A.C.N 007 870 760

Level 29, 35 Collins Street, Melbourne Victoria 3000 Australia Telephone: (03) 9242 4000 Facsimile: (03) 9242 4040

TNL

7 November 2003

Companies Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bond Street SYDNEY NSW 2000

Dear Sir/Madam,

TOLHURST NOALL GROUP LTD

Offer Information Statement

Please find attached a copy of the Offer Information Statement which was lodged with the Australian Securities and Investments Commission today.

Yours faithfully,

CRAIG GRAHAM-SMITH Company Secretary

ABN 50 007 870 760

Offer Information Statement

A one-for-four Renounceable Rights Issue at four cents per New Share to raise approximately \$700,000.

Key Dates and Important Information
Corporate Directory
	Letter from the Chairman	6
Section 1	Key Information	8
Section 2	Details of the Entitlement Offer	10
Section 3	What You Need To Do	14
Section 4	The Company and its Business	16
Section 5	Effect of Entitlement Offer on the Company	20
Section 6	Risk Factors	22
Section 7	Additional Information	25
Section 8	Defined Terms	28
Appendix	Financial Report for year ended 30 June 2003

IMPORTANT

This document is important and requires your immediate attention. It should be read in its entirety. If you are in doubt as to the course you should follow, you should consult your stockbroker, solicitor, accountant or other professional adviser without delay.

Applications for New Shares under this Offer Information Statement should be lodged by no later than 5:00pm (Adelaide time) on 12 December 2003.

There are risks associated with investing in New Shares under this Offer Information Statement. Shareholders are referred, in particular, to Section 6 of this Offer Information Statement.

Event	Date
Lodgement Date	7 November 2003
Shares quoted ex Rights and Rights trading commences on ASX	12 November 2003
Record Date to determine Entitlements to New Shares	18 November 2003
Offer Information Statement and Entitlement and Acceptance Form despatched to shareholders	21 November 2003
Last day of Rights trading	5 December 2003
First day of trading of New Shares on deferred settlement basis on ASX	8 December 2003
Last day for acceptance and payment in full of Application Monies (Closing Date)	12 December 2003
Allotment and issues of New Shares and despatch of shareholding statements for New Shares	19 December 2003

These dates are indicative only and subject to change without prior notice.

The Company reserves the right to vary the dates and times of the Entitlement Offer without prior notice, which may have a consequential effect on other dates. The decision whether or not to grant official quotation and the date of quotation of the New Shares on ASX is subject to the determination and at the discretion of the ASX. Applicants are encouraged to submit their application forms as soon as possible.

Important Information

This Offer Information Statement is dated 7 November 2003. A copy of this Offer Information Statement was lodged with ASIC on that date. ASIC and the ASX take no responsibility for the contents of this Offer Information Statement.

The expiry date of this document is the date which is 13 months after the date of this Offer Information Statement. No Securities will be issued on the basis of this document after the expiry date. This Offer Information Statement does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation.

Definitions of certain terms used in this Offer Information Statement appear in Section 8. All references to currency are to Australian dollars and all references to time are to Adelaide time. unless otherwise indicated.

No person is authorised to give any information or to make any representation in connection with the Entitlement Offer which is not contained in this Offer Information Statement. Any information or representation not so contained may not be relied on as having been authorised by the Company.

Shareholders should be aware that their Rights may have value. The Entitlement Offer is renounceable which enables Shareholders who do not wish to take up all of their Entitlement to sell their Rights on the ASX. It is important that Shareholders either accept their Entitlement (or part thereof) or deal with their Entitlement as described in Section 3 of this Offer Information Statement. Shareholders who take no action in respect of their Rights will receive no benefit.

This Offer Information Statement is not a prospectus and it has a lower level of disclosure requirement under the Corporations Act than a prospectus.

It is important that potential investors read this Offer Information Statement in its entirety and seek professional advice where necessary. Investors are urged to seek independent professional advice in relation to the material contained in this Offer Information Statement.

Directors

John Harry	Non-Executive Chairman
John Wilson	Managing Director
Peter Chapman	Executive Director
Craig Graham-Smith	Executive Director
lan Johnson	Executive Director
Russell McKimm	Executive Director
Andrew McDouall	Non-Executive Director
John Nagle	Non-Executive Director
Don Taid	Non-Executive Director

Company Secretary

Craig Graham-Smith

Registered Office	Auditors
Level 29	Moore Stephens HF
35 Collins Street	607 Bourke Street
Melbourne Victoria 3000	Melbourne Victoria 3000
Tel: 03 9242 4000
Fax: 03 9242 4040
Website: www.tolhurst.com.au

Share Registry	Solicitors
Computershare Investor	Minter Ellison
Services Pty Ltd	525 Collins Street
115 Grenfell Street	Melbourne Victoria 3000
Adelaide South Australia -5000

Dear Shareholder.

This Offer Information Statement provides the Eligible Shareholders of Tolhurst Noall Group Ltd ("Tolhurst" or the "Company") an opportunity to participate in a 1 for 4 Renounceable Rights issue at a price of four cents per New Share. The Entitlement Offer will raise, before costs, approximately \$700,000.

Tolhurst is an independent and publicly listed Australian stockbroking and financial planning business that provides employees with an opportunity to own shares in the company in which they work. The company has identified opportunities and has developed strategies to grow its advisory business and expand its equity capital markets services to small and medium sized companies over the coming years.

Tolhurst has reported a net operating profit of \$147,819 for the twelve months to June 30, 2003. This result includes a tax benefit of \$651,625. The operating loss before tax of \$503,806 was adversely affected by an equity accounted loss from our 50% investment in Tolhurst Funds Management Pty Ltd ("TFM") of \$247,692 and rationalisation and restructuring costs in its stockbroking business in the first half of approximately \$250,000. On 6 November 2003, the Company announced that it had sold its investment in TFM.

The Company experienced a recovery in operating results in the last months of the year ended 30 June 2003. In line with the pick-up in market activity post 30 June 2003, increased corporate activity and the impact of cost control measures implemented around twelve months ago. Tolhurst is now trading profitably and has experienced improved, above budget operational performance in the September quarter. Share market conditions continue to be much improved, supporting higher revenues for the Company.

The funds raised by the Entitlement Offer will be used principally to provide working capital for the Company. In the current share market climate, Tolhurst considers that the business will benefit from an increase in its working capital.

Also, as with many stockbrokers. Tolhurst wishes to increase its prudential and working capital. Tolhurst has experienced rising turnovers in recent months and wishes to support these growing revenues with a strong equity capital base and financial structure.

In addition to this Entitlement Offer, the Company will seek approval at the Annual General Meeting scheduled for 21 November 2003 for the following new issues:

an issue of 4.0 million unlisted options with a duration of 2 years to certain staff and $(1)$ consultants, including two executive directors; and

$(ii)$ an issue of 3.4 million unlisted options with a duration of 4 years to the Managing Director.

The exercise price of the above mentioned options is to be determined using the formula described in the notice of meeting.

The risks associated with investing in the Company are described in Section 6 of this Offer Information Statement. Shareholders should read this section, together with the rest of this document, carefully.

The full terms of the Entitlement Offer are set out in Section 2 of this Offer Information Statement. This Offer Information Statement also explains the purpose and effect on the Company of the Offer. Please read the Offer Information Statement carefully and consult your financial or other professional adviser before deciding whether or not to subscribe for New Shares. The directors of the Company advise that, given the uncertainty of investment markets, an investment in the Company is suitable only for investors prepared to accept material risks.

The Entitlement Offer is renounceable. That is, your right to subscribe for New Shares under the Rights Issue is transferable.

If you wish to sell your Entitlement to New Shares, please complete the relevant section of your Entitlement and Acceptance Form and instruct your stockbroker so as to complete the transaction by the due date. If you allow your Entitlement to New Shares to lapse, or you are unable to sell your Entitlement to New Shares, you will receive no proceeds from the Entitlement Offer.

Yours faithfully

John Harry

Chairman

The information set out in this section is not intended to be comprehensive and should be read in conjunction with the full text of this Offer Information Statement.

$11$ Offer

This Offer Information Statement contains an offer of New Shares in the Company by way of a renounceable Rights Issue. Under the Entitlement Offer, Eligible Shareholders are entitled to subscribe for one New Share for every four Shares held as at the Record Date, at an issue price of four cents each.

Eligible Shareholders who accept their Entitlement in full may also apply for Additional Shares. Any shortfall in subscriptions for New Shares may be issued as Additional Shares, at the sole discretion of the Directors.

The New Shares will be fully paid and on issue will rank equally with the Company's existing Shares. The Closing Date and time for acceptances and payments is 5:00pm (Adelaide time) on 12 December 2003

The details of the Entitlement Offer are set out in full in Section 2.

$1.2$ Placement of Shortfall

The Company reserves the right to place any shortfall shares to any person at its sole discretion subject to the requirements of the Listing Rules and the Corporations Act.

$1.3$ What you need to do

The number of New Shares to which you are entitled is shown on the accompanying Entitlement and Acceptance Form. You can subscribe for all, or part, of the Entitlement to New Shares specified in the Entitlement and Acceptance Form. If you apply for your full Entitlement, you may also use the Entitlement and Acceptance Form to apply for Additional Shares. Alternatively, as the Rights are renounceable you can sell on the ASX all, or part, of your Entitlement to New Shares.

Applications for Additional Shares may be accepted and allotment, if any, made at the absolute discretion of the Directors. See Section 3 for detailed instructions on what you need to do.

$1.4$ Purposes of the Entitlement Offer and use of proceeds

The Entitlement Offer is not underwritten and, if fully subscribed, will result in the issue of approximately 17,699,674 New Shares, raising approximately \$700,000 before the costs of the Rights Issue.

The key purposes of the Entitlement Offer are:

to fund the working capital requirements of the Company including the payment of operating expenses of the business from time to time and refinancing of loans and off balance sheet facilities available to the Company and its associated entities;
to enhance the prudential capital of the Company and improve the debt/equity ratio of the Company; and
to enable the accepting Shareholders to participate in the development of the Company.

Proceeds of the Entitlement Offer will be used for the purposes mentioned in points 1 and 2 above and to pay for the costs of the Offer, which include regulatory fees, legal fees, printing, mailing and associated expenses, and are estimated at \$10,000.

$1.5$ Effects of the Offer on the capital of the Company

There are 74,998,696 Shares on issue as at the date of this Offer Information Statement. The 4,200,000 Shares allotted on 5 November 2003 to Balgreggan Financial Investments Limited do not carry any entitlement to participate in the Entitlement Offer in accordance with the terms approved for the issue of those Shares at the general meeting of the Company's shareholders held on 6 October 2003. Accordingly 70,798,696 Shares are entitled to participate in the Entitlement Offer. Assuming this Entitlement Offer is fully subscribed and after the issue of New Shares, there will be approximately 92,698,370 Shares on issue. This assumes that none of the Company's issued Options are exercised before the Record Date.

A more detailed description of the effects of the Offer is contained in Section 5.

$1.6$ Risk factors

An investment in the Company involves general risks associated with an investment in the share market. The price of Shares may rise or fall. There are also a number of risk factors, both specific to the Company and of a general nature, which may affect the future operating and financial performance of the Company and the value of an investment in the Company. These and other key risk factors are described in Section 6. Before deciding to invest in the Company, prospective investors should consider those factors carefully.

$2.1$ The Entitlement Offer

The Company is making a renounceable Rights Issue offering Eligible Shareholders one New Share for every four Shares held at 5:00 pm (Adelaide time) on 18 November 2003 (the Record Date).

The issue price of four cents per New Share is payable in full on application.

The number of New Shares to which you are entitled is shown on the accompanying Entitlement and Acceptance Form. Fractional entitlements will be rounded up to the nearest whole Share. Eligible Shareholders may accept their Entitlement in whole or in part prior to the Closing Date only by completing their Entitlement and Acceptance Form. Eligible Shareholders who accept their full Entitlement may apply for Additional Shares (see Section 2.7 below).

If the Entitlement Offer is fully subscribed, the total number of New Shares issued under the Entitlement Offer will be approximately 17,699,674. This assumes that no Options are exercised on or before the Record Date. The gross proceeds (before the costs of the Entitlement Offer) will be approximately \$700,000.

The holders of options over Shares in the Company will not receive an Entitlement.

Opening and Closing Dates $2.2$

The Entitlement Offer will open for receipt of acceptances on Friday 21 November 2003. The Closing Date and time for acceptances and payments is 5:00pm (Adelaide time) on Friday 12 December 2003, subject to the Directors being able to vary the Closing Date in accordance with the Corporations Act and the Listing Rules.

Who is entitled to participate in the Entitlement Offer 2.3

This Offer Information Statement does not, and is not intended to, constitute an Entitlement Offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an Entitlement Offer or to issue this Offer Information Statement. No action has been taken by the Company to register the New Shares, or otherwise permit an offering of the New Shares in any jurisdiction outside Australia. The distribution of this Offer Information Statement in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Offer Information Statement should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. The Company will not accept an Application from any person whose address, as it appears on the relevant Application, is outside Australia or New Zealand.

The Board has appointed Tolhurst Noall Limited as nominee to sell the Rights of shareholders outside Australia and New Zealand who are unable to participate in the Entitlement Offer through

sale on the stock market if there is a viable market in Rights and a premium over the expenses of sale can be obtained. Any such sale will be at such prices and otherwise in such a manner as the Board may in its absolute discretion determine. Any interest earned on the proceeds of sale of such Rights will be applied against costs and expenses first but any balance will accrue to Tolhurst. Neither Tolhurst nor its nominee will be held liable for a failure to sell Rights or to sell Rights at any particular price. The proceeds of the sale will be distributed to the Shareholders for whose benefit the Rights have been sold in proportion to their shareholdings (after deducting costs involved in the sale and the distribution of proceeds).

Net proceeds from the sale of Rights will be provided to Shareholders in Australian dollars.

If there is no viable market for the Rights, the Entitlements will be allowed to lapse.

This Offer Information Statement does not constitute an offer or an invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation.

2.4 Ranking of New Shares

The New Shares, from the date of issue, will rank equally in all respects with existing Shares. The rights and liabilities attaching to New Shares arise from a combination of the Constitution of the Company and the law.

$2.5$ Payment

Applications must be accompanied by payment in full of four cents per New Share. Payments will only be accepted in Australian currency and cheques or bank drafts must be drawn on or payable at an Australian Bank.

Cheques or bank drafts should be made payable to "Tolhurst Noall Group Ltd Share Offer" and crossed "Not Negotiable". Applicants should not forward cash. Receipts for payment will not be provided. All Application Monies will be held on trust under Section 722 of the Corporations Act until the New Shares are issued to successful shareholders or the money is returned to Shareholders. If Application Monies are required to be refunded for any reason, no interest will be paid.

Application Monies will be held in a subscription account until issue of the New Shares. This account will be established and kept by the Company on behalf of each Applicant. The Company will be entitled to retain any interest paid on the monies so held, even if the Entitlement Offer does not proceed.

No brokerage or stamp duty on the allotment of New Shares is payable on application.

Rights Trading $2.6$

The Rights are renounceable which enables shareholders who do not wish to take up some or all of their Entitlement to New Shares to sell some or all of their Rights. Rights trading will commence on the ASX on 12 November 2003 and will cease on 5 December 2003. You may sell your Rights on the ASX in this period should you choose not to accept your full Entitlement to New Shares.

Additional Shares and Allocation Policy $2.7$

Eligible Shareholders who apply for their full Entitlement may also use the Entitlement and Acceptance Form to apply for Additional Shares.

Additional Shares may be allocated out of any shortfall in subscriptions for New Shares, to Eligible Shareholders who have applied for them in addition to taking up their full Entitlement to New Shares.

The following allocation policy will apply for any Applications in excess of an Eligible Shareholder's Entitlement:

all Eligible Shareholders will receive their Entitlement;
any amount by which Applications from Eligible Shareholders exceed their Entitlements may be scaled back, at the absolute discretion of the Directors;
Eligible Shareholders are not assured of receiving any New Shares applied for in excess of their Entitlement; and
The Company will use reasonable endeavours to allot Additional Shares on an equitable basis taking into account the shareholding of the Eligible Shareholder.

No New Shares from any shortfall will be allotted to Eligible Shareholders where the allotment might result in an acquisition prohibited under section 606 of the Corporations Act.

$2.8$ ASX quotation

The Company will make an application for the New Shares to be quoted on the ASX within seven days after the date of this Offer Information Statement. If official quotation for the New Shares is not obtained, all Application Monies will be refunded without interest and the Entitlement Offer will not proceed.

2.9 Issue and Despatch of Shareholding Statements

The Company expects that the New Shares will be issued no later than 19 December 2003 and shareholding statements will also be despatched on that date.

Issues of New Shares under this Offer Information Statement will only be made after permission for their quotation on ASX has been granted.

2.10 Refund of subscription monies

If subscription money is refundable by reason of the Directors not satisfying an application for Additional Shares in full or in part, it will be refunded as soon as reasonably practicable.

Any interest earned on the subscription money will be for the benefit of the Company and will be retained by the Company irrespective of whether New Shares are issued.

2.11 Tax Considerations

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in New Shares Taxation consequences depend on each taxpayer's particular and dealing in Rights. circumstances. Neither the Company nor any of its officers, employees, agents and advisers accept any liability or responsibility in respect of the taxation consequences connected with an investment in New Shares or dealing in Rights.

$2.12$ Minimum Subscription

There is no minimum subscription for the Entitlement Offer. The Directors reserve the right to allot any shortfall at their sole discretion.

2.13 Placement of any shortfall

The Directors reserve the right to issue at their discretion any New Shares for which an Entitlement and Acceptance Form and Application for Additional Shares has not been received by 5:00pm Adelaide time on the closing date ("Shortfall Shares") subject to compliance with the Australian Stock Exchange Listing Rules and the Corporations Act.

Shareholders are able to apply for Shortfall Shares but should note that Directors will only allot Shortfall Shares to the extent that a Shortfall exists at the closing date. The Shortfall Shares may be offered by the Directors within three months of the closing date at no less than the price under this offer to such persons and in such proportions as the Directors may determine, but always in accordance with the Listing Rules and the Corporations Act.

However, where possible, when allotting Shortfall Shares, the Directors will give priority to Shareholders at the record date that have completed the Shortfall Application Form.

$3.1$ How to take up all or part of your Entitlement and apply for Additional Shares

What you may do

The number of New Shares to which you are entitled is shown on the accompanying Entitlement and Acceptance Form. You may take the following action:

If you wish to take up all your Entitlement

Complete the accompanying Entitlement and Acceptance Form in accordance with the instructions set out therein. Forward your completed Entitlement and Acceptance Form together with your cheque or bank draft for the amount shown on the Entitlement and Acceptance Form to reach Tolhurst's Share Registry, no later than 5:00pm (Adelaide time) on 12 December 2003. An accompanying reply paid envelope is provided for your convenience. Cheques or bank drafts should be made payable to "Tolhurst Noall Group Ltd Share Offer" and crossed "Not Negotiable".

If you wish to sell all of your Entitlement on the ASX

Complete the section on the back of the accompanying Entitlement and Acceptance Form marked "Instructions to Your Stockbroker" and lodge the Form with your stockbroker. Trading of Rights will commence on the ASX on 12 November 2003. Sale of your Rights must be completed by no later than 5 December 2003, when Rights trading ceases.

If you wish to take up part of your Entitlement and sell the balance on the ASX

Complete the accompanying Entitlement and Acceptance Form in respect of the number of New Shares you wish to take up in accordance with the instructions set out in the Form and also complete the section on the back marked "Instructions to Your Stockbroker" for the balance you wish to sell on ASX. Lodge the Form with your stockbroker together with your cheque or bank draft for the amount due in respect of the New Share you wish to take up. Cheques or bank drafts should be made payable to "Tolhurst Noall Group Ltd Share Offer" and crossed "Not Negotiable". Again, Sale of your rights must be completed by no later than 5 December 2003, when Rights trading ceases.

If you wish to take up part of your Entitlement and allow the balance to lapse

Complete the accompanying Entitlement and Acceptance Form in respect of the number of New Shares you wish to take up in accordance with the instructions set out in the Form. Forward your completed Form together with your cheque or bank draft for the amount due in respect of the number of New Shares you wish to take up to reach Tolhurst's Share Registry, no later than 5:00pm (Adelaide time) on 12 December 2003. An accompanying reply paid envelope is provided for your convenience. Cheques or bank drafts should be made payable to "Tolhurst Noall Group Ltd Share Offer" and crossed "Not Negotiable".

If you wish to transfer all or part of your Entitlement to another person other than on the ASX

Forward a completed and stamped standard renunciation form (obtainable from the Share Registry) together with your Entitlement and Acceptance Form and the applicable transferee's cheque or bank draft for any acceptance money to reach Tolhurst's Share Registry no later than 5:00pm (Adelaide time) on 12 December 2003. An accompanying reply paid envelope is provided for your convenience. Cheques or bank drafts should be made payable to "Tolhurst Noall Group Ltd Share Offer" and crossed "Not Negotiable".

$3.2$ Entitlements not taken up

If you decide not to accept all or part of your Entitlement to New Shares, it is important that you consider selling your Rights to the New Shares rather than allowing your Rights to lapse. You will receive no benefit for any New Shares issued pursuant to lapsed Rights. It is therefore important that you take action either to accept or consider selling your Entitlement in accordance with the above instructions.

$3.3$ Enquiries

For further information please contact Tolhurst Noall's Share Registry:

Computershare Investor Services Pty Ltd

115 Grenfell Street

Adelaide South Australia 5000

Phone: 1300 556 161

$4.1$ Tolhurst's Core Business

The Company's main business operation is a major national sharebroking and financial planning business, the services of which include:

advice and execution for clients investing in shares, options and derivatives listed on the $\blacksquare$ ASX:
advice and placement of funds for wealth management and financial planning clients;
portfolio management services;
corporate finance advice and equity and debt capital raisings;
research;
arbitrage activities;
provision of back office and related services to other industry participants.

The clients of these businesses overlap to some extent. Similarly, advisers and dealers working for the Company may not be exclusively involved in any one activity, although there is an increasing trend towards specialisation among advisers and dealers.

Currently the allocation of staff and consultants across divisions is approximately as set out in the table below.

Department	Number of Personnel
Full time Broking and Corporate Finance Personnel	128
Broker Franchisees and Financial Planning affiliates	42
Management, Back office & Administration	35
Total	205

The Principal Business units of the Company are as set out in the chart below.

$4.2$ Tolhurst's Investments

In addition to its core operations, Tolhurst has minority interests in a number of entities offering financial planning, fixed interest funds management services and stockbroking. Further information is contained in the Appendix.

The Company announced on 6 November 2003 that, as part of the sale of Tolhurst Funds Management Pty Ltd by its shareholders, the Tolhurst group of companies has sold its 50% interest in that business. The gross consideration to Tolhurst for its share of the sale proceeds, before expenses of the sale, will be paid in two parts, with \$1 million being paid on completion of the sale arrangements and, after twelve months, a further amount of approximately \$1 million. The amount of the second payment is subject to adjustment in certain circumstances including where there is a decline in funds under management and insurance product income in the post completion period.

The Company also owns investment properties in Cairns, which are for sale. Since 30 June the Company has sold (and settled on) 7 properties to the value of \$854,975.

Prospects for 2003/04 4.3

The Directors of the Company have not provided a forecast of the Company's results for 2003/04 because of a number of factors, including:

continuing uncertain investment conditions;
the impact of the stronger Australian dollar on client investment attitude:
÷ litigation and regulatory costs and risks;
the pace of recruitment within the Company and the associated revenues and costs; and
the unpredictable nature of corporate finance revenues.

Nevertheless, the Directors are encouraged by the better tone in financial markets in recent months and by the growing attraction of the yields offered to investors in Australian equity and hybrid securities. The Company is achieving increased commission income in 2003/04. The Company also expects better corporate activity and new capital raisings in 2003/04 with the prospects of a greater contribution from its corporate finance business.

4.4 Capital Structure

This table shows the number of issued Shares at the date of this Offer Information Statement and the total issued Shares at the close of the Entitlement Offer.

Ordinary Shares	Number
Issued Shares at the date of the Offer Information Statement	74.998.696
New Shares offered under this Offer Information Statement	17.699.674
Total issued Shares on close of the Entitlement Offer	92,698,370

In addition to Shares, the Company also has unlisted Options on issue, the details of which are set out in Tolhurst's Annual Report. The figures in the table above are based on the assumption that no holders of Options will exercise their Options on or before the Record Date.

The Options will not participate in the Entitlement Offer, however the exercise prices of the Options will be adjusted in accordance with the Listing Rules.

In addition to this Entitlement Offer, the Company will seek approval at the Annual General Meeting scheduled for 21 November 2003 for the following new issues:

$(i)$ an issue of 4.0 million unlisted options with a duration of 2 years to certain staff and consultants; and
$(ii)$ an issue of 3.4 million unlisted options with a duration of 4 years to the Managing Director.

The exercise price of the above mentioned options is to be determined using the formula described in the notice of meeting.

There is no minimum subscription under this Entitlement Offer. Any funds raised will be retained by the Company and included as working capital in the business.

The principal effects of the issue of New Shares under the Entitlement Offer, assuming that 17,699,674 New Shares are subscribed by Shareholders will be as follows:

$\blacksquare$ The gross subscription price of the New Shares would be \$707,987 which would be reduced by the costs of the issue of approximately \$10,000 to produce net cash proceeds of \$697,987.
The cash will increase the Company's cash at bank.
The company's issued and fully paid ordinary shares would increase from 74,998,696 (following the allotments in October and November 2003) to produce a pro-forma total of 92,698,370.

The following is a comparison of the audited Statement of Financial Position as at 30 June 2003 with an un-audited pro-forma Statement of Financial Position illustrating the effect that the Entitlement Offer would have had on the Company at 30 June 2003 assuming the effects as described above and after taking into account the previous allotments of 1,040,000 shares which raised \$260,000, 4,200,000 shares which raised \$168,000 and the allotment of 390,000 shares at 20 cents each under the Company's Employee Share Plan.

TOLHERST NOALL GROUP LTD
Statement of Financial Position as at 30 June 2003
	30-Jun-03	30-Jun-03
	Audited	Adj for offer proceeds
	\$'000s	\$'000s
Current Assets
Cash	5,966	6,832
Receivables	24,304	24,304
Other	155	155
Investment properties	83	83
Financial assets	$290 -$	290
Total Current Assets	30.798	31.664
Non-Current Assets
Investments accounted for using the equity method	1.123	I,123
Investment properties	82	82
Financial assets	3,356	3,356
Property, plant & equipment	1.191	1,191
Deferred tax assets	654	654
Other	148	148
Total Non - Current Assets	6.554	6.554
Total Assets	37.352.	38.218
Current Liabilities
Payables	27,165	26,905
Interest bearing liabilities	1,321	I.321
Current tax liabilities	43	43
Provisions	483.	483
Total Current Liabilities	29.012	28.752.
Non Current Liabilities
Interest bearing liabilities	3,773	3,773
Deferred tax liabilities	2	2
Provisions	530	530
Total Non Current Liabilities	4.314	4.314
Total Liabilities	33.326	33,066
Net Assets	4 026	5.152.
Shareholders' Equity
Share capital	19,072	20,286
Accumulated losses	$-15,046$	15134
	$-4.026$	5152

Section 6 Risk Factors

There are risks associated with investing in any form of business and with investing in the share There are also a range of specific risks that may materially affect the market generally. performance of the Company and the value of the Shares. Many of these risks are outside the control of the Company and cannot be mitigated in any way, although prudent management may partly minimise some of these risks.

This section identifies the areas the Directors regard as the major risks associated with an investment in the Company. Eligible Shareholders should read the whole of this Offer Information Statement in order to fully appreciate those risks before any decision is made to subscribe for New Shares under this Entitlement Offer

$6.1$ Key personnel

Tolhurst relies on a number of key personnel within its operating business. The loss of key personnel may have an adverse effect on the Company.

6.2 Effective management of growth

The ability of the newly established businesses within the Company such as portfolio administration, to reach a size where they are financially self sustaining will depend on the Company's ability to manage the efficient expansion of its operational capacities and the ability of executive officers and senior management to operate effectively both independently and as a group.

6.3 Business and Operations

The business is exposed to a number of market related risks including possible exposures in its underwriting, arbitrage, options and derivatives and sharebroking businesses.

The Company is also exposed to credit risk because of its dealings with a variety of counterparties, both domestic and international.

In addition, the business has material operating risks because of its dependence on its IT and communications systems which may be vulnerable to interruption or disaster.

6.4 Competitive position

Some of the Company's businesses operate in highly competitive markets and some of its major competitors are well established in those markets. Some of the markets that the Company operates in may be perceived by potential entrants to have relatively low barriers to entry. Increased market competition may have an adverse effect on the Company.

The Australian stockbroking industry continues to consolidate and Tolhurst has been approached and from time to time held general discussions concerning merger opportunities. The Company has not entered into any agreements at this time.

6.5 Economic factors

Factors such as, but not limited to, political changes, stock market trends, changing customer preferences, interest rates, currency movements, inflation levels, commodity prices, industrial disruption, competition, taxation changes and legislative or regulatory changes may all have an adverse impact on the Company's operating costs, profit margins, asset values and share price. These factors are beyond the control of the Company. The Company expects its clients' investment decisions, and hence the Company's income, to be affected by the recent moves in the Australian dollar against other currencies.

A sustained downturn in business investment or property investment would have an adverse impact on the Company. The volatility of trading volumes on ASX in 2002/03 has had a negative impact on the Company and, if repeated, such market conditions would have an adverse impact on the Company.

6.6 Financial performance

No assurance as to future profitability or dividends can be given, as these are dependent on future earnings, the costs of the Company's businesses and the working capital requirements of the Company. The Company does not expect to declare a dividend in respect of the year ending 30 June 2004.

6.7 Capital needs of the Company

The Directors expect that the proceeds of the issue of the New Shares and borrowings will provide sufficient capital resources to satisfy its immediate working capital requirements. The Directors can give no assurance, however, that further requirements can be met without future equity financing (pro-rata offers or placements) or, if future financing is necessary, that it can be obtained on favourable terms, or at all.

As set out in the financial statements, the Company relies on various parties including creditors and directors/shareholders for financial support as indicated in the notes to the financial statements. The Company can give no guarantees that this support will continue beyond 30 June 2004. Directors/shareholders guarantees of approximately \$950,000 will not continue after 31 December 2003.

6.8 Regulation

The Company is encountering increased costs in meeting regulatory requirements and these costs are expected to continue throughout 2003/04 with the introduction of a new licensing regime in Australia for financial intermediaries such as sharebrokers. ASX and ASIC fines and penalties are now larger and constitute a material but unpredictable risk for the Company.

Various ASIC, APRA and ASX audits and investigations of the Company and its subsidiaries and associated entities have been foreshadowed. Compliance expenses have increased, and together with the new requirement for statements of advice, will all serve to negatively impact upon the Company's financial result for the period ending 30 June 2004 and beyond.

Tolhurst has lodged an application for an Australian Financial Services License.

6.9 Client Complaints

Throughout the stockbroking industry, recent legal decisions appear to have encouraged a higher level of complaints from clients compared to the historical experience, as well as influencing higher insurance costs. The Company expects to continue to incur costs and to allocate resources to this area in 2003/04 but the eventual cost, in terms of claims and legal and management costs, may be higher than the Company is currently predicting. The Company's new insurance arrangements involve the Company being required to meet a higher excess per claim than in the past, together with associated legal costs. The impact of these new arrangements on the Company cannot be quantified. While the Company seeks to assess the potential for client complaints on a realistic basis, the Company's provision for unreported claims may be inadequate.

6.10 Share Investment

Eligible Shareholders should be aware that there are risks associated with any investment in shares. The price at which the New Shares trade may be above or below the issue price of the New Shares offered under this Offer Information Statement. The New Shares offered for issue under this Offer Information Statement carry no guarantee in respect of return of capital, payment of dividends, or the price at which they may trade.

6.11 Market Forces

The market price of the Shares may be affected by market volatility arising from many and varied sources. Recent global political and economic events, including the continuing terrorist threats, may cause share price fluctuations in the Australian share market and globally.

6.12 Litigation

Current litigation is referred to in the Financial Report contained in the Appendix.

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. Those risk factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the New Shares.

Therefore, the New Shares to be issued under this Offer Information Statement carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

$7.1$ Inspection of documents lodged with ASIC

The Company is a disclosing entity for the purposes of the Corporations Act and as such is subject to regular reporting and disclosing obligations under the Corporations Act and the Listing Rules. These obligations require the Company to continuously notify ASX of information about specific events and matters as they arise, so that ASX may make the information available to the stock market conducted by it.

In particular, the Company has an obligation under the Listing Rules (subject to certain exceptions) to notify ASX immediately of any information concerning the Company, of which it becomes aware, which a reasonable person would expect to have a material effect on the price or value of the Shares. The Company is also required to prepare and lodge with ASIC both yearly and half-yearly financial statements accompanied by a Directors' statement and report and an audit or review report.

Copies of documents lodged with ASIC in relation to the Company (which are not documents of the type referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at. an office of ASIC.

Information that is already in the public domain has not been reported in this Offer Information Statement other than that which is considered necessary to make this Offer Information Statement complete. Copies of ASX announcements made by the Company are available on ASX's website:

www.asx.com.au (ASX code: TNL).

Obtaining copies of Documents

If any person requests the Company to provide a copy of one or more of the following documents at any time prior to the Closing Date, the Company will provide a copy of those documents to the person free of charge:

any continuous disclosure notices given by the Company to ASX after the lodgement of the annual financial report of the Company for the year ended 30 June 2003 with ASIC and before lodgement of a copy of this Offer Information Statement with ASIC.

$72$ CHESS

The New Shares will participate from the date of commencement of quotation in the Clearing House Electronic Subregister System (CHESS), operated by ASX Settlement and Transfer Corporation Pty Limited. They may be held in uncertificated form (i.e. no share certificate will be issued) on the CHESS subregister under sponsorship of a broker or on the issuer sponsored subregister.

If you are currently sponsored by a stockbroker your New Shares will be issued under your existing HIN (Holder Identification Number) and will continue to be held on the CHESS subregister. If you are not sponsored by a broker and your Shares are currently held on the Issuer Sponsored subregister under an SRN, then any new shares issued will continue to be held under that existing SRN.

Arrangements can be made at any subsequent time to convert your holding from the issuer sponsored subregister to the CHESS subregister under sponsorship of a broker or vice versa by contacting the Company or your broker.

Consents to the inclusion of information 73

Moore Stephens HF has given and has not, before the lodgement of this Offer Information Statement, withdrawn its written consent to the issue of this Offer Information Statement with the inclusion of the auditor's report in the form and context in which it is included.

$7.4$ Consents to be named

The following persons have given and have not, before the lodgement of this Offer Information Statement, withdrawn their written consent to be named in this document in the form and context in which they are named:

Minter Ellison
Moore Stephens HF

Neither Minter Ellison nor Moore Stephens HF have authorised or caused the issue of this document and, except as set out in this section, neither makes or purports to make any statement in this document and to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this document other than the part to which their consents respectively relate.

Computershare Investor Services Pty Limited has given and, as at the date hereof, has not withdrawn, its written consent to be named as Share Registrar in the form and context in which it is named.

Computershare Investor Services Pty Limited has had no involvement in the preparation of any part of the Offer Information Statement other than being named as Share Registrar to the Company. Computershare Investor Services Pty Limited has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of the Offer Information Statement.

$7.5$ Costs of the Offer

If the Entitlement Offer proceeds, the total estimated costs of the Offer, including legal fees incurred, registration fees, fees for other advisers, Offer Information Statement design, printing, stamp duty and other miscellaneous expenses, will be approximately \$10,000.

$7.6$ Authorisation

This Offer Information Statement is issued by Tolhurst Noall Group Ltd. Each of the Directors has consented to the lodgement of this Offer Information Statement with ASIC and has not withdrawn his consent prior to the lodgement.

The following definitions have been used throughout this Offer Information Statement unless stated otherwise:

Additional Shares means New Shares which may, at the Director's absolute discretion, be allocated out of any Shortfall in subscription for New Shares to Eligible Shareholders who have applied for them in addition to taking up their full Entitlement to New Shares

Application means an application for New Shares pursuant to the Entitlement Offer

Application Monies means monies received from applicants in respect of their Applications

ASIC means the Australian Securities and Investments Commission

ASX means the Australian Stock Exchange Limited

Board means the board of Directors of the Company

CHESS means Clearing House Electronic Subregister System operated by ASX Settlement and Transfer Corporation Pty Limited

Closing Date means the last date for accepting an offer for New Shares, being 5:00pm Adelaide time on 12 December 2003

Corporations Act means the Corporations Act 2001 (Cth)

Directors means each of the directors of the Company from time to time

Eligible Shareholders means:

all Shareholders with registered addresses in Australia; and
all Shareholders with registered addresses is in New Zealand,
and Eligible Shareholder means any one of those Shareholders

Entitlement means the number of Rights to which a Shareholder is entitled pursuant to the Rights Issue

Entitlement and Acceptance Form means the personalised Entitlement and Acceptance Form enclosed with this Offer Information Statement

Entitlement Offer means the offer by the Company of approximately 17,699,674 New Shares at four cents per Share to raise approximately \$700,000 under the Rights Issue

HIN means Holder Identification Number

Listing Rules means the listing rules of the ASX

New Shares means the fully paid Shares to be issued pursuant to this Offer Information Statement.

Ordinary Shareholders or Shareholders means the holders of Shares, including the holders of New Shares

Offer Information Statement means this Offer Information Statement dated 7 November 2003

Record Date means 18 November 2003

Rights means the rights to subscribe for New Shares pursuant to this Offer Information Statement

Rights Issue means the renounceable pro-rata offer to Ordinary Shareholders with registered addresses in Australia and New Zealand of New Shares on the basis of one New Share for every four existing Shares held on the Record Date, pursuant to this Offer Information Statement

Share Registry means Computershare Investor Services Pty Limited

Shares means fully paid ordinary shares in the Company

SRN means Shareholder Reference Number

\$ or A\$ means Australian dollars

Tolhurst or the Company means Tolhurst Noall Group Ltd ABN 50 007 870 760

Appendix

The Company's Financial Report for the year ended 30 June 2003 together with the Report of the Independent Auditors and the Directors' Declaration forms part of this Offer Information Statement.

STATEMENT OF FINANCIAL PERFORMANCE FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED		COMPANY
	NOTE	2003	2002	2003	2002
		Ŝ	\$	Ŝ	S.
Revenue from ordinary activities	2	25,989,459	25,433,319	1,135,312	219,475
Dealers rebates		(10, 939, 763)	(11, 770, 468)
Administration costs		(5,349,708)	(6,682,991)	(366,200)	(357, 180)
Depreciation and amortisation
expense	3	(1,068,960)	(3,362,151)		(435,000)
Borrowing costs	3	(543,082)	(477, 826)	(3,154)	(85,196)
Employee benefits expense		(5,591,266)	(7,539,579)	(136, 663)
Occupancy costs		(1,580,682)	(1,578,138)
Communication costs		(1,259,276)	(1,523,471)
Share of net loss of associate accounted for using the equity	9
method		(247, 692)	(379, 411)
Provision for diminution of investments in controlled entities				(735,606)	(6,545,057)
Net unrealised gain from investments		87,165	37,264
Loss from ordinary activities
before income tax expense		(503, 806)	(7, 843, 452)	(106, 311)	(7,202,958)
Income tax benefit relating to
ordinary activities	4	651,625	102,762	3,300
Profit/(Loss) from ordinary
activities after income tax expense		147,819	(7,740,690)	(103, 011)	(7,202,958)
Total changes in equity other than those resulting from transactions
with owners as owners		147,819	(7,740,690)	(103, 011)	(7, 202, 958)
Earnings per share	21
Basic earnings per share (cents per share)		0.22	(14.23)
Diluted earnings per share (cents per share)		0.22	(14.20)

Note: Franked dividends per share have not been disclosed, as the consolidated entity did not distribute any dividends during the financial year.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2003

		CONSOLIDATED		COMPANY
	NOTE	2003	2002	2003	2002
		s,	\$	S	S
CURRENT ASSETS
Cash assets	22(i)	5,965,920	5,787,718	571
Receivables	5	24,303,986	29,306,166	4,668,573	4,121,125
Other	6	155,509	174,336		1,518
Investment properties	8	82,500
Financial assets	7	290,263	1,025,206	1,247	293,021
TOTAL CURRENT ASSETS		30,798,178	36,293,426	4,670,391	4,415,664
NON-CURRENT ASSETS
Receivables	5.			1,285,252	1,285,252
Investments accounted for using the
equity method	9	1,122,897	1,370,591
Investment properties	8	82,500	165,000
Financial assets	7	3,356,297	3,336,295	42,896	2,178,502
Property, plant and equipment	10	1,190,526	1,866,771
Deferred tax assets Other	4 6	653,759 147,766	154,965	3,300

TOTAL NON-CURRENT ASSETS		6,553,745	6,893,620	1,331,448	3,463,754
TOTAL ASSETS		37,351,923	43,187,046	6,001,839	7,879,418
CURRENT LIABILITIES
Payables	$\mathbf{H}$	27,165,571	32,740,368	373,446	1,384,108
Interest bearing liabilities	12	1,320,796	2,956,347	180,000	326,986
Current tax liabilities	4	42,637	35,565
Provisions	13	483,472	816,672
TOTAL CURRENT LIABILITIES		29,012,476	36,548,952	553,446	1,711,094
NON-CURRENT LIABILITIES
Payables	$\mathbf{H}$				1,040,000
Interest bearing liabilities	12	3,772,577	3,142,284	1,140,580	1,320,000
Deferred tax liabilities Provisions	4 13	2,234 539,087	220,580
TOTAL NON-CURRENT LIABILITIES		4,313,898	3,362,864	1,140,580	2,360,000
		33,326,374	39,911,816
TOTAL LIABILITIES				1,694,026	4,071,094
NET ASSETS		4,025,549	3,275,230	4,307,813	3,808,324
SHAREHOLDERS' EQUITY
Contributed equity	14	19,072,490	18,469,990	19,072,490	18,469,990
Accumulated losses	15	(15,046,941)	(15, 194, 760)	(14, 764, 677)	(14,661,666)
TOTAL SHAREHOLDERS' EQUITY		4,025,549	3,275,230	4,307,813	3,808,324

STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED		COMPANY
	NOTE	2003 S	2002 \$	2003 S	2002 S

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		26,191,595	18,009,920
Payments to suppliers and employees		(26, 046, 211)	(24,605,706)	(309,769)	(326, 807)
Dividends received		114,328	211,360	839,027	2,100
Borrowing costs		(597,092)	(477, 826)	(3,154)	(85, 196)
Interest received		287,779 7,183	275,391	163	60,679
Income tax credit received			102,762
Net cash provided by/(used in) operating activities	22(ii)	(42, 418)	(6,484,099)	526,267	(349, 224)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments		809,343	941,639	296,122	1,338,425
Acquisition of property, plant & equipment		(384, 621)	(107,748)
Purchases of shares		(110, 300)	(1,067,999)
Proceeds from sale of property plant & equipment		75,378	896,064
Proceeds from the acquisition of controlled entity			4,194,025
Net cash provided by/(used in)		389,800	4,855,981	296,122	1,338,425
investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of Finance lease obligations Proceeds from borrowings		(23,138)
directors		750,000	480,134
other		590,057	1,966,917	260,000
Repayment of borrowings
directors		(52, 449) (323, 737)	(429, 862) (566, 917)	(1,677,332)	(453,000) (631, 491)
other Proceeds of share issues		602,500		602,500
Net cash provided by/(used in)
financing activities		1,543,233	1,450,272	(814, 832)	(1,084,491)
Net increase/(decrease) in cash held		1,890,615	(177, 846)	7,557	(95,290)
Cash at the beginning of the		3,174,509	3,352,355	(6,986)	88,304
financial year
Cash at the end of the financial	22(i)	5,065,124	3,174,509	571	(6,986)
year

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The significant policies which have been adopted in the preparation of these financial statements are:

(a) Basis of Preparation

The financial report is a general purpose financial report and has been drawn up in accordance with Australian Accounting Standards, the Corporations Act 2001, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board. They have been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets.

The financial report covers the consolidated entity of Tolhurst Noall Group Ltd and controlled entities of Tolhurst Noall Group Ltd as an individual parent entity.

Tolhurst Noall Group Ltd is a listed public company, incorporated and domiciled in Australia.

The following is a summary of the material accounting policies adopted by the consolidated entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(b) Principles of Consolidation

A controlled entity is any entity controlled by Tolhurst Noall Group Ltd. Control exists where Tolhurst Noall Group Ltd has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Tolhurst Noall Group Ltd to achieve the objectives of Tolhurst Noall Group Ltd. A list of controlled entities is contained in Note 7 to the financial statements.

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses have been eliminated on consolidation.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

(c) Goodwill

Goodwill, representing the excess of the purchase consideration plus incidental costs over the fair value of the identifiable net assets acquired on the acquisition of businesses, is amortised on a straight-line basis over the period of time which the benefits are expected to arise, which is taken to be 10 years.

The unamortised balance of goodwill is reviewed at least at each reporting date. Where the balance exceeds the value of expected future benefits, the difference is charged to net profit/(loss).

(d) Cash and Cash Equivalents

Cash on hand and in banks and short-term deposits are stated at the lower of cost and net realisable value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 2 working days, net of outstanding bank overdrafts.

Bank overdrafts are carried at the principal amount. Interest is charged as an expense as it accrues.

The Cash Trusts account is used for the retention of client funds and is subject to the regulations under the ASX Business Rules.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

(e) Receivables

Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Receivables from related parties are recognised and carried at the nominal amount due. Interest is taken up as income on an accrual basis.

(f) Provision for Doubtful Debts

The collectibility of debts is assessed at year-end and a provision is made for any specific doubtful accounts. In addition a general provision is maintained.

$(e)$ Taxes

Income Taxes

The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the profit from ordinary activities adjusted for any permanent differences.

Timing differences which arise due to the different accounting periods in which items of revenue and expense are included in the determination of accounting profit and taxable income are brought to account as either a provision for deferred income tax or as a future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable.

Future income tax benefits are not bought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits in relation to tax losses are not bought to account unless there is virtual certainty of realisation of the asset.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

(h) Financial Assets

Current

Marketable couity securities are valued at market value. Other securities are carried at the lower of cost or recoverable amount. Dividends are brought to account as they are received. The gains or losses, whether realised or unrealised, are included in profit from ordinary activities before income tax.

Non-Current

Controlled Entities

Investments in controlled entities are carried in the company's financial statements at the lower of cost and recoverable amount. Dividends and distributions are brought to account to net profit/(loss) when they are proposed by the controlled entities except when dividends are paid from pre-acquisition retained earnings. These dividends are netted against the carrying value of the investment.

Other Securities

Marketable equity securities are valued at the lower of cost and net market value. Other securities are carried at the lower of cost or recoverable amount. Dividends are brought to account as they are received.

(i) Investments in Associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting.

(i) Investment Properties

Investment units and land are valued at valuation.

(k) Property, Plant and Equipment

Plant and equipment are measured on the cost basis. All fixed assets are depreciated so as to write off the depreciable amount of each item over its estimated useful life.

The gain or loss on disposal of all fixed assets is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in the results of the consolidated entity in the year of disposal.

Depreciation is provided on a diminishing value basis or straight-line method on all property, plant and equipment.

Major depreciation periods are:	2003	2002
$\cdot$ Leasehold Improvements	$6.5 - 10$ years	$6.5 - 10$ years
$\mathbf{\hat{P}}$ Plant and Equipment	$2.5 - 7$ years	$2.5 - 7$ years
$\cdot$ Motor Vehicles	$4 - 5$ years	$4 - 5$ years

(1) Recoverable Amount of Non-Current Assets

Non-current assets are written down to recoverable amount where the carrying value of any non-current asset exceeds recoverable amount. In determining recoverable amount of non-current assets, the expected net cash flows have not been discounted to their present value.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

(m) Payables

Liabilities for trade creditors and other amounts are carried at cost which is fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accrual basis.

Deferred cash settlements are recognised as the present value of the outstanding consideration payable on the acquisition of an asset discounted at prevailing commercial borrowing rates.

(n) Interest Bearing Liabilities

All loans are measured at the principal amount. Interest is charged as an expense as it accrues. Finance lease liability is determined in accordance with the requirements of AASB 1008. Leases.

(o) Employee Benefits

Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year together with entitlements arising from wages and salaries, annual and sick leave which will be settled after one year, have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

The value of the Employee Share Scheme as described in Note 19 is not being charged as an employee entitlement expense.

(p) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Operating leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense in the periods in which they are incurred.

Finance leases

Leases which effectively transfer substantially all of the risks and benefits incidental to ownership of the leased item to the consolidated entity are capitalised at the present value of the minimum lease payments and disclosed as property, plant and equipment under lease. A lease liability of equal value is also recognised.

Capitalised lease assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and charged directly to net profit/(loss).

The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter.

(q) Contributed Equity

Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

(r) Earnings Per Share

Basic earnings per share is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends:
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares:

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(s) Financial Instruments

Refer to note 26 for accounting policies, terms and conditions associated with other financial instruments.

(t) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

Revenue from share trading is recognised at the time of completion of the contract.

Dividend revenue is recognised when the right to receive a dividend has been established.

Interest revenue is recognised when the right to receive the interest has been established.

(u) Reclassification of Prior Year Comparatives

Where applicable, prior year figures have been reclassified to enhance comparability with current year figures.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002
	\$	S	S	\$
NOTE 2 REVENUE FROM ORDINARY ACTIVITIES
Revenue from operating activities
Broking and commission	21,339,717	19,164,499
Underwriting	1,477,499	1,889,893
Management services Share trading	135,380 1,578,433	147,484 1,659,471
Total revenues from operating activities	24,531,029	22,861,347

Revenues from non-operating activities
Dividends
Other Corporations Controlled entities	114,328	211,359	839,027	2,100
Interest
Other persons	224,893	280,128	163	19,456
Controlled Entities				41,223
Proceeds from sale of investments Proceeds from sale of property, plant and	809,343	941,639	296,122	156,696
equipment	75,378	896,064
Rental revenue	234,488	242,782
Total revenues from outside the operating activities	1,458,430	2,571,972	1,135,312	219,475
Total revenues from ordinary activities	25,989,459	25,433,319	1,135,312	219,475
NOTE 3 EXPENSES AND LOSSES
Depreciation of non-current assets
Plant and equipment	933,934	852,321
Total depreciation of non-current assets	933,934	852,321
Amortisation of non-current assets
Leasehold improvements Lease prepaid term charges		50,258 10,419
Expenditure carried forward	85,026	366,089		435,000
Goodwill on Consolidation	50,000	2,083,064
Total amortisation of non-current assets	135,206	2,509,830		435,000
Total depreciation and amortisation expenses	1,068,960	3,362,151		435,000
Borrowing costs expensed Interest expense
Directors	288,861	142,082
Other related parties		2,905
Other persons	254,221	332,839	3,154	85,196
Total borrowing costs expensed	543,082	477,826	3,514	85,196

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002
	\$	\$	ç.	£
NOTE 3 EXPENSES AND LOSSES (cont)
Bad and doubtful debts - trade debtors	69,339	115,498
Operating lease rental	1,643,701	1,525,007
Net loss/(gain) on disposal of assets
- property, plant & equipment	51,554
- investments	8,771		(4,348)
NOTE 4 INCOME TAX
Net loss from ordinary activities	(503, 806)	(7,843,452)	(106, 311)	(7,202,958)
Prima facie tax benefit at 30%	(151, 141)	(2,353,036)	(31,893)	(2,160,887)
Tax effect of permanent differences:
- Other items	152,675	226,765	3,622
- Amortisation	15,000	570,508
Rebateable dividends Losses transferred to other group entities	(17, 971)		(181, 311) 21,606
Tax losses not brought to account	260,104	1,131,320	199,076	2,160,887
Under/(over) provision of income tax in prior
years	(100)	321,681
Timing differences and tax losses brought to
account	(910, 192)		(14, 400)

Income tax benefit attributable to operating loss	(651, 625)	(102, 762)	(3,300)
Deferred tax assets and liabilities
Current tax payable	42,637	35,565
Provision for deferred income tax - non current	2,234
Future income tax benefit - non current
Timing differences	653,759		3,300
Income Tax Losses
Future income tax benefits not brought to account
as assets
Tax losses - revenue	1,527,050	1,630,742	1,242,743	1,043,667
Tax losses - capital Timing differences	900,450	900,450 546,396	835,402	835,402 14,400
	2,427,500	3,077,588	2,078,145	1,893,469

Taxation benefits will only be obtained if the company:

a) has future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions to be realised;

b) continues to comply with the conditions for deductibility imposed by income tax law; and

c) is not adversely affected by changes in income tax legislation in relation to the benefit from the deductions.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED		COMPANY
		2003	2002	2003	2002
		\$	S	S	Ť.
NOTE 5 RECEIVABLES
Current
Client and dealer balances		23,597,849	28,480,908
Provision for doubtful debts		(276,000)	(226,000)
		23,321,849	28,254,908
Sundry debtors	5(a)	315,847	339,294
Unsecured loans	5(a)	(6,320)	144,024
Amounts other than trade debts
receivable from related parties:
Wholly-owned group
- controlled entities	20(c)			4,668,573	4,121,125
Directors and director related entities
- directors	20(c)	120,000	(29,763)
- director-related	20(c)	147,609	106,923
Other related parties
- associated companies	20(c)	405,001	490,780
		24,303,986	29,306,166	4,668,573	4,121,125
Non-current
Amounts receivable from related parties:
Wholly-owned group
- controlled entities	20(c)			1,285,252	1,285,252
				1,285,252	1,285,252

(a) Terms and conditions

Terms and conditions relating to the above financial instruments

Client and dealer balances are on 3 business day terms and are interest bearing at the ANZ reference rate plus 2% on all $(i)$ balances overdue (ie T+3).

Sundry debtors are non-interest bearing and amounts are generally paid within 30 days. $(ii)$

Unsecured loans are payable within 12 months and are generally interest bearing at the ANZ reference rate plus 2%. $(iii)$

Details of the terms and conditions of related party receivables are set out in note 20. $(iv)$

NOTE 6 OTHER ASSETS

Current
Prepayments and other debtors	155,509	174,336	1,518
	155,509	174,336	1,518
Non-current
Expenditure carried forward:
ASX membership fee	125,000	125,000
Capitalised costs	187,192	109,365
Software license fees	59,339	59,339
	371,531	293,704
Accumulated amortisation	(223,765)	(138, 739)
	147,766	154,965

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

		CONSOLIDATED			COMPANY
		2003	2002	2003	2002
		\$	\$	S	\$
NOTE 7 FINANCIAL ASSETS
Current
Shares listed on a prescribed stock exchange at market value Shares listed on a prescribed stock		94,763	1,025,206	1,247	293,021
exchange at cost	7(f)	195,500
		290,263	1,025,206	1,247	293,021
Non-current - at cost
Shares in controlled entities	7(c)			7,280,766	8,680,766
Provision for diminution				(7,280,663)	(6,545,057)
				103	2,135,709
Shares in listed public company	7(b)	42,793	42,793	42,793	42,793
Investment Units - Grosvenor	7(a)	2,419,727	2,419,727
Provision - Writedown	7(a)	(326, 227)	(326, 227)
Shares in other corporations	7(e)	1,220.004	1,200,002
		3,356,297	3,336,295	42,896	2,178,502

(a) The fair value of the units has been determined by reference to an independent valuation previously obtained from Michael Henderson, AAPI Certified Practising Valuer of Herron Todd White, the report dated 27 June 2001. The valuations are performed on an open market basis, being the amounts for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable seller in an arms length transaction at the valuation date.

(b) Ouoted market value of shares listed on a
prescribed stock exchange	63.139	43.408

Class of Share	2003 % Holding	2003 \$	2002 % Holding	2002 S
Ordinary	100.	1,650,000 (1,650,000)	100	1,650,000 (1,650,000)
Ordinary	100	100	100	100
Ordinary	100.		100
	100		100
Ordinary	100.	5,630,663	100	7,030,663
		(5,630,663)		(4,895,057).
	Ordinary

All subsidiaries are incorporated in Australia

(d) Deeds of cross-guarantee between Toihurst Securities Ltd. William Noall Holdings Ltd. Toihurst Noall Group Ltd. Tolhurst Holdings Pty Ltd and Company Zebra Ltd were enacted during the financial year and relief was obtained from preparing a financial report for Tolliurst Securities Ltd. William Noall Holdings Ltd and Company Zebra Ltd under ASIC Class Order 98/1418. Under the deeds, Tolhurst Noall Group Ltd guarantees to support the liabilities and obligations of Tolburst Securities Ltd. William Noall Holdings Ltd and Company Zebra Ltd.

Tolhurst Noall Group Ltd and William Noall Holdings Ltd belong to Closed Group 1 and Tolhurst Noall Group Ltd, Tolhurst Securities Ltd, Tolhurst Holdings Pty Ltd and Company Zebra Ltd belong to Closed Group 2. "Closed Group" being the holding entity and wholly owned entities which are parties to the deed of cross-guarantee. The "parties to the deed of cross guarantee" are the same as Closed Group 1 and Closed Group 2 mentioned above.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 7 FINANCIAL ASSETS (cont)

Financial information in relation to:	Closed Group 1	Closed Group 2

(i) Statement of financial performance Profit/(loss) from ordinary activities before income tax Income tax benefit relating to ordinary activities	(178, 883) 3,300	2,001,140 3,300
Profit/(Loss) from ordinary activities after income tax benefit	(175, 583)	2,004,440
Total changes in equity other than those resulting from transactions with owners as owners	(175, 583)	2,004,440
(ii) Retained Profits Accumulated losses at the beginning of the financial year Profit/(Loss) from ordinary activities after income tax benefit	(11, 912, 940) (175, 583)	(17,205,368) 2,004,440
Accumulated losses at the end of the financial year	(12,088,523)	(15,200,928)
(iii) Statement of Financial Position
CURRENT ASSETS Cash assets Receivables Financial assets	571 44,040	8,817 4,650 44,040
TOTAL CURRENT ASSETS	44,611	57,507
NON-CURRENT ASSETS Receivables Financial assets Deferred tax asset	4,668,573 5,990,165 3,300	6,844,033 1,805,706 3,300
TOTAL NON-CURRENT ASSETS	10,662,038	8,653,039
TOTAL ASSETS	10,706,649	8,710,546
CURRENT LIABILITIES Payables Interest bearing liabilities	373,346 180,000	465,595 420,000
TOTAL CURRENT LIABILITIES	553,346	885,595
NON-CURRENT LIABILITIES Payables Interest bearing liabilities	1,278,756 1,890,580	2,753,096 1,200,293
TOTAL NON-CURRENT LIABILITIES	3,169,336	3,953,389
TOTAL LIABILITIES	3,722,682	4,838,984
NET ASSETS	6,983,967	3,871,562
EQUITY Contributed equity Accumulated losses	19,072,490 (12,088,523)	19,072,490 (15,200,928)
	6,983,967	3,871,562

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 7 FINANCIAL ASSETS (cont)

(e) Other investments

The shares in other corporations includes:

The consolidated entity holds 20% (2002:20%) ownership interest in Carroll Pike & Piercy Pty Ltd. The carrying amount $\bullet$ of this investment at 30 June 2003 is \$1,200,000 (2002: \$1,200,000).
The consolidated entity holds 20% (2002:20%) ownership interest in THG Investments Pty Ltd. The carrying amount of this investment at 30 June 2003 is \$2 $(2002; 52)$ .
The consolidated entity holds 20% (2002:20%) ownership interest in Tolhurst, Wells and Lee Pty Ltd. The carrying amount of this investment at 30 June 2003 is \$20,000 (2002: \$nil).
The consolidated entity holds 50% (2002:100%) ownership interest in Elstree Tolhurst Investment Management Pty Ltd who provide a fixed interest funds management service. The carrying amount of this investment at 30 June 2003 is \$2 $(2002: Snil)$

(f) Included in listed shares are two parcels of Medical Monitors Ltd, an ASX listed stock, which were the subject of a subunderwriting shortfall. These shares have been valued at cost. Mr Johnson has guaranteed a shortfall of \$75,000 and Mr Wigzell, a director of the broker subsidiary Tolhurst Noall Ltd, has guaranteed \$120,500.

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002

NOTE 8 INVESTMENT PROPERTIES
Current
Land at fair value	82,500
Non Current
Land at fair value	82,500	165,000

The fair value of the land has been determined by reference to an independent valuation previously obtained from Michael Henderson, AAPI Certified Practising Valuer of Herron Todd White, the report dated 27 June 2001. The valuations are performed on an open market basis, being the amounts for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable seller in an arms length transaction at the valuation date. With respect to security refer to note $12(a)$ .

NOTE 9 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investment in associates	1,122,897	-
(a) Interest in associates Name	Balance date		Ownership interest
		2003	2002
Tolhurst Funds Management Pty Ltd	30 June	50%	50%

(i) Principal activity

Tolhurst Funds Management Pty Ltd provides investment services to domestic and international clients.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002
	\$	\$	¢	\$
NOTE 9 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (cont)
(ii) Share of associate's profits/(losses)
Share of associate's:
- Net loss from ordinary activities before income
tax expense	(247, 692)	(354, 411)
- Income tax expense
Share of associate's net losses from ordinary activities after income tax	(247, 692)	(354, 411)
Adjusted for:
- amortisation of goodwill on acquisition		(25,000)
Share of associate's net losses	(247, 692)	(379, 411)
The associated entity is currently reporting accumulated losses, and consequently no dividends are payable to the shareholders of Tolhurst Noall Group Ltd. (iii) Carrying amount of investment in associate
Balance at beginning of the financial year	1,370.591
- investment at cost in associate entity		1,750,002
- share of associate's net losses for the financial
year - dividends received from associate	(247, 692)	(379, 411)
Carrying amount of investment in associate at the
end of the financial year	1,122,897	1,370,591
(iv) Share of associate's assets and liabilities
Current assets	201,959	316,408
Non current assets	583,132	627,637
Current liabilities	(537, 043)	(448,306)
Non current liabilities
Net assets	248.048	495,739
(v) Accumulated losses of the consolidated entity attributable to associate
Balance at the beginning of the financial year	(379, 411)
Share of associate's net losses	(247, 692)	(379, 411)
Dividends received from associate
Balance at the end of the financial year	(627, 103)	(379, 411)

A subsidiary of Tolhurst Noall Group Ltd proposes to enter into a loan agreement under which it will advance working capital to a maximum of \$300,000 to Tolhurst Funds Management Pty Ltd.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED		COMPANY
		2003	2002	2003	2002
		\$	\$	S	\$
NOTE 10 PROPERTY, PLANT & EQUIPMENT
Plant and equipment - cost		5,342,746	5,347,246
Accumulated depreciation		(4,152,220)	(3,480,475)
		1,190,526	1,866,771
Reconciliations of the carrying amounts of property, plant and equipment
Plant and Equipment:
Carrying amount at beginning		1,866,771	322,788
Additions		384,620	749,831
Additions through acquisition of entities/operations			1,835,663
Depreciation expense		(933, 934)	(852, 321)
Disposals		(126, 931)	(189, 190)
		1,190,526	1,866,771
Assets pledged as security
Refer to Note 12a
NOTE 11 PAYABLES
Current
Client and dealer balances payable	11(a)	23,682,638	29,672,269
Funds held in trust		260,000		260,000
Other creditors and accruals Amounts payable to related parties:	11(a)	3,052,082	2,845,161	98,346	198,544
Wholly-owned group
- controlled entities Directors and director related entities	20(c)			100	1,170,564
- director related	20(c)	100,000	100,000	15,000	15,000
Other related parties - associated companies	20(c)	70,851	122,938
		27,165,571	32,740,368	373,446	1,384,108

Non Current
Amounts payable to related parties: Wholly-owned group
- controlled entities	20(c)				1,040,000
					1,040,000

(a) Terms and conditions

Terms and conditions relating to the above financial instruments:

Client and dealer balances payable are non-interest bearing and on 3 business day terms. $(i)$

Other creditors and accruals are non-interest bearing and are normally settled within 30 days. $(ii)$

Details of terms and conditions of related party payables are set out in note 20. $(iii)$

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED			COMPANY
		2003	2002	2003	2002
NOTE 12 INTEREST BEARING LIABILITIES		\$	\$	S	\$

Current
Bank overdraft	12(a)	900.796	2,613,209		6,986
Lease liability	12(a)		23,138
Loans – secured	12(a)	420.000	320,000	180.000	320,000
		1,320,796	2,956,347	180,000	326,986
Non-current
Subordinated loans	12(a)	1,822,284	1,822,284
$Loans - secured$	12(a)	1,200,293	1,640,000	1,140.580	1,320,000
Directors and director related entities
- directors	12(a)	450,000
- director related	12(a)	300.000
		3,722,577	3,142,284	1,140,580	1,320,000

(a) Terms and conditions

Terms and conditions relating to the above financial instruments

The bank overdraft is secured by a registered mortgage debenture over the assets and undertakings of the company, $(i)$ excluding Grosvenor. Interest is charged at the bank's benchmark rate.
The secured loans are secured by a first registered mortgage over the "Grosvenor", Corner of McLeod and Grove St, $(ii)$ Cairns. Interest is currently 6.06% and the facilities are currently rolled on a monthly basis. Also, Tolhurst Noall Ltd has guaranteed a fully drawn advance facility, drawn down by a related entity, with the ANZ Banking Group (2003 \$299,713; 2002 \$nil).
$(iii)$ Lease liabilities are secured via a charge of the assets to which they relate. The average interest rate implicit in the liability is 8% and the average repayment term is 4 years.
Subordinated loans and director loans are interest bearing at an average rate of 12%. There is no agreed repayment term. $(iv)$ Refer note 20(c).

NOTE 13 PROVISIONS

Current
Employee entitlements	19	483,472	816,672	$\overline{\phantom{a}}$
		483,472	816,672	$\blacksquare$
Non-current
Other – claims and penalties	13(a)	513,993	195,000	$\overline{\phantom{a}}$
Employee entitlements	19	25,094	25,580	$\overline{\phantom{0}}$
		539,087	220,580	$\blacksquare$

(a) The non-current claims and penalties provision exists to cover known and unknown, client claims, fines, penalties or other settlements. The amount has been determined using known events multiplied by a probability factor plus an estimate for unknown events.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED			COMPANY
		2003	2002	2003	2002
		\$	S	S	\$
NOTE 14 CONTRIBUTED EQUITY
Issued and paid up capital
69,368,696 ordinary shares	14(a)	19,072,490	18,469,990	19,072,490	18,469,990
Fully Paid (2002: 66,958,696)
(a) Movements in shares on issue
Beginning of the financial year		18,469,990	11,439,327	18,469,990	11,439,327
Acquisition of Tolhurst Securities Ltd
$@14$ cents			7,030,663		7,030,663
Allotted to Balgreggan $@$ 25 cents	14(b)	540,000		540,000
Allotment of staff shares $@25$ cents	19	62,500		62,500
End of the financial year		19,072,490	18,469,990	19,072,490	18,469,990
		No.	No.	No.	No.
Beginning of financial year		66,958,696	16,739,674	66,958,696	16,739,674
Acquisition of Tolhurst Securities Ltd			50,219,022		50,219,022
Allotted to Balgreggan		2,160,000		2,160,000
Allotment of staff shares		250.000		250.000
		69,368,696	66,958,696	69,368,696	66,958,696

Terms and condition of contributed equity

Ordinary Shares

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

(b) Placement to Balgreggan Financial Investments Limited

Shareholders of Tolhurst Noall Group Limited (Tolhurst) approved the issue of 4 million ordinary shares in Tolhurst to Balgreggan Financial Investments Limited (Balgreggan) together with the grant of 16 million options on the terms set out in the general meeting documentation forwarded to shareholders.

Since that approval, Tolhurst has received a total of \$800,000 from Balgreggan. Of that sum, shares have been issued in accordance with the shareholder resolution in respect of \$540,000. No shares have as yet been issued in respect of the further sum of \$260,000 received by Tolhurst. No options have as yet been issued pursuant to the resolution.

Tolhurst has announced a general meeting to approve the allotment of 1,040,000 fully paid ordinary shares to Balgreggan (\$260,000), together with a placement to Balgreggan of 4,200,000 fully paid ordinary shares at \$0.04 per share (\$168,000).

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

CONSOLIDATED			COMPANY
2003	2002	2003	2002
\$	Ф	э	J.

NOTE 14 CONTRIBUTED EQUITY (cont)

(c) Share options

Options over ordinary shares:

During the financial year, 3.334,000 options were issued over ordinary shares. The options have an exercise price of \$0.25.

Unissued shares

As at the date of this report, there were 4,203,100 unissued ordinary shares under options as follows:

Ą. 300,000 options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.30. The options expire on 10 December 2004.
Ą. 150,000 options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.75. The options expire on 21 August 2005.
132,100 options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.47. The options expire ÷ on 14 August 2005.
237,000 options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.33. The options expire ÷ on 25 July 2006.
Ą. 50,000 options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.20. The options expire on 28 February 2005.
÷ $600,000$ options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.25. The options expire on 30 June 2005.
÷. 2,734,000 options to take up one ordinary share in Tolhurst Noall Group Ltd at an issue price of \$0.25. The options expire on 30 June 2006.

NOTE 15 ACCUMULATED LOSSES

Balance at the beginning of year	(15, 194, 760)	(7,468,270)	(14,661,666)	(7,458,708)
Net profit/(loss) attributable to members of the
group	147.819	(7,740,690)	(103, 011)	(7,202,958)
Transfer of asset revaluation reserve		14,200
Balance at end of year	(15, 046, 941)	(15, 194, 760)	(14,764,677)	(14,661,666)
NOTE 16 AUDITORS' REMUNERATION
Amounts received or due and receivable by the
Auditors of the Company for: - an audit of the financial reports of the entity and
any other entity in the consolidated entity	72,000	114,500	11,000	114,500
- other services	69,733	38,566	300.	3,000
	160,693	153,066	11,300	117,500

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002
	\$	\$	S	S
NOTE 17 CAPITAL AND LEASING COMMITMENTS
Non-cancellable operating leases contracted for but not capitalised in the financial
statements
Not later than I year $\overline{\phantom{a}}$	1.774.732	1,769,096
Later than 1 year but not later than 5 years $\overline{\phantom{a}}$	5,437,946	4,298,109
Later than 5 Years $\sim$	431.379	723,200
	7,644,057	6,790,405

These payments represent amounts owing on operating lease agreements for premises occupied by the controlled entity. The lease terms vary from 0 to 6 years.

NOTE 18(a) REMUNERATION OF DIRECTORS

Income paid or payable, or otherwise made available in respect of the financial year to all directors of each entity in the economic entity, directly or indirectly, by the entities of which they are directors or any related party.
Income paid or payable, or otherwise made
available in respect of the financial year to all
directors of the parent entity, directly or indirectly
by the parent entity or any related parties.	769,844	1.189,391
The number of directors of the parent entity	Number of	Number of
whose income (including superannuation	Directors	Directors
contributions) falls within the following bands:
$$0 - $9,999$	$\overline{2}$	2
$$10,000 - $19,999$		$\overline{2}$
\$20,000 - \$29,999	3	$\overline{\mathbf{3}}$
\$50,000 - \$59,999
\$70,000 - \$79,999
$$110,000 - $119,999$
\$120,000 - \$129,999
\$150,000 - \$159,999
\$170,000 - \$179,999
\$180,000 - \$189,999
\$200,000 - \$209,999
\$210,000 - \$219,999		2
\$240,000 - \$249,999
\$260,000 - \$269,999	10	13

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002
	\$	$\mathbb T$	S	£.
NOTE 18(b) REMUNERATION OF EXECUTIVES
Remuneration received or due and receivable by executive officers of the economic entity whose remuneration is \$100,000 or more, from entities in the economic entity or any related parties, in connection with the management of the affairs of the entities in the economic entity whether as an executive officer or otherwise	689,336	833,207
The number of executives of the economic entity
whose income (including superannuation contributions) falls within the following bands:
\$120,000 - \$129,999
\$130,000 - \$139,999
\$150,000 - \$159,999	2
\$160,000 - \$169,999
\$170,000 - \$179,999
\$180,000 - \$189,999
\$200,000 - \$209,999	I
\$210,000 - \$219,999
	4	5
NOTE 19 EMPLOYEE BENEFITS
The aggregate of employee benefits liability is comprised of:
Accrued wages, salaries and on costs	120,775	465,309
Provisions - current	483,472	816,672
Provisions - non-current	25,094	25,580
	629,341	1,307,561
Number of employees and advisors at year end	172	228

Employee/Advisor share option arrangement:

An employee/advisor share option scheme has been established where employees/advisors of the consolidated entity are issued with options over the ordinary shares of Tolhurst Noall Group Ltd. The options, issued for nil consideration, are issued in accordance with performance guidelines established by the Directors of Tolhurst Noall Group Ltd. The options cannot be transferred and will not be quoted on the ASX.

Details of share options outstanding as at 30 June 2003:

$\bullet$ $2,734,000$ (2002: nil) options with an exercise price of 25 cents
132,100 (2002: 189,300) options with an exercise price of 47 cents (2002: 47 cents)
237,000 (2002: 237,000) options with an exercise price of 33 cents (2002: 33 cents) ٠
50,000 (2002: 50000) options with an exercise price of 20 cents $\bullet$

Expiry dates are 30 June 2006, 14 August 2005, 25 July 2006 and 28 February 2005 respectively.

During the year no options were exercised under the Employee Option Scheme, (2002: nil).

During the year 57,200 Options lapsed as a result of employment ceasing for a particular employee.

The value of the employee option scheme is not being charged as an employee entitlement expense.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2002
IN THE CONTROL OF A 1990 WITH A TOLK OF A 2000 TO BE STATED TO THE RESIDENCE OF A 1990 WITH CALL AND LODGED AT A 1990 WITH CALL AND LODGED AT A 1990 WITH CALL AND LODGED AT A 1990 WITH CALL AND LODGED AT A 1990 WITH CALL A		æ

NOTE 19 EMPLOYEE ENTITLEMENTS (cont)

Employee share arrangement:

A Staff Share Plan has been established whereby eligible employees of the consolidated entity are issued with up to \$1,000 of ordinary shares of Tolhurst Noall Group Ltd at the discretion of the Board. The shares, issued for nil consideration, may not be disposed of by the employee until the earlier of:

the end of the period of 3 years commencing at the time of acquisition of the Shares by the employee: $(i)$
$(ii)$ the time when the employee is no longer employed by the company; and

the end of such other period or such other circumstances as determined by the Board. $f(i)$

At 30 June 2003 there are (250,000) shares on issue under the Staff Share Plan (2002: nil).

NOTE 20 RELATED PARTY INFORMATION

a) The names of each person holding the position of director of Tolhurst Noall Group Ltd during the financial year were:

Peter Chapman	Russell McKimm
Donald Taig	Craig Graham-Smith
John Nagle	John Wilson (appointed 24/3/03)
John Harry	Andrew McDouall (appointed 15/11/02)
lan Johnson	Ross Hall (resigned 22/5/03)

b) Interests in securities held by Directors of the parent entity as at 30 June 2003: $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$

	OKDINAKY SHAKES
	2003	PURCHASE	SELL	2002
D. Taig	237,526			237,526
J. Nagle	3,533,004			3,533,004
P. Chapman	1,029,039		$\overline{\phantom{a}}$	1,029,039
J Harry	169.230			169,230
1 Johnson	16,446,364	60,000		16,386,364
R McKimm	1,239,173			1,239,173
C Graham-Smith	750.000			750,000
J Wilson (Appointed 24 March 2003)				$\overline{\phantom{a}}$
A McDouall (Appointed 15 November 2002)	2,242.456	2,160,000		82,456
R Hall (Resigned 22 May 2003)

b) Interests in securities held by Directors of the parent entity as at 30 June 2003:

		ORDINARY SHARE OPTIONS
	2003	PURCHASE	EXERCISED	2002
D. Taig
J. Nagle
P. Chapman		$\overline{\phantom{0}}$
$J$ Harry $*$		$\overline{\phantom{0}}$
1 Johnson		$\overline{\phantom{a}}$
R McKimm		$\overline{\phantom{0}}$
C Graham-Smith		$\overline{\phantom{a}}$	-
J Wilson (Appointed 24 March 2003) *	$\overline{\phantom{a}}$	$\overline{\phantom{0}}$	-
A McDouall (Appointed 15 November 2002)		$\overline{\phantom{a}}$
R Hall (Resigned 22 May 2003)

* As part of Mr Wilson's and Mr Harry's terms of engagement they are entitled to issues of options which are yet to be approved by the Board of Tolhurst Noall Group Ltd. When these matters have been determined, a resolution will be put to shareholders.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

CONSOLIDATED			COMPANY
2003	2002	2003	2002
л	ъ		5

NOTE 20 RELATED PARTY INFORMATION (cont)

Interests in Tolhurst Noall Group Ltd:

Included in directors shareholdings are beneficial interest held via related companies as disclosed.

Tizon Pty Ltd, a company controlled by Mr Taig, holds 237,526 Shares (2002:237,526 shares). MT Consumer Services Limited, a company controlled by Mr Nagle holds 3,120,846 Shares (2002: 3,120,846 shares). Fexco, a company controlled by Mr Nagle holds 412,158 shares (2002: 412,158 shares). Loquela, a company controlled by Mr Johnson holds 160,000 shares (2002; 100,000 shares). Balgreggan Financial Investments Limited, a company controlled by Mr McDouall holds 2,160,000 shares (2002; nil) Tartan Securities Limited, a company controlled by Mr McDouall holds 82,456 shares (2002: 82,456 shares)

During the year, Tolhurst Noall Limited acted as broker for transactions conducted on behalf of directors and director controlled entities. These transactions involved the purchase and sale of shares and were conducted under normal trading terms and conditions.

During the year. Mr Johnson provided sub-underwriting. The Related Party Transactions Sub-Committee approved all such transactions.

No other benefits have been received or are receivable by directors, other than those already disclosed in the notes to the financial statements.

Tolhurst Noall Group Ltd is the ultimate parent entity.

Liquidity guarantee by Directors

Mr Johnson and Mr Edwards, a director of the broker Tolhurst Noall Ltd (TNL), have signed various letters of undertaking on behalf of themselves and private companies in which they have a controlling interest, whereby they have lodged a portfolio of ASX listed securities with the broker. These letters expire on 31 December 2003 and 30 June 2004. The undertakings provide up to 100% of the value of each of these portfolios giving TNL unencumbered access to the entire share portfolio for the purpose of securing various staff and inter-company loans treated as current assets by the broker in the calculation of ASX capital liquidity requirement, Rule 1A. The value of these guarantees at 30 June 2003 was \$3,909,954 (2002: 3,780,442). No fees have been paid or accrued on these guarantees.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

		CONSOLIDATED		COMPANY
		2003	2002	2003	2002
		S	\$	\$	\$
NOTE 20 RELATED PARTY INFORMATION (cont)
Transactions with controlled entities/directors/employees $\mathbf{c}$
Wholly owned group
Loan to Alliance Strata (Qld) Pty Ltd	$\mathbf{D}$			255,130	661,567
Loan to APL (Cairns) Pty Ltd	$\mathbb{D}$			2,395,034	2,308,706
Loan to William Noall Holdings Limited	$\mathbb{I}$			1,285,252	1,285,252
Loan to Tolhurst Noall Limited	$\mathbb{I}$			2,018,409	1,150,852
Loan from Wevton Pty Limited	$\mathbb{D}$			(100)	(1,170,564)
Loan from Tolhurst Securities Ltd	$\mathbb{I}$				(1,040,000)
Interest received from William Noall					41,223
Holdings Limited
Associated companies
Loan to Carroll, Pike and Piercy Pty Ltd	$\mathbf{D}$	300,000	472,423
Loan to Tolhurst Funds Management P/L Loan to Elstree Tolhurst Investment	$\mathbf{1}$ $\left{ \right}$	85,001	18,357
Management Pty Ltd		20,000
Loan from Carroll, Pike and Piercy Pty Ltd	$\mathbf{1}$	(6,231)
Loan from THG Investments Pty Ltd	$\mathbb{I}$	(64, 620)	(122, 938)

Loans from directors & director related entities
Dorcan Pty Ltd **	$\mathbb{I}$	(15,000)	(15,000)	(15,000)	(15,000)
TM Edwards	4)	(200,000)
RA McKimm	4)	(100,000)
BJ & JK Dunn ****	4)	(30,000)
MA Wigzell ****	4)	(70,000)
GL Leigh ****	4)	(50,000)
Loquela Pty Ltd *	4)	(200,000)
Dorcan Pty Ltd **	4)	(50,000)
Tamanich Securities Pty Ltd *	$\left( 4\right)$	(36,000)
Katarina Corp Pty Ltd ****	4)	(14,000)
Success in Planning Pty Ltd *	$\mathbb{I}$	(40,000)	(40,000)
Minapet Finance Pty Ltd *	$\left{ \right}$	(45,000)	(45,000)
Loan to directors & director related entities
C Graham-Smith	3)	90,000
M Wigzell ****	3)	30,000
Pensive Investments Pty Ltd ***	$\mathbf{I}$	110,828	72,818
Success in Planning Pty Ltd *	$\left{ \right}$	36,781	34,105
Subordinated debt
1 M Johnson & entities controlled by I M	2)	(699,000)	(699,000)
Johnson
T M Edwards	2)	(533, 284)	(533, 284)
C Graham-Smith	2)	(340,000)	(340,000)
R Mc Kimm	2)	(250,000)	(250,000)

* entities controlled by 1 M Johnson
** entity controlled by P F Chapman
*** entity controlled by 1 M Johnson & T M Edwards

**** entities and persons associated with directors of Tolhurst Noall Ltd

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 20 RELATED PARTY INFORMATION (cont)

1) There is no interest charge or fixed repayment term on the loan.

2) Interest is charged at 12% and there is no fixed repayment term on the loans.
3) During the year the Group advanced funds of \$30,000 to Mr Wiezell (a director of the subsidary Tolhurst Noall Ltd) and \$90,000 to Mr Graham-Smith. The loan to Mr Wigzell is repayable over 10 months and the loan to Mr Graham-Smith is at call. Interest is charged on both loans 12%.
4) Interest is charged at 12% and there is no fixed repayment term on the loans. The loans have an attaching right of convertibility of the outstanding balance of the loan, at any time, into shares of Tolhurst Noall Group Ltd at a price of \$0.25 per share, exercisable in whole only, until 30 June 2004.

NOTE 21 EARNINGS PER SHARE

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

	CONSOLIDATED
	2003 S	2002 \$
Earnings used in calculating basic and diluted earnings per share	147.819	7,740,690).
Weighted average number of shares used to calculate basic earnings per share Effect of diluted securities:	67,895,792	54,403,941
Share options		96,938
Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share	67,895,792	54,500,879

There are no potential ordinary shares outstanding at 30 June 2003 that are dilutive as the exercise prices on the 4,453,100 options are greater than the market price of the shares. There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.

CONSOLIDATED			COMPANY
2003	2002	2003	2003

NOTE 22 STATEMENT OF CASH FLOWS

i) Reconciliation of cash

For the purposes of the statement of cash flows, eash includes eash on hand and at bank, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows:

	5,065,124	3,174,509	571	(6,986)
Bank overdraft	(900,796).	(2.613,209)	$\sim$	(6.986)
	5.965.920	5,787,718	571
Trust Account	4.316.834	4.392,633	$\overline{\phantom{a}}$
Cash at bank	1.649.086	1.395.085	571

Included in cash at bank is a term deposit of \$1,328,423, which are funds deposited with the ANZ bank as security for bank guarantees to support various lease agreements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2003
	S	S	\$	\$
NOTE 22 STATEMENT OF CASH FLOWS (cont.)
(ii) Reconciliation of operating profit/(loss) after income tax to net cash provided by operating activities
Profit/(loss) from ordinary activities after income tax	147,819	(7,740,690)	(103, 011)	(7,202,958)
Depreciation	933,934	852,321
Amortisation of goodwill	50,000	2,083,064
Other amortisation costs	85,026	426,766		435,000
Decrement/(increment) in value of investments	(87, 165)	37,262		(156, 696)
Net (profit) / loss on disposal of financial assets	8,771	(37,264)	(4,348)
Net (profit) / loss on disposal of property, plant and
equipment Provision for diminution of investment in	51,554
controlled entities			735,606	6,545,057
Loss on equity accounting	247,692	379,411
Changes in assets & liabilities net of effects from
acquisition/disposal of controlled entities
Debtors	2,891,496	(8,352,959)
Prepayments and sundry debtors	(85,982)	905,347	1,518	142,887
Payables	(3,626,426)	5,721,688	(100, 198)	(112, 514)
Provisions	(659, 137)	(759, 045)	(3,300)
Net cash provided by operating activities	(42, 418)	(6,484,099)	526,267	(349, 224)
(iii) Financing facilities available
At balance date, the following financing facilities had been negotiated and were available:
Total facilities
- bank overdraft		750,000
- bank loans	1,620,713	1,640,000	1,321,000	1,640,000
- foreign currency dealing limit	20,000	20,000
- asset finance revolving	150,000
- indemnity guarantee	1,489,500
Facilities used at balance date
- bank overdraft	900,796	2,613,209
- unpresented cheques	(900, 796)	(2,117,898)
- bank overdraft utilised		495,311

- bank loans - foreign currency dealing limit	1,619,993	1,640,000	1,321,000	1,640,000
- indemnity guarantee	1,385,818
Facilities unused at balance date
- bank overdraft		254,689
- bank loans	720
- foreign currency dealing limit	20,000	20,000
- asset finance revolving	150,000
- indemnity guarantee	103,682

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

	CONSOLIDATED		COMPANY
	2003	2002	2003	2003

NOTE 22 STATEMENT OF CASH FLOWS (cont)

(iv) Acquisition of controlled entities

On 30 September 2001. Tolhurst Noall Group Ltd acquired 100% of the share capital of Tolhurst Securities Ltd, an unlisted Company, specialising in broking services. Consideration for the acquisition was the issue of shares for \$7,030,663.

Net assets of Tolliurst Securities Ltd at 30 September 2001:

Cash	4,194,025
Receivables	14,718,099
Property, plant & equipment	1,835,663
Investments	3,313,923
Other	1,018,662
	25,080,372
Accounts payable	(17, 151, 627)
Provisions	(1,276,441)
Borrowings	(1,112,872)
Fair value of net tangible assets acquired	5.539.432
Goodwill arising on acquisition	1,491,231
	7,030,663

Cash consideration paid
Cash included in net assets acquired	4,194,025
Cash proceeds from controlled entity as reflected in
the consolidated financial report	4,194,025

NOTE 23 CONTINGENT LIABILITIES

Peter Pan

D & D Tolhurst Limited (the Company) and one of its directors. Mr Ian Johnson, are the seventh and sixth cross-respondents respectively in proceeding V963 of 2000 issued out of the Victorian Registry of the Federal Court. The proceeding relates generally to a proposed stage production of 'Peter Pan'. The applicants represent the class of investors in the production who make various claims against seven respondents [not including the Company or Mr Johnson, but including one Mr Peter Williams and the firm of accountants of which he was a principal, Williams Hatchman & Kean (the Firm)]. Mr Williams and the Firm have issued cross proceedings against the Company. Mr Johnson and the other respondents seeking damages and contribution to, or indemnity against, any amount for which Mr Williams or the Firm are liable.

The proceeding is largely in abevance pending the outcome of another Federal Court action (in which neither the Company nor Mr Johnson is a party) relating to the production of 'Crazy for You'. That case has gone to trial and judgment is awaited. It is not possible to say at this point whether the Company will incur any liability in the 'Peter Pan' proceeding or, if it will, for what amount.

ASX Matters

Tolhurst Noall Ltd has been notified by the ASX that it will need to respond in respect of two matters in relation to alleged breaches of ASX Business Rules.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 24 SEGMENT INFORMATION

Segment products and locations

The consolidated entities operating companies are organised and managed separately according to the nature of products and services that they provide, with each segment offering different products and serving different markets.

The primary segment, stockbroking, provides extensive knowledge of overseas and Australian equity markets to a mix of institutional and private clients.

Funds management provides investment services to domestic and international clients.

The group invests in property with the intention of generating capital profits and rental returns.

Geographically the Group operates within Australia.

Segment accounting policies

The group does not undertake any inter segment sales and transfers. Segment accounting policies are the same as the consolidated entity's policies described in Note 1. During the financial year, there were no changes in segment accounting policies that had a material effect on segment information.

Business Segments	Stockbroking		Funds Management		Property Investment		Other		Consolidated
	2003 \$7000	2002 \$300	2003 \$3000	2002 \$'000	2003 \$7000	2002 \$2000	2003 \$'000	2002 \$7000	2003 \$7000	2002 \$7000
Revenue
Revenue outside the economic entity Share of net profit/(loss)	24,104	25,156	1,394	244	195	178	296	235	25,989	25,813
of equity accounted investment			(248)	(380)					(248)	(380)
Total segment revenue	24,104	25,156	1,147	(136)	195	178	296	235	25,742	25,433
Result
Segment result Unallocated expenses	641	(4,959)	(227)	(780)	27	21	(945)	(660)	(504) ۰	(6,378) (1,465)
Consolidated entity profit / (loss) from ordinary activities before income tax									(504)	(7, 843)
Income tax benefit									652	102
Net profit / (loss) from ordinary activities									148	(7,741)
Assets
Segment assets Unallocated assets	32,988	37,750	1,269	1,441	2,397	2,359	45	1,537	36,698 654	43,087 100
Total assets									37,352	43,187
Liabilities
Segment liabilities Unallocated liabilities	31,232	35,261	398	85	1,321		373	4,566	33,324 2	39,912
Total liabilities									33,326	39,912

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 24 SEGMENT INFORMATION (cont)

Business Segments				Funds		Property
	Stockbroking			Management		Investment		Other		Consolidated
	2003 \$2000	2002 \$3000	2003 \$300	2002 \$2000	2003 \$2000	2002 \$7000	2003 \$300	2002 \$'000	2003 \$2000	2002 \$2000
Other segment information
Equity accounted
investments included in
segment assets		$\overline{\phantom{a}}$	1,123	496	$\cdot$		$\cdot$	$\tilde{\phantom{a}}$	1,123	496
Depreciation &
amortisation	1,019	1,267	50	12	$\,$		$\cdot$	2.083	1,069	3,362
Acquisition of Property
plant and equipment	385	1,836	$\cdot$		$\cdot$		$\overline{r}$	$\mathbf{r}$	385	1,836
cash Non expenses
other than depreciation
and amortisation	$\mathbf{r}$	135							$\cdot$	135

NOTE 25 SUBSEQUENT EVENTS

2003

On 5 August 2003 the Board of Tolhurst Noall Group Limited announced its decision to make a renounceable rights issue, offering to its shareholders ordinary shares on a 1 for 4 basis at an issue price of \$0.04 per share to raise a total of approximately \$700,000.

There have been no other events, other than noted elsewhere occurring after balance date that materially affect the financial statements as at 30 June, 2003.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 26 FINANCIAL INSTRUMENTS

26(a) Interest rate risk

The consolidated entity's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at the balance date, are as follows:

Financial Instruments	Floating interest rate	Fixed interest rate maturing in:	Non-interest bearing	Total carrying amount as per the	Weighted average
		1 year or less		statement of financial position	effective interest rate
	2003	2003	2003	2003	2003
	\$	\$	S.	\$	%
(i) Financial assets
Cash		1,328,423	4,637,497	5,965,920	Nil
Trade debtors			23,321,849	23,321,849	N/A
Sundry debtors			352,508	352,508	N/A
Listed Shares			333,056	333,056	N/A
Investment in Grosvenor			2,093,500	2,093,500	N/A
Unlisted shares			2,342,901	2,342,901	N/A
Total financial assets		1,328,423	33,081,311	34,409,734
(ii) Financial liabilities
Bank overdraft			900,796	900,796	N/A
Current Payables			23,942,638	23,942,638	N/A
Other creditors and accruals			3,010,082	3,010,082	N/A
Subordinated Ioans	1,822,284			1,822,284	12.0
Loans - Related parties	750,000		170,851	920,851	12.0
Loans-Secured		1,620,293		1,620,293	6.06
Total financial liabilities	2,572,284	1,620,293	28,024,367	32,216,944

Financial Instruments	Floating interest rate	Fixed interest rate maturing in: 1 year or less	Non-interest bearing	Total carrying amount as per the statement of financial position	Weighted average effective interest rate
	2002	2002 \$	2002 ÷.	2002 \$	2002 %
(i) Financial assets
Cash			5,787,718	5,787,718	N/A
Trade debtors			28,254,907	28,254,907	N/A
Sundry debtors			482,644	482,644	N/A
Listed Shares			1,110,792	1,110,792	N/A
Investment in Grosvenor			2,093,500	2,093,500	N/A
Unlisted shares			10,419,000	10,419,000	N/A
Total financial assets			48,148,561	48,148,561

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTE 26 FINANCIAL INSTRUMENTS (cont)

Financial Instruments	Floating interest rate	Fixed interest rate maturing in: 1 year or less	Non-interest bearing	Total carrying amount as per the statement of financial position	Weighted average effective interest rate
	2002	2002 S	2002 S	2002 \$	2002 %
(ii) Financial liabilities
Bank overdraft	495,311		2,117,898	2,613.209	8.60
Current Payables			29,672.269	29,672.269	N/A.
Other creditors and accruals			2,845,161	2,845,161	N/A
Lease liability		23.138	$\sim$	23.138	8.05
Subordinated Ioans	1,822,284			1,822,284	11.00
Loans - Related parties			222.938	222.938	N/A
Loans – Secured		1,640,000	$\overline{r}$	1,640,000	5.22
Total financial liabilities	2,317,595	1,663,138	34,858,266	38,838,999

$26(b)$ Net Fair Value

The carrying values of financial assets and liabilities approximate fair values. The following methods and assumptions are used to determine the net fair values of financial assets and liabilities:

Cash and cash equivalents: The carrying amount approximates fair value because of their short-term to maturity. Trade receivables, trade creditors: The carrying amount approximates fair value.

Short-term borrowings: The carrying amount approximates fair value because of their short-term to maturity.

Long-term borrowings: Long-term borrowings are stated at carrying values except for employee entitlements which are estimated using discounted cash flow analysis based on current incremental borrowing rates.

Long-term financial assets: A reasonable estimate of the fair value is determined by reference to the underlying net asset base of the controlled entity.

$26(c)$ Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognise financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the statement of financial position and notes to the financial statements.

The economic entity does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the economic entity.

DIRECTORS DECLARATION

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

In accordance with a resolution of the Directors of Tolhurst Noall Group Ltd, we state that:

In the opinion of the directors:

the financial statements and notes of the company and of the consolidated entity are in $(a)$ accordance with the Corporations Act 2001, including:
$\ddot{\Omega}$ giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2003 and of their performance for the year ended on that date; and
complying with Accounting Standards and Corporations Regulations 2001; and $(ii)$
$(b)$ there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

. . . . . . . . . . . . . . . . . . . . JOHN W. WILSON DIRECTOR

. . . . . . . . . . . . . . . . . . . . CRAIG A. GRAHAM-SMITH DIRECTOR

Dated at Melbourne this 24^th day of September 2003.

INDEPENDENT AUDIT REPORT TO MEMBERS OF TOLHURST NOALL GROUP LTD

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both Tolhurst Noall Group Ltd (the company) and its controlled entities (the consolidated entity), for the year ended 30 June 2003. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards [and International Standards on Auditing], in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
$\bullet$ assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit Opinion

In our opinion, the financial report of Tolburst Noall Group Ltd is in accordance with:

the Corporations Act 2001, including: $(a)$
giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2003 and $\Omega$ of their performance for the year ended on that date; and
complying with Accounting Standards in Australia and the Corporations Regulations 2001; and $(ii)$
$(b)$ other mandatory financial reporting requirements in Australia.

MOORE STEPHENS HF

Chartered Accountants

S D PITT Partner Melbourne, 25^th September, 2003

$-33-$

Moore Stephens HF ABN 39 533 589 331

14th Floor, 607 Bourke Street, Melbourne, Victoria, 3000 Australia.

Telephone: +61 39614 4444 Facsimile: +61 3 9614 6039 Email: firmidimshf.com.au Web: www.mshf.com.au

A member of the Moore Stephens International Limited Group of Independent Firms

AI assistant

First Graphene Ltd. — Capital/Financing Update 2003

35640_rns_2003-11-06_67562a3d-ec2c-4340-9216-07594a2fa0aa.pdf

TNL

TOLHURST NOALL GROUP LTD

Offer Information Statement

ABN 50 007 870 760

Offer Information Statement

Table of Contents

IMPORTANT

Important Information

Directors

Company Secretary

Dear Shareholder.

$(ii)$ an issue of 3.4 million unlisted options with a duration of 4 years to the Managing Director.

$11$ Offer

$1.2$ Placement of Shortfall

$1.3$ What you need to do

$1.4$ Purposes of the Entitlement Offer and use of proceeds

$1.5$ Effects of the Offer on the capital of the Company

$1.6$ Risk factors

$2.1$ The Entitlement Offer

Opening and Closing Dates $2.2$

Who is entitled to participate in the Entitlement Offer 2.3

2.4 Ranking of New Shares

$2.5$ Payment

Rights Trading $2.6$

Additional Shares and Allocation Policy $2.7$

$2.8$ ASX quotation

2.9 Issue and Despatch of Shareholding Statements

2.10 Refund of subscription monies

2.11 Tax Considerations

$2.12$ Minimum Subscription

2.13 Placement of any shortfall

$3.1$ How to take up all or part of your Entitlement and apply for Additional Shares

What you may do

If you wish to take up all your Entitlement

If you wish to sell all of your Entitlement on the ASX

If you wish to take up part of your Entitlement and sell the balance on the ASX

If you wish to take up part of your Entitlement and allow the balance to lapse

If you wish to transfer all or part of your Entitlement to another person other than on the ASX

$3.2$ Entitlements not taken up

$3.3$ Enquiries

$4.1$ Tolhurst's Core Business

$4.2$ Tolhurst's Investments

Prospects for 2003/04 4.3

4.4 Capital Structure

Section 6 Risk Factors

$6.1$ Key personnel

6.2 Effective management of growth

6.3 Business and Operations

6.4 Competitive position

6.5 Economic factors

6.6 Financial performance

6.7 Capital needs of the Company

6.8 Regulation

6.9 Client Complaints

6.10 Share Investment

6.11 Market Forces

6.12 Litigation

$7.1$ Inspection of documents lodged with ASIC

$72$ CHESS

Consents to the inclusion of information 73

$7.4$ Consents to be named

$7.5$ Costs of the Offer

$7.6$ Authorisation

Appendix

STATEMENT OF FINANCIAL PERFORMANCE FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2003

STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL VEAR ENDED 30 JUNE 2003

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(b) Principles of Consolidation

(c) Goodwill

(d) Cash and Cash Equivalents

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2003

(e) Receivables

(f) Provision for Doubtful Debts

$(e)$ Taxes

First Graphene Ltd. Capital/Financing Update 2003