SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of December 1999
MIH LIMITED
(Translation of registrant's name into English)
Abbot Building
Mount Street
Tortola
Road Town
BRITISH VIRGIN ISLANDS
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or
will file annual reports under cover of Form 20-F or
Form 40-F.)
Form 20-F x Form 40-F
(Indicate by check mark whether the registrant by
furnishing the information contained in this form is also
thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes No x
<PAGE>
EXHIBIT LIST
Exhibit Description
99.1 Press Release dated December 1, 1999
of MIH Holdings
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
MIH LIMITED
Date: December 2, 1999 by /s/ Allan M. Rosenzweig
-------------------------
Name: Allan M. Rosenzweig
Title: Group Director--Corporate
Finance and Director
EXHIBIT 99.1
For release 1st December 1999
MIH Limited
MIH Limited announces interim results
for the six month period ended 30 September 1999
MIH Limited (MIHL), the NASDAQ and AEX listed international television and
internet platform operator and software technology group, today announces its
results for the six month period ended 30 September 1999.
Highlights
o Successful Initial Public Offering (IPO), raising US$ 187.9 million,
before expenses, with the listing of MIH Limited on the NASDAQ National
Market (NASDAQ) and on the Amsterdam Stock Exchange (AEX).
o Strengthened position of Silicon Valley-based subsidiary, OpenTV Corp.,
as a world leader in interactive operating systems software and
applications development through the introduction of key strategic
shareholders AOL, General Instrument, Liberty Digital, News Corporation
and Time Warner.
o Successfully listed OpenTV Corp. on NASDAQ and AEX through an IPO,
raising US$ 172.5 million before expenses.
o Further developed its internet strategy through two key internet
investments:
- a 13.6% interest in Johannesburg Stock Exchange (JSE) listed M-Web
Holdings Limited, the leading South African on-line service provider
and content portal; and
- a 95% interest in M-Web Thailand, which owns Sanook!.com, Thailand's
leading Thai content internet portal.
o Strong revenue growth of 24.1% to US$ 353.2 million (1998: US$ 284.6
million) arising mainly from strong growth of digital subscribers and the
consolidation of technology revenues for the full period under review.
o A range of Mindport technologies was successfully deployed on the 42
local channel CBSAT DTH television platform launched in China.
o Increased investment in staff and software development in technology
subsidiary, Mindport BV, to focus on internet and interactive technology
opportunities
Commenting on the results, Cobus Stofberg, MIHL's Chief Executive and OpenTV's
Chairman, said: "We are pleased with the progress we have made in the last six
months, which has seen both MIHL and OpenTV being successfully listed on the
NASDAQ and AEX." "We will continue to grow our television and internet
businesses around the world. By leveraging these platforms, combined with our
media skills and technology expertise, we should be well placed to unlock
potential e-commerce and t-commerce revenue opportunities."
Enquiries:
Mark Sorour/ MIH Tel: + 31 653 413 515
Beverley Branford
Adrian Shaw/ Burson-Marsteller, London Tel: + 44 171 300 6248
Christine Grob
Gaude Paez/Steve Maslow Burson-Marsteller, NY Tel: + 212 614 4000
Heidi Geldenhuys Brunswick, Johannesburg Tel: + 27 11 442 8803
<PAGE>
COMMENTARY ON THE MIHL INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD
ENDED 30 SEPTEMBER 1999
Highlights
During the six month period ended 30 September 1999 the group achieved the
following highlights:
o Revenues up 24.1% on same period last year, with nearly 2.0 million
subscribing households under management
o Raised US$ 187.9 million, before expenses, through an initial public
offering and subsequent listing of MIH Limited on the NASDAQ National
Market (NASDAQ) and the Amsterdam Stock Exchange (AEX)
o Strengthened Silicon Valley-based OpenTV Corp.'s position as a world
leader in interactive operating systems software through the introduction
of key strategic shareholders AOL, General Instrument, Liberty Digital,
News Corporation and Time Warner
o Successfully listed OpenTV Corp. on NASDAQ and AEX through an initial
public offering, raising US$ 172.5 million before expenses
o Launched its internet strategy through two leading internet investments:
- a 13.6% interest in Johannesburg Stock Exchange (JSE) listed M-Web
Holdings Limited, the leading South African on-line service provider
and content portal; and
- a 95% interest in M-Web Thailand, which owns Sanook!.com, Thailand's
leading Thai content internet portal.
o A range of Mindport technologies was successfully deployed on the 42
local channel CBSAT DTH television platform launched in China.
o Increased investment in staff and software development in technology
subsidiary, Mindport BV, to focus on internet and interactive technology
opportunities
Results
Compared with the same period last year, revenues for the six month period
increased by 24.1% to US$ 353.2 million, arising mainly from strong growth of
digital subscribers and the consolidation of technology revenues for the full
period under review.
The operating results for the period reflect a loss of US$ 32.1 million
compared with a loss of US$ 4.4 million for the same period last year.
<PAGE>
A dynamic of the group is that the growth and expansion into new markets,
interactive technologies and internet businesses are mainly accounted for as a
charge through its income statement, with the corresponding value creation not
being reflected on balance sheet.
During the period under review, the group achieved positive group EBITDA of
US$ 5 million, after taking into account increased selling, general and
administrative costs (SG&A), incurred through investment in:
o skilled staff and software development in technology subsidiary Mindport,
to focus on internet and interactive technology opportunities world-wide;
o ongoing internet and television platform development activities in South
East Asia and China, such as the costs associated with the development of
M-Web (Thailand), following the acquisition of Sanook!.com, the leading
internet portal in Thailand.
The operating loss for the period under review amounted to US$ 47.9 million,
after accounting for the following material items:
o an increased amortisation charge arising on the amortisation of goodwill
of a further net 36% acquired in OpenTV Inc.
o an increased depreciation charge relating mainly to the capitalisation of
the PAS7 transponder lease in Africa
o equity accounted losses in joint ventures, comprising mainly losses
arising from an increase in the share of the losses of joint venture,
United Broadcasting Corporation Public Company Limited (UBC) in Thailand
from 27.8% to 31.1% and from the investment in AEK, one of the top three
football clubs in Greece
o a profit realised on the sale of South African signal distribution
subsidiary company, Orbicom (Proprietary) Limited and on the settlement
of a technology joint venture
o the group's African betting operations were repositioned to capitalise on
future interactive gaming opportunities. This resulted in the operations
of telebetting division, International Gaming Networks, being
discontinued. The "interactive components", such as know-how, staff and
software, were integrated into the African digital DStv platform.
<PAGE>
Prospects and Developments
Business Strategy
The group's strategy remains focussed on growth and development in the three
core areas - television platforms, technology and the internet, through:
o existing leading television platforms in Thailand, South Africa and the
Mediterranean region. Ongoing development activities in South East Asia
and China, to identify and grow television platforms and interactive
opportunities, remains a key focus.
o Mindport, which provides technology solutions to media and internet
companies worldwide for subscriber management, conditional access and
other media commerce applications.
o Mindport controls NASDAQ and AEX listed, OpenTV Corp., which is a world
leader in interactive television operating systems and the development of
interactive t-commerce applications.
o two leading internet investments, comprising a 13.6% interest in JSE
listed M-Web Holdings Limited, the leading online service provider and
content portal in South Africa. A 95% interest in M-Web Thailand, which
owns Sanook!.com, Thailand's leading Thai content internet portal.
Television Platforms
Sales : US$ 308.6 million *
EBITDA : US$ 21.5 million
* excluding equity accounted UBC in Thailand
The aggregate subscriber base serviced by the television platform operations
of the group increased to approximately 2.0 million subscribing households.
The African and Middle Eastern segment comprises approximately 1.35 million
subscribers and is spread over more than 40 countries. It continues to
experience an increasing trend of analogue subscribers migrating to its
digital platform, which now comprises in excess of 550,000 digital subscribing
households.
The analogue operations in Greece and Cyprus, reached 319,548 subscribing
households. During the period under review, MultiChoice Hellas (MCH), the
group's Greek subscriber management company received a digital licence,
subject to the conclusion of a concession agreement, to operate a digital DTH
platform in that country. It is expected that MCH will launch its NOVA digital
DTH service in 2000, once all formalities have been completed.
Against the recent background of difficult economic conditions in South East
Asia, UBC in Thailand, experienced reasonable growth and reached 312,190
subscribing households. This represents a colour television household
penetration rate of less than 2.5%.
<PAGE>
Technology
Sales : US$ 51.7 million
EBITDA : (US$ 5.1) million
Mindport provides software solutions for pay-TV, interactive TV and the
internet to clients in more than 50 countries. It is a world leader in the
fields of digital and analogue encryption software and integrated business
systems with more than 3.8 million digital smartcards deployed. During the
period under review, it continued its drive to capitalise on its interactive
and pay media experience by focussing investment in software development,
skilled staff and improving its sales and distribution network.
OpenTV Corp., used by 22 network operators, with more than 4.5 million
deployed operating systems, strengthened its position as a world leader in
interactive operating systems software and applications development
(t-commerce), by introducing key strategic shareholder groups America Online,
News Corporation, General Instrument, Time Warner and Liberty Digital as
shareholders, through a US$ 31.25 million equity placement. This includes an
increased investment of US$ 5 million by Sun TSI Subsidiary, Inc. In addition
various operational agreements were simultaneously cemented with these global
groups. In November 1999 OpenTV was successfully listed on NASDAQ and the AEX,
raising US$ 172.5 million before expenses from the listing.
Internet
Sales : US$ 0.0 million *
EBITDA : (US$ 4.3) million
* excluding equity accounted M-Web Holdings Limited
With its leading media and technology assets and skills, the group is well
positioned to capitalise on interactive commerce opportunities arising in the
convergence of television platforms and the internet.
The development of interactive content portals, on-line service providers and
e-commerce opportunities in South East Asia and China, with nearly two thirds
of the world's population, is a key group focus. In addition the group seeks
to capitalise on its operational presence in existing markets through the
development of interactive and internet opportunities.
<PAGE>
During the period under review, in line with its strategy, the group made two
internet related investments:
o a US$ 23.6 million investment for 13.6% of JSE listed M-Web Holdings
Limited, the leading South African-based online service provider and
content portal with a 60% dial-up subscriber market share;
o a US$ 0.6 million investment for Sanook!.com, the leading internet
content portal in Thailand;
o Sanook!.com is held through the group's 95% owned subsidiary company
M-Web (Thailand) Ltd. The group intends to continue developing this
business to ensure that it grows its position as the leading Thai content
portal, through investment in content, skilled staff and advanced
software applications.
Year 2000
The group has conducted a comprehensive review of its operations to determine
if its business-critical systems are Year 2000 compliant. It has compiled an
inventory of its hardware and software systems, prepared an impact assessment
and implemented corrections and upgrades based on diagnostic testing.
Contingency plans have also been prepared. In preparation for the Year 2000,
the group has incurred, and will incur, general staff costs, consultancy fees
and other expenses which are expected to be absorbed within the normal
operating budget. The group relies for the provision of its services on
systems, suppliers and third parties which are not controlled by it and may
not all be Year 2000 compliant. Year 2000 issues affecting the group's
business, if not adequately addressed whether by the group, third party
vendors or suppliers, or the group's customers could have a number of negative
consequences, including, for example, interruptions of the services of network
operators using the group's products, damage to the group's reputation, and
claims asserting liability, any of which could materially adversely affect the
group's business and results of operations.
On behalf of the board:
T Vosloo J D T Stofberg
Chairman Chief Executive
Directors
T Vosloo (chairman), J P Bekker, A A Coetzee, J H W Hawinkels, S G J Oldfield,
S J Z Pacak, L R Penfold, W J Raduchel, A M Rosenzweig, J D T Stofberg (chief
executive).
Registration Agents Paying Agent
First Chicago Trust Company a division of Equiserve Mees Pierson N.V.
Mail Suite 4690 Rokin 55
P O Box 2532 P O Box 243
Jersey City 1 000 AE Amsterdam
<PAGE>
New Jersey Netherlands
07303-2532
Registered Office
Abbott Building
Road Town
Tortola
British Virgin Islands
http://www.mih.com
<PAGE>
MIH Limited and Subsidiaries Unaudited
Condensed Consolidated Interim Financial Statements
Page
Report of Independent Accountants .......................... F-2
Condensed Consolidated Balance Sheets as of September 30,
1999 and March 31, 1999 .................................... F-3
Condensed Consolidated Statements of Operations for the
six-month periods ended September 30, 1999 and 1998......... F-4
Condensed Consolidated Statements of Cash Flow for the
six-month periods ended September 30, 1999 and 1998......... F-5
Consolidated Statement of Changes in Shareholders' Equity
for the six-month periods ended September 30, 1999 and
1998........................................................ F-6
Notes to the Condensed Consolidated Interim Financial
Statements.................................................. F-7
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the directors and shareholders of
MIH Limited
We have performed a limited review of the accompanying condensed consolidated
balance sheet of MIH Limited and subsidiaries as of September 30, 1999 and the
related condensed consolidated statements of operations and cash flow for the
six-month periods ended September 30, 1999 and 1998. These financial
statements are the responsibility MIH Limited's management.
We conducted our limited review in accordance with standards promulgated by
the South African Institute of Chartered Accountants, which are substantially
the same as those followed in the United States of America. A limited review
consists primarily of applying analytical review procedures to financial data
and making inquiries of persons responsible for accounting and financial
matters. It is substantially less in scope than an audit of financial
statements carried out in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express any
audit opinion on these financial statements.
Based on our limited review, we are not aware of any material modifications
that should be made to the accompanying condensed consolidated interim
financial statements for them to be in conformity with International
Accounting Standards.
Johannesburg, Republic of South Africa PricewaterhouseCoopers Inc
November 5, 1999 Chartered Accountants (SA)
Registered Accountants and Auditors
F-2
<PAGE>
<TABLE>
MIH Limited and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 1999 and March 31, 1999
(in thousands of US dollars)
<CAPTION>
(Unaudited) Audited
September 30, March 31,
Notes 1999 1999
ASSETS
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 167,279 $ 56,099
Accounts receivable, net 50,041 50,557
Other receivables 28,220 28,229
Amounts owing by related parties 21,863 14,221
Program and film rights 4 37,968 38,935
Inventories, net 5 24,632 21,368
--------- ---------
Total current assets 330,003 209,409
--------- ---------
Non-Current Assets
Tangible fixed assets, net 6 235,069 237,104
Intangible assets, net 6 209,593 207,201
Long-term investments 68,692 70,114
Program and film rights 4 105,098 52,399
--------- ---------
Total non-current assets 618,452 566,818
--------- ---------
TOTAL ASSETS $ 948,455 $ 776,227
========= =========
LIABILITIES
Current liabilities
Bank overdrafts and short-term loans $ 56,659 $ 64,117
Current portion of long-term debt 9 17,961 15,512
Current portion of program and film rights 31,349 37,857
Accounts payable 51,828 43,164
Accrued expenses and other current liabilities 7 114,671 161,472
Amounts owing to related parties 18,857 16,298
Provisions 8 16,889 11,933
--------- ---------
Total current liabilities 308,214 350,353
--------- ---------
Non-Current liabilities
Long-term debt 9 200,435 204,770
Program and film rights 96,008 43,777
Deferred taxation 110 120
--------- ---------
Total non-current liabilities 296,553 248,667
--------- ---------
TOTAL LIABILITIES 604,767 599,020
========= =========
Minority interest 354 524
SHAREHOLDERS' EQUITY
Share capital
Class A Ordinary Shares no par value:
Authorized: September 30, and March 31, 1999:
103,468,878
Issued and outstanding: September 30, 1999 22,224,513
and March 31, 1999 7,447,681 331,550 113,986
Class B Ordinary Shares no par value:
Authorized: September 30 and March 31, 1999: 55,920,509
Issued and outstanding: September 30 and March 31, 1999:
30,787,319 475,566 475,566
Preference Shares no par value:
Authorized: September 30 and March 31, 1999: 8,388,916
Accumulated loss (430,258) (382,386)
Foreign currency translation adjustment (33,524) (30,483)
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 948,455 $ 776,227
========= =========
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</TABLE>
F-3
<PAGE>
<TABLE>
MIH Limited and Subsidiaries
Condensed Consolidated Statements of Operations
for the six-month periods ended
September 30, 1999 and 1998 (in
thousands of US dollars, except per
share and share amounts)
<CAPTION>
(Unaudited)
Six month period ended
September 30,
Notes 1999 1998
<S> <C> <C> <C>
Net revenues 11 $ 353,205 $ 284,568
Operating expenses:
Cost of providing services (203,203) (187,402)
Selling, general and administrative (145,008) (76,584)
Depreciation and amortisation (37,066) (24,976)
-------- --------
Total operating expenses (385,277) (288,962)
-------- --------
Operating loss (32,072) (4,394)
Financial results, net 12 (8,454) (8,771)
Equity results in joint ventures (18,706) (13,665)
Equity results in associates (1,309) (524)
Profit on sale of joint venture 13 3,017 31,093
Profit on sale of associate 13 15,007 -
-------- --------
(Loss)/profit before taxation (42,517) 3,739
Income taxation 895 (3,562)
-------- --------
(Loss)/profit after taxation (41,622) 177
Minority interest 1,142 -
-------- --------
(Loss)/profit from continuing operations (40,480) 177
Loss from discontinuing operations 14 (4,004) (911)
Loss arising on discontinuing operations 14 (3,388) -
-------- --------
Net loss $ (47,872) $ (734)
========= ========
Per share amounts:
Loss/(profit) from continuing operations
Basic $ (0.81) $ 0.01
Diluted $ (0.78) $ 0.01
Net loss
Basic $ (0.95) $ (0.02)
Diluted $ (0.93) $ (0.02)
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</TABLE>
F-4
<PAGE>
<TABLE>
MIH Limited and Subsidiaries
Condensed Consolidated Statements of Cash Flow
for the six-month periods ended September 30, 1999 and 1998
(in thousands of US dollars)
<CAPTION>
(Unaudited)
Six month period ended
September 30,
1999 1998
<S> <C> <C>
Cash flows from operating activities
(Loss)/profit before taxation $ (42,517) $ 3,739
Adjustments to reconcile (loss)/profit before taxation to cash
generated from operations:
Elimination of non-cash flow items 72,283 35,623
Working capital changes (29,454) (56,541)
--------- ---------
Cash generated from/(used in) operations 312 (17,179)
Finance income 5,341 3,083
Taxation paid (4,210) (4,607)
Utilised in discontinued operations (7,392) (911)
--------- ---------
Net cash used in operating activities (5,949) (19,614)
========= =========
Cash flows from investing activities
Investment in OpenTV - (6,400)
Investment in associate/joint venture (31,781) (62,164)
Purchase of tangible fixed assets (9,464) (1,830)
Disposal of joint venture 3,018 -
Proceeds on sale of tangible fixed assets 1,282 28
Net increase in other investments - (3,223)
--------- ---------
Net cash used in investing activities (36,945) (73,589)
--------- ---------
Cash flows from financing activities
Finance costs (5,742) (6,242)
Proceeds from issue of share capital 187,830 -
Share issue costs (16,728) -
Funds raised from outside shareholders 10,372 -
Proceeds on transfer of M-Net/SSIH shares - 22,243
Long-term debt raised - 20,339
Capital leases repaid (14,510) (17,295)
Bank overdrafts repaid (6,145) (7,854)
--------- ---------
Net cash from financing activities 155,077 11,191
--------- ---------
Net increase/(decrease) in cash and cash equivalents 112,183 (82,012)
Cash and cash equivalents at beginning of the period 56,099 153,412
Translation adjustment on cash and cash equivalents (1,003) 16,073
--------- ---------
Cash and cash equivalents at end of the period $ 167,279 $ 87,473
========= =========
</TABLE>
Non cash transactions
The principal non-cash transactions are the conversion of the $46 million note
payable to Thomson Consumer Electronics, Inc. into 2,581,775 Class A ordinary
shares and the acquisition of property, plant and equipment using capital
leases.
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
F-5
<PAGE>
<TABLE>
MIH Limited and Subsidiaries
Consolidated Statement of Changes in Shareholders' Equity
for the six-month periods ended September 30, 1999, 1998
(in thousands of US dollars)
Share capital
<CAPTION>
Foreign
currency
Accumulated translation
Class A Class B loss adjustments Total
__________ _________ ___________ _____________ ________
<S> <C> <C> <C> <C> <C>
At April 1, 1998 $ 113,986 $ 475,566 $(313,547) $ (22,432) $ 253,573
Net loss - - (734) - (734)
Translation adjustment - - - 2,499 2,499
--------- --------- --------- --------- ---------
At September 30, 1998 $ 113,986 $ 475,566 $(314,281) $ (19,933) $ 255,338
========= ========= ========= ========= =========
At April 1, 1999 $ 113,986 $ 475,566 $(382,386) $ (30,483) $ 176,683
Issue of share capital 259,787 - - - 259,787
Share issue expenses (16,728) - - - (16,728)
Share incentive scheme (25,495) - - - (25,495)
Net loss - - (47,872) - (47,872)
Translation adjustment - - - (3,041) (3,041)
--------- --------- --------- --------- ---------
At September 30, 1999 $ 331,550 $ 475,566 $(430,258) $ (33,524) $ 343,334
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
interim financial statements.
F-6
<PAGE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements
1. Nature of operations
MIH Limited ("MIH") was incorporated on July 26, 1991 under the laws of the
British Virgin Islands. The principal activities of MIH and its operating
subsidiaries (collectively the "Company") are the provision of pay-television
and subscriber management services ("pay-television services") and the
development and sale of pay-television technology. These activities are
conducted through subsidiaries, joint ventures and investments primarily in
Africa, Greece, Cyprus, the Middle East, the Netherlands, Thailand and the
United States of America.
2. Basis of preparation
The condensed consolidated interim financial statements are prepared in
accordance with International Accounting Standard 34 "Interim Financial
Reporting". The accounting policies used in the preparation of the condensed
consolidated interim Financial statements are consistent with those used in
the annual financial statements for the year ended March 31, 1999.
The condensed consolidated balance sheet of MIH as of September 30, 1999 and
the condensed consolidated statements of operations and cash flow for the
six-months ended September 30, 1999 and 1998 are unaudited. For the purpose of
these condensed consolidated interim financial statements, certain information
and disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted. The March 31, 1999 balance sheet was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles. However, the Company believes that
the disclosures are adequate to make the information presented not misleading.
These unaudited statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the year ended March
31, 1999.
In the opinion of the management of MIH, all adjustments (consisting only of
normal recurring adjustments) necessary for fair presentation of the financial
statements have been included therein. The results of interim periods are not
necessarily indicative of the results for the entire year.
3. Significant acquisitions and divestitures
Subsequent to the past financial year the Company invested an additional $4,8
million cash in OpenTV Inc. As cash was injected pro rata to the shareholders
respective shareholdings it had no effect in the Company's /(loss) interest in
OpenTV Inc.
On August 24, 1999 the Company disposed of its 20% interest and its loan
claims in Orbicom (Proprietary) Limited to MIH Holdings Limited, who in turn,
together with its interest of 80%, sold the total investment in Orbicom
(Proprietary) Limited to M-Cell Limited in exchange for 23,952,096 M-Cell
Limited shares. The Company received an amount, equivalent in value to
12,640,469 M-Cell Limited shares which, using the market value of a M-Cell
Limited share at the date of the transaction, equated to a consideration of
$21 million. The consideration, after allocating $6 million to settle the loan
claims, gave rise to a profit on sale of the associate of $15 million, as the
carrying value of the Orbicom (Proprietary) Limited investment was recorded at
no value in the accounting records of the Company.
The Company acquired a 9,09% interest in M-Web Holdings Limited for a cash
consideration of $16,5 million following the delinking of the MIH Holdings
Limited and M-Web Holdings Limited share on August 2, 1999. Subsequent to this
initial investment the Company acquired an additional interest by exchanging
35% (4,432,273 shares) of its M-Cell Limited investment for 13,930,000 shares
representing a 4,48% interest in M-Web Holdings Limited. The excess of the
Company's equity investment over the fair value of the net assets acquired,
amounting to $19,5 million, was allocated to goodwill, and is amortized over
its estimated useful life of five years. The investment in M-Web Holdings
Limited has been treated as an equity investment because of the significant
influence that the Company's directors exercise in the financial and operating
policies of M-Web Holdings Limited. After the exchange the Company has a 1,7%
interest in M-Cell Limited, which has been accounted for under the cost
method.
With effect from July 8, 1999 the Company acquired a 40% interest in SOE
International, which owns 78,4% of AEK and 100% of Basic Hellas SA, for $6,6
million. The excess of the purchase price over the net liabilities acquired
(goodwill) amounts to $18,1 million. The Company has an option to acquire an
additional 11% interest by June 30, 2001. The acquisition has been accounted
for under the equity method. The Company also has an obligation to fund SOE
International up to an amount of $18 million. At September 30, 1999 the
Company advanced a loan, of approximately $8 million.
F-7
<PAGE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements (Continued)
4. Program and film rights
Program and film rights increased primarily due to the purchase of soccer
sports rights, the "Friendly Games" and the FIBA, basketball rights for
broadcasting in Greece and Cyprus.
5. Inventories
September 30, March 31,
1999 1999
(thousands) (thousands)
Decoders and associated components $ 36,822 $31,828
Less: provision for slow moving and (12,190) (10,460)
obsolete inventories ______________ _____________
$ 24,632 $21,368
============== =============
6. Capital expenditure
Intangible
Fixed assets assets
(thousands) (thousands)
___________ ___________
Opening net book amount at March 31, 1999 $ 237,104 $ 207,201
Additions 13,429 35,276
Disposals (1,082) -
Depreciation/amortization (17,524) (29,428)
Other movements 3,142 (3,456)
Closing net book amount at _____________ ___________
September 30, 1999 $ 235,069 $ 209,593
============= ===========
7. Accrued expenses and other current
liabilities
September 30, March 31,
1999 1999
(thousands) (thousands)
Deferred income $ 43,196 $27,508
Accrued expenses 47,466 50,226
Taxes and social securities 11,483 10,341
Amounts owing in respect of investments acquired - 46,287
Other current liabilities 12,526 27,110
__________ ___________
$ 114,671 $161,472
============= ============
F-8
<PAGE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements (Continued)
8. Provisions
<TABLE>
<CAPTION>
Credited/
Arising on (Charged)
At March Translation acquisition of to cost and At September
31, 1999 adjustment joint venture expenses 30, 1999
___________ ____________ _______________ _____________ ____________
(thousands) (thousands) (thousands) (thousands) (thousands)
<S> <C> <C> <C> <C> <C>
Provision for:
Post-retirement benefits $ (2,667) $ (76) - $ 206 $ (2,537)
Write down of carrying
values of assets in certain
African countries (3,307) (113) - 95 (3,325)
Warranties (5,460) - - 198 (5,262)
Intellectual property
infringement (499) - - - (499)
Restructuring - - - (529) (529)
Losses in joint venture - - (3,551) (1,186) (4,737)
_____________ _____________ ____________ ____________ _____________
$ (11,933) $(189) $(3,551) $(1,216) $(16,889)
============= ============= ============ ============ =============
</TABLE>
MultiChoice Africa (Proprietary) Limited provides post-retirement by way of
medical aid contributions. During the year ended March 31, 1998 an agreement
was reached with employees of MultiChoice Africa (Proprietary) Limited to
terminate the post-retirement medical aid benefits plan in exchange for an
increase of MultiChoice Africa (Proprietary) Limited annual contributions to
the retirement benefit fund. The provision is released to operating results to
match the additional contributions to the retirement benefit plan.
The provision for the write down of the carrying value of assets in certain
African countries relates to managements' estimates regarding the
recoverability of such assets, given the current economic and political
environment in certain African countries.
The warranty provision has been raised to cover smartcards and conditional
access modules supplied to customers. The intellectual property infringement
provision relates to the expected settlement amount in respect of a patent
used in the conditional access system.
The restructuring provision relates to the benefits payable to employees
following the curtailment of the development activities of the Mindport Media
Commerce Technologies division.
9. Borrowings
September 30, March 31,
1999 1999
(thousands) (thousands)
Current $ 74,620 $ 79,629
Non-current 200,435 204,770
____________ ____________
$ 275,055 $ 284,399
============ ============
The borrowings are analysed as follows:
Bank overdrafts and short term loans $ 56,659 $ 64,117
Capital leases 196,240 197,610
Other long-term debt 22,156 22,672
____________ ____________
$ 275,055 $ 284,399
============ ============
F-9
<PAGE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements (Continued)
10. Share Capital
On March 23, 1999 in anticipation of the public offering of securities by
the Company, shareholders authorised an amendment to the Company's
Articles of Association, whereby the Company's 22,789 ordinary shares
with a par value of $1 each converted into 7,447,681 Class A Ordinary
Shares with no par value and 30,787,319 Class B ordinary Shares with no
par value. The two classes of shares generally have the same rights,
except that holders of Class B Ordinary Shares are entitled to three
votes per share and holders of Class A Ordinary Shares are entitled to
one vote per share. Shareholders authorized a total of 167,778,303
Ordinary Shares divided into 103,468,878 Class A Ordinary Shares,
55,920,509 Class B ordinary Shares and 8,388,916 Preference Shares with
no par value.
During April 1999, the Company issued 10,435,000 Class A Ordinary Shares
in an initial public offering for net proceeds of $174.7 million.
Simultaneously with the completion of the public offering the $46.2
million note payable to Thomson converted into 2,581,775 Class A Ordinary
Shares.
The Company also issued 1,760,057 Class A Ordinary Shares to a trust in
terms of a share incentive scheme in return for a $25,5 million note
receivable, which has been offset against share capital in the
consolidated statement of changes in shareholders' equity.
11. Net revenues
September 30,
___________________________________
1999 1998
(thousands) (thousands)
Subscription revenues $ 245,671 $ 205,400
Decoder sales and repairs 41,870 44,100
Technology 43,434 22,539
Other 22,230 12,529
__________ __________
$ 353,205 $ 284,568
=========== ==========
12. Financial results, net
September 30,
___________________________________
1999 1998
(thousands) (thousands)
Dividend income $ 166 $ 96
Interest income 5,176 2,987
Exchange losses (1,667) (4,492)
Interest expense (12,129) (7,362)
__________ _________
$ (8,454) $ (8,771)
========== =========
F-10
<PAGE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements (Continued)
13. Profit on sale of joint venture/associate
1999
Joint venture
The profit on sale of joint venture arose out of a settlement agreement
entered into between the joint venture partners upon the liquidation of
the Digco and JoCo joint ventures.
Associate
The profit on sale of associate relates to the sale of the Company's
investment in Orbicom (Proprietary) Limited.
1998
Joint venture
At March 31, 1997 the Company deferred recognition of approximately $73.3
million of the gain arising on the sale of NetHold to Canal+,
representing the estimated probable liability for warranties of decoder
technology and guarantees of the number of subscribers and the potential
reimbursement of programming costs. During the year ended March 31, 1998
the Company paid approximately $38.0 million for guarantees of number of
subscribers. As no further claims under the warranties were made prior to
June 30, 1998, the deadline for such claims, the Company reversed the
remaining provisions to profit on sale of joint venture during the six
months ended September 30, 1998.
14. Discontinuing operations
With effect from September 6, 1999 the Company discontinued the
operations the International Gaming Networks, the gaming division of
MultiChoice Africa (Proprietary) Limited, the business of which was
spread and sports betting and the broadcasting of a racing channel. A
condensed statement of operations for the discontinuing operation is set
out below:
September 30,
___________________________________
1999 1998
(thousands) (thousands)
Net revenues $ 1,350 $ 1,701
Cost of providing services (826) (1,273)
Selling, general and administrative (4,528) (1,340)
__________ _________
Net loss $ (4,004) $ (912)
========== =========
The loss arising on discontinuing operations of $3,388,000 relates mainly
to staff retrenchment costs, lease cancellation costs and asset
impairment provisions.
15. (Loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the
(loss)/profit from continuing operations and the net loss respectively by
the weighted average number of shares in issue during the period of
50,230,474 (1998 shares at end of period of 38,235,000). The weighted
average number of shares in issue excludes the shares issued by the
Company in terms of the share incentive scheme.
Diluted (loss)/earnings per share is calculated by dividing the
(loss)/profit from continuing operations and the net loss respectively by
the weighted average number of shares in issue during the period of
51,743,076 (1998 shares at end of period of 38,235,000).
16. Segment and geographic information
The Company has determined that its reportable segments are those that
are based on the Company's method of internal reporting, which
disaggregates its businesses by service/product and by geography. The
Company's reportable business segments are pay-television services,
technology and Internet. The pay-television business segment is conducted
in Africa and the Middle East, the Mediterranean and Thailand. The
technology business segment consists of Mindport, based in The
Netherlands, and the Company's interest in OpenTV (1998 joint venture)
and TV/Com, based in the United States. The Company's interest in the
Middle East is accounted for by the equity method and is, therefore,
included in equity results in joint ventures below.
F-11
<PAGE>
<TABLE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements (Continued)
<CAPTION>
1999 Pay-television services
__________________________________
Africa
&
The Middle- Mediter- Segmental Reconciling Consolidated
East ranean Thailand Technology Internet Total Corporate items Total
(thousands) (thousands) (thousands) (thousands) (thousands) (thousands) (thousands) (thousands) (thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SALES
External sales 238,668 69,920 - 43,845 27 352,460 745 - 353,205
Inter-segment
sales - - - 7,820 - 7,820 - (7,820) -
_____________________________________________________________________________________________________________________
Total revenue 238,668 69,920 - 51,665 27 360,280 745 (7,820) 353,205
=====================================================================================================================
RESULTS
Operating loss 4,945 (11,648) - (13,669) (4,397) (24,769) (7,303) - (32,072)
Depreciation
and amortisation 19,374 8,945 - 8,523 65 36,907 158 - 37,065
Amortisation of
program and film
rights - 21,020 - - - 21,020 - - 21,020
Operating loss is stated
before the following
items;
Equity results in
associates (403) - - - (906) (1,309) - - (1,309)
Equity results in
joint ventures 341 (2,095) (16,952) - - (18,706) - - (18,706)
Other information
Segment assets 309,758 262,384 86,090 90,606 1,958 750,796 1,154,572 (956,913) 948,455
1998 Pay-television services
__________________________________
Africa
&
The Middle- Mediter- Segmental Reconciling Consolidated
East ranean Thailand Technology Internet Total Corporate items Total
(thousands) (thousands) (thousands) (thousands) (thousands) (thousands) (thousands) (thousands) (thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SALES
External sales 199,761 61,419 - 22,539 - 283,719 849 - 284,568
Inter-segment
sales - - - 8,754 - 8,754 - (8,754) -
__________________________________________________________________________________________________________________
Total revenue 199,761 61,419 - 31,293 - 292,473 849 (8,754) 284,568
==================================================================================================================
RESULTS
Operating loss (1,880) (5,802) - 4,810 - (2,872) (1,522) - (4,394)
Depreciation
and amortisation 14,327 8,647 - 2,002 - 24,976 - - 24,976
Amortisation of
program and film
rights - 14,501 - - - 14,501 - - 14,501
Operating loss is
stated before the
following items;
Equity results in
associates (524) - - - - (524) - - (524)
Equity results in
joint ventures (701) - (11,427) (1,537) - (2,238) - - (13,665)
Other information
Segment assets 395,644 93,253 - 179,027 - 667,924 758,468 (725,589) 700,803
</TABLE>
F-12
<PAGE>
MIH Limited and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements (Continued)
17. Subsequent events
In October 1999, the Company's subsidiary, OpenTV Corp. (Open TV),
completed a private placement of convertible preference shares and
warrants to American Online, Inc., General Instruments Corp., Liberty
Digital, Inc., News Corporation, Time Warner, Inc., and Sun Microsystems,
Inc. In November 1999, OpenTV completed an initial public offering (IPO)
of its common stock, listing shares on both the NASDAQ National Market
and the Amsterdam Stock Exchange. As part of the IPO, the convertible
preference shares were converted into common stock. OpenTV also entered
into operating agreements with American Online, Inc., News Corporation and
Time Warner, Inc. to increase its market penetration in the United States
and to expand the range of interactive applications available to its
global client base. Additionally, OpenTV signed memorandums of
understanding with General Instruments and Liberty Digital, Inc. to enter
into similar operating agreements. After OpenTV's IPO and conversion of
preference shares, the Company remains the majority shareholder, owning
68.2% of OpenTV's outstanding shares.
18. Comprehensive income
1999 1998
(thousands) (thousands)
Net loss $ (47,872) $ (734)
Foreign currency translation adjustment (3,041) 2,499
_____________ ___________
Comprehensive (loss)/gain $ (50,913) $ 1,765
============= ===========
F-13
