GOWING BROS LIMITED — Annual Report 2003

Sep 8, 2003

GOWING BROS, LIMITED ACN 000 010 471

MANAGING DIRECTORS REVIEW OF OPERATIONS

On behalf of the Directors of Gowing Bros Ltd, I am pleased to present the financial report for the year ended 31 July 2003.

This year has been the first full year of operations since the separate listing of Gowings Retail Ltd. The divestment has allowed the company to concentrate fully on building and developing the company's core business of investment and wealth management. I believe that the strong rise in the company's share price during the year can be directly attributed to the company's new focus and the far more transparent communication strategy it has allowed us to develop.

FINANCIAL PERFORMANCE

Our operating profit after tax for the year was \$7.584 million compared with \$8.671 million in the previous vear. This vear's profit includes significant gains made from the sale of our Mona Vale land joint venture (\$3.125 million) and the sale of our share of the Philip St joint venture to our joint venture partner St Hilliers (\$1.281 million).

More importantly the company delivered a real return to shareholders of 6.3%*, measured by the increase in net asset backing per share and dividends paid. This is the second year that the company has achieved a positive return during a period in which there has been a decline in the Australian stock market.

THE YEAR IN REVIEW

The year saw a significant increase in underlying maintainable earnings from both our long term property management business and our investment management business. In fact the combined maintainable earnings before tax for both businesses increased 53% from \$3.173 million to \$4.861 million.

This strong result was underpinned by solid increases in dividend and like-for-like rental receipts, together with a keen focus on cost and overhead control. All members of the team deserve credit. particularly the accounts staff and the building manager.

During the year we entered into two new property joint ventures, formed the Gowings Property Partnership and established a presence in the emerging mezzanine finance loan market. More details of these and other developments are provided below.

• $\ddot{\mathbf{1}}$ . The joint venture established by the company to purchase land on the plateau at Bayview Heights then subdivide and sell the $8 \times 5$ acre blocks has been very successful. The company's share in this project is expected to produce a return in excess of 25% pa on the funds invested.
• $2.$ The 74 lot subdivision in Kempsey on the New South Wales north coast purchased in February by the company and its joint venture partner has progressed well. A Development Consent for Stage 1 has been granted by Kempsey Council and subdivision works are well underway. Enquiry for individual allotments has been strong with 12 lots of the 30 lot Stage 1 already sold prior to completion of the subdivision works. The DA for the remaining 44 lots in Stage 2 has recently been submitted. Prices being achieved in the area have firmed significantly, even in the short period since acquisition, giving us great confidence that the development will prove very successful.
• $\overline{3}$ . Gowings Property Partnership, the property development and management business established in partnership with Mr Mark Steglick purchased a residential site in Oberon Street. Coogee on which we expect to build and market 8 luxury apartments, some with commanding

⁺ See chapter 19 for defined terms.

north east views over Coogee Bay. The DA for this development has been lodged with Council. Gowings Properties is also currently evaluating a number of other development opportunities as it seeks its second project. We are being patient, careful and risk averse in this endeavour having regard to the current stage of the property market cycle.

$\overline{4}$ . Since entering the mezzanine finance market in November, 2002 we have made three loans. Two loans were made during the year and one subsequent to year end. Total funds on loan now amount to \$5.065 million. Interest booked on loans made during the year was \$365,500. The average return per annum on these loans is much higher than normal market rates. reflecting the higher risks involved. We ensure that the risks are adequately balanced against security provided by the borrowers.

FINAL DIVIDEND

The Directors announce a final fully franked dividend of 3.5 cents per share (last year 3.5 cents per share) payable on 24 October. The dividend will be fully franked at the 30% tax rate.

The final dividend follows the special fully franked listed investment company capital gains dividend of 3.5 cents paid on 18 December, 2002 and the interim dividend of 3.0 cents paid on 24^th April, 2003 making total dividends for the year 10.0 cents.

Both the company's Dividend Reinvestment Plan & Bonus Share Plan will operate for the final dividend

GOWINGS WHALE TRUST

The Gowings Whale Trust project in association with the National Parks & Wildlife Service has now been funded and awaits delivery of the electronic tracking devices which will be used to study the humpback whales in their annual migration along the east coast of Australia.

GOWINGS RETAIL LIMITED

This report includes the company's share, according to equity accounting principles, of the profit announced by Gowings Retail Limited in its most recently published financial results, being the Appendix 4B - Half Yearly Report for the period ending 31 January, 2003. I note that since 31 January, 2003 the Directors of Gowings Retail Ltd have issued two statements in relation to that company's results for the full year to 31 July, 2003.

SUMMARY OF CURRENT FINANCIAL POSITION as at 31 JULY, 2003

Attached is a "Gowing Bros Ltd 'At a Glance' - Statement of Financial Position" schedule showing management's current view of the financial position of the company.

The 'Market Value per Share' of \$2.59 compares very favourably with the corresponding value per share of \$2.43 (after adjustment for dividends paid) at the previous year end. This increase is the outcome of the company's continuing focus on its core business objective of growing aggregate underlying net asset value. It is the most appropriate measure of the company's financial performance in any given financial period.

Please note that the figures shown in the table reflect estimated market value of property and private equity investments and market value of listed equity investments as at 31 July. Property values are based on management's opinion of fair market value arrived at after consultation with real estate advisors, valuers and joint venture partners. Please note that the figures in this schedule are not audited.

* The calculation of the real return to shareholders on page 1 is based on market values and 'NTA' shown in the schedule 'Gowing Bros Limited 'At A Glance' - Statement of Financial Position (as at 31 July 2003)' attached to this Managing Director's Review of Operations.

⁺ See chapter 19 for defined terms.

OUTLOOK

Since I last corresponded, the economic outlook, particularly the global outlook, has firmed substantially. There have been definite signs of a turnaround in major overseas economies, most notably that of the United States. This improvement in sentiment has flowed through into a significant rise in stock prices, pretty much across the board. It is no longer what could be considered a buver's market. The value of many stocks in our portfolio, as well as our own share price, has risen strongly.

At all times, investments need to be thoroughly researched and made judiciously. At present, a careful and thorough approach is particularly important. We are constantly monitoring and looking to add to or adjust the balance within our portfolio.

As it stands, I believe our current portfolio, with a healthy balance between prime commercial properties, listed equities, private equity, property development projects and cash, places us in a very strong position to benefit from a global turnaround, or to be suitably defensive and shield us from an unexpected global setback.

John Gowing Managing Director 8 September, 2003

⁺ See chapter 19 for defined terms.

GOWING BROS LTD 'AT A GLANCE'
Statement of Financial Position (as at 31 July 2003)

PROPERTY PORTFOLIO at market value

INVESTMENT PROPERTY			DEVELOPMENT PROPERTY
45 MARKET ST SYDNEY
Market Value		50,000,000
Site Area	624sam
Net lettable area	6,280sgm		OTHER PROPERTY
Occupancy rate	96%		Value	\$880,000
Rental per annum	\$4,300,000
			Sub Total Development Property	\$880,000
70 NORTON ST LEICHHARDT
Market value (50% share)		\$4,875,000
Area	800sam		TOTAL PROPERTY PORTFOLIO
Net lettable area	1.500sam
Occupancy rate	100%
Rental per annum	\$390,000		Total Value	\$55,755,000
			Less debt (Market St Sydney)	\$15,000,000
Sub Total Investment
Property		\$54,875,000	Total Market Value	\$40,755,000
INVESTMENT PORTFOLIO at market value
EQUITY HOLDINGS			NET INTEREST BEARING SECURITIES & OTHER
			RECEIVABLES
Listed Equities Market Value		\$52,188,000	Value	\$5,407,000
PRIVATE EQUITY			CASH ON HAND	\$11,977,000
INVESTMENTS
MIT IIB	\$3,815,000
Crescent Capital Mot Pty Ltd	\$350,000
Crescent Capital Fund	\$1,751,000
Other/Balance	\$543.000		TOTAL INVESTMENT PORTFOLIO
Market Value		\$6,459,000	Total Market Value	\$76,031,000
EATH HUNGERULLIE AF BRASENY UR BUIEAEUS BANTER BA				* ***

. MARKET VALUE OF PROPERTY AND INVESTMENT PORTFOLIO	.000
TOTAL	\$116.786
WHICH EQUATES TO A MARKET VALUE PER SHARE OF	\$2.59

*\$116.786m/45,052,508 shares on issue

20 LARGEST EQUITY HOLDINGS

Westpac Banking Corporation	\$5,139,100
National Australia Bank	\$5,051,000
Washington H Soul Pattison	\$3,444.600
Gowings Retail	\$2.870,000
BHP Billiton	\$2,835,700
ANZ Banking Group	\$2,144,400
Carlton Investments Ltd	\$1,876,400
Alesco Corp	\$1,871,700
Hills Industries	\$1,854,300
Woolworths	\$1,852,600
John Fairfax Holdings	\$1,719.600
Coles Myer Ltd	\$1,468,000
Blackmores Ltd	\$1,306,300
Brambles Industries	\$1,273,200
Macquarie Equities (Macquarie Bank)	\$1,224,000
Woodside Petroleum Ltd	\$1,202,500
Noni B Ltd	\$929,100
Centennial Coal Company Ltd	\$813.500
BHP Steel Ltd	\$688,100
Western Australian Newspaper Holdings Ltd	\$678,600
Other holdings	\$11,945,300
TOTAL	\$52,188,000

RECONCILIATION OF MOVEMENT IN MARKET VALUE PER SHARE BETWEEN 31/7/02 & 31/7/03

\$2.53
\$0.10
\$2.43
\$2.59
\$0.16

⁺ See chapter 19 for defined terms.

RULES 4.1, 4.3

APPENDIX 4E

Preliminary final report

Preliminary final (tick)
down	52%	to	22,242
down	13%	to	7,584
down	13%	to	7,584
			Franked amount per security
	3.5 ¢		3.5¢
	3.5¢		3.5¢
		31 July 2003 Amount per security 3 October 2003	Financial year ended ('current period')

⁺ See chapter 19 for defined terms.

Condensed consolidated statement of financial performance

	Current	Previous
	period -	corresponding
	\$A'000	period - \$A'000
Revenues from ordinary activities	22,242	46,664
Expenses from ordinary activities	(16,004)	(36, 159)
Borrowing costs	(863)	(954)
Share of net profits (losses) of associates and joint venture entities	3,087	392
Profit (loss) from ordinary activities before tax	8,462	9,943
Income tax on ordinary activities	(879)	(1, 272)
Profit (loss) from ordinary activities after tax	7,583	8,671
Profit (loss) from extraordinary items after tax
Net profit (loss)	7,583	8,671
Net profit (loss) attributable to outside + equity interests	1
Net profit (loss) for the period attributable to members	7,584	8,671
Non-owner transaction changes in equity
Increase (decrease) in revaluation reserves	146	(3, 226)
Total transactions and adjustments recognised directly in equity	146	(3,226)
resulting Total changes in from equity not transactions with owners as owners	7,730	5,445
	$\blacksquare$

Earnings per security (EPS)	Current period	Previous corresponding period
Basic EPS	$16.87$ cents	19.53 cents
Dilufed EPS	$16.87$ cents	19.53 cents

⁺ See chapter 19 for defined terms.

Notes to the condensed consolidated statement of financial performance

Revenue and expenses from ordinary activities

	Current period - \$A'000	Previous
		corresponding period -
		\$A'000
Revenue from sales or services		7,167
Interest revenue	944
Other relevant revenue
Sale of shares	10,449	7,628
Dividends	2,106	1,487
Other investment income	811	1,108
Rent	3,503	4,034
Proceeds on the disposal of property	4,024	14,560
Proceeds on the sale of retail division		10,220
Other property income	364	422
Other Income	41	38
Sub-total	22,242	46,664
Details of relevant expenses
Cost of goods sold		(4, 171)
Cost of investments sold	(10, 418)	(5,627)
Cost of sale of retail division		(4,622)
Cost of property sold	(2,428)	(12, 294)
Employee expenses	(1,029)	(2,461)
Other	(1,821)	(5,646)
Depreciation amortisation excluding and
amortisation of intangibles	(308)	(1, 338)
Sub-total	(16,004)	(36, 159)

⁺ See chapter 19 for defined terms.

Consolidated retained profits

	Current period - \$A'000	Previous corresponding period - \$A'000
Retained profits at the beginning of the financial period	14,439	7,832
Net profit attributable to members	7,584	8,671
Net transfers from reserves	146	1,569
Dividends and other equity distributions paid or payable	(4,081)	(3,633)
Retained profits at end of financial period	18,088	14,439

Comparison of half year profits

Consolidated profit (loss) from ordinary activities after tax attributable to members reported for the 1st half year

Consolidated profit from ordinary activities after tax attributable to members for the 2nd half year

Current year - \$A'000	Previous year - \$A'000
5,920	7,743
1,664	928
7,584	8,671

⁺ See chapter 19 for defined terms.

Individually Significant Items

	Consideration Received \$'000	Carrying Amount \$'000	Gain on Sale \$'000
31 JULY 2003
Profit on sale of non-current assets investment portfolio	10,449	10,418	31
Profit on sale of Ingleside property	1,350	1,034	316
Profit on sale of interest in joint venture (Waterloo property)	2,674	1,393	1,281
Share of net profit of associate (Bayview Heights Estate Pty Limited)	N/A	N/A	248
Share of net profit of associate (Gowings Retail Ltd 6 mths to 31 January 2003)	N/A	N/A	30
Share of net profit of associate (Healesville Holdings Pty Limited: Burrawong Ridge Estate Property)	N/A	N/A	2,809
31 JULY 2002
Profit on sale of non-current assets investment portfolio	7,628	4,887	2,741
Profit on sale of land and buildings	14,560	12,301	2,259
Profit from the sale of Gowings' retail division	12,000	7,111	$3,109*$

* Profit excludes unrealised portion.

Tax reconciliation

The income tax expense for the financial year differs from the amount calculated on the profit. The differences are reconciled as follows:

	31 Jul 2003 \$'000	31 Jul 2002 \$'000
Profit from ordinary activities before income tax expense	8,462	9,943
Income tax calculated at 30%	2,539	2,983
Tax effect of permanent differences:
Non-assessable income	(1,645)	(1, 392)
Dividend rebate		(492)
Over (under) statement of FITB in prior year	44
(Over) under provision of taxable income in prior year	(85)	49
Recognition of PDIT not previously recognised	(2)
Non-deductible expenses	28	124
	879	1.272

⁺ See chapter 19 for defined terms.

Condensed consolidated statement of financial position	of At end current period \$A'000	As shown in last annual report \$A'000	As in last half yearly report \$A'000
Current assets
Cash	11,977	12,948	6,401
Receivables	634	1,100	3,458
Investment loans	3,530
Other	489	335	489
Total current assets	16,630	14,383	10,348
Non-current assets
Receivables	649	459	430
Investments (equity accounted)	8,865	5,678	9,306
Other investments Investment loans	33,160	33,159	38,651
Development properties	2,435 293
Other property, plant and equipment	2,805	2,881	2,769
Investment Property	49,953	54,821	50,929
Tax assets	264	417	322
Other	55	80	67
Total non-current assets	98,479	97,495	102,474
Total assets	115,109	111,878	112,822
Current liabilities
Payables	3,716	1,282	1,253
Interest bearing liabilities	5,578	611	635
Tax liabilities	301	560	283
Provisions excl. tax liabilities	26	22	3
Total current liabilities	9,621	2,475	2,174
Non-current liabilities
Interest bearing liabilities	10,973	19,016	16,293
Tax liabilities	464	97	703
Provisions exc. tax liabilities	56	53	56
Total non-current liabilities	11,493	19,166	17,052
Total liabilities	21,114	21,641	19,226
Net assets	93,995	90,237	93,596
Equity
Capital/contributed equity	7,261	7,007	7,219
Reserves Retained profits	68,647 18,088	68,791 14,439	68,645 17,732

⁺ See chapter 19 for defined terms.

Equity attributable to members of the parent entity	93,996	90,237	93,596
Outside + equity interests in controlled entities	(1)	$\overline{a}$
Total equity	93,995	90,237	93,596

Condensed consolidated statement of financial position continued

⁺ See chapter 19 for defined terms.

Condensed consolidated statement of cash flows

	Current period	Previous
	\$A'000	corresponding period -
		\$A'000
Cash flows related to operating activities
Receipts from customers	5,852	32,353
Payments to suppliers and employees	(3,698)	(29, 347)
Dividends received from associates
Other dividends received	2,033 419	1,487 1,108
Interest and other items of similar nature received	(840)	(954)
Interest and other costs of finance paid	(617)
Income taxes paid
Other
Net operating cash flows	3,149	4,647
Cash flows related to investing activities
Payment for purchases of plant and equipment	(244)	(3, 128)
Proceeds from sale of property	6,365	14,560
Payment for purchase of property	(576)
Payment for purchases of equity investments Proceeds from sale of equity investments	(10, 373) 10,449	(10, 695) 7,628
Loans to other entities	(5,965)
Loans repaid by other entities	690
Payment for investment in joint venture	(336)
Net investing cash flows
	10	8,365
Cash flows related to financing activities
Proceeds from subsidiary share issue	1
Proceeds from borrowings	2,927	4,472
Repayment of borrowings Repayment of lease liabilities	(2, 545) (588)	(427) (588)
Dividends paid	(3, 186)	(2,508)
Payments for shares bought back	(641)	(156)
Net financing cash flows	(4,032)	793
Net increase (decrease) in cash held	(873)	13,805
Cash at beginning of period	12,789	(1,016)
Cash at end of period	11,916	12,789

⁺ See chapter 19 for defined terms.

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows are as follows.

NIL

Reconciliation of cash

Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current period \$A'000	Previous corresponding period - \$A'000
Cash on hand and at bank	11,977	12,948
Bank overdraft	(61	159)
Total cash at end of period	11.916	12,789

Other notes to the condensed financial statements

Ratios	Current period	Previous corresponding period
Profit before tax / revenue Consolidated profit from ordinary activities before tax as a percentage of revenue	38.0%	21.3%
Profit after tax $t^+$ equity interests Consolidated net profit from ordinary activities after tax attributable to members as a percentage of equity (similarly attributable) at the end of the period	8.1%	9.6%

⁺ See chapter 19 for defined terms.

٦

\$2.35

Earnings per security (EPS)

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

	2003	2002
Basic earnings per share Diluted earnings per share	16.87 16.87	19.53 19.53
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share	44,936,856	44,408,224
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share	44,936,856	44,408,224
NTA backing	Current period	Previous corresponding period

$$2.39$

Net tangible asset backing per ⁺ordinary security

⁺ See chapter 19 for defined terms.

Control gained over entities having material effect

Name of entity (or group of entities)

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was ⁺acquired

Date from which such profit has been calculated

Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period

Loss of control of entities having material effect

Name of entity (or group of entities)

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the current period to the date of loss of control

Date to which the profit (loss) in item 14.2 has been calculated

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period

Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from sale of interest leading to loss of control

Dividends (in the case of a trust, distributions)

Date the dividend (distribution) is payable

⁺Record date to determine entitlements to the dividend (distribution) (ie, on the basis of proper instruments of transfer received by 5.00 pm if ⁺securities are not ⁺CHESS approved, or security holding balances established by 5.00 pm or such later time permitted by SCH Business Rules if ⁺securities are ⁺CHESS approved)

If it is a final dividend, has it been declared? (Preliminary final report only)

$\overline{\text{Nil}}$

24 October 2003

3 October 2003

$\overline{Yes}$

⁺ See chapter 19 for defined terms.

Amount per security

	Amount per security	Franked amount per security at % tax (see note 4)	Amount per security of foreign source dividend
(Preliminary final report only)
Final dividend: Current year	$3.5\phi$	3.5¢
Previous year	3.5 ¢	3.5c
(Half yearly and preliminary final reports)
Interim dividend: Current year	3.0 ¢	3.0¢
Previous year	3.0 ¢	3.0 c	Ć.
(Half yearly and preliminary final reports) Special dividend: Current year (LIC Capital Gain)	$3.5\phi$	$3.5\phi$
Previous year	6.7¢	6.7¢	¢

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

(Preliminary final report only)

⁺Ordinary securities

Current year	Previous year
10¢	13.2 0
¢	c

Preference ⁺securities

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

	Current period \$A'000	Previous corresponding period - \$A'000
+ Ordinary securities	1,577	1,564
Total	1,577	1,564

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

Dividend reinvestment plan (DRP)

Bonus in lieu of dividend (BIL)

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

3 October 2003

⁺ See chapter 19 for defined terms.

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

Details of aggregate share of profits (losses) of associates and joint venture entities
Group's share of associates' and joint venture entities':	Current period \$A'000	Previous corresponding period - \$A'000
Profit from ordinary activities after tax	3,087	392
Extraordinary items net of tax
Net profit	3,087	392
Adjustments
Share of net profit of associates and joint venture entities	3.087	392

⁺ See chapter 19 for defined terms.

Material interests in entities which are not controlled entities

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

Name of entity	Percentage of ownership interest held at end of period or date of disposal		Contribution to net profit (loss) (item 1.9)
Equity accounted associates and joint venture entities	Current period	Previous corresponding period	Current period \$A'000	Previous corresponding period - \$A'000
Gowings Retail Limited	35%	35%	30	392
Healesville Holdings Pty Limited	33 1/3 %	33 1/3 %	2,809
Heights Bayview Estate Pty Limited	33 1/3 %	33 1/3 %	248
Total			3,087	392
Other material interests
Total

⁺ See chapter 19 for defined terms.

Issued and quoted securities at end of current period

(Description must include rate of interest and any redemption or conversion rights together with prices and dates)

Category of +securities	Total number	Number quoted	Issue price per security (see note 14) (cents)	Amount paid up per security (see note $14$ ) (cents)
+ Ordinary securities	45,052,508	45,052,508
Changes during current period (a) Increases through issues (b) Decreases through returns of capital, buybacks	690,577 (336, 547)	690,577 (336, 547)
Options (description and conversion factor)			Exercise price	Expiry date (f f any)
	30,000 117,000		\$1.90 \$1.95	6/12/05 10/11/04
Issued during current period
Exercised during current period
Expired during current period	340,000 25,000 53,000		\$2.80 \$2.80 \$2.62	27/11/02 4/12/02 4/12/02

⁺ See chapter 19 for defined terms.

SEGMENT INFORMATION

YEAR ENDED 31 JULY 2003

	Retail	Property		Intersegment	Total
	Operations	Operations	Investments	Eliminations
	A\$'000	A\$'000	A\$'000	A\$'000	A\$'000
Segment Revenue
Revenue from outside the
consolidated entity		8,273	13,969		22,242
Intersegment revenue		42		(42)
Total revenue		8,315	13,969	(42)	22,242
Share of net profits of associate		3,057	30		3,087
Total segment revenue		11,372	13,999	(42)	25,329
Segment Result
Operating Profit Before Tax		5,948	2,514		8,462
Income tax expense					(879)
Net profit					7,583
Segment assets		56,704	58,141		114,845
Unallocated assets					264
Total assets					115,109
Segment liabilities		17,192	3,156		20,348
Unallocated liabilities					766
Total liabilities					21,114
Investments in associates		3,157	5,708		8,865
Acquisition of property, plant
and equipment, & other non-
current segment assets		801	10,438		11,239
Depreciation and amortisation
expense		274	34		308
Profit on sale of property		1,597			1,597

⁺ See chapter 19 for defined terms.

YEAR ENDED 31 JULY 2002

	Retail Operations A\$'000	Property Operations A\$'000	Investments A\$'000	Intersegment Eliminations A\$'000	Total A\$'000
Segment Revenue
Revenue from outside the
consolidated entity	7,167	18,600	20,897		46,664
Intersegment revenue		599		(599)
Total revenue	7,167	19,199	20,897	(599)	46,664
Share of net profits of associate	u,		392	$\mathbf{r}$	392
Total segment revenue	7,167	19,199	21,289	(599)	47,056
Segment Result
Operating Profit Before Tax	(162)	3,004	7,101		9,943
Income tax expense					(1, 272)
Net profit					8,671
Segment assets		54,182	57,279		111,461
Unallocated assets					417
Total assets					111,878
Segment liabilities			338
Unallocated liabilities		20,645		$\mathbf{r}$	20,983 658
Total liabilities					21,641
Investments in associates			5,678		5,678
Acquisition of property, plant and equipment, & other non-current segment assets		3,128	10,695		13,823
Depreciation and amortisation expense	57	1,281			1,338
Profit on sale of property		2,266			2,266
Profit on sale of retail division			3,109		3,109

⁺ See chapter 19 for defined terms.

Basis of financial report preparation

Material factors affecting the revenues and expenses of the economic entity for the current period. In a half yearly report, provide explanatory comments about any seasonal or irregular factors affecting operations.

Refer to Managing Directors Report

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

Nil

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

The company has sufficient franking credits at 30% to fully frank all dividends

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

Nil

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

⁺ See chapter 19 for defined terms.

Nil

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

Nil

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:

Place

Date

Time

Level 6, Gowings Building, 45 Market Street Sydney

6 November 2003

$10a$ m

Compliance statement

This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views.

This report, and the ⁺accounts upon which the report is based (if separate), use the same accounting policies.

This report gives a true and fair view of the matters disclosed.

This report is based on ⁺accounts to which one of the following applies.

t HCK ONE)	The $^+$ accounts have been $\Box$ audited.	The + accounts have been subject to review.
	The $^+$ accounts are in the $\Box$ process of being audited or subject to review.	The * accounts have not yet been audited or reviewed.

$\mathbf 6$ The entity has a formally constituted audit committee.

J S Byers Company Secretary

Dated: 9 September 2003

⁺ See chapter 19 for defined terms.