Corporate Profile - ShareDataCompu-Clearing Annual Report 2003 Compu-Clearing Outsourcing Limited is South Africa’s industry leader in the provision of Information Technology (IT)

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Corporate Profile

Compu-Clearing Annual Report 2003

Compu-Clearing Outsourcing Limited is South Africa’s industry leader in the provision of InformationTechnology (IT) products and services to the Customs clearing, freight forwarding, air cargo, and related industries. After 20 years of operation, the group continues to improve and expand its range of services to the industries it serves. In addition to its traditional range of services, it is also able to offer related solutions to South Africa, and beyond.

The Group’s objective is to enhance shareholder wealth, employee opportunities, and customer service. The Group’s philosophy is to bring 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.

The Group is listed on the JSE Securities Exchange South Africa (JSE), Information Technology sector.

Compu-Clearing Outsourcing Limited(Registration number 1998/015541/06))Share code: CCLISIN code: ZAE 000016564(“The company”)

02468

1012141618

1999 2000 2001 2002 20032

Financial Highlights

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1999 2000 2001 2002 2003

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Operating profit, profit before taxation and attributable earnings – Rm

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Total revenue Rm 20.6 25.0 28.1 29.4 32.8 Operating profit Rm 5.1 6.4 7.1 7.1 7.6 Profit before taxation Rm 5.7 7.8 8.0 7.8 9.4 Operating margin % 24.8 25.4 25.3 24.0 23.3 Attributable earnings Rm 4.2 5.4 5.5 5.2 6.4 Proposed dividends per share cents 2.0 2.2 2.5 3.0 6.0 Earnings per share cents 10.5 11.3 12.6 12.4 16.0 Net asset value per share cents 51.0 62.2 63.1 71.4 81.5 Cash generated by operations Rm 7.3 7.5 10.5 10.0 11.7

20032001 2002Summary 1999 2000

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4 Compu-Clearing Annual Report 2003

Value-added statement for the year ended 30 June

20022003

Employee costs

Retained for future

Capital providers

Taxation

2003 2002 %R'000 R'000 change

Total revenue …………………………………………… 32,781 29,430 11.4 Net cost of products and services ……………...…… 6,453 5,671 13.8 Value added by operations …………..……………… 26,328 23,759 10.8 Interest received …………..…………………………… 1,729 1,005 72.0 Total value added …………………………………… 28,057 24,764 13.3

Applied as follows :

Employees' salaries …………………………………. 15,309 13,164 Taxation ………………………………………………… 3,005 2,580 Providers of capital …………………………………… 1,206 1,372

Interest paid …………………………………………… 5 326 Dividend paid ………………………………………… 1,201 1,046

Total value distributed ……………………………… 19,520 17,116

Re-invested in the group ……………………………… 8,537 7,648

Depreciation …………………………………………… 3,388 3,524 Reserves retained …………………………………… 5,149 4,124

28,057 24,764

Employee costs ……………………………………… 54.6% 53.2%Retained for future ……………………………………. 30.4% 30.9%Capital providers ……………………………………… 4.3% 5.5%Taxation ………………………………………………… 10.7% 10.4%

Compu-Clearing continued with its trend of improving on its revenue, taking our gross earnings to nearly R33 million (2002-R29 million). Most important of all is that our software rental income, which is our core business, has grown by 18%.

Of great significance, is the total success in cash flow. There is a significant increase in finance revenue, having increased from R679 000 to over R1.7 million. Most remarkable, is that this additional cash is not the result of having sold assets or having issued shares, or due to any other non-trading activities. Cash flows from operating activities have increased from R6.4 million to R9.3 million.

Between 1999 and 2001, we invested around R6 million in assets in each of those years. We invested only R677 000 in assets for the year 2002 due to us having acquired all the AS/400’s in prior years, which we needed to take our company to a higher level of technology. This year, however, we have invested some R2.3 million in assets, but still no comparison to the investments in assets of the past. This was also exacerbated by our commitment to move away from being a hardware supply company. This should result in a reduction of depreciation in the coming years, which should result in increased profitability.

We have invested during the reporting year, nearly R3 million (2002-R1.5 million) in buying back our own shares, almost R12 million, since that process began. We have also paid out during the reporting year, some R1.2 million (2002-R1.0 million) in dividends, making up a total of R4 million, paid out during the last 4 years. The aggregate payout of dividends and buy-back of shares over the past four years was some R16 million, and since we still are holding another R16 million in cash, had we not paid dividends or bought back shares, we would have been holding R32 million, not taking into account interest earned that could have been generated. We believe that our decisions on the buy-back and dividend policies have been correct.

Due to the contribution of finance revenue, our profit before tax has grown by 21% to R9.4 million (2002-R7.8 million). Due to a marginal tax rate, our profit after tax is up by 23% to R6.4 million (2002-R5.2 million). As a result of the shares bought back during the year, the weighted average number of shares has dropped from 41.5 million to 39.5 million. This has resulted in earnings per share growth of 29%. We enter the new financial year with 38.3 million shares; already 1.2 million shares less than the weighted average of 2003 of 39.6 million shares.

Our growth in headline earnings per share of this year is 38%.

Another positive indicator of the healthy financial situation of our company is our net asset value per share, which has grown by a very acceptable 14% to 82 cents per share (2002-71 cents per share).

Our policy has always been, that we should pay dividends every year, since listing, and that every year, the dividend should be an improvement on the previous year. We have enough cash for growth, including our very important international project, for dividends, for share buy-backs, and for acquisitions. We have not earmarked any funds for acquisitions, at this point in time, as we would only get involved with businesses, that enhance our current business, and that would be of high quality, and thus improve the quality of our existing operations. This year, our proposed dividend goes up to 37% of EPS , which translates to 6 cents per share, double the dividend of last year.

Chief Executive’s Report

Arnold GarberChief Executive

5Compu-Clearing Annual Report 2003

(Continued…………………Page 6)


Chief Executive’s Report (continued)

6

(Continued…………………Page 7)

BOARD OF DIRECTORS

In September 2003, Mr Anthony Webb was appointed as a non-executive director to the main board. Mr Webb is an executive of Barnun Investments, which has a 7% shareholding in Compu-Clearing.

We also welcomed Mr Costa Efthymiades, as executive financial director subsequent to year end. Costa has been with our group for some 12 years, and is an integral part of the senior management team.

Mr Alwyn Robbertse resigned as an executive director subsequent to year end. Mr Robbertse started his own consulting and training company for the freight industry, and works in close co-operation with Compu-Clearing. Mr Robbertse’s consulting firm, provides training to Compu-Clearing’s customer base.

OUR LISTING ON THE JSE

Compu-Clearing has observed the moves of some companies in the JSE to de-list. After considerable discussion and evaluation, the board of Compu-Clearing feels that not only was it’s listing initially successful, but the many advantages of the listing far outweigh the disadvantages. The board is very conscious of the cost of staying listed and does not intend to incur any unnecessary costs as a result. For example, newspaper announcements are put in black and white, with minimum reasonable size. The annual report is produced in-house, and no “consultants” or advisors are engaged, other than what is strictly necessary.Whilst this annual report is produced in-house, we believe that it is of an excellent quality, in terms of presentation, and information content. We have saved our shareholders tens of thousands of Rand by producing the annual reports in-house.

The newspaper announcement was also produced in house, and is reproduced on pages 8 and 9.

All the financial information, of this financial period, as well as all previous financial periods since we listed (both finals and interims) are available on our Website at www.compu-clearing.co.za, (then go to financial review).

CORPORATE GOVERNANCE AND COMPLIANCE

The board of the Compu-Clearing group as well as the management team is very conscious of the principles of corporate governance, as well as compliance. At all times, the rights of all parties, such as SARS (South African Revenue Services), South African Reserve Bank (foreign exchange), JSE (Johannesburg Securities Exchange South Africa), our customers, our suppliers, our staff and our shareholders, are complied with.

Even though it is not a requirement of the JSE to have the interim results of any listed company reviewed or audited, Compu-Clearing voluntarily calls in its auditors (KPMG Inc) to review its interim financial report. Compu-Clearing’s board has also adopted a policy of having the quarterly results reviewed by the auditors. The auditors have performed a review for the quarters ended September 2002 and March 2003 respectively. These financial reports are circulated to the directors of the company.

RISK

The board of Compu-Clearing is conscious of the potential dangers of malfunctions of the software, which is markets. As a result of that, a major accounting firm, will be appointed to do a thorough investigation of Compu-Clearing and to issue it with a SAS70 certificate (Statement On Auditing Standards 70 – “Report on the processing of transactions by service organisations”, as issued by the American Institute of Certified Public Accountants). The contract has not been awarded yet, to any major accounting firm, but will be during the course of the first half of the new financial year.

Chief Executive’s Report (continued)


BRANCHES

During the year under review, Compu-Clearing has closed its Cape Town branch, and has concentrated all coastal operation out of its Durban office. Some personnel have remained employed in Cape Town. The building, which the group owned in Cape Town, was sold after the close of the financial year-end.

SERVICE LEVELS

The board and the management of Compu-Clearing is conscious that good service levels are crucial for the continued profitability of the company. The staff compliment of Compu-Clearing will therefore be enhanced, both in quality and in number.

IT PLATFORM

Compu-Clearing remains committed to the IBM AS/400 (now known as the IBM I-series).

Compu-Clearing owns 54 of these processors. The IBM I-Series has proved itself over the years to be a robust and reliable workhorse, never subject to worms, or viruses or ever having been hacked into.

WIDE AREA NETWORKING

During the year under review, Compu-Clearing has completely dismantled its wide area network, and connected to the Telkom network. It has been a successful transition. Whilst some of the cost savings have filtered through already, other cost savings will only be realised in the coming financial year.

INTERNATIONAL ACTIVITIES

Compu-Clearing continues with its plans to market its services in other countries through the Internet. This is a project undertaken by only two individuals in the company (our technical director, Mr Mario Acosta-Alarcon, and myself). As soon as signals are evident that these activities will prove to be successful in meaningful numbers, additional staff will be hired specifically for this project, and a separate business division will be created, none of the other staff members of Compu-Clearing will have their focus diluted from servicing the South African customer base.

We enter the new year with excitement and enthusiasm, confident of the future for both our company and our country.

COMMENTARYWe are delighted to report the results for the year ended 30 June 2003. It has been a period of exceptional cash flow generation and further improvement on our already favourable liquidity. This positions us well for growth, particularly in the International arena. Compu-Clearing continues to build a steady and solid company based on annuity income. The nature of the business continues tochange, becoming focused on software for the Customs Clearing and Freight Forwarding Industry and less dependent on hardware and networking sales. Whilst our overall turnover has grown by 11%,core business turnover (software rental) has grown by 18%. Operating margin has dropped slightly by 1% remaining at a still very healthy 23%. Net margin has improved from 18% to 19%. Cash flow generated by operating activities increased by some 45%, due to Compu-Clearing having fulfilled its hardware renewal program. Some new IBM AS/400's are being purchased now continuing its commitment to that platform, thus ensuring long lasting returns on investments. The company will continue with its policy of paying an annual dividend, with this year’s dividend being double that of last year. We look ahead to the coming financial year, particularly the launching of our International services through the Internet. We have now completed the rationalisation of our network and the ensuing cost benefits will start filtering through during this coming financial year. Our local customer base continues to offer steady growth opportunities. We are continuing to strengthen our human resources, at both management and technical levels.

(Registration number 1998/015541/06) Share code CCL ISIN ZAE 000016564

REVIEWED RESULTS for the year ended 30 June 2003

Highlights :Headline earnings per share – 38%

Earnings per share – 29%

Attributable earnings – 23%

Operating margin – 23%

Net asset value per share – 14%

Total revenue – 11%

Cash flow from operating activities – 45%

Dividend declared – 100%

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www.compu-clearing.co.za

Year ended

30 June 2003

[Reviewed]

Year ended

30 June 2002

(Audited)R'000 R'0007,631 7,071 3,438 2,973

11,069 10,044 (93) (89) 675 62

11,651 10,017 (2,830) (3,213) (1,201) (1,046) 1,724 679 9,344 6,437

(2,317) (677) (2,992) (1,450) 4,035 4,310

12,401 8,091 16,436 12,401

Share capital

Share premium

Distributable reserves Total

R'000 R'000 R'000 R'000 Balance at 30 June 2001 418 14,368 11,602 26,388 Repurchase of shares (11) (1,439) (1,450) Attributable earnings 5,170 5,170 Dividend paid (1,046) (1,046) Balance at 30 June 2002 407 12,929 15,726 29,062 Repurchase of shares (24) (2,968) (2,992) Attributable earnings 6,350 6,350 Dividend paid (1,201) (1,201) Balance at 30 June 2003 383 9,961 20,875 31,219

Cash and cash equivalents at the end of the year

STATEMENT OF CHANGES IN EQUITY

Cash flow from investing activitiesCash flow from financing activitiesIncrease in cash and cash equivalentsCash and cash equivalents at the beginning of the year

Taxation paidDividend paidNet finance revenueCash flow from operating activities

Decrease in post retirement medical obligationsDecrease in working capitalCash generated by operations

CASH FLOW STATEMENT

Operating income before interest and taxationNon cash itemsCash generated by trading operations

BASIS OF PREPARATION OF FINANCIAL STATEMENTSThe financial statements have been prepared in accordance with South African statements of Generally Accepted Accounting Practice (GAAP) and the accounting policies used are consistent with the prior year.INDEPENDENT REVIEWThe Group’s auditors KPMG Inc, have reviewed the financial information for the year ended 30 June 2003. Their report is available for inspection at the registered office of the Company.DIVIDEND DECLAREDNotice is hereby given that a cash dividend of 6 cents per share (2002: 3 cents) (“the dividend”) has been declared, payable to shareholders recorded in the books of the Company at the close of business on Friday, 17 October 2003. Shareholders are advised that the last day to trade “cum” dividend will be Friday, 10 October 2003. The shares will trade “ex” dividend as from Monday, 13 October 2003, and the record date will be Friday, 17 October 2003. The pay date will be Monday, 20 October 2003. Share certificates may not be dematerialised or rematerialised during the period Monday, 13 October 2003 to Friday, 17 October2003, both days inclusive.Johannesburg A.Garber J. du Preez11 September 2003 (Chairman and Chief Executive) (Managing Director)

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

Transfer secretaries: Registered office:Computershare Limited 7 Drome RoadGround Floor Lyndhurst, 210670 Marshall Street PO Box 890856Johannesburg, 2001 Lyndhurst, 2106

30 June

2003 [Reviewed]

R'000

30 June 2002

(Audited) R'000

% Inc. /

(decr.) ASSETSNon current assets 14,513 14,880 Tangible assets 12,943 14,034 Financial assets 290 320 Deferred taxation asset 1,280 526 Current assets 22,735 18,914 Liquid current assets 16,436 12,401 Other current assets 6,299 6,513

Total assets 37,248 33,794

EQUITY AND LIABILITIESShareholders' funds 31,219 29,062Non-current liabilities 1,941 2,533Deferred taxation liability 38 537Post retirement medical obligations 1,903 1,996Current liabilities 4,088 2,199Total equity and liabilities 37,248 33,794

Net assets value per share [cents] 81.5 71.4 14

Year ended

30 June 2003

[Reviewed]

Year ended

30 June 2002

(Audited)

% Inc. /

(decr.)

R'000 R'000Sales - hardware and networking 1,323 1,257 Cost of sales 698 723 Net sales - hardware and networking 625 534 Rental and other revenue 32,156 28,896 Total revenue 32,781 29,430 11 Operating costs 25,150 22,359 - Distribution 17,757 16,809 - Admiistrtion 6,102 4,862 - Other 1,291 688

Operating profit 7,631 7,071 8 Net finance revenue 1,724 679 Profit before taxation 9,355 7,750 21 Taxation 3,005 2,580 Attributable earnings 6,350 5,170 23

Actual number of shares in issue ['000] 38,307 40,721 Weighted average number of shares in issue ['000] 39,571 41,581 Diluted weighted average number of shares in issue ['000] 43,741 43,561

Earnings per share [cents] 16.0 12.4 29 Headline earnings per share [cents] 16.1 11.7 38 Diluted earnings per share [cents] 15.2 12.2 25 Dividend paid per share [cents] 3.0 2.5 20 RECONCILIATION OF HEADLINE EARNINGS

Attributable earnings 6,350 5,170Adjusted for : Impairment of property 56 - Profit on disposal of fixed assets (36) (431) Taxation effect 11 129 Headline earnings 6,381 4,868 31 SEGMENTAL REPORTNet hardware and networking sales 625 534 17 Software rental income 21,826 18,454 18 Hardware rental income 8,735 8,794 (1) Networking rental income 1,322 1,529 (14) Other income 273 119 129 Total revenue 32,781 29,430 11 Operating profit 7,631 7,071Operating margin 23% 24%

BALANCE SHEET

INCOME STATEMENT

AuditorsSponsor


André Hofmeyr

Directorate and Management

Arnold Garber Chief executive

Johan du PreezManaging director

Mario Acosta-AlarconTechnical director

Milton LutrinNon-executive

Dave RosevearNon-executive

Mike SteeleNon-executive

Ari KatzNon-executive

Thomas MogaleNon-executive

Costa Efthymiades

Peter Curtis

Imran Mohamed

Robert Wright

Tony WebbNon-executive

Compu-Clearing Outsourcing LimitedCompu-Clearing (Proprietary) LimitedAudit Committee memberRemuneration Committee member

Alwyn RobbertseMarketing director


Corporate GovernanceThe directors subscribe to the highest business ethics and corporate practices as set out in the King report. The directors recognise the need to conduct the enterprise with the principles of openness, integrity and accountability and in accordance with generally accepted corporate practices. This recognition is evidenced by the directors’ support of the code.

Corporate code of conductCompu-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;•removing discrimination and the promotion of employees to realise their potential through training and development of their skills; and •being proactive toward environmental and social issues.

Board of directorsThe board of directors comprises four executive and six non-executive directors. These directors have a range of differing skills and experience, which they bring to bear for the benefit of the group.

The board meets regularly 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 has considered the merit of splitting the roles of Chairman of the Board and the Chief Executive Officer. It has concluded that it is best, for the time being, to keep the roles together in the same person, as it may be perceived, should the roles be split, that this is an exit in some form by Arnold Garber, the founder of the company, which is not the case, and that the downside risks outweigh any possible benefits. The Board believes, that for the time being, it is in the Group's best interest that the Chief Executive Officer also be the Chairman of the Board. The situation may change in the future.

Audit committee

The Audit Committee comprises executive and non-executive directors, with a non-executive appointed as the chairman.

The committee meets periodically with management and the external auditors who have free access to this committee. The committee addresses appropriate policies, internal controls and external audit matters, reviews the annual financial statements and addresses any other issues referred to it by the board or external auditors.

Remuneration and human resources committee

A Remuneration and Human Resources Committee has been appointed and is chaired by a non-executive director. The committee is responsible for reviewing the compensation arrangements for senior executives and non-executive directors. The committee is also responsible for reviewing management incentive schemes, share option schemes, termination entitlements and fringe benefit policies.

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.

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. The group’s Second Employment Equity Report was lodged timeously, as prescribed by legislation, with the Department of Labour at the end of September 2002. Its implementation is well on track with regular meetings taking place with the company’s elected employee representatives who monitor progress.


Directors’ responsibilities and approval of financial statements


The annual financial statements set out on pages 14 to 33 are the responsibility of the directors of the company.

The directors are responsible for the preparation of financial statements that fairly present the state of affairs of the company and the group. The financial statements have been prepared by management in accordance with South African Statements of Generally Accepted Accounting Practice, the South African Companies Act and are based on appropriate accounting policies which have been consistently applied.

The directors are responsible for selecting and adopting sound accounting practices, for maintaining a system of internal control that, among other things, will ensure the preparation of financial statements that achieve fair presentation.

The directors are satisfied that the group and the company will be going concerns for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

The auditors have concurred with the above statements.

The annual financial statements were approved by the directors on 11 September 2003 and are signed on their behalf by :

A Garber Johan Du Preez

Chairman and Managing DirectorChief 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 and Associates (CA) SACompany Secretary

To the members of

Compu-Clearing Outsourcing Limited

We have audited the annual financial statements and Group annual financial statements of Compu-Clearing Outsourcing Limited, set out on pages 14 to 33 for the year ended 30 June 2003. The financial statements are the responsibility of the company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit.

Scope

We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes :

•Examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,

•Assessing the accounting principles used and significant estimates made by management, and

•Evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Audit opinion

In our opinion, the financial statements fairly present, in all material respects, the financial position of the company and of the Group at 30 June 2003 and the results of their operations and cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Companies Act in South Africa.

KPMG Inc.Registered Accountants and AuditorsChartered Accountants (SA)

Johannesburg

11 September 2003

Report of the Independent Auditors


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 2003.

Review of activities

Compu-Clearing Outsourcing Limited (“Compu-Clearing”) is a holding and finance company whose major subsidiaries carry on the business of outsourcing computer services.

The results of the Group are reviewed in the Chief Executive’s Report.

Share capital

There have been no changes 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 repurchased 2 414 570 (2002 – 1 110 527) of its own shares on the open market itself or through a wholly-owned subsidiary in terms of this authorisation during the year. On 14 October 2002 and 15 May 2003, 2 000 000 shares and 3 020 627 shares respectively were cancelled. No shares were cancelled during 2002.

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 2003 members of the schemes had elected to acquire 155 000 shares in terms of the Compu-Clearing Share Incentive Scheme at R1 each.

The following share options were outstanding at 30 June 2003 :

Year of grant Option price (cents) Number of options1999 100 1 970 000 2003 100 2 200 000

4 170 000

Movements for the year2003 2002

Beginning of year 1,980,000 2,455,000 Additional option granted 3 March 2003 2,200,000 Lapsed (10,000) (475,000) Exercised - -

Directors - - Employees - -

At end of year 4,170,000 1,980,000

Exercise price (cents)

Number of options Expiry date

M Acosta-Alarcon 100 550 000 November 2008A Robbertse (resigned September 2003) 100 200 000 November 2008

At year end executive directors held 750 000 (2002 - 500 000) share options as detailed below.

Directors' fees

Basic remuneration Bonus

Other allow ances

Retirement / medical Total

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

ExecutiveA Garber - 725 - 45 178 948 J H P du Preez - 590 51 108 122 871 M Acosta-Alarcon - 358 30 134 78 600 A Robbertse - 169 - 28 35 232 Non-executiveA Z Katz 22 - - - - 22 M Lutrin 22 - - - - 22 T M Mogale 22 - - - - 22 D K Rosevear 6 - - - - 6 M J Steele 12 - - - - 12

84 1,842 81 315 413 2,735

ExecutiveA Garber - 666 - 45 154 865 J H P du Preez - 500 - 83 100 683 M Acosta-Alarcon - 305 39 115 66 525 A Robbertse - 304 42 55 66 467

Non-executiveA Z Katz 20 - - - - 20 M Lutrin 20 - - - - 20 T M Mogale 20 - - - - 20 D K Rosevear - - - - - - M J Steele - - - - - -

60 1,775 81 298 386 2,600

2003

2002

The directors' remuneration in respect of the financial year ended 30 June 2003 w as as follow s :Report of the Directors (continued)


Other allowances comprises company car or travel allowances.DirectorsThe directors of your company are as follows:A Garber *J H P du Preez *M Acosta-Alarcon *A Z Katz M LutrinT M MogaleA Robbertse *D K RosevearM J Steele*executive directorsA Garber and J H P du Preez have service contracts with the company that remain in force until November 2003. SecretaryLutrin & Associates (CA) SABusiness address: Postal address:1st Floor Block “A” PO Box 37172Sandhavon Office Park Birnam Park12 Pongola Crescent 2105Eastgate Ext. 17Sandton2148


Dividends

A dividend of 3,0 (2002 - 2,5) cents per share amounting to R1 201 153 (2002 - R1 045 799) relating to the year ended 30 June 2002 was declared and paid to non-group shareholders on 25 September 2002.

A dividend of 6,0 cents per share amounting to R2 402 307 relating to the year ended 30 June 2003 was declared and will be paid to shareholders on 20 October 2003. STC of R300 288 will be paid on this dividend.

Special resolutions

The following special resolutions were passed and registered during the year :

-the granting to a subsidiary of Compu-Clearing of a general authority to acquire shares in its holding company.

Litigation statement

The group is not presently involved in any pending or outstanding litigation of which the directors are aware.

Subsidiary companies

Issued share

capitalPrincipal business

2003 2002 2003 2002Subsidiary R R'000 R'000 R'000 R'000Compu-Clearing (Proprietary) Limited 6 000 Computer

services 1,281 1,281 6,342 4,113 Compu-Clearing Drome Road Property (Proprietary) Limited

100 Property owning - - 3,018 3,018

Drome Road Share Block (Proprietary) Limited

600 Property owning - - - -

Compu-Clearing Cape Town Property (Proprietary) Limited

100 Property owning - - 587 587

Three DX Property and Investments (Proprietary) Limited

100 Investment in holding company

shares - - 2,027 5,387 Compu-Clearing Outsourcing Hardware (Proprietary) Limited

150 Computer hardware

rental - - - - Compu-Clearing Outsourcing Networking (Proprietary) Limited

100 Network service

provider - - - - Compu-Clearing Outsourcing Software (Proprietary) Limited

100 Software rental

services - - - - 1,281 1,281 11,974 13,105

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

Report of the Directors (continued)

Directors' interests

2003 2002A Garber 13,688,736 13,688,736 J H P du Preez 4,500,000 4,500,000 Other directors 724,300 724,300

18,913,036 18,913,036

2003 2002% %

A Garber 35,7 33,6 J H P du Preez 11,7 11,1 The Bidvest Group Limited 25,8 24,3 Barnun Investments (Proprietary) Limited 6,0 5,6 Comshelf Limited 10,4 9,8

Results of subsidiaries

2003 2002R'000 R'000

Profits 8,040 5,367 Losses (1,767) -

6,273 5,367

There have been no material changes in the shareholdings of the directors between year end and the date of this report.

At 30 June 2003, the indirect beneficial interests of the directors in the shares of the company were as follows :

There were no direct beneficial or non-beneficial holdings.

Major shareholders

The attributable interest of the holding company in the aggregate profits or losses after taxation of its subsidiaries is :

Shareholders with a beneficial interest of more than 5% of the issued share capital of the group at 30 June 2003 were :

Report of the Directors (continued)


Borrowing powers

The borrowing powers of the group are unlimited.

Post balance sheet events

No other material events have occurred since the date of these financial statements and the date of approval thereof, the knowledge of which would affect the ability of the users of these statements to make proper evaluations and decisions.

2003 2002 2003 2002Note R'000 R'000 R'000 R'000

ASSETSNon-current assets …………………………………… 14,513 14,880 13,262 14,386

Fixed assets ……………...…………………………… 2 12,943 14,034 - - Financial assets …………..…………………………… 3 290 320 - - Interest in subsidiaries …………..…………………… 4 13,255 14,386 Deferred taxation …………..………………………… 5 1,280 526 7 -

Current assets ……………...………………………… 22,735 18,914 5,151 6,520

Inventories …………...………………………………… 15 29 - - Work in progress …………………...………………… - 2,150 - - Trade and other receivables ………………………… 6,284 4,136 126 181 Taxation ……………..…………………..……………… - 198 272 351 Bank and cash ………………………………………… 16,436 12,401 4,753 5,988

Total assets …………………………………………… 37,248 33,794 18,413 20,906

EQUITY AND LIABILITIESEquity and reserves ………………..……………… 31,219 29,062 18,072 20,458

Share capital and premium …………………………… 7 10,344 13,336 12,461 18,723 Distributable reserve …………………………………… 8 20,875 15,726 5,611 1,735

Non-current liabilities ……………………………… 1,941 2,533 - 8

Deferred taxation ……………………...……………… 5 38 537 - 8 Post retirement medical obligations ………………… 9 1,903 1,996 - -

Current liabilities …………………..………………… 4,088 2,199 341 440

Trade and other payables …………….……………… 2,858 2,199 341 440 Taxation …...………………..………………………… 1,230 - - -

Total equity and liabilities ………………………… 37,248 33,794 18,413 20,906

Group Company

Balance Sheets at 30 June


2003 2002 2003 2002Note R'000 R'000 R'000 R'000

Sales - hardware and networking …………………… 1,323 1,257 - - Less cost of sales …………………………………… 698 723 - -

Net sales - hardware and networking ……………… 625 534 - - Rental and other revenue ……………………………… 32,156 28,896 5,600 2,137

Total revenue …………………………………………… 32,781 29,430 5,600 2,137 Operating costs ……………………………………… 25,150 22,359 715 865

- Distribution ………………………………………….. 17,757 16,809 - - - Administration ………………………………………… 6,102 4,862 - - - Other ………………………………………………… 1,291 688 715 865

Operating profit ………………………………………… 10 7,631 7,071 4,885 1,272 Net finance revenue …………………………………… 11 1,724 679 569 437

Profit before taxation ………………………………… 9,355 7,750 5,454 1,709 Taxation ………………………………………………… 12 3,005 2,580 286 129

Attributable earnings ………………………………… 6,350 5,170 5,168 1,580

Actual number of shares in issue ('000) …………… 38,307 40,721 Weighted average number of shares in issue ('000)………………………………………………… 39,571 41,581 Diluted weighted average number of shares in issue ('000)…………………………………………. 43,741 43,561

Earnings per share (cents) …………………………… 14 16,0 12,4

Headline earnings per share (cents) ………………… 14 16,1 11,7Diluted earnings per share (cents) …………………… 14 15,2 12,2

Dividends per share (cents) ………………………… 3,0 2,5

Group Company

Income Statements for the year ended 30 June


Share capital

Share premium

Distributable reserve Total

R'000 R'000 R'000 R'000Balance at 30 June 2001 ……………………… 418 14,368 11,602 26,388 Repurchase of shares ………………………… (11) (1,439) (1,450) Attributable earnings …………………………… 5,170 5,170 Dividend paid ………………………………….. (1,046) (1,046)

Balance at 30 June 2002 ……………………… 407 12,929 15,726 29,062 Repurchase of shares ………………………… (24) (2,968) (2,992) Attributable earnings …………………………… 6,350 6,350 Dividend paid ………………………………….. (1,201) (1,201)

Balance at 30 June 2003 …………………… 383 9,961 20,875 31,219

Share capital

Share premium

Distributable reserve Total

R'000 R'000 R'000 R'000Balance at 30 June 2001 ……………………… 451 18,272 1,281 20,004 Attributable earnings …………………………… 1,580 1,580 Dividend paid ………………………………….. (1,126) (1,126)

Balance at 30 June 2002 …………………….. 451 18,272 1,735 20,458 Repurchase of shares ………………………… (51) (6,211) (6,262) Attributable earnings …………………………… 5,168 5,168 Dividend paid ………………………………….. (1,292) (1,292)

Balance at 30 June 2003 …………………… 400 12,061 5,611 18,072

Company

Group

Statements of Changes in Equity for the year ended 30 June



2003 2002 2003 2002R'000 R'000 R'000 R'000

9,344 6,437 3,896 331

19 11,069 10,044 4,885 1,272

(93) (89) - - 20 675 62 (44) 116

11,651 10,017 4,841 1,388 (5) (326) (2) (58) 1,729 1,005 571 495

21 (2,830) (3,213) (222) (368) (1,201) (1,046) (1,292) (1,126)

(2,317) (677) 1,131 522

(2,627) (3,099) - - 310 2,422 - - 1,131 522

(2,992) (1,450) (6,262) -

4,035 4,310 (1,235) 853

12,401 8,091 5,988 5,135

16,436 12,401 4,753 5,988

Cash and cash equivalents at the beginning of the year ………………………………………………………

Cash and cash equivalents at the end of the year………

Decrease in loans to subsidiaries.………………………

CASH FLOWS FROM FINANCING ACTIVITIES………

Repurchase of share capital ………………………………

Increase / (decrease) in cash and cash equivalents……

Dividends paid ………………………………………………

CASH FLOWS FROM INVESTING ACTIVITIES………

Additions to fixed assets …………………………………Proceeds on disposal of fixed assets …………………

Cash generated by operations ……………………………Interest paid …………………………………………………Interest received ……………………………………………Taxation paid ………………………………………………

CASH FLOWS FROM OPERATING ACTIVITIES……

Cash generated by trading operations……………………Decrease in post retirement medical obligations…………………………………………………Decrease / (increase) in working capital ………………

Note

Group Company

Cash Flow Statements for the year ended 30 June

21

Notes to the Financial Statements for the year ended 30 June 2003


1. ACCOUNTING POLICIES The financial statements are prepared in accordance with the following principal accounting policies,which are consistent with those adopted in the previous financial year.

1.1. Statement of compliance The financial statements and group financial statements are prepared in accordance withSouth African Statements of Generally Accepted Accounting Practice and the requirements ofthe South African Companies Act.

1.2. Basis of preparation The financial statements and group financial statements are prepared on the historical cost basis, except for certain financial instruments which are stated at fair value.

1.3. Basis of consolidation

The consolidated financial statements incorporate those of the company and all itssubsidiaries. The results of any subsidiaries acquired or disposed of during the year areincluded from the effective dates of acquisition and up to the effective dates of disposal.

Intergroup balances, intergroup transactions and resulting unrealised profits are eliminated.

1.4. Fixed assets

Fixed assets, excluding land, are stated at cost less accumulated depreciation. Independentvaluations of land and buildings are obtained at least every five years. In the intervening yearssuch valuations are reviewed by the directors to ensure that no permanent decline in the value of land and buildings has occurred. Depreciation is provided on the straight line basis, to write down the cost of fixed assets byequal instalments over their estimated economic lives, which may vary between three and fiveyears.

1.5. Intangible assets

Goodwill arising from the difference between the consideration paid and the fair value of nettangible assets of subsidiaries at the date of the acquisition and purchased trademarks arewritten off on a straight line basis over their estimated useful lives. Expenditure on research activities, undertaken with the prospect of gaining new scientific ortechnical knowledge and understanding, and expenditure on internally generated goodwill andbrands is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan ordesign for the production of new or substantially improved products and processes, iscapitalised if the product or process is technically and commercially feasible and the group has sufficient resources to complete development. The expenditure capitalised includes the cost ofmaterials, direct labour and an appropriate portion of overheads. Other developmentexpenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and impairmentlosses. The capitalised costs are amortised over a period of five years.

1.6. Impairment

The carrying amounts of the group’s assets are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If any such indication exists, theasset’s recoverable amount is estimated. Impairment losses are recognised in the income statement.

1.7. Financial instruments Financial instruments carried on the balance sheet include financial assets, investments, tradeand other receivables, bank and cash balances and trade and other payables. The group doesnot participate in financial instruments to reduce any of these risks. Financial instruments areinitially measured at cost, which includes transaction costs. Subsequent to the initialrecognition these instruments are measured as set out below.

Investments

Non-trading investments are stated at fair value. Investments in subsidiaries are stated attangible net asset value at acquisition.

Trade and other receivables

Trade and other receivables originated by the group are stated at cost less provision fordoubtful debts.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value, based on the relevant exchange ratesat balance sheet date.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. Gains and losses on subsequent measurement Gains and losses arising from a change in the fair value of financial instruments that are notpart of a hedging relationship are included in the net profit or loss in the period in which the change arises.

1.8. Inventories Inventories are carried at the lower of cost and net realisable value.

1.9. Revenue recognition and work in progress

Rentals and fees are accounted for when the relevant activities are conducted. Work inprogress represents the value of work performed but not yet invoiced. Interest is recognised on a time proportion basis taking account of the principal outstandingand the effective rate to maturity when it is determined that such income will accrue to the group.

Notes to the Financial Statements (continued) 30 June 2003


1.10. Revenue Group Revenue is defined as rentals and fees charged for computerised customs clearing and otherservices, excluding value added tax. Company Revenue comprises management fees and dividends received from subsidiaries.

1.11. Taxation

Current taxation comprises tax payable calculated on the basis of the expected taxable income for the year, using the tax rates enacted at the balance sheet date and any adjustments of tax payable for previous years.

Deferred taxation is provided on the comprehensive liability method and represents the potentialfuture liability for taxation in respect of items of income and expenditure which are recognised fortax purposes in periods different from those during which they are brought into account in thefinancial statements. Account is taken of deferred taxation assets where it is probable that sufficienttaxable profits will be available to ensure the realisation of those assets.

1.12. Employee benefits

Current contributions to retirement funds are based on current salary and are recognised in the results for the year.

Leave benefits due to employees are recognised in full.

Liabilities for post retirement medical benefits accruing to past employees are actuarially calculatedand unfunded liabilities recognised as a liability in the financial statements.

1.13. Dividends paid

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

1.14. Segment reporting

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 intothree major operating divisions :

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

Hardware rental, comprising the rental of hardware to operate the above software ; and

Networking, comprising the rental and provision of networking services to clients.

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 relevantportion of enterprise revenue and expenses that can be allocated on a reasonable basis to asegment, 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 directlyattributable to the segment or can be allocated to the segment on a reasonable basis. Segmentassets and liabilities do not include income tax balances.

Notes to the Financial Statements (continued) 30 June 2003


2003 2002 2003 2002R'000 R'000 R'000 R'000

2. FIXED ASSETS

Cost

1,595 1,225 - - 5,563 5,497 - - 19,076 22,497 - - 2,290 2,167 - -

28,524 31,386 - -

Accumulated depreciation

416 97 - - 310 176 - - 13,191 15,704 - - 1,664 1,375 - -

15,581 17,352 - -

Net book value

1,179 1,128 - - 5,253 5,321 - - 5,885 6,793 - - 626 792 - -

12,943 14,034 - -

2.1 Net book value at beginning of year 14,034 16,450 - -

Additions …………………………………………… 2,627 3,099 - -

Internally generated software ……………………… 370 272 - - Freehold land and buildings ……………………… 66 316 - - Computers …………………………………………… 2,021 2,333 - - Furniture, equipment and vehicles ………………… 170 178 - -

Disposals …………………………………………… Computers …………………………………………… (274) (1,991) - -

Depreciation / impairment ……………………… (3,444) (3,524) - -

Internally generated software ……………………… (319) (97) - - Buildings - depreciation……………………………… (78) (74) - - - impairment ……………………………… (56) - - - Computers …………………………………………… (2,655) (3,012) - - Furniture, equipment and vehicles ………………… (336) (341) - -

Net book value at end of year ………………… 12,943 14,034 - -

Group Company

Internally generated software ……………………………Freehold land and buildings ……………………………Computers ………………………………………………Furniture, equipment and vehicles ……………………

Internally generated software ……………………………Buildings …………………………………………………

Computers ………………………………………………Furniture, equipment and vehicles ……………………

Computers ………………………………………………Furniture, equipment and vehicles ……………………

Internally generated software ……………………………Freehold land and buildings ……………………………


Notes to the Financial Statements (continued) 30 June

2003 2002 2003 2002R'000 R'000 R'000 R'000

2. FIXED ASSETS (continued)

2.2 Details of freehold land and buildings

Section no. 70 in the scheme known as Pinelands Business Park, situated at Maitland, Cape Town ………………………………………… 706 706 - - Portions 1, 2 and 3 of Erf 14 Formain Township with buildings thereon ……………………………. 4,816 4,750 - - Timeshare units ……………………………………… 41 41 - -

5,563 5,497 - -

2.3 Impairment of buildings

An impairment loss has been recognised against the group's Cape Town building since the group no longer trades from this building and the market for such office space in the area is depressed.

3. FINANCIAL ASSETS

290 320 - -

4. INTEREST IN SUBSIDIARIES 1,281 1,281 11,974 13,105

13,255 14,386

5. DEFERRED TAXATION

1,280 526 7 - (38) (537) - (8)

1,242 (11) 7 (8)

Deferred taxation can be analysed as follows :

750 874 - - (898) (969) - - (41) (44) (3) (14) - (645) - - 80 68 10 - 780 107 - 6 571 598 - -

1,242 (11) 7 (8)

(11) 61 (8) (10) 1,253 (72) 15 2

1,242 (11) 7 (8)

Company

Momentum Life endowment policies …………………The surrender values of the policies totalled R290 000 (2002 - R320 000).

Shares at cost less amounts written off ………………Owing by subsidiaries ……………………………………

Deferred taxation assets ………………………………

Group

Deferred taxation liabilities ………………………………

Accelerated write off of trademarks for book purposes ………………………………………………..Accelerated capital allowances for tax purposes ……Payments in advance ……………………………………

Net deferred taxation asset / (liability) …………………

Work in progress …………………………………………

pay ………………………………………………………Tax losses ………………………………………….Post retirement medical obligations ……………………

Provisions for doubtful debts, bonusses and leave

The movement in deferred taxation can be analysed as follows :Balance at beginning of the year ………………………Per income statement …………………………………

Balance at end of the year ………………………………



2003 2002 2003 2002R'000 R'000 R'000 R'000

6.

- Payable within one year …………………………… 64 184 - - - Payable thereafter …………………………………… - 74 - -

64 258 - -

7.

2,000 2,000 2,000 2,000

383 407

400 451 9,961 12,929 12,061 18,272

12,929 14,368 18,272 18,272 (2,968) (1,439) (6,211) -

10,344 13,336 12,461 18,723

407 418 451 451 (24) (11) (51) -

- held by subsidiary company ……………………… (17) (11) - - - shares cancelled …………………………………… (7) - (51) -

383 407 400 451

COMMITMENTS AND CONTINGENCIES

Operating leases

SHARE CAPITAL AND PREMIUM

each ……………………………………………………..Share premium ……………………………………………

Share premium brought forward ………………………Share repurchases ………………………………………

Repurchased during the year ……………………………

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

The group repurchased 2 414 570 (2002 - 1 110 527) of its shares in the open market at an average price of R1,24 (2002 - R1,31) in terms of a special resolution passed on 24 January 2003.

Balance at beginning of the year ………………………

Balance at end of the year ………………………………

200 000 000 shares of 1 cent each ……………………

Issued

each ……………………………………………………..

Reconciliation of group and company issued shares :

38 306 875 (2002 - 40 721 445) shares of 1 cent

40 038 445 (2002 - 45 059 072) shares of 1 cent

Group Company

Authorised

The purchase of an IBM 9406 I-series AS400 for R554 500 has been contracted for prior to 30 June 2003 (2002 - nil) and was settled from internal resources in August 2003.

Capital commitment



2003 2002 2003 2002R'000 R'000 R'000 R'000

8.

- Company …………………………………………… 5,611 1,735 5,611 1,735 - Subsidiaries ………………………………………… 15,264 13,991 - -

20,875 15,726 5,611 1,735

9. 1,903 1,996 - -

1,996 2,085 - -

(93) (89) - -

1,903 1,996 - -

1,903 1,996 - -

- Discount rate ………………………………………… 10% 10%- Inflation rate (CPI)…………………………………… 7% 8%- Healthcare cost inflation …………………………… 15% 15%

10.

253 222 253 210

- Audit fee - current year …………………………… 190 210 190 210 - Other services ……………………………………… 63 12 63 -

3,388 3,524 - -

- Internally generated software ……………………… 319 97 - - - Buildings ……………………………………………… 78 74 - - - Computers …………………………………………… 2,655 3,012 - - - Furniture, equipment and vehicles ………………… 336 341 - -

Employee costs ………………………………………… 15,309 13,164 - - 30 (120) - -

- Buildings ……………………………………………… 56 - - - 23 27 23 7

- Premises …………………………………………… 175 125 - -

Income5,000 1,777

(36) (431) - - Profit on disposal of fixed assets ………………………

Impairment of fixed assets ………………………………

OPERATING PROFITOperating profit is stated after accounting for the following :

Fair value adjustment of financial assets …………….

Dividend from subsidiaries ………………………………

The group provides post retirement medical benefits to certain retired employees.

obligation…………………………………………………

provision………………………………………………….

Operating lease charges ………………………………Listing fees ………………………………………………

Balance at end of year …………………………………

Group

Closing provision raised against unfunded obligation.

Auditors' remuneration …………………………………

obligation…………………………………...……………

Depreciation ………………………………………………

Key actuarial assumptions

Charges

Actuarially determined present value of total

Company

DISTRIBUTABLE RESERVERetained income

POST RETIREMENT MEDICAL OBLIGATIONS

Opening provision raised against unfunded

Subsidies to retired employees charged against



2003 2002 2003 2002R'000 R'000 R'000 R'000

11.

1,729 1,005 571 495 (5) (326) (2) (58)

1,724 679 569 437

12.

4,108 2,377 151 - (1,253) 72 (15) (2)

150 131 150 131

3,005 2,580 286 129

% % % %

30.0 30.0 30.0 30.0 1.6 1.7 2.7 7.7 0.5 1.6 - 1.0

- - (27.5) (31.2)

32.1 33.3 5.2 7.5

13.

1,201 1,046 1,292 1,126

14.

6,350 5,170 56 -

(36) (431) 11 129

6,381 4,868

Group Company

NET FINANCE REVENUE

Income attributable to shareholders ……………………

Tax rate reconciliation

Company tax rate ………………………………………

Disallowed expenditure …………………………………Exempt income …………………………………………

Effective rate ………………………………………………

Secondary tax on companies …………………………

DIVIDENDS PAID

(2002 - 25 September 2001) ……………………………Dividend no. 5 declared 30 September 2002

Impairment of asset …………………………………..…

EARNINGS PER SHARE

The calculation of earnings per share is based on income attributable to shareholders of R6 350 000 (2002 - R5 170 000) and a weighted average of 39 571 429 (2001 - 41 581 402) shares in issue.

The calculation of headline earnings per share is based on headline earnings of R6 381 000 (2002 - R4 868 000) and a weighted average of 39 571 429 (2002 - 41 581 402) shares in issue. The following adjustments to income attributable to shareholders were taken into account in the

Profit on disposal of fixed assets ………………………Tax thereon ………………………………………………

Interest received …………………………………………Interest paid ………………………………………………

Current ……………………………………………………

Secondary tax on companies …………………………Deferred ……………………………………………………

TAXATION

calculation of headline earnings :



2003 2002 2003 2002R'000 R'000 R'000 R'000

14.The calculation of diluted earnings per share is based on earnings of R6 656 000 (2002 - R5 314 000) and an adjusted weighted average of 43 741 429 (2002 - 43 561 402) shares in issue, which includes the 4 170 000 (2002 - 1 980 000) outstanding share options.

The following adjustments to income attributable to shareholders were taken into account in the calculation of diluted earnings :

Income attributable to shareholders …………… 6,350 5,170 Notional interest on proceeds of exercisedoptions ……………………………………………… 438 206 Taxation thereon ………………………………….. (132) (62)

6,656 5,314

Executive directors

Non-executive directors

Executive directors

Non-executive directors

15.

- 84 - 60 2,651 - 2,540 -

2,651 84 2,540 60

2003 2002 2003 2002R'000 R'000 R'000 R'000

16.

623 683 - -

Company

For services as directors ……………………………………For management services …………………………………

Group

RETIREMENT BENEFITS

non-contributory members ……………………...................

The group contributes to a defined contribution plan which is governed by the Pension Funds Act. At year end, 91% of the 64 permanent employees were members of the fund (2002 - 90% of 67). The company makes the full contribution as the members are all

Group Company

DIRECTORS' EMOLUMENTS

EARNINGS PER SHARE (continued)

2003 2002



17. RELATED PARTIES AND RELATED PARTY TRANSACTIONS

Lutrin & Associates (CA) SA are corporate advisors to Compu-Clearing. M Lutrin is proprietor of Lutrin &Associates and a non-executive director of Compu-Clearing. Fees paid to Lutrin & Associates during theperiod were at market related rates. The Bidvest Group Limited owns 25.8% of the shares in Compu-Clearing group and two members of itsmanagement team are non-executive directors of Compu-Clearing. The following transaction took placeduring the period :

- The Bidvest Group is a major player in the freight industry and accordingly several of its subsidiariesare customers of Compu-Clearing and transact with the company at market related rates.

Directors’ emoluments are set out in the directors’ report and note 15.

18. FINANCIAL INSTRUMENTS Exposure to currency, interest rate and credit risk arises in the normal course of the group’s business. Currency risk

The group incurs foreign currency risk as a result of transactions which are denominated in a currency otherthan the group’s reporting currency. The value of these transactions is not significant and is not hedged.

Interest rate risk

The group adopts a policy of ensuring that its borrowings are at market related rates to address its interestrate risk.

Credit risk

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. Reputablefinancial institutions are used for investing and cash handling purposes. At balance sheet date, there wereno significant concentrations of credit risk. The maximum exposure to credit risk is represented by thecarrying amount of each financial asset in the balance sheet.

Fair values

The carrying amounts of cash and cash equivalents, receivables and trade and other payables approximatetheir fair values reflected in the balance sheet due to the short-term maturities of these assets and liabilities.



2003 2002 2003 2002R'000 R'000 R'000 R'000

19.

9,355 7,750 5,454 1,709 1,714 2,294 (569) (437)

- Items not affecting the flow of funds ………………… 3,438 2,973 - - - Depreciation …………………………………………… 3,388 3,524 - - - Fair value adjustment of financial assets..…………… 30 (120) - - - Impairment of fixed assets …………………………… 56 - - - - Profit on disposal of fixed assets …………………… (36) (431) - - - Finance charges ……………………………………… 5 326 2 58 - Interest received ……………………………………… (1,729) (1,005) (571) (495)

11,069 10,044 4,885 1,272

20.14 (4) - -

2,150 25 - - (2,148) 284 55 (12)

659 (243) (99) 128

675 62 (44) 116

21.

198 (507) 351 114 (4,258) (2,508) (301) (131)

1,230 (198) (272) (351)

(2,830) (3,213) (222) (368)

Decrease in work in progress ……………………………

year ……………………………………………………..Per income statement ……………………………………Taxation payable / (receivable) at end of the year ………

TAXATION PAIDTaxation receivable / (payable) at beginning of the

Decrease / (increase) in inventories ………………………

(Increase) / decrease in trade and other receivables……Increase / (decrease) in trade and other payables ………

DECREASE / (INCREASE) IN WORKING CAPITAL

Adjustments …………………………………………………

Group Company

CASH GENERATED BY TRADING OPERATIONSProfit before taxation ………………………………………




Softw are Hardw are Netw orking Other Total R'000 R'000 R'000 R'000 R'000

Revenue - External sales …………………………………… 465 127 33 - 625 - External services ………………………………… 22,130 8,482 1,323 221 32,156 Total revenue ……………………………………… 22,595 8,609 1,356 221 32,781

Segment results Segment results …………………………………… 12,454 2,405 101 (7,214) 7,746 Corporate expenses ……………………………… - - - (115) (115) Operating prof it …………………………………… 12,454 2,405 101 (7,329) 7,631 Interest expense …………………………………… - - - (5) (5) Interest income ……………………………………… - - - 1,729 1,729 Taxation ……………………………………………. (2,620) (738) (14) 367 (3,005)

Attributable earnings ……………………………… 9,834 1,667 87 (5,238) 6,350

Other information

Segment assets …………………………………… 5,474 6,580 254 23,660 35,968

Segment liabiliaties ………………………………… 1,608 744 37 2,372 4,761

Capital expenditure ………………………………… 770 1,621 - 236 2,627 Depreciation ……………………………………… 588 2,387 - 413 3,388 Impairment ………………………………………… - - - 56 56

Revenue - Exteral sales ……………………………………… - 373 161 - 534 - External services ………………………………… 17,947 8,892 1,750 307 28,896 Total revenue ……………………………………… 17,947 9,265 1,911 307 29,430

Segment result Segment result ……………………………………. 10,351 5,701 (734) (7,745) 7,573 Corporate expenses ……………………………… - - - (502) (502) Operating prof it …………………………………… 10,351 5,701 (734) (8,247) 7,071 Interest expense …………………………………… - - - (326) (326) Interest income ……………………………………… - - - 1,005 1,005 Taxation …………………………………………… (1,419) (1,161) - - (2,580)

Attributable earnings ……………………………… 8,932 4,540 (734) (7,568) 5,170

Other information

Segment assets …………………………………… 2,368 5,465 10 25,227 33,070

Segment liabiliaties ………………………………… - - - 4,195 4,195

Capital expenditure ………………………………… 601 2,004 - 494 3,099 Depreciation ……………………………………… 97 3,012 - 415 3,524 Impairment ………………………………………… - - - - -

2003

2002

Segmental information 30 June


Analysis of Shareholders 30 June 2003

No. of share-

holders

% of share-

holders in group

% of share-

holders in company

No. of Shares

% of shares issued

in group

211 70.6 70.3 1 - 5,000 376,140 1.0 42 14.0 14.0 5,001 - 10,000 340,160 0.9 30 10.0 10.0 10,001 - 100,000 901,366 2.4 11 3.7 3.7 100,001 - 500,000 2,316,273 6.0 - - - 500,001 - 1,000,000 - - 5 1.7 1.7 1,000,001 and over 34,372,936 89.7

299 100.0 99.7 38,306,875 100.0 1 0.3 1,731,570

300 100.0 40,038,445

% of share-

holders in company

No. of share-

holdersNo. of

shares

% of total shares held

in group

3.3 10 19,436,445 50.7

16.4 49 17,159,653 44.8 80.0 240 1,710,777 4.5 0.3 1 1,731,570 -

100.0 300 40,038,445 100.0

91.3 274 4,646,363 11.6 8.7 26 35,392,082 88.4

100.0 300 40,038,445 100.0

3.7 11 21,168,015 52.9 4.0 12 239,867 0.6

0.3 1 100,000 0.2 0.7 2 13,884,200 34.7

8.7 26 35,392,082 88.4

No. of Shares

% shareholding

of group

13,688,736 35.7 4,500,000 11.7 9,884,200 25.8 4,000,000 10.4 2,300,000 6.0

34,372,936 89.6

1,731,570

36,104,506

Total shares held in the groupHeld by subsidiary company - Three DX Property and Investments (Proprietary) Limited

Company total

The Johan du Preez Family TrustThe Bidvest Group LimitedComshelf LimitedBarnun Investments (Propertary) Limited

Major shareholders in the group and company are :

The Arnold Garber Family Trust

Any person with an interest of 10% or more

Total company shareholding

Directors and subsidiariesAssociates of directors and subsidiariesTrustees of any share schemes for directors or employees of the company

Non-publicly held

Subsidiary company

Total company shareholding

Publicly heldNon-publicly held

Shareholder spread

Directors and senior managementFinancial institutions, other corporates and trustsIndividuals

Shareholding

Held in groupSubsidiary company holding

Held in company

Shareholders’ Diary 30 June 2003


Financial year end 30 June Annual general meeting 16 January 2004 Reports - Preliminary report and dividend announcement 11 September 2003 - Interim profit announcement February - Annual financial statements December Dividend Last day to trade cum the dividend Friday, 10 October 2003 Compu-Clearing securities trade ex-dividend Monday, 13 October 2003 Record date for the dividend Friday, 17 October 2003 Dividend paid Monday, 20 October 2003

Compu-Clearing Outsourcing Limited (Registration number 1998/015541/06); Share code: CCL; ISIN code: ZAE 000016564Notice 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 on 16 January 2004 at 14h00 for the following purposes:1. To receive and adopt the audited financial statements for the year ended 30 June 2003.2. To approve the non-executive directors’ remuneration for the year ended 30 June 2003.3. To confirm the remuneration and appointment of KPMG Inc. as auditors 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 1

“Resolved that in terms of section 221 of the Companies Act 1973, 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 regulations of the JSE Securities Exchange South Africa, the unissued shares of the company”

4.2 Ordinary Resolution 2“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 months from the date of the meeting;

• 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 Securities Exchange South Africa in its Listing Requirements) and not to related parties;

• upon any issue of shares which, together with prior issues during any financial year, will constitute 5% 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 of the company and earnings per share, 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 by the company’s directors;

• that issues in the aggregate in any one financial year may not exceed 15% of the number of shares of that class of the company’s issued share (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; and

• the maximum discount at which securities may be issued is 10% of the weighted average traded price of those securities over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors;

a 75% majority is required of votes cast by the shareholders present or represented by proxy at the general meeting to approve the resolution.

5. To consider, and if approved, to pass, with or without modification, the following special resolution:5.1 Special Resolution 1

“Resolved that the company or any of its subsidiaries, are hereby authorised as a general approval given in terms of section 85(2) and 89 of the Act, to acquire shares issued by the company upon such terms and conditions and in such amounts as the directors may from time to time decide, but subject to the provisions of the Act, the articles of association and the Listings Requirements of the JSE Securities Exchange South Africa (“the JSE”) which currently stipulate that:

• the repurchase of securities being effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counterparty (reported trades are prohibited);

• at any point in time the company may only appoint one agent to effect any repurchases on the company’s behalf;• the company may only undertake a repurchase of securities if after such repurchase it still complies with the shareholder spread

requirements of the JSE;

• the company or any of its subsidiaries may not repurchase securities during a prohibited period as defined in the JSE Listings Requirements;

• 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;

• a paid press announcement will be published as soon as the company has acquired ordinary shares constituting, on a cumulative basis, 3% (three percent) of the number of ordinary shares in issue, at the time of passing of this Special Resolutionand any 3% increments thereafter which announcements shall contain full details of such acquisitions;

• acquisitions of ordinary shares by the company in terms of this general authority in the aggregate in any one financial year maynot exceed 20% (twenty percent) of the company’s issued ordinary share capital nor may any subsidiary hold more than 10% of the company’s issued shared capital at any one time;

• in determining the price at which ordinary shares issued by the company are acquired in terms of this general authority, the maximum price at which such ordinary shares may be acquired may not be greater than 10% (ten percent) above the weighted average of the market price at which such ordinary shares traded on the JSE over the 5 (five) business days immediately preceding the date on which the transaction is effected.


Notice of Annual General Meeting


Notice of Annual General Meeting (continued)Although no such repurchases are currently being considered, the general authority to repurchase the company’s shares will be acted upon within the parameters laid down by the JSE, as and when the directors deem it to be appropriate. After considering the effect of a general repurchase within these parameters, the directors are of the view that for a period of at least twelve months after the date of this notice:

• the company and its subsidiaries will be able to pay their debts as they become due in the ordinary course of business;

• the consolidated assets of the company and its subsidiaries, fairly valued in accordance with Generally Accepted Accounting Practice, report, will be in excess of the consolidated liabilities of the company and its subsidiaries;

• the issued share capital and reserves of the company and its subsidiaries will be adequate for the purposes of the business of the company and its subsidiaries;

• the working capital available to the company and its subsidiaries will be sufficient for the group’s requirements; 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.”

The Sponsor of the company will sign the appropriate working capital statement in terms of 2.12 of the JSE Listings Requirements before any general repurchases are effected by the company.The reason for this Special Resolution is to grant a general approval in terms of the Act and the Listings Requirements of the JSE for the acquisition by the company or its subsidiaries of shares issued by the company, subject to statutory and regulatory limitations and controls.The effect of this Special Resolution is to enable the company and/or a subsidiary, by way of a general approval, to repurchase up to a maximum of 20% of its share capital in any one financial year; such authority to remain valid until the company’s next annual general meeting but not beyond the period of 15 (fifteen months) after the date of this resolution.The directors, whose names have been given on page 10 of this 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 nofacts that have been omitted which would make any statement false or misleading and that all reasonable enquiries to ascertain such facts have been made and that the annual report contains all information required by the JSE Listings Requirements, have considered the general authority to repurchase securities resolution and are of the opinion that shareholders of the Company should vote in favour of the resolutions necessary to implement the resolution.As per sections, 11.26b of the Listings Requirements of the JSE Securities Exchange South Africa, shareholders are referred to the following sections in the annual report to which this notice of annual general meeting is attached:

• Details of directors and management on page 10;• Directors’ interest in securities on page 17 (which beneficial interests have not changed since 30 June 2003); • Major shareholders on page 34;• Material changes in the nature of the company’s trading or financial position post 30 June 2003 on page 17; • Litigation statement on page 16; and• The Share Capital note on page 27.

6. To transact such other business as may be transacted at an Annual General Meeting.A member entitled to attend and vote at the 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, Mr P Buys, Computershare Limited, 70 Marshall Street, Johannesburg, by not less than 24 hours before the time for holding the meeting.Shareholders who hold their shares in certificated form or are own name dematerialised shareholders and who are unable to attend the Annual General Meeting, which is to be held on Friday, 16 January 2004 at 14h00, but wish to be represented at the Annual General Meeting should complete and return the form of proxy enclosed, in accordance with the instructions contained therein to be received by the transfer secretaries by no later than Thursday, 15 January 2003 at 14h00.Other shareholders who hold their shares in a uncertificated form through a Central Share Depository Participant (“CSDP”) or broker and 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 between the shareholders and their CSDP or broker.Other shareholders who hold their shares in uncertificated form through a CSDP or broker and who wish to vote by way of proxy at the Annual General Meeting, 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 the CSDP or broker by the cut-off time and date advised by the 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 and Associates (CA) SAGroup Secretary

11 September 2003

Compu-Clearing Outsourcing Limited (Registration number 1998/015541/06)

Share code: CCL

ISIN code: ZAE 000016564

Registered office 7 Drome Road

Lyndhurst, 2192

P O Box 890856, Lyndhurst, 2106

Internet Address http://www.compu-clearing.com

Company Secretary

Lutrin & Associates (CA) SA

1st Floor Block “A”

Sandhavon Office Park

12 Pongola Crescent, Eastgate Ext. 17

Sandton, 2148

P O Box 37172, Birnam Park, 2105

Commercial Bankers

Nedcor Bank Limited

Hollard House

Kruis Street

Johannesburg, 2000

P O Box 1076, Johannesburg, 2000

Auditors

KPMG Inc.

Registered Accountants and Auditors

KPMG Crescent

85 Empire Road

Parktown 2193

Private Bag 9, Parkview, 2122

Attorneys

Werksmans

Werksmans Chambers

22 Girton Road

Parktown, 2193


Sponsor

A Division of

Sasfin Bank Limited

(Registration number 1951/002280/06)

Sasfin Place

13 –15 Scott Street

Waverley, 2090

P O Box 95104, Grant Park, 2051

Transfer Secretaries

Computershare Limited

70 Marshall Street

Johannesburg, 2001



Administration 30 June 2003

Documents

Corporate Profile - ShareDataCompu-Clearing Annual Report 2003 Compu-Clearing Outsourcing Limited is South Africa’s industry leader in the provision of Information Technology (IT)