history of overall stability, reliability, 'true to label' investment processes and superior investment performance in difficult markets.

Personal Financial Services

As indicated earlier, the past 6 months have seen considerable change in the financial advice industry, changes which impact our Personal Financial Services division.

In this changing market environment, our Private Clients and Superannuation businesses have shown resilience, generating revenues of $32.0 million for the half year to 31 December 2002, comparable to the corresponding period last year. This is despite the adverse effect of falling market values on our asset-based fees.

Total funds managed for our private clients, trusts, estates and philanthropic foundations totalled $5.0 billion at 31 December 2002.

Our advisory business model, based on salaried advisers who charge professional fees, not trails and commissions, remains robust and we continue to build our capability in superannuation, portfolio management and back office administration. The growing strength of our salaried adviser team saw us attract 285 new portfolio management accounts from clients who entrusted a further $170 million to our care during the period. Our advisory staff has grown, along with our reputation as a quality financial adviser to affluent Australian families.

During 2003, we will be launching a number of new products for clients, including new philanthropic services.

Corporate Trust

This division continued its strong growth during the half-year, with revenues of $20.7 million, up from $17.5 million in the corresponding period last year, an increase of 18 percent.

The division's EBITDA before unallocated corporate and support costs was $10.6 million, up from $8.3 million in the period to 31 December 2001.

Securitisation bonds on issue for which we act as trustee increased from $52 billion at 30 June 2002 to $60 billion at 31 December 2002. In addition we administer a further $17 billion in preliminary funding arrangements and security trusteeships for our securitisation clients. The increase followed another strong period of issuance of residential mortgage backed securities.

During the period, we have also been involved in programs to securitise new asset classes, including pre-sale contracts and personal loans, and have won mandates from new clients, including SG Australia and Australand.

The division continues to broaden its value-added services to the securitisation market with the release of our investor reporting website during the half. The service provides authoritative information on securitisation transactions and asset performance, and enjoys strong support from investors, analysts and dealers.

We were also recently engaged by Standard and Poor's (S&P) to act as data collection agent to provide performance information on the assets underlying mortgage-backed securities to facilitate services to S&P's rating clients. Our engagement by S&P is testimony to the high reputation our investor reporting service has gained in the marketplace.

During the period, we created a new business unit called Fund Governance Solutions in order to take advantage of growing opportunities to provide our responsible entity and trustee services to the funds management industry.

ASX Perpetual Registrars

Despite subdued market conditions during the past 6 months, our 50 percent joint venture, ASX Perpetual Registrars, has made sound progress and is beginning to realise the benefits of its investment in the OSCAR share registry system. The business is well positioned to take full advantage of future improvement in capital market conditions.

Revenue for the half of $25.0 million was up by 14 percent from $21.9 million in the prior corresponding period. Although ASX Perpetual Registrars now manages an increased level of shareholdings, operating costs were held in line with the prior corresponding period. The net result after tax for the period was a loss of $0.7 million (Perpetual's share: $0.4 million), reflecting an increase of $3.0 million in non-cash depreciation and amortisation charges associated with the OSCAR system. Cash based earnings, however, improved significantly as reflected by EBITDA improving 122 percent to $6.0 million from $2.7 million in the prior December half. EBITDA as a percent of revenue was 24 percent, up from 12 percent in the prior corresponding period.

Looking ahead, ASX Perpetual Registrars expects to make further cost efficiencies and believes it is now well placed to serve both existing and new clients. Even though the market outlook remains subdued due to reduced levels of corporate activity, ASX Perpetual Registrars will not be drawn into irrational price competition and will continue to focus on providing a quality service at a fair and appropriate price.

Outlook

In a changing market environment and a difficult operating climate, we continue to steer a steady course. The core strengths and business strategies we have developed at Perpetual are fundamentally suited to these uncertain times, and our market position remains strong. Our independence, our experienced professional staff, our commitment to quality service, our reputation for integrity in dealing with clients and our focus on providing useful investment products to Australians, are the building blocks of our trusted brand name. We have every confidence in our ability to maintain our clients' support in the period ahead.

Equity markets have continued to decline over recent months as the prospect of war looms and a slow world economic recovery undermines investor confidence. Accordingly, one should approach the Immediate future with some caution. However, it is

pleasing to achieve a strong start to the 2003 financial year despite difficult business conditions, and to lay the foundation for a satisfactory full year. result.

We continue to produce superior investment returns for investors, and anticipate ongoing willingness of investors to invest in quality managed funds and to seek professional advice. Our brand position is strong, we are well supported by financial planners, our systems are now fully competitive, and the board has confidence in the quality and dedication of our people. We will continue to manage our expenses closely as we move forward. All these factors should enable us to report in August an increased full year operating profit.

The group has the financial capability to grow organically and also to seek out acquisition opportunities that meet our investment criteria. The growth of our business can be achieved while maintaining the board's policy of distributing surplus funds and franking credits to shareholders.

In closing, we thank all of Perpetual's staff for their hard work and commitment over the past half-year.

France

Charles Curran AO Chairman

Graham Bradle,

Graham Bradley Managing Director

26 February 2003

Half-year performance

June 1998 to December 2002

Australian Capital Territory

Level 4 10 Rudd Street Canberra ACT 2601 02 6248 7977

New South Wales 39 Hunter Street Sydney NSW 2000 02 9229 9000

Queensland

Level 10 Riverside Centre 123 Eagle Street Brisbane QLD 4000 07 3834 5656

123 Margaret Street Toowoomba QLD 4350 07 4632 1355

South Australia

Perpetual House 89 King William Street Adelaide SA 5000

08 8239 4400

Victoria Level 28 360 Collins Street Melbourne VIC 3000 03 8628 0400

87 High Street Kew VIC 3101

03 9853 3355

Western Australia

89 St Georges Terrace Perth WA 6000 08 9322 6011

ASX Perpetual Registrars Limited Level 8 580 George Street Sydney NSW 2000 02 8280 7100

Level 4 333 Collins Street Melbourne VIC 3000 03 9205 4800

Website: www.perpetual.com.au