMENT

Cost

Leasehold improvements

Plant and equipment

- Owned

- Leased

Motor vehicles - owned

Furniture and fittings - owned

Small tools - owned

Office equipment - owned

Computer hardware - owned

Fibre lab equipment - owned

Accumulated depreciation


- Historic cost

Plant and equipment

- Owned

- Leased



Small tools - owned




Carrying amount


Plant and equipment

- Owned

- Leased






Group Company

2003 2002 2003 2002

R R R R

39 374 170 786 - -

2 701 628 9 438 168 - -

970 368 9 438 168 - -

1 731 260 - - -

1 254 335 2 278 188 - -

110 226 172 238 - -

100 100 - -

256 077 380 409 - -

319 241 571 878 - -

1 587 850 1 544 880 - -

6 268 831 14 556 647 - -

11 421 4 859 - -

721 274 3 339 975 - -

524 390 3 339 975 - -

196 884 - - -

552 112 999 256 - -

43 361 53 954 - -

100 100 - -

124 298 154 116 - -

240 329 479 128 - -

474 270 159 775 - -

2 167 165 5 191 163 - -

27 953 165 927 - -

1 980 354 6 098 193 - -

445 978 6 098 193 - -

1 534 376 - - -

702 223 1 278 932 - -

66 865 118 284 - -

131 779 226 293 - -

78 912 92 750 - -

1 113 580 1 385 105 - -

4 101 666 9 365 484 - -


Group Company

2003 2002 2003 2002

13

2.

2.1

2.2

PROPERTY, PLANT AND EQUIPMENT (continued)

Movement for the year

At beginning of year

Additions

- Leasehold improvements

- Plant and equipment

- Motor vehicles

- Furniture and fittings

- Office equipment

- Computer hardware

- Fibre lab equipment

Disposed of on liquidation of subsidiary


- Motor vehicles

- Furniture and fittings

- Office equipment

- Computer hardware

Disposals

At end of year

Movement for the year

Depreciation


- Charge for year

- Eliminated on disposals

- Eliminated on liquidation of subsidiary

At end of year

R R R R

14 556 647 10 547 278 - -

1 968 905 4 615 843 - -

- 170 786 - -

1 731 260 2 166 289 - -

128 532 485 100 - -

- 84 259 - -

19 558 87 926 - -

46 585 76 603 - -

42 970 1 544 880 - -

(7 918 005) - - -

(6 334 056) - - -

(1 078 825) - - -

(62 012) - - -

(143 889) - - -

(299 223) - - -

(2 338 716) (606 474) - -

6 268 831 14 556 647 - -

5 191 163 3 080 754 - -

1 043 639 2 595 469 - -

(718 524) (485 060) - -

(3 349 113) - - -

2 167 165 5 191 163 - -

DYNAMIC CABLES RSA LTD — ANNUAL REPORT

- -

-

-

-

-

-

-

-

-

-

-

- -

- -

-

-

-

-

-

-

-

-

-

-

- -

- -

-

-

-

-

-

-

-

-

-

-

- -


3. INTANGIBLE ASSETS

Cost

Goodwill

- Cost

-Impairment

Patents and trademarks

Computer software

Other intangible asset

Accumulated amortisation

Goodwill

- Accumulated amortisation

- Impairment


Computer software


Carrying amount

Goodwill

- Carrying amount

- Impairment


Computer software


2003

R

3 273 157

3 273 157

-

22 163 000

119 816

240 000

25 795 973

1 909 341

1 909 341

-

12 928 418

99 630

240 000

15 177 389

1 363 816

3 273 157

-

9 234 582

20 186

-

10 618 584

Group

2002

R

1

3 273 157

(3 273 156)

22 163 000

108 368

240 000

22 511 369

-

1 582 025

(1 582 025)

10 712 118

68 552

120 000

10 900 670

1

1 691 132

(1 691 131)

11 450 882

39 816

120 000

11 610 699

Company

2003 2002

R R


Group Company

2003 2002 2003 2002

R R R R

3. INTANGIBLE ASSETS (continued)

3.1 Movement for the year

Cost

At beginning of year 22 511 369 25 745 251 - -

Additions

- Computer software 12 530 39 275 - -

Eliminated on liquidation of subsidiary

- Computer software (1 083) - - -

Impairment 3 273 157 (3 273 157) - -

At end of year 25 795 973 22 511 369 - -

3.2 Movement for the year

Amortisation

At beginning of year 10 900 670 9 778 799 - -

Charge for year 2 693 617 2 376 581 - -

Impairment/reversal of impairment 1 583 102 (1 254 710) - -

At end of year 15 177 389 10 900 670 - -

The goodwill was impaired on consolidation in the prior year owing to zoning problems with the occupied premises

which resulted in lower margins due to greater levels of outsourcing and a forced relocation of the plant during the

company's busiest period. The maintainability of service level agreements with a major customer came under

question. Therefore the directors took a conservative approach by impairing the goodwill. The subsequent

relocation proved positive and previous productivity levels and margins were soon reached. As the impairment in

the prior year was the result of an "external event", the original write-off period has been reverted to and the

impairment has been reversed in the current year in terms of AC 128.



16

4. INVESTMENT IN SUBSIDIARIES

Book value of

holding company's

Issued Company's interest

share effective Shares

Nature of capital holding at cost Indebtedness Impairment Total

Name of company business 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002

R'000 R'000 % % R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000

Dynamic Cables Distributor

SA (Pty) Ltd of cable 0,001 0,001 100 100 27 832 27 832 3 016 10 885 (17 432) (17 432) 13 416 21 285

H Investments Manufacturer

No 220 (Pty) Ltd of engineered

products for the

communications

industry 1 1 100 100 - - 3 346 4 073 (581) (581) 2 765 3 492

Dynatech Telecom In

(Pty) Ltd liquidation

(note 5) 0,1 0,1 100 100 - - 13 881 10 158 (5 881) 6 015 8 000 4 143

Capital Options In

(Pty) Ltd liquidation 1 000 1 000 100 100 10 10 4 363 4 363 (4 373) (4 373) - -

H Investments

No 197 (Pty) Ltd Liquidated - - - - - - - 727 - - - 727

Utility Vending

Systems (Pty) Ltd Dormant 0,1 0,1 100 100 - - - - - - - -

27 842 27 842 24 606 30 206 (28 267) (28 401) 24 181 29 648

5. INVESTMENT IN SUBSIDIARY IN LIQUIDATION

At the date that Dynatech Telecoms (Proprietary) Limited was placed in liquidation, the loan to the subsidiary from

the company was R13 881 057. This loan had been impaired by R6 014 592 in the prior year. In order to protect the

company's claim with the liquidator, the directors negotiated with the liquidator to purchase the assets (over which

the company held a notarial bond) and contractual rights of Dynatech Telecoms (Proprietary) Limited (in liquidation)

from the liquidator. The transaction was approved by the master of the high court shortly after year end. As the

directors are currently negotiating the sale of this operation, they estimate the likely recovery of the investment to

be R8 000 000 and have therefore adjusted the impairment accordingly (refer note 20).


2003

Group

2002 2003

Company

2003

R R R R

6. OTHER FINANCIAL ASSETS

Loans to directors and managers

At beginning of year 727 096 727 096 727 096 727 096

The loan is unsecured, interest-free and

repayable by mutual arrangement. The loan

was made to the trust to purchase shares

in the company on behalf of the directors

and employees.

Loans to companies and close corporations

controlled by directors 2 969 045 2 969 045 - -


Advances

2 969 045

-

2 118 040

851 005

-

-

-

-

At end of year 3 696 141 3 696 141 727 096 727 096

The loan is unsecured, interest-free and

repayable by mutual arrangement.

7. DEFERRED TAXATION

Accelerated capital allowances

for tax purposes

Provision for bad debts

Other

Tax losses available for set-off

against future taxable income

-

-

-

-

(1 377 272)

120 110

40 759

2 001 071

-

-

-

-

-

-

-

-

Deferred taxation asset - 784 668 - -



Group Company

2003 2002 2003 2002

R R R R

7. DEFERRED TAXATION (continued)

Reconciliation of deferred taxation asset

At beginning of year 784 668 1 612 803 - -

Increase/(decrease) in tax losses available

for set-off against future taxable income - (575 533) - -

Originating temporary difference on

intangible assets - (284 953) - -

Originating temporary difference on

tangible fixed assets - 1 780 - -

Reversing temporary difference on

provisions - (10 188) - -

Reversing temporary difference on

prepayments - 40 759 - -

Transferred to deferred tax liability (784 668) - - -

At end of the year - 784 668 - -

8. INVENTORY

Raw materials 1 096 311 3 010 208 - -

Work in progress 772 754 4 721 088 - -

Merchandise 5 196 414 5 993 988 - -

7 065 479 13 725 284 - -

Manufacturing contracts in progress, included

in work in progress, comprise:

- Costs incurred 337 711 2 161 460 - -

- Recognised profits less recognised losses 238 008 876 000 - -

575 719 3 037 460 - -

- Progress billings - (1 490 503) - -

575 719 1 546 957 - -


9. SHARE CAPITAL AND PREMIUM

Authorised

66 800 000 ordinary shares of R0,05 each

Issued

46 734 249 ordinary shares

Share premium

Group Company

2003 2002 2003 2002

R R R R

3 340 000 3 340 000 3 340 000 3 340 000

2 336 712 2 336 712 2 336 712 2 336 712

89 862 091 89 862 091 106 796 091 106 796 091

92 198 803 92 198 803 109 132 803 109 132 803

During the 2002 year 990 000 ordinary shares of 1 000 000 issued share capital of Capital Options (Proprietary)

Limited (in liquidation), formerly known as Conlog (Proprietary) Limited, were cancelled as the directors believe that

the shares had been unlawfully allotted and issued. The entire share capital in Capital Options (Proprietary) Limited

(in liquidation) was purchased by the company in 1998 by issuing 22 545 454 shares for R5,50 per share. The effect

of the cancellation of the subsidiary shares is that those shares in the company that were issued in order to acquire

the shares in the subsidiary are "tainted".

The directors are in the process of determining a practical way in which to address the issue and are involved in

this end in discussion with the company's attorneys, the JSE Securities Exchange South Africa and STRATE. At this

stage the directors are of the opinion that the most likely outcome will be a form of "rectification" of the tainted

shares once the matter is settled. Settlement talks with the previous vendors are currently taking place.

As such, no adjustment has been made to the authorised or issued share capital in the annual financial statements.

Should an adjustment prove to be necessary, the shareholders will be advised through the normal channels.

2003

Group

2002

Company

2003 2002

R R R R

10. ACCUMULATED LOSS

Company

Subsidiaries

(100 812 174)

18 198 296

(100 600 474)

15 513 706

(100 812 174)

-

(100 600 474)

-

(82 613 878) (85 086 768) (100 812 174) (100 600 474)

11. LONG-TERM BORROWINGS

Secured loan

Secured in terms of suspensive sale

agreements over moveable assets with

a book value of R2 114 922 (2002: R4 260 773)

Less: Repayable within one year, included

in short-term borrowings

2 073 301

(736 881)

2 774 576

(1 008 466)

-

-

-

-

1 336 420 1 766 110 - -


20


Group Company

2003 2002 2003 2002

R R R R

12. VENDOR LOAN 20 545 879 20 545 879 20 545 879 20 545 879

This amount represents the balance of the purchase price payable to Cape Empowerment Trust Limited in respect

of the acquisition of Dynamic Cables SA (Proprietary) Limited. The purchase price is payable at the election of

Dynamic Cables RSA Limited by way of:

• the allotment and issue of ordinary shares in Dynamic Cables RSA Limited at an issue price of 60 cents per share;

• a cash payment;

• a combination of the aforegoing.

The purchase price was determined by a multiple of 2,25 of the consolidated profit of Dynamic Cables SA

(Proprietary) Limited for the 2001 and 2002 year ends which amounted to R45 412 751.

Group Company

2003 2002 2003 2002

R R R R

13. DEFERRED TAXATION

Accelerated capital allowances

for tax purposes 1 662 226 - - -

Provision for bad debts movement (57 254) - - -

Prepayments (41 806) - - -

Deferred taxation liability 1 563 166 - - -

Reconciliation of deferred taxation liability

At beginning of the year - - - -

Transfer from deferred tax asset (784 668) - - -

(Increase)/decrease in tax losses available

for set-off against future taxable income 2 017 947 - - -

Originating temporary difference

on intangible fixed assets 284 953 - - -

Originating temporary difference on provisions 45 981 - - -

Increase in prepayments (1 047) - - -

At end of theyear 1 563 166 - - -

14. OTHER FINANCIAL LIABILITIES

Forward exchange contracts at fair value 22 087 352 892 -

Forward exchange contracts

Total foreign currency Average forward exchange rate Date of maturity

237 641,10 euros between 8,0901 and 8,4845 between 05/01/04 and 07/05/04

103 747,90 dollars between 6,4253 and 7,2760 between 07/01/04 and 21/01/04


15. CONTINGENCIES

The company has signed an unlimited letter of suretyship in favour of The Standard Bank of South Africa Limited

in respect of overdraft and other facilities of R19 547 000 (2002: R19 547 000) granted to Dynamic Cables SA

(Proprietary) Limited. At the year end the banking facilities utilised amounted to R2 979 584 (2002: R4 558 092).

The 1998 taxable income for Capital Options (Proprietary) Limited (in liquidation) has been reassessed by the

Receiver of Revenue. As an objection has been lodged with the Receiver of Revenue, and the directors are of the

opinion that the assessment is invalid, no provision has been made in the accounts in this regard. Furthermore, as

the company has been placed in liquidation, any claim will not be settled by the group. The reassessment stipulates

an amount owing by the group of R3 413 758 (2002: R3 413 758).

The company has signed an unlimited letter of suretyship in favour of Nedcor Bank Limited in respect of facilities

granted to Capital Options (Proprietary) Limited (in liquidation), formerly known as Conlog (Proprietary) Limited.

The account has been subsequently closed and so no facility has been utilised. At the date of signature of these

financial statements, Nedcor Bank Limited had not acknowledged release of this guarantee by Dynamic Cables RSA

Limited.

The company has signed an unlimited letter of suretyship in favour of Absa Bank Limited in respect of facilities

granted to Log-Tek (Proprietary) Limited. The company has requested to have the facility released; however, Absa

Bank Limited is unable to trace the guarantee.

The company has guaranteed all amounts payable to New Republic Bank Limited (under curatorship) in respect of

asset-based finance provided to Satellite Data Networks (Proprietary) Limited. At the date of signature of these

financial statements, New Republic Bank Limited had not acknowledged release of this guarantee by Dynamic

Cables RSA Limited.

16. RISK MANAGEMENT

16.1 Forward exchange contracts

The group has entered into certain forward exchange contracts which do not relate to specific items appearing on

the balance sheet but which were entered into to cover foreign commitments not yet due and proceeds not yet

received. The contracts will be utilised for purposes of trade.

16.2 Foreign exchange risk

Group subsidiaries carry out a significant portion of their purchases in foreign currencies. Hedging instruments are

used to reduce the risks arising from foreign currency fluctuations against the various companies' own currencies.

16.3 Interest rate risk

The group is not exposed to interest rate risk to a large degree.

16.4 Credit risk

The group maintains cash and cash equivalents with reputable financial institutions. The group's policy is designed

to limit transactions executed to financial institutions with a high credit standing.



17. TURNOVER

Sale of goods

Contract revenue

18. OPERATING PROFIT

Operating profit for the year is stated

after accounting for the following:

Income

Profit on disposal of tangible assets

Charges

Intangible assets

Amortisation

- Goodwill

- Trademarks

- Computer software

- Other intangible asset

Loss on foreign exchange

Loss on disposal of tangible assets

Operating lease charges


- Premises

- Minimumpayments

Property, plant and equipment

Depreciation

- Leasehold improvements


-Motor vehicles

-Furniture and fittings

- Office equipment

- Computer hardware

- Fibre lab equipment

Staff costs

2003

R

44 505 670

21 122 789

65 628 459

-

2 693 617

327 316

2 216 300

30 001

120 000

277 062

-

501 000

8 534

492 466

1 043 639

6 562

414 831

220 387

18 371

42 034

26 959

314 495

7 405 311

Group

2002

R

88 900 158

12 194 538

101 094 696

509 014

2 376 581

1

2 216 300

40 280

120 000

771 683

-

1 332 335

222 838

1 109 497

2 595 470

4 859

1 661 313

498 309

25 767

67 422

178 025

159 775

6 415 716

Company

2003 2002

R R

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- 41 000

233 709 222 311

- -

233 709 222 311

- -

- -

- -

- -

- -

- -

- -

- -

- 38 304


Group Company

2003 2002 2003 2002

23

19.

R R R R

AUDITORS' REMUNERATION

- Audit fee 345 218 284 567 212 943 -

- Fees for other services - 42 878 - 42 878

Auditors' remuneration 345 218 327 445 212 943 42 878

20. LIQUIDATION OF SUBSIDIARY

During the year the directors became aware of various operational and management issues at Dynatech Telecoms

(Proprietary) Limited. The company was placed into liquidation by one of its creditors. These issues have caused

the directors to doubt the quality of the financial information of the subsidiary in liquidation, and the directors

believe that the separate disclosure of trading losses incurred prior to liquidation based on questionable

information may be misleading. As such, the directors have elected to deviate from South African Statements of

Generally Accepted Accounting Practice (refer note 32), and have disclosed the effects of the liquidation of Dynatech

Telecoms (Proprietary) Limited on the group as a composite item in the consolidated income statement.

This composite item comprises the effects of the following:

• The gain to the group that results from the subsidiary being placed in liquidation as the liabilities of the

subsidiary are no longer a group obligation and the directors estimate recovery of the company's loan to the

subsidiary at R8 000 000 (refer note 5).

• The current year's trading loss incurred by the company prior to its being placed in liquidation.

The directors believe that the net gain in the group net asset value of R1 553 929 is correct and that presenting this

information in any other manner based on unreliable information would be potentially misleading.

Group Company2003 2002 2003 2002

21.

R R R R

FAIR VALUE ADJUSTMENT OF INVESTMENTS

Impairment of loans to subsidiaries (1 031 102) - (341 734) -

Subsidiary debtor written off as irrecoverable (727 396) - (727 396) -

Profit on elimination of subsidiary - 549 764 - -

Goodwill impaired - (23 109 578) - -

Provision for loss on investments - (810 000) - (18 013 316)

(1 758 498) (23 369 814) (1 069 130) (18 013 316)

22. INCOME FROM INVESTMENTS

Income from investments 244 573 483 382 501 47 394

Income

Interest 244 573 483 382 501 47 394

DYNAMIC CABLES RSA LTD - ANNUAL REPORT


Group mpany

2003 2002 2003 2002

R R R R

23. FINANCE CHARGES

Bank and other short-term borrowings 12 910 43 707 - -

Finance leases 142 977 360 622 - -

Other 1 042 252 1 193 235 - -

1 198 139 1 597 564 - -

24. TAXATION

Major components of taxation expense

SA normal taxation

Current 378 861 1 296 059 30 066 659 519

Deferred taxation

- Current year 542 631 828 135 - 85 636

921 492 2 124 194 30 066 745 155

Reconciliation between accounting

profit and taxation expense

Accounting profit/(loss) 3 394 382 (18 221 419) (181 634) (17 098 402)

Taxation at the applicable tax rate of 30%

(2002: 30%) 1 018 315 (5 466 426) (54 490) (5 129 521)

Tax effect of adjustments to taxable income 115 920 7 590 620 84 556 5 874 676

- Additional allowances (1 047) (40 760) - -

- Goodwill amortisation 134 194 36 000 - -

- Loss on investment in subsidiary (363 659) - 62 459 5 403 995

- Impairment of goodwill - 6 933 000 - -

- Exempt income (388 460) (300 000) - (30 000)

-Capital items 165 599 087 (202 583) 500 681

- SARS interest 289 810 361 659 - -

- Donations 233 1 634 - -

- Non deductible expenses 232 988 - 224 680 -

- Deferred tax movement 211 696 - - -

Tax losses utilised (212 743) - - -

921 492 2 124 194 30 066 745 155

25. BASIC EARNINGS/(LOSS) PER SHARE

The calculation of basic earnings/(loss) per share is based on earnings of R2 472 890 (2002: R(20 347 811)) and a

weighted average of 46 734 249 (2002: 46 734 249) ordinary shares in issue throughout the year.


26. HEADLINE EARNINGS/(LOSS) PER SHARE

The calculation of headline earnings/(loss) per ordinary share is based on earnings of R2 891 460 (2002:

R(4 109 580)) and a weighted average of 46 734 249 (2002: 46 734 249) ordinary shares in issue throughout the year.

As described in note 20, the trading loss incurred by Dynatech Telecoms (Proprietary) Limited prior to its liquidation

has not been disclosed separately and has therefore effectively been eliminated from these headline earnings.

Group Company

2003 2002 2003 2002

25

R R R R

Reconciliation between net profit/(loss)

and headline earnings:

Net profit/(loss) before taxation 3 394 382 (18 221 419)

Adjusted for:

- Additional provision for restructuring

costs reversed - (1 150 000)

- Goodwill amortisation 447 315 120 000

- (Profit)/loss on sale of fixed assets (233 314) (510 013)

- Abnormal items - 17 431 046

- Surplus on liquidation of subsidiary (1 553 929) -

- Fair value adjustment of investments 1 031 102 -

- Creditor written off 727 396 -

3 812 952 (2 330 386)

Less:

- Taxation (921 492) (2 124 194)

- Tax effect of adjustments - 345 000

Headline earnings/(loss) 2 891 460 (4 109 580)

Headline earnings/(loss) per share 6,2 (8,8)

27. FULLY DILUTED EARNINGS/(LOSS)/HEADLINE EARNINGS/(LOSS ► PER SHARE

The calculation of fully diluted earnings/(loss) per share is based on earnings of R2 472 890 (2002: R(20 347 811)) and

a weighted average of 72 337 381 (2002: 68 337 892) dilutive potential ordinary shares in issue throughout the year.

The calculation of fully diluted headline earnings/(loss) per share is based on earnings of R2 891 460 (2002:

R(4 109 580)) and a weighted average of 72 337 381 (2002: 68 337 892) dilutive potential ordinary shares in issue

throughout the year.


I


Group Company

2003 2002 2003 2002

R R R R

28. DIRECTORS' EMOLUMENTS

Emoluments received by the directors

— Directors and past directors — executive

— For services as directors of

Dynamic Cables RSA Limited — — 65 000 38 000

— In connection with the affairs

of the company or its subsidiaries 1 125 330 1 607 941 — —

29. RELATED PARTIES AND RELATED

PARTY TRANSACTIONS

Related parties

Related parties where control existed during the year are as follows:

Directors: MJI Brown

AF Pheiffer

SL Rai

TD Rai

VA Butler

Shareholders: Cape Empowerment Trust Limited

Companies: Dynamic Cables SA (Pty) Ltd (subsidiary)

Dynatech Telecoms (Pty) Ltd (in liquidation) (subsidiary)

H Investments No 220 (Pty) Ltd (subsidiary)

Trading transactions

During the year, the company entered into the following transactions with related parties:

Amounts owed by Amounts owed to

Expenses related parties related parties

Year ended Year ended

31/12/03 31/12/02 31/12/03 31/12/02 31/12/03 31/12/02

R R R R R R

Cape Empowerment

Trust Limited 2 500 000 — 583 130 — 20 545 879 20 545 879

30. POST BALANCE SHEET EVENTS

As part of the group's ongoing rationalisation process the company has entered into negotiations regarding a

possible management buyout of one of its subsidiary companies, H Investments No 220 (Proprietary) Limited.

At the date of signing the audit report no agreement had been reached.

31. COMPARATIVE FIGURES

The comparative figures have been reclassified in certain cases.

DYNAMIC CABLES RSA LTD — ANNUAL REPORT26

32. DEPARTURE FROM GENERALLY ACCEPTED ACCOUNTING PRACTICE

During the year, a subsidiary, Dynatech Telecoms (Proprietary) Limited, was placed in liquidation. Owing to the

nature of the subsidiary's records, the directors are not able to analyse the results of this subsidiary in order to

provide all the disclosures required by Statements of Generally Accepted Accounting Practice. Instead, the net

result for the year has been presented as a single composite line item in the group income statement.

Group Company

2003 2002 2003 2002

27

33. CASH FLOW STATEMENT

33.1 The following convention applies to figures

other than adjustments:

Outflows of cash are represented by figures

in brackets. Inflows of cash are represented

by figures without brackets.

33.2 Reconciliation of profit/(loss) for the year

on ordinary activities before taxation to

cash generated/(absorbed by) operations

Profit/(loss) on ordinary activities before

taxation for the year

Adjustments

- (Profit)/loss on disposal of property, plant

and equipment

- Depreciation and amortisation

- Investment income

- Finance charges

- Movement in forward exchange contracts

- Abnormal items

- Provision for losses on investments

- Other non-cash items

Operating profit before working

capital changes

Increase in working capital

- Decrease/(increase) in inventories

- (Increase)/decrease in trade and

other receivables

- (Decrease)/increase in trade and

other payables

Cash generated/(absorbed by) operations

R R R R

3 394 382 (18 221 419) (181 634) (17 098 402)

4 564 586 31 892 825 935 094 18 971 239

- (509 014) - 41 000

3 737 256 4 972 050 - -

(244 573) (483 382) (501) (47 394)

1 198 139 1 597 564 - -

(330 805) 2 400 906 - -

204 569 23 369 814 935 595 18 013 316

- 965 317 - 965 317

- (420 430) - (1 000)

7 958 968 13 671 406 753 460 1 872 837

(4 800 887) (7 322 508) (2 370 836) (7 899 546)

6 659 805 (26 082) - -

(1 201 188) (1 919 141) (2 383 693) -

(10 259 504) (5 377 285) 12 857 (7 899 546)

3 158 081 6 348 898 (1 617 376) (6 026 709)



2003

Group

2002

Company

2003 2002

R R R R

33. CASH FLOW STATEMENT (continued)

33.3 Normal taxation refunded

Taxation owing at beginning of year

Taxation charged per the income statement

Taxation owing at end of year

(7 830 570)

(378 861)

8 209 431

(6 534 511)

(1 296 059)

7 830 570

(659 519)

(30 066)

689 585

-

(659 519)

659 519

33.4 Proceeds on disposal of property, plant

and equipment

Profit on disposal of property, plant

and equipment

Carrying value of property, plant

and equipment

-

1 620 192

509 014

546 000

-

-

(41 000)

41 000

Proceeds 1 620 192 1 055 014 - -

33.5 Cash and cash equivalents

Cash and cash equivalents included in the

cash flow statement comprise the following

balance sheet amounts:

Cash and cash equivalents

Bank overdraft

6 373 030

(203 830)

7 674 500

(126 834)

3 127 538

-

213 251

-

Cash and cash equivalents 6 169 200 7 547 666 3 127 538 213 251


I Notice of annual general meeting Dynamic Cables RSA Limited ("Dynamic" or "the company")

Notice is hereby given that the sixteenth annual general

meeting of shareholders of Dynamic will be held on the 21st

Floor, 2 Long Street, Cape Town at 13:00 on Friday, 1 August

2003, to transact the following business:

1. ORDINARY RESOLUTION NUMBER ONE

RESOLVED THAT –

the audited financial statements of the company, and of the

group, and the directors' and auditors' report for the financial

year ended 31 December 2003, be and they are hereby

confirmed.

2. ORDINARY RESOLUTION NUMBER TWO

RESOLVED THAT –

TD Rai, who retires by rotation at the annual general meeting

but, being eligible, offers himself for re-election, be and is

hereby reappointed as director of the company.

3. ORDINARY RESOLUTION NUMBER THREE

RESOLVED THAT –

AF Pheiffer, who retires by rotation at the annual general

meeting but, being eligible, offers himself for re-election, be

and is hereby reappointed.

4. ORDINARY RESOLUTION NUMBER FOUR

RESOLVED THAT –

the directors' fees for the financial year ended 31 December

2003, be and are hereby approved.

5. ORDINARY RESOLUTION NUMBER FIVE

RESOLVED THAT –

the remuneration of the auditors for the financial year ended

31 December 2003, be and is hereby approved.

6. ORDINARY RESOLUTION NUMBER SIX

RESOLVED THAT

Grant Thornton be reappointed as auditors of the company for

the ensuing year.

7. ORDINARY RESOLUTION NUMBER SEVEN

RESOLVED THAT

subject to not less that 75% of those shareholders of the

company, present in person or by proxy and entitled to vote at

the general meeting at which this ordinary resolution number

eight is to be considered, voting in favour thereof, the

directors of the company be and are hereby authorised by

way of a general authority to issue all or any of the authorised

but unissued ordinary shares of 0,1 cent each in the capital of

the company for cash as they in their discretion deem fit,

subject to the following limitations:

– this authority shall not extend beyond the later of the date

of the next annual general meeting of the company or the

date of expiry of 15 (fifteen) months from the date of this

general meeting;

– 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 one year, 5% or more of the

number of shares of that class in issue prior to such issue;

– issues in terms of this authority will not exceed 15% in the

aggregate of the number of shares in the company's issued

share capital, in any one financial year;

– in determining the price at which an issue of shares will be

made in terms of this authority the maximum discount

permitted will be 10% of the weighted average trade price

of such shares, as determined over a 30 (thirty) business

day period to the date that the price of the share issue is

determined or agreed by the directors; and

– any such issue will only be made to public shareholders as

defined by the JSE Securities Exchange South Africa

("JSE") and not to a related party.

8. ORDINARY RESOLUTION NUMBER EIGHT

RESOLVED THAT

the unissued shares in the capital of the company be and

they are hereby placed under the control of the directors of

the company as a general authority in terms of the section

221 of the Companies Act, 61 of 1973, as amended ("the

Act"), who are hereby authorised to allot and issue shares in

the capital of the company to any party upon such terms and

conditions as the directors in their sole discretion deem fit,

subject to the provisions of the Act, and the Listings

Requirements of the JSE ("the Listings Requirements").

Save as provided in ordinary resolution number eight, no issue of

these shares is contemplated at the present time and no issue will

be made that could effectively transfer the control of the company

without prior approval of shareholders in general meeting.

9. SPECIAL RESOLUTION NUMBER ONE

RESOLVED THAT

the company be and is hereby authorised, by way of a general

authority:

– to repurchase issued shares in the capital of the company;

– to purchase shares in the company's holding company

(if any);

DYNAMIC CABLES RSA LTD – ANNUAL REPORT 29

30

Notice of annual general meetingDynamic Cables RSA Limited ("Dynamic" or "the company")

— permit the purchase of shares in the company by a subsidiary may take place (a 10% premium above the weighted average

of the company; of the market value for the shares for the 5 (five) trading days

— as and when deemed appropriate, subject to the following immediately preceding the date on which such price was

provisions: agreed) and having regard to the current price of the shares

— that the authority is valid until the company's next annual on the JSE at the last practical date prior to the date of this

general meeting provided that it shall not exceed notice that

15 (fifteen) months from the date that this authority is — the company and its subsidiaries ("the group") will be able,

given; in the ordinary course of business, to pay its debts;

— that any such purchase be implemented on the JSE; — the consolidated assets of the group, fairly valued in

— that a paid press announcement giving such details, as accordance with accounting policies applied for purposes of

may be required in terms of the Listings Requirements, the latest audited annual group financial statements, will be

will be published when the company and its subsidiaries in excess of its consolidated liabilities;

(if any) has/have cumulatively repurchased 3% of its — the group will have adequate ordinary share capital and

shares in issue; reserves;

— that the general purchase during any one financial year of — the group will have adequate working capital, for the

the company may not exceed 20% of the number of 12 (twelve) month period after the date of the notice of

shares in issue at the time this authority is given; annual general meeting of which this explanatory note

— that, in determining the price at which shares may be forms part.

purchased in terms of this authority, the maximum

premium permitted will be 10% above the weighted 10. ORDINARY RESOLUTION NUMBER NINE

average of the market value of the shares as determined RESOLVED THAT —

over the 5 (five) trading days prior to the day upon which the directors and secretary of the company be and are hereby

the price was agreed; authorised to do all such things and sign all documents and

— that the repurchase may not be made at a bid price greater take all such action as they consider necessary to implement

that the current trading price of the share; the resolutions set out in the notice convening the annual

— that such purchase shall be subject to the Act, and the general meeting at which this ordinary resolution number ten

applicable provisions of the Listings Requirements; and will be considered.

— that this authority shall be automatically amended so as to

conform with the Listings Requirements applicable from TO TRANSACT SUCH OTHER BUSINESS AS MAY BE

time to time. TRANSACTED AT AN ANNUAL GENERAL MEETING

Reason for and effect of special resolution number one A shareholder entitled to attend and vote at the sixteenth

The reason for and effect of special resolution number one is annual general meeting is entitled to appoint one or more

to grant a renewable general authority to the company to proxies to attend, speak and, on a poll, vote in his/her stead.

repurchase shares of the company which are in issue from A proxy need not be a member of the company.

time to time, to permit the purchase of shares in the company

by a subsidiary of the company (if any) and to permit the A form of proxy is attached for the convenience of any

company to purchase shares in the company's holding shareholder who cannot attend the fifteenth annual general

company (if any). It is the intention of the directors of the meeting. Duly completed forms must be lodged with

company that they may use such authority should prevailing the share certificate secretaries, Computershare Investor

circumstances (including the tax dispensation and market Services 2004 Limited at 70 Marshall Street, Johannesburg

conditions) in their opinion warrant it. (PO Box 61051, Marshalltown, 2107) by not later than 13:00

on 30 August 2004 in accordance with the instructions

The directors are of the opinion, after considering the effect thereon.

of such acquisition of shares, if implemented and on the

assumption that the maximum of 20% of the current issued

shares will be repurchased using the mechanism of the By order of the board

general authority at a maximum price at which the repurchase Director/Company secretary


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