NEXTED GROUP LIMITED — Interim / Quarterly Report 2013

Feb 27, 2013

ABN 75 105 012 066

DGI HOLDINGS LTD

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ASX Appendix 4D

Financial Statements for the half-year ended 31 December 2012 (All comparisons to half-year ended 31 December 2011)

Results for announcement to the market

Earnings	$A’000	Up/Down	% Movement
Revenue from ordinary activities	5	down	92%
Profit from ordinary activities after tax attributable to members	5,294	up	156%
Profit for the period attributable to members	5,294	up	156%

The Company has recognised a profit of $5,294,186 from ordinary activities for the half-year to 31 December 2012 compared with a loss of $9,527,092 in the prior half-year. The Company was subject to a Deed of Company Arrangement (“DOCA”) and the current period profit includes an amount of $5,954,527 relating to the forgiveness of pre-DOCA liabilities which occurred upon effectuation of the DOCA.

		Franked amount per
Dividends	Amount per share	share
Final dividend	N/A	N/A
Interim dividend	N/A	N/A

Record date for determining entitlements to dividends N/A

Commentary

This report is based on information extracted from the Half-Year Report of DGI Holdings Limited for the period ended 31 December 2012. The Half-Year Report has been subject to review by the Company’s auditor and the review report is included with the attached report. Additional Appendix 4D disclosure requirements can be found in the Report of Directors and the 31 December 2012 halfyear financial statements.

	31	Dec	2012	31	Dec	2011
NTA tangible assets per security		0.31	cents			nil

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DGI HOLDINGS LIMITED ABN 75 105 012 066

HALF‐YEAR REPORT FOR THE HALF‐YEAR ENDED 31 DECEMBER 2012

DGI HOLDINGS LIMITED

ABN 75 105 012 066

Index:	Page
Corporate Directory	1
Report of the Directors	2
Auditor’s Independence Declaration	5
Statement of Profit or Loss and Other Comprehensive Income	6
Statement of Financial Position	7
Statement of Cash Flows	8
Statement of Changes in Equity	9
Notes to the Financial Report	10‐14
Directors’ Declaration	15
Independent Auditor’s Review Report	16‐17

DGI HOLDINGS LIMITED

CORPORATE DIRECTORY

Directors

Stock Exchange Listing

Mr Roger Steinepreis ‐ Non‐Executive Chairman Mr George Ventouras ‐ Non‐Executive Director Mr Nick Castleden ‐ Non‐Executive Director

ASX Limited (Home branch ‐ Perth, Western Australia) ASX Code: DGI

Company Secretary

Auditor

Ms Susan Hunter

BDO Audit (WA) Pty Ltd Chartered Accountants 38 Station Street SUBIACO WA 6008

Registered Office

Bankers

C/‐Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth Telephone: + 61 8 8262 3115 Facsimile: + 61 8 8262 8490

National Australia Bank Limited Ground Floor, 50 St Georges Terrace PERTH WA 6000

Solicitors

Share Registry

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

Boardroom Pty Limited Level 7, 207 Kent Street SYDNEY NSW 2000

1

DGI HOLDINGS LIMITED

REPORT OF THE DIRECTORS

The Directors of DGI Holdings Limited present their report on DGI Holdings Limited (“the Company” or “DGI”) for the half‐year ended 31 December 2012.

DIRECTORS

The Directors in office at the date of this report and at any time during the half‐year are as follows. Directors were in office for the entire period unless otherwise stated.

Current Directors

Mr Roger Steinepreis ‐ Non‐executive Chairman (appointed 3 July 2012) Mr George Ventouras ‐ Non‐executive Director (appointed 3 July 2012) Mr Nick Castleden ‐ Non‐executive Director (appointed 27 August 2012)

Former Directors

Ms Luceille Outhred ‐ (resigned 21 August 2012)

PRINCIPAL ACTIVITIES

DGI Holdings Limited is an Australian company listed on the Australian Securities Exchange (ASX code: DGI). DGI’s principal business activity is the research, development and marketing of innovative miniature projection technologies and products. It is also the intention of DGI’s board to identify new opportunities in related or non‐ related industries that may increase shareholder value.

REVIEW OF OPERATIONS AND CHANGES IN STATE OF AFFAIRS

On 19 December 2011, the Company was placed into Administration, and Mr Peter Ivan Macks and Mr Timothy James Clifton of PPB Advisory were appointed as Voluntary Administrators of the Company, then known as Digislide Holdings Limited.

On 18 January 2012, Mr Michael James Humphris and Mr George Divitkos were appointed Joint and Several Administrators of the Company pursuant to a resolution passed at a duly convened meeting of creditors that was held on 3 January 2012 replacing the previous Administrators.

Under the terms of a Deed of Company Arrangement entered into by the Company on 31 May 2012, the Deed Administrators were authorised, among other things, to investigate the restructure of the Company’s capital with a view to re‐listing the Company on ASX for the benefit of creditors and Shareholders.

The creditors of the Company, together with the Deed Administrators, agreed to a proposal presented by Blueknight Corporation Pty Ltd (Blueknight) for the restructure and recapitalisation of the Company (Proposal) which was approved by Shareholder’s approval at the General Meeting held on 27 August 2012.

The Proposal involved:

• (a) the retention of certain of the Company’s existing business assets (unencumbered), and specifically those relating to the Company’s retractable image projecting system, dual image slide and video projector and personal entertainment arrangement;

• (b) the consolidation of the Company’s existing capital on a 1 for 2 basis, leaving the Company with 34,395,540 Shares on issue and 3,906,694 Options on issue;

2

DGI HOLDINGS LIMITED

REPORT OF THE DIRECTORS

(c) the Company raising new equity by way of the following placements (made pursuant to a prospectus):

• i. a placement of:

  • a) 120 million Shares at a placement price of $0.001 per Share to raise $120,000 (First Placement Shares); and

  • b) 60 million Options which are free attaching to the First Placement Shares, with each Option exercisable at $0.01 on or before 31 December 2015 (First Placement Options), and

• ii. a second placement of up to 170 million Shares at a placement price of $0.01 per Share to raise up to $1.7 million (Second Placement Shares)

• (d) a total of up to 60,000,000 Shares and 30,000,000 Options, pursuant to the First Placement and up to 40,000,000 Shares pursuant to the Second Placement to be placed to Mr Roger Steinepreis, Mr George Ventouras and Mr Nick Castleden;

• (e) the entry by the Company into a Creditors’ Trust Deed for the purposes of satisfying approved creditor claims;

• (f) the Syndicate paying $575,000 in cash to the Creditors Trust and all assets of the Company other than those specified in the Proposal being transferred to the Creditors Trust (Creditors Consideration);

• (g) the existing Directors and Company Secretary, resigning on or before the Meeting and new Directors Roger Steinepreis, George Ventouras and Nick Castleden being appointed to the Board; and

• (h) the change of the Company’s name from Digislide Holdings Limited to DGI Holdings Limited.

The Proposal was subjected to the following general conditions:

• (a) the Company’s liabilities and long term commitments being released and compromised under the DOCA, with the DOCA being wholly effectuated and the Deed Administrators’ appointment terminating simultaneously with the payment of the Creditors Consideration into the Creditors’ Trust;

• (b) the Company’s creditors being bound by the DOCA and required to prove in accordance with the terms of the DOCA and the Creditors’ Trust, with no creditor having the right to claim payment against the Company;

• (c) the Company’s subsidiaries being excised from the Company (unless otherwise requested by the Syndicate);

• (d) the employment of all employees being terminated at no cost to the Company following effectuation of the DOCA;

• (e) ASX confirming that it will lift the suspension on the trading of the Company’s securities without the need to re‐comply with Chapters 1 and 2 of the Listing Rules;

• (f) all convertible notes on issue being determined to be debt and being required to prove in accordance with the terms of the DOCA and no convertible note holder having the right to claim payment against the Company; and

• (g) during the term of the DOCA, any transfers of Shares and any alteration in the status of Shareholders or the issue of Shares being void, except so far as a Court otherwise orders.

On 28 August 2012, the Company changed its name to DGI Holdings Limited.

On 4 September 2012, the Deed of Company Arrangement was effectuated and the Company was released from external administration.

The Company completed a successful capital raising on 10 December 2012 through the issue of 290 million shares raising $1.82 million in total. Through the raising of capital the Company was able to complete the successful effectuation of the DOCA and the Company’s fully paid ordinary shares were reinstated to the official quotation on 20 December 2012 (ASX: DGI).

3

DGI HOLDINGS LIMITED

REPORT OF THE DIRECTORS

RESULTS

The Company recorded a p rofit after tax for the h a lf‐year ended 31 Dece m ber 2012 o f $5,294,18 6 (2011: Los s of $9,527,092). The current p eriod profit included an amount of $5,954,527 r elating to t h e forgiven e ss of pre‐D O CA lia b ilities whic h occurred upon effectu a tion of the D OCA.

SUBSEQUENT EVENTS

There has no t been any m atter or c i rcumstance , other tha n disclosed elsewhere i n this repo r t, the financial st a tements or notes thereto, that has arisen sinc e the end of the financial period, th a t has signifi c antly affec t ed, or may signifi c antly affect, the operations of the C ompany, th e results of t hose opera t ions, or th e state of affairs of the Compa n y in future financial yea r s.

FUTURE DEVELOPMENTS

It i s the intention of DGI’s board to id e ntify new o pportunitie s that may i n crease sha r eholder value in indust r ies w h ich may or m ay not be r elated to D G I’s existing b usiness.

AUDITOR INDEPENDENCE DECLARATION

A c opy of the a uditor’s independence d eclarations as required under secti o n 307C of t h e Corporat i ons Act 20 0 1 is in c luded in thi s report, an d can be fou n d on page 5 .

Si g ned in acco r dance with a resolution of the Dire c tors.

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Roger Steinep r eis Chairman

Perth, Wester n Australia 28 February 2 0 13

4

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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28 February 2013

The Directors DGI Holdings Limited Level 4, 16 Milligan Street PERTH WA 6000

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PETER TOLL TO THE DIRECTORS OF DGI HOLDINGS LIMITED

As lead auditor for the review of DGI Holdings Limited for the half-year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been:

• No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the review; and

• No contraventions of any applicable code of professional conduct in relation to the review.

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Peter Toll Director

BDO Audit (WA) Pty Ltd Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

5

DGI HOLDINGS LIMITED

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Note Revenues Revenue from continuing operations Total revenues Expenses Administration expenses Compliance Consultant fees Cost of Sales Finance expenses Marketing expenses Impairment of assets 3 Depreciation and amortisation 4,5 Occupancy expenses Payment to creditor’s trust Other expenses Total expenses Other Income 2 Profit/(loss) before Income Tax Income tax expense Profit/(loss) after income tax attributable to members of DGI Holdings Limited Total comprehensive profit/(loss) attributable to members of DGI Holdings Limited Earnings/(loss) per share Basic loss per share Diluted loss per share	Six Months Ended 31 December 2012 $ 5,172 5,172 ‐ (6,912) (31,472) ‐ ‐ ‐ ‐ (6,362) ‐ (575,000) (45,767) (665,513) 5,954,527 5,294,186 ‐ 5,294,186 5,294,186 Cents per Share 6.63 6.33	Six Months Ended 31 December 2011 $ 60,944
		60,944
		(865,644) ‐ ‐ (10,358) (280,595) (246,881) (7,950,110) ‐ (62,540) ‐ (171,908)
		(9,588,036)
		‐ (9,527,092) ‐
		(9,527,092)
		(9,527,092)
		Cents per Share (13.94) ‐

The Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the notes to the interim financial statements.

6

DGI HOLDINGS LIMITED

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

Note ASSETS Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non‐Current Assets Property, plant & equipment 4 Intangible assets 5 Total Non‐Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables 2 Borrowings 6 Employee benefits Total Current Liabilities Non‐Current Liabilities Borrowings 6 Total Non‐Current Assets Total Liabilities Net Assets Equity Issued capital 7 Reserves Accumulated losses Total Equity	31 December 2012 $ 1,004,928 25,559 1,030,487 23,220 34,039 57,259 1,087,746 51,124 15,000 ‐ 66,124 ‐ ‐ 66,124 1,021,622 25,943,274 116,130 (25,037,782) 1,021,622	30 June 2012 $ ‐ 11,987
		11,987
		25,800 24,200
		50,000
		61,987
		3,426,480 1,606,582 533,827
		5,566,889
		399,625
		399,625
		5,966,514
		(5,904,527)
		24,311,311 116,130 (30,331,968)
		(5,904,527)

The Statement of Financial Position should be read in conjunction with the notes to the interim financial statements.

7

DGI HOLDINGS LIMITED

STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Note Cash flows from operating activities Receipts from customers Interest received Interest paid Payments to suppliers and employees Net cash flows used in operating activities Cash flows from investing activities Other non‐current assets – IP Net cash flows used in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Proceeds from issue of shares Payment of share issue costs Payments made to DOCA Net cash flows provided by financing activities Net increase/(decrease) in cash and cash equivalents held Add opening cash and cash equivalents brought forward Closing cash and cash equivalents carried forward	31 December 2012 $ ‐ 5,172 ‐ (58,586) (53,414) (13,621) (13,621) 575,000 (272,500) 1,532,500 (188,037) (575,000) 1,071,963 1,004,928 ‐ 1,004,928	31 December 2011 $ 60,944 ‐ (267,392) (224,707)
		(431,155)
		‐
		‐
		430,861 ‐ ‐ ‐ ‐
		430,861
		(294) 2,546
		2,252

The Statement of Cash Flows should be read in conjunction with the notes to the interim financial statements.

8

DGI HOLDINGS LIMITED

STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

At 1 July 2012 Income for the period Total comprehensive income for the period Transactions with owners in their capacity as owners: Issue of share capital, net of transaction costs At 31 December 2012 At 1 July 2011 Loss for the period Total comprehensive loss for the period Transactions with owners in their capacity as owners: Issue of share capital, net of transaction costs Administration adjustments At 31 December 2011	Issued Capital Accumulated Losses Option Reserve Total Equity $ $ $ $ 24,311,311 (30,331,968) 116,130 (5,904,527) ‐ 5,294,186 ‐ 5,294,186
	‐ 5,294,186 ‐ 5,294,186 1,631,963 ‐ ‐ 1,631,963
	25,943,274 (25,037,782) 116,130 1,021,622
	24,584,059 (21,162,085) 116,130 3,538,104 ‐ (9,527,092) ‐ (9,527,092)
	‐ (9,527,092) ‐ (9,527,092) 94,263 ‐ ‐ 94,263 (367,011) 563,884 ‐ 196,873
	24,311,311 (30,125,291) 116,130 (5,697,850)

The Statement of Changes in Equity should be read in conjunction with the notes to the interim financial statements.

9

DGI HOLDINGS LIMITED

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS 31 DECEMBER 2012

1. BASIS OF PREPARATION OF HALF‐YEAR FINANCIAL REPORTS

Basis of Accounting

This general purpose financial report for the half‐year reporting period ended 31 December 2012 has been prepared in accordance with Corporations Act 2001 and Australian Accounting Standards (including Australian Accounting Interpretations) and authoritative pronouncements of the Australian Accounting Standards Board.

This financial report has been prepared in accordance with the historical costs convention.

The functional currency and presentation currency of DGI Holdings Limited is Australian dollars.

These half‐year financial reports do not include all the notes of the type normally included in annual financial reports and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial reports.

The half‐year financial reports should be read in conjunction with the annual financial reports for the year ended 30 June 2012 and any public announcements made by DGI Holdings Limited during the half‐year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. For the purpose of preparing the half‐year financial statements, the half‐year has been treated as a discrete reporting period.

Accounting standards issued, not yet effective

The accounting standards and methods of computation have in general been consistently applied since the prior year except for as follows:

• AASB 2011‐9 Amendments to Australian Accounting Standards — Presentation of Items of Other Comprehensive Income. Comparatives have been reclassified to be consistent with the current year presentation. The reclassification does not have an impact on the results presented.

In the half‐year ended 31 December 2012, the Company has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 January 2013.

It has been determined by the Company that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to the Company’s accounting policies.

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DGI HOLDINGS LIMITED

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS 31 DECEMBER 2012

2. OTHER INCOME

Effectuation of the DOCA (refer to Review of Operations) has resulted in a net accounting gain of approximately $5,954,527.

Forgiveness of debt Liabilities settled under DOCA Trade and other payables Borrowings Employee benefits Total	31 December 2012 $ 3,426,480 1,994,220 533,827 5,954,527	31 December 2011 $ ‐ ‐ ‐
		‐

The above liabilities are no longer required to be settled by the Company in line with the Terms and Conditions of the DOCA which was effectuated on 4 September 2012.

3. IMPAIRMENT OF ASSETS

Plant and equipment Intangible assets Inventories Current tax receivables Investments accounted for using the equity method Financial assets Trade and other receivables	31 December 2012 31 December 2011 $ $ ‐ 898,079 ‐ 3,382,406 ‐ 559,463 ‐ 29,420 ‐ 25,000 ‐ 292,500 ‐ 2,763,242
	‐ 7,950,110

As at 31 December 2011, the Company was under administration and the assets were not recoverable at the previous carrying amounts. Total impairment charges of $7,950,110 were recognised during the period to record these assets at the recoverable amounts.

4. PLANT & EQUIPMENT

Plant and equipment Opening balance At cost Accumulated depreciation Impairment charges Total plant and equipment	31 December 2012 31 December 2011 $ $ ‐ 17,281 ‐ ‐ ‐ ‐ ‐ (17,281)
	‐ ‐

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DGI HOLDINGS LIMITED

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS 31 DECEMBER 2012

4. PLANT & EQUIPMENT (Continued)

Office equipment Opening balance At cost Accumulated depreciation Impairment charges Total office equipment Computer Software Opening balance At cost Accumulated depreciation Impairment charges Total computer software Leasehold improvements Opening balance At cost Accumulated depreciation Impairment charges Totalleasehold improvements Manufacturing plant Opening balance At cost Accumulated depreciation Impairment charges TotalManufacturing plant Tooling Opening balance At cost Accumulated depreciation Impairment charges TotalTooling Artwork Opening balance At cost Accumulated depreciation Impairment charges TotalArtwork Total Plant and equipment		31 December 2012 31 December 2011 $ $ ‐ 151,370 ‐ ‐ ‐ ‐ ‐ (151,370)
		‐ ‐
		‐ 81,873 ‐ ‐ ‐ ‐ ‐ (81,873)
		‐ ‐
		‐ 150,473 ‐ ‐ ‐ ‐ ‐ (150,473)
		‐ ‐
		25,800 449,809 ‐ ‐ (2,580) ‐ ‐ (424,009)
		23,220 25,800
		‐ 36,364 ‐ ‐ ‐ ‐ ‐ (36,364)
		‐ ‐
		‐ 36,709 ‐ ‐ ‐ ‐ ‐ (36,709)
		‐ ‐
		23,220 25,800

As at 31 December 2011, the Company was under administration and the plant and equipment were not recoverable at the previous carrying amounts. Impairment charges of $898,079 were raised in 2011 to record these assets at the recoverable amounts.

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DGI HOLDINGS LIMITED

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS 31 DECEMBER 2012

5. INTANGIBLE ASSETS

Licences and franchises Opening balance Additions Accumulated amortisation Impairment charges Net carrying amount Intellectual property Opening balance Additions Accumulated amortisation Impairment charges Net carrying amount	31 December 2012 31 December 2011 $ $ ‐ 50,000 ‐ ‐ ‐ ‐ ‐ (50,000)
	‐ ‐
	24,200 3,406,606 13,621 ‐ (3,782) ‐ ‐ (3,382,406)
	34,039 24,200

As at 31 December 2011, the Company was under administration and the intangible assets were not recoverable at the previous carrying amounts. Impairment charges of $3,382,406 were raised during 2011 to record these assets at the recoverable amounts.

6. BORROWINGS Current Other financial liabilities Total current borrowings Non Current Borrowings and loans Total current borrowings	31 December 2012 31 December 2011 $ $ 15,000 1,606,582
	15,000 1,606,582
	‐ 399,625
	‐ 399,625

Under the terms of a Deed of Company Arrangement entered into by the Company on 31 May 2012, the Company was released of liabilities pre settlement of the Deed of Company Arrangement on 4 September 2012.

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DGI HOLDINGS LIMITED

NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS 31 DECEMBER 2012

7. CONTRIBUTED EQUITY

Number of Shares Summary of Movements: Issue Price 68,790,993 Opening balance 1 July 2012 (34,395,453) Consolidation of capital on 1:2 basis ‐ 120,000,000 Share placement on 10 December 2012 0.001 170,000,000 Share placement on 10 December 2012 0.01 ‐ Costs of capital raising ‐ 324,395,540 Closing balance at 31 December 2012 66,134,340 Opening balance 1 July 2011 714,540 Share issue 8 July 2011 0.04635 1,782,623 Share issue 24 August 2011 0.0343 159,490 Administration Adjustments 31 December 2011 ‐ 68,790,993 Closing balance at 31 December 2011	$ 24,311,311 ‐ 120,000 1,700,000 (188,037)
	25,943,274
	24,584,059 33,119 61,144 (367,011)
	24,311,311

8. SEGMENT INFORMATION

The Company operates in one business and one geographical segment, being research, development and marketing of innovative miniature projection technologies and products in Australia.

9. CONTINGENT LIABILITIES

In the opinion of the directors there are no contingent assets or liabilities as at 31 December 2012.

10. RELATED PARTY TRANSACTIONS

Mr Roger Steinepreis, Director, is a director and shareholder of Steinepreis Paganin. During the period an amount of $135,143 was paid to this business for legal advice at normal commercial rates.

Mr Roger Steinepreis, Director, also holds an interest in the Blueknight Syndicate. During the period, a loan amount of $575,000 was made to Company by the Blueknight Syndicate which was paid to the Creditors Trust pursuant to the Deed of Company Arrangement (refer to Review of Operations). As at 31 December 2012, there was a balance of $15,000 to be repaid to the Blueknight Syndicate.

11. EVENTS OCCURING AFTER REPORTING DATE

No other matter or circumstance has arisen since 31 December 2012 that has significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company, in subsequent financial years.

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DGI HOLDINGS LIMITED DIRECTORS’ DECLARATION

In accor d ance with a resolution o f the Board of Director s , I state tha t :

In the o p inion of th e Directors:

• (a) t h e financial statements and notes of t he Company are in acc o rdance wit h the Corpor a tions Act 2 0 01, includi n g:

• (i ) giving a true and fair view of the C ompany’s f inancial pos i tion at 31 D e cember 2012 and of it s perform a nce for the h alf‐year en d ed on that date; and

• (ii) complying with Acco u nting Stan d ard AASB 1 3 4 Interim Fi n ancial Rep o rting, the C o rporations Regulati o ns 2001 an d other man d atory repo r ting require m ents; and

• (b) t h ere are rea s onable grounds to belie v e that the C ompany will be able to p ay its debt s as and wh e n t h ey become d ue and payable.

On beh a lf of the Bo a rd

Roger S t einepreis Chairman Perth, W estern Australia 28 Febr u ary 2013

1 5

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF DGI HOLDINGS LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of DGI Holdings Limited, which comprises the statement of financial position as at 31 December 2012, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the disclosing entity are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the disclosing entity’s financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of DGI Holdings Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of DGI Holdings Limited, would be in the same terms if given to the directors as at the time of this auditor’s review report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

16

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Basis for Qualified Conclusion

Attention is drawn to the comparative figures included in the statement of profit or loss and other comprehensive income. As a consequence of the inability to access documents from previous advisers, employees, and staff, the directors were unable to obtain the company’s records for the prior period to 31 December 2011. Due to these limitations we were unable to undertake sufficient appropriate procedures to form a conclusion on the statement of comprehensive income for the half year ended 31 December 2011. As a result, we do not give any assurance about the comparative figures included in the statement of profit or loss and other comprehensive income and associated notes.

Attention is drawn to the comparative figures included in the statement of financial position for liabilities totalling $5,966,514. As a consequence of the company being placed into administration in the previous financial year we were unable to obtain adequate assurance that liabilities totalling $5,966,514 in the statement of financial position as at 30 June 2012 had been completely recorded. As a result, we do not give any assurance to the amount of liabilities totalling $5,966,514 recorded as a comparative figure included in the statement of financial position nor are we able to determine the effect that any adjustments, if any, to these amounts would have on the statement of profit or loss and other comprehensive income, the statement of changes in equity and associated notes for the half year ended 31 December 2012.

Qualified Conclusion

Except for the effect, if any, on the comparatives for the preceding corresponding half-year and the previous financial year end that may result from the qualification in the preceding paragraph, based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of DGI Holdings Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the disclosing entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

BDO Audit (WA) Pty Ltd

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Peter Toll Director

Perth, Western Australia Dated this 28[th] day of February 2013

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