CVC LIMITED — Interim / Quarterly Report 2008

Apr 23, 2008

balance sheet (condensed)

as at 31 December 2007

==> picture [228 x 470] intentionally omitted <==

----- Start of picture text -----

Consolidated
31 Dec 2007 30 Jun 2007
$ $
CURRENT ASSETS
Cash and cash equivalents 61,821,190 115,008,945
Trade and other receivables 37,011,649 24,794,211
Other assets 203,630 69,421
Total current assets 99,036,469 139,872,577
NON-CURRENT ASSETS
Trade and other receivables 4,294,812 4,069,502
Financial assets “available-for-sale” 231,039,655 204,265,739
Investments accounted for
using the equity method 59,932,560 41,512,461
Investment properties 2,791,493 2,799,197
Property, plant and equipment 38,267 45,621
Intangible assets 8,415,132 8,473,634
Deferred tax assets 2,877,597 3,218,075
Total non-current assets 309,389,516 264,384,229
TOTAL ASSETS 408,425,985 404,256,806
CURRENT LIABILITIES
Trade and other payables 932,189 1,209,233
Provisions 208,718 187,623
Current tax liabilities 3,033,772 4,429,030
Total current liabilities 4,174,679 5,825,886
NON-CURRENT LIABILITIES
Interest bearing loans
and borrowings 9,349,129 8,325,924
Deferred tax liabilities 45,529,904 44,940,051
Total non-current liabilities 54,879,033 53,265,975
TOTAL LIABILITIES 59,053,712 59,091,861
NET ASSETS 349,372,273 345,164,945
EQUITY
Contributed equity 146,912,792 145,370,769
Retained profits 113,784,213 113,202,090
Other reserves 88,460,710 86,494,859
Parent entity interest 349,157,715 345,067,718
Minority interest 214,558 97,227
TOTAL EQUITY 349,372,273 345,164,945
----- End of picture text -----

statement of changes in equity (condensed)

cash flow statement (condensed)

for the half-year ended 31 December 2007

for the half-year ended 31 December 2007

==> picture [508 x 481] intentionally omitted <==

----- Start of picture text -----

Consolidated Consolidated
31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
$ $ $ $
Income and expenses recognised directly in equity CASH FLOWS FROM OPERATING ACTIVITIES
“Available-for-sale” investments:
Cash receipts in the course
- Increase in fair values
of operations 1,714,805 1,056,933
recognised in other reserves 14,796,998 66,556,945
Cash payments in the course
- Amounts transferred from other reserves
of operations (2,849,456) (3,435,311)
to the income statement on sale (11,355,057) (3,568,955)
Interest received 5,301,892 1,376,048
- Income tax on fair value movements
Dividends received 2,840,750 2,757,418
taken to or from other reserves (1,032,584) (18,896,395)
- Value of equity based remuneration Interest paid (83,389) (52,926)
Income taxes paid (4,636,708) (4,291,428)
recognised in other reserves 41,209 59,441
- Value of associates equity Net cash flows (used in)/provided
based remuneration recognised by operating activities 2,287,894 (2,589,266)
in other reserves (201,947) (3,345)
- Value of associates foreign CASH FLOWS FROM INVESTING ACTIVITIES
currency translation reserve
recognised in other reserves (9,571) - Payments for property, plant
and equipment (3,349) (25,507)
Net income reflected directly in equity 2,239,048 44,147,691 Payments for equity
Profit for the half-year 11,002,838 7,866,223 investments (63,705,954) (16,335,587)
Proceeds on disposal of
Total recognised income and equity investments 28,543,985 14,097,748
expense for the half-year 13,241,886 52,013,914 Loans provided (17,958,108) (10,492,338)
Loans repaid 6,925,021 3,712,159
Attributable to:
Shareholders 13,124,556 52,013,898 Net cash flows used in
Minority interests 117,330 16 investing activities (46,198,405) (9,043,525)
13,241,886 52,013,914
CASH FLOWS FROM FINANCING ACTIVITIES
-
Transactions with shareholders Proceeds from borrowings 1,606,690
-
Borrowings repaid (1,734,106)
in their capacity as shareholders
Dividends paid to members
Shares issued during the half-year:
- through the dividend reinvestment plan 732,046 139,942 of the parent entity (9,558,777) (3,404,824)
- under the executive and non-executive Payments for share buy-backs (2,566,345) (1,124,328)
Issue of shares 3,101,520 139,942
long term incentive plan 3,105,000 2,999
- transaction cost of shares issued Net cash flows used in
through dividend reinvestment plan (2,436) - financing activities (9,151,018) (4,389,210)
Payments for share buy-backs (2,566,345) (1,124,328)
Dividends paid to shareholders (10,302,823) (3,491,819) Net decrease in cash held (53,061,529) (16,022,001)
Total transactions with shareholders Cash at the beginning
in their capacity as shareholders (9,034,558) (4,473,206) of the half-year 115,008,945 24,194,797
-
Net increase in equity Foreign exchange loss on cash (126,226)
for the half-year 4,207,328 47,540,708 CASH AT THE END
Equity at the beginning OF THE HALF-YEAR 61,821,190 8,172,796
of the half-year 345,164,945 167,406,124
Level 42, Suncorp Place, 259 George Street, Sydney NSW 2000
EQUITY AT THE END
OF THE HALF-YEAR 349,372,273 214,946,832 Telephone +612 9087 8000 Facsimile +612 9087 8088
----- End of picture text -----

Level 42, Suncorp Place, 259 George Street, Sydney NSW 2000 Telephone +612 9087 8000 Facsimile +612 9087 8088 www.cvc.com.au ABN 34 002 700 361

==> picture [101 x 31] intentionally omitted <==

Half-yearly Financial Report

CVC Limited and its Controlled Entities

for the half-year ended 31 December 2007

income statement (condensed)

for the half-year ended 31 December 2007

for the half-year ended 31 December 2007

Commentary on Results

Half-year result

The Directors of CVC report a net profit after tax of $11.0 million (2006: $7.9 million) for the half-year ended 31 December 2007, an increase of 39.2% over the corresponding half-year. In addition there was a $2.0 million increase in the after tax value of listed investments during the period which is reflected directly in reserves.

Highlights of the half-year

Highlights of the six months include:

• Positive contributions by all operating segments, with a notable contribution from the sale of listed investments which underpinned the half year result.

• Advance of $11 million in additional mezzanine finance (principally as first or second mortgage security) for a number of different property projects with the objective of earning above benchmark returns.

• Contribution of $1.2 million to the result by the newly created Corporate Finance segment.

• Significant shareholdings were either taken or added to in ASX listed companies including Blue Energy Limited, Cellnet Group Limited and Pro Pac Packaging Limited which CVC anticipates will form a base for significant future earnings.

Commentary on Future Expectations and Profit Outlook

Recent significant volatility in Australian equity markets may have a significant impact upon CVC’s operations in the short to medium term. As at 27 February 2008, from a net asset perspective, the mark-to-market valuation of underlying ASX listed investments has eroded net assets per share by approximately 10% since 31 December 2007. Moreover, market volatility has delayed CVC’s ambition to seed a number of satellite vehicles with assets from its balance sheet to drive growth in funds under management. The Company reiterates that profitability will be largely determined by the timing of the realisation of investments that result in capital gains, which may result in periods of significant fluctuations in future profitability rather than a uniform recurrent income.

The performance of two of our significant investments, Cellnet Group Limited and Greens Foods Limited has not yet achieved our expectations of a satisfactory turnaround. The Company is committed to both of these investments and will continue to devote significant management efforts to improve their performance and unlock value from each of those investments.

On a positive note, the more realistic valuations that have resulted from the recent market turmoil have generated an environment which we believe is fundamentally positive to a value based and activist investor such as CVC. The Company believes that with its strong balance sheet free from gearing it is extremely well poised to take advantage

of opportunities that have materialised as a result of weak balance sheets, refinancing pressures of excessive debt and more realistic equity valuations.

The Company will continue with its main objective of generating shareholder returns in excess of 15% per annum and anticipates achieving this objective through a combination of attempting to build recurrent income streams, acquiring strategic stakes in companies from which it believes it can unlock or release significant value over the medium to long term. In addition the Company has commenced the process to obtain shareholder approval to buy-back up to 35 million shares as a potential mechanism to provide liquidity and longer term net asset appreciation to shareholders in a period of uncertainty in the equity market.

ADH Beard

Director

29 February 2008

==> picture [228 x 483] intentionally omitted <==

----- Start of picture text -----

Consolidated
31 Dec 2007 31 Dec 2006
$ $
INCOME
Dividends received 2,711,634 2,757,418
Interest income 6,049,601 2,570,021
Net gain on sale of equity investments 7,690,059 4,719,106
-
Impairment recovery on loans 22,333
Impairment recovery on equity
investments - 67,000
Sales of services 2,249,099 1,014,544
Other income 371,837 315,943
Total income 19,094,563 11,444,032
Equity accounted profits/(losses)
Share of net profits/(losses)
of associates (1,049,705) 1,136,329
Share of net profits of joint ventures 21,402 3,385
Net equity accounted profits/(losses) (1,028,303) 1,139,714
EXPENSES
Audit fees 30,098 30,000
Amortisation of intangible assets 58,500 58,500
Finance costs 1,224,447 95,971
Depreciation expense 18,407 17,694
Directors fees 37,000 37,000
Employee costs 1,095,835 787,862
Insurance 61,932 55,760
Legal and associated costs 34,647 1,691
-
Loss on foreign exchange 126,226
Management and consultancy fees 632,622 820,300
Operating lease expense 207,469 185,382
Travel and accommodation 49,317 78,472
Other expenses 346,304 404,105
Total expenses 3,922,804 2,572,737
Profit before related income
tax expense 14,143,456 10,011,009
Income tax expense 3,140,618 2,144,786
Profit for the half-year 11,002,838 7,866,223
Net profit attributable to
minority interests 117,892 16
Profit attributable to members
of the parent entity 10,884,946 7,866,207
Basic earnings per share (cents) 6.51 6.92
Diluted earnings per share (cents) 6.49 6.88
Dividends paid during period per share (cents) 6.00 3.00
----- End of picture text -----