COMPLII FINTECH SOLUTIONS LTD — Annual Report 2003

Oct 29, 2003

Company Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

30 October 2003

Dear Sir

Annual Report - Period ended 3 August 2003

In accordance with listing rule 4.5 attached is the Gowings Retail Limited Annual Report for the period ended 3 August 2003.

Yours faithfully

Clarleson

CJ Charleson Company Secretary

Gowings Retail Limited

ACN 098 238 585

ANNUAL REPORT

2008

Contents

Chainnean s Report
Chief Executive's Review	2
Chef Financial Officer's Review	Z
Diractors Report	7
Corporate Governance	邇
Statements of Financial Performance	P
Statements of Financial Position	B
Statements of Cash Hows	Ø.
Notes to the Financial Statements	B
Directors December	28
Independent Audit Report to the Members	29
STEIGIÖ GELINGI ALARI T	30

Chairman's Report

Dear Shareholder

I am extremely disappointed to report that the loss for the year was \$1.697 million. This compares very poorly with last year's profit of \$1.135 million.

There were a number of external factors that impacted negatively on the retail trading environment and hence this result; the Bali bombing, the impending, then actual war in Iraq, the Sydney bushfires and the SARS outbreak, to name a few.

However, following a review of the disappointing performance of the Company through the particularly important Christmas period, it became clear to the Board that the problems were not just external and that there were a number of significant issues that were endemic to the Company.

As the year progressed, the Non-Executive Directors initially formed reservations, then lost confidence in the ability of the senior executives of the Company, to turn what was becoming an increasingly difficult situation around (I refer you to the Chief Executive's Review of Operations for further details).

As a consequence, the Company now has a new Chief Executive Officer and a new Chief Financial Officer. These gentlemen have the ability, with the guidance of the newly strengthened Board, after the appointment of Ken Terry, to turn the business around and restore profitability.

This has been a very difficult and turbulent year. I would like to sincerely thank those employees who have stuck it out. I would also like to thank our suppliers and shareholders for their support and patience.

John Gowing CHAIRMAN

Chief Executive's Review of Operations

Gowings has gone through a very difficult year. Unfortunately whatever effort or actions we might take in the future we are mothe able to change the past 12 months. We have therefore decided to learn from the past fake incisive actions to change the direction of the business and invest all of our energy in our future and on the opportunities we have in front of us.

The issues that have had a major impact on the performance of the Company in the last year were:

Stores performance

Whilst the city based stores performed creditably, the performance of our Hornsby and Parramatta stores and the airport stores were, at best, poor. This has placed an undue strain on the whole organisation. Retail in men's apparel in general has been extremely tough.

Decline in tourism and falling CBD employment

In the city the tourist market is a significant part of our business, especially with respect to our "Heritage" brand business (Bonds, RM Williams, Drizabone, Akubra etc.) The whole SARS episode had a strong negative impact on that business and held the CBD stores, in particular Wynyard, to a lowersales performance.

The constant fall in employment numbers in the CBD business district caused by the downsizing of many financial institutions. has generated a tangible reduction in the numbers of shoppers throughout the city stores.

Pricing promotions and sales activities.

Price matching the intense competition amongst the major city retailers has impacted immensely on our gross margin as has extending our yearly warehouse sale to all stores. This extension was however essential for us in order to turn excess stock into cash.

Product ranging and inventory.

The product offering, although impressive, has grown to be too broad, extremely difficult to manage properly and has not always reflected our customer's needs. This has lead to the Company being over ranged and overstocked in some departments.

Whilst a tight control of cost was maintained in some areas, events have proven that bigger picture issues dominated the year and sufficient action was not taken to deal with the challenges posed by them.

The retail landscape is constantly changing and will continue to do so. Our success is going to revolve around us refocusing our business and increasing our relevance. However, our success will be more dictated by us understanding that we need to runour business in a smarter and more efficient way. We have recently conducted a series of audits on all sectors of our business and have identified a number of areas where there is a definite opportunity for improvements to be made.

Our initial areas of action are:

1. We have appointed Ken Terry as a nonexecutive director and deputy chairman. Ken has considerable experience of retailing businesses and is currently President of Sheridan International. I welcome his appointment and look forward to him sharing his immense knowledge of business generally and retailing specifically.

2. We have changed our management structure and methodology to reflect a more entrepreneurial approach. We have done this by empowering our store managers, allocating them more responsibility and establishing clear KPI's. This will enable them to exercise a proactive approach to the day to day running of their business.

3. We have implemented a cost review strategy whereby we will eliminate all nonessential costs. In particular, we have reviewed our marketing expenses and reallocated some of them to more sales and services related activities

4. We have reviewed, and considerably reduced, our product assortment and mix to better reflect our customers purchasing needs and desires. This will allow us to further reduce our inventory levels and improve stock turns.

5. We have redesigned the layouts of each of our stores to improve our customers' ease of shopping and to clearly reflect our product offering. These new layouts have been engineered to take into account and maximise the opportunities for third party concessions in our business.

6. We have recommenced the customer service and sales staff training program to increase our sales conversion rates.

7. We are in the process of implementing a new loss prevention program to combat shrinkage caused by shoplifting and bring it to acceptable levels.

8. We have started the process of implementing an upgraded computer assisted reordering system which will improve the supply of our best selling products, improve sales and also help to reduce our 'out of stocks'.

9. We have conducted a series of in depth market research studies to review our current market positioning and ensure we have the necessary information and ability to put a comprehensive strategic plan in place. This is essential so that we can fully exploit all of our potential and all opportunities we have to expand our customer base and the Gowings brand awareness.

10. We are evaluating further opportunities available to us to exploit our Web site and our extensive Gowings Club database.

11. We are in the process of expanding our third party concession program to increase the presence of concessions in all stores.

At present our main focus and priority is to ensure that we place ourselves in the best position possible to have a strong and profitable trading result over the key-Christmas period.

I am confident that implementing and refentlessly carrying through these steps will allow us to save on unnecessary expenses, increase traffic, increase sales, improve our gross margin and reduce working capital, with the ultimate aim of delivering a satisfactory return on the investment made by our shareholders. I look forward to reporting in the future on the changes now underway.

Paolo Gnecchi-Ruscone CHIEF EXECUTIVE OFFICER

Chief Financial Officer's Review of Operations

Overview

In the 52 week period to 3 August 2003. the consolidated entity recorded total revenue of \$34,953,000, an increase of \$7,709,000 or 28.3% over the previous corresponding period. However, the previous corresponding trading period was only 39 weeks as it was the initial trading period of the business following listing on the ASX.

Loss after tax for the 52 week period ended 3 August 2003 was \$1,697,000 compared to a profit after tax of \$1.135,000 for the 39 week period in 2001/02. After a \$10,000 profit attributable to outside equity interests, a loss of \$1,707,000 is attributable to shareholders. In view of the loss, the

directors have not proposed a dividend.

Revenue

The consolidated entity's revenue from the sale of goods increased over the period by 29.1% to \$33,939,000. Other revenue increased by 5.5% to \$1,014,000.

An analysis of revenue is set out below:

	2003 52 weeks \$'000	2002 39 Weeks \$'000
Revenue from the sale of goods	33.939	26.283
Other revenue	1.014	961
Total revenue	34.953	27.244

Retail sales

On a like for like basis, excluding sales from stores opened or closed in the period, retail sales have fallen by 3%. This is attributed to a number of factors as outlined in the CEO's report.

The retail marketplace remains dominated by a small number of dominant retailers. In 2002/03 competition has been intense, with sale periods being brought forward thereby significantly reducing the period when merchandise is on sale at a nondiscounted price. Reluctantly we have been drawn into the pricing wars, as to not do so would see our sales erode even further.

It is possible to be almost blasé about the significant events that have rocked the world in the last 18 months, starting with the September 11 terrorist attacks in the US, followed by the Ball bombing in 2002. the SARS crisis early in 2003 and most recently the second Gulf War. All these events have had an adverse impact on tourism and in particular on the number of tourists from overseas. Gowings is somewhat dependent on tourist shoppers especially at our Sydney CBD stores in Market Street and at Wynyard. Here we estimate that tourists can account for 10-20% of total sales.

Our Hornsby store recorded sales up by 16% in 2002/03 compared to the previous period. By comparing like for like trading periods (the Hornsby store opened in October 2001) the increase reduces to 6%, which is still a credible result considering the Hornsby area was ravaged by bushfires over the key trading period of Christmas 2002. Christmas sales at the Hornsby store were down 14% on the previous period.

2003 saw the opening of our new store in the Westfield shopping centre in Parramatta. The 2002/03 results include 8 months of trading from the store and despite the absence of a base to measure the performance against, the trading is below our expectations and there are a number of actions that need to be undertaken at this store.

As flagged in last year's annual report, we did not exercise our 3 year lease options over the Sydney Airport leases and we stopped trading at these locations at the end of October 2002. Much of the fixturing was incorporated in the fit-out of the Parramatta store and the remaining stock was also transferred to Parramatta.

Other revenue

Other revenue principally comprises interest income and rental income from in store concessions.

Gross Profit

Gross profit for 2002/03 increased by \$2,519,000 or 22.1% over the corresponding period to \$13,915,000. The gross profit percentage reduced from 43.4% to 41.0%. This in part reflects the intense retail competition and the absence of higher margin sales to tourists referred to above. However, it additionally reflects the results of a detailed review of our product assortment that was undertaken in the final quarter of the year. As part of this review our core range was refined and narrowed. As a result a number of lines, and in some cases whole ranges, were identified as being non-core and have been discontinued. The discontinued lines were substantially cleared as part of the July 2003 Warehouse Sale, which was run, for the first time, in all stores. This resulted in the clearance of in excess of \$1 million of stock, but the margin achieved on these sales was substantially below that which we would normally expect.

As a result of this review we commence 2003/04 with a much cleaner stock profile. and clearly identified range plans.

Operating expenses

Operating expenses comprise selling expenses, occupancy expenses, marketing expenses, distribution expenses and administration expenses. For 2002/03 operating expenses totalled \$16,554,000 and amounted to 48.8% of retail sales. This represents an increase of 52% over 2001/2 which was only a 39 week period. 2001/02 operating expenses amounted to 41.3% of sales. 2002/03 operating expenses include the costs of running the Hornsby store for the full year along with the costs of the new Parramatta store from December 2002. In addition, the costs of exiting the airport sites, which amounted to approximately \$200,000, are included in operating expenses.

Income tax

In view of the loss before taxation, no provision for income taxation has been made. In addition, existing deferred tax assets and liabilities have been written off.

Net assets

Net assets at 3 August 2003 are \$18.1 million, compared to \$20.2 million at 4 August 2002. The reduction is attributable to the loss attributable to shareholders of \$1.7 million and the dividend paid during the year of \$0.6 million offset by the increase in equity for the shareholders who participated in the DRP (\$0.2 million).

Inventories amounted to \$10.3 million in 2003 compared to \$11.4 million in 2002. The reduction is mainly attributable to the range review that was undertaken during the final quarter of the year.

Tangible fixed assets have increased by a net \$0.6 million, reflecting additions of \$1.1 million (mainly for the fit-out of the Parramatta store) less depreciation of \$0.5 million.

Intangible assets amounted to \$4.5 million and related to goodwill on the acquisition of the retail business from Gowing Brothers Limited in 2001. The balance has reduced by \$0.25 million over 2002. reflecting the amortisation of the balance.

Borrowings at 3 August 2003 amounted to \$0.5 million, an increase of \$0.4 million over 2002. We have a bill acceptance facility of \$1.0 million, which is drawn down to \$0.5 million. The consolidated entity is conservatively geared at approximately 3% of net assets.

Net tangible assets per security at 3 August 2003 amounted to \$0.66 (2002: $$0.76$ ).

Chief Financial Officer's Review of Operations (continued)

Cash flow

The cash flow statement for the consolidated entity can be summarised as follows:

	2003 \$'000	2002 \$'000
Cash inflow/(outflow) from operations	1.017	(1,531)
Cash outflow from investing activities	(1,161)	(474)
Cash inflow from financing	162	5,328
Net increase in cash held	18	3.323
Cash at the beginning of the period	3.323
Cash at the end of the period	3.341	3.323

Cash from operations amounted to \$1,017,000 despite the consolidated entity making a loss after tax of \$1,697,000. This was mainly due to better working capital management achieved through a reduction of in inventories of over \$1.1 million, despite the addition of the new Parramatta store, and an increase in current payables of just over \$1 million. to the previous period an operating cash outflow of \$1,531,000 was recorded.

Cash flow from investing activities amounted to \$1,161,000. The majority of this was in relation to the fit-out of the Parramatta store.

Cash flows from financing activities reflect the cash component of the 2001/02

dividend (\$373,000) offset by \$500,000 bank finance raised. In 2001/02 a net \$6.3 million was raised from the issue of equity, from which \$1 million was used to repay borrowings.

The consolidated entity ends the year with \$3.3 million in cash and a moderate level of gearing of \$0.5 million.

Madesy

Chris Charleson CHIEF FINANCIAL OFFICER

Our Stores

MARKET ST SYLNEY 02 9287 6394

319 GEORGE ST WYNYARD 02 9262 1281

OXFORD ST

SYDNEY

02 9331 5544

Pacific Highway

02 9287 6394

LEVEL 2, WESTFIELD Hornsby Westfield PARRAMATTA 02 9687 8650

Directors' Report

Your Directors present their report on the consolidated financial report for the 52 weeks ended 3 August 2003 and in accordance with the Corporations Act 2001 report as follows:

Directors

The names of the Directors in office during the financial period and at the date of this report are:

Non-executive Directors:

John Gowing BComm, CA CHAIRMAN MEMBER AUDIT COMMITTEE & REMUNERATION COMMITTEE

John Gowing (age 42) has been Chairman of Gowings Retail Limited since listing and Managing Director of Gowing Bros. Ltd since 1987. He has had over 20 years experience in men's retailing in Australia. Prior to Gowings, Mr. Gowing spent 4 years with accounting firm Arthur Young as a Chartered Accountant. He also holds Non-Executive Board positions with Noni B Limited and venture capital firm, Crescent Capital Partners Ltd. Mr Gowing previously held the position of Vice President and Treasurer of the Australian Retailers Association of New South Wales.

Duncan Shaw

MEMBER REMUNERATION COMMITTEE

Duncan Shaw (age 62) is currently the Chief Executive Officer of the Australian Retailers Association of New South Wales and has over 40 years experience in the retail industry. He commenced at Grace Bros. as a management trainee and attained the role of Group General Manager Retail Operations and a member of the Managerial Board.

Michael Alscher BComm

CHAIRMAN AUDIT COMMITTEE & MEMBER REMUNERATION COMMITTEE

Michael Alscher (age 35) is currently an Executive Director of Crescent Capital Partners Ltd and Non-Executive Director of Gowing Bros. Ltd. Mr Alscher previously held the position of Chief Operating Officer of Gowing Bros. Limited for three years. Prior to Gowings Mr Alscher worked as a management consultant with Bain International and the LEK Partnership.

Ken Terry

DEPUTY CHAIRMAN (APPOINTED 1 SEPTEMBER 2003)

Ken Terry (age 65) has worked for a number of significant corporations throughout the world. He has held a variety of sentor positions at United Technologies Group, both in Australia and the USA. He was managing director of the Dymocks Group for 9 years. Currently Mr Terry is President of Sheridan International. Sheridan has 90 stores in Australia and international operations in New Zealand, UK and Asia.

Executive Director:

Paolo Gnecchi-Ruscone

CHIEF EXECUTIVE OFFICER (APPOINTED 18 AUGUST 2003)

Paolo Gnecchi-Ruscone (age 45) has been involved in the retail industry for the last 20 years. running his own marketing and business development consultancy for the latter 10. He was involved in the original Gowings retail restructure in 1994 and headed the product and business development department from 1995 to 1999.

Mr P Sillick resigned as Managing Director on 18 August 2003 and Mr M Faulkner resigned as Finance Director and Company Secretary on 4 April 2003.

Directors' Report (continued)

Principal activities

The principal activities of the consolidated entity during the period consisted of retail operations in recreational products and general merchandise. The consolidated entity has 5 retail stores in and around Sydney, NSW.

Review of operations

The operations of the consolidated entity are reviewed in detail in the CEO's and CFO's Reviews of Operations.

Dividends

No dividend has been proposed for the 52 week period ended 3 August 2003. A fully franked dividend of 3.0 cents per share was paid on 7 November 2002.

Significant changes in the state of affairs

In December 2002 the consolidated entity opened its 5th retail store in Westfield Parramatta.

Except for the matters noted above or disclosed elsewhere in the financial report, there were no other significant changes in the state of affairs of the consolidated entity.

Matters subsequent to the end of the financial period

At the date of this report, no matters or circumstances have arisen since balance date that have significantly affected or may significantly affect:

the operations in future financial periods; or

the results of those operations; or

the consolidated entity's state of affairs in future financial periods.

Likely developments

Certain comments on likely developments in the operations of the consolidated entity and the expected results of those operations are included in the CEO's report. Further information has not been included in this report because, in the opinion of the Directors, It would prejudice the interests of the consolidated entity.

Environment

The operations of the consolidated entity are not subject to any particular and significant environmental regulation under a law of the Commonwealth of Australia or any of its States or Territories.

The consolidated entity is committed to a policy of environmental responsibility in all its business dealings. This policy ensures that when the consolidated entity can either directly or indirectly influence decisions which impact upon the environment, that influence is used responsibly.

The consolidated entity, in union with Gowing Bros. Ltd, continues to support the Gowings Whale Trust, a trust devoted to raising funds to foster research that will lead to a healthier environment for whales and other sea creatures. All proceeds from the sale of nominated merchandise within our stores is donated to the trust.

Directors' and officers' indemnity/insurance

The constitution of the Company provides an indemnity (to the extent permitted by law) to each person who is or has been a director, alternate director or executive officer of the Company and, if the Directors so determine, to any auditor or former auditor of its related bodies corporate for all losses or liabilities incurred as an officer or, if the directors

Directors' and officers' indemnity/insurance (continued)

so determine, an auditor of the company including, but not limited to, a liability for negligence or for legal costs on a full indemnity basis.

The Company paid a premium in respect of a contract of insurance insuring Directors' and Officers' against certain liability incurred in that capacity. Disclosure of the amount of the premium and the nature of the liabilities in respect of such insurance is prohibited by the contract of insurance.

Directors' interests

The relevant interest in shares capital and options of the company as at the date of this report are:

Director	Fully Paid Ordinary Shares Number	Shares Options Number
John Gowing (1)	1.056.196	$\ddotsc$
Duncan Shaw	52.500	$\cdots$
Michael Alscher (2) (3)	64.823	250,000
Ken Terry	$\cdot$	$\cdot$
Paolo Gnecchi-Ruscone	$\ddot{\phantom{1}}$	$\ddot{\phantom{1}}$

(1) John Gowing is the Managing Director of, and holds approximately 19% of, the issued capital of Gowing Bros. Ltd. Gowing Bros. Ltd. holds 7,350,001 shares in the Company.

• (2) Michael Alscher is a non-executive director of Gowing Bros. Ltd. Gowing Bros. Ltd holds 7,350,001 shares in the Company.
• (3) York Corporate Advisory Pty Limited, a company associated with Michael Alscher, holds 250,000 options over unissued shares in the Company. The options have an exercise price of \$1.00 and expire on 30 November 2006.

Remuneration of Directors and Senior Executives

Remuneration of Directors and senior executives is determined annually by the Board based on recommendations from the Remuneration Committee. Remuneration levels are based on market conditions and consolidated entity performance.

Remuneration during the 52 week period ended 3 August 2003 was as follows:

Non-executive Directors

	LANCICIO LOCO
	Ж
John Gowing	46.667
Duncan Shaw	25.000
Michael Alscher	25.000

Executive Directors and Executive Officers

	Salary	Other Benefits $(2)$	Superannuation Contributions \$	Total \$
Peter Sillick (3) -	150.000	27.500	13.500	191.000
Michael Faufkner (1)	141.070	23.514	12.696	177.280
John McLay	90.600	34.602	8154	133 356

(1) Mr M Faulkner resigned as a Director of the Company on 4 April 2003. He received termination payments of \$56,312 included in salary above.

(2) Other benefits include motor vehicle and parking benefits inclusive of FBT and options granted (3) Mr P Sillick resigned as a Director of the Company after the period end.

Disactors Rags

Directors' Report (continued)

Executive Directors' and Executive Officers' Options

Executive	Options Lapsed Number	Options Remaining Number
Peter Sillick	100.000	$\overline{\phantom{a}}$
Michael Faulkner	65.500
John McLay	65,500

Meetings of Directors

There were 11 Directors meetings and 2 meetings of the Audit Committee during the period. The attendance by each Director of the Company during the period was:

Director	Board Meetings Attended/Held	Meetings of the Audit Committee
John Gowing	11/11	272
Dimcan Shaw	10/11
Michael Alscher	11/11	212
Peter Sillick	11/11
Michael Faulkner	777

No meetings of the Remimeration committee have been held.

Rounding of Amounts to Nearest Thousand Dollars

The Company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission relating to the "rounding off" of amounts in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order or, in certain cases, to the nearest dollar.

Signed in accordance with a Resolution of the Directors of Gowings Retail Limited.

John Gowing CHAIRMAN

Paolo Gnecchi-Ruscone DIRECTOR

Sydney, NSW 29 October 2003

Corporate Governance

Board responsibilities and objectives

The Directors are responsible for ensuring that the business of the Company is conducted with the utmost integrity and objectivity in order to enhance the reputation and performance of the Company.

The Directors acknowledge their accountability to all shareholders for the creating of shareholder value and the safeguarding of shareholders' funds. The Board aims to achieve these objectives through the adoption and monitoring of corporate strategies, plans, policies and performance reviews.

Composition of the Board

The Board currently comprises four nonexecutive members (including the Chairman) and one executive member, the Chief Executive Officer. The Constitution states that the number of Directors should be determined by the Board, but be not less than three and no more than twelve at any time.

Any Director (excluding the Chief Executive Officer) appointed during a year must retire from office at the next Annual General Meeting following their appointment, although each being eligible may stand for reelection.

At each Annual General Meeting one third of the Directors (excluding the Chief Executive Officer) must retire from office, although each may stand for re-election.

Audit Committee

The Audit Committee is responsible for assisting the Board monitor the control and management of significant business and financial risks, the quality of financial reporting and compliance with statutory and regulatory requirements, codes of conduct and reasonable community expectations. It provides a direct line of communication between the Directors and External Auditors.

It also recommends to the Board the appointment of the external auditor, reviews the scope and activity of external auditors and reviews audit reports.

The Committee is comprised of two nonexecutive Directors, Michael Alscher (Chairman) and John Gowing. The Chief Financial Officer and External Auditor are also invited to attend meetings when required.

Remuneration Committee

Responsible for major changes and developments in remuneration policies and personnel practices as well as recommending market-related remuneration for the Senior Executives of the Company. The committee is comprised of four non-executive Directors.

Share Transactions

Directors and Senior Executives who are shareholders can buy or sell securities within 45 days after price sensitive announcements to the Australian Stock Exchange unless at that time they have access to information that, if generally available, might affect the share price of Gowings Retail Limited.

Ethics

Gowings Retail Limited adheres to the highest. ethical standards and strives to operate to best business practices.

ASX Principles of Good Corporate Governance

On 31 March 2003, the ASX Corporate Governance Council released Principles of Good Governance and Best Practice Recommendations.

For the period ending 31 July 2004, Gowings Retail Limited will be required to provide a statement in its annual report disclosing the extent to which the best practice recommendations have been followed and giving reasons for any recommendations not followed.

The Directors believe that the Company complies with many of the recommendations and conceptually agree with the ASX's desireto improve the Standard of Corporate Governance in Australia. However, in view of the size of the Company it is unlikely that the Company will comply with all recommendations from the outset.

Statements of Financial Performance

For the 52 week period ended 3 August 2003

Note 2	2003 \$'000 33,939	2002 \$'000 26,283	2003 \$'000 32,857	2002 \$'000 25,238
	(20, 024)	(14, 887)	(19, 813)	(14, 606)
	13,915	11.396	13,044	10,632
Other revenue from ordinary activities 2	1,014	961	1,538	1,261
	(6,985)	(5,033)	(6, 691)	(4, 815)
	(4,277)	(3,023)	(4,277)	(2,894)
	(1,546)	(533)	(1,525)	(511)
	(611)	(445)	(611)	(445)
	(3, 135)	(1,826)	(3, 125)	(1, 773)
	(23)	(30)	(23)	(30)
3	(1,648)	1,467	(1.670)	1.425
4	(49)	(332)	(27)	(306)
	(1,697)	1,135	(1,697)	1.119
	(10)	(16)
22	(1,707)	1,119	(1,697)	1,119
24	(1,707)	1,119	(1,697)	1,119
36	$(8.3)$ ¢	5.5¢

The above statements of financial performance should be read in conjunction with the accompanying notes.

Statements of Financial Position as at 3 August 2003

			Consolidated	Parent Entity
	Note	2003 \$'000	2002 \$'000	2003 \$'000	2002 \$'000
Current assets
Cash and deposits	5	3,341	3,372	3,199	3,251
Receivables	6	377	442	316	405
Inventories	7	10,253	11,386	9,933	9,731
Other	8	456	435	453	424
Total current assets		14,427	15,635	13,901	13.811
Non-current assets
Receivables	9	703	745	862	2,174
Investment in controlled entities	32			245	245
Property, plant and equipment	10	4,132	3.484	4.104	3.458
Deferred tax assets	11		88	$\overline{\phantom{a}}$	88
Intangible assets	12	4.481	4.727	4.481	4,727
Other	13	134	87	134	87
Total non-current assets		9,450	9,131	9,826	10,779
Total assets		23,877	24.766	23,727	24,590
Current Liabilities
Payables	14	4,757	3,756	4,672	3,675
Interest bearing liabilities	15	503	53	503	53
Current tax liabilities	16	55	274	48	246
Other	17	353	349.	346	343
Total current liabilities		5,668	4,432	5,569	4,317
Non-current liabilities
Interest bearing liabilities	18	15	17	15	17
Deferred tax liabilities	19		61	$\overline{a}$	61
Other	20	117	99	117	99
Total non-current liabilities		132	177	132	177
Total liabilities Net assets		5,800	4.609	5.701	4,494
		18,077	20,157	18,026	20,096
Equity Parent equity interest
Contributed equity	21	19,210	18,977	19,210	18,977
Retained profits/(losses)	22	(1, 194)	1,119	(1, 184)	1,119
Total parent equity interest		18,016	20,096	18,026	20,096
Outside equity interest in
controlled entities	23	61	61
Total equity	24	18,077	20,157	18.026	20,096

The above statements of financial position should be read in conjunction with the accompanying notes.

Statements of Cash Flows

For the 52 week period ended 3 August 2003

	Note	2003	Consolidated 2002	2003	Parent Entity 2002
		\$'000	\$'000	\$'000	\$'000
Cash flows from operating activities
Receipts from customers		38,452	29,658	37,764	28,509.
Payments to suppliers and employees		(37, 278)	(31,311)	(36, 722)	(30, 051)
Service fee received from associate					177
Dividends received				45	45
Interest and bill discount received		108	152	122	150
fficome tax paid		(242)		(198)
Borrowing costs		(23)	(30)	(23)	(30)
Net cash provided by/(used in)
operating activities	34	1,017	(1,531)	988	(1,200)
Cash flows from investing activities
Loans to related parties					(471)
Payments for property,
plant and equipment		(1, 161)	(480)	(1, 153)	(473)
Repayment of loans by
related parties			6.		6
Net cash outflow from investing activities		(1, 161)	(474)	(1.153)	(938)
Cash flows from financing activities
Loan proceeds received		500		500
Proceeds from issues of
equity securities			7,578		7,578
Payment of share issue costs		÷	(1,236)		(1,236)
Repayment of borrowings		(4)	(1,002)	(4)	(1,002)
Proceeds from repayments of loans		39.		39
Dividends paid		(373)	(12)	(373)
Net cash provided by financing
activities		162	5,328	162	5,340
Net increase/(decrease) in cash held		18	3,323	$\left(3\right)$	3,202
Cash at the beginning of the
financial period		3,323		3,202
Cash at the end of the financial period	5	3,341	3,323	3,199	3.202
Financing arrangements
Non-cash financing and investing
activities	35

The above statements of cash flows should be read in conjunction with the accompanying notes.

Notes to the Financial Statements

1. Summary of Significant Accounting Policies

This general purpose financial report has been prepared in accordance with Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act 2001.

It is prepared in accordance with the historical cost convention. Unless otherwise stated, the accounting policies adopted are consistent with those of the previous period.

(a) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Gowings Retail Limited ("company" or "parent entity") as at 3 August 2003 and the results of all controlled entities for the period then ended. Gowings Retail Limited and its controlled entities together are referred to in this financial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full. Outside equity interests in the results and equity of controlled entities are shown separately in the consolidated statement of financial performance and statement of financial position respectively.

Where control of an entity is obtained during a financial period, its results are included in the consolidated statement of financial performance from the date on which control commences. Where control of an entity ceases during a financial period its results are included for that part of the period during which control existed.

(b) Income Tax

Tax effect accounting procedures are followed whereby the income tax expense in the statement of financial performance is matched with the accounting profit after allowing for permanent differences. The future tax benefit relating to tax losses is not carried forward as an asset unless the benefit is virtually certain of realisation. Income tax on cumulative timing differences is set aside to the deferred income tax or the future income tax benefit accounts at the rates which are expected to apply when those timing differences reverse.

(c) Revenue Recognition

Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. Retail sales are recognised when possession of the goods has passed to the customer. Rental and concession income is recognised in accordance with the underlying agreement.

(d) Receivables

All trade debtors are recognised at the amounts receivable as they are due for settlement no more than 90 days from the date of recognition.

Collectibility of trade debtors is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to collection exists.

(e) Inventories

Inventories are valued using the retail inventory method. This method involves valuing inventories at current selling prices and then reducing the amount to cost through application of mark-up ratios. This method results in the inventories being valued at an amount that approximates the lower of cost and net realisable value.

(f) Depreciation of Property, Plant and Equipment

Depreciation is calculated on a straight line basis to write off the net cost of each item of plant and equipment over its expected useful life to the consolidated entity. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. The expected useful lives of plant and equipment are 2-15 years.

(g) Leasehold Improvements

The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement to the consolidated entity, whichever is the shorter. Leasehold improvements held at the reporting date are being amortised over periods ranging from 1 to15 years.

(h) Leased Non-Current Assets

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incident to ownership of leased noncurrent assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.

hipance leases are capitalised. A lease asset and liability are established at the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the interest expense.

The lease asset is amortised on a straight line basis over the term of the lease, or where it is likely that the consolidated entity will obtain ownership of the asset, the life of the asset. Lease assets held at the reporting date are being amortised over 6 years.

Other operating lease payments are charged to the statement of financial performance in the periods in which they are incurred, as this represents the pattern of benefits derived from the leased assets.

(i) Intangible Assets - Goodwill

Where an entity or operation is acquired, the identifiable net assets acquired are measured at fair value. The excess of the fair value of the cost of acquisition over the fair value of the identifiable net assets acquired, including any liability for restructuring costs, is brought to account as goodwill and amortised on a straight line basis over 20 years.

(j) Recoverable amount of non-current assets

The recoverable amount of an asset is the net amount to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal.

Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, recoverable amount is determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense in net profit or loss in the reporting period in which the recoverable amount writedown occurs.

The expected net cash flows included in determining recoverable amounts of non-current assets are not discounted to their present values using a market-determined, risk-adjusted discount rate.

(k) Trade and Other Creditors

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial period and which are unpaid.

(l) Interest bearing liabilities

Loans are carried at their principal amounts which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the period it becomes due and is recorded as part of other creditors.

(m) Employee Benefits

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other creditors in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(ii) Long Service Leave

The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits and is measured in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Employee Benefit on-costs

Employee benefit on-costs, including payroll tax, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

(n) Cash

For purposes of the statement of cash flows, cash includes deposits at call which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.

(o) Earnings Per share

(i) Basic Earnings Per Share

Basic earnings per share is determined by dividing the operating profit after income tax attributable to members of the Company by the weighted average number of ordinary shares outstanding during the period.

(ii) Diluted Earnings Per Share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(n) Rounding of Amounts

The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Total revenue from ordinary activities	34.953	27.244	34.395	26.499
	1.014	961	1.538	1,261
Other	207	33	203	13
Service fees			377	277
Supplier discount and rebates received	92	135	73	115
Dividends – controlled entities			45	45
Rental and concession income	607	641	737	641
Interest income	108	152	103	170
Other revenue from ordinary activities
Revenue from sales of goods	33,939	26,283	32,857	25,238
2. Revenue
	\$'000	\$'000	\$'000	\$'000
	2003	2002	2003	2002
	Consolidated		Parent Entity

3. Profit/(loss) from ordinary activities before income tax expense

Erofit/(loss) from ordinary activities before

income tax expense has been determined

after charging the following specific expenses:

Depreciation of plant and equipment	438	248	432.	243
Amortisation:
Leasehold improvements	55	44	55	44
Plant and equipment under finance leases	4	2	4	2
Goodwill	246	187	246	187
Total amortisation	305	233	305	233
Net bad and doubtful debts	88	17	88	9
Rental expense relating to operating leases	4.585	3.290	4.585	3.160

4. Income tax

Income tax expense

(a) The income tax expense for the financial period differs from the amount calculated on the profit. The differences are reconciled as follows: Profit/(loss) from ordinary activities before income tax expense $(1,648)$ 1,467 $(1,670)$ Income tax calculated @ 30% $(494)$ 440 $(501)$ Tax effect of permanent differences: Non-assessable income $(90)$ $(13)$ $\overline{a}$ Amortisation of goodwill 74 56 74 $(74)$ Deduction for capital raising $\overline{a}$ Other permanent differences 5 $\mathcal{L}$ $(415)$ Income tax adjusted for permanent differences 332 $(435)$ Losses not recognised 437 435 $\omega$ Timing differences not recognised 27 27 $\mathbb{Z}$

49

332

1,425

427

$(103)$

56

$(74)$

306

306

$\overline{a}$

5

27

Consolidated			Parent Entity
2003.	2002	2003	2002
\$'000	\$'000	\$'000	\$'000

4. Income tax (continued)

b) The Directors estimate that the potential
uture income tax benefit a 5 August 2003 is .
espect of tax losses not brought to account is	437	Service	435

This benefit for tax losses will only be obtained if:

(i) the entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised; or

(ii) the losses are transferred to an eligible entity in the consolidated entity;

(iii) the entity continues to comply with the conditions for deductibility imposed by tax legislation; and

(iv) no changes in tax legislation adversely affect the entity in realising the benefit from the deductions for the losses.

The franking account balance of the consolidated entity at 3 August 2003 is \$28,457 (2002: Nil)

5. Cash and deposits

Balances per statements of cash flows	3.341	3.323	3.199	3.202
Less: bank overdrafts (note 15).		(49)		(49)
Balances as above	3.341	3.372	3.199	3.251
the statements of cash flows as follows:
the end of the financial period as shown in
The above figures are reconciled to cash at
	3,341	3.372	3.199	3.251
Deposits at call-	1,071	3,182	1,071	3,182
Cash at bank and on hand	2,270	190	2,128	69

Deposits at call bear floating interest rates between 4.25% and 4.8%

6. Receivables
Trade debtors	363	342.	296	293
Less: provision for doubtful debts	(176)	(57)	(162)	(43)
	187	285	134	250
Other receivables	190	157	182	155
	377	442	316	405
7. Inventories
Finished goods	10,171	11,126	9,851	9,715
Stock in transit	82	260	82	16
	10,253	11,386	9,933	9,731
8. Other assets
Prepayments	456	435	453	424
9. Receivables (non-current)
Loans to directors	460	567	460	567
Loans to associate companies	108		267	1,429
Other debtors	135	178	135	178
	703	745	862	2,174

	Consolidated			Parent Entity
	2003 \$'000	2002. \$'000	2003 \$'000	2002 \$'000
10. Property, plant and equipment Leasehold improvements
At cost	387	446	387	446
Less: accumulated amortisation	(45)	(44)	(45)	(44)
Total leasehold improvements	342	402	342	402.
Plant and Equipment
At cost	4.472	3.324	4.428	3,288
Less: accumulated depreciation	(700)	(264)	(684)	(254)
	3.772	3.060	3.744	3.034
Plant and equipment under finance lease
At cost	24	24	24	24
Less: accumulated amortisation	(6)	(2)	(6)	(2)
	18	22	18	22
Total plant and equipment	3,790	3,082	3.762	3,056
Total	4,132	3.484	4.104	3.458

Reconciliation of movements in property, plant and equipment

	Leasehold	Plant &		Plant & Equipment
	Improvements	Equipment.		Under Finance Lease	Total
Consolidated Entity	\$'000	\$'000		\$'000	\$'000
Opening balance	402	3.060		22	3,484
Additions		1.161			1.161
Disposals	(5)	(11)			(16)
Depreciation/amortisation	(55)	(438)		(4)	(497)
Closing Balance	342	3,772		18	4.132
	Leasehold	Piant &		Plant & Equipment
	Improvements	Equipment		Under Finance Lease	Total
Parent Entity	\$'000	\$'000		\$'000	\$'000
Opening balance	402	3,034		22	3.458
Additions		1.153			1,153
Disposals	(5)	(11)			(16)
Depreciation/amortisation	(55)	(432)		(4)	(491)
Closing Balance	342	3,744		18	4,104
		Consolidated			Parent Entity
		2003	2002	2003	2002
		\$'000.	\$'000	\$'000	\$'000
謎. Deferred tax assets
37 Future income tax benefit			88		88
12. Intangible assets
Goodwill on acquisition (note 35)		4.914	4.914	4.914	4.914
Less: Accumulated amortisation		(433)	(187)	(433)	(187)
		4.481	4.727	4.481	4.727

134

${\bf 87}$

134

87

Prepayments

	Consolidated		Parent Entity
	2003	2002	2003	2002
	\$'000	\$'000	\$'000	\$'000
14. Payables
Trade creditors	3.799	3.121	3.700	3,033
Other creditors	958	635	972	642
	4.757	3.756	4.672	3.675
15. Interest bearing liabilities
Lease liabilities (note 29)	3	4	3	4
Bank loans - secured	500	49	500	49
	503	53	503	53

The Company has a \$1 million commercial bill facility. At 3 August 2003 the facility was drawn down to \$500,000. The facility is secured by a fixed and floating charge over the assets of the Company and it's wholly owned subsidiaries and is repayable within one year. Interest on the facility is 5.14%.

	16. Current tax liabilities
Income tax		55	274	48	246
17. Other liabilities
Employee entitlements		353	299	346	293
Other			50		50
		353	349	346	343
	18. Interest bearing liabilities (non-current)
Lease liabilities (note 29)		15	17	15	17
	19. Deferred tax liabilities
	Provision for deferred income tax		61		61
	20. Provisions (non-current)
Employee entitlements		117	99	117	99
21. Contributed equity
(a)	Share capital
Ordinary shares (notes b,c)		20,446	20,213	20,446	20,213
Less cost of capital raising		(1,236)	(1, 236)	(1,236)	(1,236)
Contributed equity		19.210	18.977	19.210	18.977
(b)	Movements in ordinary share capital:
				Issue Price
Date	Details		No. of Shares	\$	\$'000
24 Nov 2001 5 Nov 2001	Opening balance (issued on incorporation)		1	1.00 1.00
18 Dec 2001	Issue of shares on purchase of business 12,000,000 Issue of shares from				12,000
	capital raising		8,212,500	1.00	8,213
4 Aug 2002	Balance		20,212,501		20,213
7 Nov 2002	Dividend reinvestment plan		387,592	0.60	233
3 Aug 2003	Balance		20,600,093		20,446

On 7 November 2002, 387,592 ordinary shares were issued under the Company's dividend reinvestment plan.

21. Contributed equity(continued)

$\epsilon$ Ordinary Shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote.

$(d)$ Dividend Reinvestment Plan

The company has a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. Shares are issued under the plan at a price determined as the weighted average market price of shares traded during the period commencing 15 trading days before the record date and ending five trading days after the record date, less a discount of up to 10% at the discretion of the Directors.

$(e)$ Options

There are 468,000 (2002:714,000) options over unissued shares at 3 August 2003. 79,500 options expired in the period due to employees resigning and 166,500 expired through the Company not meeting set performance targets. Subsequent to the period end a further 50,000 options expired. The remaining options are exercisable at \$1.00 and expire on 31 November 2006 or earlier, should the employee no longer be employed by the Company.

	Consolidated		Parent Entity
	2003	2002	2003	2002
	\$'000	\$'000	\$'000	\$'000
22. Retained Profits
Retained profits at the beginning
of the financial period	1.119		1.119
Net profit/(loss) attributable to members
of Gowings Retail Limited	(1,707)	1.119	(1,697)	1,119
Dividend paid	(606)		(606)
Retained profits/(losses) at the end of the
financial period	(1, 194)	1.119	(1.184)	1.119

23. Outside Equity Interests in Controlled Entities

Interest in:

	£.
Retained profits	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	۰
Share capital			$\overline{\phantom{0}}$
.

24. Equity
Total equity at the beginning of the
financial period	20.157		20.096
Total changes in equity recognised in the
statement of financial performance	(1,707)	1.119	(1,697)	1.119
Shares issued, net of transaction costs	233	18.977	233	18.977
Dividend paid	(606)		(606)
Total changes in outside equity interest		61
Fotal equity at the end of the financial period	18,077	20.157	18.026	20.096
A C H. P.: JEJ A ŽIJE JE JE JE JE ZA ZO RIJI JI JI JI JE ZA STATI JE JI JI JI JI JE ZA KOLIJI JE ZA PODO

A fully franked final dividend of 3 cents per ordinary share was paid on 7 November 2002.

25. Financial Instruments

(a) Accounting policies

The consolidated entity's accounting policies with respect to financial instruments are set out in Note 1.

(b) Interest rate risk exposures

The consolidated entity's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are as follows:

		Floating	Fixed interest maturing in		Non-interest
2003	Notes	interest rate \$OOO	1 year or less \$OOO	1-5 years \$000	bearing \$000	Total \$000
Financial assets
Cash and deposits	5	1,071			2,270	3,341
Receivables	6,9				1,080	1,080
		1,071			3,350	4,421
Weighted average interest rate		4.70%	$\overline{a}$	L,
Financial liabilities
Payables	14				4,757	4.757
Commercial bills	15	500				500
Lease liabilities	15, 18		3	15		18
		500	3	15	4,757	5,275
Weighted average interest rate Net financial assets/(liabilities)		5.14%	6.80%	6.80%
		571	(3)	(15)	(1, 407)	(854)
2002
Financial assets
Cash and deposits	5	3,182			190	3,372
Receivables	6.9		÷	÷,	1,187	1,187
		3.182		÷,	1,377	4,559
Weighted average interest rate		4.50%	$\overline{a}$	÷,
Financial liabilities
Payables	14				3.756	3.756
Bank overdraft	15	49				49
Lease liabilities	15, 18	ä,	4	17		21
		49	4	17	3.756	3,826
Weighted average interest rate		6.50%	6.80%	6.80%
Net financial assets/(liabilities)		3.133	(4)	(17)	(2,379)	733

(c) Off balance sheet financial assets and liabilities

The consolidated entity has no off balance sheet financial assets or liabilities.

(d) Credit risk exposures

The consolidated entity's maximum exposure to credit risk at the balance date in relation to each class of recognised financial asset is the carrying amount of those assets in the balance sheet.

(e) Net fair value of financial assets and liabilities

The net fair value of financial assets and liabilities of the consolidated entity approximates their carrying value.

	Directors of Entities in Consolidated Entity			Directors of Parent Entity
	2003 \$'000.	2002 \$'000	2003. \$'000.	2002 \$'000
26. Remuneration of Directors
Income paid or payable, or otherwise made available, to Directors by entities in the consolidated entity and
related parties in connection with the management of affairs of the parent entity or its controlled entities	465	349	465	349

Chiflons granted to executive directors under the Gowings Retail Employee Option Plan, are mcluded in note 21(e).

The numbers of parent entity directors whose total income from the parent entity or related parties was within the specified bands are as follows:

			2003	2002
			Number	Number
\$10,000	$\overline{\phantom{m}}$	\$19,999	۰	2
\$25,000	$\overline{\phantom{a}}$	\$29,999	2	۰
\$30,000	٠	\$39,999	۰
\$40,000	$\overline{\phantom{a}}$	\$49,000
\$120,000	$\overline{\phantom{a}}$	\$129,999	-
\$140,000	$\overline{\phantom{a}}$	\$149.999	۰
\$170,000	$\overline{\phantom{a}}$	\$179.999		۰
\$190,000	٠	\$199,999

27. Remuneration of Executives

	Executive Officers of Consolidated Entity		Executive Officers
				of Parent Entity
	2003.	2002.	2003.	2002
	s'ono	\$'00O	\$'000	\$'000
eration received, or due and receivable,

Remune from entities in the consolidated entity and related parties by Australian based executive officers (including directors) whose remuneration was at least \$100,000:

	Executive officers of the parent entity-	502	380	- רז uz	380

Options granted to executive officers under the Gowings Retail Employee Option Plan, are included in note $21(e)$ . A summary of the numbers of options granted to executive officers (with income of at least \$100,000) during the 52 week period ended 3 August 2003 is set out below.

	Granted	Lapsed	Outstanding
	Number	Number	Number
Executive officers of the parent entity	COL	233,000	-

The numbers of executive officers (including directors) whose remuneration from entities in the consolidated entity and related parties was within the specified bands are as follows: $2500$

	EXECULIVE UIHEEFS		Executive UIHcers of Parent Entity
	of Consolidated Entity
	2003	2002	2003	2002
	Number	Number	Number	Number
\$100,000 - \$109.999
$$120,000 - $129,999$
\$130,000 - \$139,999
$$140,000 - $149,999$
\$170,000 - \$179,999

Consolidated		Parent Entity
2003.	2002.	2003	2002
\$'000	\$'000.	\$'000	\$'000

28. Remuneration of Auditors

Remuneration for audit or review of the financial reports of the parent entity or any entity in the consolidated entity:

	96	118	96	118
Other services	Æ.
Audit Services	45	48	45	48

It is the consolidated entity's policy to employ HLB Mann Judd on assignments additional to their statutory audit duties where their expertise and experience with the consolidated entity are important. These assignments principally relate to tax advice.

29. Commitments for expenditure

Lease Commitments

Commitments in relation to leases contracted for at the reporting date but not recognised .
. . . . . . . . $\overline{1}$

as liabilities, payable:
Within one year	4.946	3,986	4.946	3,986
Later than one year but not later than
5 years	20,849	17,592	20,849	17,592
Later than 5 years	21,063	18,712	21,063	18,712
	46,858	40,290	46,858	40,290
Representing:
Non-cancellable operating leases	46,856	40,288	46,856	40,288
Future finance charges on finance leases	2	2	2.	2
	46,858	40,290	46,858	40,290
Operating Leases
Commitments for minimum lease payments
(excluding GST) in relation to non-cancellable
operating leases are payable as follows:
Within one year	4,945	3,985	4.945	3,985
Later than one year but not later than
5 years	20,848	17,591	20,848	17,591
Later than 5 years	21,063	18,712	21,063	18,712
Commitments not recognised in the
financial statements	46,856	40,288	46.856	40,288
Finance Leases
Commitments in relation to finance leases
(excluding GST) are payable as follows:
Within one year	3	S	З	5
Later than one year but not later than 5 years	17	18	17	18
Later than 5 years
Minimum lease payments	20	23	20	23
Less: Future finance charges	(2)	(2)	(2)	(2)
Total lease liabilities	18	21	18	21
Representing lease liabilities:
Current (note 15)	3	4	3	4

$17\,$

$\overline{21}$

15

$\overline{18}$

The weighted average interest rate implicit in the leases is $6.8\%$

Non-current (note 18)

17

$\overline{21}$

$1\,5$

$\overline{18}$

		Consolidated		Parent Entity
	2003 \$'000	2002 \$'000	2003 \$'000	2002 \$'000
30. Employee entitlements
Employee Entitlement Liabilities
Provision for employee entitlements
Current (note 17)	353	299	346	293
Non-current (note 20)	117	99	117	99
Aggregate employee entitlement liability	470	398	463	392
∄mployee numbers	No.	No.	No.	No.
Average number of employees
during the financial period	253	235	248	230

For details of the Gowings Retail Employee Option Plan refer note 21(e)

31. Related parties

Directors

The names of persons who were directors of Gowings Retail Limited at any time during the financial period are as follows: John Gowing, Michael Alscher, Duncan Shaw, Peter Sillick and Michael Faulkner. Paolo Gnecchi-Ruscone and Ken Terry were appointed as directors after the end of the period. Michael Faulkner resigned as a director on 4 April 2003 and Peter Sillick resigned as a director on 18 August 2003.

Remuneration and Retirement Benefits

Information on remuneration of directors is disclosed in note 26.

Loans to Directors and Director-Related Entities

Loans to directors of entities in the consolidated entity and their director-related entities disclosed in note 9 comprise:

		Consolidated		Parent Entity
	2003	2002	2003	2002
	\$'000	\$'000	\$'000	\$'000
Secured share loans	460	567	460	567
CONTRACTOR	CONTRACTOR			CONTRACTOR

Directors share loans are issued under the terms of the Executive and Director share plan. The loans are provided to the Directors on a limited recourse basis and are issued interest free.

Other transactions with Directors and Director-related entitles

(a) Gowing Bros. Limited - John Gowing is Managing Director and holds directly or indirectly approximately 19% of the issued capital. Michael Alscher is also a non-executive Director and holds 225,635 shares.

The Company has a lease for the retail property at 45 Market Street with Gowing Bros. Limited. The terms of the lease are normal commercial terms. The gross amount of rent paid during the period amounted to \$2,300,000 (2002: \$1,813,000 for 39 weeks).

On 5 November 2001 the Company acquired the retail business of Gowing Bros. Limited pursuant to a Business Purchase Agreement. The purchase price paid under the agreement was \$12,000,000, which was satisfied by the issue of 12,000,000 shares.

(b) York Corporate Advisory Pty Limited - a company associated with Michael Alscher, has acted as corporate adviser to the company during the period. The Company paid \$4,400 (2002: \$1,500) fees to York Corporate Advisory Pty Limited for advisory services. In 2002, the Company also paid York Corporate Advisory Pty Limited fees for the successful listing of the company on the Australian Stock Exchange which amounted to \$300,000. All fees paid to York Corporate Advisory Pty Limited have been charged on a commercial basis.

(c) Creative Licence - a director-related entity of John Gowing. During the year to 3 August 2003 the Company incurred fees amounting to \$137,000 (2002: \$123,000) from Creative Licence for services rendered in creative production of the Company's advertising journals and printed documentation. All fees charged were on a commercial basis.

(d) Several directors and/or their associates operate store accounts. The transactions in the period and balances at period end are as follows:

	Balance at 3 August 2003	Transactions in 2002/03 \$
John Gowing	1,058	8.147
Duncan Shaw	268	1,077
Michael Alscher		208

The terms upon which the Directors purchase goods are similar to the terms offered to employees.

32. Investments in controlled entities

			Equity Holding			Cost of Parent Entity's Investment
Name of Entity	Country of Incorporation	Class of Shares%	2003 %	2002 96	2003	2002
Gowings Pty Limited	Australia	Ordinary	100	100	100	100
Gowings Hardware Pty Limited	Australia	Ordinary	80	80		245.154 245.154
Gowings Wholesale Pty Limited	Australia	Ordinary	100	100	100	100

33. Segment information

The consolidated entity operates in one business, namely the general retailing of menswear and men's products, and in one geographical market, Australia

		Consolidated		Parent Entity
	2003 \$'000	2002 \$'000	2003 \$'000	2002 \$'000
34. Reconciliation of operating profit after income tax to net cash inflow from operating activities
Operating profit after income tax	(1,697)	1.135	(1,697)	1,119
Depreciation and amortisation of
non-current assets	743	481	737	476
Loss on disposal of property,
plant and equipment	16		16
Increase/(decrease) in provision for
income taxes payable	(220)	275.	(171)	247
Decrease/(increase) in deferred tax balances	27	60		60
Decrease/(increase) in receivables	11	(10)	1,284	(3)
Decrease/(increase) in inventories	1,133	(535)	(202)	(221)
Increase in other current assets	(21)	(107)		(98)
Increase/(decrease) in trade creditors	1,003	(2.915)	999	(2, 861)
Increase/(decrease) in provisions	22	85	22	81
Net cash inflow/(outflow) from
operating activities	1,017	(1,531)	988	(1,200)

35. Non-cash financing and investing activities

On 7 November 2002, 387,592 shares were issued under the Company's dividend reinvestment plan.

On 5 November 2001 the Company purchased its core business from Gowing Bros. Limited for \$12,000,000 settled by way of issue of 12,000,000 ordinary shares of \$1.00 each.

36. Earnings per share

	Consolidated	Consolidated
	2003	2002
	Cents	Cents
Basic earnings/(loss) per share	(8.3)	5.5
Diluted earnings/(loss) per share	(8.3)	5.5

Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

Earnings/(loss)	(1.706)	. 119
Weighted average number of ordinary shares	20.496.027	20,212,501

Diluted earnings per share

Cludions over ordinary shares of the Company have not been taken into account in calculation of diluted earnings per share as their exercise price (\$1.00) is significantly above the current trading price of the shares.

Directors' Declaration

The Directors declare that the financial statements and notes set out on pages 12 to 28:

• (a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
• (b) give a true and fair view of the Company's and consolidated entity's financial position as at 3 August 2003 and of their performance, as represented by the results of their operations and their cash flows, for the 52 week period ended on that date.

In the Directors' opinion:

• (a) the financial statements and notes are in accordance with the Corporations Act 2001; and
• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Directors.

JOHN GOWING Chairman

Sydney, NSW 29 October, 2003

PAOLO GNECCHI-RUSCONE Director

Independent Audit Report

To the members of Gowings Retail Limited:

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position as at 3 August 2003, and the statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for the 52 week period ended 3 August 2003 for both Gowings Retail Limited ("the company") and the consolidated entity as set out on pages 12 to 28. The consolidated entity comprises both the company and the entities it controlled during that period.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls designed to prevent and detect fraud and error, for the accounting policies and for the accounting estimates within the financial report.

Audit approach

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance that the financial report is free of material misstatement. The nature of an audit is influenced by several factors including the use of professional judgement, selective testing, the inherent limitations of internal control and the availability of audit evidence which may be persuasive rather than conclusive. Accordingly, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether, in all material respects, the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

When determining the nature and extent of our procedures we considered the effectiveness of management's internal controls over financial reporting. Our audit was not designed to provide assurance in relation to internal controls.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit opinion

In our opinion, the financial report of Gowings Retail Limited is in accordance with:

(a) the Corporations Act 2001, including:

(i) giving a true and fair view of the company's and consolidated entity's financial position as at 3 August 2003 and of their performance for the 52 week period ended on that date; and

(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and

(b) other mandatory financial reporting requirements in Australia.

$ALB$ $C/A$

HLB MANN JUDD (NSW Partnership) Chartered Accountants

Sydney, NSW 29 October, 2003.

an //LL/

D K SWINDELLS Partner

Shareholder Information

The shareholder information set out below was applicable as at 30 September 2003.

Distribution of securities

Range of fully paid ordinary shares.			Number of Shareholders
	$\overline{\phantom{a}}$	1.000	1.142
1.001	$\overline{\phantom{a}}$	5.000	584
5.001	$\overline{\phantom{a}}$	10,000	225
10,001	$\overline{\phantom{a}}$	100,000	195
100,001	$\overline{\phantom{a}}$	and over	11

Voting rights

On show of hands, at a General Meeting of the Company each member present in person or by proxy has one vote and upon a poll each person present or by proxy shall have one vote for each ordinary share held.

Substantial Shareholders

The substantial shareholders as defined by Section 708 of the Corporations Act 2001 are:

Gowing Bros. Limited	7.350.001	ordinary shares
Mr Anthony Kieron Young/
Strategic Value Pty Limited	2.149.516	ordinary shares

20 Largest shareholders

The names of the 20 largest holders of shares are listed below:

		ғину раң	Percentage or
	Name	ordinary shares	issued capital
$\mathbf{1}$	Gowings Bros. Limited	7,350,001	35.68%
2	Mr Anthony Kieron Young	1,579,413	7.67%
3	Cogent Nominees Pty Limited	764,170	3.71%
4	Strategic Value Pty Limited	570,103	2.77%
5	Mr Edward John Gowing	456,253	2.21%
6.	Warwick Pty Limited	319,845	1.55%
7	Mr John Edward Gowing	300,000	1.46%
8	Carlton Hotel Limited	286,342	1.39%
$\overline{\Omega}$	Washington H Soul Pattinson	198,608	0.96%
10	Woodside Pty Limited	135,288	0.66%
	TI Mrs Mollie Gowing	118,908	0.58%
	XXX Wes Hughes Pty Limited	101,000	0.49%
	#13 Ausa International Pty Ltd	100,000	0.49%
	14 Malla Pty Ltd	100,000	0.49%
15	Mr Peter Sillick	100,000	0.49%
	16 Dandeloo Pty Limited	78,967	0.38%
17	Appleby Pty Limited	70,020	0.34%
	18 Ayming Pty Ltd	70,000	0.34%
19	Mr John McLay	67,000	0.33%
	20 Mr Michael Faulkner	67,000	0.33%

Marketable parcels

The number of shareholdings held in less than marketable parcels is 1,250.

Corporate Directory

Gowings Retail Limited ABN 71 098 238 585

Reason Cines Leve₈ 45 Market Street SYDNEY NSW 2000 Telephone: 02 9287 6394 Facsimile: 02 9261 3020 Website: www.gowings.com.au

Company Steedary Chris Charleson

$\sin \cos \varphi$ Computershare Investor Services Psy Ltd Level 3 60 Carrington St SYDNEY NSW 2000 Telephone: 02 8234 5000 Facsimile: 02 8234 5050.

Authors ELLE Mann pool (NSW Partnership) Magn Judd House 207 Kent Street SYDNEY NSW 2000

Gowings Retail Limited ACN 098 238 585 $^\circ$

www.gowings.com.au