DCL has responded to a request for more information by the Stock Exchange that caused share trading to be halted earlier in the week. The company will now be required to report monthly to the ASX on its financial position.

In its response DCL comments on its radio business saying:

“The radio business is not as yet profitable, however, with a fresh
line up at one of the radio stations, an appropriate level of
promotion for 3AK and consistent sales performance we are confident
that the business will exceed our expectations over the current year
and deliver a profitable result… ”

The company says it is expecting to ride through a hard year: “The outlook for the Company for the current year is to operate on a lower cost base with less exposure to large fluctuations and for an improved trading performance in the radio operations…”

The full explanation for the trading halt and the ASX query relates to a question about the comapny’s cash reserves and an associated rights issue.

A statement to the Stock Exchange reads:

We refer to the ASX query in respect to the current cash reserves of
the Company following the lodgment of the Company’s Appendix 4C
Statement for the period ending 31 December 2002.

We make the following comments:

1. The Company initially did not seek to have the rights issue
underwritten as it had the support of its major shareholders and
expected the rights to be substantially subscribed. However, the
Company has observed the destabilising effect of the uncertainty of
the outcome of the rights issue on the operations of the business,
particularly the radio operations. As such the rights issue will now
be fully underwritten by Ron Hall (a director of the Company).

The Company will prepare a supplementary prospectus in due course
setting out full details of the underwriting agreement.

Further, the Company does not plan to invest at the same rate as has
been reported in previous reports. The Company has two operational
areas of activities – radio broadcasting and communications
infrastructure services. The broadcasting business has under gone
substantive changes over the last year with the operations being
relocated to new premises in Swan Street in Richmond, the merger of
the radio operations, the restructuring of the broadcasting
departments and an overhaul of the broadcasting line up.

The radio business is not as yet profitable, however, with a fresh
line up at one of the radio stations, an appropriate level of
promotion for 3AK and consistent sales performance we are confident
that the business will exceed our expectations over the current year
and deliver a profitable result. The operating cost base for the
business has been substantially reduced over the last few months and
the exposure to trading losses has been materially reduced from what
was previously experienced.

The infrastructure services business is now substantially
self-sustaining. Whilst the business may require some additional
working capital to fund the growth from time to time this is not
expected to have a material recurrent negative impact on cash flow.

The corporate overheads, directors’ fees and their expenses provided
by the company have also been reduced following the changes to the
board of the Company at the Annual General Meeting in November 2002.

Over the last two quarters the Company has had substantial capital
expenditure commitments to build a new radio broadcasting complex
and also has reduced the level of liabilities that has reflected in
the cash flow. The capital expenditure items are non-recurring. The
Company does have a schedule to reduce its liabilities through to
June of 2003, which is reflected in a general improvement in the
financial strength of the Group.

The outlook for the Company for the current year is to operate on a
lower cost base with less exposure to large fluctuations and for an
improved trading performance in the radio operations to reduce the
burden on the group’s cash resources.

2. The Company does expect to have negative operating cash flows
similar to that reported in the Appendix 4C for the current quarter.
However, with the rights issue now being underwritten, the Company
should have adequate cash reserve to fund its ongoing operations.

Further, the Company’s cash forecast for the current year shows a
continued improvement in the cash flow. The forecasts reflect
reduction in the monthly operating costs which have been
implemented, the completion of the capital raising program and the
schedule for the reduction in liabilities over the period…

An attached balance sheet lists the company’s Total Current Assets as $1,866,000 as at December 2002. Total Current Liabilities as at December 2002 are $6,373,000, with Total Non Current Liabilities $1,954,000 and Total Equity $10,475,000.

A letter to shareholders on 5 February accompanying a new prospectus reads:

Dear Shareholder

As you may be aware, on 23 January 2003 the Company announced that it would be
undertaking a non renounceable rights issue on the basis of l share for every 2 shares held at
an issue price of 7 cents per share to raise up to 53.447 million (“Rights Issue”).

Subsequent to that announcement, the Company submitted its quarterly cash flow statement
to Australian Stock Exchange Limited(“ASX”) and a prospectus for the Rights Issue from
which it received a further query from ASX. ASX questioned the consequences to the
Company should the Rights Issue not be fully subscribed.

Speculation about the Company’s financial health has been detrimental to the trading
operations of its subsidiaries, particularly the radio operations, where the Company has made
a significantinvestment in rebuilding 3AK and merging the operation with 3MP. The
Company is not willing to see its substaniial investment in these operations prejudiced
through repetition of negative publicity.

Accordingly, Mr R D Hall, a director and substantial shareholder of the Company has agreed
to underwrite the Rights Issue. The receipt of $3.447 million horn the Rights Issue will enable
Data & Commerce Ltd to move forward through the year with confidence and improved
financial strength.

Attached to this letter is a prospectus setting out the terms of the offer, a supplementay
prospectus detailing the ‘terms and conditions of ‘the underwriting and an applicalion form.
Shareholders should read the prospectuses carefully before deciding whether or not to
participate in the Rights Issue. If, after reading the prospectuses, you have any questions you
should contact your stockbroker, solicitor, accountant or professional advisor.

Yours faithfully, R. J (Jeff) Chatfield, Managing Director