PEET LIMITED — Annual Report 2001

Aug 1, 2004

Peet & Company Limited and its Controlled Entities

ABN: 56 008 665 834

Financial Report 30 June 2001

FINANCIAL REPORT 30 JUNE 2001

CONTENTS

$\frac{1}{3}$

Page No

Directors' Report
Statements of Financial Performance
Statements of Financial Position
Statements of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report

DIRECTORS' REPORT

Your directors present their report on the consolidated entity consisting of Peet & Company Limited ("the Company") and the entities it controlled at the end of, or during, the financial year ended 30 June 2001.

$\mathbf{1}$ Directors

The following persons were directors of Peet & Company Limited during the whole of the financial year and up until the date of this report:

AW Lennon, AVLE

Mr Lennon is the Executive Chairman of Peet & Company Limited and has been the Chief Executive since 1985. Mr Lennon has 38 years experience in property agency and development. Of particular relevance, he has specialised in development and marketing of land estates.

Interest in shares of the company; 430,455 ordinary shares Interest in options of the company; nil

WD Hemsley, B.Comm, CPA, Assoc.Dip.Val, FVLE (VAL & ECON.)

Mr Hemsley is the Managing Director of Peet & Company Limited and has been a Director of Peet & Company since 1985. He has a total of 23 years experience in property and agency work.

Interest in shares of the company; 132,229 ordinary shares Interest in options of the company; nil

IMC Palmer, Dip.Val., AVLE, Dip. REM

Mr Palmer has been a Director of Peet & Company Limited since 1986. He has been a qualified valuer for 27 years with 31 years in real estate including 13 years as principal of Ian Palmer & $Co$ .

Interest in shares of the company; 162,193 ordinary shares Interest in options of the company; nil

AJ Lennon, BA, Grad.Dip.Bus.Admin.

Mr Lennon joined Peet & Company Limited in 1991 and became a director in 1994. Prior to that he worked in England for 3 years.

Interest in shares of the company; nil Interest in options of the company; nil

All the directors are executive directors and details of interests in securities of the company are as at the date of this report.

$\overline{2}$ Principal activities

The principal activities of the consolidated entity during the course of the financial year were project management, land syndication, management of land sales and marketing, corporate management services, land development and land and other real estate sales. There was no significant change in the nature of the activities during the year.

DIRECTORS' REPORT

Consolidated result 3.

The consolidated profit after income tax of the consolidated entity for the year ended 30 June 2001 after providing for income tax was $2,532,920 (2000: $2,152,505).

4. Review of operations

During the year the Company continued to gain good results from the management of various residential property developments and continued its land development and syndication activities.

During the year ended 30 June 2001, the Company established a permanent office on St Kilda Road, Melbourne, Victoria, moving from serviced offices in the Melbourne CBD. Staff numbers in Victoria increased from two (2) at the beginning of the financial year to five (5) full-time and part-time employees and consultants.

Completed settlements of sales of residential land under the management of the Company in Western Australia and Victoria totalled approximately $80,000,000 (2000: $65,000,000) for the year ended 30 June 2001. Actual contracts written during the year ended 30 June 2001 for sales of land in projects under management totalled in excess of $103,000,000 (2000: $83,000,000).

5. Significant changes in the state of affairs

In the opinion of the directors there were no significant changes in the state of the consolidated entity that occurred during the financial year under review.

6. Dividends

Dividends paid or declared by the Company during the financial year are as follows:

On 23 October 2000 the Company paid a fully franked dividend of approx.	S
33.80 cents per share, with Class C franking credits.	250,000
On 22 December 2000 the Company paid a fully franked dividend of approx.27.04 cents per share, with Class C franking credits.	200,000
On 15 March 2001, the Company paid a fully franked dividend of approx.40.56 cents per share, with Class C franking credits.	300,000
	750,000

7. Likely developments

No information as to the likely developments in the operations of the consolidated entity and the expected results of those operations in subsequent financial years has been included in this report because in the opinion of the directors, it would prejudice the interests of the consolidated entity.

DIRECTORS' REPORT

8. Environmental Regulation

The consolidated entity is subject to environmental regulation by way of the Environmental Protection Act 1986 (as amended) in respect of its Western Australian land subdivision activities and the Environmental Protection Act 1970 (as amended) in respect of its Victorian subdivision activities.

To the best of the Directors' knowledge all activities have been undertaken in compliance with the requirements of subdivision approvals granted.

9. Directors' meetings

The number of directors' meetings and number of meetings attended by each of the directors of the company during the financial year are detailed below:

		Peet & Company Ltdin its own right		Peet & CompanyLimited as trustee
	Held	Attended	Held	Attended
AW Lennon	15	14	28	17
WD Hemsley	15	15	28	28
IM Palmer	15	13	28	21
AJ Lennon	15	11	28	15

10. Matters subsequent to the end of the financial year

The Directors declared a fully franked dividend of 81 cents per share ($600,000) on Thursday, 23 August 2001 and the dividend was paid on Friday, 24 August 2001.

Except for the dividend discussed above, no other matter or circumstance has arisen since 30 June 2001 that has significantly affected, or may significantly affect:

• (a) the consolidated entity's operations in future financial years, or
• (b) the results of those operations in future financial years, or

(c) the consolidated entity's state of affairs in future financial years.

Auditor 11.

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.

Signed for and on behalf of the Board in accordance with a resolution of the Board of Directors.

Director Director

Perth, Western Australia 31 October 2001

STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2001

	Consolidated			Parent Entity
	Note	2001$	2000$	2001$	2000
					$
Revenue from ordinary activities	$\overline{2}$	9,636,610	10,050,281	7,890,153	10,163,176
Change in inventories		1,801,162	2,958,926	$372,393 \sim$	2,958,926
Employee benefits expense		1,932,948	1,748,291	1,932,948 $\leq$	1,748,291
Depreciation expense		82,474	86,515	$82,445$ $\checkmark$	86,515
Borrowing costs expenseOther expenses from ordinary		225,438	52,638	31,231	52,638
activities		2,080,922	1,935,231	2,021,866	1,968,456
Profit from ordinary activities before
income tax expense	3	3,513,666	3,268,680	3,449,270	3,348,350
Income tax expense	4	(980, 746)	(1,116,175)	(875,093)	(1,125,923)
Net profit attributable to members
of Peet & Company Limited		2,532,920	2,152,505	2,574,177	2,222,427
Total changes in equity other thanthose resulting from transactions
with owners as owners		2,532,920	2,152,505	2,574,177	2,222,427

$\sim 10^{-10}$ M

STATEMENTS OF FINANCIAL POSITIONAS AT 30 JUNE 2001

		Consolidated		Parent Entity
	Note	2001	2000	2001	2000
CURRENT ASSETS
Cash assets		1,014,825	514,999	947,073	508,696
ReceivablesInventories	6$\overline{7}$	3,040,242 $\nu$	2,029,572	3,481,351	2,006,559
		$1,474,838 \times$	664,018	361,440	664,018
TOTAL CURRENT ASSETS		5,529,905	3,208,589	4,789,864	3,179,273
NON-CURRENT ASSETS
Receivables	8	$7,107 \times$	7,107	1,886,443	1,810,682
Deferred tax assets	9	24,999 $\nu$	132,523		104,267
Investments	10	732,705 ✓	935,076	732,708	935,083
Property, plant and equipment	$\mathbf{1}$	178,036 $\checkmark$	209,529	175,163	209,529
Inventories	12	$21,373,421$ $\checkmark$	8,981,417	391,080	134,606
Other	13	71,152 $\sim$	3,350
TOTAL NON-CURRENT
ASSETS		22,387,420	10,269,002	3,185,394	3,194,167
TOTAL ASSETS		27,917,325	13,477,591	7,975,258	6,373,440
CURRENT LIABILITIES
Payables	14	$13,823,817 \times$	3,204,475	300,893	250,062
Interest bearing liabilities	15	6,280,000 $\sim$	4,207,968		7,968
Current tax liabilities		282,987 $\checkmark$	699,354	49,901	699,354
Provisions	16	195,756 $\sqrt{ }$	251,670	195,756	251,670
TOTAL CURRENT
LIABILITIES		20,582,560	8,363,467	546,550	1,209,054
NON-CURRENT LIABILITIES
Payables	17			2,002	2,002
Deferred tax liabilities	18	636,824	209,290	631,610	201,652
Provisions	19	$35,240 \swarrow$	25,053	35,240	25,053
TOTAL NON-CURRENT
LIABILITIES		672,064	234,343	668,852	228,707
TOTAL LIABILITIES		21,254,624	8,597,810	1,215,402	1,437,761
NET ASSETS		6,662,701	4,879,781	6,759,856	4,935,679
EQUITYContributed equity
Retained profits	20	1,479,198	1,479,198	1,479,198	1,479,198
	21	5,183,503	3,400,583	5,280,658	3,456,481
TOTAL EQUITY	22	6,662,701	4,879,781	6,759,856	4,935,679

The above statements of financial position should be read with the accompanying notes.

STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2001

	Note	Consolidated2001	2000	Parent Entity2001
		S	$	$	2000$
Cash Flows from Operating
Activities
Receipts from customers andsuppliers (inclusive of GST)Payments to suppliers and		8,522,584	9,636,214	6,609,383	9,636,214
employees (inclusive of GST)Dividend received		(8,386,547)	(5,800,701)	(4,741,776)	(4, 137, 283)
Interest received		7,09539,636	7,719	51,385	33,114
Trust Distributions Received		367,152	25,708294,706	31,813367,152	25,708
Interest and other borrowing costs					294,706
paid		(459, 934)	(358, 173)	(28,079)	(24, 384)
Income tax paid		(991, 579)	(1, 598, 909)	(990, 321)	(1, 598, 909)
Net cash (outflow)/inflow from
operating activities	28(c)	(901, 593)	2,206,564	1,299,557	4,229,166
Cash Flows from InvestingActivitiesProceeds from sale of property, plant
and equipment		181	663	181	663
Payments for property, plant and
equipmentPayments for investments		(53,663)	(42, 622)	(50,761)	(42, 622)
Proceeds from capital returns		202,375	(40,000)	202,375	(40,002)
					20,000
Net cash inflow/(outflow) from
investing activities		148,893	(81,959)	151,795	(61, 961)
Cash Flows from FinancingActivities
Dividends paid		(750,000)	(1,150,000)	(750,000)	(1,150,000)
Loans to related entities				(356,763)	(813,317)
Loans from related entities			793	101,756
Transaction costs from capitalraisings
Repayments of borrowing		(69, 506)(1,400,000)	(2,200,000)
Proceeds from borrowings		3,480,000	1,200,000		(2,200,000)
Net cash inflow/(outflow) from
Financing Activities		1,260,494	(2,149,207)	(1,005,007)	(4,163,317)
Net increase/(decrease) in cash
held		507,794	(24,602)	446,345	3,888
Cash at beginning of financial yearCash at the end of the financial		507,031	531,633	500,728	496,840
year	28(a)	1,014,825	507,031	947,073	500,728
Financing arrangements	28(b)

The above statements of cash flows should be read with the accompanying notes.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

$1.$ Summary of significant accounting policies

The significant policies, which have been adopted in the preparation of this financial report, are:

$(a)$ Basis of preparation

This general-purpose financial report has been prepared in accordance with Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act 2001.

It is prepared in accordance with the historical cost convention, except for certain assets which, as noted, are at valuation. Unless otherwise stated, the accounting policies adopted are consistent with those of the previous year.

As a result of applying the revised Accounting Standard AASB 1018 Statement of Financial Performance, revised AASB 1034 Financial Report Presentation and Disclosures and AASB 1040 Statement of Financial Position for the first time, a number of comparative amounts were represented or reclassified to ensure comparability with the current reporting period.

$(b)$ Principles of consolidation

H

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Peet $&$ Company Limited ("The Company") as at 30 June 2001 and the results of all controlled entities for the year then ended. The Company and its controlled entities together are referred to in this financial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full.

Where control of an entity is obtained during a financial year, its results are included in the consolidated statement of financial performance from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control existed.

$\left( \text{c} \right)$ Depreciation of property, plant and equipment

Depreciation is calculated to write off the net cost of each asset over its expected useful life to the consolidated entity using the straight-line method. Estimates of remaining useful lives are made on a regular basis for all assets.

Expected useful life of plant $&$ equipment is between 1 and 20 years.

$(d)$ Employee entitlements

Wages, salaries and annual leave

The provisions for employee entitlements to wages, salaries and annual leave represent the amounts which the consolidated entity has a present obligation to pay resulting from employees' services provided up to the balance date. The provision has been calculated at nominal amounts based on current wage and salary rates and includes related on-costs.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

Summary of significant accounting policies (continued) 1.

$(d)$ Employee entitlements (continued)

Long service leave

The liability for employee entitlements to long service leave represents the present value of the estimated future cash outflows to be made by the employer resulting from employees7 services provided up to the balance date.

Liabilities for employee entitlements which are not expected to be settled within 12 months are discounted using the rates attaching to national government securities at balance date, which most closely match the terms of maturity of the related liabilities.

In determining the liability for employee entitlements, consideration has been given to future increases in wage and salary rates and the consolidated entity's experience with staff departures. Related on-costs have also been included in the liability.

Superannuation fund

The Company contributes to various complying employee superannuation funds. Contributions are charged against income as they are made.

$(e)$ Income tax

The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense shown in the profit and loss statement is based on the operating profit before tax, adjusted for any permanent differences.

Timing differences which arise due to the different accounting periods in which items of revenue and expense are included in the determination of operating profit and taxable income, are brought to account as either provision for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable to the period in which the benefit is expected to be received or the liability is expected to become payable.

Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain.

$(f)$ Investments

Interests in listed and unlisted securities, other than controlled entities and associates in the consolidated financial statements, are brought to account at cost. Dividend income is recognised in the statement of financial performance when received and trust distribution income is recognised in the statement of financial performance when receivable.

Investments in controlled entities are accounted for in the consolidated financial statements as set out in note $1(b)$ .

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

$\mathbf{1}$ Summary of significant accounting policies (continued)

$\left( \mathbf{g} \right)$ Property, plant and equipment

Items of property, plant and equipment are recorded at cost and depreciated as per Note 1(c). All items of property, plant and equipment are carried at the lower of cost (less accumulated depreciation) and recoverable amount.

$(h)$ Recoverable Amount of Non Current Assets

The recoverable amount of an asset is the net amount expected to be recovered through the net cash inflows arising from its continued use and subsequent disposal.

When the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, recoverable amount is determined on the basis of the relevant group of assets. To the extent that a revaluation decrement reverses a revaluation increment previously credited to, and still included in the balance of, the asset revaluation reserve, the decrement is debited directly to that reserve. Otherwise the decrement is recognised as an expense in the statement of financial performance.

The expected net cash flows included in determining recoverable amounts of non-current assets are not discounted to their present values using a market determined, risk adjusted discount rate.

$\hat{\mathbf{n}}$ Land held for syndication or development

Land held for syndication or development or deposits on land are carried at the lower of cost and recoverable amount.

Inventories $(i)$

Land held for development and resale is stated at the lower of cost and net realisable value. Cost includes the cost of acquisition, development and borrowing costs during development. When development is completed borrowing costs and other holding charges are expensed as incurred.

Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if the expenditure on the acquisition and development of the land had not been made. Borrowing costs incurred while active development is interrupted for extended periods are recognised as expenses.

$(k)$ Trustee recognition of assets and liabilities

In addition to its own operations, the company acts as trustee for a number of trusts.

Pursuant to the ASIC Accounting Commentary Update 163, which states that where a trust has sufficient assets to meet all its liabilities then it is unlikely that the trustee will have to meet these liabilities, it is not appropriate that the trustee recognise the liability and corresponding asset. Accordingly, the company has not recognised the trust's liabilities at balance date.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

Summary of significant accounting policies (continued) 1.

$\Omega$ Borrowing Costs

Borrowing costs are recognised as expenses in the period in which they are incurred, except where they are included in the costs of qualifying assets.

The actual amount capitalised to the balance sheet is determined on a pro-rata basis of cash paid. For example cash paid in respect to qualifying assets divided by the total cash outlay for the period is the percentage of borrowing costs allocated to qualifying assets. Such capitalised amounts are then written off to profit & loss when blocks of land sold, settle,

Borrowing costs include interest on bank overdrafts and commercial bills and amortisation of ancilliary costs incurred in connection with the arrangement of borrowings.

Receivables $(m)$

Receivables are recognised on an accrual basis as the services to which they relate are performed. Collectibility of receivables is reviewed on an ongoing basis. Debts, which are known to be uncollectible, are written off.

$(n)$ Trade and Other Creditors

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year which are unpaid. These amounts are unsecured and usually paid within 30 days of recognition.

$\left( 0 \right)$ Cash

For the purposes of the statement of cash flows, cash includes deposits at call which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.

$(p)$ Goods and Services Tax Systems changes

Costs incurred to update existing systems or to design, develop and implement new systems to deal with the GST are charged to expenses as incurred, except where they result in an enhancement of future economic benefits and are recognised as an asset.

$(q)$ Interest bearing liabilities

Loans are carried at their principal amounts, which represent their present value of future cash flows associated with servicing the debt. Interest expense incurred in respect of commercial bills is expensed to the statement of financial performance as it is incurred. Any interest attributable to the following financial year is treated as a prepayment.

$(r)$ Revenue recognition

Revenue on land development and resale is recognised when contracts are settled. Other revenue is recognised on an accrual basis.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

$\overline{2}$ . Revenue

		Consolidated	Parent Entity
	2001	2000	2001	2000
	$	$	S	S
Revenue from Operating Activities
Revenue from trading activities	9,331,048	9,681,819	7,556,548	9,749,319
as.	9,331,048	9,681,819	7,556,548	9,749,319
Revenue from Outside theOperating Activities
- Dividends	7,095	7,719	51,385	33,114
- Trust distributions	250,407	333,042	250,407	333,042
- Interest	39,636	25,708	31,813	25,708
- Other	8,424	1.993		21,993
	305,562	368,462	333,605	413,857
Revenue from ordinary activities	9,636,610	10,050,281	7,890,153	10,163,176

Operating profit $3.$

Profit from ordinary activities before income tax includes the following specific expenses:

	Consolidated		Parent Entity
	2001	2000	2001	2000
Expenses
Auditors' remuneration
- Auditing services	17,943	17,586	14,743	15,336
- Other services	15,938	14,320	13,068	11,970
	33,881	31,906	27,811	27,306
The auditors received no otherbenefits.
Depreciation	82,474	86,515	82,445	86,515
Borrowing costs:
- Interest $&$ finance charges	611,474	363,414	31,231	52,638
- Amount capitalised	(386,036)	(310, 776)
Borrowing costs expense	225,438	52,638	31,231	52,638
Amounts set aside to provision for
employee entitlements	14,771	34,916	14,771	34,916
Lease rental expense – operating
expense	178,807	154,939	178,807	154,939
Write off of development expenditureNet loss on disposal of non-current		60		60
assets	2,501	1,125	2,501	1,125

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

4. Income tax

		Consolidated	Parent Entity
	2001	2000	2001	2000
	$	$	$	$
(a) The income tax expense for thefinancial year differs from the amountcalculated on the operating profit. Thedifferences are reconciled below:
Profit from operating activities beforeincome tax expense	3,513,666	3,268,680	3,449,270	3,348,350
Income tax calculated at 34% (2000:$36%)$	1,194,646	1,176,725	1,172,752	1,205,406
Tax effect of permanent differences:- Non deductible entertainment- Sundry items	6,984(64,003)	7,02011,886	6,984(10, 297)	7,020(7,047)
Income tax adjusted for permanentdifferencesTransfer of tax losses from controlledentityNet adjustments to deferred income	1,137,627	1,195,631	1,169,439(136, 476)	1,205,379
tax liabilities & assets to reflect thedecrease in company tax to 30%$(2000; 34%)$Income tax refund from 1999(Over) provision in previous year	(83, 227)(73, 654)	(5,731)(73, 725)	(84,216)(73, 654)	(5, 731)(73, 725)
Income tax expense	980,746	1,116,175	875,093	1,125,923

Adjustment to deferred income tax balances

Legislation reducing the company tax rate from 36% to 34% in respect of the 2000-2001 income tax year and then to 30% from the 20001-2002 income tax year was passed during the year ended 30 June 2000. As a consequence, deferred tax balances were remeasured during the year ended 30 June 2001 using the appropriate new rates, depending on the timing of their reversal.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

5. Dividends

	Consolidated		Parent Entity
	2001	2000	2001	2000
	S	S	S	S
Ordinary Shares
Fully franked dividends paid during	$\mathcal{L}^{\mathcal{A}}$
the year	750,000	1,150,000	750.000	1,150,000
Franking credits available for thesubsequent financial year	4,860,418	4,175,512	4.618.766	4.175.512

The above amounts represent the balances of the franking accounts as at 30 June of the relevant financial year, adjusted for:

• franking credits that will arise from the payment of income tax payable as per the accounts for the $(a)$ year ended 30 June 2001.
• franking debits that will arise from the payment of dividends proposed (if any) as at 30 June. $(b)$
• The balance at 30 June 2001 has been restated to 30% in line with the reduction in the corporate tax $(c)$ rate from 34% to 30%, applying from 1 July 2001.

6. Current Assets - Receivables

Trade debtors	2,732,842	1,527,635	2,732,842	1,527,635
Prepayments	84,410	59.801	51.755	36,788
Other debtors	222,990	442,136	696,754	442,136
	3,040,242	2,029,572	3,481,351	2,006,559
	The Bill Excellent Editor (Fight) (Columbia and Columbia and Columbia and Columbia and Columbia and Columbia		--------------------------------------	27.17.1110.000 commerce and contact the contact of the contact of the contact of the contact of the contact of the contact of the contact of the contact of the contact of the contact of the contact of the contact of the c

Other debtors

These amounts generally arise from transactions other than fee earning activities of the consolidated entity. Interest may be charged at commercial rates where the terms of repayment exceed six months. Collateral is not normally obtained

7. Current Assets - Inventories

Land held for resale:
Cost of acquisition	690,132	206,105	94.074	206,105
Capitalised development costs	677,776	450,426	263,032	450,426
Capitalised borrowing costs	106,930	7.487	4,334	7.487
	1,474,838 1977 - 1987 - 1988 (UNICOLOR AL 1974), premier met	664,018	361,440	664,018

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

8. Non-Current Assets - Receivables

	Consolidated		Parent Entity
	2001	2000	2001	2000
	S	$	5	$
Owing by controlled entities	$,$	$\rightarrow$	1,879,336	1,803,575
Owing by other related parties	7,107	7.107	7,107	7,107
	7,107	7,107	1,886,443	1,810,682

Further information on the above is set out in Note 26

$\overline{9}$ . Non-Current Assets - Deferred Tax Assets

Future income tax benefit	-999- ב**______________________________________	100 KOOエンエンレン	SeptimeAddress$- - - -$	04.26www.community.com
	24 999****--------------------------------------$M = 2m$	on.1. 3. 4. 4. 3. 4. 4. 3.managakata i www.moc.com	presented with the con-	104,267

10. Non-Current Assets - Investments

Shares in unrelated companies	32.333	32,333	32,333	32,333
Unit trusts	480,750	682,250	480,750	682,250
Syndicates (related companies)	219,622	220,493	219,625	220,500
	732,705	935,076	732,708	935,083

Investments in controlled entities comprise:

	Place of	Class of Share	Holding
At Directors' valuation - 1996	Incorporation		$%$
Peet Prosper Pty Ltd	WA.	Ordinary	100
		Preference	100
Hawkstone Conveyancing Pty Ltd	WΑ	Ordinary	100
At Cost
Hawkestone Unit Trust	N/A.	Trust Unit	100
Peet Management Limited	WА	Ordinary	100
Peet Jandakot Land Syndicate Limited	WΑ	Ordinary	100
Dunnings Road Limited	WА	Ordinary	100
Peet Windsor Park Syndicate Limited (formerly
Peet No. 56 Syndicate Limited)	WA	Ordinary	100
Peet & Co Western Estates Limited	WΑ	Ordinary	100

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

10. Non-Current Assets – Investments (cont)

• $(a)$ The valuations were based on a review of the net asset values of the controlled entities, which resulted in a write down to recoverable amount.
• The net tangible assets of Hawkestone Unit Trust at acquisition date were nil. The trust was acquired $(b)$ on 9 September 1994 for nil consideration.
• The share held in Peet Jandakot Land Syndicate Limited was sold in August 2001 to an unrelated $(c)$ third party. Accordingly, at the date of this report, Peet Jandakot Land Syndicate Limited is not a controlled entity of the Company.
• Since the end of the financial year ended 30 June 2001, Peet Windsor Park Syndicate Limited issued $(d)$ 14,000,000 $1.00 shares paid to $0.50 cents. The capital raising was closed in September 2001. Accordingly, at the date of this report, Peet Windsor Park Syndicate Limited is not a controlled entity of the Company.

11. Non-Current Assets - Property, plant and equipment

	Consolidated		Parent Entity
	2001	2000	2001	2000
	$	S	S	$
Fixtures and fittings
- at cost	759,692	715,018	756,790	715,018
Less: accumulated depreciation	(581, 656)	(505, 489)	(581, 627)	(505, 489)
	178,036	209,529	175,163	209,529

Reconciliations

Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below.

	Consolidated		Parent Entity
	Plant $&$Equipment	Total	Plant $&$Equipment	Total
	(S)	$\left( \mathbb{S}\right)$	$\left( \mathbb{S}\right)$	$($)$
Carrying amount at 1 July 2000	209,529	209,529	209,529	209,529
Additions	53,663	53,657	50,761	50,755
Disposals	(2,682)	(2,676)	(2,682)	(2,676)
Depreciation	(82, 474)	(82, 474)	(82, 445)	(82, 445)
Carrying amount at 30 June 2001	178,036	178,036	175,163	175,163

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

12. Non-Current Assets - Inventories

	Consolidated		Parent Entity
	2001	2000	2001	2000
	S	$	S	S
Land held for resale:
Cost of acquisition	20,764,983	7,937,530	391,080	134,606
Cost of development costs	481,542	539,062
Capitalised borrowing costs	126,896	504,825
	21,373,421	8,981,417	391,080	134,606
13.Non-Current Assets – Other Assets
Transaction costs from capital raisings	71,152	3,350
	71,152	3,350
14.Current Liabilities - Payables
Unsecured
Trade creditors	143,037فتحمل	137,059	68,618	133,746
Other creditors	134,119	117,416	130,519	116,316
Amount owing on land acquisition	13,546,661$\mathbf{v}^{\prime}$	2,950,000
Owing to controlled entities			101,756
	13,823,817	3,204,475	300,893	250,062

Further information on related parties is set out in note 26.

15. Current Liabilities - Interest bearing liabilities

Secured
Bank Overdraft	$\overline{\phantom{a}}$	$\overline{\phantom{m}}$	$\overline{\phantom{a}}$
MasterCard Facility	$\overline{\phantom{a}}$	7.968		7.968
Bank Bills	6,280,000	4,200,000
	6,280,000WAS REPORTED TO A 49YO F. HOLD FOR THE CARD TO A $400 F.	4,207,968		7,968

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

15. Current Liabilities - Interest bearing liabilities (cont)

The interest bearing liabilities are secured by a variety of registered mortgage debentures over the consolidated entity's assets and undertakings, term deposit requirements and registered mortgages over certain properties of the consolidated entity. The terms of the consolidated entity's borrowing facilities are as follows:

Terms of facilitiesPeet & Company Limitedz,
Facility:	Overdraft &/or Guarantee by Bank &/or Bills A/D or ShortTerm Fixed Rate Loan.
Limit:	$350,000, term expiry date 30 September 2001.
Peet Jandakot Land Syndicate Limited
Facility:	Overdraft &/or Bills A/D &/or Bills Fixed
Limit:	The facility of $1,400,000 was repaid and cancelled on thesettlement of the sale of the company's land holding.
Dunnings Road Limited
Facility:	Overdraft &/or Bills A/D &/or Bills Fixed & Guarantees
Limit:	$8,725,000, term expiry date 30 September 2001. The renewal iscurrently being renegotiated. The Directors do not anticipate anydifficulty in renewing the facility
Peet Windsor Park Syndicate Limited(formerly Peet No 56 Syndicate Limited):
Facility:	Overdraft & Multi Option Facility
Limit:	$15,000,000, term expiry date 30 June 2002. This facility wasnegotiated in July 2001.

16. Current Liabilities - Provisions

	Consolidated		Parent Entity
	2001	2000	2001	2000
	S	$	S	$
Employee Entitlements	148,256	143,670	148,256	143,670
Rebates	47,500	108,000	47,500	108,000
	195,756	251,670	195,7562242004.0000000000000000000000000000000	251,670--------------------------------------

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

$17.$ Non-Current Liabilities - Accounts Payable

H

$\frac{1}{2}$

		Consolidated		Parent Entity
	2001	2000	2001	2000
	$	$	$	$
Unsecured
Owing to controlled entities			2,002	2,002
Amount owing on land acquisition
			2,002	2,002
Further information on related parties is set out in note 26.
18.Non-Current Liabilities - Deferred Tax Liabilities
Provision for deferred income tax	636,824
		209,290	631,610	201,652
	636,824	209,290	631,610	201,652
19.Non-Current Liabilities - Provisions
Employee Entitlements	35,240	25,053	35,240	25,053
	35,240	25,053	35,240	25,053
20.Contributed Equity - Peet & Company Limited
Paid up capital
739,599 Ordinary shares -- fully paid	1,479,198	1,479,198	1,479,198	1,479,198
	1,479,198	1,479,198	1,479,198	1,479,198
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding upon the companyin proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or in proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

21. Retained Profits

		Consolidated	Parent Entity
	2001	2000	2001	2000
	$	$	S	$
Retained profits at the beginning of
the financial year	3,400,583	2,398,078	3,456,481	2,384,054
Net profit from ordinary activities
after related income tax	2,532,920	2,152,505	2,574,177	2,222,427
Dividends provided for or paid	(750,000)	(1, 150, 000)	(750,000)	(1,150,000)
Retained profits at the end of the
financial year	5,183,503	3,400,583	5,280,658	3,456,481
22.Equity
Total equity at the beginning of the
financial year	4,879,781	3,877,276	4,935,679	3,863,252
Total changes in equity recognised in
the statement of financial performance	2,532,920	2,152,505	2,574,177	2,222,427
Transactions with owners as owners:
- Dividends provided for or paid	(750,000)	(1,150,000)	(750,000)	(1,150,000)
Total equity at the end of the financial
year	6,662,701	4,879,781	6,759,856	4,935,679

23. Segmental information

The consolidated entity operates primarily in one industry being the land syndication and development industry and in one geographical segment being Australia.

Directors' remuneration 24.

The numbers of parent entity directors whose total income from the parent entity or related parties was within the specified bands are as follows:

	2001$	2000S
$$110,000 - $119,999$
$$130,000 - $139,999$$$140,000 - $149,999$
$$170,000 - $179,999$$$240,000 - $249,999$
$$270,000 - $279,999$
Income paid or payable, or otherwise made available, to directors byentities in the consolidated entity and related parties in connection with themanagement of affairs of the parent entity or its controlled entities,inclusive of GST:
	768.885	734.430

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

24. Directors' remuneration (Cont)

Aggregate number of shares of Peet & Company Limited held directly, indirectly or beneficially by directors or their director-related entities at balance date.

	2001	2000
Ordinary shares	724,877______________________________________	724,877$\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$BERGHAMMAN

$25.$ Remuneration of Executives

The numbers of Australian based executive officers including directors whose remuneration from entities in the consolidated entity and related parties was within the specified bands are as follows:

	2001S	2000S
$$100,000 - $109,999$$$110,000 - $119,999$$$130,000 - $139,999$$$140,000 - $149,999$$$170,000 - $179,999$$$240,000 - $249,999$$$270,000 - $279,999$
Remuneration received, or due and receivable from entities in theconsolidated entity and related parties by Australian based executiveofficers (including directors) whose remuneration was at least $100,000.
Executive officers of the parent and consolidated entity	980,603	734.430

26. Related parties

Directors

The names of persons who were directors of the company at any time during the financial year are as follows: AW Lennon, WD Hemsley, IMC Palmer and AJ Lennon. All of these persons were also directors during the year ended 30 June 2000.

Remuneration Benefits

Information on remuneration benefits of directors is disclosed in notes 24 and 25.

Transactions of Directors and Director-related Entities Concerning Shares

There were no transactions with directors and director-related entities concerning shares during the financial year ended 30 June 2001. The aggregate number of shares held directly, indirectly or beneficially by directors or their director-related entities at balance date is disclosed in note 24, with individual details disclosed in the Directors' Report.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

Related parties (continued) 26.

Other Transactions with Directors and Director-related Entities

During the year ended 30 June 2001, the Company derived the following fees from entities over which the directors and their related entities have significant influence:

	Parent Entity
	2001	2000
$\mathcal{F}^{\mathcal{A}}$	S	S
Project management, marketing and selling fees	4,624,897	3,293,709
Manager's performance fees	476,947	361,260
Asset identification fees	213,750	48,000
Brokerage, underwriting & corporate advisory fees	10,000	307,100
Bookkeeping and secretarial fees	344,221	191,901
Other consultancy fees	69,360	97,600
	5,739,175	4.299.570

As at 30 June 2001 the following amounts were receivable from / (payable) to directors and their director related entities at balance date:

	Parent Entity
	2001	2000
		S
Aggregate amounts receivable from directors and their director
related entities	14,359	4,793
Aggregate amounts payable to directors and their director related
entities	(24,761)	(3,604)

The Company entered into a Company Management, Project Management and Marketing Agreement to act as company manager, project manager and marketing and selling agent for Peet Windsor Park Syndicate Limited (formerly Peet No 56 Syndicate Limited) while it was 100% owned by the Company. Under this agreement an asset identification fee was payable to the company as at 30 June 2001. No invoice had been issued as at year-end, but the fee of $213,750 was accrued.

The Company also entered into an underwriting and capital raising coordination agreement with Peet Windsor Park Syndicate Limited during the year. As at 30 June 2001, no fees were payable.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

26 Related parties (continued)

Other related parties

Aggregate amounts of advances receivable from and repayable to, each class of related parties at balance date is as follows:

		Parent Entity
	2001	2000
	S	S
Payable to Controlled Entities
Current:
Peet Jandakot Land Syndicate Limited	101,756
Non-current:	101,756
Hawkstone Conveyancing Pty Ltd	2,002	2,002
	2,002	2,002
Total
	103,758	2,002
Receivable from Controlled Entities
Current:
Peet Windsor Park Syndicate Limited(formerly Peet No 56 Syndicate Ltd)
	281,002
Non-current:	281,002
Hawkestone Unit Trust	238,444
Dunnings Road Limited	1,629,067	235,264
Peet Jandakot Land Syndicate Ltd		1,347,122
Peet & Co Western Estates Syndicate Ltd	11,825	216,6762,863
Peet Windsor Park Syndicate Limited (formerly Peet No 56 Syndicate Ltd)		1,650
	1,879,336	1,803,575
Receivable from other related parties
Non current:
Thompson's Lake Unit Trust	6,919	6,919
	6,919	6,919
	2,167,257	1,810,494

$(i)$

As at the date of this report, the Company no longer controlled Peet Jandakot Land Syndicate Limited or Peet Windsor Park Syndicate Limited.

The amounts owing are unsecured, interest free and repayable on demand. The purpose of the advances to the various entities is to allow the purchase and potential development of broad acre land.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

26 Related parties (continued)

Wholly Owned Group

The wholly owned group consists of Peet & Company Limited (incorporated in Australia), being the ultimate parent entity, and its wholly owned controlled entities: Peet Prosper Pty Ltd; Peet Management Ltd; Hawkstone Conveyancing Pty Ltd; Hawkestone Unit Trust: Peet Jandakot Land Syndicate Ltd (refer to note 10): Peet Windsor Park Syndicate Ltd (formerly Peet No. 56 Syndicate Ltd – refer to note 10); Peet & Co Western Estates Syndicate Ltd; and Dunnings Road Ltd.

Ownership interest in these controlled entities is set out in note 10.

Transactions between Peet & Company Limited and other entities in the wholly owned group during the years ended 30 June 2001 and 2000 consisted of loans advanced by Peet & Company Limited. There are no interest charges or fixed terms for the repayment of loans advanced by Peet & Company Limited.

$27.$ Trusts

The company is trustee for the following trusts:

	2001Right of	2001Total	2001	2000Right of	2000Total	2000
	Indemnity	Liabilities	Deficiency	Indemnity	Liabilities	Deficiency
Australind Unit Trust	18,485	18.485		151,712	151,712
Bunbury Unit Trust	125,094	125,094		168,788	168,788
Eaton Unit Trust	1,076,694	1,076,694	٠	1,297,497	1,297,497
Glenfield Oceanside Unit Trust	236,546	236,546		730,108	730,108
Hawkstone Unit Trust	220,144	238,944	18,800	220,131	235,514	15,383
Jandakot Unit Trust	57,050	57,050		45,709	45,709
Mather Drive Unit Trust				20,936	20,936
Thompson's Lake Unit Trust	86,627	86,627		75,757	75,757
Warnbro Oceanside Unit Trust	1,567,525	1,567,525		2,863,296	2,863,296
Yanchep Ocean Front Unit Trust	1,816,708	1,816,708	۰.	1,804,149	1.804.149
Burns Beach Property Trust	3,851,117	3,851,117
Yatala Unit Trust	5,724,187	5,724,187
	14,780,177	14,798,977	18,800	7,378,083	7,393,466	15,383

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

28. Notes to Statements of Cash Flows

$(a)$ Reconciliation of cash

Cash as at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the statement of financial position as follows:

	Consolidated		Parent Entity
	2001	2000	2001	2000
Cash at bank and on handBank overdraftMasterCard facility	1,014,825$\mathbf{u}$$\blacksquare$	514,999(7,968)	947,073-	508,696(7,968)
	1,014,825	507,031	-947,073	500,728The HIRIS (110) colleges was

$(b)$ Financing arrangements

Unrestricted access was available at balance date to the following lines of credit:

	Consolidated		Parent Entity
	2001	2000	2001	2000
	S	$	S	S
Total facilities
Bank overdrafts	$\left( i\right)$	(1)	$\Omega$	$\left( 1\right)$
Bank loan facilities	10,425,000	4,700,000	350,000	500,000
Credit cards	12,000	12,000	12,000	12,000
Bank Guarantees/ Letters of Credit	13,740,732	76,740	90,732	76,740
Used at balance date
Bank overdraft
Bank loan facilities	6,280,000	4,200,000
Credit cards		7,968		7,968
Bank Guarantees/ Letters of Credit	13,740,732	76,740	90,732	76,740
Unused at balance date
Bank overdraft	$\rm(i)$	$\left( i\right)$	(i)	$\left( 1\right)$
Bank loan facilities	4,145,000	500,000	350,000	500,000
Credit cards	12,000	12,000	12,000	4,032
Bank Guarantees/ Letters of Credit

(i) the bank loan facilities and the bank overdraft of the parent entity cannot together exceed $350,000 (2000: $500,000) at any one time. The bank loan facilities and the bank overdrafts of the consolidated entity as at 30 June 2001 could not together exceed $10,425,000 (2000: $4,700,000) at any one time. These are multi option facilities. Refer to note 15 for more details.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

28. Notes to Statements of Cash Flows (cont)

Reconciliation of operating profit after income tax to net cash provided by operating activities. $(c)$

	Consolidated		Parent Entity
	2001	2000	2001	2000
	$\mathbb{S}$	$	S	$
Operating profit after income taxAdd/(deduct) non cash items:	2,532,920	2,152,505	2,574,177	2,222,427
Depreciation	82,474	86,515	82,445	86,515
Return of capital				(20,000)
Increase in value of listed shares		(521)		(521)
Loss on sale of non-current
assets	2,501	1,125	2,501	1,125
Other non-cash	(1,162)
Net cash provided by operating
activities before changes in assets
and liabilities	2,616,733	2,239,624	2,659,123	2,289,546
Change in operating assets and
liabilities during the financial year:
Decrease/(increase) in trade
debtors	$(1,205,207)$ $\checkmark$	17,208	(1,205,207)	17,208
Decrease/(increase) in
prepayments & other debtors	194,537 $\vee$	(186, 107)	11,417	(163,096)
(Increase)/decrease in inventory	$(13,202,824) \checkmark$	1,780,701	46,104	2,550,379
Decrease/(increase) in future
income tax benefit	107,524 $\checkmark$	(37,504)	104,267	(26, 250)
(Decrease)/increase in income
taxes payable	$(416,367) \vee$	(443, 306)	(649, 453)	(443,306)
Increase/(decrease) in trade
creditors	$5,978$ and $\sim$	(208, 213)	(65, 128)	(211, 526)
Increase/(decrease) in other
creditors	10,613,364 $\nu$	(1,087,366)	14,203	76,724
(Decrease)/increase in provisions	(45, 727)	142,916	(45, 727)	142,916
Increase/(decrease) in deferred
taxes payable	427,534 $\checkmark$	(1,923)	429,958	2,300
Decrease/(increase) in other
assets	2,862	(9, 466)		(5, 729)
Net cash provided by operating
activities	(901, 593)	2,206,564	1,299,557	4,229,166

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

29. Financial instruments

$(a)$ Credit risk exposures

The credit risk on financial assets of the consolidated entity which have been recognised on the statement of financial position, other than investments in shares, is generally the carrying amount, net of any provisions for doubtful debts.

The cash component of financial assets is considered to have low credit risk as it is maintained within accounts operated by a reputable financial institution subject to Australian Prudential Regulatory Authority supervision.

$(b)$ Interest rate risk exposures

The consolidated entity's exposure to interest rate risk and the interest rate for each class of financial asset and liability is set out below.

Exposures to this type of risk arise predominantly from assets and liabilities bearing variable interest rates as any fixed rate assets or liabilities that the consolidated entity may hold is likely to be held to maturity.

2001	Notes	Floatinginterestrate$	Fixedinterestmaturing in1 year orlessS	NoninterestbearingS	Total$
Financial assets
Cash assets		1,014,722		103	1,014,825
Receivables	6; 8			2,962,939	2,962,939
Investments	10			732,705	732,705
		1,014,722		3,695,747	4,710,469
Weighted average interest rate		4.00 %		N/A
Financial liabilities
Payables	14			13,823,817	13,823,817
Interest bearing liabilities	15		6,280,000		6,280,000
			6,280,000	13,823,817	20,103,817
Weighted average interest rate			5.66%	N/A
Net financialassets/(liabilities)		1,014,722	(6,280,000)	(10, 128, 070)	(15,393,348)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

29. Financial instruments (Continued)

2000	Notes	Floatinginterestrate$	Fixedinterestmaturing in1 year or less$	Noninterestbearing$	TotalS
Financial assetsCash assets
Receivables	6; 8	506,983		8,016	514,999
Investments	10			2,036,679935,076	2,036,679935,076
		506,983		2,979,771	3,486,754
Interest rate		4.5%		N/A
Financial liabilities
Payables	14			3,204,475	3,204,475
Interest bearing liabilities	15	7,968	4,200,000		4,207,968
		7,968	4,200,000	3,204,475	7,412,443
Interest rate		16.5%	6.5%	N/A
Net financialassets/(liabilities)		499,015	(4,200,000)	(224, 704)	(3,925,689)

Net fair value of financial assets and financial liabilities $\left( \text{c} \right)$

The net fair value of the consolidated entity's financial assets and financial liabilities approximates their carrying value.

30. Commitments

The Company commitments relate to the lease of its premises at Level 7, 200 St George's Terrace, Perth and Level 2, 470 St Kilda Road, Melbourne.

	Consolidated		Parent Entity
	2001	2000	2001	2000
	$	$	S	$
Future operating lease rentals notprovided for in the financialstatements and payable:
Not later than one yearLater than one year but not later	161,829	158,748	161,829	158,748
than five years	221,157	165,658	221,157	165,658
	382,986	324,406	382,986	324,406

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

31. Contingent liabilities

The details and estimated amount of contingent liabilities are set out below. The directors are not aware of any circumstances or information, which would lead them to believe that these liabilities will crystallise and consequently no provisions are included in the accounts in respect of these matters.

As licensee of a securities business, the company has a bank guarantee of $20,000 in favour of the Australian Securities & Investments Commission ("ASIC"). As at 1 July 2000, this license was revoked and replaced by a new Dealer's License by the ASIC. The bank guarantee of $20,000 remains in force.

In September 2000, the company arranged a bank guarantee of $13,992 in favour of 470 St Kilda Road Pty Ltd (A.C.N. 006 075 381) for the sub lease of premises at Level 2, 470 St Kilda Road Melbourne, Victoria. The lease term commenced 8 August 2000 and ends 8 August 2003. The lease agreement also contains two, 2-year options to extend the term at the discretion of the Company.

As from 1 July 2000, the Company is subject to the Managed Investments Provisions of the Corporations Law in respect to several associated entities for which it acts as the Responsible Entity ("RE") and Custodian. The entities are:

• (a) Burns Beach Property Trust
• (b) Yatala Unit Trust
• (c) Jandakot Unit Trust
• (d) Thompson's Lake Unit Trust
• (e) Australind Unit Trust

To assist the Company in meeting the requirements to act as an RE and Custodian, it had one of its wholly owned subsidiaries arrange a Bank Guarantee of $2,400,000 in favour of the Company.

The company has a bank guarantee of $46,740 in favour of the City of Joondalup. This is in respect to the company's development project known as The Sanctuary. As at the date of this report, all blocks in the estate have been sold and settled. Arrangements have been made to have the bank guarantee cancelled.

As trustee of the Hawkestone Unit Trust an agreement was entered into during the 1998 financial year with Peet Adios Syndicate Limited, Peet Forrestdale Syndicate Limited and Peet Oakford Land Syndicate Limited relating to a cost sharing arrangement for joint use of a water pipeline. The total costs relating to the pipeline agreement amount to $329,750. The trust's share is calculated at 2% of the total cost, being $6,595. The company as trustee for the Hawkestone Unit Trust has a bank guarantee of $10,000 in favour of the City of Armadale, in respect to this issue.

During the year, the Company entered into an Underwriting and capital raising coordination agreement with Peet Windsor Park Syndicate Limited, with the Company underwriting the capital raising to a maximum of $10,000,000. As at the date of this report, Peet Windsor Park Syndicate had allotted 14,000,000 $1.00 shares paid to $0.50 cents.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2001

32. Employee Entitlements

	Consolidated		Parent Entity
	2001	2000	2001	2000
	S	$	$	S
Employee Entitlement Liabilities
Provision for employee entitlements
Current (note $16$ )	148,256	143,670	148,256	143,670
Non – current (note 19)	35,240	25,053	35,240	25,053
	183,496	168,723	183,496	168,723
	Number		Number
Employee numbers
Number of employees at the end of
the financial year	27	27	27	27

33. Events occurring after balance date

The Directors of the parent entity declared a fully franked dividend of 81 cents per share ($600,000) on Thursday, 23 August 2001 and the dividend was paid on Friday, 24 August 2001.

Since the end of the financial year ended 30 June 2001, Peet Windsor Park Syndicate Limited issued 14,000,000 $1.00 shares paid to $0.50 cents. The capital raising was closed in September 2001. Accordingly, at the date of this report, Peet Windsor Park Syndicate Limited is not a controlled entity of the Company.

The share held in Peet Jandakot Land Syndicate Limited was sold in August 2001 to an unrelated third party. Accordingly, at the date of this report, Peet Jandakot Land Syndicate Limited is not a controlled entity of the Company.

The financial effects of the above transactions have not been brought to account at 30 June 2001. The operating results and assets and liabilities of Peet Jandakot Land Syndicate Limited and Peet Windsor Park Syndicate Limited were consolidated as at 30 June 2001.

34. Going concern

Notwithstanding current liabilities exceeding the current assets of the consolidated entity, the directors believe the consolidated entity will be able to pay its debts as and when they fall due because:

• the consolidated entity has appropriate facilities in place with its financiers, National Australia Bank $(a)$ and the directors do not foresee the bank making a call on existing debt;
• if required, the Company has the ability to arrange a capital raising to retire debt; and $(b)$
• $(c)$ the consolidated entity is in a healthy overall net asset position. The majority of its non current inventory (land held for development and resale) is recorded at its cost which, based on an independent valuation dated 30 June 2001, is significantly lower than its market value at that date.

DIRECTORS DECLARATION

The directors declare that the financial statements and notes set out on pages 6 to 31:

• comply with Accounting Standards, the Corporations Regulations 2001 and other $(a)$ mandatory professional reporting requirements; and
• give a true and fair view of the company's and consolidated entity's financial position as at $(b)$ 30 June 2001 and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date.

In the directors' opinion :

• the financial statements and notes are in accordance with the Corporations Act 2001; and $(a)$
• there are reasonable grounds to believe that the company will be able to pay its debts as $(b)$ and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

.Director Director

Perth, Western Australia 31 October 2000

PRICEWATERHOUSE COPERS

Independent Audit Report to the Members of

Peet & Company Limited

Scope

PricewaterhouseCoopers The Ouadrant 1 William Street PERTH WA 6000 GPO Box D198 PERTH WA 6840 Telephone (08) 9238 3000 Facsimile (08) 9238 3999 DX 77 Perth

We have audited the financial report of Peet & Company Limited (the Company) for the financial year ended 30 June 2001 as set out on pages 6 to 32. The Company's directors are responsible for the financial report which includes the financial statements of the Company and the consolidated financial statements of the consolidated entity comprising the Company and the entities it controlled at the end of, or during, the financial year. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the Company.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and the Corporations Act 2001 in Australia so as to present a view which is consistent with our understanding of the Company's and the consolidated entity's financial position, and performance as represented by the results of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of the Company is in accordance with:

• $(a)$ the Corporations Act 2001, including:
  • giving a true and fair view of the Company's and consolidated entity's financial $(i)$ position as at 30 June 2001 and of their performance for the financial year ended on that date: and
  • (ii) complying with Accounting Standards and the Corporations Regulations 2001; and

other mandatory professional reporting requirements. $(b)$

Louse Cooper

Pricewaterhouse@copers Auntants Chartered

Alan J Good Partner

Perth, Western Australia 31 October 2001