Commitments Test Entity - Second Quarter Report

POCKETMAIL GROUP LIMITED                      2003-01-31  ASX-SIGNAL-G

HOMEX - Sydney                                                        

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PocketMail reports a strong net operating cash surplus for the
December quarter and a profitable trading result for the second
successive quarter.

* December quarter earnings before interest tax, amortisation and
depreciation were $A0.18 million. The company's second successive
positive result.

* December quarter operations produced a net operating cash surplus
of $A 0.19 million.

* Restructuring and liability reduction programs continue to have a
positive impact on the groups' operation as trade creditors drop by
$A0.35 million (27%). Trade creditors have now decreased by $A1.20
million since June 2002 (a reduction of more than 50%).

* Centralisation in San Jose, California, of worldwide Network
Operations Centre (NOC) is now complete and PocketMail network
services worldwide are supported from one NOC.

* PocketMail Subscribers now have access to global roaming at no
additional cost.

* PocketMail pursues growth opportunities in Europe and Asia.

PocketMail Group Limited (ASX: PKT), leading worldwide provider of
affordable mobile e-mail services, released its Statement of Cash
Flows for the quarter ended 31 December 2002.

STATEMENT OF CASH FLOWS

Total receipts from customers for the quarter were $A2.8 million, the
same as the September quarter. Trading operations produced a net
operating cash flow surplus of $A0.2 million, compared to a deficit
of $A0.5 million in the September quarter. This represents a 100%
increase on the same quarter last year.

Receipts from subscription services have remained stable at $2.4
million, the same as the September quarter.

The company has maintained an operating cash flow surplus while
successfully reducing trade creditors. The December quarter reduction
of $A0.35 million brings the total reduction in trade creditors since
June 2002 to $A1.2 million, a reduction of over 50%.

The company's liability reduction program is now almost complete and
it is strongly positioned to generate operating cash surpluses for
the remainder of the financial year.

OTHER FINANCIAL RESULTS

Earnings before interest tax amortisation and depreciation (EBITDA)
was $A1.8 million, slightly less than the September quarter ($A0.24
million).

The reduction was largely attributable to one off costs and
expenditure associated with restructuring the Australian operations
and the Network Operations Centre (NOC). The cost savings created by
these changes will make a strong contribution to operating results in
the second half of this financial year.

The company's success in trading profitably in successive periods is
a significant milestone, and demonstrates the underlying
profitability of the business and the strength of its subscriber
base.

NETWORK OPERATIONS

The transfer of technical control of all Australian subscribers to
our Network Operations centre (NOC) in San Jose, California was
completed today. We have now established a single, global, NOC
capable of supporting worldwide PocketMail services. The new
operating structure has also allowed us to introduce global roaming
to all subscribers, at no additional cost.

This is a significant development for the company. It will further
reduce our overheads as well as allowing us to expand the PocketMail
service without the necessity of establishing capital intensive local
infrastructure in different regions.

Worldwide customer support (call centre) operations, finance and
administration functions will continue to operate from our Australian
office.

COMMENTS

PKT Chief Executive, David Marchant, commented:

"We have now had two successive quarters of profitable trading, in
EBITDA terms. This demonstrates the underlying profitability of our
business model and our subscriber base.

It is extremely pleasing that we have reduced our liabilities while
maintaining an operating cash flow surplus. Our liability reduction
program is almost complete and we are now strongly positioned to
leverage our improved financial position and rationalised operating
structure to grow our business worldwide.

Progress to date has provided the company with a foundation from
which to expand into new markets by establishing alliances with
appropriate partners.

We are currently engaged in negotiations to expand the PocketMail
service by licensing third parties as well as other marketing
strategies. We believe significant opportunities exist for PocketMail
in Europe and Asia"

POCKETMAIL GROUP LIMITED

* PocketMail Group Limited ("PKT"), a leading world-wide provider of
mobile e-mail services, is a company listed on the Australian Stock
Exchange.

* PocketMail is an innovative, low cost, mobile e-mail service that
enables PocketMail customers to send and receive e-mail from almost
any telephone in the world using a PocketMail device.

* The PocketMail service is available locally in USA, Canada and
Australia, and internationally from every other country in the world.

* PocketMail's board of directors are Andrew Kelly, Chris Coudounaris
and David Marchant

For further information, please contact:

David Marchant
CEO PocketMail
Tel: +1 (408) 689 1241 or +612 9234 0000   
Fax: +612 9233 8370

E-mail: david.marchant@pkt.com.au


                       APPENDIX 4C
               QUARTERLY REPORT FOR ENTITIES
                  ON BASIS OF COMMITMENTS

Name of entity
Pocketmail Group Limited

ABN                        Quarter ended ("current quarter")
008 719 015                31/12/2002

CONSOLIDATED STATEMENT OF CASH FLOWS

Cash flows related to                          Current   Year to date 
operating activities                           Quarter   (6 months)
                                               AUD'000      AUD'000

1.1  Receipts from customers                         2,783        5,629
1.2  Payments for         
       (a) staff costs                           (867)      (1,890)
       (b) advertising & marketing               (132)        (269)
       (c) research & development                    -            -
       (d) leased assets                          (90)        (177)
       (e) other working capital               (1,471)      (3,505)
1.3  Dividends received                              -            -
1.4  Interest and other items of
     a similar nature received                       -            1
1.5  Interest and other costs of
     finance paid                                 (31)         (77)
1.6  Income taxes paid                               -            -
1.7  Other (provide details if material)             -            -

1.8  Net Operating Cash Flows                      192        (288)

Cash flows related to investing activities                
1.9  Payment for acquisition of:        
       (a) businesses (item 5)                       -            -
       (b) equity investments                        -            -   
       (c) intellectual property                  (26)         (32)   
       (d) physical non-current assets               -            -   
       (e) other non-current assets                  -            -
1.10  Proceeds from disposal of:        
       (a) businesses                                -            -
       (b) equity investments                        -            -   
       (c) intellectual property                     -            -   
       (d) physical non-current assets               -            -   
       (e) other non-current assets                  -            -
1.11 Loans to other entities                         -            -
1.12 Loans repaid by other entities                  -            -
1.13 Other (provide details if material)             -            -

     Net investing cash flows                     (26)         (32)
 
1.14 Total operating and
     investing cash flows                          166        (320)

Cash flows related to financing activities                
1.15 Proceeds from issues of
     shares, options, etc.                           -            -
1.16 Proceeds from sale of
     forfeited shares                                -            -
1.17 Proceeds from borrowings                      200          200
1.18 Repayment of borrowings                     (150)        (308)
1.19 Dividends paid                                  -            -
1.20 Other (provide details if material)             -            -

     Net financing cash flows                       50        (108)

     Net increase (decrease) in cash held          216        (428)

1.21 Cash at beginning of quarter/
     year to date                                  159          803

1.22 Exchange rate adjustments to item 1.20          -            -

1.23 Cash at end of quarter                        375          375


PAYMENTS TO DIRECTORS OF THE ENTITY AND ASSOCIATES OF THE DIRECTORS
PAYMENTS TO RELATED ENTITIES AND ASSOCIATES OF THE RELATED ENTITIES

                                                       Current Quarter
                                                           AUD'000

1.24 Aggregate amount of payments to
     the parties included in item 1.2                          111

1.25 Aggregate amount of loans to the 
     parties included in item 1.11                               -

1.26 Explanation necessary for an understanding
     of the transactions

 $200,000 in loan funds were advanced by Bindera Pty Limited, the
 groups major shareholder

NON-CASH FINANCING AND INVESTING ACTIVITIES

2.1  Details of financing and investing transactions which have had a
     material effect on consolidated assets and liabilities but did
     not involve cash flows

 -

2.2  Details of outlays made by other entities to establish or
     increase their share in businesses in which the reporting entity
     has an interest
        
 -


FINANCING FACILITIES AVAILABLE
Add notes as necessary for an understanding of the position.
(See AASB 1026 paragraph 12.2)

                                                Amount       Amount
                                              available       used
                                               AUD'000      AUD'000

3.1  Loan facilities 
     - related parties & shareholders            2,678        2,678
     - Hire Purchase facility                      383          383
3.2  Credit standby arrangements                     -            -



RECONCILIATION OF CASH

Reconciliation of cash at the end              Current     Previous
of the quarter (as shown in the                quarter      quarter
consolidated statement of cash flows)          AUD'000      AUD'000
to the related items in the accounts 
is as follows.

4.1  Cash on hand and at bank                      375          159
4.2  Deposits at call                                -            -
4.3  Bank overdraft                                  -            -
4.4  Other (provide details)                         -            -

     Total: cash at end of quarter (item 1.22)     375          159




ACQUISITIONS AND DISPOSALS OF BUSINESS ENTITIES

                                 Acquisitions        Disposals
                                 (item 1.9(a))      (Item 1.10(a))

5.1 Name of entity               -                 -              

5.2 Place of incorporation
    or registration              -                 -              

5.3 Consideration for
    acquisition or disposal      -                 -              

5.4 Total net assets             -                 -              

5.5 Nature of business           -                 -              



COMPLIANCE STATEMENT

1. This statement has been prepared under accounting policies which
   comply with accounting standards as defined in the Corporations 
   Act (except to the extent that information is not required because
   of note 2) or other standards acceptable to ASX.

2. This statement does give a true and fair view
   of the matters disclosed.

D McArthur                     
COMPANY SECRETARY            Date: 31/01/2003