KWV INVESTMENTS LIMITED INTERIM REPORT

(REG. NO. 79/07263/06)

KWV INVESTMENTS LIMITED INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 199
THE RESULTS OF KWV INVESTMENTS LIMITED ARE AS FOLLOWS:
INCOME STATEMENT

                                       SIX MONTHS            YEAR

                                       ENDED                 ENDED

                                       31 DECEMBER           30 JUNE

                                       UNAUDITED  UNAUDITED  AUDITED

                                       1998       1997       1998

                                       R'000      R'000      R'000

NET INCOME BEFORE INTEREST             11 712     12 461     40 254

INTEREST RECEIVED                      31         59         124

NET INCOME BEFORE TAXATION             11 743     12 520     40 378

TAXATION                               11         3          43

NET INCOME AFTER TAXATION              11 732     12 517     40 335

EQUITY ACCOUNTED EARNINGS              62 478     46 630     44 262

SHARE OF EARNINGS OF ASSOCIATES        42 378     46 630     44 262

EXCEPTIONAL ITEM                       20 100     -          -
NET INCOME AFTER EQUITY ACCOUNTED
EARNINGS ATTRIBUTABLE TO SHARE-

HOLDERS                                74 210     59 147     84 597

DIVIDENDS                              11 760     12 600     40 320

RETAINED INCOME                        62 450     46 547     44 277

EARNINGS PER SHARE (CENTS)             176,7      140,8      201,4

HEADLINE EARNINGS PER SHARE            128,8      140,8      201,4
(CENTS)

DIVIDEND PER SHARE (CENTS)             28,0       30,0       94,25
BALANCE SHEET

                                       SIX MONTHS            YEAR

                                       ENDED                 ENDED

                                       31 DECEMBER           30 JUNE

                                       UNAUDITED  UNAUDITED  AUDITED

                                       1998       1997       1998

                                       R'000      R'000      R'000
EMPLOYMENT OF CAPITAL

INVESTMENT                             532 068    471 965    469 590
CURRENT ASSETS

DEBTORS                                11         -          -

DIVIDEND RECEIVABLE                    11 760     12 600     28 140

BANK BALANCES                          274        222        91
LESS:
 CURRENT LIABILITIES

 DIVIDEND PAYABLE                      11 760     12 600     27 720

 CREDITORS                             103        110        301

 NET CURRENT ASSETS                    182        112        210

 NET ASSETS                            532 250    472 077    469 800
 CAPITAL EMPLOYED

 SHARE CAPITAL                         42 000     42 000     42 000

 RESERVES                              490 250    430 077    427 800

TOTAL SHAREHOLDERS' FUNDS              532 250    472 077    469 800
 NUMBER OF SHARES ISSUED

 (THOUSAND)                            42 000     42 000     42 000

 NET ASSET VALUE PER SHARE (CENTS)     1 267      1 124      1 119
CASH FLOW STATEMENT

                                       SIX MONTHS            YEAR

                                       ENDED                 ENDED

                                       31 DECEMBER           30 JUNE

                                       UNAUDITED  UNAUDITED  AUDITED

                                       1998       1997       1998

                                       R'000      R'000      R'000
CASH RETAINED FROM OPERATING
ACTIVITIES

NET INCOME BEFORE TAXATION             11 743     12 520     40 378
ADJUSTMENT FOR:

DECREASE IN DIVIDEND RECEIVABLE        16 380     15 540     -
(INCREASE)/DECREASE IN WORKING

CAPITAL                                (198)      (179)      12
CASH GENERATED BY OPERATING

ACTIVITIES                             27 925     27 881     40 390

TAXATION PAID                          (22)       (3)        (43)

DIVIDEND PAID                          (27 720)   (27 825)   (40 425)
AMOUNT UNPAID AT BEGINNING OF

PERIOD                                 (27 720)   (27 825)   (27 825)
AMOUNT CHARGED TO THE INCOME

STATEMENT                              (11 760)   (12 600)   (40 320)

AMOUNT UNPAID AT END OF PERIOD         11 760     12 600     27 720
NET INCREASE/(DECREASE) IN CASH

AND CASH EQUIVALENTS                   183        53         (78)
CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR                      91         169        169
CASH AND CASH EQUIVALENTS AT

END OF YEAR                            274        222        91
GROUPSTRUCTURE

THE ONLY ASSET OF KWV INVESTMENTS LIMITED IS AN INTEREST OF 30% IN BOTH
DISTILLERS CORPORATION (SA) LIMITED AND STELLENBOSCH FARMERS WINERY GROUP
LIMITED HELD VIA REMBRANDT KWV INVESTMENTS LIMITED (RKB). THE DIVIDEND, WHICH
RKB RECEIVES FROM DISTILLERS AND SFW, IS PAID OUT IN FULL BY RKB.
FINANCIAL RESULTS

THE COMPANY'S RESULTS REFLECT THE RESULTS OF THE ASSOCIATE COMPANIES.

EXCEPTIONALLY HIGH INTEREST RATES IN THE PERIOD UNDER REVIEW HAD A NEGATIVE
INFLUENCE ON THE COST OF FINANCE AS WELL AS ON CONSUMER SPENDING. THE EARNINGS
OF ASSOCIATE COMPANIES ARE THEREFORE UNDER PRESSURE AND DIVIDENDS WERE EITHER
MAINTAINED OR CUT. THIS SITUATION IS REFLECTED IN THE EARNINGS OF THE COMPANY.
EXCEPTIONAL ITEM - HEADLINE EARNINGS

THE AMOUNT IS THE COMPANY'S SHARE OF THE PROCEEDS ON THE SALE OF DISTRIBUTION
RIGHTS BY AN ASSOCIATE.
PROSPECTS

TRADING CONDITIONS FOR THE ASSOCIATE COMPANIES REMAIN UNDER PRESSURE AND EVEN
THOUGH INTEREST RATES DECREASED SLIGHTLY THERE IS NO EXPECTATION THAT CONSUMER
SPENDING WILL IMPROVE SIGNIFICANTLY DURING THE SECOND HALF OF THE FINANCIAL
YEAR.
INTERIM DIVIDEND DECLARATION

THE BOARD OF DIRECTORS DECLARED AN INTERIM DIVIDEND OF 28 CENTS PER SHARE
(1998: 30 CENTS PER SHARE) ON 17 FEBRUARY 1999. THIS DIVIDEND WILL BE PAID ON
12 MARCH 1999 TO SHAREHOLDERS REGISTERED ON 5 MARCH 1999.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS ON THE 17 FEBRUARY 1999.
L N JONKER             W J BARNARD
CHAIRMAN               DIRECTOR