RESIMAC GROUP LTD — Annual Report 2006

Sep 12, 2006

Appendix 4E

Preliminary final report

Introduced 30/6/2002.

Name of entity
Homeloans Limited
ABN or equivalent companyHalf yearlyPreliminaryfinal $(iick)$reference$(\textit{tick})$				Half year/financial year ended ('current period')
55 095 034 003	30 June 2006
Results for announcement to the marketExtracts from this report for announcement to the market (see note 1).SA'000
Revenues from ordinary activities $(\text{item } 1.1)$	up	4.5%	Т0	$74,260
Profit (loss) from ordinary activities after tax attributable tomembers (item 1.22)	[up]	$4.2%$	Т0	$2,597
Profit (loss) from extraordinary items after tax attributableto members ( item $2.5(d)$ )	gain(loss) of	N/A		Nil
Net profit (loss) for the period attributable to members(item 1.11)	[up]	$4.2%$	T0	$2,597
Dividends (distributions)	Amount per security			Franked amount persecurity
Final dividend (Preliminary final report only - item 15.4)Interim dividend (Half yearly report only - item 15.6)	$2.5\epsilon$2.5¢			Nil¢Nile
Previous corresponding period (Preliminary final report -item 15.5; half yearly report - item 15.7)	1.5c			Nil¢
*Record date for determining entitlements to thedividend,(in the case of a trust, distribution) (see item $15.2$ )	6 October 2006
Brief explanation of any of the figures reported above (see Note 1) and short details of any bonus or cashissue or other item(s) of importance not previously released to the market:
Please refer to results announcement attached to this document.

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

Condensed Income Statement

		Current period -$30/6/06 -$$A'000	Previous correspondingperiod30/6/05-$A'000
$\mathbf{L}$	Revenues from ordinary activities (see items 1.23$-1.25$	74,260	71,058
1.2	Expenses from ordinary activities (see items 1.26& 1.27)	33,176	33,684
1.3	Borrowing costs	37,457	33,686
1.4	Share of net profits (losses) of associates and jointventure entities (see item 16.7)
1.5	Profit (loss) from ordinary activities before tax	3,627	3,688
1.6	Income tax on ordinary activities (see note 4)	(1,030)	(1,196)
		2,597	2,492
1.7	Profit (loss) from ordinary activities after tax
1.8	Profit (loss) from extraordinary items after tax(see item $2.5$ )
		2,597	2,492
1.9	Net profit (loss)
1.10	Net profit (loss) attributable to outside $+$ equityinterests
1.11	Net profit (loss) for the period attributable tomembers	2,597	2,492
	Non-owner transaction changes in equity
1.12	Increase (decrease) in revaluation reserves
1.13	Net exchange differences recognised in equity
1.14	Other revenue, expense and initial adjustments
1.15	recognised directly in equity (attach details)adjustments from UIGInitialtransitionalprovisions	131
1.16	Total transactions and adjustments recogniseddirectly in equity (items 1.12 to 1.15)	131
1.17	Total changes in equity not resulting fromtransactions with owners as owners	2,728	2,492

Earnings per security (EPS)	Current period30/6/06	Previous correspondingPeriod-30/6/05
Basic EPS1.18	$5.16$ cents	4.94 cents
Diluted EPS1 19	$4.03$ cents	$3.70$ cents

Notes to the Condensed Income Statement Profit (loss) from ordinary activities attributable to members

		Current period-$30/6/06 -$$A'000	Previouscorresponding period -$30/6/05 -$$A'000
1.20	Profit (loss) from ordinary activities after tax(item 1.7)	2,597	2,492
1.21	Less (plus) outside $+$ equity interests
1.22	Profit (loss) from ordinary activities aftertax, attributable to members	2,597	2,492

Revenue and expenses from ordinary activities

(see note $15$ )

			Previous
		Current period -	corresponding period -
		$30/6/06 -$	$30/6/05 -$
		SA'000	$A'000
1.23	Revenue from sales or services	29,139	32,180
	(Refer Attachment A)
1.24	Interest revenue	43,671	38,523
1.25	Other relevant revenue	1,450	355.
1.26	Details of relevant expenses(Refer Attachment A)	70,633	67,370
1.27	Depreciation and amortisation excludingamortisation of intangibles (see item 2.3)	458	1,100
	Capitalised outlays
1.28	Interest costs capitalised in asset values
1.29	Outlays capitalised in intangibles (unlessarising from an $^+$ acquisition of a business)

Consolidated retained profits

			Previous corresponding
		Current period -	period-
		$30/6/06 -$	$30/6/05 -$
		$A'000	SA'000
1.30.	Retained profits (accumulated losses) at thebeginning of the financial period	(17,368)	(19,355)
1.31	Net profit (loss) attributable to members (itemLH)	2,597	2,492
1.32.	Net transfers from (to) reserves (details ifmaterial)
1.33	Opening balance adjustment - AASB 132 &AASB 139	131
1.34	Dividends and other equity distributions paidor payable	(2,014)	(505)
1.35	Retained profits (accumulated losses) at endof financial period	(16, 654)	(17,368)

Intangible and extraordinary items

		Consolidated - current period
		Before tax	Related tax	Related	Amount (after
		$A'000$\left( a\right)$	$A'000(b)	outside$\pm$ equityinterests$A'000(c)	$\tan$ )attributable tomembers$A'000(d)
2.1	Amortisation of goodwill	Nil	Nil	Nil	Nil
$2.2^{\circ}$	Amortisation of otherintangibles
2.3	Total amortisation ofintangibles	Ni1	Nil	Nil	Nil
2.4	Extraordinaryitems(details)	N/A
2.5	Total extraordinary items	N/A

Comparison of half year profits (Preliminary final report only)

• $3.1$ Consolidated profit (loss) from ordinary activities after tax attributable to members reported for the Ist half year (item 1.22 in the half yearly report)
• $3.2$ Consolidated profit (loss) from ordinary activities after tax attributable to members for the 2nd half year

Current year-30/6/06$A'000	Previous year -30/6/05$A'000
1,272	1,041
1,325	1,451

Condensed Balance Sheet		At end of currentperiod 30/6/06	At end of previousperiod 30/6/05
		$A'000	$A'000
	Assets
4.1	Cash	25,574	16,946
4.2/4.8	Receivables	11,669	10,860
4.3	Investments
4.4/4.11	Inventories
4.5/4.16	Tax assets
4.6/4.17	Loans and advances to customers	686,854	496,855
	Deferred Expenses	19,514	22,149
4.9	Investments (equity accounted)
4.10	Other investments
4.12	Exploration and evaluation expense
4.13	Development properties
4.14	Plant and equipment (net)	1,672	1,957
4.15	Goodwill	15,997	15,997
		761,280	564,764
4.19	Total assets
	Liabilities
	4.20/4.26 Payables	25,610	6,464
	4.21/4.27 Interest bearing liabilities	691,150	516,136
	4.22/4.28 Tax liabilities	5,944	4,797
	4.23/4.29 Provisions exc. tax liabilities	680	573
	4.24/4.30 Reset Preference Shares	4,998
	Lease incentives	560	665
4.32	Total liabilities	728,942	528,635
4.33	Net assets	32,338	36,129
	Equity
4.34	Capital/contributed equity	48,624	53,395
4.35	Reserves	367	102
4.36	Retained profits (accumulated losses)	(16, 653)	(17,368)
4.37	Equity attributable to members of the	32,338	36,129
	parent entity
4.38	Outside $\dot{\tau}$ equity interests in controlled entities
		32,338	36,129
4.39	Total equity
4.40	Preference capital included as part of 4.37		4,771

Notes to the condensed consolidated statement of financial position

Exploration and evaluation expenditure capitalised

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

		Current period	Previouscorresponding period
		30/6/06	$-30/6/05-$
		$A'000	$A'000
5.1	Opening balance
5.2	Expenditure incurred during current period
5.3	Expenditure written off during current period
5.4	Acquisitions, disposals, revaluationincrements, etc.
5.5	Expenditure transferred to DevelopmentProperties
5.6	Closing balance as shown in theconsolidated balance sheet (item 4.12)

Development properties

(To be completed only by entities with mining interests if amounts are material)

consolidated balance sheet (item 4.13)

			Previouscorresponding
		Current period -	$period -$
		30/6/06	30/6/05
		$A'000	$A'000
6.1	Opening balance
6.2	Expenditure incurred during current period
6.3	Expenditure transferred from exploration andevaluation
6.4	Expenditure written off during current period
6.5	Acquisitions, disposals, revaluationincrements, etc.
6.6	Expenditure transferred to mine properties
6.7	Closing balance as shown in the

Г

Condensed Cash Flow Statement

			Previous
		Current period	corresponding period
		30/6/06	$-30/6/05 -$
		$A'000	$A'000
	Cash flows related to operating activities
7.1	Receipts from customers	35,531	39,429
7.2	Payments to suppliers and employees	(38, 183)	(42, 945)
7.3	Dividends received from associates
7.4	Other dividends received
7.5	Interest and other items of similar naturereceived	44,076	38,260
7.6	Interest and other costs of finance paid	(33,537)	(32,715)
7.7	Income taxes paid	(116)	(9)
7.8	Other (provide details if material)		22.
7.9	Net operating cash flows	7,771	2,042
	Cash flows related to investing activities
7.10	Payment for purchases of property, plant andequipment	(199)	(166)
7.11	Proceeds from sale of property, plant andequipment
7.12	Payment for purchases of equity investments
7.13	Proceeds from sale of equity investments
7.14	Loans to other entities	(165, 835)
7.15	Loans repaid by other entities		65,577
7.16	Other - RMT set up costs	(716)	(154)
	- Acquisition of business		(262)
	- Stamp Duty Refund	861
7.17	Net investing cash flows	(165, 889)	64,995
	Cash flows related to financing activities
7.18	Proceeds from issues of + securities (shares,options, etc.)
7.19	Proceeds from borrowings	331,443	130,739
7.20	Repayment of borrowings	(162, 666)	(208, 687)
7.21	Dividends paid	(2,014)	(504)
7.22	Other (provide details if material)	(17)
7.23	Net financing cash flows	166,746	(78, 452)
7.24		8,628	(11, 415)
7.25	Net increase (decrease) in cash heldCash at beginning of period	16,946
	(see Reconciliation of cash)		28,362
7.26	Exchange rate adjustments to item 7.25.
7.27	Cash at end of period	25,574	16,946
	(see Reconciliation of cash)

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. $\int f \sin m$ amount is quantified, show comparative amount.)

Reconciliation of cash

	Reconciliation of cash at the end of the period (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.	Current period30/6/06$A'000	Previouscorresponding$period -$30/6/05$A'000
8.18.2	Cash on hand and at bankDeposits at call	1,50169	1,41454
8.3	Bank overdraft
8.4	Other (provide details) - RMT TrustCollection accounts (Restricted to each RMTTrust only, not available to other Homeloansgroup companies for operational purposes)	24,004	15,478
8.5	Total cash at end of period (item 7.27)	25,574	16,946

Other notes to the condensed financial statements

Ratios		Current period30/6/06	PreviouscorrespondingPeriod-30/6/05
9.1	Profit before tax / revenueConsolidated profit (loss) from ordinaryactivities before tax $(item I.5)$ as a percentageof revenue (item 1.1)	4.9%	$5.2%$
9.2	Profit after tax $\ell^+$ equity interestsConsolidated net profit (loss) from ordinaryactivities after tax attributable to members.( item 1.11 ) as a percentage of equity (similarlyattributable) at the end of the period (item4.37)	$8.0%$	6.9%

Earnings per security (EPS)

Details of basic and diluted EPS reported separately in accordance with paragraph 9 and $10.$ 18 of AASB 1027: Earnings Per Share are as follows.

Net Profit after tax $2.596.827 Weighted average number of ordinary shares 50.354.063 Ordinary Shares Diluted weighted average number of ordinary shares 64,395,653 Ordinary Shares Basic earnings per share 5.16 cents per share (cumulative dividends paid on Reset Preference shares during the 12 months ended 30 June 2006 have been treated as interest expense and included in the calculation of Net Profit After Tax in calculating the Basic earnings per share) Diluted earnings per share 4.03 cents per share (Some share options were in the money during the year ended 30 June 2006, and hence have a dilutive effect and have been taken into account in calculating Diluted Earnings Per Share, refer 18.7 and 18.8. Reset Preference shares can be converted to ordinary shares and their dilutive effect has been taken into account)

NTA backing(see note 7)		Current period30/6/06	Previous correspondingPeriod30/6/05
$\mathsf{H}$	Net tangible asset backing per + ordinary	$32.45$ cents per	$30.50$ cents per
	security	share	share

Discontinuing Operations

(Entities must report a description of any significant activities or events relating to discontinuing operations in accordance with paragraph 7.5 (g) of $\angle AAB$ 1029: Interim Financial Reporting, or, the details of discontinuing operations they have disclosed in their accounts in accordance with AASB 1042: Discontinuing Operations (see note 17).)

$12.1$ Discontinuing Operations

Control gained over entities having material effect

• 13.1 Name of entity (or group of entities)
• 13.2 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was *acquired
• 13.3 Date from which such profit has been calculated
• 13.4 Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period

$
$

Loss of control of entities having material effect

• $14.1$ Name of entity (or group of entities)
• 14.2 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the current period to the date of loss of control
• 14.3 Date to which the profit (loss) in item 14.2 has been calculated
• 14.4 Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period
• $14.5$ Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from sale of interest leading to loss of control

Dividends (in the case of a trust, distributions)

• 15.1 Date the dividend (distribution) is payable
• $15.2$ +Record date to determine entitlements to the dividend (distribution) (ie, on the basis of proper instruments of transfer received by 5.00 pm if $\dot{\tau}$ securities are not $\dot{\tau}$ 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)
• 15.3 If it is a final dividend, has it been declared? (Preliminary final report only)

Ŝ
${\mathbb S}$
$\mathbb S$

13 October 2006

6 October 2006

Yes

Amount per security

		Amount persecurity	Frankedamount persecurity at $%$tax (see note)4)	Amount persecurity offoreign sourcedividend
15.4	(Preliminary final report only)Final dividend:Current year	2.56	Nile	Nile
15.5	Previous year	$1.5\phi$	Nil¢	$Nil\ell$
15.6	(Half yearly and preliminary final reports)Interim dividend:Current year – ordinaryCurrent year $-$ reset preference shares	$2.5\epsilon$50¢	Nile	Nile
15.7	Special Dividend:Previous yearInterim dividend:Previous year	Nil¢Nile	NileNile	$Nil\ell$$Nil\epsilon$

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

(Preliminary final report only)

15.8 +Ordinary securities

15.9 Preference +securities (Note: From 1 July 2005 Dividends paid on Reset Preference Shares are treated as Interest Expense as the underlying securities are classified as debt.)

Current year	Previous year
$5.0\phi$	$1.5\phi$
$1.00	$1.00

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

		Current period30/6/06SA'000	Previous correspondingPeriod $-$$30/6/05 -$$A'000
15.10	$+$ Ordinary securities (each class separately)	1,259	Nil
15.11	Preference + securities (each classseparately) (Note: From 1 July 2005Dividends paid on Reset Preference Sharesare treated as Interest Expense as theunderlying securities are classified as debt.)	252	252
15.12	Other equity instruments (each classseparately)	N/A	N/A
15.13	Total	1,511	252

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

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

$N/A$

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

entities':	Group's share of associates' and joint venture	Current period30/6/06$A'000	Previouscorresponding period$-30/6/05$$A'000
16.1	Profit (loss) from ordinary activities before tax
16.2	Income tax on ordinary activities
16.3	Profit (loss) from ordinary activities aftertax
16.4	Extraordinary items net of tax
16.5	Net profit (loss)
16.6	Adjustments
16.7	Share of net profit (loss) of associates andjoint venture entities

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 acquiredor disposed of during either the current or previous corresponding period, indicate date of acquisition $dd/mm/yy$ ") or disposal ("to $dd/mm/yy$ ").)

Name of entity		Percentage of ownershipinterest held at end of period ordate of disposal		Contribution to net profit (loss) (item7.9)
17.1	Equity accountedassociates andjoint ventureentities	Currentperiod	Previouscorrespondingperiod	Current period30/6/06$A'000	Previouscorrespondingperiod-30/6/05$A'000
17.2	Total
17.3	Other materialinterests
17.4	Total

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	Issueprice persecurity(see note(4)(cents)	Amountpaid up persecurity(see note14)(cents)
18.1	Preference + securitiesReset preference shares	503,528	503,528	$10.00	$10.00
18.2	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks,redemptions
18.3	+ Ordinary securities	50,354,063	50,354,063	$1.00	$1.00
18.4	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks
18.5	+ Convertible debt securities(description and conversionfactor )
18.6	Changes during current period(a) Increases through issues(b) Decreases throughsecurities matured, converted
18.7	Options (description andconversion factor)			Exerciseprice	Expirydate(fany)
	Employee Options:Conversion Factor 1	750,000260,000520,000		$0.35$0.36$0.46	14.12.0931.8.0931.8.10
	Other Exec Options:Conversion Factor 1	500,000		$0.994	1.4.07
	Exec Directors Options:Conversion Factor 1	200,000615,000375,000500,000760,000500,000200,000200,000		$0.35$0.36$0.40$0.45$0.46$0.50$0.52$0.994	14.12.0931.8.091.12.091.12.0931.8.101.12.0921.1.081.4.07
	Mortgage Asset Services PtyLtd Options:Conversion Factor 1	750,0001,000,000250,000250,000250,000		$0.40$0.50$0.36$0.46$0.51	7.12.097.12.097.12.097.12.097.12.09

18.8	Issued during current periodEmployee Options:Conversion Factor 1Exec Directors Options:Conversion Factor 1Mortgage Asset Services PtyLtd Options:Conversion Factor 1	260,000520,000615,000760,000250,000250,000250,000	$0.36$0.46$0.36$0.46$0.36$0.46$0.51	31.8.0931.8.1031.8.0931.8.107.12.097.12.097.12.09
18.9	Exercised during currentperiod
18.10	Expired during current periodNon-Executive Directors'Options:Conversion Factor 1Other Exec Options:Conversion Factor 1Employee Options:Conversion Factor 1Mortgage Asset Services PtyLtd Options:Conversion Factor 1	400,000400,000400,000500,000825,0001,000,000	$1.00$1.15$1.30$1.01$1.01$0.45	9.3.069.3.069.3.0627.3.0627.3.0631.3.06
18.11	Debentures (description)
18.12	Changes during current period(a) Increases through issues
	(b) Decreases throughsecurities matured, converted
18.13	Unsecured notes(description)
18.14	Changes during current period
	(a) Increases through issues
	(b) Decreases throughsecurities matured, converted

Comments by directors

(Comments on the following matters are required by ASX or, in relation to the half yearly report, by AASB 1029: Interim Financial Reporting. The comments do not take the place of the directors' report and statement (as required by the Corporations Act) and may be incorporated into the directors' report and statement. For both half yearly and preliminary final reports, if there are no comments in a section, state NIL. If there is insufficient space to comment, attach notes to this report.)

Basis of financial report preparation

• $19.1$ If this report is a half yearly report, it is a general purpose financial report prepared in accordance with the listing rules and AASB 1029: Interim Financial Reporting. It should be read in conjunction with the last *annual report and any announcements to the market made by the entity during the period. The financial statements in this report are "condensed financial statements" as defined in AASB 1029: Interim Financial Reporting. This report does not include all the notes of the type normally included in an annual financial report. [Delete if preliminary final report.1
• 19.2 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.
• A description of each event since the end of the current period which has had a material effect 19.3 and which is not already reported elsewhere in this Appendix or in attachments, with financial effect quantified (if possible).

Refer Attachment B: "Impact of Adopting Australian equivalents to IFRS"

$19.4$ Franking credits available and prospects for paying fully or partly franked dividends for at least the next year.

Estimated franking credits of $109,268 available. With tax losses in excess of $10m it is unlikely that fully franked dividends will be payable for at least the next year. The board has decided to pay the current dividend as unfranked as current franking credits are less than 10% of proposed final dividend.

$19.5$ 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).

Refer Attachment B: "Impact of Adopting Australian equivalents to IFRS"

19.6 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.

Refer Attachment B: "Impact of Adopting Australian equivalents to IFRS"

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

Additional disclosure for trusts

• 20.1 Number of units held by the management company or responsible entity or their related parties.
• 20.2 A statement of the fees and commissions payable to the management company or responsible entity.

Identify:

• initial service charges $\blacksquare$
• management fees
• other fees

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:

Place	The Theatrette, 168 St Georges Terrace,Perth WA
Date	23 November 2006
Time	10.00am WST
Approximate date the "annual report will beavailable	6 October 2006

Compliance statement

This report has been prepared in accordance with AASB Standards, other AASB $\mathbf{l}$ authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX (see note 12).

Identify other standards used

This report is the first that Homeloans Limited has prepared in accordance with all Australian equivalents to International Financial Reporting Standards (AIFRS). Financial Statements of Homeloans Limited until 30 June 2005 had been prepared in accordance with previous Australian Generally Accepted Accounting Principles (AGAAP). AGAAP differs in certain respects from AIFRS. When preparing this financial report, management has amended certain accounting, valuation and consolidation methods applied in the previous AGAAP financial statements to comply with AIFRS. The comparative figures in respect of 2005 were restated to reflect these adjustments. Reconciliations and descriptions of the effect of transition from previous AGAAP to AIFRS on the Group's equity and its net income are given at Attachment B of this report.

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

• $\mathcal{S}$ If the audit report or review by the auditor is not attached, details of any qualifications are attached/will follow immediately they are available* (delete one). (Half yearly report only - the audit report or review by the auditor must be attached to this report if this report is to satisfy the requirements of the Corporations Act.)
• 6 The entity has a formally constituted audit committee.

Sign here:

Date: Non-Executive Chairman/Director 13 September 2006

Print name: Timothy Alastair Holmes

Notes

• $\mathbf{L}$ For announcement to the market The percentage changes referred to in this section are the percentage changes calculated by comparing the current period's figures with those for the previous corresponding period. Do not show percentage changes if the change is from profit to loss or loss to profit, but still show whether the change was up or down. If changes in accounting policies or procedures have had a material effect on reported figures, do not show either directional or percentage changes in profits. Explain the reason for the omissions in the note at the end of the announcement section. Entities are encouraged to attach notes or fuller explanations of any significant changes to any of the items in page 1. The area at the end of the announcement section can be used to provide a cross reference to any such attachment.
• $\overline{2}$ . True and fair view If this report does not give a true and fair view of a matter (for example, because compliance with an Accounting Standard is required) the entity must attach a note providing additional information and explanations to give a true and fair view.

$31$ Condensed consolidated statement of financial performance

• The definition of "revenue" and an explanation of "ordinary Item 1.1 activities" are set out in $AASB$ 1004: Revenue, and $AASB$ 1018: Statement of Financial Performance.
• Item $1.6$ This item refers to the total tax attributable to the amount shown in item 1.5. Tax includes income tax and capital gains tax (if any) but excludes taxes treated as expenses from ordinary activities (eg, fringe benefits tax).
• 1. Income tax If the amount provided for income tax in this report differs (or would differ but for compensatory items) by more than 15% from the amount of income tax prima facie payable on the profit before tax, the entity must explain in a note the major items responsible for the difference and their amounts. The rate of tax applicable to the franking amount per dividend should be inserted in the heading for the column "Franked amount per security at $%$ for items 15.4 to 15.7.

5. Condensed consolidated statement of financial position

Format The format of the consolidated statement of financial position should be followed as closely as possible. However, additional items may be added if greater clarity of exposition will be achieved, provided the disclosure still meets the requirements of AASB 1029: Interim Financial Reporting, and AASB 1040: Statement of Financial Position. Also, banking institutions, trusts and financial institutions may substitute a clear liquidity ranking for the Current/Non-Current classification.

Basis of revaluation If there has been a material revaluation of non-current assets (including investments) since the last +annual report, the entity must describe the basis of revaluation adopted. The description must meet the requirements of AASB 1010: Accounting for the Revaluation of Non-Current Assets. If the entity has adopted a procedure of regular revaluation, the basis for which has been disclosed and has not changed, no additional disclosure is required.

Condensed consolidated statement of cash flows For definitions of "cash" and 6. other terms used in this report see AASB 1026: Statement of Cash Flows. Entities should follow the form as closely as possible, but variations are permitted if the directors (in the case of a trust, the management company) believe that this presentation is inappropriate. However, the presentation adopted must meet the

requirements of AASB 1026. +Mining exploration entities may use the form of cash flow statement in Appendix 5B.

• $7.$ Net tangible asset backing Net tangible assets are determined by deducting from total tangible assets all claims on those assets ranking ahead of the +ordinary securities (ie, all liabilities, preference shares, outside +equity interests etc). +Mining entities are not required to state a net tangible asset backing per $+$ ordinary security.
• 1. Gain and loss of control over entities The gain or loss must be disclosed if it has a material effect on the "accounts. Details must include the contribution for each gain or loss that increased or decreased the entity's consolidated profit (loss) from ordinary activities and extraordinary items after tax by more than 5% compared to the previous corresponding period.
• $91$ Rounding of figures This report anticipates that the information required is given to the nearest $1,000. If an entity reports exact figures, the $$A$ '000 headings must be amended. If an entity qualifies under ASIC Class Order 98/0100 dated 10 July 1998, it may report to the nearest million dollars, or to the nearest $100,000, and the $A'000 headings must be amended.
• 1. Comparative figures Comparative figures are to be presented in accordance with AASB 1018 or AASB 1029 Interim Financial Reporting as appropriate and are the unadjusted figures from the latest annual or half year report as appropriate. However, if an adjustment has been made in accordance with an accounting standard or other reason or if there is a lack of comparability, a note explaining the position should be attached. For the statement of financial performance, AASB 1029 Interim Financial Reporting requires information on a year to date basis in addition to the current interim period. Normally an Appendix 4B to which AASB 1029 Interim Financial Reporting applies would be for the half year and consequently the information in the current period is also the year to date. If an Appendix 4B Half yearly version is produced for an additional interim period (eg because of a change of reporting period), the entity must provide the year to date information and comparatives required by AASB 1029 Interim Financial Reporting. This should be in the form of a multi-column version of the consolidated statement of financial performance as an attachment to the additional Appendix 4B.
• $11.$ Additional information An entity may disclose additional information about any matter, and must do so if the information is material to an understanding of the reports. The information may be an expansion of the material contained in this report, or contained in a note attached to the report. The requirement under the listing rules for an entity to complete this report does not prevent the entity issuing reports more frequently. Additional material lodged with the +ASIC under the Corporations Act must also be given to ASX. For example, a director's report and declaration, if lodged with the $^{+}$ ASIC, must be given to ASX.
• $12.$ Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if one exists) must be complied with.
• 1. Corporations Act financial statements This report may be able to be used by an entity required to comply with the Corporations Act as part of its half-year financial statements if prepared in accordance with Australian Accounting Standards.
• $14.$ Issued and quoted securities The issue price and amount paid up is not required in items 18.1 and 18.3 for fully paid securities.

15 Details of expenses AASB 1018 requires disclosure of expenses from ordinary activities according to either their nature or function. For foreign entities, there are similar requirements in other accounting standards accepted by ASX. AASB ED 105 clarifies that the disclosures required by $AASB$ 1018 must be either all according to nature or all according to function. Entities must disclose details of expenses using the layout (by nature or function) employed in their $\pm$ accounts.

The information in lines $1.23$ to $1.27$ may be provided in an attachment to Appendix 4B.

Relevant Items AASB 1018 requires the separate disclosure of specific revenues and expenses which are not extraordinary but which are of a size, nature or incidence that disclosure is relevant in explaining the financial performance of the reporting entity. The term "relevance" is defined in AASB 1018. There is an equivalent requirement in AASB 1029: Interim Financial Reporting. For foreign entities, there are similar requirements in other accounting standards accepted by ASX.

16 Dollars If reporting is not in A$, all references to $A must be changed to the reporting currency. If reporting is not in thousands of dollars, all references to "000" must be changed to the reporting value.

17. Discontinuing operations

Half yearly report

All entities must provide the information required in paragraph 12 for half years beginning on or after 1 July 2001.

Preliminary final report

Entities must either provide a description of any significant activities or events relating to discontinuing operations equivalent to that required by paragraph 7.5 (g) of AASB 1029: Interim Financial Reporting, or, the details of discontinuing operations they are required to disclose in their "accounts in accordance with AASB 1042" Discontinuing Operations.

In any case the information may be provided as an attachment to this Appendix 4B.

18. Format

This form is a Word document but an entity can re-format the document into Excel or similar applications for submission to the Companies Announcements Office in ASX.

		Current period-30/6/06$A'000	Previouscorresponding period30/6/05$A'000
1.23	Revenue from sales or services
	Mortgage Origination Income	12,654	16,277
	Incr. in Unearned Origination Income	(271)	(612)
	Loan Management Fees	16,756	16,516
	Total Revenue from sales or service	29,139	32,180
1.26	Details of relevant expenses
	Commission & Other Direct Expenses	16,575	14,947
	Incr. in Prepaid Direct Expenses	(2,281)	(2,185)
	Salaries and Employee Benefits	10,343	11,632
	Advertising Costs	778	950
	Consultancy/Corporate Affairs	508	992
	Insurance	359	382
	Interest Expense	36,321	32,843
	Interest on Reset Preference Shares (debt)	504
	Occupancy Costs	1,537	1,771
	Telephone Costs	550	712
	Printing & Stationery Costs	222	263
	Portfolio Management Fees	1,075	1,146
	RMT Administration Costs	1,213	622
	Other Expenses from Ordinary Activities.	2,928	3,295
	Total Expenses	70,632	67,370

Attachment B: Impact of Adopting Australian equivalents to IFRS

(a) Effect of AIFRS on the Consolidated Financial Statements at the date of transition on 1 July 2004

(Note: The Homeloans group provides mortgage origination services and housing loans and is a financial institution to which AASB 130 "Disclosures in the Financial Statements of Banks and Similar Financial Institutions" applies. As such the Consolidated Balance Sheet presentation has changed from prior year reporting and lists Assets and Liabilities in order of liquidity without classifying components of either as Current or Non-Current.)

	Note*	Previous	Effect of
		AGAAPPosition	Transition toAIFRS	AIFRSAdjusted
		A$,000	A$,000	A$,000
ASSETS
Cash assets	1	623	27,736	28,359
Receivables	$\overline{2}$	12,793	(1,288)	11,505
Loans and advances to	$\mathbf{1}$		559,606	559,606
customers
Deferred Expenses	$\mathbf{1}$	32,052	(8,160)	23,892
Plant and equipment		2,809		2,809
Goodwill	3	15,716		15,716
TOTAL ASSETS		63,993	577,894	641,887
LIABILITIES
Payables	1	4,387	4,009	8,396
Interest-bearing	1	6,755	587,373	594,128
liabilities
Unearned revenue	1	10,220	(9,770)	450
Lease incentive		609		609
Deferred income tax		4,597	(980)	3,617
liabilities
Provisions		641		641
TOTAL LIABILITIES		27,209	580,632	607,841
NET ASSETS		36,784	(2,738)	34,046
EQUITY
Issued capital		53,395		53,395
Other reserves	4		6	6
Accumulated losses	$\star$ $\star$	(16, 611)	(2,744)	(19,355)
TOTAL EQUITY		36,784	(2,738)	34,046

* Refer notes at the end of this attachment.

** Any profit impact of the AIFRS changes as at 1 July 2004 was charged to the Accumulated losses account,

			(b) Effect of AIFRS on the Consolidated Financial Statements as at
30 June 2005

	Note*	Previous	Effect of
		AGAAP	Transition to	AIFRS
		Position	AIFRS	Adjusted
		A$,000	A$,000	A$,000
ASSETS
Cash assets	1	1,468	15,478	16,946
Receivables	$\overline{2}$	10,193	667	10,860
Loans and advances to	$\mathbf{1}$		496,855	496,855
customers
Deferred Expenses	$\mathbf{1}$	34,762	(12, 613)	22,149
Plant and equipment		1,957		1,957
Goodwill	3	15,072	925	15,997
TOTAL ASSETS		63,452	501,312	564,764
LIABILITIES
Payables	1	4,123	2,341	6,464
Interest-bearing	$\mathbf{1}$	4,691	511,445	516,136
liabilities
Unearned revenue	$\mathbf{1}$	10,993	(10, 993)
Lease incentive		665		665
Deferred income tax	5	5,611	(814)	4,797
liabilities
Provisions		573		573
TOTAL LIABILITIES		26,656	501,979	528,635
NET ASSETS		36,796	(667)	36,129
EQUITY
Issued capital		53,395		53,395
Other reserves	$\overline{4}$		102	102
Accumulated losses		(16, 599)	(769)	(17, 368)
TOTAL EQUITY		36,796	(667)	(36, 129)

* Refer notes at the end of this attachment

Reconciliation of profit reported under the previous Australian Generally $\left( \mathbf{c} \right)$ Accepted Accounting Principles (AGAAP) to profit under Australian equivalents to IFRS (AIFRS) for the year ending 30 June 2005.

	Consolidated30 June 2005Ъ
Net profit after income tax as reported under AustralianGAAP	516
Effects of transition to AIFRS on net profit:
Effect of consolidation of the Residential Mortgage Trust (1)	460
Write-back stamp duty claim write-off (2)	852
Write-back of goodwill amortisation (3)	925
Recognition of share-based payment expense (4)	(96)
Tax effect of the above adjustments $(5)$	(165)
Net profit after income tax measured under AIFRS	2.492

Notes

(1) AASB 127 - Consolidated and Separate Financial Statements requires reporting entities to prepare consolidated financial statements that include the results of all subsidiaries of the parent. The Residential Mortgage Trust ("RMT") has been classified as a Special Purpose Entity ("SPE") and has been consolidated as part of the Homeloans group. This has resulted in the recognition of various adjustments on recognition of the financial assets and liabilities of RMT.

(2) AASB 137 Provisions, Contingent Liabilities and Contingent Assets prohibits the recognition of a contingent asset unless it is virtually certain that an inflow of economic benefit will arise in respect of an asset in the future. In regards to the Stamp Duty claim carried as an asset at 30 June 2004 under the previous AGAAP. As the amount was not virtually certain, under AASB 137 it cannot be recognised and has been written off.

(3) Goodwill is not amortised under AASB 3 'Business Combinations', but was amortised under the previousAGAAP.

(4) Share-based payment costs are charged to the income statement under AASB 2 'Share-based Payment', but not under AGAAP.

(5) Tax impact of the AIFRS changes as well as recognition of changes under the new Tax Balance Sheet approach to calculating the group's tax expense.

Level 2, The Atsium Building 168 St Georges Terrace ست ۲۵۱۹ ۲۵۱۹Telephone: 08 9261 7000Facsimile: 08 9261 7079

Wednesday 13 September 2006

HOMELOANS LIMITED ASX CODE HOM

The Directors of Homeloans Limited are pleased to announce a final dividend of 2.5 cents per share on the fully paid ordinary shares of the Company as follows:-

Date of Payment: 13 October 2006

Record Date: 6 October 2006

The dividend will be unfranked.

The Company's Dividend Reinvestment Plan will not apply to this dividend.

Further information:

Tim Holmes Chairman 08 9261 7000 / 0419 384 775 Jarrod Smith Finance Director 02 8267 2000 / 0409 813 958

Customer Enquiries Telephone: 1300 78 78 74 Facsimile; 1300 78 78 73 New Loan Enquiries Telephone: 13 38 39 Postal Address PO Box 7216, Cloisters Square, Western Australia 6850 Website www.homeloans.com.au ABN 55 095 034 003

Level 2, The Atriam Building 168 St Georges Terrace Telephone: 08.9261.7000 acsimile: 08 9261 7079

Wednesday, 13 September 2006

News Release

Profit up 400% to $6.2 million

Result highlights Homeloans Ltd's continued turn around.

Financial highlights include:

(All figures are quoted on an AGAAP basis with AIFRS comparison)

• Net profit before tax up over 400% to $6.2 million (AIFRS down 2% to $\bullet$ $3.63 million)
• Basic earnings per share up from 0.02 cents to 7.03 cents (AIFRS 4.94 $\bullet$ . cents to 5.16 cents)
• Dividend for the half year 2.5 cents unfranked, bringing a total of 5.0 $\bullet$ cents for the year. Up 3.5 cents from 1.5 cents paid last year.
• Operating cash flow up 31% to $5.5 million from $4.2 million (AIFRS $2.0 million to $7.8 million)
• New loan approvals rose 15% to $1.24 billion $\bullet$

The Directors of non bank lender Homeloans Ltd (HOM) are pleased to announce a net profit before tax of $6.2 million. This year is the first full year in which results are reported under Australian International Financial Reporting Standards ("AIFRS"). On this basis the net profit before tax fell by just under 2% to $3.63 million, due to the re-classification of various items under the new accounting standards. The underlying performance is reflected in the AGAAP result.

Basic earnings per share rose from 0.02 cents to 7.03 cents per share.

The Directors have declared an unfranked dividend of 2.5 cents per ordinary share, bringing dividends for the full year to 5 cents per share. This is up 3.5 cents on the 1.5 cents paid last year.

Operating cash flow of $5.5 million is up 31% from $4.2 million last year. The AIFRS cash flow rose by $5.8 million from $2.0 million to $7.8 million.

New loan approvals increased 15% to $1.24 billion.

Under AIFRS the Residential Mortgage Trust ("RMT"), Homeloans Ltd's proprietary funding line, is brought onto Homeloans Ltd's balance sheet. This has the impact of dramatically increasing the assets and liabilities, revenue, expenses and operating cash flow of Homeloans Ltd. In essence the balance sheet is increase by the $711 million of loans in the trusts. The revenue is similarly increased by the interest revenue earned by the trusts.

Under AIFRS RMT is now accounted for under the effective interest rate model, AASB139. That is, income is now brought to account over the life of the loan rather than booked as an origination fee (upfront) and a management fee (ongoing). The increased penetration of the RMT programme in the same year as the introduction of AIFRS has had a negative impact on Homeloans Ltd's reported AIFRS result of approximately $3.9 million. This $3.9 million will now be brought to account in future accounting periods, resulting in a stronger recurring earnings stream.

From a net income point of view there are 5 major changes under AIFRS compared to AGAAP:

Swaps on fixed rate loans	$$0.07 \text{ m}$
Reset Preference Shares	($0.59 m)
Expensing of Employee Options	$($0.26 \text{ m})$
The Stamp Duty Refund	$$0.86 \text{ m}$
RMT	$($ $3.88 m)

The year saw a number of the initiatives introduced over the past eighteen months begin to gain momentum, such as;

• The increased penetration of the RMT as a significant funder;
• The increasing acceptance of our refined broker offering;
• The focus of our Western Australian retail offering; and,
• The improved operational efficiencies and cost controls. $\bullet$

The year ahead will see continued focus on our broker sales and the retail offering, especially in Western Australia, as well as continued focus on further operational efficiencies. The Company also sees opportunities in the consolidation of the sector.

The start to the year has continued as positively as the end of the June 06 year with volumes still growing. The Directors remain confident in the year ahead and for the Company to continue to grow profits and maintain a dividend at least in line with the 5 cents paid this year.

Further information: Tim Holmes, Chairman 08 9271 7000

Brian Jones, Managing Director 02 8267 2000

Jarrod Smith, Finance Director 02 8267 2000