alr2009 annual report - sharedataannual report 2009 1 compu‐clearing outsourcing limited financial...

A l R 2009

Compu-Clearing integrated systems

Tariff book Universal airfreight

tracking system

SA Flyer Trade & Track Order Planning

System

Stash Air Waybill Production

System

Annual Report 2009

Corporate profile

Compu-Clearing Outsourcing Limited is South Africa’s industry leader in the provision of IT (Information Technology)products and services to the customs clearing, freight forwarding, air cargo and related industries. After 26 years ofoperation, the Group continues to improve and expand its range of services to the industries it serves. In addition to itstraditional range of services, it is also able to offer related solutions to South Africa and beyond.

he Group’s objective is to enhance shareholder wealth, employee opportunities, and customer service. Its philosophy isto provide information technology solutions, rather than technology for its own sake, and to do so at practical,economically realistic costs, which are both profitable to the company and give real value to its customers. A philosophyof developing and maintaining long-term relationships with our customers is borne out by the fact that many of our earlycustomers continue to use our systems.

The Group is listed on the computer services sector of the JSE Securities Exchange South Africa.

0 compu‐clearing outsourcing limited

Financial review 1

Key ratios and share statistics 3

Value-added statement 4

Chairman's report 5

Directorate and senior management 9

Corporate governance 12

Directors' responsibility and approval of financial statements 15

Declaration by the company secretary 15

Independent auditors’ report 16

Report of the directors 17

Balance sheets 22

Income statements 23

Statements of changes in equity 24

Cash flow statements 25

Accounting policies 26

Notes to the financial statements 32

Segmental analysis 49

Analysis of shareholders 50

Shareholders' diary 51

Notice of annual general meeting 52

Administration 56

Form of proxy Attached

Contents

Contents

(‘The Group’, ‘Compu‐Clearing’, ’The Company’)

annual r

eport 2

009


financial review

Summary

Total revenue Rm 35.3 37.6 39.8 42.3 45.5 45.0

Operating profit Rm 7.7 7.9 9.5 9.1 12.4 7.4 Profit before income tax Rm 9.0 9.4 11.1 10.9 15.0 10.0

Operating margin % 21.9 21.2 23.9 21.6 27.2 16.3

Attributable earnings Rm 6.0 5.8 7.6 8.2 10.9 6.5 Earnings per share cents 15.7 15.1 19.6 20.6 27.0 15.8

Ordinary dividend per share cents 8.0 10.0 11.0 11.0 - 25.0

Special dividend per share cents 10.0 - - - - -

Capital distribution per share cents - - 9.0 19.0 12.0 -

Net asset value per share cents 90.9 92.0 103.9 97.1 112.4 112.2

Cash generated by operations Rm 11.6 9.8 11.7 12.8 14.9 10.9

SA GAAP IFRS

20062004 2005 20082007 2009

0

20

40

60

80

100

120

2004 2005 2006 2007 2008 2009

Net asset value per share ‐ cents

0

5

10

15

20

25

30

35

40

45

50

2004 2005 2006 2007 2008 2009

Total revenue Rm

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009

Cash generated by operations Rm

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009

Distributions per share ‐ cents

Ordinary dividend per share cents Special dividend per share cents Capital distribution per share cents

annual r

eport 2

009

2compu‐clearing outsourcing limited

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009

Operating margin %

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009

Earnings per share cents

0

10

20

30

40

50

60

2004 2005 2006 2007 2008 2009

Total assets Segmental revenue

Software rental revenue Hardware rental revenue Other

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009

Operating profit

Profit before income tax

Attributable earnings

Operating profit, profit before income tax and attributable earnings ‐ R'm

annual r

eport 2

009


key ratios and share statistics

Ratios SA GAAP IFRS 2004 2005 2006 2007 2008 2009

Return on shareholders' funds %1 17.3 18.8 18.8 21.0 23.9 14.1

Return on total assets %2 20.9 24.7 24.7 24.9 29.6 19.1

Operating margin %3 21.9 23.9 23.9 21.6 27.2 16.3

Quick ratio 4 4.4 10.0 10.0 10.7 10.2 9.0

Price/earnings 5 9.6 12.5 12.8 14.3 8.9 15.8

Share statistics

Headline earnings per share cents6 16.0 15.3 19.9 20.6 27.0 15.9

Dividend per share cents7 8.0 10.0 11.0 11.0 - 25.0

Special dividend per share cents7 10.0 - - - - -

Capital distribution per share cents7 - - 9.0 19.0 12.0 -

Net asset value per share cents 90.9 92.0 103.9 97.1 112.4 112.2

Share price

high cents 170 245 385 310 310 270

low cents 110 105 225 235 210 170

closing (30 June) cents 150 245 250 295 240 250

Market capitalisation R'000 60,058 98,094 100,096 120,709 98,871 104,104

Volume traded '000 331 644 636 1,397 378 443

Shares in issue '0008 38,117 38,461 38,836 40,380 40,658 41,208

1 Attributable earnings expressed as a percentage of total equity at the end of the year.

2 Profit before tax expressed as a percentage of total assets at the end of the year.

3 Operating profit divided by total revenue.

4 Current assets, excluding inventories, divided by current liabilities.

5 The number of years current earnings per share represented by the closing share price at the end of the year.

6 Based on the weighted average number of shares in issue during the year.

7 Dividends and capital distributions declared and paid.

8 The number of shares in issue has been reduced by the treasury shares held by a subsidiary company.

annual r

eport 2

009


value‐added statement for the year ended 30 June

2009 2008R'000 R'000

Total revenue 45,037 45,496 Net cost of products and services 10,340 9,804

Value added by operations 34,697 35,692 Interest received 2,644 2,629

Total value added 37,341 38,321

Applied as follows :

Employee benefits 24,363 20,717 Government - direct taxes 3,483 4,107 Providers of capital 10,226 -

Interest paid 5 - Dividend paid 10,221 -

Total value distributed 38,072 24,824

Re-invested in the group (731) 16,279

Depreciation and amortisation 2,981 5,373 Reserves (utilised) retained (3,712) 10,906

37,341 41,103

% %Employee benefits 65.2 50.4 Government - direct taxes 9.3 10.0 Providers of capital 27.4 - Total value distributed 101.9 60.4 Re-invested in the group (1.9) 39.6

100.0 100.0

‐5%

30%

65%

100%

2009 2008Employee costs Retained for future Capital providers Taxation

annual r

eport 2

009


chairman’s report

Arnold Garber Chairman

The year under review was dominated by difficult economic conditions and revenue growth has been dampened by a 30% decline in import volumes during the year. Head count was increased as part of a medium-term succession plan designed to ensure the retention of skills within the Group. In addition, the remuneration of key staff members has been revisited to ensure theIr continued service to the Group. A resulting 17,6% increase in payroll was the most significant factor in a 13,8% increase in operating costs.

A charge of R1,022 million in respect of STC (secondary tax on companies), arising from the dividend paid out during the year, accounted for a 9,4% drop in attributable earnings, as no dividends were paid during the previous financial year.

CASH RESOURCES

Cash generation continues to be excellent with cash generated from operations amounting to 149% (2008 – 120%) of operating profit. Cash levels remain excellent at a healthy R25.2 million after payments to shareholders of R10,2 million (2008 – R4,9 million) during the year. As a result of these excellent cash levels, the board of directors has resolved to distribute 25c (2008 – 25 cents) a share to shareholders in the form of a dividend.

INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT

Investment in new property, plant and equipment grew from R2,5 million in 2008 to R2,9 million in 2009, as the Group continues to upgrade its existing hardware infrastructure and provide customers with better hardware performance.

The Group’s land and buildings were valued by registered valuators at 30 June 2009. The valuation of R9,4 million resulted in a revaluation surplus of R4,5 million, which has been recognised in reserves, after the deduction of tax of R0,9 million.

Management review the estimated useful lives and residual values of property, plant and equipment on a regular basis. There has been no significant change in the estimates of management from the previous year.

INCOME TAX

Our effective tax rate has increased from 27.4% to 34.9%. The effective rate for 2009 was increased by a charge for STC, arising from dividends paid by the Group during the year.

annual r

eport 2

009


CORPORATE GOVERNANCE AND COMPLIANCE

Compu-Clearing continues to be committed to Corporate Governance and Compliance with all statutory requirements.

BLACK ECONOMIC EMPOWERMENT

The Group embraces the spirit of the Broad-Based Black Economic Empowerment Act of 2003 (“the Act”). In order to contribute to the upliftment of black people, as defined in the Act, we have implemented the following steps :

• Development and publication of a non-discrimination policy that protects the human rights and dignity of all staff members, regardless of race, religion, gender or disability;

• Development of a procurement policy that favours procurement from businesses that have achieved a high level of contribution to BEE, as well as directing portion of procurement spend towards Qualifying Small Enterprises and Exempt Micro Enterprises;

• Offering of recognised courses to uplift skills of staff, both in the critical and non-critical skills; • Compliance with the Employment Equity Act of 1998; • Supporting enterprise development through a combination of mentoring and financial support.

PROSPECTS

Compu-Clearing continues to be the leading service provider of systems to the customs clearing and freight forwarding industry in South Africa and continues to grow its customer base.

The 1% drop in revenue compares favourably to the 30% drop in import volumes and places the Group in a favourable position to benefit from an expected economic turnaround.

Management plan to broaden the Group’s revenue base through the introduction of new products. In this regard, I am pleased to announce that the Group has been appointed as the sole local distributor of CargoWise, an ERP freight management system.

We anticipate further growth in the Group’s pc-based products during the year ahead. Increased use of the Internet as a distribution mechanism will serve to expand the Group’s reach, without significant incremental costs.

With our strong balance sheet and the stable, skilled workforce, as well as our recurring revenue business model, Compu-Clearing is well placed to withstand the less than favourable current economic climate, which no doubt will continue for some months to come. Our strong customer retention ability also helps us to withstand the difficult climate of the freight industry which prevails at present.

In conclusion, I would like to thank our loyal customers for their valued patronage, our suppliers for their valued service and our staff for their efforts in the past year.

annual r

eport 2

009


Commentary The year under review was dominated by difficult economic conditions. The Group’s revenues are closely linked to import volumes, which have declined by some 30% during the period under review. Increases in the Group’s payroll expense of 17,6% arose from the necessity to retain skilled personnel and an increase in headcount, to facilitate long-term skills transfer and continuity of the Group’s skills base. The increased payroll costs resulted in an increase of 13,8% in operating costs and an operating margin of 16,3% (2008 : 27.2%). Attributable earnings of R6,5m (2008 : R10,9) were achieved after a charge of R1,02 million for STC (secondary tax on companies) (2008 : Nil), arising from the payment of a dividend during the year. Cash generation continues to be strong with cash generated from operations amounting to 150% (2008 : 120%) of operating profit. Cash balances remain a very healthy R25,2m, (2008 : R27,8m) after payments to shareholders of R10,2m (2008 : R4,9m). Prospects The Group’s core activities continue to be influenced by the slowdown in the global economy. However, the customer base continues to grow, serving to mitigate the impact of a general decline in import volumes. The 1% drop in revenue compared to the 30% decrease in import volumes positions the Group favourably to benefit from a turnaround in the economy. There has been pleasing growth in users of STASH, a pc-based warehousing solution and the Group’s online tariff book, albeit off a low base. We anticipate these products will experience further positive growth in the year ahead. The Group is making increasing use of the Internet as a distribution mechanism for its products, expanding our reach, without significant incremental costs.

Management plan to broaden the revenue base through the introduction of new products and to this end has been appointed as the sole local distributor of Cargowise, an ERP freight management solution. Basis of preparation The preliminary condensed financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS), the presentation and disclosure requirements of IAS 34 Interim Financial Reporting and in the manner required by the Companies Act of South Africa. The accounting policies applied are consistent with those reflected in the financial statements for the year ended 30 June 2008, other than land and buildings, which changed from the cost value method to the fair value method of recognition.

Review report The Group’s auditors KPMG Inc, have reviewed the preliminary condensed financial statements for the year ended 30 June 2009. Their unmodified review conclusion is available for inspection at the registered office of the Company.

Ordinary dividend declaration

Notice is hereby given of the declaration of an ordinary cash dividend of 25 cents per share (2008 : 25 cents per share) (‘the dividend’). The following salient dates will apply to the dividend:

Last date to trade `cum`

the dividend Friday, 2 October 2009

Trading commences `ex`

the dividend Monday, 5 October 2009

Record date Friday, 9 October 2009

Date of payment of the dividend Monday, 12 October 2009

Share certificates may not be dematerialised or rematerialised during the period Monday, 5 October 2009 to Friday, 9 October 2009 both days inclusive.

Posting of annual reports and Annual General Meeting

The annual report will be posted to shareholders on or about 29 September 2009.

The Annual General Meeting of Compu-Clearing will be held at 7 Drome Road, Lyndhurst, Johannesburg, 2192 on 25 November 2009.

For and on behalf of the Board

Johannesburg A.Garber J. du Preez

3 September 2009 (Chairman) (Chief Executive)

Directors: A.Garber, J.du Preez, D.E. Cleasby*, A.Katz*, M.Lutrin*, Dr.T.M.Mogale*, G.McMahon*, A. Webb*, C.P. Efthymiades, M.Acosta-Alarcon *(Non-executive)

Transfer secretaries: Registered office: Computershare Investor Services 7 Drome Road

(Pty) Limited Lyndhurst, 2106

Ground Floor PO Box 890856

70 Marshall Street Lyndhurst, 2106

Johannesburg, 2001

Sponsor Auditors

7 September 2009

annual r

eport 2

009


annual r

eport 2

009


directorate

Arnold Garber

(Executive Chairman)

Arnold has been actively involved with the “computer evolution” since the 1960’s. He was born in Buenos Aires, Argentina and attended his very first computer training school during November 1964, when the computer industry was still very much in its infancy. He was later trained by IBM, thereafter joining The Premier Milling Company as a computer programmer. In 1971, at the age of 24, Arnold was appointed as the IT manager of the Marine and Trade Insurance Company, with a staff of 20 people under him. In 1976, Arnold joined the administrative service division of Arthur Andersen and Company, the forerunner to Accenture. Three months after joining Arthur Andersen and Company, Arnold was transferred to Chicago and then to London where he was contracted to work for the London Branch. On returning to South Africa, in 1980, Arnold established his own software house and then in 1983 formed Compu-Clearing, together with his brother, Manuel.

Johan Du Preez

(Chief Executive Officer)

Johan commenced his career in IT as a programmer with Delfos & Atlas Copco. He later joined the Marine and Trade Insurance Company, where he met and worked with Arnold. During the course of 1975, he joined ICL as a systems engineer, supporting fully integrated on-line systems within the motor industry. During this period, Johan twice attended overseas training sessions with BMW and Kerridge Computer Company, based in the United Kingdom. Johan later attended a system design and development course at the University of Cape Town’s Graduate School of Business. Johan joined Compu-Clearing in 1985.

Mario Acosta-Alarcon

(Executive Director)

Mario holds a Masters degree in Computer Science, which he obtained in Spain. He has over 25 years experience in the computer industry, obtained during spells in South America and Europe. In 1980, Mario formed IBM Bolivia. He later joined New Hampshire Insurance Co, in Spain. In 1987, Mario joined AEG Argentina as IT manager. During 1990, Arnold met Mario in Buenos Aires and invited him to join the Compu-Clearing Group. Mario was promoted to the position of Development Manager in 1996 and then to Programme Development Director. He presently serves as managing director of Compu-Clearing (Pty) Ltd, the Group’s operating subsidiary.

Costas Efthymiades

(Financial Director)

After matriculating in 1973, Costas served three years articles of clerkship at auditors, Greenwood Poulton & Co. During the early 1980’s Costas joined United Building Society where he received management training. He gained further management experience within service-related industries. In August 1991, Costas was appointed as Compu-Clearing’s Group Financial Manager. In January 1998 he was promoted to the position of Administrative Director. Costas currently holds the portfolio of Financial Director.

Ari Katz

(Independent)

Ari is a Chartered Accountant (SA), as well as a Certified Public Accountant (Israel). He graduated from the University of South Africa with the Degrees Bachelor of Commerce, Bachelor of Accounting (Honours) and Datametrics (with distinction). He then specialised in computer auditing and completed the CISA(USA). Ari was appointed a partner of the then Arthur Young & Co, which later merged to become Ernst & Young. Upon leaving Arthur Young & Co, Ari served as a visiting associate professor at the University of the Witwatersrand. In 1991, Ari founded Boston City Campus, which now operates 41 campuses throughout South Africa. In 2000 Ari was awarded Professor Extraordinary at Unisa.

He was appointed to the board of the company in 1998.

annual r

eport 2

009


Milton Lutrin

(Non-executive)

Milton practices as a Chartered Accountant (SA) and is a Fellow of the Association of Authorised Public Accountants in the United Kingdom. He has held appointments as Financial Consultant to various companies and also served on the board of directors of several listed companies. Milton has a close association with the Compu-Clearing Group as the Group’s company secretary and has served as a director of the company since 1998.

Thomas Mogale

(Independent)

Dr Thomas Mathukhu Mogale lecturers at the University of the Witwatersrand’s Graduate School of Public and Development Management (P&DM) and holds the positions of Assistant Dean (Graduate Affairs; Faculty of Commerce, Law and Management) and Assistant Director (Academic) at the Graduate School of P&DM. He obtained his BA (Honours) through the University of the North (now University of Limpopo), and his MSc through the University of London (SOAS) in 1987. His PhD was awarded by the University of Pittsburgh’s Graduate School of Public and International Affairs (US). Dr Mogale sits on several government reference Groups, community organisations and on the Board of a development

NGO as non-executive director.

David Cleasby

(Non-executive)

David graduated from the University of the Natal with the degrees Bachelor of Commerce and Higher Diploma in Accounting. He served articles at Deloitte Pim Goldby, where he qualified as a Chartered Accountant (SA). David was financial director of Rennies Terminals when the Rennies Group Limited was acquired by Bidvest in 1998. In 2001, David joined the Bidvest Corporate Office being involved in corporate finance and investor relations. David was appointed Financial Director of The Bidvest Group Limited on July 9 2007.

Gillian McMahon

(Non-executive)

After completing her B.Comm, with a major in Business Economics, Gillian joined Fedex, where she gained experience in the fields of customer service & sales, operations, training & development and human resource management. During this time, Gillian obtained her B.Comm (honours) in Industrial Psychology from RAU (now the University of Johannesburg). At the end of 2005, Gillian took up the position of commercial director at BidTravel, the travel management arm of the Bidvest group. Gillian is now the Group Transformation Executive of The Bidvest Group, where she provides strategic input and guidance to Bidvest subsidiaries on the broader aspects of transformation and change within the context of Black Economic Empowerment.

annual r

eport 2

009


Andre Hofmeyr

(Account Manager)

Andre began his working career as a management trainee at Gundelfingers in 1968 and was appointed as Import Manager after 4 years. When the CNA Group established a clearing and forwarding agency, he moved across to take up the position of assistant managing director, responsible for developing the commercial division, now known as Premier Freight. Andre was contracted as a consultant to Compu-Clearing for a few years, before joining the Group permanently in 1990. In January 1993 he was appointed as Cape Town Branch Manager. In May 2000, having returned to head office he headed up the helpdesk and currently heads the quality control division. Andre holds diplomas in S/36 system operations, MAST customer care and IATA dangerous goods (Gold).

Imran Mohammed

(Divisional Director)

Imran began his career at Compu-Clearing in 1988 as a trainee programmer. He has subsequently worked his way up to development manager. Imran has several IT qualifications, including a diploma in RPGII, RPG400 and RPGILE development. He presently heads all development on IBM iseries (AS/400). During 2002 he was appointed as a divisional director of Compu-Clearing (Proprietary) Limited, the Group’s operating company

Melvin Narainsamy

(Operations Manager)

After matriculating in 1987, Melvin enrolled for an Information Technology diploma in Cobol programming. Two years later he joined Compu-Clearing as an IBM iseries (AS/400) technician and has worked for the company ever since. In 2000, Melvin was promoted to Operations Manager, responsible for the Group’s 24/7 operations and technical division. A year later, Melvin was certified as an IBM Certified Specialist at a Common User Group Conference in New Orleans. He also has attended and completed Microsoft A+ and N+ courses. In addition to IBM iseries, Melvin has technical experience with firewalls, mail servers and routers.

Robert Wright

(Clearway Director)

Robert is the developer and founder member of the Clearway system. He held several positions within the clearing and forwarding industry before joining Atlas Copco, where he was appointed shipping manager. Whilst at Atlas Copco, Robert designed and wrote a PC-based Bill of Entry system, Clearway. Robert sold Clearway to Compu-Clearing in 1999, and took up a management position within the Group. Robert serves on the board of directors of Compu-Clearing (Proprietary) Limited, the Group’s operating company

senior management

annual r

eport 2

009


corporate governance

The Board subscribes to the values of and accepts the inclusive approach to good corporate governance espoused in the King II Report. The Board and individual directors accept their duty and responsibility to ensure that the principles set out in the code of corporate practices and conduct, as defined in the King II Report, are observed where possible. The recommendations of King III are currently being reviewed by the Board and recommendation will be implemented, where relevant.

Corporate code of conduct

Compu-Clearing is committed to:

• the highest standards of integrity and behaviour in all its dealings with its stakeholders and society at large;

• carrying on of business through fair commercial competitive practises;

• trading with customers and suppliers who subscribe to ethical business practice;

• removing discrimination in the workplace and the promotion of employees to realise their potential through training and development of their skills; and

• being proactive towards environmental and social issues.

Board of directors

The board of directors comprises four executive and five non-executive directors, two of whom are independent. These directors have a range of differing skills and experience, which they bring to bear for the benefit of the Group. There is a policy evidencing a clear division of responsibilities at board level to ensure balance of power and authority, such that no individual has unfettered powers of decision-making.

The non-executive directors ensure impartial and objective viewpoints in the decision making process. The board met twice during the year, to debate and deal with Group strategy, policy, operations, progress, and performance. As such, it retains full and effective control of the Group and monitors management through a structured approach of reporting and accountability. The board are of the opinion that the open lines of communication between the executive and non-executive bodies, negates the need for additional formal meetings. Details of attendance at meetings are set out on page 13.

Certain functions have been delegated to subcommittees, which currently consist of the audit committee, risk committee, human resources and remuneration committee. The committees are free to take independent external advice when required. The functions of these committees are described more fully under each of the relevant subheadings in this report.

The roles of chairman of the board and chief executive officer are separate. Arnold Garber serves as executive chairman and Johan Du Preez as chief executive officer. The chairman is not an independent chairman as recommended in King II, but the Board believe that he has, and continues to be, best suited to lead the Board. This decision is reviewed on an ongoing basis. The Board will, in due course, consider the appointment of an independent non-executive chairman, as recommended in King III.

Policy for the appointment of directors

There is a policy detailing the procedures for appointments, which are formal and transparent and a matter for the board as a whole. In circumstances where the board sees fit to appoint a new director, whether to fill a casual vacancy or to address areas of expertise not presently available on the board, the following procedures are applied:

• The board determine the skills, knowledge and experience required of the appointee, having regard to the competencies and qualifications of the other board members;

• The merits of prospective directors are considered and suitability assessed on the basis of:

• Competencies and qualifications;

• Independence;

• Other board appointments;

• Time availability;

• Their understanding of the role and legal obligations of a director;

• Their ability to contribute to the overall effectiveness of the board and to the long-term success of the Group.

The chairman reviews the composition of the board on an ongoing basis, to ensure the board continues to possess the level of skills and experience required by the Group’s operations. .

annual r

eport 2

009


corporate governance (continued)

Audit committee

The Audit Committee comprises executive and non-executive directors, is led by a non-executive director and met twice during the year. The committee is led by M. Lutrin, a non-executive director. Details of the committee’s composition and attendance at meetings are set out on page 13.

The Audit Committee has been established primarily to assist the board in overseeing:

• the quality and integrity of the company's financial statements and public disclosures thereof;

• the scope and effectiveness of the external audit function; and

• the effectiveness of the company’s internal controls

The board has delegated extensive powers to the audit committee to perform these functions. In line with these requirements the audit committee has, among other things, recommended principles for the use of external auditors for non-audit services. The audit committee meets the Group's external auditors and executive management periodically to consider risk assessment and management to review accounting, auditing, financial reporting, corporate governance and compliance matters. The audit committee approves the external auditors' engagement letter and the terms, nature and scope of the audit function and the audit fee. Interim and annual results of the Group and trading statements of the company are reviewed by the audit committee before publication. Both the committee and the board are satisfied that the independence of the external auditors is not in any way impaired or compromised.

The company, and more specifically the audit committee, is aware of the new listings requirement to appoint a financial director to the board. The committee is pleased to report that this requirement has been met and that the encumbent Financial Director has the necessary experience and expertise to manage the finance function.

Remuneration and human resources committee

A Remuneration and Human Resources Committee has been appointed. The committee, which met twice during the year, is led by M. Lutrin, a non-executive director. Details of the committee’s composition and attendance at meetings are set out in the below table.

The committee’s mandate is to assist the board in

• reviewing the compensation arrangements for senior executives and non-executive directors;

• reviewing management incentive schemes, share option schemes, termination entitlements and fringe benefit policies;

The committee has determined the Group’s remuneration philosophy, which is to offer remuneration that will attract, retain and motivate employees with the skills required for the company to achieve its business goals.

Risk committee

The Risk Committee comprises executive and non-executive directors and met once during the year. The committee is led by M. Lutrin, a non-executive director. Details of the committee’s composition and attendance at meetings are set out in the below table.

The Risk Committee has been established primarily to assist the board in overseeing the establishment and maintenance of a risk management framework to manage and mitigate the business risks posed to the Group.

Name Committee

memberships Board Audit Committee Risk Committee Human Resources

Meetings Attended Meetings Attended Meetings Attended Meetings Attended

A.Garber R 2 2 1 1

J. Du Preez HR 2 2 2 2

M Acosta- Alarcon 2 -

C.Efthymiades A 2 2 2 2

M. Lutrin A, R,HR 2 2 2 2 1 1 2 2

A. Katz A,R 2 2 2 1

D. Cleasby 2 1

M. Steele 1 1

G. McMahon 1 -

T. Mogale HR 2 1

A. Webb 2 1

A – Audit committee R – Risk committee HR – Human resources and remuneration committee

annual r

eport 2

009


Internal controls

The directors recognise their responsibility for the Group’s system of financial and internal controls. The board has established controls and procedures to ensure the accuracy and integrity of accounting records and monitors the Group’s business and its performance. Internal controls focus on critical areas and are designed to provide reasonable assurance that assets are safeguarded from loss or unauthorised use, and that financial records can be relied upon for preparing the annual financial statements, while complying with applicable laws and regulations.

Internal audit

The Group does not maintain a formal internal audit function. The board are of the opinion that the lack of transaction volumes and close involvement of the executive mitigate the requirement for such a function.

Employment equity

The Group’s strategy regarding employment is aimed at the development of all its employees. It does not believe that the promotion of a select few individuals is appropriate. Compu-Clearing’s strategy centres on creating opportunities that will enable previously disadvantaged employees to prepare themselves to occupy more skilled and responsible positions within the organisation. The key aspect of this strategy is to promote education and training opportunities for all employees within the organisation and externally.

Share dealings by employees and directors

All directors, officers and employees are advised of closed periods. The company has closed periods during which directors, officers and all employees are prohibited from trading in the securities of the company. The closed period is from the last day of the financial year or half year to the date of the respective announcements relating to the reporting period, and when other price-sensitive information may be known. Any dealings by a director and/or management must be approved by the Chairperson in writing and are reported to the JSE in terms of the JSE Listings Requirements.

annual r

eport 2

009


directors’ responsibility and approval of financial statements

directors’ responsibility statement

The company’s directors are responsible for the preparation and fair presentation of the Group annual financial statements and separate parent annual financial statements, comprising the balance sheets at 30 June 2009, and the income statements, the statements of changes in equity and cash flow statements for the year then ended, the notes to the financial statements, which include all significant accounting policies, and other explanatory notes, and the directors’ report, in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa.

The directors’ responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of these financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

The directors’ responsibility also includes maintaining adequate accounting records and an effective system of risk management as well as the preparation of the supplementary schedules included in these financial statements.

The directors have made an assessment of the Group and company’s ability to continue as a going concern and there is no reason to believe the businesses will not be going concerns in the year ahead.

The auditor is responsible for reporting on whether the Group annual financial statements and separate parent annual financial statements are fairly presented in accordance with the applicable financial reporting framework.

approval of Group annual financial statements and separate parent annual financial statements

The Group annual financial statements and the annual financial statements of Compu-Clearing Outsourcing Limited, set out on pages 17 to 49 were approved by the board of directors on 23 September 2009 and are signed on its behalf by-

A Garber Johan Du Preez

Executive Chairman Chief Executive Officer

declaration by the company secretary

In terms of Section 268G(d) of the Companies Act, No. 61 of 1973, as amended, I certify that the company has lodged with the Registrar of Companies, all such returns as are required of a public company, in terms of the Companies Act, and that all such returns are true, correct and up to date.

Lutrin, Abrams, Sklar Chartered Accountants (SA )

Company Secretary

annual r

eport 2

009


independent auditors’ report

TO THE MEMBERS OF COMPU-CLEARING OUTSOURCING LIMITED

We have audited the group annual financial statements and the annual financial statements of Compu-Clearing Outsourcing Limited, which comprise the balance sheets at 30 June 2009, and the income statements, the statements of changes in equity and cash flow statements for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors’ report as set out on pages 17 to 49.

Directors’ responsibility for the financial statements

The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Compu-Clearing Outsourcing Limited at 30 June 2009, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa.

KPMG Inc.

Registered Auditor

Per D. Thompson

Chartered Accountant (SA)

Registered Auditor

Director

23 September 2009

annual r

eport 2

009


report of the directors

To the members of Compu-Clearing Outsourcing Limited

The directors have pleasure in presenting their report for the year ended 30 June 2009.

Review of activities

The Company is a holding and finance company whose major subsidiary provides outsourced computer services to the customs clearing and freight forwarding industry.

The results of the Group are reviewed in the chairman’s report.

Share capital

There has been no change in the authorised share capital during the year. On 10 May 2000 the shareholders authorised a change in the articles to allow the company to acquire its own shares. Compu-Clearing has not repurchased any of its own shares on the open market in terms of this authorisation, during the current or prior year. During the year, 105 419 treasury shares were sold by a wholly-owned subsidiary (2008 – Nil).

Share incentive scheme

The Compu-Clearing Share Participation Scheme and the Compu-Clearing Share Incentive Scheme have been established to facilitate the acquisition of shares by employees. The aggregate number of shares which may be made available for the purposes of the schemes shall not exceed 10% of the entire issued share capital of Compu-Clearing from time to time. In November 1998 options were granted to employees to acquire a total of 3 220 000 shares in tranches of 10% at a consideration of R1 each, contingent on their being in the employ of the Group on the specified dates between November 1999 and November 2008. In March 2003 additional options were granted to employees to acquire 2 200 000 shares in tranches of 10% at a consideration of R1 each, contingent on their being in the employ of the Group on the specified dates between March 2004 and March 2013.

At 30 June 2009 members of the schemes had cumulatively exercised 1 910 000 (2008 –1 465 000) shares in terms of the Compu-Clearing Share Incentive Scheme. The following share options were outstanding at 30 June 2009:

Number of

options Year of grant Option price 1999 1,00 - 2003 1,00 935,000

935,000

Movements for the year 2009 2008

Beginning of year 1,700,000 1,955,000

Lapsed (320,000) -

Exercised (445,000) (255,000)

At end of year 935,000 1,700,000

A total of 2,575,000 (2008 - 2,255,000) share options have lapsed since the commencement of the scheme.

Executive directors held 255,000 (2008 - 485,000) share options at year end as detailed below.

Details of the directors' outstanding share options

Share options at 30 June 2008

Share options exercised during the year

Share options at 30 June 2009

Name Number Strike price

Number Exercise price

Benefit arising

Number Strike price

R R R

M Acosta-Alarcon 265,000 1 90,000 193,200 103,200 175,000 1

C Efthymiades 220,000 1 140,000 286,000 146,000 80,000 1

annual r

eport 2

009


The following changes in the directorate took place during the year under review. Name Nature of change Date

MJ Steele Resignation 30 December 2008

G McMahon Appointment 30 December 2008

A Webb, a non-executive director, has retired from the Board with effect from 3 September 2009. We thank him for his service and wish him well in his retirement.

Your directors at the date of this report were:

Directors Secretary

A Garber* Lutrin, Abrams, Sklar Chartered Accountants (SA)

JHP Du Preez*

M Acosta-Alarcon* Registered address:

C Efthymiades* 1st Floor Block "A"

A Katz ∆ Sandhavon Office Park

M Lutrin 12 Pongola Crescent

TM Mogale ∆ Eastgate Ext. 17

DE Cleasby Sandton

G McMahon 2148

Postal address:

PO Box 37172

* executive directors Birnam Park

∆ independent 2105

The directors' remuneration for the years ended 30 June 2008 and 2009 was as follows:

2009

Directors'

fees Basic

remuneration Bonus Other

allowances Retirement/

medical

Share-based

payment expense Total

R'000 R'000 R'000 R'000 R'000 R'000 R'000 Executive

A Garber - 888 74 111 234 - 1,307

J H P du Preez - 861 72 140 177 - 1,250

M Acosta-Alarcon - 713 96 271 148 - 1,228

C Efthymiades - 586 25 209 136 - 956

Non-executive

A Z Katz 18 - - - - - 18

M Lutrin 42 - - - - - 42 T M Mogale 12 - - - - - 12

D J Cleasby 1 6 - - - - - 6

G McMahon 1 - - - - - - -

M J Steele 1 6 - - - - - 6

A Webb2 6 - - - - - 6

90 3,048 267 731 695 - 4,831 1 Paid to The Bidvest Group Limited 2 Resigned after the reporting date

annual r

eport 2

009


report of the directors (continued)

2008

Directors' fees

Basic remuneration Bonus

Other allowances

Retirement/ medical

Share-based

payment expense Total

R'000 R'000 R'000 R'000 R'000 R'000 R'000

Executive

A Garber - 880 - 62 226 - 1,168

J H P du Preez - 849 72 129 168 - 1,218 M Acosta-Alarcon - 684 55 168 134 37 1,078

C Efthymiades - 535 45 198 124 29 931

Non-executive

A Z Katz 12 - - - - - 12

M Lutrin 24 - - - - - 24

T M Mogale - - - - - - -

D E Cleasby 1 - - - - - - - D K Rosevear 1 - - - - - - -

M J Steele 1 12 - - - - - 12

A Webb 12 - - - - - 12

60 2,948 172 557 652 66 4,455 1 Paid to The Bidvest Group Limited

Subsidiary companies

Details of the subsidiary companies, all of which are wholly owned and registered in the Republic of South Africa are set out below:

Cost of shares Indebtedness Issued

share capita

Principal business

2009 2008 2009 2008

Subsidiary R R'000 R'000 R'000 R'000

Compu-Clearing (Proprietary) Limited

4 938 Computer services

1,961 1,906 539 968

Compu-Clearing Drome Road Property (Proprietary) Limited

100 Property owning

- - 3,018 3,018

Drome Road Share Block (Proprietary) Limited

600 Property owning

- - - -

Three DX Property and Investments (Proprietary) Limited

100 Investment holding company

- - 1,425 1,425

1,961 1,906 4,982 5,411

The amounts owing by subsidiaries are unsecured, interest-free and have no fixed repayment date.

Holding company

Compu-Clearing is a public company with no holding company.

annual r

eport 2

009


Distributions

A capital distribution in the amount of 12,0 cents per share amounting to R4,914,213 was paid during the previous year.

An ordinary dividend of 25,0 cents per share, amounting to R10,349,111 and relating to the year ended 30 June 2008, was paid during the year. An ordinary dividend of 25,0 cents per share, amounting to R10,410,361 and relating to the year ended 30 June 2009, was declared on 3 September 2009 and is payable to shareholders of the company on 12 October 2009. The salient dates are as follows:

Last date to trade “cum” the dividend Friday, 2 October 2009

Trading commences “ex” the dividend Monday, 5 October 2009

Record date Friday, 9 October 2009

Payment date Monday, 12 October 2009

Special resolution

The following special resolution was passed and registered during the year:

The granting to Compu-Clearing of a general authority to acquire its own shares.

Litigation statement

The directors are unaware of any pending or outstanding litigation, presently involving the Group.

Borrowing powers

The borrowing powers of the Group are unlimited.

Results of subsidiaries

The attributable interest of the holding company in the after tax profit and loss of its subsidiaries is:

2009 2008 R'000 R'000

Profits 6,854 9,731 Losses - -

6,854 9,731

Directors' interests

At 30 June 2009, the direct and indirect beneficial interests of the directors in the shares of the company were as follows:

2009

Executive directors A. Garber J. Du Preez M. Acosta-

Alarcon C. Efthy-miades R. Wright* Total

Direct beneficial 297,650 - 525,000 452,500 360,909 1,636,059 Indirect beneficial 13,688,736 4,500,000 - - - 18,188,736 Held by associates 271,850 10,000 - - - 281,850 Total 14,258,236 4,510,000 525,000 452,500 360,909 20,106,645 % 34.2 10.8 1.3 1.1 0.9 48.3

Executive directors 2008

Direct beneficial 297,650 - 435,000 312,500 360,909 1,406,059 Indirect beneficial 13,688,736 4,500,000 - - - 18,188,736 Held by associates 271,850 10,000 - - - 281,850 Total 14,258,236 4,510,000 435,000 312,500 360,909 19,876,645 % 34.6 10.9 1.1 0.8 0.9 48.2

* A director of Compu-Clearing (Proprietary) Limited, a subsidiary company.

annual r

eport 2

009


report of the directors (continued)

Non- Executive directors

2009

A. Katz M. Lutrin T. Mogale A. Webb* Total

Direct beneficial 15,400 360,100 5,200 10,000 390,700 Indirect beneficial - - - - - Held by associates - - - - - Total 15,400 360,100 5,200 10,000 390,700 % - 0.9 - - 0.9

Non- Executive directors

2008

Direct beneficial 15,400 360,100 5,200 10,000 390,700 Indirect beneficial - - - - - Held by associates - - - - - Total 15,400 360,100 5,200 10,000 390,700 % - 0.9 - - 0.9

* Resigned after the reporting date

There have been no material changes in the shareholdings of the directors between the year end and the date of this report. Major shareholders Shareholders other than directors with a beneficial interest of more than 5% of the issued share capital of the group at 30 June were:

2009 2008

% %

- The Arnold Garber Family Trust 33.2 33.7

- The Johan du Preez Family Trust 10.9 11.1

- The Bidvest Group Limited 24.0 24.3

- Comshelf Limited 9.7 9.8

- Barnun Investments (Proprietary) Limited 5.6 5.7

Post balance sheet events

No material events, other than the distributions declared, have occurred between the balance sheet date and the date of approval thereof, knowledge of which would affect the ability of the users of these statements to make proper evaluations and decisions.

Going Concern

The directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparing the financial statements.

annual r

eport 2

009


balance sheets at 30 June

Group Company

2009 2008 2009 2008 Note R'000 R'000 R'000 R'000

ASSETS

Non-current assets 20,457 14,869 1,961 1,906

Property, plant and equipment 1 18,333 13,655 - - Intangible assets 2 1,300 662 - - Interest in subsidiaries 3 1,961 1,906 Deferred taxation 4 824 552 - -

Current assets 31,864 35,842 10,444 15,667

Inventories 5 64 66 - - Investments - - - - Income tax receivable 217 1,304 2 12 Trade and other receivables 6 6,410 6,694 63 85 Owing by subsidiaries 3 4,982 5,411 Cash and cash equivalents 7 25,173 27,778 5,397 10,159

Total assets 52,321 50,711 12,405 17,573

EQUITY AND LIABILITIES

EQUITY Total equity and reserves 46,251 45,687 12,076 17,327

Share capital 9 416 412 416 412 Share premium 1,267 689 986 545 Treasury shares 9 (463) (576) - - Reserves 10 45,031 45,162 10,674 16,370

LIABILITIES Non-current liabilities 2,543 1,509 10 10

Deferred taxation 4 1,066 168 10 10 Post retirement medical obligations 11 1,477 1,341 - -

Current liabilities 3,527 3,515 319 236

Trade and other payables 12 3,314 3,157 108 86 Income tax payable 213 358 211 150

Total equity and liabilities 52,321 50,711 12,405 17,573

annual r

eport 2

009


income statements for the year ended 30 June

Group Company 2009 2008 2009 2008

Note R'000 R'000 R'000 R'000

Revenue 45,037 45,496 5,793 3,347

Operating costs 37,684 33,112 525 290

-Distribution 26,976 24,266 - - -Administration 10,112 8,342 2 - -Other 596 504 523 290

Operating profit 13 7,353 12,384 5,268 3,057

Net financial income 14 2,639 2,629 650 1,254

-Finance income 2,644 2,629 650 1,254 -Finance expense (5) - - -

Profit before income tax 9,992 15,013 5,918 4,311

Income tax expense 15 3,483 4,107 1,263 389

SA normal taxation 2,461 4,107 241 389 Secondary Tax on Companies 1,022 - 1,022 -

Profit for the year attributable to ordinary shareholders 6,509 10,906 4,655 3,922

Basic earnings per share (cents) 18 15.8 27.0

Diluted basic earnings per share (cents) 18 15.6 26.5

annual r

eport 2

009


statements of changes in equity for the year ended 30 June

Group

Share capital

Share premium

Treasury shares

Retained earnings

Revaluation reserve

Share-based

payment reserve Total

Note R'000 R'000 R'000 R'000 R'000 R'000 R'000

Balance at 30 June 2007 409 5,351 (601) 33,574 - 456 39,189 Total recognised income and expense - profit for the year 10,906 10,906 Share issues 3 252 255 Distribution of share premium 16 (4,914) 25 (4,889) Share-based payment transaction 226 226

Balance at 30 June 2008 412 689 (576) 44,480 - 682 45,687 Total recognised income and expense 6,509 3,583 10,092

- profit for the year 6,509 6,509 - surplus on revaluation of land and buildings 1 4,501 4,501 - deferred taxation effect of revaluation (918) (918)

Sale of treasury shares 137 113 250 Share issues 4 441 445 Dividends paid 16 (10,221) (10,221) Share-based payment transaction (2) (2)

Balance at 30 June 2009 416 1,267 (463) 40,768 3,583 680 46,251

Company

Share capital

Share premium

Retained earnings

Share-based

payment reserve Total

R'000 R'000 R'000 R'000 R'000

Balance at 30 June 2007 409 5,207 11,766 456 17,838 Total recognised income and expense - profit for the year 3,922 3,922 Share issues 3 252 255 Distribution of share premium 16 (4,914) (4,914) Share-based payment transaction 226 226

Balance at 30 June 2008 412 545 15,688 682 17,327 Total recognised income and expense

- profit for the year 4,655 4,655 Share issues 4 441 445 Dividends paid 16 (10,349) (10,349) Share-based payment transaction (2) (2)

Balance at 30 June 2009 416 986 9,994 680 12,076

annual r

eport 2

009


cash flow statements for the year ended 30 June

Group Company

2009 2008 2009 2008 Note R'000 R'000 R'000 R'000

Cash inflows (outflows) from operating activities 510 8,540 (5,579) (1,090)

Cash generated from trading operations 21 10,346 15,226 5,268 3,057

Increase (decrease) in post retirement medical obligations 136 (222) - - Decrease (increase) in working capital 22 443 (106) 44 (179)

Cash generated from operations 10,925 14,898 5,312 2,878 Finance expense (5) - - - Finance income 2,644 2,629 650 1,254 Income taxes paid 23 (2,833) (4,098) (1,192) (308) Distribution of share premium - (4,889) - (4,914) Dividend paid (10,221) - (10,349) -

Cash (outflows) inflows from investing activities (3,810) 1,941 372 5,634

Utilised to expand operations - - - Acquisition of propert, plant and equipment (2,930) (2,497) - - - Acquisition of intangible asset (962) (252) - - Proceeds on disposal of property, plant and equipment 82 74 - - Disposal of other investments - 4,616 - 4,616 Increase in investment in subsidiary company (57) - Decrease in amounts owing by subsidiaries 429 1,018

Cash inflows from financing activities 695 255 445 255

Proceeds on sale of treasury shares 250 - - - Proceeds on issue of share capital 445 255 445 255

Net (decrease) increase in cash and cash equivalents (2,605) 10,736 (4,762) 4,799 Cash and cash equivalents at the beginning of the year 27,778 17,042 10,159 5,360

Cash and cash equivalents at the end of the year 7 25,173 27,778 5,397 10,159

annual r

eport 2

009


accounting policies

1. Reporting entity

Compu-Clearing Outsourcing Limited (“the Company”) is a company domiciled in the Republic of South Africa. The financial statements include those of the Company and its subsidiaries (together referred to as the “Group”).

2. Statement of compliance

The consolidated financial statements and Company separate financial statements are prepared in accordance with International Financial Reporting Standards (IFRSs), its interpretations adopted by the International Accounting Standards Board (IASB) and the requirements of the South African Companies Act.

3. Basis of measurement

The Company financial statements and Group financial statements are prepared on the historical cost basis, except for land and buildings, which are reflected at fair value.

4. Functional and presentation currency

The Company financial statements and Group financial statements are presented in Rands, which is the Company’s and Group’s functional currency, rounded to the nearest thousand, unless otherwise indicated.

5. Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Although estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances (the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources), the actual outcome may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of IFRSs that have a significant effect and estimates with a risk of material adjustment in the next year, are disclosed in note 26.

The accounting policies set out below have been applied consistently, by Group entities, to all periods presented in these financial statement except in the case of owner occupied land and buildings as set out below.

6. Basis of consolidation

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences to the date that control ceases. Intergroup balances, any unrealised gains and losses or income and expenses arising from intergroup transactions, are eliminated on consolidation.

7. Property, plant and equipment

Items of property, plant and equipment, except for owner occupied land and buildings, are measured at cost less accumulated depreciation and accumulated impairment losses. Owner occupied land and buildings are measured at fair value at intervals not exceeding five years. In prior years owner occupied land and buildings were measured at cost less accumulated depreciation and accumulated impairment losses.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing such an item, when the cost is incurred, if it is likely that the future economic benefits embodied in the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in profit or loss as an expense, as incurred.

annual r

eport 2

009


accounting policies (continued)

7. Property, plant and equipment (continued)

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The current estimated useful lives are as follows:

Freehold buildings 50 years

Computer equipment 4 – 10 years

Furniture and office equipment 5 years

Motor vehicles 3 - 9 years

Freehold land is not depreciated.

The useful lives, depreciation methods and residual values, if not insignificant, are reassessed annually.

8. Intangible assets

8.1 Internally generated software

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, and expenditure on internally generated goodwill and brands is recognised in profit or loss as an expense as incurred.

Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible, development costs can be measured reliably, future economic benefits are probable, the Group intends to use or sell the asset and the Group has sufficient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate portion of normal overheads. Other development expenditure is recognised in profit or loss as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and accumulated impairment losses. The capitalised costs are amortised on a straight line basis, over the estimated useful life, which is currently a period of five years.

8.2 Acquired software

Computer software acquired by the Group, is stated at cost less accumulated amortisation and accumulated impairment losses, and is amortised on a straight line basis, over the estimated useful life, which is currently five years.

8.3 Subsequent expenditure

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.

9. Investment in subsidiaries

The Company’s investment in subsidiary companies is stated at cost less accumulated impairment losses.

10. Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group has the following non-derivative financial assets: financial assets at fair value through profit or loss, loans and receivables and available-for sale financial assets. All financial instruments are recognised at fair value on initial recognition and, except for those items stated at fair value through profit and loss, include directly attributable transaction costs. Subsequent to initial recognition, financial instruments are recognised as set out below:

annual r

eport 2

009


10. Financial instruments (continued)

10.1 Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost less any impairment losses. Loans and receivables comprise trade and other receivables.

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.

10.2. Recognition and derecognition

Financial assets and liabilities are recognised on the balance sheet when the Group become party to the contractual provisions of the particular instrument. Financial assets are derecognised when the Company or Group loses control of the contractual rights that comprise the asset, for instance where those rights are realised, expire or are surrendered. Financial liabilities are derecognised when the Company or Group has fulfilled its contractual obligations that comprise the financial liability.

Non-derivative financial liabilities

The Group initially recognises financial liabilities (including liabilities designated at fair value through profit or loss) at fair value on the trade date at which the Group becomes a party to the contractual provisions of the instrument. Subsequent to initial recognition financial liabilities are recognised at amortised cost. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

11. Inventories

Inventories consist of consumable stores and are measured at the lower of cost and net realisable value. The cost of inventories is based on the first in, first out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

12. Impairment

12.1 Financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired and is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of available for sale financial assets is calculated by reference to its fair value. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognized in profit or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss.

12.2 Non-financial assets

The carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

annual r

eport 2

009



12.2 Non-financial assets (continued)

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss.

13. Share capital

When share capital, recognised as equity, is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from in equity.

Shares repurchased by a subsidiary company are classified as treasury shares and presented as a deduction from total equity.

14. Employee benefits

Defined contribution retirement plans

Current contributions to the retirement funds are based on current salary and are recognised in profit or loss when they are due, on an undiscounted basis. 60 of the Group’s 62 eligible employees are members of the Funds At Work Umbrella Provident Fund, which is administered by Momentum Life.

Defined benefit plans

The Group’s obligations for post retirement medical benefits accruing to past employees in terms of defined benefit schemes have been calculated by a qualified actuary, using the projected unit credit actuarial valuation method. The Group’s estimated liability in respect of post retirement medical benefits, have been fully provided for in the balance sheet. The value of future unfunded obligations is actuarially determined on an annual basis.

Where there is a change in the assumptions underlying the actuarial valuation, such as the medical inflation rate, the change in the actuarially calculated value of the plan is recognised in profit or loss.

Short-term employee benefits

The cost of all short-term employee benefits is recognised during the period in which the employee renders the related service. The accruals for employee entitlements to salaries, performance bonus and annual leave represents the amounts which the Group has a present obligation to pay as a result of services provided by employees. These accruals have been calculated on undiscounted amounts based on current salary rates.

Share-based payment transactions

The grant date fair value of equity instruments granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the equity instruments. The amount recognised as an expense is adjusted to reflect the actual number of equity instruments for which the related service and non-market vesting conditions are met.

Share-based payment arrangements in which the group receives goods or services as consideration for equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the group.

15. Provisions

A provision is recognised if, as a result of a past event, the Company or Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflect the current markets assessment of the time value of money and the risks specific to the liability.

annual r

eport 2

009


16. Revenue

Group

Revenue is defined as rentals and fees charged for computerised customs clearing and other services, excluding value-added tax. Rentals and fees are accounted for when the relevant activities are conducted, the benefits to be derived therefrom can be reliably measured and the future economic benefits will flow to the Group. No revenue is recognised if significant uncertainty exists regarding recovery of the consideration due, associated costs or requires continuing management involvement.

Company

Revenue comprises management fees, which are recognised when services are provided, and dividends received from subsidiaries, which are recognised when the Company’s right to receive payments is established.

17. Operating leases

The Group enters into rental contracts with its clients. The leases operate on a month-to-month basis. Consequently, income arising on such transactions is recognised on a month-to-month basis and amounts received in terms of these contracts are not straight-lined.

18. Finance income and finance expense

Finance income comprises interest receivable on funds invested and gains or losses on remeasurement of financial instruments at fair value through profit or loss. Interest income is recognised in profit or loss as it accrues using the effective interest method.

Finance expense comprises interest payable on borrowings calculated using the effective interest method.

19. Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable calculated on the taxable income for the year, using the tax rates enacted or substantively enacted at the reporting date and any adjustments of tax payable for previous years.

Deferred taxation is recognised using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the forseeable future. The amount of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Secondary tax on companies (“STC”) that arises from the distribution of dividends is recognised at the same time as the liability to pay the related dividend.

20. Dividends paid

Dividends to shareholders are accounted for once they have been approved by the board of directors.

annual r

eport 2

009



21. Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

The Group is a provider of information technology products and services to the customs clearing, freight forwarding, air cargo and related industries. On a primary basis, the Group is organised into two major operating divisions:

Software rental, comprising the rental of freight clearing software to customers; and

Hardware rental, comprising the rental of hardware to operate the above software.

As the Group predominantly trades in South Africa at present, no geographical segments were identified on a secondary basis.

Segment results include revenue and expenses directly attributable to a segment and the relevant portion of enterprise revenue and expenses that can be allocated on a reasonable basis to a segment, whether from external transactions or from transactions with other Group segments. Unallocated items comprise mainly corporate expenses.

Segment assets and liabilities comprise those operating assets and liabilities that are directly attributable to the segment or can be allocated to the segment on a reasonable basis. Segment assets and liabilities do not include income tax balances.

22. Foreign currency transactions

Transactions in foreign currencies are translated to Rand at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Rand at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

23. Financial guarantees

A financial guarantee is a contract that requires the issuer to make specific payments to reimburse the holder for a loss it incurs due to the failure of the specific debtor to make payment when due, under the original or modified terms. The company accounts for such guarantees as insurance contracts.

24. Earnings per share

The Group presents basic and diluted earnings per share (EPS) and headline earnings and diluted headline earnings per share data for its ordinary shares. Basic EPS is calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

Headline earnings per share is calculated by dividing headline earnings attributable to the ordinary shareholders of the Company by the weighted average number of shares outstanding during the period.

annual r

eport 2

009


notes to the financial statements for the year ended 30 june

Group Company

2009 2008 2009 2008

R'000 R'000 R'000 R'000

1. PROPERTY, PLANT AND EQUIPMENT

Cost/Valuation

Freehold land* 3,345 900 - - Buildings* 6,096 4,665 - -

Computer equipment 17,012 17,942 - -

Furniture and office equipment 1,477 1,683 - -

Motor vehicles 1,445 1,260 - -

29,375 26,450 - -

Accumulated depreciation and impairment

Buildings - 558 - -

Computer equipment 9,436 10,016 - -

Furniture and office equipment 1,240 1,459 - -

Motor vehicles 366 762 - -

11,042 12,795 - -

Carrying value

Freehold land 3,345 900 - -

Buildings 6,096 4,107 - -

Computer equipment 7,576 7,926 - - Furniture and office equipment 237 224 - -

Motor vehicles 1,079 498 - -

18,333 13,655 - -

* At valuation

Group

Freehold land Buildings

Computer Equipment

Furniture and office equipment

Motor vehicles Total

R'000 R'000 R'000 R'000 R'000 R'000

2009

Carrying value at beginning of

year 900 4,107 7,926 224 498 13,655 Acquisitions - - 2,006 107 817 2,930

Disposals - - (62) - (14) (76)

Revaluation surplus 2,445 2,056 - - - 4,501

Depreciation - (67) (2,294) (94) (222) (2,677)

Carrying value at end of year 3,345 6,096 7,576 237 1,079 18,333

2008 Carrying value at beginning of

year

900

4,174 7,651 173 642 13,540

Acquisitions - - 2,365 132 - 2,497

Disposals - - (98) - - (98)

Depreciation - (67) (1,992) (81) (144) (2,284)

Carrying value at end of year 900 4,107 7,926 224 498 13,655

annual r

eport 2

009


notes to the financial statements (continued)

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

1. PROPERTY, PLANT AND EQUIPMENT (continued)

Details of freehold land and buildings

Freehold land - Portions 1, 2 and 3 of Erf 14 Formain Township at valuation

3,345 900 - -

Buildings at valuation 6,055 4,624 - - Timeshare units at valuation 41 41 - -

Change in accounting policy

The group changed its accounting policy with regard to owner occupied land and buildings at year end as set out in the respective accounting policy. The effect of the change has been an upward revaluation of such property of R4,5 million in the current year. The change in accounting policy has no effect on prior years.

2. INTANGIBLE ASSETS

Cost

Internally generated software 2,204 1,595 - -

Purchased software 2,608 2,558 - -

4,812 4,153 - -

Accumulated amortisation

Internally generated software 1,595 1,595 - -

Purchased software 1,917 1,896 - -

3,512 3,491 - -

Carrying value

Internally generated software 609 - - -

Purchased software 691 662 - -

1,300 662 - -

Group Internally

generated software

Purchased software Total

R'000 R'000 R'000

2009

Carrying value at beginning of year - 662 662

Acquisitions 609 353 962 Disposals - (20) (20) Amortisation - (304) (304)

Carrying value at end of year 609 691 1,300

2008

Carrying value at beginning of year - 718 718

Acquisitions - 252 252 Disposals - - - Amortisation - (308) (308)

Carrying value at end of year - 662 662

annual r

eport 2

009


Company

2009 2008 R'000 R'000

3. INTEREST IN SUBSIDIARIES Shares at cost 1,961 1,906 Owing by subsidiaries 4,982 5,411

6,943 7,317

The amounts owing by subsidiaries are unsecured, interest free and have no fixed repayment terms.

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

4. DEFERRED TAXATION Deferred tax assets 824 552 - - Deferred tax liabilities (1,066) (168) (10) (10)

Net deferred taxation (liabilities) asset (242) 384 (10) (10)

Deferred taxation can be attributed to the following : Accelerated write off of trademarks - 117 - - Accelerated capital allowances 57 (113) - - Prepayments (142) (153) (10) (10) Provisions 393 317 - - Deferred income 113 - - - Revaluation of land and buildings (1,077) (159) - - Post retirement medical obligations 414 375 - -

(242) 384 (10) (10)

The movement in deferred taxation can be analysed

as follows:

Balance at beginning of the year 384 158 (10) (79)

Recognised in income statement 292 226 - 69 Recognised in revaluation reserve (918) - - -

Balance at end of year (242) 384 (10) (10)

The income tax rate of 28% (2008 - 28%) has been applied in measuring the deferred tax on all temporary differences.

The expected manner of recovery of deferred tax is dependent on future taxable profits in excess of the profits

arising from the reversal of existing temporary differences. Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

5. INVENTORIES Consumable stores 64 66 - -

annual r

eport 2

009



Group Company 2009 2008 2009 2008 R'000 R'000 R'000 R'000

6. TRADE AND OTHER RECEIVABLES

Trade receivables 6,206 6,154 - - Impairment adjustment - provision for credit notes 348 209 - -

5,858 5,945 Prepayments 507 578 63 68 Other receivables 45 171 - 17

6,410 6,694 63 85

7. CASH AND CASH EQUIVALENTS

Money market funds - - - 13 Bank balances 1,707 1,385 150 50 Call deposits 23,466 26,393 5,247 10,096

25,173 27,778 5,397 10,159

8. COMMITMENTS AND CONTINGENCIES

There were no material commitments or contingencies at the reporting date (2008 - Nil).

9. SHARE CAPITAL AND PREMIUM

Authorised 200 000 000 shares of 1 cent each 2,000 2,000 2,000 2,000

Issued

41 641 445 (2008 - 41 196 445) shares of 1 cent each 416 412 416 412

Reconciliation of group and company issued shares : Balance at beginning of the year 412 409 412 409 Reissued during the year

- by the company 4 3 4 3

Balance at end of the year 416 412 416 412

Treasury shares The group has authority, in terms of a special resolution passed on 6 February 2009, to repurchase its shares in the open market. It did not repurchase any shares during current or prior year.

Shares Shares 2009 2008

Shares held by the subsidiary company at the financial year end 433,331 538,750

The unissued shares are under the control of the directors until the next annual general meeting.

annual r

eport 2

009


Group Company 2009 2008 2009 2008 R'000 R'000 R'000 R'000

10. RESERVES

consist of: - Retained earnings 40,768 44,480 9,994 15,688 - Share-based payment reserve 680 682 680 682 - Revaluation reserve 3,583 - - -

45,031 45,162 10,674 16,370

The share-based payment reserve relates to the accumulated cost for the future settlement of options granted under the share option scheme (refer note 19).

The revaluation reserve relates to the revaluation surplus arising from the revaluation of the Group's land and

buildings, less the taxation effects arising therefrom.

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

11. POST RETIREMENT MEDICAL

OBLIGATIONS

The Group subsidises the medical aid contributions of two (2008 - two) retired employees. The amounts recognised in the financial statements are as follows: 1,477 1,341 - -

Projected benefit obligation 1,629 1,521 Plan assets 152 180

Funding liability 1,477 1,341

Change in projected benefit obligations

Balance at beginning of year 1,521 1,572 - - Recognised in profit and loss as an expense 222 49 - -

Interest cost 161 118 - - Actuarial loss (gain) recognised 61 (69) - -

Contributions paid (114) (100) - -

Balance at end of year 1,629 1,521 - -

There are no unrecognised actuarial gains or losses. Actuarial valuations are performed annually.

Key actuarial assumptions - Discount rate 9.0% 11.0% - Salary increase rate 8.0% 8.0% - Pension increase rate 8.0% 8.0% - General inflation rate 6.0% 8.0% - Healthcare cost inflation 9.0% 11.0%

Change in plan assets

Balance at beginning of year 180 - Actual return 12 16

Expected return 22 11 Actuarial gain (loss) (10) 5

Contributions by participants 74 64

Benefits paid (114) (100) Insurance policy receipt - 200

Balance at end of year 152 180

annual r

eport 2

009



Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

12. TRADE AND OTHER PAYABLES

Trade payables 556 1,185 - - Non-trade payables and accrued

expenses

2,758 1,972 108 86 3,314 3,157 108 86

13. OPERATING PROFIT Operating profit is stated after accounting for

the following :

Charges Amortisation of intangible assets 304 308 - - Auditors' remuneration 730 387 - - - Audit fee - current year 545 382 - - - Underprovision in prior year 185 5 - - Depreciation 2,677 2,284 - - Employee costs, inclusive of directors'

emoluments

24,363 20,717 - - Listing fees 226 220 226 220 Loss on disposal of intangible assets 20 - - - (Profit) loss on disposal of property, plant

and equipment

(6) 25 - - Operating lease charges - Premises 9 8 - - Share-based payment expense (2) 226 - -

Income Dividend from subsidiaries 5,000 2,747

14. FINANCE INCOME AND EXPENSE

Finance income 2,644 2,629 650 1,254

Interest received 2,644 2,160 650 785 Fair value adjustment to investments - 469 - 469 Finance expense Interest paid (5) - - - Net finance income 2,639 2,629 650 1,254

15. INCOME TAX EXPENSE

Current 2,753 4,333 241 458 - current year 3,143 4,333 259 441 - prior year (390) - (18) 17

Deferred (292) (226) - (69) - current year (292) (231) - (66) - rate change - 5 - (3) Secondary tax on companies 1,022 - 1,022 -

3,483 4,107 1,263 389

Tax rate reconciliation % % % %

Company tax rate 28.0 28.0 28.0 28.0 Secondary tax on companies 10.2 - 17.3 - Disallowed expenditure 0.6 0.2 - - Exempt income - (0.8) (23.7) (19.4) (Over) underprovision in prior year (3.9) - (0.3) 0.4

Effective rate 34.9 27.4 21.3 9.0

annual r

eport 2

009


Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

16. DISTRIBUTIONS PAID

Distribution of share premium - 21 August 2007 - 4,889 - 4,914 Dividends paid - 22 September 2008 10,221 - 10,349 - Total distributions 10,221 4,889 10,349 4,914

Executive directors

Non-executive directors

Executive directors

Non-executive directors

2009 2009 2008 2008

R'000 R'000 R'000 R'000

17. DIRECTORS' EMOLUMENTS

Paid by the company - for services as directors - 90 - 60 Paid by subsidiary company - for management

services 4,741 - 4,342 -

4,741 90 4,342 60

Details of directors remuneration are presented on pages 18 and 19 of this report.

18. EARNINGS PER SHARE

Earnings per share is derived by dividing attributable earnings by the weighted average number of shares after adjusting for treasury shares. Appropriate adjustments are made in calculating diluted and headline earnings per share.

Group

2009 2008 Number of

shares Number of

shares

Weighted average number of shares 41,070,490 40,459,695 Potential dilutive effect of outstanding share options 535,427 636,009

Diluted weighted average number of shares 41,605,917 41,095,704

2009 2008 R'000 R'000 Headline earnings is determined as follows:

Profit attributable to shareholders 6,509 10,906 Loss on disposal of intangible assets 20 ‐ Taxation effect (6) ‐ Profit on disposal of property and equipment (6) 25

Taxation effect 2 (7)

Headline earnings 6,519 10,924

2009 2008 cents cents

Basic earnings per share

Basic 15.8 27.0 Diluted 15.6 26.5

Headline earnings per share

Basic 15.9 27.0 Diluted 15.7 26.6

annual r

eport 2

009



19. EMPLOYEE BENEFITS Share-based payments At 1 March 2003, the company established a share option programme that entitles key management and senior

employees to purchase shares in the company. In accordance with this programme options are exercisable at the market price of the shares at the date of grant. An additional share option arrangement granted before 7 November 2002 also exists. The recognition and measurement principles in IFRS 2 have not been applied to this grant, based on the IFRS 1 election available to the Group.

The terms and conditions of the grants, whereby all options are settled by physical delivery of shares, are as follows:

Grant date/employees entitled Number of instruments

Vesting Conditions Contractual life of

options

Options granted to directors - March 2003 255,000 10 percent per year from

grant date 10 years

Options granted to senior management (key management) - March 2003

170,000 10 percent per year from grant date

10 years

Options granted to other employees - March 2003

510,000 10 percent per year from grant date

10 years

Total share options 935,000

The number and weighted average exercise prices of share options is as follows:

Number of options

Number of options

2009 2009 2008 2008 Outstanding at beginning of the period R1 1,700,000 R1 1,955,000 Exercised during the period (445,000) (255,000) Lapsed during the period (320,000) -

Outstanding at end of the period R1 935,000 R1 1,700,000

Exercisable at end of the period R1 415,000 R1 640,000

The options outstanding at 30 June 2009 have an exercise price of R1 and a weighted average contractual life

of 3.75 years.

The fair value of services rendered in return for share options granted is measured at the date of issue by reference to the fair value of share options granted. The estimate of the fair value of services received is measured based on the Black-Scholes-Merton option pricing model. The contractual life of the option (10 years) is used as an input into the model.

Senior Other Directors Management Employees 2009 Fair value at measurement date 100 cents 100 cents 100 cents

Share price 115 cents 115 cents 115 cents Exercise price 100 cents 100 cents 100 cents Expected volatility 9.84% 9.84% 9.84% Option life 3.8 years 3.7 years 2.1 years Expected dividends 2.45% 2.45% 2.45% Risk-free interest rate 10.96% 10.96% 10.96%

annual r

eport 2

009


19. EMPLOYEE BENEFITS (continued)

2008

Fair value at measurement date 100 cents 100 cents 100 cents

Share price 115 cents 115 cents 115 cents

Exercise price 100 cents 100 cents 100 cents

Expected volatility 9.84% 9.84% 9.84% Option life 4.0 years 3.7 years 2.1 years

Expected dividends 2.45% 2.45% 2.45%

Risk-free interest rate 10.96% 10.96% 10.96%

The expected volatility has been estimated by calculating the standard deviation of the volume weighted monthly

price of the shares over the 12 month period prior to 31 March 2003. The risk-free rate is based on the yield on the R150, the government bond with a maturity date closest to the

expiry of the option scheme.

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

20. POST RETIREMENT BENEFITS

The group contributes to a defined contribution plan which is governed by the Pension Funds Act. 60 of the 62 permanent employees were members of the fund (2008 - 54 of 59). The group makes the full contribution as the members are all non-contributory members. These costs are included in employee costs in note 12. 1,657 1,126 - -

21. CASH GENERATED FROM TRADING OPERATIONS

Profit for the year 6,509 10,906 4,655 3,922 Income tax expense 3,483 4,107 1,263 389 Adjustments for 354 213 (650) (1,254)

Items not affecting the flow of funds 2,993 2,842 - -

- Depreciation 2,677 2,284 - - - Amortisation of intangible assets 304 307 - - - Loss on disposal of intangible assets 20 - Profit on disposal of property, plant and

equipment (6) 25 - -

- Share option expense (2) 226 - -

Finance expense 5 - - - Finance income (2,644) (2,629) (650) (1,254)

10,346 15,226 5,268 3,057

22. DECREASE (INCREASE) IN WORKING CAPITAL

Decrease in inventories 2 36 - - Decrease (increase) in trade and other receivables 284 (609) 22 (12) (Decrease) increase in trade and other payables 157 467 22 (171)

443 (106) 44 (183)

annual r

eport 2

009



Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

23. INCOME TAXES PAID

Taxation receivable (payable) at beginning of the year 946 1,181 (138) 12

Income statement charge (3,775) (4,333) (1,263) (458)

Taxation (receivable) payable at end of the year (4) (946) 209 138

(2,833) (4,098) (1,192) (308)

24. RELATED PARTY TRANSACTIONS

24.1 Key management personnel compensation Key management are those persons having authority and responsibility for planning, directing and controlling the

activities of the company, directly or indirectly, including any director (whether executive or otherwise) of the company as well as close members of the family of any of these individuals.

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

Short-term employee benefits 7,303 6,745 - -

Benefit on exercise of share options 448 191 - -

7,751 6,936 - -

24.2 Related party transactions Group Lutrin, Abrams, Sklar (CA) SA are corporate advisors to the Group. M Lutrin is a partner of Lutrin, Abrams, Sklar

and a non-executive director of Compu-Clearing. Fees paid to Lutrin, Abrams, Sklar during the year were at market related rates.

The Bidvest Group Limited owns 24.3% of the shares in the Group and two members of its management team are non-executive directors of Compu-Clearing. The following transactions took place during the year :

- The Bidvest Group Limited is a significant player in the freight industry and accordingly several of its

s subsidiaries are customers of Compu-Clearing and transact with the company at market related rates.

A non-executive director, Mr. A. Webb, is financial director of Premier Freight (Proprietary) Limited, which is a customer of Compu-Clearing. All transactions with Premier Freight are at market related rates.

A non-executive director, Mr. A. Katz is the chief executive officer of Boston Technology Campus, which has

supplied training services to the Group.

Directors’ emoluments are set out in the directors’ report and note 17.

Details of transactions with related parties and outstanding balances at 30 June 2009 and 30 June 2008 are as follows:

2009 Balance due

Name (Paid/Received) R’000 R’000

Lutrin, Abrams, Sklar Paid (21) -

The Bidvest Group Received 4,058 589

Premier Freight Received 871 80

annual r

eport 2

009


24.2 Related party transactions (continued)

2008 (Paid/Received) R’000 Balance due

Lutrin, Abrams, Sklar Paid (21) -

The Bidvest group Received 4,456 363

Premier Freight Received 860 89

Transactions with all the above related parties are on an arm's length basis and balances are settled in

accordance with the Group's standard credit terms.

Company

The company is a holding and investment company and has advanced amounts to subsidiary companies as reflected in note 3 and page 19 of this report. No guarantees have been provided in respect of subsidiaries.

25. FINANCIAL INSTRUMENTS

Overview

The Group has exposure to the following risks from its use of financial instruments:

credit risk

liquidity risk

market risk

operational risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.5 The Company and Group are exposed to credit risk, liquidity risk and market risk in the normal course of business.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board has established the Risk Committee, which is responsible for developing and monitoring the Group's risk management policies. The primary purposes of the Group’s Risk Committee are to:

establish and maintain an understanding of the risk environment;

make recommendations to the Board on those practices and procedures required to comply with changes in the Group’s risk environment; and

report to the board of directors on the risk management work undertaken and the extent of any action taken by management to address areas identified for improvement.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. The Risk Committee interacts regularly with management to assess the efficacy of the Group’s risk management policies.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

annual r

eport 2

009



25. FINANCIAL INSTRUMENTS (continued)

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk. No more than 7 % of the Group’s turnover is derived from any single customer. Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

The Group establishes an allowance for impairment that represents its estimated losses in respect of trade and other receivables. The impairment allowance comprises a specific loss component that relates to individual exposures.

Other investments

The Group limits its exposure to credit risk by only investing in assets comprising cash or convertible into cash within a 24 hour notice period. In all cases investments are placed with reputable financial institutions. Management does not expect any counterparty to fail to meet its obligations, in terms of existing investments.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to discharge its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or loss of reputation.

The Group manages liquidity risk by effectively managing its working capital, capital expenditure and cash flows. The Group finances its operations through retained earnings and does not have any debt.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

Currency risk

The Group incurs currency risk as a result of transactions which are denominated in a currency other than the Group’s functional currency. The value of these transactions is not significant and is not hedged.

Interest rate risk

Exposure to interest rate risk on financial assets and liabilities is monitored on a continuous and proactive basis.

Equity risk

The Company is exposed to equity risk on its interest in subsidiary companies. Management monitor this risk both through day to day involvement in the activities of the subsidiary companies and through the financial reporting function.

Fair value

The fair values of all financial instruments are substantially identical to the carrying values reflected on the balance sheet.

annual r

eport 2

009



Loans and borrowings

The Group has no contractual obligations in terms of interest-bearing debt instruments and has no debt convertible into any class of equity.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

Interest in subsidiaries 1,961 1,906 Trade and other receivables 5,903 6,694 63 85 Owing by subsidiaries 4,982 5,411 Cash and cash equivalents 25,173 27,778 5,397 10,159

31,076 34,472 12,403 17,561

The Group's most significant customer accounts for R588 879 (10,0%) of the trade receivables carrying amount at 30 June 2009.

Impairment losses

The ageing of trade receivables at the reporting date:

Gross Impairment Gross Impairment 2009 2009 2008 2008

Group R'000 R'000 R'000 R'000

Not past due 5,860 30 5,992 100 Past due 0 - 30 days 118 90 70 21 Past due 31 - 120 days 228 228 92 88

Total 6,206 348 6,154 209

The trade receivables, less the amounts impaired have been collected in full, subsequent to the year end.

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

2009 2008 R'000 R'000

Balance at beginning of year 209 132 Increase in impairment losses 139 77

Balance at 30 June 348 209

The allowance for impairment in respect of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount due is possible; at that point the amount considered irrecoverable is written off.

annual r

eport 2

009




Liquidity risk Group Company

Carrying Amount

Contractual Cash flows

6 months or less

Carrying Amount

Contractual Cash flows

6 months or less

R'000 R'000 R'000 R'000 R'000 R'000

2009 Non-derivative financial liabilities

Trade and other payables 3,314 3,314 3,314 108 108 108

2008 Non-derivative financial liabilities

Trade and other payables 3,157 3,157 3,157 86 86 86

Profile

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

Group Company

2009 2008 2009 2008 R'000 R'000 R'000 R'000

Variable rate instruments

Financial assets 25,173 27,778 5,397 10,159

Cash flow sensitivity for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes all other variables remain constant. The analysis is performed on the same basis for 2008.

Profit or loss Equity

100 bp 100 bp 100 bp 100 bp Effect in R'000 increase decrease increase decrease

30 June 2009

Variable rate instruments 181 (181) 181 (181)

30 June 2008

Variable rate instruments 200 (200) 200 (200)

annual r

eport 2

009



Fair values versus carrying amounts

The fair values of financial assets and liabilities and liabilities, together with the carrying amounts shown in the balance sheet are as follows:

30 June 2009 30 June 2008

Carrying amount

Fair value

Carrying amount

Fair value

Group R'000 R'000 R'000 R'000

Loans and receivables 5,903 5,903 6,116 6,116

Cash and cash equivalents 25,173 25,173 27,778 27,778

Trade and other payables (3,314) (3,314) (3,157) (3,157)

Company

Interest in subsidiary companies 1,961 1,961 1,906 1,906

Owing by subsidiaries 4,982 4,982 5,411 5,411

Trade and other receivables - - 17 17 Cash and cash equivalents 5,397 5,397 10,159 10,159

Trade and other payables (108) (108) (86) (86)

Basis for determining fair values

The following summarises the significant methods and assumptions used in estimating the fair value of financial instruments.

Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows.

Cash and cash equivalents

The carrying amount of cash and cash equivalents approximates fair value due to the relatively short term nature of these financial instruments.

Trade and other payables

The fair value of trade and other payables is estimated as the present value of future cash flows.

26. ESTIMATION AND JUDGEMENT APPLIED BY MANAGEMENT IN APPLYING ACCOUNTING POLICIES

The following estimations or judgements, which could have a significant effect on the 2009 results were made by management in applying the accounting policies at 30 June 2009.

Impairment of trade receivables

Management identifies impairment of trade receivables on a continuing basis. The estimation of the requirement for impairment is based on the current collectibility of the trade receivables, as well as taking into account the historical factors with regard to impairment of trade receivables. Management believe that there are no significant trade receivables that are doubtful and have not been provided for.

Property and equipment

Management reviews the useful lives of the different categories of property, plant and equipment and the residual values of items thereof, at least twice a year. In conducting such a review, management make use of estimates based on their experience, as well as historical data.

annual r

eport 2

009



27. CAPITAL MANAGEMENT

The Board’s policy is to retain sufficient capital to provide for the future development of the business and to maintain investor, creditor and market confidence. The board of directors monitors both the demographic spread of shareholders as well as, the return on capital, which the Group defines as shareholders equity and the level of distributions to shareholders. The methods of distribution include dividends and a return of share premium. The level of distribution takes into account the prevailing market conditions, and future cash requirements of the business.

From time to time the Group purchases its own shares on the market; the timing of these purchases depends on market prices. Buy and sell decisions are made on a specific transaction basis. The Group does not have a defined buy-back plan.

There were no changes in the Group’s approach to capital management during the year.

Neither the Company nor any of its subsidiaries are exposed to externally imposed capital requirements.

28. STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE

In terms of International Financial Reporting Standards, the group is required to include in its annual financial statements disclosure about the future impact of standards and interpretations issued but not yet effective at the issue date.

At the date of authorisation of the financial statements for the year ended 30 June 2009, the following standards and interpretations applicable to the Group were in issue but not yet effective.

Standard/Interpretation Effective date

IAS 1 (AC 101) Presentation of Financial Statements Annual periods commencing on or after 1 January 2009

IFRS 2 (AC 139) amendment

IFRS 2 Share-based Payment: Vesting Conditions and Cancellations

Annual periods commencing on or after 1 January 2009

IFRS 8 (AC 145) Operating Segments Annual periods commencing on or after 1 January 2009

IAS 32 (AC 125) amendment

IAS 32 (AC 125) Financial Instruments: Presentation

Annual periods commencing on or after 1 January 2009

IAS 27 & IAS 1 amendment

Consolidated and Separate Financial Statements

Annual periods commencing on or after 1 July 2009

IAS 1 Presentation of Financial Statements

The revised IAS 1 supersedes the 2003 version of IAS 1 and will be adopted by the group for the first time for the year ending 30 June 2010.

The main change in the revised IAS 1 is a requirement to present all non-owner changes in equity, for example revaluation reserve movements, as follows:

• in a single statement of comprehensive income (which includes income statement line items), or

• in a statement of comprehensive income (which includes only non-owner equity changes). In addition an income statement is also disclosed.

For each component of comprehensive income, the revised IAS 1 requires the disclosure of reclassification adjustments, i.e., the reclassification (former “recycling”) to profit or loss of amounts recognised previously directly in other comprehensive income (for example available-for-sale fair value adjustments). In addition, the income tax relating to each component of other comprehensive income must be disclosed. These disclosures may be given either on the face of the statement of comprehensive income or in the notes.

Owner changes in equity, for example dividends and capital contributions, are required to be presented in the statement of changes in equity, which has to be presented as a financial statement rather than in the notes to the financial statements.

The revised standard requires dividends and related per-share amounts to be disclosed on the face of the statement of changes in equity or in the notes.

annual r

eport 2

009


29. STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE (continued)

Under the revised IAS 1, a statement of financial position (preferred term for “balance sheet”) also has to be presented at the beginning of the comparative period when the entity restates the comparatives as a result of a change in accounting policy, the correction of an error, or the reclassification of items in the financial statements.

Amendment to IFRS 2 Share-based Payment: Vesting Conditions and Cancellations

The amendments will be adopted by the group for the first time for the year ending 30 June 2010 and apply to equity-settled share-based payment transactions and clarify (1) the meaning of vesting and “non-vesting conditions”, and (2) the accounting treatment where either the entity or the beneficiary of a grant chooses not to meet the vesting conditions.

Vesting conditions are now limited to service conditions (as defined in the current IFRS 2) and performance conditions. The amendments clarify that performance conditions are those conditions that require the counterparty to complete a specified period of service, either explicitly or implicitly, and specify performance targets to be met.

The concept of non-vesting conditions has been introduced for all conditions other than service and performance conditions. Conditions that do not determine whether the entity receives the services that entitle the counterparty to a share-based payment are non-vesting conditions. For example, where receipt of a share-based payment is contingent on the movement in the gold price or exchange rate, this would be considered a non-vesting condition. Similarly a non-vesting condition will exist where the receipt of a share-based payment is contingent on an employee making monthly contributions to a savings scheme.

Non-vesting conditions (similar to market conditions as discussed in the current IFRS 2) are taken into account in measuring the grant date fair value and thereafter there is no true-up for differences between expected and actual outcomes. Therefore, if all vesting conditions are met, then the entity will recognise the grant date fair value of the share-based payment (over the vesting period) even if the counterparty does not become entitled to the share-based payment due to failure to meet a non-vesting condition.

If either the entity or the counterparty chooses not to meet a non-vesting condition, the lapsing of the counterparty’s entitlement should be treated as a cancellation, not a forfeiture. Under cancellation accounting, the compensation cost that would have been recognised over the remainder of the vesting period, is recognised as an expense immediately.

IFRS 8 Operating segments

The disclosure according to IAS 14: Segment Reporting will be replaced by the disclosure requirements of IFRS 8: Operating Segments. Disclosure will be made in Operating Segments as used in management reports. The adoption of IFRS 8 will not have any significant impact on the accounting policies adopted.

IFRS 1 and IAS 27 Amendments consolidated and separate financial statements

The amendments require all dividends from a subsidiary, jointly controlled entity or associate to be recognised as income in the separate financial statements of the investor and remove the current definition of "cost method". The amendments also specify the accounting in the separate financial statements of a newly formed entity that becomes the new parent entity to another entity in the Group when certain criteria are satisfied.

annual r

eport 2

009


20

08

R'0

00

45,

496

13,

329

(945

)

12,

384

-

2,62

9

15,0

13

48,

855

1

,856

50,

711

4

,498

52

6

5

,024

2

,749

2

,591

2009

R'0

00

45,

037

8

,516

(1,

163)

7

,353

(5)

2

,644

9

,992

51,2

80

1,04

1

52,3

21

4,79

1

1

,279

6,07

0

3,89

2

2,98

1

2008

R'0

00

(369

)

-

-

-

-

-

-

(2,

281)

-

2

,281

-

-

-

-

-

2009

R'0

00

-

5

,222

(5,

222)

-

(5,

222)

-

-

(5,

222)

(3,5

70)

(3,5

70)

-

-

-

-

-

2008

R'0

00

1

,549

(8,8

49)

(945

)

(9,7

94)

-

2,62

9

(7,1

65)

41,

527

41,

527

1

,829

1

,829

13

2

29

2

2009

R'0

00

6

,586

(4,

470)

(1,

163)

(5,

633)

(5)

2

,644

-

2

,994

44,8

42

44,8

42

2,52

0

2,52

0

924

378

2008

R'0

00

10,

405

4

,036

-

4

,036

-

-

4

,036

7

,926

7

,926

2

,100

2

,100

2

,365

1

,991

2009

R'0

00

9

,685

2

,044

-

2

,044

-

-

2

,044

7,55

9

7,55

9

1,81

7

1,81

7

2,00

6

2,29

9

2008

R'0

00

34,

142

18,

142

-

18,

142

-

-

18,

142

1

,683

1

,683

56

9

56

9

25

2

30

8

2009

R'0

00

33,

988

16,

164

-

16,

164

-

-

16,

164

2,44

9

2,44

9

454

454

962

304

Rev

enu

e

Ext

erna

l ser

vice

s an

d sa

les

Seg

men

t re

sult

s

Seg

men

t re

sults

Cor

pora

te e

xpen

ses

Ope

ratin

g pr

ofit

Fin

anci

al e

xpen

se

Fin

anci

al in

com

e

Pro

fit b

efor

e in

com

e ta

x

Oth

er i

nfo

rmat

ion

Seg

men

t as

sets

Una

lloca

ted

asse

ts

Seg

men

t lia

bilit

ies

Una

lloca

ted

liabi

litie

s

Cap

ital e

xpen

ditu

re

Dep

reci

atio

n an

d am

ortis

atio

n

seg

men

tal analysis

for the year en

ded

30 June

Co

nso

lid

ated

E

lim

inat

ion

s S

oft

war

e H

ard

war

e O

ther

annual r

eport 2

009


analysis of shareholders 30 june

Number of shareholders

% of totalNo. of Shares

% of shares issued

in group

% of shares issued in company

Category

Other companies and corporate bodies 27 5.7 17,234,584 41.8 41.4 Trusts 23 4.8 18,913,510 45.9 45.4 Individuals 425 89.3 5,060,020 12.3 12.2 Treasury shares 1 0.2 433,331 - 1.0

476 100.0 41,641,445 100.0 100.0

Number of shareholders

% of totalNo. of Shares

% of shares issued

in group


Public 456 95.6 9,190,510 22.3 22.1 Non-public 21 4.4 32,450,935 77.7 77.9

11 2.3 2,026,759 4.9 4.9 Associates 7 1.5 20,106,645 48.8 48.3

2 0.4 9,884,200 24.0 23.7 1 0.2 433,331 - 1.0

477 100.0 41,641,445 100.0 100.0

No. of Shares

% of shares issued

in group


13,688,736 33.2 32.9 4,500,000 10.9 10.8 9,884,200 24.0 23.7 4,000,000 9.7 9.6 2,300,000 5.6 5.5

34,372,936 83.4 82.5

Barnun Investments (Proprietary) Limited

Total shares held in the group

Major shareholders in the group and company are :

The Arnold Garber Family TrustThe Johan du Preez Family Trust

Shareholder spread

Directors

Any person with an interest of 10% or

The Bidvest Group LimitedComshelf Limited

Treasury shares

Total

annual r

eport 2

009


shareholders’ diary

Financial year end 30 June 2009

Annual general meeting 25 November 2009

Reports

Preliminary report and dividend announcement 3 September 2009

Interim profit announcement February / March

Annual financial statements September

Dividend

Last day to trade cum dividend Friday, 2 October 2009

Compu-Clearing securities trade ex-dividend Monday, 5 October 2009

Record date for the dividend Friday, 9 October 2009

Dividend payable Monday, 12 October 2009

annual r

eport 2

009


notice of annual general meeting Compu-Clearing Outsourcing Limited (Registration number 1998/015541/06); Share code: CCL;

ISIN: ZAE000016564

Notice is hereby given that the annual general meeting of Compu-Clearing Outsourcing Limited will be held in the boardroom, North Building, 7 Drome Road, Lyndhurst, Johannesburg on Wednesday, 25 November 2009 at 14h00 for the following purposes:

1. To receive and adopt the audited financial statements for the year ended 30 June 2009;

2. To approve the non-executive directors’ remuneration for the year ended 30 June 2009;

3. To confirm the remuneration and appointment of KPMG Inc. as auditors and D. Thompson as the individual designated auditor of the company for the ensuing year;

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

4.1 Ordinary resolution number 1

“Resolved that in terms of section 221 and 222 of the Companies Act 1973 as amended (“the Act”), the company hereby extends, until the next annual general meeting, the directors’ authority to allot and issue, at their discretion and in terms of the JSE Limited (“the JSE”) Listings Requirements, the unissued shares of the company.”


“Resolved that the following directors, retiring in terms of the company’s articles of association and offering themselves for re-election, be re-elected:

A.Garber

J. DuPreez

M. Acosta-Alarcon

C. Efthymiades

D. Cleasby

A. Katz

M. Lutrin

T. Mogale

G. McMahon

Details of the directors standing for re-election appear on pages 9-10 of the annual report.


“Resolved that the directors have the powers to allot and issue any shares of any class already in issue in the capital of the company for cash when the directors consider it appropriate in the circumstances, subject to the following:

• this authority shall not endure beyond the earlier of the next annual general meeting of the company or beyond 15 (fifteen) months from the date of passing of this ordinary resolution;

• there will be no restrictions in regard to the persons to whom the shares may be issued, provided that such shares are to be issued to public shareholders as defined by the JSE Listings Requirements and not to related parties;

• upon any issue of shares which, together with prior issues during any financial year, will constitute 5% (five percent) or more of the number of shares of the class in issue, the company shall, by way of a paid press announcement in terms of 11.22 of the JSE Listings Requirements, give full details thereof, including the effect on the net asset value per share, net tangible asset value per share, headline earnings per share and earnings per share of the company, the number of securities issued and the average discount to the weighted average traded price of the securities over the 30 days prior to the date that the price of such issue was determined or agreed in writing between the issuer and the parties subscribing for the securities.

• that issues in the aggregate in any one financial year may not exceed 15% (fifteen percent) of the number of that class of the company’s issued shares (including instruments which are compulsorily convertible into shares of that class) at the date of application less any shares of that class issued, or to be issued in the future arising from options / convertible securities issued during the current financial year, plus any shares to be issued pursuant to an announced, irrevocable and fully underwritten rights offer or to be issued pursuant to any acquisition for which final terms have been announced;

annual r

eport 2

009


notice of annual general meeting (continued)

• the maximum discount at which securities may be issued is 10% (ten percent) of the weighted average traded price of those securities over the 30 (thirty) business days prior to the date that the price of the issue is determined or agreed between the issuer and the party subscribing for the securities; and

• a 75% (seventy-five percent) majority is required of votes cast by the shareholders present or represented by proxy at the annual general meeting to approve the resolution.”

4.4 Ordinary Resolution number 4

“Resolved that, in terms of article 13.2 of the company’s Articles of Association and subject to the company obtaining a declaration of the directors that:

the directors of the company shall be entitled, from time to time, to pay by way of a reduction of share premium, capital distributions pro-rata to all shareholders of the company in lieu of a dividend. Such distributions shall be the amounts which the directors would have declared and paid out of the profits of the company as interim and final dividends in respect of the financial year ended 30 June 2009. This authority shall not extend beyond the earlier the date of the annual general meeting following the annual general meeting at which this resolution is being proposed or 15 months from the date of the resolution.”

In terms 5.86 of the JSE Listings Requirements any general payment(s) may not exceed 20% (twenty percent) of the company’s issued share capital, including reserves but excluding minority interests, and revaluations of assets and intangible assets that are not supported by a valuation by an independent professional expert acceptable to the JSE prepared within the last six months, in any one financial year, measured as at the beginning of such financial year.

The method by which the company intends to make capital distributions to shareholders in terms of the authority and the date on which such payments will take place, will be announced following the decision by the board to make such payments; and

Further relevant disclosure as required for ordinary resolution number 4, in terms of the JSE Listings Requirements, is contained in the special resolution number 1.

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

5.1 Special Resolution number 1

“Resolved that the company hereby approves, as a general approval contemplated in sections 85(2), 85(3) and 89 of the Companies Act, 1973 (Act 61 of 1973), as amended (“the Act”), and in terms of the company’s articles of association the acquisition of the company or any of its subsidiaries from time to time of the issued ordinary shares of the company, upon such terms and conditions and in such amounts as the directors of the company may from time to time determine, but, subject to the articles of association of the company, the provisions of the Act and the JSE Listings Requirements, as presently constituted and which may be amended from time to time, and provided:

that any such acquisition of ordinary shares shall be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company or any of its subsidiaries and the counter party (reported trades are prohibited);

that this general authority shall only be valid until the company’s next annual general meeting provided that it shall not extend beyond 15 (fifteen) months from the date of passing of this Special Resolution;

that a paid press announcement will be published as soon as the company or its subsidiaries has/have acquired ordinary shares constituting, on a cumulative basis, 3% (three percent) of the number of ordinary shares in issue, prior to the acquisition pursuant to which the 3% (three percent) threshold is reached, and in respect of every 3% (three percent) thereafter, which announcement shall contain full details of such acquisitions;

that acquisitions by the company and its subsidiaries of ordinary shares in any one financial year may not exceed 20% (twenty percent) of the company’s issued ordinary share capital from the date of the grant of this general authority;

that no subsidiary of the company will acquire more than 10% of the company’s issued ordinary share capital at any one time;

that in determining the price at which the company’s ordinary shares are acquired by the company or any of its subsidiaries in terms of this general authority, the maximum price at which such ordinary shares may be acquired will be at a premium of no more than 10% (ten percent) of the weighted average of the market price at which such ordinary shares are traded on the JSE, as determined over the 5 (five) business days immediately preceding the date of repurchase of such ordinary shares by the company or any of its subsidiaries;

that the company may at any point in time only appoint one agent to effect any repurchase(s) on its behalf;

annual r

eport 2

009


that the company or any of its subsidiaries may only undertake a repurchase if, after such a repurchase it shall still comply with the spread requirements of the JSE Listings Requirements; and

that the company or any of its subsidiaries may not repurchase securities during a prohibited period, as defined in the JSE Listings Requirements unless they have in place a repurchase programme where the dates and quantities of securities traded during the relevant period are fixed (not subject to any variation) and full details of the programme have been disclosed in an announcement over SENS prior to the commencement of the prohibited period.”

The reason for the Special Resolution is to grant the company or any of its subsidiaries a general authority in terms of the Act for the acquisition by the company or any of its subsidiaries of shares issued by the company, which authority shall be valid until the earlier of the next annual general meeting of the company or the variation or revocation of such general authority by special resolution by any subsequent general meeting of the company, provided that the general authority shall not extend beyond 15 (fifteen) months from the date of this annual general meeting. The passing and registration of this special resolution will have the effect of authorising the company or any of its subsidiaries to acquire shares issued by the company. Additional Information required in terms of the JSE Listings Requirements with regard to this general authority for the company or any of its subsidiaries to repurchase the company’s securities and for the payment of capital distributions to shareholders, appears in the annual financial statements, to which this notice of annual general meeting is annexed as indicated below:

• Directors and senior management of the company: pages 9 – 11 • Major shareholders: page 46

• Directors’ interest in securities: page 19

• Share capital of the company: page 33

The directors, whose names and abridged resumes appear on pages 9 – 10 of the annual report, collectively and individually accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made in the annual report and that the annual report and notice of annual general meeting contains all information required by law and the JSE Listings Requirements. There has been no material change in the financial or trading position of the company or any of its subsidiaries that has occurred since 30 June 2009. There are no legal or arbitration proceedings, either pending or threatened against the company or its subsidiaries, of which the directors are aware, which may have, or have had in the last 12 months, a material effect on the financial position of the company and its subsidiaries. Pursuant to and in terms of the JSE Listings Requirements, the directors of the company hereby state : I. That the intention of the company and or any of its subsidiaries is to utilise the authorities if at some future date

the cash resources of the company are in excess of its requirements. In this regard the directors will take account, inter alia, an appropriate capitalisation structure for the company, the long-term cash needs of the company, and will ensure that any such utilisation is in the interest of shareholders;

II. That the method by which the company and or any of its subsidiaries intends to re-purchase its securities and the date on which such repurchase will take place, has not yet been determined, and III. That after considering the effect of a maximum permitted re-purchase of securities and the payment of capital distributions to shareholders, the company and its subsidiaries are, as at the date of this notice convening the annual general meeting of the company, able to fully comply with the JSE Listings Requirements. Nevertheless, at the time that the contemplated re-purchase and capital distribution to shareholders are to take place, the directors of the company will ensure that: The company and the Group will be able in the ordinary course of business to pay its debts for a period of 12 months after the date of the repurchase and or the capital distribution

● The assets of the company and the Group will be in excess of the liabilities of the company and the Group for a period of 12 months after the date of the repurchase and or the capital distribution. For this purpose, the assets and liabilities will be recognised and measured in accordance with the accounting policies used in these audited annual Group financial statements;

● The share capital and reserves of the company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the repurchase and or capital distribution;

annual r

eport 2

009


notice of annual general meeting (continued)

● The working capital of the company and the Group will be adequate for ordinary business purposes for a

period of 12 months after the date of the repurchase and or capital distribution; and

● The company will provide its sponsor and the JSE with all documentation as required in Schedule 25 of the JSE Listings Requirements, and will not commence any repurchase programme until the sponsor has signed off on the adequacy of its working capital, advised the JSE accordingly and the JSE has approved this documentation.

6. To transact such other business as may be transacted at an Annual General Meeting.

Shareholders who hold their shares in certificated form or who are own name registered dematerialised shareholders who are unable to attend the annual general meeting, which is to be held on Wednesday, 25 November 2009 at 14h00, but wish to be represented thereat, are required to complete and return the attached form of proxy so as to be received by the transfer secretaries, Computershare Investor Services (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), by not later than 14:00 on Tuesday, 24 November 2009.

A member entitled to attend and vote at the annual general meeting is entitled to appoint a proxy to attend, speak and, on a poll, vote in his stead. A proxy need not be a member of the company. Proxy forms must reach the transfer secretaries, Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) by not less than 24 hours prior to the scheduled commencement of the annual general meeting (excluding Saturdays, Sundays and public holidays).

Shareholders who have dematerialised their shares through a CSDP or broker, other than with own name registration who wish to attend the annual general meeting should instruct their CSDP or broker to issue them with the necessary Letters of representation to attend the meeting, in terms of the custody agreement entered into between such shareholders and their CSDP or broker.

Shareholders who have dematerialised their shares through a CSDP or broker, other than with own name registration who wish to vote by way of proxy, should provide their CSDP or broker with their voting instructions, in terms of the custody agreement entered into between such shareholders and their CSDP or broker. These instructions must be provided to their CSDP or broker by the cut-off time or date advised by their CSDP or broker for instructions of this nature.

In respect of dematerialised shares, it is important to ensure that the person or entity (such as a nominee) whose name has been entered into the relevant sub-register maintained by the CSDP or broker completes the form of proxy in terms of which he appoints a proxy to vote at the annual general meeting.

By order of the board

Lutrin, Abrams, Sklar Chartered Accountants (SA )

Group Secretary

23 September 2009

annual r

eport 2

009


administration

Auditors

Compu-Clearing Outsourcing Limited

Registration number 1998/15541/06

Share code : CCL

ISIN code : ZAE 000016564

KPMG Inc

Registered Auditor

KPMG Crescent

85 Empire Road

Registered office Parktown, 2193

7 Drome Road Private Bag 9, Parkview, 2122

Lyndhurst, 2192 Attorneys

P.O. Box 890856

Lyndhurst, 2106 Werksmans

155 5th Street

Internet address

www.compu-clearing.com

Sandown

Sandton

Private Bag 10015,

Company secretary Sandton, 2146

Lutrin, Abrams, Sklar

1st Floor Block B

Sandhavon Office Park

12 Pongola Crescent

Eastgate Ext 17

Sandton, 2090

Sponsor

Sasfin Capital a division of

Sasfin Bank Limited

(Registration number 1951/002280/06)

Sasfin Place

Commercial bankers 13-15 Scott Street

Waverley, 2090

Transfer secretaries

Nedcor Bank Limited

Hollard House

Kruis Street Computershare Investor Services (Pty) Limited

Johannesburg, 2000 70 Marshall Street

P.O. Box 1076, Johannesburg, 2000 Johannesburg, 2000

PO Box 61051, Marshalltown, 2107

form of proxy

Compu-Clearing Outsourcing Limited (Incorporated in the Republic of South Africa) (Registration number 1998/015541/06)) (Share code: CCL) ISIN code: ZAE 000016564 (“The company”) For use ONLY by certificated shareholders and own name dematerialised shareholders at the annual general meeting of Compu-Clearing shareholders to be held at 14h00 on WEDNESDAY, 25 November 2009, or such later time that may be applicable (“the annual general meeting”).

I/We Of address being the registered holder(s) of ordinary shares in the company do hereby appoint 1. or failing him/her 2. or failing him/her

the Chairman of the annual general meeting as my/our proxy to vote for me/us and on my/our behalf at the annual general meeting of the company to be held in the boardroom, New Building, 7 Drome Road, Lyndhurst, Johannesburg on 25 November 2009 at 14h00, for the purpose of and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof, and to vote for and/or against the resolutions and/or abstain from voting in respect of the shares registered in my/our name/s, in accordance with the following instructions:

Number of ordinary shares

For Against Abstain

1. Adoption of annual financial statements

2. Approval of non-executive directors remuneration

3. Approval of auditors remuneration and appointment for ensuing year

4. Approval of resolutions

4.1 Ordinary resolution 1 - Control of issued and unissued shares

4.2 Ordinary resolution 2 - Re-election of directors

4.2.1 A. Garber

4.2.2 J. Du Preez

4.2.3 M. Acosta-Alarcon

4.2.4 C. Efthymiades

4.2.5 D. Cleasby

4.2.6 A. Katz

4.2.7 M. Lutrin

4.2.8 T. Mogale

4.2.9 G. McMahon

4.3 Ordinary resolution 3 - General authority to issue shares for cash

4.4 Ordinary resolution 4 - General authority to pay capital distributions

5.1 Special resolution 1 – General authority to repurchase the shares

Shareholders who hold their shares in certificated form or who are own name registered dematerialised shareholders who are unable to attend the annual general meeting but who wish to be represented thereat, are required to complete and return the attached form of proxy so as to be received by the transfer secretaries 70 Marshall Street, Johannesburg, 2001 (P O Box 61051, Marshalltown, 2107) by not later than 14h00 on TUESDAY, 24 November 2009. Shareholders who have dematerialised their shares through a CSDP or broker, other than by own name registration who wish to attend the annual general meeting should instruct their CSDP or broker to issue them with the necessary authority to attend the annual general meeting, in terms of the custody agreement entered into between such shareholders and their CSDP or broker. Shareholders who have dematerialised their shares through a CSDP or broker, other than by own name registration who wish to vote by way of proxy, should provide their CSDP or broker with their voting instructions, in terms of the custody agreement entered into between such shareholders and their CSDP or broker. These instructions must be provided to their CSDP or broker by the cut-off time or date advised by their CSDP or broker for instructions of this nature. Signed at on this day of 2009 . Signature

Assisted by me (where applicable)

notes

1. A Compu-Clearing shareholder may insert the name of a proxy or the names of two alternative proxies of the Compu-Clearing shareholder’s choice in the space/s provided, with or without deleting “the chairperson of the annual general meeting”, but any such deletion must be initialled by the Compu-Clearing shareholder concerned. The person whose name appears first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

2. Please insert an “X” in the relevant spaces according to how you wish your votes to be cast. However, if you wish to cast your votes in respect of a lesser number of shares than you own in Compu-Clearing, insert the number of ordinary shares held in respect of which you desire to vote. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit in respect of all the shareholder’s votes exercisable thereat. A Compu-Clearing shareholder or his/her proxy is not obliged to use all the votes exercisable by the Compu-Clearing shareholder or by his/her proxy, but the total of the votes cast and in respect whereof abstentions recorded may not exceed the total of the votes exercisable by the shareholder or by his/her proxy.

3. The date must be filled in on this proxy form when it is signed.

4. The completion and lodging of this form of proxy will not preclude the relevant Compu-Clearing shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof. Where there are joint holders of shares, the vote of the senior joint holder who tenders a vote, as determined, by the order in which the names stand in the register of members, will be accepted.

5. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the transfer secretaries of Compu-Clearing or waived by the chairperson of the annual general meeting of Compu-Clearing shareholders.

6. Any alterations or corrections made to this form of proxy must be initialled by the signatories.

7. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the transfer secretaries of Compu-Clearing.

8. Forms of proxy must be received by the transfer secretaries, Computershare Investor Services (Pty) Ltd at 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) by not later than 14h00 on 24th day of November 2009.

9. The chairperson of the annual general meeting may accept or reject any form of proxy, in his absolute discretion, which is completed other than in accordance with these notes.

10. If required, additional forms of proxy are available from the transfer secretaries of Compu-Clearing.

11. Dematerialised shareholders, other than by own name registration, must NOT complete this form of proxy but must provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between such shareholders and their CSDP or broker.

Issy Van Schoor

Computershare Investor Services (Pty) Ltd

P.O Box 61051

Marshalltown

2107

Issy Van Schoor

Computershare Investor Services (Pty) Ltd

70 Marshall Street

Johannesburg

2001

Finance and administration

SecretarialDiane Wolpert

ProgrammingAudaine Govender

Account management

the compu‐clearing team

HelpdeskDrizel Burger

Jo-deen Erasmus

StoresJimmy Muhlari

Philemon Mongwato

Edward Letshedi

Fay Abader

Lovis Efthymiades

Lesley Greenberg

Sue Martin

Diane Wolpert

Dee Temba

Hilary Cohen

Tabita Mokoena

uda e Go e de

Charles Goldman

Frances De Sousa

Henry Wallace

Imran Mohamed

Julian Kew

Niel Curtis

Omar Mookadam

Trevor Thompson

managementAndre Hofmeyr

Angela Saunders

Elizabeth Moller

Franco Bavajee

Gavriel Rootshtain

Menachem Mendelow

Moshe Zulberg Jo deen Erasmus

Louis Buys

Peter Curtis

Roasane Parsons

Shandenie Pillay

Tariff bookShulamit Chackelsonas

Robert PeleTrevor ThompsonMoshe Zulberg

Uven Vengothsamy

Yigal Tepper

OperationsCall centre

Executive Directors: Arnold Garber (chairman); Johan Du Preez (managing director); Mario Acosta-Alarcon (Technical); Costa Ethymiades (Financial)

VB & Internet development

Quality control

Ian Peters

Jack Naicker

Johan Van Buren -Schelle

Khotso Lekhetho

Melvin Narainsamy

Peter Lobay

Raveen Moonsamy

Colleen Badenhorst

Marlon Hackenberg

Miriam Khanye

Moira Khumalo

Neil Bindeman

Thys Smit

Clearway Systems

developmentBrian Baker

Hristo Tzatchev

Jaco De Klerk

Valery Goldis

controlJonathan Davis

Louis Buys

Miguel Viera

Sheldon Vorster

Waldo Coetsee

Warehousing Systems

Roy Naicker

Trevor Van Der Schyff

Clearway SystemsRobert Wright

TransportVivian Mogale

Contact details available at http://www.compu-clearing.co.za/Staff.aspx

Emile Kamffer

Werner Pretorius

SOUTH AFRICA’S LEADING IT SPECIALIST FOR THE FREIGHT INDUSTRYSOUTH AFRICA'S LEADING IT SPECIALIST FOR THE FREIGHT INDUSTRY

Reg. No. 1998/15541/06Tel. No. (011) 882-7300Fax No. (011) 882-9352

www.compu-clearing.co.za

alr2009 annual report - sharedataannual report 2009 1 compu‐clearing outsourcing limited financial...

Documents