MANAGING DIRECTOR’S REPORT BOB THORN, MANAGING DIRECTOR, TELLS US ABOUT HIS TIME WITH SUPER CHEAP AUTO, REFLECTING ON THE PAST AND HOW HE SEES THE FUTURE 2005 will be my twelfth year with Super Cheap  Auto, the last eight of which I have served as  Managing Director. I clearly recall the business in  1993 at eight stores and less than 100 people. We  had a vision as to where we wanted the company  to be, however, some may have doubted our  goals at that point in time. It is extremely  pleasing to see those plans come to fruition and  with it an enormous sense of achievement. Our success at Super Cheap Auto is a combination  of passion and hard work from a dedicated team  of people. Each and every one of our 3000 team  members have played an important role in  achieving our many milestones. Our approach in  some ways is relatively simple… We set clear and  precise goals which are understood by everyone;  we have trust and respect in our people; we  provide feedback on our progress and we  continually review and adjust our plan. This  approach has allowed us to ‘smash-through’ and  achieve our successes to date. This approach is  what makes the Super Cheap Auto Team Culture! A. As Managing Director I am responsible with  our management team for delivering profitable  results and strong returns for all our  shareholders. To achieve this we need to ensure  the strength of the existing business while at the  same time defining our plans and guiding our  business to our target of 300 stores across  Australia and New Zealand. Generally people  speak of sales growth, gross margin and expense  and capital management, as the main drivers of  a business. Although these are important issues,  I also see that one of my main responsibilities is  to maintain and strengthen the Super Cheap  Auto Team Culture. Our culture is based on a set of principles or  values that are the foundation of our business.  We have developed a set of Team Framework  Principles that we use to operate the business on  a day to day basis. It is more than just the written  word. There is a requirement of me to apply and  practice these values and principles in the way  we operate right across the business. I believe  that the Chief Executive’s role is to lead by  example and help all our people to understand  the importance of our culture. The 2004 financial year has been a year of dramatic change for our company. Over the  last 10 years our business has been growing at over 27% compound growth per annum. In our  early years although the growth in percentage  terms was large, the growth in store numbers  was small. As the years rolled on, the growth  continued and the store numbers and people  have grown substantially. There have been many  substantial changes in the business over the  years, but in the 2004 financial year, we have set  new levels of change for the company. Our first and only acquisition of the Perth-based  Marlows Rocca’s business which operated in WA, SA and Victoria occurred in May 2003,  however the transformation happened in the 2004 financial year. The conversion of 20 stores  and two distribution centres to Super Cheap Auto  over a seven week period was a major  achievement. In addition to this, we restructured our supply chain processes and now operate three distribution centres, Malaga WA servicing  WA, SA and NT; Lawnton, Qld servicing the  balance of Australia and part of New Zealand;  and Wiri in Auckland, NZ servicing our New  Zealand requirements. This new structure was  essential to service our Australian stores and as  importantly to facilitate our entry into the New Zealand market. On 29 November 2003, we opened seven stores  in New Zealand on the one day and two in  Australia. With the TV advertisements boasting  the catch-phrase “New Zealand, you’ve been  paying too much for too long!” we saw Super  Cheap establish new ground in the North Island  of New Zealand. That weekend broke all  previous records for sales and transactions for an  opening day and weekend… and New Zealand  customers were certainly attracted to the Super  Cheap Auto offer and have continued to support  us since that day. From a zero base, we have now  grown to 21 stores across both islands of New  Zealand and we see positive signs of future  growth in that country. In addition to the acquisition, restructured supply chain, expansion into New Zealand,  opening 18 stores in Australia and growing the  business by 39% we also had the pressure of  preparing for our Initial Public Offering which  occurred on 6 July 2004. With all this activity, 2004 will be a year proudly  remembered for many years to come. What have been your highlights of the 2003/04 year?  Q. What are your main priorities in your role as  Managing Director?  PAGE13