The results for the year were characterised by a very good second six months caused mainly by a strong performance in the
Thompsons Outbound division. Sales to all destinations, with the exception of South Africa, showed significant increases. The
stronger rand and buoyant consumer spending no doubt contributed to this performance.
The group continues to generate strong positive cash flows. The bank balances increased by R30.3 million to R107.0 million after
capital expenditure of R14.4 million and an ordinary dividend payment of R7.2 million.
FIXED ASSETS
The movement in the net book value of property, plant and equipment is detailed in note 1 of the financial statements. The group
incurred capital expenditure of R14.4 million. The main items being:
- Motor vehicles R3.0m
- Computer equipment R5.2m
- Computer software R3.8m
WORKING CAPITAL
The group’s working capital showed a significant decrease during the year in line with the increased turnover,
particularly in the Thompsons Outbound division, which operates on negative working capital.
CASH FLOW
A detailed cash flow is reflected in the financial statements and the notes thereto.
TAXATION
The estimated tax losses for the group at 30 September 2004 amounted to R37,2 million.
DIVIDENDS
An ordinary dividend (number 125) of 1 cent per ordinary share was declared and paid during the year.
RISK MANAGEMENT
Insurance losses, including material damage to assets and the resultant business interruption, are covered through policies
underwritten locally by reputable insurers.
Exchange rate exposures on loans, capital equipment and inventory purchase commitments in foreign currencies are covered forward.
· Price hedging on future purchases and sales of goods and services is not undertaken. Prices are established on normal commercial
terms directly with suppliers or customers through agents.
· Internal financial controls are monitored on an ongoing basis with the external auditors performing “status of records” audits and
reporting to the audit committee half-yearly.
· Credit risk is managed through an adequate internal control system including credit checks, client assessment and security over
client assets.
· Liquidity risk is managed through comprehensive cash forecasts and cash management policies.
EMPLOYEE SHARE PURCHASE AND OPTION SCHEME
In October 1998 the shareholders of Cullinan Holdings Limited approved a new share scheme which, in the opinion of the directors,
would more adequately serve the purpose and the functions of the share option scheme. The scheme was amended slightly in 2000.
The position of the scheme at 31 October 2004 was:
|
| Number of options available for issue and allotment |
93 000 000 |
| Options taken back in 1993. Held in trust and subsequently sold in 2004. |
( 898 300) |
Options taken up and shares issued
|
- at 31/12/01
- 01/01/02 to 31/10/02
- 01/11/02 to 30/09/03
- 01/10/03 to 30/09/04 |
|
(31 050 000)
( 2 500 000)
( 1 000 000)
|
( 261 700)
(34 550 000) |
(34 811 700) |
|
|
|
|
Options allotted to participants
Options allotted to participants
Less options taken up
Options lapsed
Balance of allotted options outstanding
|
- at 31/12/01
- 01/01/02 to 31/10/02
- as above
- at 30/09/04
|
|
27 550 000
8 350 000
(34 550 000)
( 600 000)
( 750 000) |
|
( 750 000)* |
|
| Balance of options available for future issue and allotment |
|
|
56 540 000 |
|
* Share options exercisable at 4 cents per share in three equal annual tranches ending June 2007.
|
