CTI LOGISTICS LIMITED — Interim / Quarterly Report 2003

Mar 13, 2003

CTI Logistics Limited

Directors' Report

Your directors present their report on the consolidated entity consisting of CTI Logistics Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2002.

Directors of the Company in office during the whole of the half-year and up to the date of this report are:

David Robert Watson

Mr Watson is the founder and executive chairman of the consolidated entity.

Trevor John Kennedy

Mr Kennedy is the non-executive deputy chairman of CTI Logistics Limited. He is also chairman of Oil Search Limited and Cypress Lakes Group Limited. He is a director of Oantas Airways Limited, Downer EDI Limited, FTR Holdings Limited, RG Capital Radio Limited, Qantas Superannuation Limited and June Investments Pty Limited. Mr Kennedy has also served on a number of other boards and Australian Government Authorities including the Federal Government Remuneration Tribunal. He is a member of the remuneration committee.

David Anderson Mellor

Mr Mellor is a chartered accountant who has been with the consolidated entity since 1978. He is responsible for the consolidated entity's finances and accounts.

Bruce Edmond Saxild

Mr Saxild has been with the consolidated entity since 1977. He is responsible for the consolidated entity's logistics and transport operations.

Jonathan David Elbery

Mr Elbery is a chartered accountant who has been with the consolidated entity since 1992. He is responsible for the consolidated entity's security, freight forwarding and customs broking operations. Mr Elbery is a member of the audit committee.

Warren William Lindsay Tucker

Mr Tucker is a non-executive director of CTI Logistics Limited. He retired from the board of CTI Logistics Limited on 21 November 2002. He is a property consultant and has had a close relationship with the consolidated entity for many years.

Peter James Leonhardt

Mr Leonhardt is a non-executive director of CTI Logistics Limited and has been with the consolidated entity since 1999. He is also chairman of Voyager Energy Limited, a director of Alliance Finance Limited and a former managing partner of Coopers $\&$ Lybrand. Mr Leonhardt is the chairman of the audit committee and remuneration committee.

Review of operations

In the half-year under review consolidated revenue has decreased from \$51,045,725 to \$48,753,784. Operating profit after income tax decreased from \$682,000 to \$103,938.

Andle

DAVID MELLOR

Director. 14 March 2003

Appendix 4B

Half yearly report

Introduced 30/6/2002.

Name of entity
CTI LOGISTICS LIMITED
Half yearly ABN or equivalent company Preliminary reference final (tick) (nck)		Half year ('current period')
69 008 778 925		31 December 2002
For announcement to the market Extracts from this report for announcement to the market (see note 1).				\$A' 000
Revenues from ordinary activities $(item 1.1)$	down	4.5%	tо	48,753
Profit from ordinary activities after tax attributable to members (item 1.22)	down	85%	ĺО	104
Profit (loss) from extraordinary items after tax attributable to members ( item 2.5( d ))	gain (loss) of
Net profit for the period attributable to members (item $1.11$ )	down	85%	l0.	104
Dividends (distributions)	Amount per security			Franked amount per security
Final dividend (Preliminary final report only - item 15.4) Interim dividend (Half yearly report only - item 15.6)		- ¢		- ¢
Previous corresponding period (Preliminary final report - item 15.5; half yearly report - item 15.7)		- ¢		- ¢
*Record date for determining entitlements to the dividend, (in the case of a trust, distribution) (see item $15.2$ )
Brief explanation of any of the figures reported above (see Note 1) and short details of any bonus or cash issue or other item(s) of importance not previously released to the market:

If this is a half yearly report it is to be read in conjunction with the most recent annual financial report.

Condensed consolidated statement of financial performance

		Current period - SA' 000	Previous corresponding period - \$A' 000
1.1	Revenues from ordinary activities (see items 1.23 $-1.25$ )	48,753	51,046
$1.2^{\circ}$	Expenses from ordinary activities (see items 1.26 & 1.27)	47,411	49,140
1.3	Borrowing costs	785	893
1.4	Share of net profits (losses) of associates and joint venture entities (see item 16.7)
1.5	Profit from ordinary activities before tax	557	1,013
1.6	Income tax on ordinary activities (see note 4)	453	331
1.7	Profit from ordinary activities after tax	104	682
1.8	Profit (loss) from extraordinary items after tax (see item $2.5$ )
1.9	Net profit	104	682
1.10	Net profit (loss) attributable to outside $+$ equity interests
1.11	Net profit for the period attributable to members	104	682
	Non-owner transaction changes in equity
1.12	Increase (decrease) in revaluation reserves
1.13	Net exchange differences recognised in equity
1.14	Other revenue, expense and initial adjustments recognised directly in equity (attach details) UIG Initial adjustments from transitional
1.15	provisions
1.16.	Total transactions and adjustments recognised directly in equity (items 1.12 to 1.15)
1.17	Total changes in equity not resulting from transactions with owners as owners	w
	Earnings per security (EPS)	Current period	Previous corresponding Period

Basic EPS . 18	$0.41$ cents	$2.74$ cents
Diluted EPS 1.19	$0.41$ cents	$2.74$ cents

Notes to the condensed consolidated statement of financial performance

Profit (loss) from ordinary activities attributable to members

		Current period - SA' 000	Previous corresponding period - SA' 000
1.20	Profit from ordinary activities after tax (item 1.7)	104	682
1.21	Less (plus) outside $+$ equity interests	$\overline{\phantom{a}}$
1.22	Profit from ordinary activities after tax, attributable to members	104	682

Revenue and expenses from ordinary activities

(see note $15$ )

			Previous
		Current period -	corresponding period -
		SA' 000	SA' 000
1.23	Revenue from sales or services
	Sales of goods	10,181	11,023
	Sales of services	42,927	45,306
	Deduct agency sales, excise and other duties	(5, 431)	(5,999)
	Revenue from operating activities	47,677	50,330
1.24	Interest revenue	69	75
1.25	Other relevant revenue
	Dividends received	I	Ŧ
	Rent received	56	188
	Grant revenue	229
	Proceeds from sale of:
	Property, plant and equipment	253	96.
	Other investment	I	30
	Other	467	326
	Other revenue	1,076	716
	Total revenue	48,753	51,046
1.26	Details of relevant expenses
	Changes in inventories	53.	489.
	Raw materials and consumables used	4,628	4,433
	Employee benefits expense	13,446	12,987
	Subcontractor expense	19,985	22,482
	Depreciation of non-current assets	1.832	1,939
	Amortisation of non-current assets	300	269
	Motor vehicle and transportation costs	2,832	2,236
	Property costs	799	1,013
	Bank fees	231	230.
	Write-down of investment	462
	Provision for share scheme loan	381
	Other expenses	2,462	3,062
	Total operating expenses excluding borrowing
	costs	47,411	49,140
1.27	Depreciation and amortisation excluding
	amortisation of intangibles (see item 2.3)	1,869	1,978
	Capitalised outlays
1.28	Interest costs capitalised in asset values
1.29	Outlays capitalised in intangibles (unless
	arising from an + acquisition of a business)

		Current period - SA' 000	Previous corresponding period $-$ \$A' $000$
1.30	Retained profits at the beginning of the financial period	795	254
1.31	Net profit attributable to members (item 1.11)	104	682
1.32	Net transfers from (to) reserves (details if material)
1.33	Net effect of changes in accounting policies
1.34	Dividends and other equity distributions paid or payable
1.35	Retained profits at end of financial period	899	936

Consolidated retained profits

Intangible and extraordinary items

		Consolidated - current period
		Before tax	Related tax	Related	Amount (after
		SA' 000 (a)	SA' 000 (b)	outside + equity interests SA' 000 (c)	(ax) attributable to members \$A' 000 (d)
2.1	Amortisation of goodwill	237			237
$2.2^{\circ}$	Amortisation of other intangibles	26			26
2.3	Total amortisation of intangibles	263			263
2.4	Extraordinary items(details)	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	L
$2.5^{\circ}$	Total extraordinary items

Comparison of half year profits

(Preliminary final report only)

• Consolidated profit (loss) from ordinary $3.1$ activities after tax attributable to members reported for the $1st$ half year (item $1.22$ in the half yearly report)
• 3.2 Consolidated profit (loss) from ordinary activities after tax attributable to members for the 2nd half year

Current year - \$A' 000	Previous year - $SA'$ 000
N/A	N/A

	Condensed consolidated statement of financial position	At end of current period SA'000	As shown in last annual report SA' 000	As in last half yearly report SA' 000
	Current assets
4.1	Cash	17	756	313
4.2	Receivables	21,094	21,553	21,802
4.3	Investments
4.4	Inventories	1,563	1,375	2,002
4.5	Tax assets	714	1,002	1,113
4.6	Other (provide details if material)
	(a) Asset held for resale	1,969 1,248	944	772
	(b) Other
4.7	Total current assets	26,605	25,630	26,002
	Non-current assets
4.8	Receivables	487	687	687
4.9	Investments (equity accounted) Other investments
4.10 4.11	Inventories	328	789	789
4.12	Exploration and evaluation expenditure
	capitalised (see para .71 of AASB 1022)
4.13	$(^+$ mining Development properties entities)
4.14	Other property, plant and equipment (net)	28,585	29,339	32,919
4.15	Intangibles (net)	5,002	5,194	5,413
4.16	Tax assets	303	362	441
4.17	Other (provide details if material)			$\mathbf{1}$
4.18	Total non-current assets	34,705	36,371	40,260
4.19	Total assets	61,310	62,001	66,262
	Current liabilities
4.20	Payables	10,337	10,162	12,109
4.21	Interest bearing liabilities	12,986	7,084	5,715
4.22	Tax liabilities	439	193	311
4.23	Provisions exc. tax liabilities	1,916	1,962	1,796
4.24	Other (provide details if material)
4.25	Total current liabilities	25,678	19,401	19,931
	Non-current liabilities
4.26	Payables	583
4.27	Interest bearing liabilities	12,154	19,706	23,338
4.28	Tax liabilities	1,510	1,701	1,745
4.29	Provisions exc. tax liabilities	442	541	455
4.30	Other (provide details if material)
4.31	Total non-current liabilities	14,689	21,948	25,538

Condensed consolidated statement of financial position continued

4.32	Total liabilities	40,367	41,349	45,469
4.33	Net assets	20,943	20,652	20,793
	Equity
4.34	Capital/contributed equity	20,044	19,857	19,857
4.35	Reserves
4.36	Retained profits	899	795	936
4.37	Equity attributable to members of the parent entity	20,943	20,652	20,793
4.38	Outside + equity interests in controlled entities
4.39	Total equity	20,943	20,652	20,793
4.40	Preference capital included as part of 4.37	۰

Notes to the condensed consolidated statement of financial position

Exploration and evaluation expenditure capitalised

(To be completed only by entities with mining interests if amounts are material. Include all expenditure incurred.)

		Current period \$A' 00	Previous
			corresponding period -
			SA' 000
5.1	Opening balance
5.2	Expenditure incurred during current period
5.3	Expenditure written off during current period
5.4	Acquisitions, disposals, revaluation
	increments, etc.
5.5	Expenditure transferred to Development
	Properties
5.6	Closing balance as shown in the
	consolidated balance sheet (item 4.12)

Development properties

(To be completed only by entities with mining interests if amounts are material)

		Current period \$A' 000 Previous
			corresponding
			Period - \$A' 000
-6.1	Opening balance
-6.2	Expenditure incurred during current period
-6.3	Expenditure transferred from exploration and evaluation
-6.4	Expenditure written off during current period

• 6.5 Acquisitions, disposals, revaluation increments, etc.
• 6.6 Expenditure transferred to mine properties

$6.7$ Closing balance as shown in the consolidated balance sheet (item $4.13$ )

Condensed consolidated statement of cash flows

			Previous
		Current period	corresponding period
		SA' 000	$-$ SA' 000
	Cash flows related to operating activities
7.1	Receipts from customers	58,274	62,139
7.2	Payments to suppliers and employees	(55,240)	(59, 302)
7.3	Dividends received from associates
7.4	Other dividends received	1
7.5	Interest and other items of similar nature
	received	69	9
7.6	Interest and other costs of finance paid	(785)	(883)
7.7	Income taxes paid	(52)	(98)
7.8	Other (provide details if material)
7.9	Net operating cash flows	2,267	1,866
7.10	Cash flows related to investing activities Payment for purchases of property, plant and
	equipment	(776)	(634)
7.11	Proceeds from sale of property, plant and	253	96
7.12	equipment Payment for purchases of equity investments
7.13	Proceeds from sale of equity investments
7.14	Loans to other entities
7.15	Loans repaid by other entities	6
7.16	Other (provide details if material)
	a) Deferred consideration from sale of businesses	998
	b) Payment for purchase of business	(83)	(28)
7.17	Net investing cash flows	398	(566)
	Cash flows related to financing activities
7.18	Proceeds from issues of + securities (shares,
	options, etc.)
7.19	Proceeds from borrowings
7.20 7.21	Repayment of borrowings	(4,234)	(2,659)
	Dividends paid	(249)
7.22	Other (provide details if material)
7.23	Net financing cash flows	(4,483)	(2,659)
7.24	Net decrease in cash held	(1, 818)	(1,359)
7.25	Cash at beginning of period (see Reconciliation of cash)	756	917

Appendix 4B Page 7

7.26 Exchange rate adjustments to item 7.25.

7.27 Cash at end of period

(see Reconciliation of cash)

w	Appendix 4B Half Yearly Report
(1,062)	(442)

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows are as follows. (If an amount is quantified, show comparative amount.)

Acquisition of plant and equipment by means of finance and hire purchase of \$1,529,206 (2001)

• \$1,357,094). Acquisition of a business for \$916,667 being payable over a 3 year period.

Issue of shares under the employee share scheme \$187,155.

Reconciliation of cash

	Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current period SA' 000	Previous corresponding period - SA' 000
8.1	Cash on hand and at bank	17	313
8.2	Deposits at call
8.3	Bank overdraft	(1,079)	(755)
8.4	Other (provide details)
8.5	Total cash at end of period ( item 7.27)	(1,062)	'442

Other notes to the condensed financial statements

Ratios		Current period	Previous corresponding period
-9.1	Profit before tax / revenue Consolidated profit (loss) from ordinary activities before tax ( item 1.5 ) as a percentage of revenue ( item 1.1 )	1.14%	1.98%
9.2	Profit after tax $/$ + equity interests Consolidated net profit (loss) from ordinary activities after tax attributable to members ( item 1.11 ) as a percentage of equity (similarly attributable) at the end of the period (item 4.37	$0.50\%$	3.28%

Earnings per security (EPS)

$10¹⁰$ Details of basic and diluted EPS reported separately in accordance with paragraph 9 and 18 of AASB 1027: Earnings Per Share are as follows. (a) Basic and diluted EPS 0.41 cents (b) Weighted average number of ordinary shares outstanding during the period used in the calculation of Basic EPS - 25,143,767

NTA backing (see note 7)	Current period	Previous corresponding Period
11.1 Net tangible asset backing per + ordinary security	$62.93$ cents	$61.82$ cents

Discontinuing Operations

(Entities must report a description of any significant activities or events relating to discontinuing operations in accordance with paragraph 7.5 (g) of AASB 1029: Interim Financial Reporting, or, the details of discontinuing operations they have disclosed in their accounts in accordance with AASB 1042: Discontinuing Operations (see note $17)$ .)

12.1	Operations Discontinume ----
CONTRACTOR ---

Control gained over entities having material effect

• 13.1 Name of entity (or group of entities)
• 13.2 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was + acquired
• 13.3 Date from which such profit has been calculated
• 13.4 Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period

Loss of control of entities having material effect

14.2 Consolidated profit (loss) from ordinary activities and

Name of entity (or group of entities) $14.1$

Consolidated profit (loss) from ordinary activities and
extraordinary items after tax of the controlled entity (or group- of entities) for the current period to the date of loss of control
Date to which the profit (loss) in item 14.2 has been calculated

of entities) for the current period to the date of loss of contr 14.3 Date to which the profit (loss) in item 14.2 has been calculated

$\bar{\mathfrak{C}}$

$\bar{\mathcal{C}}$

Appendix 4B Half Yearly Report

• 14.4 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period
• 14.5 Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from sale of interest leading to loss of control

Dividends (in the case of a trust, distributions)

• 15.1 Date the dividend (distribution) is payable
• $15.2$ +Record date to determine entitlements to the dividend (distribution) (ie, on the basis of proper instruments of transfer received by 5.00 pm if ⁺securities are not ⁺CHESS approved, or security holding balances established by 5.00 pm or such later time permitted by SCH Business Rules if ⁺securities are ⁺CHESS approved)
• 15.3 If it is a final dividend, has it been declared? (Preliminary final report only)

Amount per security

		Amount per security	Franked amount per security at $%$ tax (see note 4)	Amount per security of foreign source dividend
	(Preliminary final report only)
15.4	Final dividend: Current year	¢	¢	¢
15.5	Previous year	¢	¢	¢
	(Half yearly and preliminary final reports)
15.6	Interim dividend: Current year	- ¢	- ¢	- $\emptyset$
15.7	Previous year	- ¢	- ¢	- ¢

Total dividend (distribution) per security (interim plus final)

(Preliminary final report only)

15.8 +Ordinary securities

15.9- Preference + securities
----------------------------------	--

Half yearly report - interim dividend (distribution) on all securities or Preliminary final report - final dividend (distribution) on all securities

	Current period SA' 000 Previous corresponding	period - $SA'$ 000
15.10 +Ordinary securities (each class separately)	-

Current year

Previous year

$\mathcal{C}$

$\tilde{\mathcal{G}}$

$\overline{1}$

• 15.11 Preference ⁺securities (each class separately)
• 15.12 Other equity instruments (each class separately)
• 15.13 Total

The ⁺dividend or distribution plans shown below are in operation.

The last date(s) for receipt of election notices for the ⁺dividend or distribution plans

	$\ldots$
-

Any other disclosures in relation to dividends (distributions). (For half yearly reports, provide details in accordance with paragraph 7.5(d) of AASB 1029 Interim Financial Reporting)

Details of aggregate share of profits (losses) of associates and joint venture entities

entities':	Group's share of associates' and joint venture	Current period SA' 000	Previous corresponding period - \$A' 000
16.1	Profit (loss) from ordinary activities before tax
16.2	Income tax on ordinary activities
16.3	Profit (loss) from ordinary activities after tax
16.4	Extraordinary items net of tax
16.5	Net profit (loss)
16.6	Adjustments
16.7	Share of net profit (loss) of associates and joint venture entities

Material interests in entities which are not controlled entities

The economic entity has an interest (that is material to it) in the following entities. (If the interest was acquired or disposed of during either the current or previous corresponding period, indicate date of acquisition ("from $dd/mm/yy"$ ) or disposal ("to dd/mm/yy").)

	Name of entity	Percentage of ownership date of disposal	interest held at end of period or	Contribution to net profit (loss) (item 1.9)
17.1	Equity accounted associates and joint venture entities	Current period	Previous corresponding period	Current period SA'000	Previous corresponding period - SA'000
17.2	Total
17.3	Other material interests
17.4	Total

Issued and quoted securities at end of current period
(Description must include rate of interest and any redemption or conversion rights together with prices and dates)

	Category of + securities	Total number	Number quoted	Issue price per security (see note (4) (cents)	Amount paid up per security (see note (4) (cents)
18.1	Preference +securities (description)
18.2	Changes during current period (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions
18.3	+ Ordinary securities	25,329,931	25,329,931	N/A	N/A
18.4	Changes during current period (a) Increases through issues (b) Decreases through returns of capital, buybacks	450,000	450,000	41.59 cents	41.59 cents
18.5	+ Convertible debt securities (description and conversion factor)
18.6	Changes during current period (a) Increases through issues (b) Decreases through securities matured, converted
18.7	Options (description and conversion factor)	650,000		Exercise Price 75 cents	Expiry date 28/2/2004
18.8	Issued during current period	Nil
18.9	Exercised during current period
18.10	Expired during current period
18.11	Debentures (description)
18.12	Changes during current period (a) Increases through issues
	(b) Decreases through securities matured, converted

Segment reporting

(Information on the business and geographical segments of the entity must be reported for the current period in accordance with AASB 1005. Segment Reporting and for half year reports, AASB 1029: Interim Financial Reporting. Because entities employ different structures a pro forma cannot be provided. Segment information in the layout employed in the entity's $+$ accounts should be reported separately and attached to this report.)

Comments by directors

(Comments on the following matters are required by ASX or, in relation to the half yearly report, by AASB 1029: Interim Financial Reporting. The comments do not take the place of the directors' report and statement (as required by the Corporations Act) and may be incorporated into the directors' report and statement. For both half yearly and prefiminary final reports, if there are no comments in a section, state NIL. If there is insufficient space to comment, attach notes to this report.)

Basis of financial report preparation

• $19.1$ If this report is a half yearly report, it is a general purpose financial report prepared in accordance with the listing rules and AASB 1029: Interim Financial Reporting. It should be read in conjunction with the last "annual report and any announcements to the market made by the entity during the period. The financial statements in this report are 'condensed financial statements' as defined in AASB 1029: Interim Financial Reporting. This report does not include all the notes of the type normally included in an annual financial report. [Delete if preliminary final report.]
• 19.2 Material factors affecting the revenues and expenses of the economic entity for the current period. In a half yearly report, provide explanatory comments about any seasonal or irregular factors affecting operations.

See attached letter to shareholders

19.3 A description of each event since the end of the current period which has had a material effect and which is not already reported elsewhere in this Appendix or in attachments, with financial effect quantified (if possible).

Nil

19.4 Franking credits available and prospects for paying fully or partly franked dividends for at least the next year.

Franking credits available \$408,034

$19.5 -$ Unless disclosed below, the accounting policies, estimation methods and measurement bases used in this report are the same as those used in the last annual report. Any changes in accounting policies, estimation methods and measurement bases since the last annual report are disclosed as follows. (Disclose changes and differences in the half yearly report in accordance with AASB 1029: Interim Financial Reporting. Disclose changes in accounting policies in the preliminary final report in accordance with AASB 1001: Accounting Policies-Disclosure).

Changes in accounting policies since the last annual report

There have been no changes in accounting policies since the last annual report except for the changes described below.

Change in segment accounting policy

The segment accounting policy has been revised to align with the information that is prepared for reporting to management. The adjustments involved with the preparation of segmental information relate to the reallocation of the cost of capital and other costs to more fairly reflect the actual resources used by each segment. Internal service companies have been classified as unallocated. The comparative information has been restated to reflect this change.

The financial effect of this change was to reduce the Sales of the Transport and Logistics segment by \$44,964 (2001; \$198,855) and to reduce Sales of the Manufacturing, Security and Other segment by \$272,922 (2001; \$368,978), while giving rise to corresponding adjustment to Intersegment eliminations and Unallocated sales. The result of the Transport and Logistics segment has increased by \$392,955 (2001: \$299,462) while the result of the Manufacturing, Security and Other segment has decreased by \$256,414 (2001: \$6,267). There has been a corresponding adjustment to Intersegment eliminations and Unallocated result.

Change in accounting policy for providing for dividends

Provision is only made for the amount of any dividend declared, determined or publicly recommended by the directors on or before the end of the half-year but not distributed at balance date.

The above policy was adopted with effect from 1 July 2002 to comply with AASB 1044 Provisions, Contingent Liabilities and Contingent Assets released in October 2001 and applied to the half-year ended 31 December 2002. In previous periods, in addition to providing for the amount of any dividends declared, determined or publicly recommended by the directors on or before the end of the period but not distributed at balance date, provision was made for dividends to be paid out of retained profits at the end of the period where the dividend was proposed, recommended or declared between the end of the period and the completion of the financial report.

An adjustment of \$248,799 was made against consolidated retained profits at the beginning of the half-year to reverse the amount provided at 30 June 2002 for the proposed final dividend for the year ended on that date that was recommended by the directors between the end of the financial year and the completion of the financial report. This reduced the consolidated current liabilities – provisions and total liabilities at the beginning of the half year by \$248,799 with corresponding increases in consolidated net assets, retained profits, total equity and the total dividends provided for or paid during the current interim period.

The restatements of the consolidated retained profits, total dividends provided for or paid during the halfyear and current provisions set out below show the information that would have been disclosed had the new accounting policy always been applied.

		Previous
	Current period	corresponding period
	SA' 000	- SA' 000
	(Restated)	(Restated).
Restatement of retained profits
Previously reported retained profits at the end of the previous financial year	795	254
Change in accounting policy for providing for dividends	249
Restated retained profits at the beginning of the half-year	1.044	254
Net profit attributable to members of CTI Logistics Limited	786	682.

Appendix 4B Page 15

		Appendix 4B
Total available for appropriation	1.830	Half Yearly Report 936
Dividends provided or paid
	(249)
Restated retained profits at the end of the half-year	1.581	936
Restatement of total dividends provided or paid
Previously reported total dividends provided for or paid during the half-year	249
Adjustment for change in accounting policy
Restated total dividends provided for or paid during the half-year	249
Restatement of current liabilities - provisions
Previously reported carrying amount at the end of the half-year	1,916	1,962
Adjustment for change in accounting policy		(249)
Restated carrying amount at the end of the half-year	1.916	.713

19.6 Revisions in estimates of amounts reported in previous interim periods. For half yearly reports the nature and amount of revisions in estimates of amounts reported in previous +annual reports if those revisions have a material effect in this half year.

$19.7$ Changes in contingent liabilities or assets. For half yearly reports, changes in contingent liabilities and contingent assets since the last + annual report.

Additional disclosure for trusts

• $20.1$ Number of units held by the management company or responsible entity or their related parties.
• 20.2 A statement of the fees and commissions payable to the management company or responsible entity.

Identify:

• $\bullet$ initial service charges
• management fees ٠ ÷ other fees

Annual meeting (Preliminary final report only) The annual meeting will be held as follows:

Place

Date

Time

Approximate date the ⁺annual report will be available

Compliance statement

$\mathbf{I}$ This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX (see note 12).

Identify other standards used

• $\overline{2}$ This report, and the ⁺accounts upon which the report is based (if separate), use the same accounting policies.
• 3 This report does/does not* (delete one) give a true and fair view of the matters disclosed $(see note 2).$
• $\overline{4}$ This report is based on ⁺accounts to which one of the following applies. $(Tick one)$
• The ⁺accounts have been audited.
• The ⁺accounts are in the process of being audited or subject to review.
• The ⁺accounts have been subject to review.
• The ⁺accounts have not yet been audited or reviewed.
• 5 If the audit report or review by the auditor is not attached, details of any qualifications will follow immediately they are available* ). (Half yearly report only - the audit report or review by the auditor must be attached to this report if this report is to satisfy the requirements of the Corporations Act.)
• 6 The entity has a formally constituted audit committee.

Andle

Sign here:	(Company Secretary)	Date: 14 March 2003
Print name:		David Mellor

Notes

• $\mathbf{I}$ . For announcement to the market The percentage changes referred to in this section are the percentage changes calculated by comparing the current period's figures with those for the previous corresponding period. Do not show percentage changes if the change is from profit to loss or loss to profit, but still show whether the change was up or down. If changes in accounting policies or procedures have had a material effect on reported figures, do not show either directional or percentage changes in profits. Explain the reason for the omissions in the note at the end of the announcement section. Entities are encouraged to attach notes or fuller explanations of any significant changes to any of the items in page 1. The area at the end of the announcement section can be used to provide a cross reference to any such attachment.
• $2.$ True and fair view If this report does not give a true and fair view of a matter (for example, because compliance with an Accounting Standard is required) the entity must attach a note providing additional information and explanations to give a true and fair view.

3. Condensed consolidated statement of financial performance

• The definition of "revenue" and an explanation of "ordinary activities" Item $1.1$ are set out in AASB 1004: Revenue, and AASB 1018: Statement of Financial Performance.
• Item $1.6$ This item refers to the total tax attributable to the amount shown in item 1.5. Tax includes income tax and capital gains tax (if any) but excludes taxes treated as expenses from ordinary activities (eg, fringe benefits tax).
• $4.$ Income tax If the amount provided for income tax in this report differs (or would differ but for compensatory items) by more than 15% from the amount of income tax prima facie payable on the profit before tax, the entity must explain in a note the major items responsible for the difference and their amounts. The rate of tax applicable to the franking amount per dividend should be inserted in the heading for the column "Franked" amount per security at $%$ tax" for items 15.4 to 15.7.

$5.$ Condensed consolidated statement of financial position

Format The format of the consolidated statement of financial position should be followed as closely as possible. However, additional items may be added if greater clarity of exposition will be achieved, provided the disclosure still meets the requirements of AASB 1029: Interim Financial Reporting, and AASB 1040: Statement of Financial Position. Also, banking institutions, trusts and financial institutions may substitute a clear liquidity ranking for the Current/Non-Current classification.

Basis of revaluation If there has been a material revaluation of non-current assets (including investments) since the last $\alpha$ ⁺ annual report, the entity must describe the basis of revaluation adopted. The description must meet the requirements of AASB 1010: Accounting for the Revaluation of Non-Current Assets. If the entity has adopted a procedure of regular revaluation, the basis for which has been disclosed and has not changed, no additional disclosure is required.

• 1. Condensed consolidated statement of cash flows For definitions of "cash" and other terms used in this report see AASB 1026: Statement of Cash Flows. Entities should follow the form as closely as possible, but variations are permitted if the directors (in the case of a trust, the management company) believe that this presentation is inappropriate. However, the presentation adopted must meet the requirements of AASB 1026. ⁺Mining exploration entities may use the form of cash flow statement in Appendix 5B.
• $7.$ Net tangible asset backing Net tangible assets are determined by deducting from total tangible assets all claims on those assets ranking ahead of the ⁺ordinary securities (ie, all liabilities, preference shares, outside $+$ equity interests etc). $+$ Mining entities are not required to state a net tangible asset backing per ⁺ordinary security.
• 1. Gain and loss of control over entities The gain or loss must be disclosed if it has a material effect on the 'accounts. Details must include the contribution for each gain or loss that increased or decreased the entity's consolidated profit (loss) from ordinary activities and extraordinary items after tax by more than 5% compared to the previous corresponding period.
• 1. Rounding of figures This report anticipates that the information required is given to the nearest \$1,000. If an entity reports exact figures, the \$A'000 headings must be amended. If an entity qualifies under ASIC Class Order 98/0100 dated 10 July 1998, it may report to the nearest million dollars, or to the nearest $$100,000$ , and the $$A000$ headings must be amended.
• 1. Comparative figures Comparative figures are to be presented in accordance with AASB 1018 or AASB 1029 Interim Financial Reporting as appropriate and are the unadjusted figures from the latest annual or half year report as appropriate. However, if an adjustment has been made in accordance with an accounting standard or other reason or if there is a lack of comparability, a note explaining the position should be attached. For the statement of financial performance, AASB 1029 Interim Financial Reporting requires information on a year to date basis in addition to the current interim period. Normally an Appendix 4B to which AASB 1029 Interim Financial Reporting applies would be for the half year and consequently the information in the current period is also the year to date. If an Appendix 4B Half yearly version is produced for an additional interim period (eg because of a change of reporting period), the entity must provide the year to date information and comparatives required by AASB 1029 Interim Financial Reporting. This should be in the form of a multi-column version of the consolidated statement of financial performance as an attachment to the additional Appendix 4B.
• $11.$ Additional information An entity may disclose additional information about any matter, and must do so if the information is material to an understanding of the reports. The information may be an expansion of the material contained in this report, or contained in a note attached to the report. The requirement under the listing rules for an entity to complete this report does not prevent the entity issuing reports more frequently. Additional material lodged with the ⁺ASIC under the Corporations Act must also be

given to ASX. For example, a director's report and declaration, if lodged with the ⁺ASIC, must be given to ASX.

• $12.$ Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if one exists) must be complied with.
• Corporations Act financial statements This report may be able to be used by an entity $\left| \right|$ required to comply with the Corporations Act as part of its half-year financial statements if prepared in accordance with Australian Accounting Standards.
• $(4)$ Issued and quoted securities The issue price and amount paid up is not required in items 18.1 and 18.3 for fully paid securities.
• $15^°$ Details of expenses AASB 1018 requires disclosure of expenses from ordinary activities according to either their nature or function. For foreign entities, there are similar requirements in other accounting standards accepted by ASX. AASB ED 105 clarifies that the disclosures required by AASB 1018 must be either all according to nature or all according to function. Entities must disclose details of expenses using the layout (by nature or function) employed in their ⁺accounts.

The information in lines 1.23 to 1.27 may be provided in an attachment to Appendix $4B$ .

Relevant Items AASB 1018 requires the separate disclosure of specific revenues and expenses which are not extraordinary but which are of a size, nature or incidence that disclosure is relevant in explaining the financial performance of the reporting entity. The term "relevance" is defined in AASB 1018. There is an equivalent requirement in AASB 1029: Interim Financial Reporting. For foreign entities, there are similar requirements in other accounting standards accepted by ASX.

16 Dollars If reporting is not in A\$, all references to \$A must be changed to the reporting currency. If reporting is not in thousands of dollars, all references to '000" must be changed to the reporting value.

17. Discontinuing operations

Half yearly report

All entities must provide the information required in paragraph 12 for half years beginning on or after 1 July 2001.

Preliminary final report

Entities must either provide a description of any significant activities or events relating to discontinuing operations equivalent to that required by paragraph 7.5 $(g)$ of AASB 1029: Interim Financial Reporting, or, the details of discontinuing operations they are required to disclose in their ⁺ accounts in accordance with AASB 1042 Discontinuing Operations.

In any case the information may be provided as an attachment to this Appendix 4B.

18. Format

This form is a Word document but an entity can re-format the document into Excel or similar applications for submission to the Companies Announcements Office in ASX.

CTI LOGISTICS LIMITED

SEGMENT INFORMATION 31 DECEMBER 2002

The economic entity operates predominantly in Australia and is involved in the production and sale of the following products and services:

• $\neg$ Logistics and Transport services
• $\neg$ Manufacturing, Security and other services

	Logistics and Transport 2002 \$	Manufacturing, Security and Other 2002 \$	Intersegment eliminations 2002 \$	Consolidated 2002 \$
Sales to customers outside the
consolidated entity	35,979,537	12,465,316		48,444,853
Intersegment sales	144,638	26,496	(171, 134)
Total segment revenue	36,124,175	12,491,812	(171, 134)
Unallocated Sales				308,931
Consolidated revenue from ordinary activities				48,753,784
Segment result	211,059	1,607,224	(65, 395)	1,752,888
Unallocated revenues and expenses
Write down for investments				(461, 580)
Provision for share scheme loan				(381,000)
Other				(352, 881)
				(1, 195, 461)
Consolidated profit from ordinary activities before income tax				557,427
Income tax expense				453,490
Net profit				103,937
	2001 \$	2001 \$	2001 \$	2001 \$
Sales to customers outside the consolidated entity	37,969,351	12,511,519		50,480,870
Intersegment sales	123,820	30,613	(154, 433)
Total segment revenue	38,093,171	12,542,132	(154, 433)
Unallocated Sales				564,855
Consolidated revenue from ordinary activities				51,045,725
Segment result	886,420	555,309	(81, 396)	1,360,333
Unallocated revenues and expenses				(347,368)
Consolidated profit from ordinary activities before income tax				1,012,965
Income tax expense				330,965
Net profit				682,000

CTI LOGISTICS LIMITED

NOTE $4$

INCOME TAX ON ORDINARY ACTIVITES

The aggregate amount of income tax attributable to the financial year differs from the amount of prima facie payable on the operating profit.	2002 \$
The differences are reconciled as follows:
Prima facie income tax on the operating profit	167,228
Tax effect of permanent differences which
Reduce tax expense:
Utilisation of prior year tax losses not booked	50,678
Other	8.376
Increase tax expense:
Non-deductible write downs and provisions	252,774
Non-deductible amortisation	92.542
Income tax on ordinary activities	453.490

CTI Logistics Limited

Directors' Declaration

The directors declare that the Half yearly report Appendix 4B and notes set out on pages 1 to 22

• $(a)$ comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
• $(b)$ give a true and fair view of the consolidated entity's financial position as at 31 December 2002 and of its performance, as represented by the results of its operations and its cash flows, for the half-year ended on that date.

In the directors' opinion:

• $(a)$ the Half yearly report Appendix 4B and notes are in accordance with the Corporation Act 2001; and
• $(b)$ there are reasonable grounds to believe that CTI Logistics Limited 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.

DAVID MELLOR Director

Perth 14 March 2003

PRICEWATERHOUSE COPERS &

Independent review report to the members of CTI Logistics Limited

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report (defined below) is not presented in accordance with:

• the Corporations Act 2001 in Australia, including giving a true and fair view of the financial position of the CTI Logistics Group (defined below) as at 31 December 2002 and of its performance for the half-year ended on that date
• Accounting Standard AASB 1029: Interim Financial Reporting and other mandatory professional reporting requirements in Australia, the Corporations Regulations 2001 and ASX Listing Rules relating to half yearly financial reports.

This statement must be read in conjunction with the following explanation of the scope and summary of our role as auditor.

Scope and summary of our role

The financial report – responsibility and content

The preparation of the financial report for the half-year ended 31 December 2002 is the responsibility of the directors of CTI Logistics Limited. It includes the financial statements for the CTI Logistics Group (the Group), which incorporates CTI Logistics Limited (the Company) and the entities it controlled during the half-year ended 31 December 2002.

The financial report comprises the attached half yearly report in the form of Appendix 4B of the Australian Stock Exchange (ASX) Listing Rules and the directors' declaration thereon for the half year ended 31 December 2002, excluding material factors affecting the revenues and expenses of the consolidated entity for the current period (page 14) and compliance statement (pages 17 and 18).

The auditor's role and work

We conducted an independent review of the financial report in order for the Company to lodge the financial report with the Australian Securities $\&$ Investments Commission and the ASX. Our role was to conduct the review in accordance with Australian Auditing Standards applicable to review engagements. Our review did not involve an analysis of the prudence of business decisions made by the directors or management.

This review was performed in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report does not present fairly a view in accordance with the Corporations Act 2001, Accounting Standard AASB 1029: Interim Financial Reporting and other mandatory professional reporting requirements in Australia,

PricewaterhouseCoopers ABN 52 780 433 757

OV₁ 250 St Georges Terrace PERTH WA 6000 GPO Box D198 PERTH WA 6840 DX 77 Perth Anstralia www.pwcglobal.com/au Telephone +61 8 9238 3000 Pacsimile +61 8 9238 3999

PRICEWATERHOUSE COPERS

the Corporations Regulations 2001 and ASX Listing Rules relating to half yearly financial reports, which is consistent with our understanding of the Group's financial position, and its performance as represented by the results of its operations and cash flows.

The review procedures performed were limited primarily to:

• inquiries of company personnel of certain internal controls, transactions and individual items
• analytical procedures applied to financial data.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit, and accordingly, we do not express an audit opinion.

Independence

As auditor, we are required to be independent of the Group and free of interests which could be incompatible with integrity and objectivity. In respect of this engagement, we followed the independence requirements set out by The Institute of Chartered Accountants in Australia, the Corporations Act 2001 and the Auditing and Assurance Standards Board.

In addition to our statutory audit and review work, we were engaged to undertake other services for the Group. In our opinion the provision of these services has not impaired our independence.

Picaroleshouse(orgens

PricewaterhouseCoopers

Ind J. for

David Smith Partner

Perth 14 March 2003

ABN 69 008 778 925

328 Aberdeen Street West Perth WA 6005

Postol Address PO Box 400 West Perth Western Australia 6872 Telephone (08) 9227 6333 Facsimile (08) 9227 8000 Email corporate@atillogistics.com Web www.dilogistics.com

14 March 2003

Dear Shareholder,

The Company's results for the 6 months ended 31 December 2002 were released today to the Australian Stock Exchange.

Profit from ordinary adivities for the period has been affeded by two abnormal charges which do not relate at all to our namal business operations. Without these conormal charges, profit from ordinary activities before tax was \$1,400,000, up 38.2% on the previous corresponding period.

However, the directors decided to adjust the book values of two long term non-operating assets in the period. These adjustments, made in accordance with Australian Accounting Standards, impact directly on the bottom line, but have no aash flow effect on the Company, nor do they in any way affect the Company's ongoing operations.

The end result for the period, after the indusion of the donormal asset value adjustments, is a profit before tax of \$557,000 and a profit after tax attributable to members of \$104,000.

The two significant items, both of which were disdosed in the 2002 Annual Report issued last October, are

• $\left| \cdot \right\rangle$ A small residual investment in another public listed company which used to be a controlled entity has been retained for some years. The company has a very small capitalisation and is thinly traded. It has been dedided to write the investment down by \$462,000, to a level which reflects current market value. The net tangible asset backing value of these shares is substantially more than ourrent market value. There are no current plans to liquidate this investment and if the shares are subsequently sold at a price above the written down value any profit will be brought to account as it arises.
• $2)$ There is a shortfall between the issue price of shares issued several years app to executive directors under the Employee Share and Option Plan and the current market price. Previously this shortfall had been alsdosed in last year's Annual Report but the directors consider it prudent practice to make a provision of \$381,000 in the accounts to reflect this shortfall. This provision is of no benefit to the executive directors.

In spite of the disappointing overall result caused by the adjustments outlined doove, the Company's operating profitability has improved and net interest bearing liabilities have been reduced by another \$1.65 million in the six months under review. A further reduction of debt of \$2 million has been made since 31 December 2002, and there will more reductions as deferred receivables from the prior sales of businesses are redised. Operating cash flows were strong at \$2.267 million (previously \$1.866 million).

The objectives of realising non-performing assets and businesses, rebuilding the balance sheet and concentrating on core businesses will continue to show improvements to the bottom line results.

Finally, as for the previous finandal year, the directors will review the dividend payable on completion of the accounts for the full year ending 30 June 2003.

Yours faithfully,

DAM D WATSON EXECUTIVE CHAIRMAN