DATA#3 LIMITED — Interim / Quarterly Report 2003

Mar 2, 2003

Rules 4.1, 4.3

Appendix 4B

Half yearly/preliminary final report

Introduced 30/6/2002.

Name of entity
DATA#3 LIMITED
ABN or equivalent company Half yearly Preliminary reference final (tick) (iick)	Half year ended ('current period')
31 010 545 267	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 $1.1$ )	$1\%$ up	84,375 10 10
Profit (loss) from ordinary activities after tax attributable to members ( item 1.22 )	95% down	66 to
Profit (loss) from extraordinary items after tax attributable to members ( item 2.5( d ))	gain (loss) of
Net profit (loss) for the period attributable to members $(i$ tem $1.11)$	down 95%	66 10 2
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)	$2.5 \notin$	$2.5 \notin$
Previous corresponding period (Preliminary final report - item $15.5$ ; half yearly report - item $15.7$ )	NIL¢	NIL¢
N/A $+$ Record date for determining entitlements to the dividend. (in the case of a trust, distribution) (see item $15.2$ )

⁺ See chapter 19 for defined terms.

On 15 August 2002 Powerlan (Qld) Pty Ltd (Powerlan Qld), the consolidated entity's 50% joint venture partner in the joint venture partnerships Queensland Desktop Services (QDS) and Queensland Software Services (QSS), was placed into voluntary administration and receivership. The financial effect of this event includes a loss of \$2,141,000, which is reflected in the current period results of the consolidated entity.

Excluding the effect of this event the core operating results reflected the best first half performance recorded by the consolidated entity, as follows:

Profit from ordinary activities after tax attributable to members of \$1,614,000 (2001: \$1,336,000)

Net profit for the period attributable to members of \$1,614,000 (2001: \$1,336,000)

Profit from ordinary activities before tax of \$2,507,000 (2001; \$1,779,000)

Basic earnings per share of 11.1 cents (2001: 9.2 cents).

Further details are outlined in the attached note titled "Receivership and administration of Powerlan Qld and the acquisition of QDS & QSS".

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

⁺ See chapter 19 for defined terms.

1.1 Revenues from ordinary activities (see items 1.23 84,375 83,503 $-1.25)$ 1.2 Expenses from ordinary activities (see items 1.26 84,009 & 1.27) 1.3 Borrowing costs 80 Share of net profits (losses) of associates and joint 1.4 venture entities (see item 16.1) 80 1.5 Profit (loss) from ordinary activities before tax 366 1.6 Income tax on ordinary activities (see note 4) 300 1.7 Profit (loss) from ordinary activities after tax 66 $1.8$ Profit (loss) from extraordinary items after tax (see item $2.5$ ) 1.9 Net profit (loss) 66 1.10 Net profit (loss) attributable to outside $+$ equity interests 1.11 Net profit (loss) for the period attributable to 66 members Non-owner transaction changes in equity 1.12 Increase (decrease) in revaluation reserves Net exchange differences recognised in equity 1.13 1.14 Other revenue, expense and initial adjustments recognised directly in equity (attach details) Initial adjustments from UIG transitional provisions 1.15 Total transactions and adjustments recognised 1.16 directly in equity (items 1.12 to 1.15) 1.17 Total changes in equity not resulting from		Current period - \$A'000	Previous corresponding period - \$A'000
			81,710
			208
			194
			1,779
			443
			1,336
			1,336
			1,336
	transactions with owners as owners

Condensed consolidated statement of financial performance

Earnings per security (EPS)	Current period	Previous corresponding period
Basic EPS 1.18	$0.5$ cents	9.2 cents
Diluted EPS 1.19	$0.5$ cents	9.2 cents

⁺ See chapter 19 for defined terms.

Notes to the condensed consolidated statement of financial performance

Profit (loss) from ordinary activities attributable to members

		Current \$A'000	period $\blacksquare$	Previous corresponding period - \$A'000
1.20	Profit (loss) from ordinary activities after tax (item 1.7)		66	1,336
1.21	Less (plus) outside $+$ equity interests
1.22	Profit (loss) from ordinary activities after
	tax, attributable to members		66	1.336

Revenue and expenses from ordinary activities

(see note 15)

		Current \$A'000	period	Previous corresponding period - \$A'000
1.23	Revenue from sales or services		84,153	83,371
1.24	Interest revenue
1.25	Other relevant revenue		123	122
1.26	Details of relevant expenses		99	10
	(refer attached for details)		84,089	81,918
1.27	Depreciation and amortisation excluding amortisation of intangibles (see item 2.3) (included in attached details of expenses)		291	314
	Capitalised outlays
1.28	Interest costs capitalised in asset values
1.29	Outlays capitalised in intangibles (unless arising from an $+$ acquisition of a business)

Consolidated retained profits

		Current period - \$A'000	Previous corresponding period - \$A'000
1.30	Retained profits (accumulated losses) at the beginning of the financial period	458	(2,712)
1.31	Net profit (loss) attributable to members (item 1.11)	66	1,336
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

⁺ See chapter 19 for defined terms.

1.35 Retained profits (accumulated losses) at end of financial period	524	(1,376)
----------------------------------------------------------------------------	-----	---------

Intangible and extraordinary items

		Consolidated - current period
		Before tax \$A'000 (a)	Related tax \$A'000 (b)	Related outside $+$ equity interests \$A'000	Amount (after ${ax}$ attributable to members \$A'000
				(c)	(d)
2.1	Amortisation of goodwill	162			162
2.2	Amortisation of other intangibles		-
2.3	Total amortisation of intangibles	162			162
2.4	Extraordinary items (details)
2.5	Total extraordinary items

Comparison of half year profits

(Preliminary final report only)

• $3.1$ Consolidated profit (loss) from ordinary 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 - \$A'000

⁺ See chapter 19 for defined terms.

	Condensed consolidated statement of financial position	end οf Αŧ current period \$A'000	As shown in last annual report \$A'000	As in last half yearly report \$A'000
	Current assets
4.1	Cash	12	5,193	4,178
4.2	Receivables	27,886	22,569	19,537
4.3	Investments
4.4	Inventories	3,046	1,296	1,998
4.5	Tax assets			57
4.6	Other (refer attached for details)	411	1,156	1,208
4.7	Total current assets	31,355	30,214	26,978
	Non-current assets
4.8	Receivables
4.9	Investments (equity accounted)		631	524
4.10	Other investments	7	7	7
4.11	Inventories
4.12	Exploration and evaluation expenditure capitalised (see para .71 of AASB 1022)
4.13	$\int$ mining Development properties entities)
4.14	Other property, plant and equipment (nct)	2,014	1,934	2,212
4.15	Intangibles (net)	5,144	5,101	5,258
4.16	Tax assets	1,135	573	543
4.17	Other (provide details if material)
4.18	Total non-current assets	8,300	8,246	8,544
4.19	Total assets	39,655	38,460	35,522
	Current liabilities
4.20	Payables	23,414	20,946	23,818
4.21	Interest bearing liabilities	2,927	691	690
4.22	Tax liabilities	449	344
4.23	Provisions exc. tax liabilities	1,327	1,182	1,125
4.24	Other (refer attached for details)	1,726	5,180	1,200
4.25	Total current liabilities	29,843	28,343	26,833
	Non-current liabilities
4.26	Payables
4.27	Interest bearing liabilities	779	1,085	1,429
4.28	Tax liabilities

⁺ See chapter 19 for defined terms.

4.29	Provisions exc. tax liabilities	423	435	445
4.30	Other - Lease incentives	677	730	782
4.31	Total non-current liabilities	1,879	2,250	2,656
4.32	Total liabilities	31,722	30,593	29,489
4.33	Net assets	7,933	7,867	6,033
4.34	Equity Capital/contributed equity	7,409	7,409	7,409
4.35	Reserves
4.36	Retained profits (accumulated losses)	524	458	(1,376)
4.37 4.38	Equity attributable to members of the parent entity Outside $+$ equity interests in controlled	7,933	7,867	6,033
	entities
4.39	Total equity	7,933	7,867	6,033
4.40	Preference capital included as part of 4.37

Condensed consolidated statement of financial position continued

Notes to the condensed consolidated statement of financial position

Exploration and evaluation expenditure capitalised $-N/A$

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

		Current period \$A'000	Previous corresponding period -
5.1	Opening balance		SA'000
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 )

⁺ See chapter 19 for defined terms.

Development properties $-N/A$
(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 $4.13$ )

r.

Condensed consolidated statement of cash flows

		Current period	Previous
		\$A'000	corresponding period
			$-$ \$A'000
	Cash flows related to operating activities
7.1	Receipts from customers	89,670	93,910
7.2	Payments to suppliers and employees	(88, 504)	(90, 730)
	Payments to former joint venture partnership
	creditors	(2, 128)
7.3	Distributions received from joint venture
	partnerships		215
7.4	Other dividends received
7.5	Interest and other items of similar nature
	received	161	122
7.6	Interest and other costs of finance paid	(80)	(234)
7.7	Income taxes paid	(783)	(115)
7.8	Income taxes refunded	34
7.9	Net operating cash flows	(1,630)	3,168
	Cash flows related to investing activities
7.10	Payment for purchases of property, plant and
	equipment	(246)	(176)
7.11	Proceeds from sale of property, plant and
	equipment	18
7.12	Payment for purchases of business	(203)	(85)
7.13	Proceeds from sale of equity investments
7.14	Loan to joint venture partnership	(3,406)
7.15	Loans repaid by other entities

⁺ See chapter 19 for defined terms.

7.16	Other - Cash acquired on assumption of net liabilities of joint venture partnerships	2,176
7.17	Net investing cash flows	(1,661)	(261)
	Cash flows related to financing activities
7.18	Proceeds from issues of $+$ securities (shares, options, etc.)
7.19	Proceeds from borrowings	1,500
7.20	Repayment of borrowings	(316)	(355)
7.21	Dividends paid
7.22	Other - Repayment of short term funds from
	joint venture partnership	(3, 819)	(2,107)
7.23	Net financing cash flows	(2,635)	(2,462)
7.24	Net increase (decrease) in cash held	(5,926)	445
7.25	Cash at beginning of period	5,193	3,733
	(see Reconciliation of cash)
7.26	Exchange rate adjustments to item 7.25.
7.27	Cash at end of period (see Reconciliation of cash)	(733)	4,178

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.)

$NIL$

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 \$A'000	Previous corresponding period - \$A'000
8.1	Cash on hand and at bank	12	1,099
8.2	Deposits at call		3,079
8.3	Bank overdraft	(745)
8.4	Other (provide details)
8.5	Total cash at end of period (item 7.27)	733)	4.178

Other notes to the condensed financial statements

⁺ See chapter 19 for defined terms.

Ratios		Current period	Previous corresponding period
9.1	Profit before fax / revenue Consolidated profit (loss) from ordinary activities before tax ( item 1.5 ) as a percentage of revenue (item 1.1)	0.4%	2.1%
9.2	Profit after tax $\wedge^+$ 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	0.8%	17.0%

Earnings per security (EPS)

$10₁$ Details of basic and diluted EPS reported separately in accordance with paragraph 9 and 18 of AASB 1027: Earnings Per Share are as follows.

Basic earnings per share: 0.5 cents

Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share: 14,601.930

Information concerning earnings per share:

• a) Earnings for the purpose of the calculation of basic earnings per share is the net profit / (loss).
• b) Earnings for the purpose of the calculation of diluted earnings per share is also the net profit / (loss).
• c) Options granted are considered to be potential ordinary shares. (Refer 18.7)

Diluted earnings per share are not materially different to basic earnings per share.

NTA backing (see note $7)$	Current period	Previous corresponding period
11.1 Net tangible asset backing per + ordinary security	0.19	0.05

Discontinuing Operations - N/A

(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).)

Discontinuing Operations $12.1$

$+$ See chapter 19 for defined terms.

Control gained over entities having material effect $\sim N/A$

• 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 - $N/A$

• 14.1 Name of entity (or group of entities)
• 14.2 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
• 14.3 Date to which the profit (loss) in item 14.2 has been calculated
• 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

	\$
l
	\$
	\$

Dividends (in the case of a trust, distributions)

15.1 Date the dividend (distribution) is payable

$N/A$

$+$ See chapter 19 for defined terms.

15.2 ⁺Record date to determine entitlements to the dividend (distribution) (ie, on the basis of proper instruments of transfe 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)

d	N/A
×,
l,
h
e

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 30% tax (see note 4)	Amount per security of foreign source dividend
15.4	(Preliminary final report only) Final dividend: Current year	-Ć	-c	-C
15.5	Previous year	-Ć	- C
15.6	(Half yearly and preliminary final reports) Interim dividend: Current year	2.5 $\epsilon$	2.5 $\epsilon$	-É
15.7	Previous year		- 0

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

(Preliminary final report only)

		Current year	Previous year
	$15.8$ +Ordinary securities	-0	- 6
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 \$A'000	Previous corresponding period - \$A'000
15.10	+ Ordinary securities (each class separately)	14,601,930	14,601,930
15.11	Preference + securities (each class separately)
15.12	Other equity instruments (each class separately)
15.13	Total	14,601,930	14,601,930

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

⁺ See chapter 19 for defined terms.

Data#3 Limited Dividend Reinvestment Plan. Shares under the plan are issued at a discount of 5% to the weighted average market price of all shares sold on the ASX on the first day on which those shares are quoted ex-dividend in relation to the dividend and on the following 4 trading days.

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

16 April 2003

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

$NIL$

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

Group's share of associates' and joint venture entities':		Current period \$A'000	Previous corresponding period - \$A'000
16.1	Profit (loss) from ordinary activities before tax	80	194
16.2	Income tax on ordinary activities	(24)	(58)
16.3	Profit (loss) from ordinary activities after tax	56	136
16.4	Extraordinary items net of tax	۰
16.5	Net profit (loss)	56	136
16.6	Adjustments	-
16.7	Share of net profit (loss) of associates and joint venture entities	56	136

⁺ See chapter 19 for defined terms.

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 interest held at end of period or		Contribution to net profit (loss) (item
		date of disposal or acquisition		1.9)
17.1	Equity accounted associates and joint venture entifies	Current period	Previous corresponding period	Current period \$A'000	Previous corresponding period - \$A'000
Queensland	Software Services	50%* (see note)	50%	12	81
Services	Queensland Desktop	50%* (see note)	50%	44	55
17.2	Total			56	136
17.3	Other material interests
17.4	Total			56	136

* Note:

On 25 November 2002 the consolidated entity acquired the remaining 50% of the interests held by its joint venture partner in the Queensland Software Services and Queensland Desktop Services joint ventures.

⁺ See chapter 19 for defined terms.

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 $14$ ) (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	14,601,930	14,601,930	N/A	N/A
18.4	Changes during current period (a) Increases through issues (b) Decreases through returns of capital, buybacks
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)			Exercise price	Expiry date (if any)
		210,000	210,000	0.91	21/11/05
18.8	Issued during current period	210,000	210,000	0.91	21/11/05
18.9	Exercised during current period
18.10	Expired during current period	20,000 150,000	20,000 150,000	3.47 3.45	15/11/02 18/11/02
18.11	Debentures (description)
18.12	Changes during current period (a) Increases through issues
	(b) Decreases through securities matured, converted

⁺ See chapter 19 for defined terms.

18.13	Unsecured notes (description)
18.14	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 vearly and preliminary 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 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.

Revenues from ordinary activities for the previous corresponding period, and for the first two months of the current period, do not include any share of joint venture partnership revenues generated by Queensland Desktop Services or Queensland Software Services.

Effective from 1 September 2002 the joint venture partnerships' sales contracts were reassigned to the consolidated entity, and revenue generated from those contracts has been included in the consolidated entity's revenues from ordinary activities from that date.

19.2 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).

On 15 August 2002 Powerlan (Qld) Pty Ltd (Powerlan Qld), the consolidated entity's 50% joint venture partner in the joint venture partnerships Queensland Desktop Services (QDS) and Queensland Software Services (QSS), was placed into voluntary administration and receivership.

The financial effect of this event includes a loss of \$2,141,000 which is reflected in the current period results of the consolidated entity. Further details are outlined in the attached note titled "Receivership and administration of Powerlan Qld and the acquisition of QDS & QSS".

⁺ See chapter 19 for defined terms.

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

Class C franking credits available in company \$4,259,000.

Class C franking credits available in Group \$7,160,000.

19.4 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 vearly 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).

NIL

$19.5 -$ 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.

NIL

$19.6$ Changes in contingent liabilities or assets. For half yearly reports, changes in contingent liabilities and contingent assets since the last * annual report.

On 15 August 2002 Powerlan (Qld) Pty Ltd (Powerlan Qld), the consolidated entity's 50% joint venture partner in the joint venture partnerships Queensland Desktop Services (QDS) and Queensland Software Services (QSS), was placed into voluntary administration and receivership.

The financial effect of this event includes a loss of \$2.141,000 which is reflected in the current period results of the consolidated entity. Further details are outlined in the attached note titled "Receivership and administration of Powerlan Qld and the acquisition of QDS & QSS".

Additional disclosure for trusts - N/A

20.1 Number of units held by the management company or responsible entity or their related parties.

⁺ See chapter 19 for defined terms.

20.2 A statement of the fees and commissions payable to the management company or responsible entity.

Identify:

• initial service charges ٠
• management fees ×
• 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

$\mathbf{1}$ 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

NIL

• $\overline{2}$ This report, and the "accounts upon which the report is based (if separate), use the same accounting policies.
• This report does give a true and fair view of the matters disclosed (see note 2). 3
• This report is based on 'accounts to which one of the following applies. $\overline{4}$ $(Tick one)$

тта олег	The $\vec{i}$ accounts have been $\vec{\mathcal{L}}$ audited.	The * accounts have been subject to review.
	The "accounts are in the process of being audited or subject to review.	The "accounts have not yet been audited or reviewed.

⁺ See chapter 19 for defined terms.

• $\overline{5}$ If the audit report or review by the auditor is not attached, details of any qualifications are attached/will follow immediately they are available.
• 6 The entity has a formally constituted audit committee.

Date: 3rd March 2003

Sign here:

(Company Secretary)

Print name: Bremner Hill

Notes

• $\mathbb{I}$ . 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.
• $\overline{2}$ . 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" are set Item $1.1$ 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).
• $\overline{4}$ . 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 % $\text{tax"}$ for items 15.4 to 15.7.

5. Condensed consolidated statement of financial position

$+$ See chapter 19 for defined terms.

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 ⁺annual report, the entity must describe the basis of revaluation adonted. 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.

• Condensed consolidated statement of cash flows For definitions of "cash" and other terms 6. 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.
• Gain and loss of control over entities The gain or loss must be disclosed if it has a material 8. 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 \$A'000 headings must be amended.
• $10.$ 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.

⁺ See chapter 19 for defined terms.

• $11$ 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 $+A$ SIC, 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 13. required to comply with the Corporations Act as part of its half-year financial statements if prepared in accordance with Australian Accounting Standards.
• $14$ 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;

⁺ See chapter 19 for defined terms.

Interim Financial Reporting, or, the details of discontinuing operations they are required to disclose in their $\text{*}$ 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.

⁺ See chapter 19 for defined terms.

Additional Information to support Appendix 4B Half-year Ended 31 December 2002

		Half-Year 2002 \$'000	Half-Year 2001 \$3000
Lines $1.26 \& 1.27$ - Expenses from ordinary activities
Expenses from ordinary activities consist of:
Changes in inventories of finished goods Purchase of goods Employee and contractor costs directly on-charged Internal employee and contractor costs		(1,750) 60,907 5,706 13,169	(1,304) 63,354 3,116 12,918
Telecommunications Rent Travel Depreciation and amortisation Borrowing costs Other		597 925 453 453 80 1,408	647 897 495 473 208 1,114
Loss on assumption of joint venture partnerships' net liabilities Total		81,948 2,141 84,089	81,918 81,918
Line 4.6 – Other current assets	31 December 2002 \$200	30 June 2002 \$'000	31 December 2001 \$'000
Other current assets consist of:
Prepayments Security deposits Accrued rebates	288 74 49 411	324 66 766 1,156	212 75. 921 1,208
Line 4.24 – Other current liabilities
Other current liabilities consist of:
Unearned income Lease incentives Amounts payable to joint venture partnership	1,622 104 1,726	1,257 104 3,819 5,180	1,021 104 75 1,200

⁺ See chapter 19 for defined terms.

Additional Information to support Appendix 4B Half-year Ended 31 December 2002

Segment Information

Business Segment

The consolidated entity predominantly operates in one segment. Its activities include the procurement of Information Technology (IT) products; the design, implementation and support of IT infrastructure solutions; and the supply, implementation and support of application software solutions.

Geographical Segment

The consolidated entity's operations are predominantly based in Australia.

Income Tax

	Half-Year 2002 \$2000	Half-Year 2001 \$'000
The income tax expense for the financial year differs from the amount calculated on the profit / (loss). The differences are reconciled as follows:
Profit / (loss) from ordinary activities before income tax expense	366	1,779
Income tax calculated at 30%	110	534
Tax effect of permanent differences: Amortisation of goodwill Other non-allowable items	48 68	48 76.
Share of joint venture partnerships' non-deductible expenses Share of joint venture partnerships' non-assessable	411
revenue	(362)
Income tax adjusted for permanent differences	275	658
Under (over) provision in previous year	25	46
Benefit of tax losses of prior years recouped		(261)
Future income tax benefit not brought to account
Income tax expense	300	443

$+$ See chapter 19 for defined terms.

Additional Information to support Appendix 4B Half-vear Ended 31 December 2002

Receivership and administration of Powerlan Old and the acquisition of ODS & OSS

As set out in the June 2002 Annual Report (note 41), the result for the half-year has been affected by the administration and receivership of Powerlan Old, the consolidated entity's joint venture partner in ODS and OSS.

Negotiations with the Powerlan Old receivers (Receivers) and administrators (Administrators) were concluded on 25 November 2002 (the Agreement) and various outstanding claims and issues relating to this matter were settled, as announced at the consolidated entity's Annual General Meeting on 26 November 2002.

Under the Agreement the Receivers were paid \$2,500,000 from joint venture partnership assets. The consolidated entity assumed the remaining assets & liabilities of the joint venture partnerships. One of the joint venture partnership assets was a loan of \$3,092,000 to Powerlan Old (being the net of the original OSS loan to Powerlan Old of \$3,819,000 offset by moneys owed to Powerlan Old by the joint venture partnerships). The Agreement confirmed the consolidated entity's right to prove as a creditor for the \$3,092,000 receivable in the administration of Powerlan Qld.

The payment to the Receiver facilitated the discharge of Powerlan Limited's secured ANZ debt which effectively enabled the administration of Powerlan Old to continue. On 23 December 2003 a Deed of Company Arrangement (DOCA) was executed by Powerlan Limited under which Powerlan Limited has committed to pay the Administrators \$2,600,000 by 30 June 2003, and a further \$100,000 per month for 24 months commencing from 1 July 2003. The DOCA also approved the transfer of the secured charge over the assets of Powerlan Limited and its controlled entities, to the creditors of Powerlan Old. The consolidated entity is the largest creditor of Powerlan Old, representing approximately 25% of total creditors.

The consolidated entity has estimated that it will recover at least \$1,000,000 of the \$3,092,000 Powerlan Qld receivable, representing its approximate 25% share of the \$4,000,000 in administration funds that is expected to be available for distribution following receipt of the first \$2,600,000 DOCA payment from Powerlan Limited in June 2003. The consolidated entity has provided for the remaining \$2,092,000 of the Powerlan Old receivable.

Based on the preliminary estimates of the recoveries provided by Administrators, the consolidated entity's possible total recovery ranges up to approximately \$1,700,000 to \$2,000,000. Any additional funds that may be recovered from the administration process, in excess of the current \$1,000,000 net receivable, will provide further mitigation against the loss.

The consolidated entity also negotiated arrangements with the joint venture partnership creditors to permanently forbear from pursuing recovery of a component of the joint venture partnership debt. The debt forgiveness recognized by the partnerships totalled approximately \$1,600,000.

The joint venture partnership assets and liabilities acquired by the consolidated entity from Powerlan Old at settlement are shown below.

$+$ See chapter 19 for defined terms.

Additional Information to support Appendix 4B Half-year Ended 31 December 2002

Receivership and administration of Powerlan Old and the acquisition of ODS & OSS (continued)

	Half-Year 2002 \$'000
Fair value of identifiable net assets / (liabilities) acquired:
Cash	2,176
Trade and other debtors	1,356
Receivable – Powerlan Qld	3,092
Provision for non-recovery of receivable - Powerlan Qld	(2,092)
Inventories	61
Plant and equipment	121
Trade and other creditors	(2, 434)
Loan payable to consolidated entity	(3,406)
Unearned income	(154)
Net identifiable liabilities assumed	(1,280)
Less 50% interest in joint venture partnerships already held	(638)
Legal and other costs	(223)
Loss on assumption of joint venture partnerships' net liabilities	(2,141)

This outcome compares with the original assessment of the possible financial impact detailed in the June 2002 Annual Report, being a range from \$2,000,000 to \$8,000,000, and is consistent with the estimate provided at the consolidated entity's Annual General Meeting on 26 November 2002.

This outcome may be improved further depending on the final recovery from the administration of Powerlan Old, Furthermore, since 25 November 2002 the consolidated entity has control of 100% of the former QDS and QSS joint venture partnership operations, and the consolidated entity's second half results will reflect the entire contribution from those operations.

⁺ See chapter 19 for defined terms.