SDI LIMITED — Interim / Quarterly Report 2003

Mar 3, 2003

4 March 2003

SDI CONTINUES STRONG GROWTH

The Board of Directors of SDI Ltd today announced a 53% increase in Net Profit after Tax (NPAT) to $1.76m for the six months to 31 December 2002 ($1.15m in 2001). Earnings Before Interest and Tax (EBIT) were up by 41% to $2.57m ($1.83m) on the corresponding period of 2001.

The result was achieved on sales of $16.66m ($14.59m) which represents an increase of 14.1% over the prior corresponding period. The result also included the receipt of a research grant of $348,000 which is part of an annual grant payment that will continue to 2005. Earnings per Share at 7.5 cents (with no substantial change in shares on issue) also rose by 53%.

Commenting on the result, SDI Chairman, Russell Smith, noted that the sales focus during the last half year had been on issues of quality margins. "Due to our strong representation worldwide and the 'pipeline' that this has afforded us for the distribution of our new and existing products, we have taken the view that we can afford to focus more on quality sales and we no longer seek to tender for low margin business", Mr Smith said.

"As can be seen from the drop down to our bottom line profits from our current sales, issues of production efficiencies and our focus on higher margin sales are producing earnings growth ahead of our forecasts" said Mr Smith.

Most of SDI's growth for this reporting period has been organic apart from the successful Pola Tooth Whitening System which was launched 18 months ago. With only an estimated 2% of the world market, SDI is still able to benefit from growth in new markets as well as new products, and with many developing countries only beginning to address the dental needs of their population, organic growth should continue.

Export sales represented 94% of total sales which earns the company both US dollars and Euros for which the company has currency option contracts in place. US dollars are hedged at an average protection rate of 54 cents to December 2005, and the Euro is hedged at a protection rate of 55 cents to January 2005.

Referring to SDI's ability to continue to deliver earnings growth at a multiple of sales growth, the Managing Director, Jeffery Cheetham, said, "We are now achieving stronger margins on our products and we are looking for even higher margins from our new products which will be launched at the forthcoming International Dental Show in Germany on 25 March 2003. This bi-annual exhibition is the largest in the world of dental products and is attended by over 60,000 dentists, together with worldwide distributors. The majority of our customers attend this exhibition. These new products will further complement our existing range of products and will be welcomed by our extensive global network of exclusive distributors and dealers.

We are confident that the range and quality of the new products developed by our in-house Research and Development team will generate both high demands and margins with full year contributions from these products coming in the 2004 financial year."

"Looking ahead I have every reason to expect that the full and subsequent years' results will continue to reflect the underlying strength of our technology, our distributor network and the flow through benefits that achieving critical mass in manufacturing has demonstrated in the half year. I project these strengths should produce ongoing profit increases of at least 25% per annum", Mr Cheetham said.

The Board declared an interim dividend of 3 cents (2002: 2 cents) representing a 50% increase in dividend. The dividend will be fully franked and will be paid on 12 May 2003.

MANAGING DIRECTOR'S LIPDATE.

The last 6 months has been an exciting and beneficial period with total emphasis towards ensuring that the future growth and profit of the company continues to develop exponentially.

SDI's scientists have a passion for new products and they understand that profit generation is the main focus. This week the long awaited 600 sq. m. state of the art Research Centre will be completed and occupation will commence immediately. This facility is a major part of the future of SDI and is fully capable of producing new and updated products. The current range of R&D products has now been completed and will be launched this month internationally. I am pleased to advise that there is a 'pipeline' of additional and improved products in the system, designed to continually 'feed' the sales appetite of our everincreasing global distributor network. Several new Patents have been registered for worldwide protection.

SDI's production facilities have been improved during this period; the results of 'Pola' tooth whitening products have encouraged us to build a dedicated 500 sq. m. facility for these products. This new facility has considerable capacity for expected future growth of this product range. The new high-speed syringe filling and labelling line (at a speed of 200 syringes per minute) has been successfully commissioned. This line has substantial capacity and will enable filling syringes of many sizes at the lowest possible cost, thereby further assisting the quest for lower cost of goods, resulting in higher margins. Additional specialised equipment has been commissioned throughout most manufacturing facilities with an emphasis on automatic, high quality, high-speed production and assembly.

It is worth noting that the existing plant at Bayswater has the capacity to produce at least $60 million of sales without any major capital expenditure.

The Company has continued to strengthen its worldwide marketing network by additional new sales appointments. These include an additional Regional Manager based in Shanghai, Peoples Republic of China, a Country Manager in Colombia, several additional representatives in the EU and a European Distributor Manager. These salaried employees are well experienced in SD1 products and the Company expects to add additional suitable employees in Peru, Venezuela, and Japan as well as several EU countries. SDI has proven that by having our own employees on the ground, the Company and products are taken more seriously resulting in increased market penetration.

SDI's Distributors worldwide recognise that the Company is an emerging force in the dental industry and we believe that our relationships with them will further strengthen in the ensuing years. These Distributors understand the need for continual growth of their SDI business, which is reflected by their performance based contracts.

SDI continues to develop its worldwide management information systems including web site communications and its Enterprise Resource Planning (ERP) computer system. This ERP system is also installed in our US and German subsidiary companies giving real time information allowing pro active planning and decision making by management. The company's Brazilian subsidiary will come on line this year. Sales, margins and expenses are monitored on a daily basis for all countries from the Bayswater head office. Information collated from this system assists our manufacturing department to react guickly to changes in demand and ensures a constant review of product mix held in all warehouses. These world class systems will further assist the company in its future growth.

In summary, much has been accomplished in the last year and in particular the last 6 months. Significant investment has been wisely spent to position SDI for development of products, people and processes, that together are designed to further increase future profits for the company.

For further information, please contact:

Jeffery Cheetharn, Managing Director (03) 8727 7111 Gerry Bullon, INSOR Investor Relations 0418 106 675

$\bm{\Omega}$

SDI

Rules 4.1, 4.3

Appendix 4B

Half yearly report

Introduced 30/6/2002.

Name of entity

SDI Limited
Half yearlyABN or equivalent companyPreliminaryreference$final$ $(iick)$(iick)		Half year/financial year ended ('current period')
ABN 008 075 581		31 December 2002
For announcement to the marketExtracts from this report for announcement to the market (see note 1).				SA'000
Revenues from ordinary activities (item 1.1)	up.	12.1%	to	17,591
Profit (loss) from ordinary activities after tax attributable tomembers (item 1.22)	up	53.1%	to	1,758
Profit (loss) from extraordinary items after tax attributableto members (item $2.5(d)$ )	gain of		to
Net profit (loss) for the period attributable to members(item 1.11)	up.	53.1%	to	1,758
Dividends (distributions)		Amount per security		Franked amount persecurity
Interim dividend (Half yearly report only - item 15.6)		3.0e		3.0e
Previous corresponding period half yearly report - item15.7		$2.0\epsilon$		2.0e
+ Recorddeterminingdate forentitlementstheto.dividend.(in the case of a trust, distribution) (see item $15.2$ )		$28^{\text{th}}$ April 2003
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:

This half yearly report is to be read in conjunction with the most recent annual financial report.

$+$ See chapter 19 for defined terms.

		Current period -SA'000	Previous correspondingperiod - $A'000
1.1	Revenues from ordinary activities (see items 1.23$-1.25$	17,591	15,691
1.2	Expenses from ordinary activities (see items 1.26& 1.27)	(15,025)	(13,866)
131.4	Borrowing costsShare of net profits (losses) of associates and jointventure entities (see item $16.7$ )	(131)	(167)
15	Profit (loss) from ordinary activities before tax	2,435	1,658
1.6	Income tax on ordinary activities (see note 4)	677	510
1.7	Profit (loss) from ordinary activities after tax	1,758	1,148
1.8	Profit (loss) from extraordinary items after tax(see item $2.5$ )
1.9	Net profit (loss)	1,758	1,148
1.10	Net profit (loss) attributable to outside + equityinterests
1.11	Net profit (loss) for the period attributable tomembers	1,758	1,148
	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)InitialadjustmentsfromUIGtransitional	(115)	31
1.15	provisions
1.16	transactionsadjustmentsTotalandrecogniseddirectly in equity (items 1.12 to 1.15)	(115)	31
1.17	Total changes in equity not resulting fromtransactions with owners as owners	1,643	1,179
	Earnings per security (EPS)	Current period	Previous correspondingPeriod
1.18	Basic EPS	7.5e	4.9c
1.19	Diluted EPS	7.56	4.9c

Condensed consolidated statement of financial performance

$+$ See chapter 19 for defined terms.

Notes to the condensed consolidated statement of financial performance

Profit (loss) from ordinary activities attributable to members

		Current	period$\cdot$	Previous
		$A'000		corresponding	period
				$A'000
1.20	Profit (loss) from ordinary activities after tax$(i\epsilon m L.7)$		1,758		1,148
1.21	Less (plus) outside $\pm$ equity interests		$\mathbf{r}$
1.22	Profit (loss) from ordinary activities after		1.758		1,148
	tax, attributable to members

Revenue and expenses from ordinary activities

(see note 15) Current period Previous $A'000 corresponding period $A'000 $1.23$ Revenue from sales or services Sales 16,655 14,593 1.24 Interest revenue $\overline{4}$ $\mathbf{H}$ $1.25$ Other relevant revenue Foreign Exchange Gains (Losses) Realised 503 1,211 Foreign Exchange Gains (Losses) Unrealised $(129)$ $(131)$ 348 Government Grants 178 Proceeds From Sale Of Fixed Assets 32 Other Income 17,591 15,691 Total Revenues 1.26 Details of relevant expenses Cost Of Goods Sold 5,564 5,611 Selling & Administrative Expense 7,934 6,943 Research and Development Costs 565 525 Bad Debts $131$ 167 Borrowing Costs - Other Persons 228 173 Amortisation of Intangibles (see item 2.3) $312$ 232 Other 373 1.27 Depreciation amortisation excluding 422 and amortisation of intangibles (see item 2.3) Capitalised outlays Interest costs capitalised in asset values $1.28$ 1.29 Outlays capitalised in intangibles (unless arising from an $^+$ acquisition of a business)

$\overline{\overline{z}}$

$\ddot{9}$

$+$ See chapter 19 for defined terms.

Consolidated retained profits

		Current period-SA'000	Previous correspondingperiod - $A'000
1.30	Retained profits (accumulated losses) at thebeginning of the financial period	4,422	1,581
1.31	Net profit (loss) attributable to members (item1.1T)	1,758	1,148
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		(467)
1.35	Retained profits (accumulated losses) at endof financial period	6,180	2,262

Intangible and extraordinary items

		Consolidated - current period
		Before tax	Related tax	Related	(afterAmount
		$A'000	SA'000	outside+ equityinterests	tax)attributabletomembers
		(a)	(b)	$A'000	$A'000(d)
				$\left( c\right)$
2.1	Amortisation of goodwill
$2.2^{\circ}$	Amortisation of otherintangibles	228		÷	228
2.3	Total amortisation ofintangibles	228		$\overline{ }$	228
2.4	Extraordinaryitems(details)
2.5	Total extraordinary items	$\overline{\phantom{a}}$		÷

$+$ See chapter 19 for defined terms.

		Consolidated - Prior period
		Before taxSA'000$\left( a\right)$	Related tax$A'000(b)	Relatedoutside+equityinterests$A'000(c)	(afterAmounttax)attributableto.members$A'000(d)
2.1	Amortisation of goodwill
$2.2^{\circ}$	Amortisation of otherintangibles	173			173
2.3	Total amortisation ofintangibles	173			173
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
N/A	N/A
N/A	N/A

$+$ See chapter 19 for defined terms.

Condensed consolidated statement of		endofAt	As shown in last	As in last half
	financial position	periodcurrent	annual report	yearly report
		SA'000	$A'000	$A'000
	Current assets
4.1	Cash	1,721	1,494	1,134
4.2	Receivables	6,648	7,748	6,253
4.3	Investments
4.4	Inventories	6,888	6,548	6,041
4.5	Tax assets
4.6	Other (provide details if material)
	- Prepayments	360	195	223
4.7	Total current assets	15,617	15,985	13,651
	Non-current assets
4.8	Receivables
4.9	Investments (equity accounted)
4.104.11	Other investmentsInventories
4.12	Exploration and evaluation expenditure
	capitalisedpara .71of AASB{see
4.13	1022)
	$\int$ + miningDevelopmentpropertiesentities)
4.14	Other property, plant and equipment	7,642	6,282	5,538
4.15	(net)Intangibles (net)	5,845	5,776	5,668
4.16	Tax assets	560	356	470
4.17	Other (provide details if material)	31	30	455
4.18	Total non-current assets	14,078	12,444	12,131
4.19	Total assets	29,695	28,429	25,782
4.20	Current liabilitiesPayables	2,135	2,514	1,756
4.21	Interest bearing liabilities	1,780	955	1,605
4.22	Tax liabilities	927	1,554	780
4.23	Provisions exc. tax liabilities	849	1,458	1,194
4.24	Other (provide details if material)
4.25	Total current liabilities	5,691	6,481	5,335
	Non-current liabilities
4.26	Payables
4.27	Interest bearing liabilities	3,274	3,100	3,509
4.284.29	Tax liabilitiesProvisions exc. tax liabilities	1,281	1,061122	1,231132
4.30	Other (provide details if material)	141
4.31	Total non-current liabilities	4,696	4,283	4,872

Total liabilities	10,387		10,207
Net assets	19,308	17,665	15,575
Capital/contributed equity	11,700	11,700	11,700
Reserves	1,428	1,543	1,613
Retained profits (accumulated losses)	6,180	4,422	2,262
Equity attributable to members of the	19,308	17,665	15,575
parent entity
Outside + equity interests in controlled	$\overline{r}$
entities
Total equity	19,308	17,665	15,575
capitalincludedpart ofPreferenceas
4.37
	Equity		10,764

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 -
			SA'000
5.1	Opening balance	N/A	N/A
5.2	Expenditure incurred during current period	N/A	N/A
53	Expenditure written off during current period	N/A	N/A
5.4	Acquisitions, disposals, revaluationincrements, etc.	N/A	N/A
5.5	Expenditure transferred to DevelopmentProperties	N/A	N/A
5.6	Closing balance as shown in theconsolidated balance sheet ( item 4.12 )	N/A	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.	N/A.
6.2	Expenditure incurred during current period	N/A.	N/A
63	Expenditure transferred from exploration and	N/A	N/A
	evaluation
6.4	Expenditure written off during current period	N/A	N/A.
6.5	Acquisitions, disposals, revaluationincrements, etc.	N/A	N/A.
6.6	Expenditure transferred to mine properties	N/A.	N/A
6.7	Closing balance as shown in theconsolidated balance sheet (item 4.13)	N/A	N/A

Condensed consolidated statement of cash flows

		Current periodSA'000	Previouscorresponding period
			$-$ SA'000
	Cash flows related to operating activities
7.1	Receipts from customers	18,130	16,493
72	Payments to suppliers and employees	(15,041)	(13,524)
73	Dividends received from associates
74	Other dividends received
75	Interest and other items of similar nature	4	Ħ
	received
7.6	Interest and other costs of finance paid	(131)	(167)
7.7	Income taxes paid	(1,287)	(851)
7.8	Other (provide details if material)	348
7.9	Net operating cash flows	2.023	1,962
	Cash flows related to investing activities
7.10	Payment for purchases of property, plantandequipment	(1,962)	(1,430)
7.11	sale ofProceeds fromproperty, plantandequipment	178	7
7.12	Payment for purchases of equity investments
7.13	Proceeds from sale of equity investment s
7.14	Loans to other entities
7.15	Loans repaid by other entities
7.16	Other (provide details if material)	(297)	(259)
7.17	Net investing cash flows	(2,081)	(1,682)

$+$ See chapter 19 for defined terms.

7.18	Cash flows related to financing activitiesProceeds from issues of + securities(shares,options, etc.)
7.19	Proceeds from borrowings	966	1,192
7.20	Repayment of borrowings	(119)	(737)
7.21	Dividends paid	(701)	(467)
7.22	Other (provide details if material)
7.23	Net financing cash flows	146	(12)
7.24	Net increase (decrease) in cash held	88	268
7.25	Cash at beginning of period	1,197	(117)
7.26	(see Reconciliation of cash)Exchange rate adjustments to item 7.25.

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.

			N/A
-----	the contract of the contract of the contract of the contract of the contract of the contract of the contract of

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 period $A'000	Previouscorrespondingperiod - $A'000
8.1	Cash on hand and at bank	1,721	1,006.
8.2	Deposits at call	÷	128
83	Bank overdraft	(436)	(983)
8.4	Other (provide details)	÷
8.5	Total cash at end of period (item 7.27)	1.285	151

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 $(item 1.1)$	13.9%	$10.6%$
9.2	Profit after tax $/$ + 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	$9.1%$	$7.4%$

$+$ 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.

	Current	Previous
	Period	Corresponding
		Period
Basic EPS	7.5 cents	4.9 cents
Diluted EPS	7.5 cents	4.9 cents
Weighted average number of shares used as aDenominator in the Calculation of
basic EPS. And Diluted EPS.	23,362,439	23,332,999

NTA backing(see note 7)	Current period	Previous correspondingperiod
-11.INet tangible asset backing per + ordinarysecurity	$57.6$ cents	$42.5$ cents

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
	N/A

Control gained over entities having material effect

• Name of entity (or group of $13.1$ 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
• $N/A$ $$N/A$

$N/A$

$N/A

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)	N/A
14.2	Consolidated profit (loss) from ordinary activities andextraordinary items after tax of the controlled entity (or groupof entities) for the current period to the date of loss of control	$N/A
14.3	Date to which the profit (loss) in item 14.2 has been calculated	N/A
14.4	Consolidated profit (loss) from ordinary activities andextraordinary items after tax of the controlled entity (or groupof entities) while controlled during the whole of the previouscorresponding period	$N/A
14.5	Contribution to consolidated profit (loss) from ordinaryactivities and extraordinary items from sale of interest leadingto loss of control	$N/A
	Dividends (in the case of a trust, distributions)
15.1	Date the dividend (distribution) is payable	$12^{th}$ May 2003
15.2	+ Record date to determine entitlements to the dividend(distribution) (ie, on the basis of proper instruments of transferreceived by 5.00 pm if + securities are not + CHESS approved,or security holding balances established by 5.00 pm or suchlater time permitted by SCH Business Rules if + securities are+ CHESS approved)	$28th$ April 2003
15.3	If it is a final dividend, has it been declared?(Preliminary final report only)	N/A

Amount per security

		Amount persecurity	Frankedamount persecurity at %tax (see note4)	Amount persecurity offoreign sourcedividend
15.4	(Preliminary final report only)Final dividend:Current year	N/A	N/A	N/A
15.5	Previous year	N/A	N/A	N/A
15.6	(Half yearly and preliminary final reports)Interim dividend:Current year	3.0 l	$3.0 \notin$	0.0¢
15.7	Previous year	2.0 c	$2.0\phi$	0.0 c

$+$ See chapter 19 for defined terms.

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

(Preliminary final report only)

		Current year	Previous year
-15.8	+ Ordinary securities	N/A	N/A
-15.9	Preference + securities	N/A	N/A

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

		Current period $A'000	Previous correspondingperiod - $A'000
15.10	+ Ordinary securities (each class separately)	702	467
15.11	Preference + securities (each classseparately)
15.12	Other equity instruments (each class)separately)
15.13	l'otal	702	467

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

The Inch decorated Commonwhere of about an involved framely

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)

In accordance with the requirements of Accounting Standard AASB 1044, the dividend proposed has not been provided within the accounts, as it was not declared at 31 December 2002.

The corresponding period includes a provision for dividend, as AASB 1044 was not operative.

$+$ See chapter 19 for defined terms.

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

Details of aggregate share of profits (losses) of associates and joint 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 acquired or disposed of during either the current or previous corresponding period, indicate date of acquisition ("from dd/mm/sy") 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) (item(1.9)PreviousCurrent periodSA'000period-$A'000
17.1Equity accountedassociates andjoint ventureentitiesN/A		Currentperiod	Previouscorrespondingperiod		corresponding
		N/A	N/A	N/A	N/A
17.2	Total	N/AN/A		N/A	N/A
17.3	Other materialinterests	N/A	N/A	N/A	N/A
	N/A	N/AN/A		N/A	N/A
17.4	Total	N/AN/A		N/A	N/A

$+$ See chapter 19 for defined terms.

Issued and quoted securities at end of current period(Description must include rate of interest and any redemption or conversion rights together with prices and dates)

Category of + securities		Total number	Number quoted	Issuepricepersecurity(seenote(4)(cents)	Amountpaiduppersecurity(seenote $14$ )(cents)
18.1	Preference + securities(description)	N/A	N/A
18.2	Changes during current period(a) Increases through issues(b) Decreases through returnsof capital, buybacks,redemptions	N/A	N/A
18.3	+ Ordinary securities	23,362,439	23,362,439	÷
18.4	Changes during current period(a) Increases through issuesDecreases through returns(b)of capital, buybacks	N/A	N/A
18.5	+ Convertible debt securities(descriptionandconversionfactor)	N/A	N/A.
18.6	Changes during current period(a) Increases through issues(b) Decreases throughsecurities matured, converted	N/A	N/A
18.7	Options (description andconversion factor)	N/A	N/A	Exerciseprice	Expirydate(if any)
18.818.918.10	Issued during current periodExercised during currentperiodExpired during current period	N/A.N/AN/A	N/AN/AN/A
18.11	Debentures (description)
18.12	Changes during current period(a) Increases through issues	N/A	N/A
	(b) Decreases throughsecurities matured, converted

$+$ See chapter 19 for defined terms.

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

Segment reporting

(Information on the business and geographical segments of the entity must be poorted 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.

$N/A$

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

$N/A$

$+$ 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.

The company has $4,320,704 Franking Credits Available at 31st December 2002. The Company expects to continue its policy of payment of fully franked dividends.

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).

$N/A$

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.

NIL

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

NIL

Additional disclosure for trusts

20.1	Number of units held by the managementcompany or responsible entity ortheirrelated parties.	N/A
20.2	A statement of the fees and commissionspayable to the management companyorresponsible entity.
	Identify:initial service charges٠management fees٠other fees٠	N/A

$+$ See chapter 19 for defined terms.

Annual meeting

(Preliminary final report only)

The annual meeting will be held as follows:
Place	N/A
Date	N/A
Time	N/A
Approximate date the "annual report willbeavailable	N/A

Compliance statement

$\mathbf{1}$ This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to $\overline{ASX}$ (see note 12).

Identify other standards used

$\overline{\text{NIL}}$

• $\overline{2}$ This report, and the "accounts upon which the report is based (if separate), use the same accounting policies.
• 3 This report does/does not* (delete one) give a true and fair view of the matters disclosed (see note $2$ ).
• $\overline{4}$ This report is based on "accounts to which one of the following applies.
  • (Tick one)
    • The "accounts have been audited.
  • П
• The "accounts are in the The *accounts have not yet process of being audited or been audited or reviewed.

subject to review.

The "accounts have been

• 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.)
• 6 The entity has/does not have* (delete one) a formally constituted audit committee.
• Sign here: ................................Date: 4 March 2003.............................. (Company Secretary)

Print name: John Slaviero....................................

subject to review.

$+$ See chapter 19 for defined terms.

Notes

• For announcement to the market The percentage changes referred to in this section are the $\mathbf{1}$ . 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 anouncement 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.
• $2.$ 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

• 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.
• This item refers to the total tax attributable to the amount shown in item 1.5. Item $1.6$ 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 9% $\text{tax}$ " 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 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

$+$ See chapter 19 for defined terms.

presentation adopted must meet the requirements of AASB 1026. $\frac{1}{2}$ 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.
• $101$ 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.
• Additional information An entity may disclose additional information about any matter, and $\mathbf{H}$ . 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.
• 1. 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.

$+$ See chapter 19 for defined terms.

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 mitty. 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.

ATTACHMENT1

Notes to and forming part of the financial report

$\mathbf{1}$ . Financial Report

This interim financial report, which is a general purpose financial report, does not include the note disclosures as required by Australian Accounting Standards and the Corporations Act that would normally be disclosed in the Annual Report. Please refer to the previous Annual Report for the year ended 30 June 2002 should such information be required.

It is recommended that this financial report be read in conjunction with the financial report for the year ended 30 June 2002 and any public announcements made by SDI Limited and its controlled entities during the half-year in accordance with and continuous disclosure obligations arising under the Corporations Act.

$\overline{2}$ . Application of Accounting Standards

The interim financial report for the six months ending 31 December 2002 has been prepared in accordance with AASB Accounting Standards applicable to corporate entities, other authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Consensus Views.

3. Accounting Policies

The appendix 4B has been prepared on a basis consistent with the Accounting Policies as disclosed in note 1 to the 30 June 2002 annual report and that report should be read in conjunction with the financial information contained within the appendix 4B. The accounting policy in relation to Research and Development, while consistently applied, should read as follows:

Research and Development is carried at cost less, where applicable, any accumulated amortisation. Significant research and development costs are capitalized to the extent that future benefits are expected, beyond reasonable doubt, to exceed those costs. Amortisation of capitalised costs commences six months immediately following the commercialisation and continues with full clearance of the costs on a straight-line basis within a maximum of five years. Research and development costs capitalised are regularly reviewed and, when the criterion for capitalisation is no longer met, the unamortised balance is charged to the profit from ordinary activities of that period.

$\overline{4}$ . Contingent Liabilities

Contingent liabilities as at 31 December 2002 remain consistent with those disclosed in the Annual Report for the year ended 30 June 2002.

$+$ See chapter 19 for defined terms.

ATTACHMENT 2

SEGMENT REPORTING

PRIMARY REPORTINGGEOGRAPHIC SEGMENTS IBY LOCATION OF ASSETS)

31 December 2002	AUSTRALIA$'000s	EUROPE$'UGOs	NTR AMERICA$'000s	STIS AMERICA$'UGOs	MIDDLE EAST$'000s	ASIA/PACIFIC$'UGOs	OTHER$'000s	ELIMINATIONS$'UGOs	CONSCITION YEED$'000s
Reverage
External segment revenue	5.657	6.401	5.598	931					12.587
Inter-segment revenue	6,938				$\alpha$		Q.	(8.936	Q.
Total segment revenue	12.596	6.401	5.598	931			$\alpha$	(8.938	17.587
Other unablocated revenue									$\ddot{\epsilon}$
Total Revenue (Item 1.25)									17,591
Result
Segment resist	2.488	$^{0.97}$	238						2.566
Unaflocated Corporate Expenses									(233)
Prefit from ordinary activities before income tax (hem 1.5).									2.435
Income ras essense (flem 1.6)									(671)
Net profit after income tax (item 1.7)									1,758
The segeneat result has been arrived at after charging (crediting) the followingitems:
Depreciation and amortisaton expesse.	693	36	39						650
Non-cash expenses other than depreciation and amortisation.			c						ß
Proceeds on sake of propiety	128		O						128
Written down value of property sold.	(383)		$\Omega$						(281)
	(3)		O						(3)
thentory erite-down
Assots
Segreeny abseto	27.017	2.983	2.929	1.564				(4.769)	20.696
Unaflocated Corporate assets.									$\sim$
Consolidated total assets (Item 4.19)									29,695
Liabililties
Segment fiabilities	9.254	2.100	2.050	1.566				(4.803)	10.387
Unallocated corporate liabilities
Consolidated total liabilities (Item 4.32)									10,387
Other information
states laerabanen la anoticialista	2.150	126	48	-63					2.269
Revesues from sales to external customers by location of customers	1.050	6.065	5.612	2.329	461	1.847			16.655

PRIMARY REPORTINGGÉOGRAPHIC SEGMENTS IBY LOCATION OF ASSETS)

31 December 2001	AUSTRALIA$'000s	EUROPE$'UGOs	NTR AMERICA$'000s	STR AMERICA$'UGOs	MIDDLE EAST$'000s	PACIFICASIA/$TUCOs	OTHER$'000s	ELIMINATIONS$TRXIS	CONSCI IDATED$'000s
Reverase
External segment revenue	4.652	4.200	5.329	1.368	c		¢		16.680
Infer-segment revenue	4.309		$\circ$		$^{\circ}$		$^{\circ}$	(4.309)
Yotal segment revenue	9.161	4.200	5.328	1.368	$\Omega$		$\circ$	(4.309)	16,680
Other unablocated revenue									11
Total Revenue (Item 1.25)									15,891
Result
Segment resist	3,391	313	44	$^{22}$					5.825
Unaflocated Corporate Expenses									32670
Prefit from ordinary activities before income tax (hem 1.5).									7.658
Income raz espense (Hem 1.6)									3610)
Net profit after income tax (Item 1.7)									1,149
The segment result has been arrived at after charging (crediting) the followingitems:
Depreciation and amortisator expesse-	604		25						646
Non-cash expenses other than depreciation and amortisation.									B.
Proceeds on sale of property
Written down value of ceoperty sold.			(16)						(16)
			$\ddot{\mathrm{s}}$						$\mathbf{g}_i$
theratory enite-down	$\lesssim$								$\lesssim$
Assets
Segreent assets	23.741	2.640	2.289	1.060				(3.837)	25.782
Unallocated Corporate assets
Consolidated total assets (Item 4.19)									25,782
Liabililties
Segment fiabilities	9.421	3.551	3.633	1.254	c		c	(3.651)	10.208
Unailocated corporate liabilities									14
Consolidated total liabilities (Item 4.32)									10,209
Other information
Acquisitions of non-corrent assets	3.661	22	501	×	$\sim$	×	$\mathbf{r}$		1.689
Revenues from sales to external customers by location of customers.	996	4.756	6.320	1.837	224	1,464			14.593

SECONDARY REPORTINGBUSINESS SEGMENTS

The conscircted entity operates predominately in one basiness segment being the manufacture and distribution of dental restorative products.

SDI LIMITED ACN 008 075 581

DIRECTORS' DECLARATION

In accordance with a resolution of the Board of Directors' of SDI Limited, I hereby state that:

In the opinion of the Directors':

$(a)$ The financial statements and notes of the company and of the Economic Entity

(1) Comply with Accounting Standard AASB 1029: Half-Year Accounts and Consolidated Accounts and the Corporations Regulations; and

(2) Give a true and fair view of the Economic Entity's financial position as at 31 December 2002 and its performance for the half year ended on that date.

$(b)$ there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors

J.J. Cheetham Director 4 March 2003

SDI LIMITED ACN 008 075 581

AND CONTROLLED ENTITIES

DIRECTORS' REPORT

The Directors present the financial report of the Economic Entity for the half-year ended 31 December 2002.

DIRECTORS

The following persons held office of the Company at the date of this report-

EXECUTIVE DIRECTORS DIRECTORS

NON-EXECUTIVE

Jeffery James Cheetham Samantha Jane Cheetham

Russell Sinclair Smith Gabrielle Mary McCorkell Jack Arthur Roseman Anthony John Bardsley

REVIEW OF OPERATIONS

The group has achieved turnover from trading activities of $16,655,000 for the halfvear ended December 2002.

A detailed review of the operations of the economic entity during the half-year, and of the results of these operations is contained in the Chairman's Statement included in this report.

SIGNIFICANT CHANGES

In the opinion of the Directors no significant changes occurred in the state of affairs of the economic entity during the half-year other than those disclosed in this report or the consolidated accounts.

ROUNDING OF ACCOUNTS

The Economic Entity has applied the relief available to it in ASIC Class Order 98/100 and accordingly, certain amounts in the financial report and the Director's Report have been rounded off to the nearest $1,000.

This report is signed in accordance with a resolution of the Board of Directors.

J.J. Cheetham Director 4 March 2003

Chartered Accountants & Advisers

INDEPENDENT REVIEW REPORT TO THE MEMBERS OF SDI LIMITED

ABN 27 008 075 581

Scope

We have reviewed the financial report of SDI Limited for the half-year ended 31 December 2002 in the form of Appendix 4B "Half Yearly Report" of the Australian Stock Exchange (ASX) Listing Rules, consisting of the Consolidated Statement of Financial Performance, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, accompanying notes as set out in Appendix 4B "Half Yearly Report" and the Directors' Declaration. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year. The company's directors are responsible for the 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, 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 company to lodge the financial report with the Australian Securities and Investments Commission and the Australian Stock Exchange Limited.

Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. A review is limited primarily to inquiries of company 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, do not express an audit opinion.

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 SDI Limited is not in accordance with:

• (a) the Corporations Act, 2001, including:
  • giving a true and fair view of the consolidated entity's financial position as at 31 December $(i)$ 2002 and of its performance for the half-year ended on that date; and
  • (ii) complying with Accounting Standard AASB 1029: Interim Financial Reporting and the Corporations Regulations 2001; and
• (b) other mandatory professional reporting requirements in Australia and ASX Listing Rules as they relate to Appendix 4B "Half Yearly Report".

BDO Chartered Accountants

RDD Collie Partner

Melbourne: 4 March, 2003