COMPLII FINTECH SOLUTIONS LTD — Interim / Quarterly Report 2003

Apr 30, 2003

30 April 2003

Dear Shareholder,

With the completion of the half-year ending 2 February 2003, Gowings Retail Limited has reported a net profit after tax of \$85,000, compared with \$823,000 in the previous corresponding period.

The previous corresponding financial period was for the three months from 5 November 2001 to 31 January 2002 and therefore comparative amounts disclosed in the half yearly report are not strictly comparable.

The result for the half-year is disappointing; it was impacted by a number of factors which have been previously communicated.

Factors which impacted upon the result;

• 1. Christmas trade was much slower than expected, particularly after we had experienced a very strong run up to Christmas in November 2002. We believe Christmas impacted trade was by consumer uncertainty, uncertainty which was initiated by the Bali terrorist attack and compounded by the worsening drought, the Sydney bushfires and the deteriorating global security outlook bought on as the world girded itself for war on the Middle East. Rising petrol prices also took the toll on a tighter consumer purse.
• 1. Post Christmas trade has continued to be impacted by the factors outlined above and more particularly, by a significant drop off in international tourists visiting Sydney, as a result of the lead up to the war in Iraq, which has had a negative effect on trading in our CBD stores.
• 1. Our second regional store was opened in early December last year, on the ground floor at Westfield Parramatta. The store was opened both on time and under budget. Early Christmas trade was promising; however, post Christmas trade has been very poor, with the store trading significantly below a conservative budget.

Action taken:

In light of the poor performance for the six months to the end of January 2003, the continuing environment of uncertainty that is impacting on the company's sales and more particularly the poor performance of the new Parramatta store, management has initiated a company wide strategic review from which a detailed plan of action has been developed, this plan has been endorsed by the board, the essential elements outlined below:

1. Cost Control:

All business costs are to be put to the test of risk reward and cost benefit analysis. Management have set a target to reduce general business overhead costs by 10%.

2. Working capital management;

A target has been set to reduce working capital requirements for the group by between 1 and 2 million dollars. This will be achieved by a combination of range rationalisation, improved process controls over the ordering and re-ordering of product lines combined with more timely out of stock reporting from the recently upgraded inventory IT system.

3. More targeted sales and marketing;

We have initiated a full review of all the companies marketing activities, including commencing customer focus group research. The aim of the review combined with the research is to ensure that every dollar of the marketing budget is well spent and to gain a better understanding of what are the key drivers that will increase traffic in our reaional stores.

4. Increase Parramatta store sales;

To tackle the poor performance of the Parramatta store we have firstly enlisted a store specific marketing program.

Outlook:

We previously advised that the full year EBIT was likely to be \$700,000 to \$1,000,000. However, since January 2003, we have continued to experience challenging trading conditions, and we expect this to continue in light of current world events. Given that the profit for the second half clearly depends on winter trading conditions in the months of May, June and July, it is very difficult to predict the likely performance for the full year, other than to say that unless there is a significant turnaround in the general retail environment and we have a very cold winter, that the performance for the year will be significantly lower than previously advised.

The Directors have not declared an interim dividend for the period ended 2 February 2003.

Yours faithfully

Peter Sillick Managing Director

Level 8, 45 Market Street Sydney NSW 2000

Phone: (02) 9264 6321 Fax: (02) 9261 3020 www.gowings.com