LARK DISTILLING CO. LTD — Interim / Quarterly Report 2004

Oct 21, 2004

Montec International Limited ABN: 62 104 600 544

Level 6, 55 York Street Sydney NSW 2000 Australia

montec@montec-international.com www.montec-international.com

Telephone: +61 2 9299 0011 Facsimile: +61 2 9299 1499

22 October 2004

ASX RELEASE

SEPTEMBER 2004 QUARTERLY REPORT FOR ENTITIES ADMITTED ON THE BASIS OF COMMITMENTS

Attached is the Montec International Limited ("Montec International" or the "Company") September 2004 quarterly report for entities admitted on the basis of commitments.

Cash Flows related to Operating Activities

The September quarter saw the continued receipt of cash from sales made by the Company's China business in Qingdao, and cash receipts from royalties attributable to sales in Australia.

Staff costs for the current quarter reflect the requirements necessary for developing the Qingdao market, and to plan the Company's broader China roll out initiative. Advertising and marketing costs have been largely directed at stimulating the Qingdao market.

Cash outflows associated with other working capital in the current quarter were in line with the June quarter as prepayments and advances in respect of operations funded in the March quarter continued to be utilised in the current quarter.

Cash Flows related to Financing and Investing Activities

Limited cash outflow associated with fixed asset purchases and repayment of a lease liability was incurred in the current quarter.

The net decrease in cash held in the current quarter is in line with expectations given the building phase of the Company's business, as is the level of cash on hand at the end of the quarter.

Ends For further enquiries: Nick Geddes Company Secretary 02 9252 1933

Malcolm Campbell Managing Director 02 9299 0011

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001

Name of entity

Montec International Limited

ABN

62 104 600 544

Quarter ended ("current quarter")

30 September 2004

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter \$A'000	Year to date $(3$ months) \$A'000
1.1	Receipts from customers	164	164
1.2	Payments for (a) staff costs	(258)	(258)
	(b) advertising and marketing (c) research and development (d) leased assets	(126)	(126)
	(e) other working capital	(131)	(131)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	24	24
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net operating cash flows	(327)	(327)

$+$ See chapter 19 for defined terms.

		Current quarter \$A'000	Year to date $(12$ months) \$A'000
1.8	Net operating cash flows (carried forward)	(327)	(327)
1.9 1.10	Cash flows related to investing activities Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non- current assets (e) other non-current assets Proceeds from disposal of: (a) businesses (item 5)	(22)	(22)
1.11 1.12 1.13	(b) equity investments (c) intellectual property (d) physical non- current assets (e) other non-current assets Loans to other entities Loans repaid by other entities Other (provide details if material)
	Net investing cash flows	(22)	(22)
1.14	Total operating and investing cash flows	(349)	(349)
1.15 1.16 1.17 1.18 1.19 1.20	Cash flows related to financing activities Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid Other (provide details if material)	(2)	(2)
	Net financing cash flows	(2)	(2)
	Net increase (decrease) in cash held	(351)	(351)
1.21 1.22	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	2,090	2,090
1.23	Cash at end of quarter	1,739	1,739

$+$ See chapter 19 for defined terms.

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter \$A'000
1.24	Aggregate amount of payments to the parties included in item 1.2	(121)
1.25	Aggregate amount of loans to the parties included in item 1.11

1.26 Explanation necessary for an understanding of the transactions

Payment comprises salary and allowance paid to Directors of Montec International Limited.

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

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

None

Financing facilities available

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

		Amount available \$A'000	Amount used \$A'000
3.1	Loan facilities
3.2	Credit standby arrangements

⁺ See chapter 19 for defined terms.

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.		Current quarter SA'000	Previous quarter \$A'000
4.1	Cash on hand and at bank	221	194
4.2	Deposits at call	1.518	1.896
4.3	Bank overdraft
4.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	1.739	2.090

Acquisitions and disposals of business entities

		Acquisitions (Item $1.9(a)$ )	Disposals (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

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act.
• $\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Sign here:	ORIGINAL SIGNED
	(Director/Company secretary)

Date: 22 October 2004

Print name: N J V Geddes

Notes

$\mathbf{L}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to

$+$ See chapter 19 for defined terms.

disclose additional information is encouraged to do so, in a note or notes attached to this report.

• The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this $\overline{2}$ . report except for the paragraphs of the Standard set out below.
• $\bullet$ 6.2 - reconciliation of cash flows arising from operating activities to operating profit or loss
• $9.2$ - itemised disclosure relating to acquisitions
• itemised disclosure relating to disposals 9.4 $\bullet$
• $12.1(a)$ policy for classification of cash items
• disclosure of restrictions on use of cash $12.3$ é
• $13.1$ - comparative information $\Delta$
• 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 any) must be complied with.

$+$ See chapter 19 for defined terms.