CVC LIMITED — Interim / Quarterly Report 2005

Feb 21, 2005

Commentary on Results, Developments and Future Expectations

Record Half Year Profit

The Directors of CVC Limited ("CVC") wish to report a record net profit of \$16.6 M (15.6 cents per share) for the 6 months to 31 December 2004. The profit is an increase of 84% from 31 December 2003, which itself was a record result. The Directors have also recently declared an interim dividend of 2 cents per share, a 33% increase on the 2004 interim dividend.

It should be noted that this result has been achieved without the sale of any of CVC's shares in Sunland Group Limited ("Sunland") and does not include any recognition of the unrealised increases in the market values of CVC's listed investments during the period (which increased by over \$40 million during the 6 months). A key driver of the result for the period was the sale of CVC's interest in the Chevron Renaissance shopping centre on the Gold Coast. This sale has contributed over \$9 million to the CVC half year result and with future conditional consideration the final realised profit could rise to over \$10 million.

Commentary on Developments

Notwithstanding the results reported today, the Directors believe it is some of the developments that are not reflected in these results that represent the greatest advances during the period for CVC. These include: the unrealised increase in the value of the CVC portfolio of listed investments; the acquisition of the investment manager; the recent placement of 16.5 Million shares in the Company at \$1.70 per share; the new investment in Ron Finemore Transport Pty Ltd ("RFT"); and the development of investments in Pro-Pac Group Limited ("Pro-Pac"), Probiotec Group; the joint venture at Fern Bay, NSW and the joint venture acquisition of a commercial bulky goods development site at Belrose, NSW.

Between 30 June 2004 and 31 December 2004 the unrealised profit in respect of the differences between market values and accounting values of CVC's investments in Sunland and other listed companies has increased by over \$40 million.

During the period, CVC acquired the funds management business of its investment manager, internalising the management function, eliminating future performance fee liabilities, reducing ongoing overheads and providing a new recurring revenue stream for CVC. Shareholders will recall that another key rationale of this restructure was to increase the appeal of CVC to the wider investment community. Accordingly, we believe the recent share placement, raising \$28 million for future investment activities, led by two major institutional investors, is a significant step towards achieving greater appeal for CVC.

The investment in Ron Finemore Transport (RFT) and the acquisition of the Lewingtons transport companies represents an exciting opportunity for CVC to get back into partnership with Ron Finemore who has an outstanding record in the transport industry. The acquisition of the Lewington's business is the first in what we believe will be a series of acquisitions to build RFT into a major regional logistics group.

CVC is pleased to report continuing positive development of the investments in: Pro-Pac's packaging business, Probiotec Group's nutraceutical and pharmaceutical business, the joint venture with Winten Property Group to develop a major parcel of residential land at Fern Bay near Newcastle New South Wales and the recently completed joint venture acquisition of a commercial bulky goods site at Belrose New South Wales.

CVC Limited	Level 42, AAP Centre	t T 02 9087 8000
ABN 34 002 700 361 1 259 George Street		IF0290878088
AFSL 239665	I Sydney NSW 2000	www.cycitd.com.au

The Pro-Pac business continues to grow, both organically and by acquisition, and is targeting a listing on the Australian Stock Exchange before the end of the current financial year.

Similarly, Probiotec Group continues to grow both organically and by acquisition and recently completed an acquisition of Milton Pharmaceuticals, continuing its development towards a proposed listing in late 2005.

The development of the land at Fern Bay is also progressing well. The site has development approval for approximately 200 lots, with sales expected to commence before the end of the year, and we remain optimistic that development approval for significant additional lots will be forthcoming

Commentary on Future Expectations

Your Directors look forward to the future with great optimism. CVC is now in a strong position for the future:

• the current listed investments continue to perform and, there is great potential for short ٠ and long term growth in the value of Pro-Pac, Fern Bay and other unlisted investments including Ron Finemore Transport,
• following the previously announced settlement of the sale of the Chevron Shopping Centre, the sale of shares in Sunland, and the recent placement of shares, CVC will have approximately \$60 Million available for future investment and no debt.
• CVC will continue to build its funds management business with capital raisings ٠ commencing for CVC Sustainable Investments and other initiatives for further product development being evaluated. CVC sees the funds management business as a core platform for future growth. CVC's management team have expertise developed over 20 years across a broad range of disciplines, including asset management, corporate restructuring, corporate advisory, infrastructure and property development, acquisitions and divestment. CVC believes these skills will underpin CVC's future development.
• At the date of this report it is anticipated that CVC's full year profit after tax for the year ۰ ended June 30, 2005 will exceed \$25 Million.

Finally shareholders should be aware of two accounting issues that will affect future performance and net asset positions of CVC. These are the way of accounting for the Sunland investment and the effects of the introduction of Australian equivalents to International Financial Reporting Standards.

With the post half-year sale of part of CVC's shareholding in Sunland, it can be expected that CVC will cease equity accounting for Sunland, this would mean that the reported future results of CVC will not include a share of the results of Sunland but will instead include only dividends received.

From 1 July 2005, CVC will be required to adopt accounting policies consistent with new Australian equivalents to International Financial Reporting Standards. CVC has not concluded its review work on the effects of the new standards, nor made all the determinations of which policies to adopt where different approaches are permitted. However, it is currently anticipated that the introduction of the new standards will lead to the net assets of CVC substantially increasing to reflect the underlying unrealised increases in market values of its listed investments.

CVC Limited	Level 42, AAP Centre T 02 9087 8000
ABN 34 002 700 361 259 George Street AFSL 239665	Sydney NSW 2000	F02 9087 8088 www.cvcitd.com.au

Appendix 4D

Half Yearly Report Results for announcement to the market

CVC Limited
ABN	Half Year ended ('Reporting Period')		Previous Half Year ended ('Corresponding period')
34 002 700 361	31 December 2004		31 December 2003
Results Revenues from Ordinary Activities		Down	$42\%$ to	\$17,576,914
Profit from Ordinary Activities after Tax attributable to Members		Up	84 % to	\$16,594,182
Net Profit for the Period attributable to Members		Up	84 % to	\$16,594,182

Dividends (distributions)

	Amount per security	Franked amount per security
Interim Dividend	2.0 c	2.0 e
Previous Corresponding Period Dividend	1.5

Information on Dividends:

A final dividend of 1.5 cents per share in respect of the financial year ended 30 June 2004 was declared on 6 October 2004 and paid on 14 December 2004.

An interim dividend of 2 cents per share in respect of the financial year ended 30 June 2005 was declared on 17 February 2005 to be paid on 10 March 2005. Shareholders can elect to receive the dividend as new shares in the Company in accordance with the rules of the CVC Limited Dividend Reinvestment Plan.

Record date for determining entitlements to the dividend	-28 February 2005
Last date for receipt of election notices for participation in the CVC Limited Dividend Reinvestment Plan	-28 February 2005

Commentary

Brief explanation of any of the figures reported above:

Please refer to the attached commentary for a detailed review.

CVC LIMITED AND ITS CONTROLLED ENTITIES

HALF YEAR FINANCIAL REPORT

For the half-year ended 31 December 2004

ACN 002 700 361

COMPANY PARTICULARS

CVC LIMITED

ACN 002 700 361

DIRECTORS

Vanda R Gould John S Leaver John D Read Alexander D H Beard John T Riedl

SECRETARIES

Alexander D H Beard Michael J Bower

MANAGEMENT TEAM

Alexander D H Beard Michael J Bower Vanda R Gould William J Highland Saxon J Hill Christian T Jensen Elliott G Kaplan Geoffrey P Leaver John S Leaver

PRINCIPAL AND REGISTERED OFFICE

Level 42, AAP Centre, 259 George Street SYDNEY, NSW 2000, AUSTRALIA Telephone: $(02)$ 9087 8000 Facsimile: $(02)$ 9087 8088

SHARE REGISTRY

Gould Ralph Services Pty Limited Share Registry Division Level 42, AAP Centre, 259 George Street SYDNEY, NSW 2000, AUSTRALIA Telephone: $(02)$ 9032 3000 Facsimile: $(02)$ 9032 3088

AUDITORS

HLB Mann Judd (NSW Partnership) Chartered Accountants Level 19, 207 Kent Street SYDNEY, NSW 2000, AUSTRALIA

BANKERS

Westpac Banking Corporation Limited Suncorp-Metway Limited

HOME STOCK EXCHANGE Sydney

CVC LIMITED & CONTROLLED ENTITIES DIRECTORS' REPORT

The Directors present their report together with the consolidated financial report for CVC Limited and its controlled entities ("CVC") for the half-year ended 31^® December 2004 and the auditors' review thereon.

Directors

The Directors of the Company during or since the end of the half-year are:

Vanda Russell Gould (Chairman) B. Comm. (Uni. of NSW), M. Comm. (Uni. of NSW) Board member since 1996. Fellow of the Institute of Chartered Accountants in Australia. Director of numerous private and public companies including educational establishments.

John Scott Leaver (Non Executive Director)

B.Ec. (Uni. of Sydney) Licensed Securities Dealer. Board member since 1984. Chairman of Sunland Group Limited.

John Douglas Read (Non Executive Director)

B.Sc. (Hons.) (Cant.), M.B.A. (A.G.S.M.). Board member since 1989 and Chairman of the Environmental Group Limited. Mr Read is a Fellow of the Australian Institute of Company Directors.

Alexander Damien Harry Beard (Non Executive Director and Company Secretary)

B. Comm. (Uni. of NSW). Associate of the Institute of Chartered Accountants in Australia. Director of Greens Foods Limited and numerous private and public companies.

John Thomas Riedl (Non Executive Director)

B. Sc, B.E. (Elect), (Hons.) (Sydney) Director of numerous public and private companies.

Operating Results

The net profit for the six months ended 31^s December 2004 attributable to shareholders of CVC amounted to \$16,594,182.

Review of Operations

During the six months ended 31st December 2004, CVC continued its existing venture capital operations.

Auditor's Independence Declaration

A copy of the Independence Declaration given to the Directors by the lead auditor for the review undertaken by HLB Mann Judd (NSW Partnership) is included on page 18.

Dividends

Dividends of \$1,660,154 were paid during the period. Since the end of the period, the directors have determined to pay a 2 cents per share interim dividend payable on 10 March 2005.

Indemnification and Insurance of Officers and Auditors

The Company has not, during or since the end of the financial period, in respect of any person who is or has been an auditor of the Company or a related body corporate:

• Indenmified or made any relevant agreement for indemnifying against a liability, including costs and expenses in $(i.)$ successfully defending legal proceedings; or
• $(ii.)$ Paid or agreed to pay a premium in respect of a contract insuring against a liability for the costs or expenses of defending legal proceedings.

The Company has paid insurance premiums in respect of Directors and Officers liability and legal expense insurance for Directors and Officers of the Company, its controlled entities and certain other directorships of associated companies. In accordance with sub section 300(9) of the Corporations Act 2001 further details have not been disclosed due to confidentiality provisions contained in the insurance contract.

Signed and Sydney this 22nd day of February 2005 in accordance with a Resolution of Directors.

ALEXANDER D. H. BEARD Director

CVC LIMITED & CONTROLLED ENTITIES STATEMENT OF FINANCIAL PERFORMANCE FOR THE HALF YEAR ENDED 31 DECEMBER 2004

	Notes	Consolidated
		31 Dec 2004	31 Dec 2003
		\$	\$
Revenue from Sale of Goods		11,109,120	9,360,494
Proceeds from Share Sales		4,391,347	18,680,424
Revenue from Sale of Services		244,843
Interest Income		1,012,720	1,606,975
Other Revenue from Ordinary Activities		818,884	527,059
Total Revenues From Ordinary Activities	2	17,576,914	30,174,952
Share of Net Profits of Associates Accounted for using the Equity Method	10	5,000,600	5,621,092
Share of Net Profits of Joint Ventures Accounted for using the Equity Method	10	10,808,728	1,516,389
Expenses
Audit Fees		31,506	26,500
Amortisation of Intangible Assets		380,378	208,004
Borrowing Costs			(10, 427)
Cost of Shares Sold		3,140,686	12,208,028
Cost of Goods Sold		6,350,287	5,035,255
Depreciation Expense Directors Fees		79,903	62,850
Distribution, Consumables & Royalty Costs		25,000 490,889	24,999 404,063
Employee Expenses		1,902,078	1,668,310
Legal Costs		112,781	9,074
Increase/ (Reduction) in Loan Provisions for Non-Recovery		1,011,010	4,912,179
Management & Consultancy Fees		1,105,577	1,340,780
Operating Lease Payments		353,153	253,461
Unrealised Loss on Investments		76,500	797,965
Other Expenses from Ordinary Activities		932,833	715,413
Profit from Ordinary Activities Before Related Income Tax Expense		17,393,661	9,655,979
Income Tax Expense	3	269,066	337,380
Net Profit	15	17,124,595	9,318,599
Net Profit Attributable to Outside Equity Interests		530,413	314,781
Net Profit Attributable to Members of the Parent Entity	14	16,594,182	9,003,818
Total Changes in Equity Attributable to Members of the Parent Entity other
than those arising from transactions with Owners as Owners		16,594,182	9,003,818
Basic & Diluted Earnings Per Share (Cents)	5	15.63	8.24

The above statement should be read in conjunction with the accompanying notes to the Half Year Report.

CVC LIMITED & CONTROLLED ENTITIES STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2004

	Notes	Consolidated
		31 Dec 2004	30 Jun 2004
		\$	\$
CURRENT ASSETS
Cash Assets	15	3,717,335	12,269,691
Receivables	6	11,403,997	7,615,477
Inventories	7	1,533,355	1,132,013
Other Financial Assets	8	6,230,079	4,922,116
Current Tax Assets		43,984	40,152
Other Assets		372,702	238,692
Total Current Assets		23,301,452	26,218,141
NON-CURRENT ASSETS
Receivables	6	5,292,843	2,889,908
Investments Accounted for using the Equity Method	10	64,519,366	49,524,380
Other Financial Assets	8	14,053,477	11,861,444
Property, Plant and Equipment		960,291	670,692
Deferred Tax Assets		794,063	139,700
Intangible Assets	9	15,471,524	5,157,691
Total Non-Current Assets		101,091,564	70,243,815
TOTAL ASSETS		124,393,016	96,461,956
CURRENT LIABILITIES
Payables	11	13,456,740	11,714,568
Provisions	12	472,184	208,830
Current Tax Liabilities		1,097,732	991,657
Total Current Liabilities		15,026,656	12,915,055
NON-CURRENT LIABILITIES
Provisions	12	39,901	143,206
Deferred Tax Liabilities			177,557
Total Non-Current Liabilities		39,901	320,763
TOTAL LIABILITIES		15,066,557	13,235,818
NET ASSETS		109,326,459	83,226,138
EQUITY
Contributed Equity	13	27,943,257	20,237,527
Retained Profits	14	75,464,437	60,530,410
Total Parent Entity Interest		103,407,694	80,767,937
Outside Equity Interest		5,918,765	2,458,201
TOTAL EQUITY		109,326,459	83,226,138

The above statement should be read in conjunction with the accompanying notes to the Half Year Report.

CVC LIMITED & CONTROLLED ENTITIES STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2004

	Notes		Consolidated
		31 Dec 2004	31 Dec 2003
		S	\$
CASH FLOWS RELATED TO OPERATING ACTIVITIES
Cash Receipts in the Course of Operations		11,800,744	9,467,541
Cash Payments in the Course of Operations		(16, 289, 283)	(10, 309, 342)
Interest Received		322,781	405,832
Dividends Received		3,202,395	1,792,685
Interest Paid			(204, 573)
Income Taxes (Paid)/ Repaid		(998, 743)	4,269
Net Cash (Used in)/ Provided by Operating Activities	15	(1,962,106)	1,156,412
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for Property, Plant and Equipment		(366, 553)	(109, 545)
Proceeds from Disposal of Property, Plant and Equipment		20,455
Payments for Equity Investments		(7,352,258)	(6,217,279)
Payments for Controlled Entities net of Cash Acquired		(46, 769)	(1,743,261)
Proceeds on Disposal of Equity Investments		2,714,514	18,679,224
Payments for Other Financial Assets		(61,306)
Proceeds on Disposal of Interests in Controlled Entities		1,678,000
Loans Provided		(4,043,911)	(3,673,315)
Loans Repaid		6,542,003	22,921,237
Net Cash (Used in)/ Provided by Investing Activities		(915, 825)	29,857,061
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid to Members of the Parent Entity		(1,660,155)	(2,184,935)
Payments for share buy-backs		(4,014,270)	(828,745)
Issue of Shares by Subsidiary to Outside Equity Interests			63,274
Cash Used in Financing Activities		(5,674,425)	(2,950,406)
Net (Decrease)/ Increase in Cash Held		(8,552,356)	28,063,067
Cash at the Beginning of the Period		12,269,691	2,477,100
CASH AT THE END OF THE PERIOD	15	3,717,335	30,540,167

The above statement should be read in conjunction with the accompanying notes to the Half Year Report.

NOTE 1: STATEMENT OF ACCOUNTING POLICIES

Basis of Preparation

This general purpose financial report for the interim half-year reporting period ended 31 December 2004 has been prepared in accordance with Australian Accounting Standard AASB 1029 Interim Financial Reporting, other mandatory professional reporting requirements (Urgent Issues Group Consensus Views), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2004 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

		Consolidated
	31 Dec 2004	31 Dec 2003
	\$	\$
NOTE 2: REVENUES FROM ORDINARY ACTIVITIES
Revenue from Sale of Goods	11,109,120	9,360,494
Proceeds from Share Sales	4,391,347	18,680,424
Revenue from Sale of Services	244,843
Other Revenues from Operating Activities:
Dividends:
Other Parties	734,433	505,200
Interest: Related Parties
Other Parties	99,623 913,097	168,945 1,438,030
Other Revenue	84,451	21,859
	17,576,914	30,174,952
NOTE 3: TAXATION
Income Tax Expense:
Prima facie Income Tax Expense calculated at 30% (2003: 30%) on the Profit
from Ordinary Activities	5,218,098	2,896,793
Increase in Income Tax Expense due to:
Provision to reflect Recoverable Amount of Equity Accounted component of
Investment carrying value		82,182
Sundry Items	36,995	4,140
Amortisation of Intangible Assets	108,023	62,401
Future Tax Assets Not Recognised	160,819	2,390,512
Decrease in income tax expense due to:
Tax attributable to Equity Accounted Profits of Associates	(759, 792)	(1,686,328)
Tax Credits on Franked Dividends	(935,481)	(109, 497)
Div 43 Building Allowances	(156,036)	(177, 240)
Recovery of Tax Losses Not Previously Recognised	(3,315,884)	(3,235,745)
	356,742	227,218
Prior Year (Over)/ Under Provision	(87,676)	110,162
Income Tax Expense attributable to Profit from Ordinary Activities	269,066	337,380

NOTE 4: DIVIDENDS

Dividends proposed or paid and not provided for in previous periods by the company are:

On 14 December 2004, the Company paid a final dividend in respect of the year ended 30 June 2004 of 1.5 cents per share, equivalent to a total dividend of \$1,660,155.

On 17 February 2005, the Company declared an interim dividend of 2 cents per share to be paid on 10 March 2005 to shareholders registered on 28 February 2005.

		Consolidated
	31 Dec 2004	31 December 2003
	\$	\$
NOTE 5: EARNINGS PER SHARE
	Cents	Cents
Basic and Diluted Earnings Per Share	15.63	8.24
Reconciliation of Earnings used in calculation of Earnings Per Share: Profit After Income Tax Less: Outside Equity Interests	\$ 17,124,595 (530.413)	\$ 9,318,599 (314,781)
Earnings used in calculation of Earnings Per Share:	16,594,182	9,003,818
		The Local Local and Children and

		NUMBER OF SHATES
Weighted Average Number of Ordinary Shares	106.152.589	109.326.522

		Consolidated
	31 Dec 2004	30 Jun 2004
	\$	\$
NOTE & RECEIVABLES
Current
Trade Debtors	3,877,261	3,136,836
Other Debtors	72,355	136,200
Loans to Other Corporations	7,053,405	6,546,774
Provision for Non-Recovery of Loans to Other Corporations	(2,432,048)	(2,344,333)
Loans to Related Entities	2,833,024	140,000
Total Current Receivables	11,403,997	7,615,477
Non-Current
Loans to Other Corporations	4,929,946	4,595,890
Provision for Non-Recovery of Loans to Other Corporations	(4,769,186)	(3,845,890)
Loans to Related Entities	5,132,083	2,139,908
Total Non-Current Receivables	5,292,843	2,889,908

	Consolidated
	31 Dec 2004	30 Jun 2004
NOTE 7: INVENTORIES	\$	\$
Current
Raw materials and work in progress Finished Goods	95,003 1,438,352	213,824 918,189
Total Inventories	1,533,355	1,132,013
NOTE 8: OTHER FINANCIAL ASSETS
Current
Shares in listed corporations - at Cost	4,960,472	4,922,116
Shares in listed corporations - at Market Value	594,607
Shares in listed corporations (a)	5,555,079	4,922,116
Shares in Other investments at Cost or Realisable Value	675,000
	6,230,079	4,922,116
Non-Current
Shares in listed corporations - at Cost or Realisable Value (a)	5,903,303	5,772,580
Shares in Other investments at Cost or Realisable Value	8,150,174	6,088,864
	14,053,477	11,861,444
(a) Market value of Shares in listed corporations (Current & Non-Current)	29,245,516	14,102,366
NOTE 9: INTANGIBLE ASSETS
Goodwill	8,847,158	5,702,947
Accumulated Amortisation	(816, 635)	(545, 256)
	8,030,523	5,157,691
Management Agreements & Licences	7,550,000
Accumulated Amortisation	(108, 999)
	7,441,001
	15,471,524	5,157,691

NOTE 10: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

		Consolidated
	31 Dec 2004	30 Jun 2004
	\$	\$
Equity Accounted Shares in listed Associated Companies (a)	35,411,283	32,380,577
Equity Accounted Shares in other Associated Companies (a)	6.199.364	5,043,812
	41,610,647	37,424,389
Equity Accounted shares of Joint Ventures (b)	22,908,719	12,099,991
	64,519,366	49,524,380

Associated Entities a)

Details of material interests in associated entities are as follows:

	% Ownership at End of Period			Carrying Value		Contribution to Net Profit
	31 Dec 2004	30 fune 2004	31 Dec 2004 \$	30 lune 2004 S	31 Dec 2004 \$	31 Dec 2003 \$
Sunland Group Limited (i)	18.9%	19.2%	35,411,283	32,380,577	5,498,668	5,621,092
CVC Private Equity Limited	24.3%	24.6%	3,982,565	4,196,355	(210.922)
CVC Reef Investment Managers Limited (ii)	50%	-%	76,306		(637)
Ron Finemore Transport Pty Limited (iii)	25%	-%	1,312,549	$\overline{\phantom{a}}$	(262, 451)
Winten (No 20) Pty Limited	50%	50%	827.944	847.457	(24,058)
			41,610,647	37,424,389	5,000,600	5,621,092

• (i) Shares in Sunland Group Limited are listed on the Australian Stock Exchange Limited and at 31 December 2004, the market value of the investment, based on the last sale price of \$1.82, was \$74.86 million (30 June 2004: \$42.78 million)
• (ii) CVC Reef Investment Managers Pty Limited were acquired as part of the acquisition of CVC Managers Pty Limited, refer to Note 18: "Control gained over entities having material effect".
• (iii) CVC contributed \$1.575m for a 25% interest in the initial share capital Ron Finemore Transport Pty Limited. Ron Finemore Transport Pty Limited was set up as a new holding company for the acquisition of the Lewingtons transport group of companies.

b) Joint Venture Partnerships

Details of material interests in joint ventures are as follows:

Chevron Developments (i) Bel Air Real Estate	50% 50%	50% 50%	17,065,730 1.724.852	7.281.590 987.731	9.784.141 737.121	746.355 34.654
Skyline Investments Australia	50%	50%	4.118.137	3.830.670	287.466	735,380
			22.908.719	12.099.991	10.808.728	1.516.389

(i) On 24 November 2004, Chevron Developments entered into an unconditional contract for the sale of the Chevron Renaissance shopping centre. Included in the contribution to net profit for the period is \$9,056,911 profit from the sale of the centre. The sale contract provides that further sale consideration, up to an additional \$1,250,000, may become payable to CVC in the future depending on the future performance and costs of the centre. Any additional amounts received would lead to corresponding additional profits being recognised in respect of the sale in future reporting periods.

	Consolidated
	31 Dec 2004	30 Jun 2004
	\$	\$
NOTE 11: PAYABLES
Current
Trade Creditors	2,682,802	2,066,214
Loans from Joint Venture Entities	9,805,798	4,715,322
Performance Fees Payable		4,000,000
Sundry Creditors and Accruals	821,856	770,624
GST Payable	146,284	162,408
	13,456,740	11,714,568
NOTE 12: PROVISIONS
Current
Employee Entitlements	472,184	208,830
Non-Current
Employee Entitlements	39,901	143,206
NOTE 13: CONTRIBUTED EQUITY
Issued and Paid-Up Share Capital: Fully Paid Ordinary Shares
	S
Balance at Beginning of Period	20,237,527	26,633,636
Shares Bought Back	(4,008,000)	(6,396,509)
Share Issues	11,720,000
Difference between cost and dividend equivalent of shares acquired on
market for dividend reinvestment plan	(6,270)
Balance at End of Period	27,943,257	20,237,527
	Number	Number
Number at Beginning of Period	103,994,456	109,736,032
Shares Bought Back	(3,508,772)	(5,741,576)
Share Issues	10,191,304
Number at End of Period	110,676,988	103,994,456
All shares are quoted on the Australian Stock Exchange Limited
NOTE 14: RETAINED PROFITS
Retained Profits at the Beginning of the Period	60,530,410	54,202,318
Net Profit Attributable to Members of the Parent Company	16,594,182	10,146,022
Dividends	(1,660,155)	(3,817,930)
Retained Profits at the End of the Period	75,464,437	60,530,410

NOTE 15: NOTES TO THE STATEMENT OF CASH FLOWS

a) Reconciliation of Cash

For the purposes of the statements of cash flows, cash includes cash on hand and at bank and short-term deposits at call, net of outstanding bank overdrafts. Cash as at the end of the financial period as shown in the statements of cash flows is reconciled to the related items in the statements of financial position as follows:

		Consolidated
	31 Dec 2004	30 Jun 2004
	\$	\$
Cash Assets	3,717,335	12,269,691

b) Reconciliation of Profit from Ordinary Activities after Income tax to the Net Cash Provided by Operating Activities:

	Consolidated
	31 Dec 2004	31 Dec 2003
	\$	\$
Profit from Ordinary Activities after Income Tax	17,124,595	9,318,599
Add/(Less) Non-Cash Items:
Share of Equity Accounted Profits	(15,809,328)	(7,137,481)
Dividends Received from Equity Accounted Investments	2,467,962	1,287,485
Depreciation and Amortisation of Property, Plant and Equipment	79.903	62,850
Amortisation of Intangible Assets	380,378	208,004
Unrealised Loss on Investments	76,500	797,965
Net Profit on Disposal of Investments	(1,250,661)	(6,472,396)
Movement in Loan Provisions	1,011,010	4,912,179
Interest Income Not Received	(689,939)	(1, 101, 700)
Movement in Income Tax Provision	102,243	435.913
Movement in Deferred Tax Assets & Liabilities	(831.920)	(94,350)
Changes in Assets and Liabilities:
Receivables	(700, 142)	(973, 949)
Inventories	(401,342)	(140,987)
Payables	(3,386,621)	121,676
Provisions	(734)	25,315
Other Assets	(134,010)	(92,711)
Net Cash (Used In)/ Provided By Operating Activities	(1,962,106)	1,156,412

NOTE 16: SEGMENT REPORTING

Primary Segments - Business Segments a)	Private Equity & Venture Capital	Listed Investments	Property	Funds Management	Eliminations	Consolidated
Half Year Ended 31 December 2004:
Revenues: Revenues from External Customers Inter-Segment Revenue	13,971,183	3,287,116		318,615 587,797	(587,797)	17,576,914
Operating Revenues Equity Accounted Profits	13,971,183 (132, 491)	3,287,116 5,498,668	10,443,788	906,412 (637)	(587, 797)	17,576,914 15,809,328
Total Revenues and Equity Accounted Profits	13,838,692	8,785,784	10,443,788	905,775	(587,797)	33,386,242
Results: Segment Result Unallocated Corporate Expenses Income Tax Expense	___ 1,822,346	6,652,947	10,443,788	102,504		19,201,585 (1,627,924) (269,066)
Profit After Taxation						17,124,595
Half Year Ended 31 December 2003:
Revenues: Revenues from External Customers Inter-Segment Revenue	10,649,548	19,185,624	339,780			30,174,952 $\tilde{\phantom{a}}$
Operating Revenues Equity Accounted Profits	10,649,548	19,185,624 5,621,092	339,780 1,516,389			30,174,952 5,621,092
Total Revenues and Equity Accounted Profits	10,649,548	24,806,716	1,856,169			37,312,433
Results: Segment Result Unallocated Corporate Expenses Income Tax Expense	(4,506,380)	13,765,180	1,856,169			11,114,969 (1,458,990) (337, 380)
Profit After Taxation						9,318,599 ________

b) Secondary Segments – Geographical Segments
The consolidated entity operates predominantly in Australia.

NOTE 17: ASSETS PER SECURITY

	Consolidated
	31 Dec 2004	30 June 2004
	Cents	Cents
Net Assets Per Security	93.43	73.66
Market Value Adjusted Net Assets Per Security	145.15	88.59
Net Tangible Assets Per Security	82.55	69.95
Market Value Adjusted Net Tangible Assets Per Security	134.26	84.88

Market Value Adjusted assets per security figures reflect the difference between market value of listed investments and associates at balance date compared to their carrying value in the statement of financial position based on cost, recoverable amount or equity accounting. The figures do not include any amounts for: the increase in value of other, non-listed, assets; the movement in market values of listed investments after balance date; and the tax that would be payable in respect of the realisation of any increase in market values after deducting available tax losses.

NOTE 18: CONTROL GAINED OVER ENTITIES HAVING MATERIAL EFFECT

In October 2004, CVC acquired 100% of CVC Managers Pty Ltd for a consideration of 7,391,304 shares in the Company at a valuation of \$8,500,000. A summary of the assets and liabilities of CVC Managers Pty Ltd at the date of the acquisition is as follows:

	\$
Net Assets at Acquisition:
Cash assets	181,483
Property, plant & equipment	23,404
Investments accounted for using the equity method	76,944
Intangible assets	8,417,269
Payables	(38,317)
Provisions	(160,783)
	8,500,000

In August 2004, the CVC sold 1,131,544 shares in Pro-Pac Group Limited, representing 16.3% of the share capital, reducing its ownership in this controlled entity from 81.6% to 65.3%. The transaction resulted in a profit on sale of \$327,935 and the creation of an additional outside equity interest of \$1,351,076.

In December 2004 Pro-Pac Group Limited increased its interests in Pro-Pac Packaging (Aust) Pty Ltd, and its controlled entities, and Pro-Pac (GLP) Pty Ltd from 80% to 100%. The shareholdings of Pro-Pac Packaging (Aust) Pty Ltd and Pro-Pac (GLP) Pty Ltd not previously held by Pro-Pac Group Limited were cancelled in consideration for 1,735,498 shares in Pro-Pac Group Limited, at a valuation of \$3,100,020. As a result of the restructure: goodwill of \$2,047,677 and outside equity interests of \$1,579,095 were created and there was a profit realised of \$468,582.

During the half year Pro-Pac Packaging (Aust) Pty Ltd acquired 2 unincorporated businesses for a total consideration and costs of \$236,574, with a corresponding increase in intangible assets.

At 31 December 2004, CVC owns 52.2% of Pro-Pac Group Limited which owns 100% of Pro-Pac Packaging (Aust) Pty Ltd, and its wholly owned controlled entities, and 100% of Pro-Pac (GLP) Pty Ltd.

NOTE 19: CONTINGENT ASSETS & LIABILITIES

Since the date of the 30^th June 2004 financial report, the conditions for the payment of the \$4 million settlement of Performance Fees were satisfied and the amount has been paid.

In relation to the action brought against CVC by the liquidator of Amann Aviation Pty Limited (in liquidation); the action has been struck out by Justice Bryson of the Supreme Court of New South Wales. However, the liquidator has appealed and on 21 March 2005, the full court of the Supreme Court of New South Wales is scheduled to hear an application by the liquidator to overturn the strike out of the action.

NOTE 20: SUBSEQUENT EVENTS

On 28 January 2005, CVC sold 9 million shares in Sunland Group Limited resulting in a profit on disposal of approximately \$10 million.

On 17 February 2005, the Company announced the placement of 16.5 million new shares in the Company for \$28.05 million and declared an interim dividend of 2 cents per share.

NOTE 21: THE EFFECTS OF THE ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

To harmonise Australian Accounting Standards with International Financial Reporting Standards, the Australian Accounting Standards Board issued a suite of new and revised Australian Accounting Standards. These standards will first apply to CVC for the financial year ending 30 June 2006, but at that time CVC must also present comparative information for the current financial year, ending 30 June 2005, as though the new standards had also applied at that time.

In the 2004 Annual Report, CVC provided a detailed analysis of: the management process for the introduction of the new standards; and the main areas of the financial reporting of CVC that were expected to be impacted by the introduction of the new standards. The following commentary should be read in conjunction with the information provided in the Annual Report.

Since the date of the Annual Report, work has continued on assessing the impacts of the new standards and in particular in collating and analysing the information necessary to develop:

• restated statements of financial position at 1 July 2004, the 'opening position', and at 31 December 2004; and
• a restated statement of financial performance for the current financial year to date.

This work is designed to:

• provide a smooth transition to accounting under the new accounting standards from 1 July 2005;
• provide the comparative information in respect of the current financial year necessary for reporting during the 2005-06 financial year; and
• provide both officers and shareholders with information about the impacts of the new accounting standards.

The results of this work has been summarised below into four areas:

• Initial transition effects on the Statement of Financial Position, at 1 July 2004, and Ongoing Effects on future Statements of Financial Position
• Ongoing Effects on Reported Profits
• Effects on CVC Limited the Company
• Other Business Effects

It is also important to appreciate that the new standards permit a number of different accounting policy approaches in situations relevant to CVC and that CVC has not yet determined which accounting policy approaches it will use in all circumstances. Where different approaches can be applied and they would have a significant financial effect this is also considered.

NOTE 21: THE EFFECTS OF THE ADOPTION OF AUSTRALIAN EOUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (Continued)

Initial transition effects on the Statement of Financial Position at 1 July 2004 and Ongoing Effects on future Statements of Financial Position

Under the new accounting standards, CVC's listed investments will be 'marked to market', that is carried at market value. At 1 July 2004, as a result of this change, the reported value of investments in the statement of financial position would increase by approximately \$3.4 million. At 31 December 2004, this uplift in value would have increased by a further \$14.4 million to \$17.8 million.

Under the new accounting standards a 'Venture Capital entity' can choose to carry investments that would otherwise be classified as associates, and accounted for using the equity method, at market value rather than use the equity method. If CVC was to choose to do this in respect to the investment in Sunland Group Limited, the carrying values of the investment at 1 July 2004 and 31 December 2004 would increase by \$10.4 million and \$39.4 million respectively.

If CVC continues to account for Sunland Group Limited using the equity method, it will be required using current, rather than historical, financial reports for Sunland. The effect would be to increase the carrying value of the investment by approximately \$5.5 million at 1 July 2004. At the date of this report, Sunland Group Limited has not announced its 31 December 2004 half-year financial report so the effect at 31 December 2004 is not yet known.

At 1 July 2004, CVC's equity accounted interests in investment properties will be required to be either revalued to market/ fair value or carried at depreciated cost. If the properties were to be restated to market/ fair value the value of CVC's equity accounted interests at 1 July 2004 would have increased by approximately \$8 million. If they were carried at depreciated cost, then the value of CVC's equity accounted interests would have decreased by approximately \$4 million. At 31 December 2004, CVC no longer has interests in these properties.

Under the new accounting standards, CVC will be more likely to be able to recognise future tax assets in respect of tax losses. However, there will also be a requirement to recognise future tax liabilities in respect of such items as unrealised increases in the market values of listed investments. At the current date it is not yet possible to quantify the effects of these matters, but to a large extent they are expected to offset.

Ongoing Effects on Reported Profits

Under the new accounting standards the value of listed investments at each reporting date will be marked to market but different methods of reflecting the movements in market value during a period are permitted. The movement can either be reflected as a component of reported profits or be effectively treated as a form of revaluation reserve. If the former method is applied then for the half year ended 31 December 2004, the reported profit would have increased by \$14.4 million to reflect the increase in unrealised market values during the period.

If CVC applied the 'Venture Capital' exemption in respect of the Sunland Group Limited investment, the profit for each period would include the movement in market value of the investment. In respect of the half year 31 December 2004 this would have increased reported profits by approximately \$29 million.

As CVC has disposed of its interests in investment properties, there will be no ongoing effects on reported profits from the new accounting standard in respect of investment properties. However, the profit for the 31 December 2004 half-year would have increased or decreased in relation to the change in the opening carrying values of the properties at 1 July 2004.

Effects on CVC Limited the Company

The effects of the introduction of the new standards on CVC Limited, the Company, are as described above for CVC as a group, except:

• there is no equity method accounting used in the Company financial report for associate investments and so the effects on the Sunland Group Limited investment will be as for all other listed investments; and
• the uplift in investment values to reflect market values and movements between periods will exclude those investments held by subsidiaries companies.

Other Business Effects

Overall, it is expected that the effects of the introduction of the new accounting standards will be to substantially increase the net assets of CVC and have positive effects on retained earnings. Accordingly, the new standards are not expected to have any significant effect on dividend policies, bank covenants or other business matters.

CVC LIMITED & CONTROLLED ENTITIES HALF YEARLY REPORT

DIRECTORS' DECLARATION

In the opinion of the Directors:

• the financial statements and associated notes comply with Accounting Standard 1029: Interim Financial $(a)$ Reporting and the Corporations Act 2001;
• the financial statements and notes give a true and fair view of the financial position as at 31 December 2004 and $(b)$ performance as represented by the results of its operation and cash flows of the consolidated entity for the halfyear then ended; and
• there are reasonable grounds to believe that the company will be able to pay its debts as when they become due $(c)$ and payable.

This statement has been made in accordance with a resolution of directors.

Signed at Sydney this 22nd day of February 2005.

VANDA R. GOULD Director

ALEXANDER D. H. BEARD Director

CVC LIMITED & CONTROLLED ENTITIES HALF YEARLY REPORT

AUDITOR'S INDEPENDENCE DECLARATION

To the Directors of CVC Limited:

As lead auditor for the review of CVC Limited and its Controlled Entities for the half-year ended 31 December 2004, I declare that, to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

b) no contraventions of any applicable code of professional conduct in relation to the review.

P B Meade Partner

HLB MANN JUDD (NSW Partnership) Chartered Accountants

Sydney, 22nd February 2005

CVC LIMITED & CONTROLLED ENTITIES HALF YEARLY REPORT

INDEPENDENT REVIEW REPORT

To the members of CVC Limited (ACN 002 700 361)

Scope

We have reviewed the financial report of CVC Limited for the half-year ended 31 December 2004 as set out on pages 4 to 17. The financial report includes the consolidated financial statements of the consolidated entity comprising CVC Limited and the entities it controlled at the end of the half-year or from time to time during the half-year. The Company's directors are responsible for the financial report. We have performed an independent review of the financial report 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 is not presented fairly in accordance with Accounting Standard AASB 1029: Interim Financial Reporting, other mandatory professional reporting requirements in Australia and statutory requirements, so as to present a view which is consistent with our understanding of the consolidated entity's financial position, and performance as represented by the results of its operations and its cash flows, and in order for the consolidated entity to lodge the financial report with the Australian Securities & Investments Commission.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. A review is limited primarily to inquiries of the disclosing entity's personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Statement

Based on our review, which is not an audit, we have not become aware of any matter that causes us to believe that the half-year financial report of CVC Limited is not in accordance with:

• $(a)$ the Corporations Act 2001, including:
• $(i)$ giving a true and fair view of the consolidated entity's financial position as at 31 December 2004 and of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 1029: Interim Financial Reporting and the Corporations $(ii)$ Regulations 2001; and
• $(b)$ other mandatory professional reporting requirements in Australia.

HLB Mann ludd (NSW Partnership) Chartered Accountants

P B Meade Partner

Sydney, 22nd February 2005