SCHOOLBLAZER LIMITED — Interim / Quarterly Report 2003

May 27, 2003

Level 5, 34 Hunter Street Sydney NSW 2000 GPO Box 4406 Sydney NSW 2001

Phone: +612 9221 7155 Fax: +612 9233 2713 Email: hol@hol.com.au Web: www.hgl.com.au

28 May 2003

Companies Announcements Platform Australian Stock Exchange 20 Bridge Street SYDNEY NSW 2000

RE: Half Yearly Announcement

Please find attached HGL Limited's Chairman's address, Appendix 4B - Half Year announcement, Directors report, Directors declaration and independent auditors review report.

Yours sincerely HGL Limited

MP Mahoney SECRETARY

investing in businesses

Level 5, 34 Hunter Street Svdney NSW 2000 GPO Box 4406 Sydney NSW 2001

Phone: +612 9221 7155 Fax: +612 9233 2713 Email: hol@hol.com.au Web: www.hol.com.au

Half year result

HGL today announced a net profit after tax and minorities of $2.0 million for the half year to 31 March 2003. The earnings before interest and tax from continuing operating businesses are up 78% to $4.4 million from $2.5 million while sales have increased by 17% to $40 million. The profit before tax in the same period last year was $8.5 million higher. The comparative period included the sale of GMA and the revaluation of Hunter Hall. A revaluation deficit of $1.2 million before tax for Hunter Hall has been recognised in the results for this half year. A detailed comparison of the 2003 and 2002 half year results is contained in the financial commentary section of this report.

At the Annual General Meeting in January of this year I commented that HGL has somewhat irregular earnings due to the timing of investment transactions. Investment profits of $4.5 million are anticipated in the second half.

We are currently reviewing a number of potential opportunities and have made two acquisitions of operating businesses, both of which are summarised below:

• In December, HGL acquired 28% of MMC Asset Management, an Adelaide based boutique funds manager for $1.9million; and
• In April, HGL acquired 100% of Sydney Point-of-Sale (SPOS) for $7.0 million, with an additional $1.2 million $\bullet$ payable subject to performance targets. SPOS imports and distributes price ticketing, and shelf management systems, merchandising and promotional display products to retailers, brand manufacturers, shopfitters and advertising agencies.

MMC has increased funds under management to $172 million from $151 million in December 2002 and was a finalist in the Morningstar Emerging Fund Manager of the year awards.

Dividends

With franking credits now available, the Directors have declared a fully franked interim dividend of 4.2 cents per share. The company has sufficient franking credits to continue to fully frank the dividend for the foreseeable future.

Outlook

Including SPOS, HGL now generates recurring profit after tax and minorities of about $4 million per annum. This is before any contribution from investment transactions or revaluations. If the sale of our investments in Sabre and Lemarne proceed the disposals would contribute $4.5 million to the full year profit after tax.

HGL is striving to increase the amount invested in operating businesses to strengthen and enhance our ongoing profits and cash flows. We will continue to acquire easily understood businesses with an EBIT in excess of $2 million.

On the successful completion of the sale of Sabre and Lemarne HGL would receive $16 million. In addition we have $24 million of available bank borrowing facilities and $8 million of listed securities. With approximately $50 million to invest while still maintaining a prudent debt to equity ratio, the Directors believe this strategy will lead to a substantial increase in the value of HGL over the coming years.

Operating businesses

Earnings before interest and tax from continuing operating businesses were up 78% to $4.4 million from $2.5 million, sales increased 17% to $40 million. The improvement is the result of the continuing efforts over the past two years to ensure the operating businesses are well structured and focused.

HGL Limited ACN 009 657 961

investing in businesses

The IT division has seen substantial improvements, earnings increased by $1.7 million to $1.9 million, sales increased by 35% to $18 million.

Investments

Sabre Group Limited

Sabre has received a $2.15 cash offer for all its shares under a scheme of arrangement. If the scheme of arrangement is completed HGL will receive $9.9 million cash and recognise a profit after tax of $3 million. HGL owns 15% of Sabre and intends to vote in favour of the scheme.

Lemarne Corporation

In November 2002 HGL made a bid for Lemarne, the bid is scheduled to close on 27 June 2003. On 22 May 2003 a subsidiary of HGL entered into a buy back agreement with Lemarne for the shares it owns in Lemarne. Subject to a number of conditions HGL will recognise a profit after tax of $1.5 million and receive $6 million in cash.

Hunter Hall

HGL owns 6% of Hunter Hall International Limited (ASX code: HHL). Hunter Hall is a boutique international funds manager. This investment is marked to market and the price of $3.60 on 31 March 2003 is our book cost of $5.6 million. As the market price was $4.40 at 30 September 2002 a revaluation deficit of $1.2 million before tax has been recognised in the results for this half year.

Financial commentary

Summary of balance sheet and results

A summary of the profit for the six months to 31 March and net assets at 31 March is shown below:

	Net assets2003$'000	EBIT2003$'000	Net assets2002$'000	EBIT2002$'000
Continuing operating businessesGMA	27,6260	4,3800	28,3970	2,4621,842
Operating businesses	27,626	4,380	28,397	4,304
Non operatingUnallocated central costs	30,467	(286)(1, 135)	24,855	8,747(1, 317)
Net assets/EBITNet interest payable	58,093	2,959(87)	53,252	11,734(318)
Profit before taxTax		2,872433		11,416(3,712)
Profit after taxMinority interests		3,305(1, 293)		7,704(1,381)
Profit after tax and minorities		2,012		6,323
Earnings per shareDividends per share - unfranked		4.31		13.596.0
Dividends per share - fully franked		4.2

• In 2002 $0.4 million of reorganisation costs were included within continuing operating businesses.
• In 2003 non operating comprised a $1.2 million revaluation deficit on Hunter Hall and investment income of $0.9 million
• In 2002 non operating comprised a profit on the sale of GMA of $5.8 million, a $4.0 million revaluation surplus on Hunter Hall, $2.1 million of goodwill written off and asset write downs and $1.1 million of investment income.
• The goodwill written off in 2002 included $0.9 million of goodwill previously disclosed within continuing operating businesses.
• Working capital is well controlled with trade debtors and inventories remaining at September 2002 levels. Creditors have reduced by $2.7 million.
• The reduction in creditors resulted in net operating cash flows being only $0.5 million in the first half. We are anticipating strong cash creation in the second half.
• GMA was sold on 26 March 2002 for $18 million.

Taxation

The tax charge has benefited by $1.1 million due to past tax losses being brought to account and offset against the deferred tax liability associated with the revaluation of Hunter Hall. The effective tax rate before this $1.1 million credit was 23%.

About HGL

• HGL is a diversified industrial group listed on the ASX
• HGL invests in companies that need capital to fund growth, strengthen their financial position or buy out a shareholder who wants to divest their holding - HGL invests for the long term
• These businesses are usually partially owned by management, linking their wealth to the profitability of the business they operate
• HGL has achieved an average compound earnings per share growth of 10% a year since 1990

Kevin Eley on 02 9221 7155 For further information:

Peter Miller Chairman

Rules 4.1, 4.3

Appendix 4B

Half yearly/preliminary final report

Introduced 30/6/2002.

Name of entity
HGL Limited
Half yearlyPreliminaryABN or equivalent companyreferencefinal (tick)(nck)	Half year/financial year ended ('current period')
25 009 657 961	31 March 2003
For announcement to the marketExtracts from this report for announcement to the market (see note 1).			$A'000
Revenues from ordinary activities (item $1.1$ )	down	44.8%to	40,476*
Profit (loss) from ordinary activities after tax attributable tomembers (item 1.22)	down	68.2%to	2,012*
Profit (loss) from extraordinary items after tax attributableto members ( item 2.5( d ))	gain (loss)оf		Nil
Net profit (loss) for the period attributable to members(item I. II)	down	68.2%to	2,012*
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)	$4.2 \notin$		$4.2 \notin$
Previous corresponding period (Preliminary final report -item 15.5; half yearly report - item 15.7)	$6.0 \notin$		Nil ¢
+ Record date for determining entitlements to the27 June 2003dividend.(in the case of a trust, distribution) (see item $15.2$ )
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:
*The earnings before interest and tax from continuing operating businesses are up 78% to $4.4million from $2.5 million while sales have increased by 17% to $40 million. The profit before tax inthe same period last year was $8.5 million higher due mainly to the sale of GMA and the revaluationof Hunter Hall. Refer to Chairman's Announcement for full details.
A 4.2c fully franked dividend is the equivalent of a 6.0c unfranked dividend.

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

$+$ See chapter 19 for defined terms.

		Current period -$A'000	Previous correspondingperiod - $A'000
1.1	Revenues from ordinary activities (see items 1.23$-1.25$ )	40,476	73,360
1.2	Expenses from ordinary activities (see items 1.26& 1.27)	37,350	61,056
1.31.4	Borrowing costsShare of net profits (losses) of associates and jointventure entities (see item 16.7)	358104	546(342)
1.5	Profit (loss) from ordinary activities before tax	2,872	11,416
1.6	Income tax on ordinary activities (see note $4$ )	(433)	3,712
1.7	Profit (loss) from ordinary activities after tax	3,305	7,704
1.8	Profit (loss) from extraordinary items after tax(see item $2.5$ )
1.9	Net profit (loss)	3,305	7,704
1.10	Net profit (loss) attributable to outside $+$ equityinterests	1,293	1,381
1.11	Net profit (loss) for the period attributable tomembers	2,012	6,323
	Non-owner transaction changes in equity
1.121.131.14	Increase (decrease) in revaluation reservesNet exchange differences recognised in equityOther revenue, expense and initial adjustmentsrecognised directly in equity (attach details)	(3)	7
1.15	Initialadjustments from UIG transitionalprovisions
1.16	Total transactions and adjustments recogniseddirectly in equity (items 1.12 to 1.15)	(3)	7
1.17	Total changes in equity not resulting fromtransactions with owners as owners	2,009	6,330
		Current period	Previousبما من الألف من ما يمكن

Condensed consolidated statement of financial performance

Earnings per security (EPS)	Current period	Previouscorrespondingperiod
Basic EPS1.18	$4.31 \notin$	13.59 $\ell$
Diluted EPS1.19	n/a	n/a

Ĭ.

$+$ See chapter 19 for defined terms.

Notes to the condensed consolidated statement of financial performance

		Current	period٠	Previous
		$A'000		corresponding period -
				$A'000
1.20	Profit (loss) from ordinary activities after tax		3,305	7,704
	(item I.7)
1.21	Less (plus) outside $+$ equity interests		1.293	1.381
1.22	Profit (loss) from ordinary activities after		2,012	6,323
	tax, attributable to members

Profit (loss) from ordinary activities attributable to members

Revenue and expenses from ordinary activities

(see note $15$ )

		Currentperiod	Previous
		$A'000	corresponding period -
			$A'000
1.23	Revenue from sales or services	39,497	43,881
1.24	Interest revenue	271	228
1.25	Other relevant revenue:
	Dividends	636	484
	Proceeds on sale of PPE	93	1,222
	Proceeds on sale of operating and
	equity investments	432	4,431
	Proceeds on sale of controlled equity		18,049
	Marking to market of securities	(1, 131)	3,855
	Other	678	1,210
1.26	Details of relevant expenses
	Changes in inventories	(159)	(1,376)
	Raw materials and consumables used	21,859	23,076
	Employee benefits	9,215	9,534
	Cost of disposal of securities	360	3,689
	Advertising, marketing and
	distribution	1,381	4,351
	Operating lease expenses	1,158	858
	Cost of disposal of controlled entity		12,279
	Amortisation of intangibles	101	154
	Write off of intangibles		868
	Cost of PPE sold	107	1,588
	Other	2,601	4,452
1.27	amortisationDepreciationandexcluding	727	1,583
	amortisation of intangibles (see item 2.3)
	Capitalised outlays
1.28	Interest costs capitalised in asset values
1.29	Outlays capitalised in intangibles (unless
	arising from an $+$ acquisition of a business)

$+$ See chapter 19 for defined terms.

		Current period -	Previous corresponding
		$A'000	period - $A'000
1.30	Retained profits (accumulated losses) at thebeginning of the financial period	18,710	16,271
1.31	Net profit (loss) attributable to members (itemLH)	2.012	6,323
1.32	Net transfers from (to) reserves (details ifmaterial)
1.33	Net effect of changes in accounting policies
1.34	Dividends and other equity distributions paidor payable		2.786
1.35	Retained profits (accumulated losses) at endof financial period	20,722	19,808

Consolidated retained profits

Intangible and extraordinary items

			Consolidated - current period
		Before tax$A'000	Related tax$A'000	Relatedoutside$+$ equityinterests$A'000	Amount (after${ax}$attributable tomembers$A'000
		(a)	(b)	(c)	(d)
2.1	Amortisation of goodwill	98		(29)	69.
2.2	Amortisation of otherintangibles	3		(1)	$\overline{2}$
2.3	Total amortisation ofintangibles	101		(30)	71.
2.4	Extraordinaryitems(details)
2.5	Total extraordinary items

Comparison of half year profits

(Preliminary final report only)

• $3.1$ Consolidated profit (loss) from ordinary activities after tax attributable to members reported for the 1st half year (item 1.22 in the half yearly report)
• $3.2$ Consolidated profit (loss) from ordinary activities after tax attributable to members for the 2nd half year

Current year - $A'000	Previous year - $A'000

+ See chapter 19 for defined terms.

Condensed consolidated statement offinancial position		оfendAtcurrentperiod$A'000	As shown in lastannual report$A'000	As in last halfyearly report$A'000
	Current assets
4.1	Cash	8,131	9,175	18,536
4.2	Receivables	16,159	17,509	15,989
4.3	Investments
4.4	Inventories	28,462	29,357	26,737
4.5	Tax assets	1,108	1,090	491
4.6	Other (provide details if material)
4.7	Total current assets	53,860	57,131	61,753
	Non-current assets
4.8	Receivables	1,189	1,071	999
4.9	Investments (equity accounted)	2,058	252	449
4.10	Other investments	13,070	11,258	7,978
4.114.12	InventoriesExploration and evaluation expenditure
	capitalised (see para.71 of AASB
	1022)
4.13	Development properties (*mining
4.14	entities)Other property, plant and equipment	7,209	7,094	7,107
	(nct)
4.15	Intangibles (net)	2,047	2,091	3,012
4.16	Tax assets
4.17	Other (provide details if material)
4.18	Total non-current assets	25,573	21,766	19,545
4.19	Total assets	79,433	78,897	81,298
	Current liabilities
4.20	Payables	10,600	13,254	9,011
4.21	Interest bearing liabilities	951	1,063	1,129
4.22	Tax liabilities	765	596	826
4.23	Provisions exc. tax liabilities	1,215	4,298	4,147
4.24	Other (provide details if material)
		13,531	19,211	15,113
4.25	Total current liabilities
	Non-current liabilities
4.26	Payables
4.27	Interest bearing liabilities	6,130	2,144	9,851
4.284.29	Tax liabilitiesProvisions exc. tax liabilities	571	2,030	2,024
4.30	Other (provide details if material)	1,108	1,061	1,058
4.31	Total non-current liabilities	7,809	5,235	12,933

$+$ See chapter 19 for defined terms.

4.32	Total liabilities	21,340	24,446	28,046
	Net assets	58,093	54,451	53,252
	Equity
4.34	Capital/contributed equity	28,388	27,994	27,848
4.35	Reserves	(69)	(66)	(136)
4.36	Retained profits (accumulated losses)	20,722	18,710	19,808
4.37	Equity attributable to members of the	49,041	46,638	47,520
4.38	parent entityOutside + equity interests in controlledentities	9,052	7,813	5,732
4.39	Total equity	58,093	54,451	53,252
4.40	Preference capital included as part of4.37

Condensed consolidated statement of financial position continued

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 $A'000	Previouscorresponding period -$A'000
5.1	Opening balance	n/a	40.
5.2	Expenditure incurred during current period	n/a
5.3	Expenditure written off during current period	n/a	(2)
5.4	Acquisitions, disposals, revaluationincrements, etc.	n/a	(38)
5.5	Expenditure transferred to DevelopmentProperties	n/a
5.6	Closing balance as shown in theconsolidated balance sheet ( item 4.12 )	n/a

Development properties

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

		Current period $A'000	Previous
			corresponding
			period - $A'000
-6.1	Opening balance	n/a	3,844
6.2	Expenditure incurred during current period	n/a
6.3	Expenditure transferred from exploration and	n/a
	evaluation

+ See chapter 19 for defined terms.

• 6.4 Expenditure written off during current period
• 6.5 Acquisitions, disposals, revaluation increments, etc.
• Expenditure transferred to mine properties 6.6
• $6.7$ Closing balance as shown in the consolidated balance sheet (item 4.13)

(114)
(3,730)

Condensed consolidated statement of cash flows

		Current period	Previous
		$A'000	corresponding period
			$- $A'000$
	Cash flows related to operating activities
7.1	Receipts from customers	44,232	48,352
7.2	Payments to suppliers and employees	(43, 594)	(46, 349)
7.3	Dividends received from associates	113
7.4	Other dividends received	727	405
7.5	Interest and other items of similar nature
	received	270	223
7.6	Interest and other costs of finance paid	(359)	(547)
7.7	Income taxes paid	(864)	(487)
7.8	Other (provide details if material)
7.9	Net operating cash flows	525	1,597
7.10	Cash flows related to investing activitiesPayment for purchases of property, plant and	(842)	(741)
	equipment
7.11	Proceeds from sale of property, plant and	93	1,222
	equipment
7.12	Payment for purchases of equity investments	(4, 113)	(8,270)
7.137.14	Proceeds from sale of equity investmentsLoans to other entities	433(325)	4,432(87)
7.15	Loans repaid by other entities	47	627
7.16	Other (provide details if material)
	-Proceeds from sale of controlled equity
		1,500	18,000
	-Cash in disposed equity		(1, 558)
			13,625
7.17	Net investing cash flows	(3,207)
	Cash flows related to financing activities
7.18	Proceeds from issues of $+$ securities (shares,
	options, etc.)
7.19	Proceeds from borrowings	4,589	4,584
7.20	Repayment of borrowings	(162)	(425)
7.21	Dividends paid
	-Shareholders-Minorities	(2,359)(389)	(2,632)(945)
7.22	Other (provide details if material)
	-Share Buyback	(41)	(490)

$+$ See chapter 19 for defined terms.

7.23	Net financing cash flows	1.638
-7.247.25	Net increase (decrease) in cash heldCash at beginning of period	(1,044)9,175	15,3143,222
7.26	(see Reconciliation of cash)Exchange rate adjustments to item 7.25.
7.27	Cash at end of period(see Reconciliation of cash)	8,131	18.536

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows are as follows. ( If an amount is quantified, show comparative amount.)

	Current period $-$A'000	Previouscorrespondingperiod - $A'000
Acquisition of plant and equipment by finance lease	208	1,005
Dividends satisfied by issue of shares under DRP	434	391

Reconciliation of cash

Reconciliation of cash at the end of the period (asshown in the consolidated statement of cash flows) to		Current period $A'000	Previouscorresponding
the related items in the accounts is as follows.			period - $A'000
8.1	Cash on hand and at bank	8,131	18,536
8.2	Deposits at call
8.3	Bank overdraft
8.4	Other (provide details)
8.5	Total cash at end of period (item 7.27)	8.131	18,536

Other notes to the condensed financial statements

Ratios		Current period	Previouscorrespondingperiod
9.1	Profit before tax / revenueConsolidated profit (loss) from ordinaryactivities before tax (item $1.5$ ) as a percentageof revenue ( item 1.1 )	7.10%	15.56%
9.2	Profit after tax $\pi$ 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	4.10%	13.31%

$+$ See chapter 19 for defined terms.

Earnings per security (EPS)

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

The diluted earnings per share is the same as the basic earnings per share as the company does not have any potential ordinary shares on issue. No adjustments have been made to the net profit attributable to members of HGL Limited when calculating earrings per share. The weighted average number of shares used to calculate the earnings per share is 46,662,990.

NTA backing(see note $7)$	Current period	Previous correspondingperiod
11.1Net tangible asset backing per + ordinarysecurity	100.11 $\phi$	95.84 $\phi$

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 AASB 1029: Interim Financial Reporting, or, the details of discontinuing operations they have disclosed in their accounts in accordance with AASB 1042: Discontinuing Operations (see note 17).)

$12.1$ 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

$
$

$+$ See chapter 19 for defined terms.

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
• Date to which the profit (loss) in item 14.2 has been calculated $14.3$
• 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
• Contribution to consolidated profit (loss) from ordinary $14.5$ 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 $+$ 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)
• 15.3 If it is a final dividend, has it been declared? (Preliminary final report only)

Amount per security

т

		Amount persecurity	Frankedamount persecurity at30% tax (seenote 4)	Amount persecurity offoreign sourcedividend
	(Preliminary final report only)
15.4	Final dividend:Current year	¢	¢	¢
15.5	Previous year	¢	¢	¢
	(Half yearly and preliminary final reports)
15.6	Interim dividend: Current year	$4.2 \notin$	$4.2 \notin$	NIL $\epsilon$
15.7	Previous year	$6.0 \notin$	NIL $\oint$	NIL $\epsilon$

$ $\mathbf{\hat{S}}$ $

27 June 2003

11 July 2003

¢

¢

¢

$+$ See chapter 19 for defined terms.

Previous year

¢.

¢.

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

(Preliminary final report only)

• 15.8 +Ordinary securities
• 15.9 Preference +securities

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

Current year

• 15.10 +Ordinary securities (each class separately)
• 15.11 Preference +securities (each class separately)
• 15.12 Other equity instruments (each class separately)

t (gistriduuon) on an securities
Current period $A'000	Previous correspondingperiod - $A'000
	2,786
	2,786

¢

¢

15.13 Total

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

Dividend Reinvestment Plan

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

27 June 2003

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 ventureentities':		Current period$A'000	Previouscorresponding period- $A'000
Profit (loss) from ordinary activities before tax16.1		148	(309)
Income tax on ordinary activities16.2		(44)	(33)
Profit (loss) from ordinary activities after16.3tax		104	(342)
Extraordinary items net of tax16.4

$+$ See chapter 19 for defined terms.

16.5	Net profit (loss)	104	(342)
16.6	Adjustments
16.7	Share of net profit (loss) of associates andjoint venture entities	104	(342)

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 ownershipdate of disposal	interest held at end of period or	Contribution to net profit (loss) (item1.9)
17.1Equity accountedassociates andjoint ventureentities	Currentperiod	Previouscorrespondingperiod	Current period$A'000	Previouscorrespondingperiod -$A'000
Charmant Australia PtyLimited	25.0%	25.0%	20	17
Digital ManagementLimited	27.3%	27.3%	-	(359)
MMC AssetManagement Limited ~from 1 December 2002	27.7%	Nil	84	Nil
17.2Total			104	(342)
Other material17.3interests
17.4Total

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)

$+$ See chapter 19 for defined terms.

Category of + securities		Total number	Number quoted	Issueprice persecurity(see note(4)(cents)	Amountpaid uppersecurity(seenote $14$(cents)
18.1	Preference + securities(description)
18.2	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks,redemptions
18.3	+ Ordinary securities	46,941,613	46,941,613
18.4	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks	392,92733,982	392,92733,982	110.5118.7	110.5118.7
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$(f,$ any $)$
18.8	Issued during current period
18.9	Exercised during currentperiod
18.10	Expired during current period
18.11	Debentures (description)
18.12	Changes during current period(a) Increases through issues
	(b) Decreases throughsecurities matured, converted

$+$ See chapter 19 for defined terms.

18.13	Unsecured notes(description)
18.14	Changes during current period
	(a) Increases through issues
	(b) Decreases throughsecurities matured, converted

Segment reporting - REFER ATTACHED APPENDIX A

(Information on the business and geographical segments of the entity must be reported for the current period in accordance with AASB 1005: Segment Reporting and for half year reports, AASB 1029: Interim Financial Reporting. Because entities employ different structures a pro forma cannot be provided. Segment information in the layout employed in the entity's +accounts should be reported separately and attached to this report.)

Comments by directors

(Comments on the following matters are required by ASX or, in relation to the half yearly report, by AASB 1029: Interim Financial Reporting. The comments do not take the place of the directors' report and statement (as required by the Corporations Act) and may be incorporated into the directors' report and statement. For both half 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.]
• 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.

Refer to Chairman's Announcement

A description of each event since the end of the current period which has had a material effect and which $19.3$ is not already reported elsewhere in this Appendix or in attachments, with financial effect quantified (if possible).

Refer to Chairman's Announcement

+ See chapter 19 for defined terms.

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

$3.8 million. The directors anticipate that dividends in respect of 2003 and 2004 will be fully franked.

$19.5 -$ 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).

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.

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.

$+$ See chapter 19 for defined terms.

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

Identify:

• initial service charges
• management fees
• other fees

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:

Place

Date

Time

Approximate date the +annual report will be available

Compliance statement

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

Identify other standards used

• $\mathbf{2}$ This report, and the "accounts upon which the report is based (if separate), use the same accounting policies.
• 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.

The *accounts have been audited.

The 'accounts have been subject to review.

The "accounts are in the process of being audited or subject to review.

Tbe

he "accounts have not yet en audited or reviewed.

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

$+$ See chapter 19 for defined terms.

Sign here:

....................................... (Director)

Date: ..28 May 2003...................................

Print name: Kevin J Elev Notes

• $\mathbb{L}$ 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.
• True and fair view If this report does not give a true and fair view of a matter (for example, $2.$ because compliance with an Accounting Standard is required) the entity must attach a note providing additional information and explanations to give a true and fair view.

3. Condensed consolidated statement of financial performance

• Item $1.1$ The definition of "revenue" and an explanation of "ordinary 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).
• $4.$ Income tax If the amount provided for income tax in this report differs (or would differ but for compensatory items) by more than 15% from the amount of income tax prima facie payable on the profit before tax, the entity must explain in a note the major items responsible for the difference and their amounts. The rate of tax applicable to the franking amount per dividend should be inserted in the heading for the column "Franked amount per security at % $\text{tax}$ " for items 15.4 to 15.7. REFER ATTACHED APPENDIX B

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

+ See chapter 19 for defined terms.

Revaluation of Non-Current Assets. If the entity has adopted a procedure of regular revaluation, the basis for which has been disclosed and has not changed, no additional disclosure is required.

• Condensed consolidated statement of cash flows For definitions of "cash" and other terms 6. used in this report see AASB 1026: Statement of Cash Flows. Entities should follow the form as closely as possible, but variations are permitted if the directors (in the case of a trust, the management company) believe that this presentation is inappropriate. However, the presentation adopted must meet the requirements of AASB 1026. $+$ Mining exploration entities may use the form of cash flow statement in Appendix 5B.
• $7.$ Net tangible asset backing Net tangible assets are determined by deducting from total tangible assets all claims on those assets ranking ahead of the $+$ ordinary securities (ie, all liabilities, preference shares, outside +equity interests etc). +Mining entities are not required to state a net tangible asset backing per $+$ ordinary security.
• $\mathbf{R}$ . 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.
• 1. Rounding of figures This report anticipates that the information required is given to the nearest $1,000. If an entity reports exact figures, the $A'000 headings must be amended. If an entity qualifies under ASIC Class Order 98/0100 dated 10 July 1998, it may report to the nearest million dollars, or to the nearest $100,000, and the $A'000 headings must be amended.
• $10.$ Comparative figures Comparative figures are to be presented in accordance with AASB 1018 or AASB 1029 Interim Financial Reporting as appropriate and are the unadjusted figures from the latest annual or half year report as appropriate. However, if an adjustment has been made in accordance with an accounting standard or other reason or if there is a lack of comparability, a note explaining the position should be attached. For the statement of financial performance, AASB 1029 Interim Financial Reporting requires information on a year to date basis in addition to the current interim period. Normally an Appendix 4B to which AASB 1029 Interim Financial Reporting applies would be for the half year and consequently the information in the current period is also the year to date. If an Appendix 4B Half yearly version is produced for an additional interim period (eg because of a change of reporting period), the entity must provide the year to date information and comparatives required by AASB 1029 Interim Financial Reporting. This should be in the form of a multi-column version of the consolidated statement of financial performance as an attachment to the additional Appendix 4B.
• $11.$ 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.

+ See chapter 19 for defined terms.

• Accounting Standards ASX will accept, for example, the use of International Accounting $12.$ 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.
• $137$ 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 $+$ 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.

$+$ See chapter 19 for defined terms.

HGL LIMITED AND ITS CONTROLLED ENTITIES Appendix 4B (rule 4.1,4.3)Half yearly/preliminary final report

			APPENDIX A
SEGMENT REPORTING
	IndustrialAbrasives$'000	InformationTechnology$'000	Optical$'000	Fabrics$'000	Investment**$'000	SegmentTotal$'000	Unallocated*$'000	Cansalidated$'000
Business segments
31 March 2003
Revenue
Segment Revenue - External SalesSegment Revenue - Other	÷,	17,881141	3,737469	17,879104	369	39,4971,083		39,4971,083
	$\overline{a}$	18,022	4,206	17,983	369	40,580	$\frac{1}{2}$	40,580
Segment Result
Profit/(loss) before income tax	$\overline{a}$	1,922	529	1,929	(1,508)	2,872		2,872
Income tax benefit/(expense)							433	433
Profit/(Loss) after income tax		1.922	529	1,929	(1, 508)	2,872	433	3,305
Segment Assets	$\overline{a}$	14,792	4,173	20,646	38,714	78,325	1,108	79,433
Segment Liabilities	-	5,800	1,438	4,747	8,019	20,004	1,336	21,340
Net Assets	÷,	8,992	2,735	15,899	30,695	58,321	(228)	58,093
Other disclosures
Depreciation & Amortisation		503	47	256	22	828		828
Acquistion of segment assets		536	24	240	32	832		832
Carrying value of equity investments		L,	196	$\sim$	1,862	2,058	٠	2,058
Share of associates profit		$\overline{a}$	20	$\overline{\phantom{a}}$	84	104		104
Other significant revenue:Sale of shares			ä,	$\overline{a}$	432	432		432
Dividends		i.	$\sim$	ä,	636	636		636
Other significant expenses:
Stock obsolescence		117	39	20	$\overline{\phantom{a}}$	176		176
Marking to market listed securities			÷	$\overline{a}$	1,131	1,131		1,131
31 March 2002
Revenue
Segment Revenue - External Sales	10,134	13,234	3,543	16,970		43.881		43,881
Segment Revenue - Other	517	96	602	72	27,850	29,137	$\overline{\phantom{a}}$	29,137
	10,651	13,330	4,145	17,042	27,850	73,018	$\blacksquare$	73,018
Segment ResultProfit/(loss) before income fax	1,842	(691)	696	1,589
Income tax benefit/(expense)					7,980	11,416	(3,712)	11,416(3,712)
Profit/(Loss) after income tax	1,842	(691)	696	1,589	7,980	11,416	(3,712)	7,704
Segment Assets	49	13,388	4,067	20,537	42,766	80,807	491	81,298
Segment Liabilities		4,245	701	4,649	15,602	25,197	2,849	28,046
Net Assets	49	9,143	3,366	15,888	27,164	55,610	(2,358)	53,252
Other disclosures
Depreciation & Amortisation	897	527	46	265	2	1,737		1,737
Write off intangibles	-	868	÷	$\overline{a}$	$\overline{\phantom{a}}$	868	L	868
Non-cash exps other than depn & amort	L,	436	$\overline{\phantom{a}}$	÷,	341	777	$\overline{a}$	777
Acquistion of segment assets	893	75	96	268	28	1,360	$\overline{a}$	1,360
Carrying value of equity investments	L,		449	÷,	$\overline{\phantom{a}}$	449	ä,	449
Share of associates profit/(loss)Other significant revenue:	÷	(359)	17	ä,	$\overline{\phantom{a}}$	(342)	$\overline{\phantom{a}}$	(342)
Marking to market listed securities			Ĭ.	÷,	3,855	3,855	٠	3,855
Sale of controlled entity			$\overline{a}$	$\overline{a}$	18,049	18,049	$\overline{a}$	18,049
Sale of shares			$\overline{a}$	$\overline{a}$	4,431	4,431	$\overline{a}$	4,431
Dividends			÷,		484	484	$\overline{a}$	484
Other significant expenses:
Stock obsolescence		317	17	80	400	814		814

* Unallocated refers to income tax assets, liabilities and expenses** Investment segment assets includes cash. Investment segment liabilities includes all interest bearing debt. The results of the invesment segment includ interest.

The consolidated entities main business is carried on in Australia. There are no material geographical segments to report.

APPENDIX B

$\overline{\mathbf{4}}$ INCOME TAX

	Consolidated
		Previous
		Current Corresponding
	Period	Period
	A$'000	A$'000
The prima facie income tax expense on pre-tax accountingprofit reconciles to the income tax expense in the Appendix4B as follows:
Prima facie income tax expense on the operatingprofit at 30% (2002:30%)	862	3,425
Tax effect of permanent differences:
Rebatable dividends	(185)	(71)
Tax rate differential relating to overseas controlled entities	36	17
Equity share of associates' profit	(31)	103
Marking to market of securities		821
Prior year tax losses booked	(1,087)
Utilisation of prior year unbooked future income tax benefit	(125)	(992)
Amortisation of intangibles	30	307
Amortisation and depreciation on buildings	5	95.
Non-allowable expenses	5	7
Prior year underprovision	57
Income tax (benefit)/expense on operating profit	(433)	3,712

DIRECTORS' REPORT

The directors of HGL Limited submit herewith the financial report for the half year ended 31 March 2003. In order to comply with the provisions of the Corporation Act 2001, the directors report as follows:

The names of directors of the company during or since the end of the half-year are:

PG Miller (alternate: MA Hershon) RJ Constable (resigned 29 October 2002) KJ Elev DN Constable (alternate: JD Constable) Dr F Wolf

Review of operations

HGL today announced a net profit after tax and minorities of $2.0 million for the half year to 31 March 2003. The earnings before interest and tax from continuing operating businesses are up 78% to $4.4 million from $2.5 million while sales have increased by 17% to $40 million. The profit before tax in the same period last year was $8.5 million higher. The comparative period included the sale of GMA and the revaluation of Hunter Hall. A revaluation deficit of $1.2 million before tax for Hunter Hall has been recognised in the results for this half year. A detailed comparison of the 2003 and 2002 half year results is contained in the financial commentary section of this report.

At the Annual General Meeting in January of this year I commented that HGL has somewhat irregular earnings due to the timing of investment transactions. Investment profits of $4.5 million are anticipated in the second half.

We are currently reviewing a number of potential opportunities and have made two acquisitions of operating businesses, both of which are summarised below:

• In December, HGL acquired 28% of MMC Asset Management, an Adelaide based boutique funds manager for $\bullet$ $1.9million; and
• In April, HGL acquired 100% of Sydney Point-of-Sale (SPOS) for $7.0 million, with an additional $1.2 million payable subject to performance targets. SPOS imports and distributes price ticketing, and shelf management systems, merchandising and promotional display products to retailers, brand manufacturers, shopfitters and advertising agencies.

MMC has increased funds under management to $172 million from $151 million in December 2002 and was a finalist in the Morningstar Emerging Fund Manager of the year awards.

Dividends

With franking credits now available, the Directors have declared a fully franked interim dividend of 4.2 cents per share. The company has sufficient franking credits to continue to fully frank the dividend for the foreseeable future.

Outlook

Including SPOS, HGL now generates recurring profit after tax and minorities of about $4 million per annum. This is before any contribution from investment transactions or revaluations. If the sale of our investments in Sabre and Lemarne proceed the disposals would contribute $4.5 million to the full year profit after tax.

investing in businesses

HGL is striving to increase the amount invested in operating businesses to strengthen and enhance our ongoing profits and cash flows. We will continue to acquire easily understood businesses with an EBIT in excess of $2 million.

On the successful completion of the sale of Sabre and Lemarne HGL would receive $16 million. In addition we have $24 million of available bank borrowing facilities and $8 million of listed securities. With approximately $50 million to invest while still maintaining a prudent debt to equity ratio, the Directors believe this strategy will lead to a substantial increase in the value of HGL over the coming years.

Operating businesses

Earnings before interest and tax from continuing operating businesses were up 78% to $4.4 million from $2.5 million, sales increased 17% to $40 million. The improvement is the result of the continuing efforts over the past two years to ensure the operating businesses are well structured and focused.

The IT division has seen substantial improvements, earnings increased by $1.7 million to $1.9 million, sales increased by 35% to $18 million.

Investments

Sabre Group Limited

Sabre has received a $2.15 cash offer for all its shares under a scheme of arrangement. If the scheme of arrangement is completed HGL will receive $9.9 million cash and recognise a profit after tax of $3 million. HGL owns 15% of Sabre and intends to vote in favour of the scheme.

Lemarne Corporation

In November 2002 HGL made a bid for Lemarne, the bid is scheduled to close on 27 June 2003. On 22 May 2003 a subsidiary of HGL entered into a buy back agreement with Lemarne for the shares it owns in Lemarne. Subject to a number of conditions HGL will recognise a profit after tax of $1.5 million and receive $6 million in cash.

Hunter Hall

HGL owns 6% of Hunter Hall International Limited (ASX code: HHL). Hunter Hall is a boutique international funds manager. This investment is marked to market and the price of $3.60 on 31 March 2003 is our book cost of $5.6 million. As the market price was $4.40 at 30 September 2002 a revaluation deficit of $1.2 million before tax has been recognised in the results for this half year.

Financial commentary

Summary of balance sheet and results

A summary of the profit for the six months to 31 March and net assets at 31 March is shown below:

	Net assets2003	EBIT2003	Net assets2002	EBIT2002
	$'000	$'000	$'000	$'000
Continuing operating businessesGMA	27,6260	4,3800	28,3970	2,4621,842
Operating businesses	27,626	4,380	28,397	4,304
Non operatingUnallocated central costs	30,467	(286)(1, 135)	24,855	8,747(1, 317)
Net assets/EBITNet interest payable	58,093	2,959(87)	53,252	11,734(318)
Profit before taxTax		2,872433		11,416(3,712)
Profit after taxMinority interests		3,305(1, 293)		7,704(1,381)
Profit after tax and minorities		2,012		6,323
Earnings per shareDividends per share - unfranked		4.31		13.596.0
Dividends per share - fully franked		4.2

• In 2002 $0.4 million of reorganisation costs were included within continuing operating businesses.
• In 2003 non operating comprised a $1.2 million revaluation deficit on Hunter Hall and investment income of $0.9 million.
• In 2002 non operating comprised a profit on the sale of GMA of $5.8 million, a $4.0 million revaluation surplus on Hunter Hall, $2.1 million of goodwill written off and asset write downs and $1.1 million of investment income.
• The goodwill written off in 2002 included $0.9 million of goodwill previously disclosed within continuing operating businesses.
• Working capital is well controlled with trade debtors and inventories remaining at September 2002 levels. ٠ Creditors have reduced by $2.7 million.
• The reduction in creditors resulted in net operating cash flows being only $0.5 million in the first half. We are ۰ anticipating strong cash creation in the second half.
• GMA was sold on 26 March 2002 for $18 million.

Taxation

The tax charge has benefited by $1.1 million due to past tax losses being brought to account and offset against the deferred tax liability associated with the revaluation of Hunter Hall. The effective tax rate before this $1.1 million credit was 23%.

HGL Limited ACN 009 657 961

investing in businesses

Rounding off of amounts

The company is a company of the kind referred to in ASIC Class Order 98/0100 dated 10 July 1998, and in accordance with that Class Order amounts in the Directors' Report, and the financial report are rounded off to the nearest thousand dollars.

Signed in accordance with a resolution of Directors.

On behalf of the Directors:

KJ Eley Director

Sydney 28 May 2003

DIRECTORS' DECLARATION for the half-year ended 31 March 2003

The Directors declare that:

• The attached financial statements and notes thereto comply with $(a)$ Accounting Standards;
• The attached financial statements and notes thereto give a true and fair $(b)$ view of the financial position and performance of the consolidated entity;
• In the directors' opinion, the attached financial statements and notes $(c)$ thereto are in accordance with the Corporations Act 2001; and
• In the director's opinion, there are reasonable grounds to believe that the $(d)$ disclosing entity will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors made pursuant to section 303 (5) of the Corporations Act 2001.

On behalf of the Directors:

KJ Eley Director

Sydney 28 May 2003

Defoitte Touche Tohmatsu A.B.N. 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1212 Australia

DX 1030755E Tefephone (02) 9322 7000 Facsimile (02) 9322 7001 www.defoltte.com.au

Deloitte Touche Tohmatsu

INDEPENDENT REVIEW REPORT TO THE MEMBERS

OF HGL LIMITED

Scope

We have reviewed the attached financial report of HGL Limited in the form of Appendix 4B of the Australian Stock Exchange (ASX) Listing Rules, including the directors' declaration, for the half-year ended 31 March 2003, but excluding the following sections:

• material factors affecting the revenues and expenses of the consolidated entity for the $a)$ current period (page 14); and
• compliance statement (pages 16 and 17). b)

The financial report includes the consolidated financial statements of the consolidated entity comprising the disclosing entity and the entities it controlled at the end of the half-year or from The disclosing entity's directors are responsible for the time to time during the half-year. financial report. We have performed an independent review of the financial report in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with Accounting Standard AASB 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements in Australia, statutory requirements and ASX Listing Rules as they relate to Appendix 4B, so as to present a view which is consistent with our understanding of the consolidated entity's financial position, and performance as represented by the results of its operations and its cash flows, and in order for the disclosing entity to meet its obligations to lodge the financial report with the Australian Securities and Investments Commission and the ASX.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. A review is limited primarily to inquiries of the entity's personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

DeloitteTouche Tohmatsu

Statement

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 HGL Limited is not in accordance with:

• the Corporations Act 2001, including: $\left( a\right)$
  • giving a true and fair view of the consolidated entity's financial position as at 31 March $(i)$ 2003 and of its performance for the half-year ended on that date; and
  • complying with Accounting Standard AASB 1029 "Interim Financial Reporting" and $(ii)$ the Corporations Regulations 2001; and
• other mandatory professional reporting requirements in Australia and ASX Listing Rules as $(b)$ they relate to Appendix 4B.

Edoitte Touche Tohnsatsu

DELOITTE TOUCHE TOHMATSU

Seyer

M Dreyer Partner Chartered Accountants

Sydney, 28 May 2003