SIETEL LIMITED — Annual Report 2002

Dec 22, 2002

AQUAMAX

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PRIVACY & CONFIDENTIALITY NOTICE:The information contained in this facsimile is intended for the named recipients only. It may contain privileged and confidentialInformation and if you are NOT an intended recipient, yo

Sietel Limited	---------
	Address:	463-467 Warrigal Rd, Moorabbin, Victoria, Australia
A.C.N. 004 217 734
		Postał Address: PO Box 1195 Moorabbin, Victoria 3189
	Telephone:
		$(03)$ 9553 5740Fax: (03) 9532 5244

SIETEL LIMITED

A.B.N. 75 004 217 734 Registered Office: 463-67 Warrigal Road, Moorabbin 3189

FORM OF PROXY

I/We....................................

01.....................................

Being a member of Sietel Limited and entitled to....................................

HEREBY APPOINT....................................

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

of ....................................

or failing him the Chairman of the Meeting as my/our proxy vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at 11am on the 29th January 2003 and at the adjournment thereof.

Should you desire to direct your proxy how to vote please complete the following section of this form by inserting X in the appropriate boxes. If you do not direct your proxy on any item he will vote on it as he thinks fit or may abstain from voting.

TAME INSTRUCT MY/OUR PROXY TO VOTE AS INDICATED BELOW IN RESPECT OF:-	FOR L	AGAINST
Adoption of Reports and Accounts	$\Box$	and the state of the state
Election of a Director - Mr. D. G. Rees	$\begin{array}{ c c c c c c c c c c c c c c c c c c c$
As witness on this

Signature....................................

A member entitled to attend and vote is entitled to appoint not more than two proxies. Where a member appoints more than one proxy, each proxy must be appointed a specified portion of the members voting rights. A proxy need not be a member of the Company. To be effective Proxies and any Power of Attorney under which a Proxy may be signed must be lodged at the company's registered office, 463-67 Warrigal Road, Moorabbin, not less than 48 hours before the time for holding the Meeting. A proxy executed by a Corporation must be under seal. Under the Articles of Association. Preference Shareholders are entitled to vote at this Meeting and have four votes for each share held.

2002

Fifty Sixth Annual Report

FOR THE YEAR ENDED 30 SEPTEMBER 2002

A.B.N. 75 004 217 734

AQUAMAX

BOARD OF DIRECTORS

D. G. Rees, Chairman R. Rees, Managing Director G. E. Nanscawen, Director

REGISTERED AND PRINCIPAL BUSINESS OFFICE 463/67 Warrigal Road Moorabbin Vic. 3189 Phone: (03) 9553 5740

AUDITORS

McDonald Carter HPW Business Advisors & Chartered Accountants Level 4/256 Queen Street Melbourne 3000

SECRETARY

R. Rees, B. Comm., C.A. Australian Company No. 004 217 734 ABN 75 004 217 734

SOLICITORS

Brian Ward and Partners Eggleston Clifton-Jones & Co. Prior and Prior

BANKERS National Australia Bank Ltd 445 Warrigal Road Moorabbin 3189 Australia and New Zealand Banking Group 13 Chesterville Rd Cheltenham 3192

GPO Box 35 Brisbane QLD

Registries

SHARE REGISTER

Douglas Heck & Burrell

4001

NOTICE OF MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Sietel Limited will be held at 11.00am on Wednesday 29th January 2003 at the Registered Office of the Company, 463/67 Warrigal Road, Moorabbin, Victoria, for the purpose of transacting the following business:

• To receive and consider the Statement of Financial Position as at September 30, 2002 and Statement of $\mathbf{1}$ Financial Performance of the Company and the economic entity for the year ended and Reports of the Directors and Auditors thereon.
• Mr. D. G. Rees retires being over the age of 72 and being eligible offers himself for re-election. $2.$
• 1. To transact any other business as may legally be brought forward.

By Order of the Board.

B. Bees

B. Comm., C.A.

Moorabbin, 13 December 2002.

PROXIES:

A member is entitled to appoint no more than two other persons to attend the Meeting and to act on his behalf. Where a member appoints two proxies, the proportion of the members' voting rights given in favour of each proxy must be specified. An additional proxy form will be supplied by the Company on request. The proxy must be deposited at the Office of the Company not less than 48 hours before the time of the Meeting. A proxy may, but need not be a member of the Company. Under the Articles of Association Preference Shareholders are entitled to vote at this Meeting and have four votes for each share held.

SIETEL LIMITED AND CONTROLLED ENTITIES

DIRECTORS REPORT FOR YEAR ENDED 30 SEPTEMBER 2002

In accordance with a resolution of the Directors dated 13 December 2002, the Directors of the Company have pleasure in reporting on the Statements of Account of the Chief Entity and the Economic Entity for the financial year ended 30 September 2002 and the state of affairs as at 30 September 2002.

The Directors of the Chief Entity in office at the date of this report are:- Delwyn Garland Rees, Richard Rees, and Geoffrey Nanscawen. The directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Refer table "Directors Meetings" page 3 of this report.

PRINCIPAL ACTIVITIES:

The Chief Entity is engaged principally in investment in industrial and commercial real estate, provision of leased facilities, and plant and management services to its controlled entities and management, evaluation and expansion of these and other business opportunities. No significant change in the principal activities of the Chief Entity occurred during the year.

The wholly owned controlled entity Cooks Body Works Pty Ltd continued trading as a commercial vehicle body builder.

The controlled entity, The Cylinder Company Pty Ltd provided equipment to related companies and is the trustee company for the Sierac Unit Trust.

Aqua-Max Pty Ltd has operated a research and development division since it became a controlled entity.

Aqua-Max Pty Ltd Manufacturing division continued production and sales of water heaters during the year.

There were no significant changes in the nature of the economic entity's activities during the year.

DIVIDENDS:

No dividends were paid or recommended since the end of the previous financial year.

REVIEW OF OPERATIONS:

The properties owned by the Chief Entity have been tenanted for the full year with a significant proportion of the premises in Moorabbin being occupied by the Chief Entity's controlled entities, Cook's Body Works Pty Ltd and Aqua-Max Pty Ltd.

The water heating business experienced continuing competition especially from imported products and increased costs of labour on costs and marketing expenditures. The over all market remained relatively static. The company has implemented cost savings where possible but has found it difficult to gain any price increases especially from large customers.

Considerable engineering resources were employed and capital expenditure made during the year on finalising product development and plant design and set up for a new range of vitreous enamel storage electric water heaters, due for release early in the new year. Extra costs were incurred on equipment supplied that did not meet specifications and required significant redesign and rework. Arbitration currently in progress could result in recovery of all or part of these costs.

The body building business experienced cost and demand pressures with changing demand patterns of existing large customers and the continued need to develop new products. The operating loss was the result of these market forces and it is anticipated that corrective action taken during the year will bring about an improved result in the coming year.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS:

There have been no significant changes in the state of affairs of the economic entity during the financial year.

EVENTS SUBSEQUENT TO BALANCE DATE:

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Economic Entity and the results of those operations or the state of affairs of the economic entity in financial years subsequent to the financial year ended 30 September 2002.

FUTURE DEVELOPMENTS:

No information has been included on the likely developments of the Chief Entity or the economic entity as the directors are of the opinion that to include such comments would be unreasonably prejudicial to the interests of the economic entity.

INFORMATION ON DIRECTORS:MR. DELWYN G. REESQualifications	DIRECTOR (CHAIRMAN) Age 76Diploma of Commerce (Melbourne University)Member of Australian Society of AccountantsCertified Practising Accountant
Experience	Board Member since 1967Appointed Chairman in 1970An accountant in public practice for over 30 years
Interests in Contracts	Director of a company which provides financial and management services to theChief Entity. Consultant to Garland Consulting Services which providesconsulting and secretarial services to the Chief Entity.
Interests in Shares	Refer to Table headed Directors' Interest in Ordinary Shares on page 21 whichis to be read as forming part of this report.
MR. RICHARD REESQualifications	MANAGING DIRECTOR Age 52Bachelor of Commerce (Melbourne University)
Experience	Member of the Institute of Chartered Accountants in AustraliaBoard Member and Chief Executive of Chief Entity since 1981.
Interests in Contract	Has a service and share option agreement with the Chief Entity dated March 1984.Receives allowance for the provision of motor vehicles for use by the EconomicEntity. Share options taken up during 1996/1997 in accordance with the Trust Deedof Sietel Limited "A Staff Equity Participation Plan" ("the plan") which expired inFebruary 2002.
Interest in Shares	Refer to Table headed Directors' Interest in Ordinary Shares on page 21 which is tobe read as forming part of this report.
MR. GEOFFREYNANSCAWEN	DIRECTOR Age 54
Experience	Board Member since 2001 and marketing executive of a subsidiary since 1994.Over 30 years experience in the gas industry occupying numerous managerialpositions, particularly in marketing, sales and advertising.Member of various Committees within the industry, including the Australian GasAssociation. Involved in the product development of many local gas appliances aswell as overseas products.
Interests in Contract	Share options taken up during 1996/1997 in accordance with the Trust Deed "A StaffEquity Participation Plan" ("the plan") which expired in February 2002.

DIRECTORS' MEETINGS

During the financial year the attendance at Directors' meetings was as follows:

	Meetings attended
9	9
9	я
9	9
	Meetings held

354,427

INDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year, the company paid a premium in respect of a contract insuring the directors of the company (as named above) and all executive officers of the company and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent of the policy limits with a current $1ml in aggregate.

The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor.

DIRECTOR'S REMUNERATION
TOTALBENEFITSSALARY/FEESOFFICENAME
D. G. Rees	Director
R. Rees	Director	110.528	75.047	185.575
G. E. Nanscawen	Director	110,238	58,594	168,852

There are no proceedings on behalf of the company.

Signed in accordance with a resolution of the Directors made pursuant to S.298 (2) of the Corporations Act 2001. On behalf of the Board

D. G. Rees, Director

R. Rees, Director

Moorabbin, 13 December 2002

Corporate Governance

The Board of Directors has a non executive director being Mr D. G. Rees (Chairman) who is an experienced business man and director.

The Chairman can seek independent professional advice in the furtherance of his duties as a Director and has direct access to senior staff of the Company. The company will pay claims for re-imbursement of this expenditure provided prior written authority of the expenditure and amount has been obtained from the Chairman and one other Director.

The small size of the Board does not lend itself or provide any advantage in the appointment of committees and for this reason the whole Board has retained the responsibility for all committee work including audit and Corporate governance committees.

The Chairman has agreed to attend the premises on a regular basis to;

• Counter sign a significant proportion of cheques for the Company or in his absence Mr G. L. Rees of Brian Ward & Partners.
• Counter sign a significant sample of cheques for the subsidiary companies.
• Review operations and have direct contact with staff and consultants.
• Review remuneration packages of executive directors and senior staff.

The Board has focused on a number of specific areas relating to business risk and opportunities along with overseeing of financial reporting and maintenance of internal controls for the coming year.

The Boards responsibilities and duties include the following;

• Appointment of senior executives.
• Determination of strategic direction of the company and group entities. ü
• Measuring of performance against past performance after adjusting for factors outside management's control.
• Appointment and ongoing arrangements with auditors.
• Overview of company and subsidiary companies with compliance with legal requirements and maintenance of general business conduct standards.
• Balancing competing interests of shareholders employees, customers, consumers and creditors.

INDEPENDENT AUDIT REPORT

To the members of Sietel Limited

Scope

We have audited the financial report of Sietel Limited and controlled entities comprising the Directors' Declaration, Profit and Loss Statement, Balance Sheet, Statement of Cash Flows and notes to and forming part of the financial statements of Sietel Limited for the financial year ended 30 September 2002.

The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at year's end or from time to time during the financial year. The company's directors are responsible for the preparation and presentation of the financial report. We have conducted an independent audit of this 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 whether the financial report is free of material misstatement. Our procedures include 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 whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting and statutory requirements 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 Sietel Limited and controlled entities is in accordance with:

$(a)$ the Corporations Act 2001, including:

• $(i)$ giving a true and fair view of the company's and consolidated entity's financial position as at 30 September 2002 and its performance for the year ended on that date; and
• $(ii)$ complying with Accounting Standards and the Corporations Regulations; and
• $(b)$ other mandatory professional reporting requirements.

McDONALD CARTER HPW

CHARTERED ACCOUNTANTS

G.S.PARKER PARTNER

Dated this 13 day of December, 2002 Melbourne

DIRECTORS' DECLARATION

The directors declare that:

The attached financial statements and notes thereto comply with accounting standards; $a)$

$61 - 3 - 9532 - 5244$

• The attached financial statements and notes thereto give a true and fair view of the financial position and b) performance of the company and the economic entity;
• In the directors' opinion, the attached financial statements and notes thereto are in accordance with the c) Corporations Act 2001; and
• d) In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed, in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors

Director, Mr. D. G. Rees Director, Mr. R. Rees

Moorabbin, 13 December 2002

AQUAMAX

$PAGE = 10$

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 SEPTEMBER 2002

Note	Economic Entity				Chief Entity
	2001	2002		2002	2001
	$	$		$	$
20	18,915,175	19,904,903	Revenues from ordinary activities	3,288,081	2,845,453
21	18,559,865	18,309,956	Expenses from ordinary activities	2,532,715	2,146,999
21	178,977	232,958	Borrowing expenses	232,707	178,720
21	176,333	1,361,989	Profit (loss) from ordinary activities beforeincome tax expense	522,659	519,734
22		(636, 794)	income tax expense/(revenue) relating toordinary activities	(501, 200)
	176,333	1,998,783	Profit (loss) from ordinary activities afterincome tax expense	1,023,859	519,734
			Total revenues, expenses and valuationadjustments attributable to members of theparent entity and recognised directly inequity.
	176,333	1,998,783	Total changes in equity other than thoseresulting from transactions with owners asowners.	1,023,859	519,734
33	2.20	24.96	Earnings per share - Basic (cents per share)
33	2.10	24.72	Earnings per share - Diluted (cents per share)

Notes to and forming part of the accounts are set out on pages 10 to 21.

STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2002

Note	Economic Entity			Chief Entity
	2001$	2002$		2002$	2001$
			Current Assets
	1,116,177	1,296,608	Cash assets	67,325	127,154
$\mathbf 2$	1,391,390	1,176,723	Receivables	38,472	18,631
3			Other financial assets	842,823	2,235
4	1,303,395	1,494,033	Inventories	$\overline{\phantom{a}}$
5	72,318	97,533	Other	97,525	72,246
	3,883,280	4,064,897	Total Current Assets	1,046,145	220,266
			Non-Current Assets
6	165,142	125,132	Receivables	125,132	165,142
7	28,587	28,587	Other financial assets	1.186,298	1,186,298
8	11,337,594	11,698,412	Property, plant and equipment	9,992,183	9,719,818
9	452,571	418,597	Intangibles
10		867,650	Deferred tax assets	728,724
11	631,561	525,637	Other
	12,615,455	13,664,015	Total Non-Current Assets	12,032,337	11,071,258
	16,498,735	17,728,912	Total Assets	13,078,482	11,291,524
			Current Liabilities
12	3,448,328	1,705,752	Payables	46,693	268,005
13	2,220,214	1,911,150	Interest bearing liabilities	1,911,150	2,201,822
14	2,498,827	2,604,992	Provisions	517,251	427,889
15		218,671	Current tax liabilities	227,524
	8,167,369	6,440,565	Total Current Liabilities	2,702,618	2,897,716
			Non-Current Liabilities
16	533,847	1.492,044	Interest bearing liabilities	1,492,044	533,847
	533,847	1,492,044	Total Non-Current Liabilities	1,492,044	533,847
	8.701,216	7,932,609	Total Liabilities	4,194,662	3,431,563
	7.797,519	9.796,303	Net Assets	8,883,820	7,859,961
			Equity
18	4,257,129	4,257,129	Contributed equity	4,257,129	4,257,129
19	1,223,240	1,223,241	Reserves	1,223,241	1,223,240
	2,317,150	4,315,933	Retained profits	3,403,450	2,379,592
	7.797.519	9.796.303	Total Shareholders' Equity	8,883,820	7,859,961

Notes to and forming part of the accounts are set out on pages 10 to 21.

Sietel WATED

STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 SEPTEMBER 2002

Note	Economic Entity			Chlef Entity
	2001	2002		2002	2001
	$	$		$	$
			Cash flows from Operating Activities
	19,635,855	20,684,653	Receipts from customers	4,227,881	3,238,569
	(17, 345, 848)	(17,934,139)	Payment to suppliers and employees	(2,895,007)	(1,214,624)
(12, 185)			Income Tax Paid
	69.644	38,652	Interest received	2,896	15,845
	(178, 975)	(140, 532)	Borrowing costs	(232, 707)	(178, 721)
32(ii)	2,180,676	2,636,449	Net cash provided by/(used in) operatingactivities	1,103,063	1,861,069
			Cash flows from Investing Activities
	(15.715)		Cash paid for investments		(12, 816)
	167.536	55,591	Proceeds from sale of property, plant andequipment	4,091	167,536
	41,696	683,636	Proceeds from sale of investments	683,636	41,696
(2,039,446)		(582, 804)	Payment for property, plant andequipment	84,594	(1,096,642)
			Payment for Research and Development
	(736, 592)	(26, 182)	and Intangibles
	1,992	1,371	Dividends received	711	1,452
	(2,580,529)	131,612	Net cash provided by/(used in )investingactivities	773,032	(898, 774)
			Cash flows from Financing Activities
			Loans (to)/repaid by Controlled Entities	(968, 635)	312,609
	500,000		Proceeds from borrowings		500,000
	(288, 292)	(2,569,238)	Repayment of borrowings	(967, 289)	(1,536,489)
	211,708	(2,569,238)	Net cash provided by/(used in) financingactivities	(1,935,924)	(723, 880)
	(188, 145)	198,823	Net Increase/(decrease) in cash held	(59, 829)	238,415
	1,285,930	1,097,785	Cash as at 1 October 2001	127,154	(111, 261)
32(i)	1,097,785	1,296,608	Cash as at 30 September 2002	67,325	127,154

Notes to and forming part of the accounts are included on pages 10 to 21.

Note 1 STATEMENT OF ACCOUNTING POLICIES

Financial Reporting Framework

The financial report is a general purpose financial report which has been prepared in accordance with the Accounting Standards, Urgent Issues Group Consensus Views, and other authoritative pronouncements of the Australian Accounting Standards Board.

Significant Accounting Policies $(A)$

Accounting policies are selected and applied in a manner which helps ensure that the resultant financial information satisfies the concepts of relevance and reliability, thereby, ensuring that the substance of the underlying transactions and other events is reported. The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently applied, unless otherwise stated.

In addition to the accounting policies prescribed by applicable Accounting Standards and Urgent Issues Group Consensus Views, the following significant accounting policies have been adopted in the preparation and presentation of the financial report.

Property, Plant and Equipment and Investments $(B)$

Depreciation has been charged in the accounts using either the reducing balance or straight line method on all classes of depreciable assets so as to write off their book value over the estimated useful life of the asset including buildings classified as investments. The economic entity's land and buildings leased to third parties and land and buildings occupied by the economic entity have been classified as Property, Plant and Equipment. The following estimated useful lives are used in the calculation of depreciation. Buildings: 20 - 25 years and Plant and Equipment 4 - 8 years. The policy of the company is to review its valuations of land and buildings every 3 years. There has also been no capital gains tax taken into account in determining revalued amounts.

Inventories $(C)$

All entities in the economic entity have:

• Valued stocks at the lower of cost and net realisable value $\left( i\right)$
• Calculated costs by including all variable manufacturing cost, and an appropriate portion of fixed $(ii)$ manufacturing cost, but excluding selling, distribution and administration expenses, and
• Assigned cost to inventory quantities on hand at balance date on a first in first out basis. $(iii)$

$(D)$ Goodwill

Goodwill is recorded initially at the amount by which the purchase price for a business exceeds the fair value attributed to its net tangible assets at date of acquisition. Goodwill is amortised on a straight line basis over the period in which the future benefits are expected to arise, but not exceeding 20 years. The balances are reviewed annually and any balance representing future benefits, the realisation of which is considered to be no longer probable, are written off.

Research and Development Expenditure $(E)$

Research and development expenditure on new major projects is deferred where it is expected beyond reasonable doubt that sufficient future benefits will be derived so as to recover those deferred costs. Deferred research and development expenditure is amortised on a straight line basis over the period during

which the related benefits are expected to be realised.

Employee Entitlements $(F)$

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and are capable of being measured reliably.

Provisions made in respect of wages and salaries, annual leave, and long service leave expected to be settled within 12 months, are measured at their nominal values.

Provisions made in respect of other employee entitlements (annual leave, long service leave) which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the economic entity in respect of services provided by employees up to the reporting date.

AQUAMAX

23/12/2002 13:59 Sietel Hanger

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2002

$61 - 3 - 9532 - 5244$

$(G)$ Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to entities within the economic entity are classified as finance leases. Finance leases are capitalised recording an asset and a liability equal to the present value of the minimum lease payments, including any quaranteed residual values. Lease payments are allocated to the reduction of the lease liability. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

$(H)$ Comparative Figures

Where required by Accounting Standards comparative figures have been adjusted with changes in presentation for the current financial year.

$(1)$ Receivables

Trade receivables and other receivables are recorded at amounts due less any provision for doubtful debts.

$(J)$ Recoverable Amount of Non-Current Assets

Non-current assets are written down to recoverable amounts where the carrying value of any non-current assets exceed recoverable amounts. In determining the recoverable amount of non-current assets, the expected net cash flows have been discounted to their present value.

Investment in subsidiary companies are valued at cost although in the case of one subsidiary the net assets are less than the company's investment. The Directors have written down this investment as they believe there is a permanent diminution in value.

$(K)$ Accounts Payable

Trade payables and other accounts payable are recognised when the economic entity becomes obliged to make future payments resulting from the purchase of goods and services.

$(L)$ Principles of Consolidation

The consolidated accounts comprise the accounts of Sietel Limited and all of its controlled entities. A controlled entity is any entity controlled by Sietel Limited. Control exists where Sietel Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Sietel Limited to achieve the objectives of Sietel Limited. A list of controlled entities is contained in Note 20 to the financial statements.

All inter company balances and transactions between entities in the economic entity, including any unrealised profit or losses, have been eliminated on consolidation.

$(M)$ Revenue

Revenue from the sale of goods is recognised upon the delivery and invoicing of goods to customers.

Revenue from rent is recognised on expiration of time. The holding company recognises rental income from all properties as normal operating income.

Interest revenue is recognised on proportional basis taking into account the interest rates applicable to the financial assets.

Revenue from the rendering of a service is recognised upon the delivery and invoicing of the service to the customers.

$(N)$ Provision for Warranties

Provision is made in respect of the economic entity's estimated liability on products under warranty at balance date.

$(0)$ Income Tax

The economic entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the profit from ordinary activities 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 accounting profit and taxable income are brought to account as either a provision for deferred income tax or as a future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will 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 in relation to tax losses are not brought to account unless there is virtual certainty or realisation of the benefit.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of

23/12/2002 13:59 61-3-9532-5244 $\langle \text{ } (\text{\small{\textcircled{\tiny{M}}}}) \text{ } \rangle$ Sietel $\text{ }^{\text{LIMITED}}_{\text{}}$

$\int$

١

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2002

	Economic Entity		Chief Entity
	2002	2001	2002	2001
	$	$	S	$
Note 2 CURRENT RECEIVABLESTrade Receivables
Other	1,129,33847,385	1,319,38272,008
	1,176,723	1,391,390	38,47238,472	18,63118,631
Note 3 OTHER FINANCIAL ASSETSInvestments in controlled entities
- Loans
			842,823842,823	2,2352,235
Note 4 CURRENT INVENTORIESRaw materials and stores
Work in progress	423,100356,961	415,068
Finished goods	713,972	351,321537,006
	1,494,033	1,303,395		$\overline{\phantom{a}}$
Note 5 OTHER CURRENT ASSETS
Pre-payments	97,533	72,318	97,525
				72,248
Note 6 NON-CURRENT RECEIVABLESReceivables
	125,132125,132	165,142165,142	125,132	165,142
			125,132	165, 142
NOTE 7 NON-CURRENT OTHER FINANCIAL ASSETSInvestments in controlled entities
- Loans at Cost
- Shares at Cost			400,000771,713	400,000771,713
	$\blacksquare$		1,171,713	1,171,713
Investments in other companies
- Shares at cost	28,587	28,587	14,585	14,585
	28,58728,587	28,58728,587	14.5851,186,298	14,5851,186,298
Note 8 PROPERTY PLANT AND EQUIPMENT
Plant and Equipment at cost	11,461,394	12,031,198	5,136,510	5,740,173
Less Accumulated depreciation	(8,525,892)	(8,990,586)	(3,907,237)	(4,317,337)
	2,935,502	3,040,612	1,229,273	1,422,836
Leased Plant and EquipmentLess Accumulated depreciation	2,079,967	894,805	2,079,967	894,805
	(399,926)1,680,041	(197,990)696,815	(399, 926)1,680,041	(197, 990)696,815
Total Plant and Equipment	4,615,543	3,737,427	2,909,314	2,119,651
PropertyLand at Directors Valuation 1998*
Land at Cost*	3,702,9371,273,568	3,887,9371,273,568	3,702,937	3,887,937
Total Land	4,976,505	5,161,505	1,273,5684,976,505	1,273,5685,161,505
Buildings at Directors Valuation 1998*Buildings at Cost*	1.989,750	2,279,750	1,989,750	2,279,750
Additions at Cost*	379,659294,799	379,659294,799	379,659294,799	379,659
Less Accumulated depreciation	(557,844)	(515, 546)	(557, 844)	294.799(515, 546)
Total BuildingsTotal Property	2,106,364	2,438,662	2,106,364	2,438,662
Total Property Plant and Equipment	7,082,86911,698,412	7,600,167	7,082,869	7,600,167
		11,337,594	9,992,183	9,719,818

*Last year the Directors resolved to leave the current book value for the Group properties at this stage at 1998 Directors valuations at cost. An independent valuation of interests in land and buildings was carried out by Mr. N. Walsh, certified practising valuer F.A.P.I., A.R.E.I. November 2001. The valuation was carried out for the company's bankers to provide the current market value for mortgage security purposes. Valuation November 2001 $9,160,000 WD Book Value as at 30 September 2001 $7,600,167 Less property 16 Powlett St (sold November 2001) $ 388,000 Net Gain $1,947,833 Capital Gain applicable to the above $$392,197$

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year. Land .Ruitab $\mathbb{R}^2$ $\mathbb{R}^2$ $\mathbf{r}$

	Land	Buildings	Plant andEquipment	Leased plantandEquipment	Total
Balance at the beginning of the year	5.161.505	2.438.662	3.040,612	696.815	11,337,594
Additions		٠	892.082	1.325.537	2,217,619
Disposals	(185,000)	(199.375)	(41, 449)		(425,824)
Depreciation expense		(132,923)	(983,818)	(314,236)	(1,430,977)
Transfers to plant and equipment				(140, 375)	(140, 375)
Transfers from leased plant andequipment			140.375		140,375
Transfers to plant and equipment(depreciation)			٠	112,300	112,300
Transfersfromleasedplantandequipment (depreciation)			(112.300)		(112,300)
Carrying amount at the end of the year	4,976,505	2.106.364	2.935,502	1,680,041	11,698,412

	Economic Entity		Chief Entity
	2002	2001	2002	2001
	S	S	Ŝ.	$
Note 9 INTANGIBLES
Goodwill at cost	679,495	679,495
Accumulated amortisation	(260,898)	(226,924)
Total intangibles	418,597	452,571
Note 10 DEFERRED TAX ASSETSFuture income tax benefit- The future income tax benefit is made upof the following estimated tax benefits:
- tax losses
- timing difference	867,650		728,724
	867,650		728,724	$\blacksquare$
Note 11 OTHER NON-CURRENT ASSETSResearch and Development ExpenditureRef Note 1 (e)
Balance 1st October	2,533,128	1,796,536
Capitalised during the year	26,182	736,592
Balance 30th September	2,559,310	2,533,128
Less accumulated amortisation	2,033,673	1,901,267
	525,637	631,561
Note 12 CURRENT ACCOUNTS PAYABLEUnsecured :
Trade Creditors	1,327,426	1,300,230	2.457	8,750
Sundry Creditors	378,326	2,148,098	44,236	131,208
Amounts payable to controlled entities whollyowned				128,047
	1,705,752	3,448,328	46,693	268,005

f

$\mathbf i$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2002

	2002$	2001s.	2002$	2001$
Note 13 INTEREST BEARING LIABILITIESUnsecured:
Secured:
Bank Overdraft (i)Commercial Bills (I)Finance Lease Liabilities (ii)	1,500.000363,388	18,3922,000,000181,645	1,500,000363,388	2,000,000181,645
Hire Purchase Creditors (ii)Less Unexpired term changes	58,283(10.521)	20,557	58,283	20,557
	47,762	(380)20.177	(10, 521)47,762	(380)
	1,911,150	2,220,214	1,911,150	20,1772,201,822
(i) Bank overdraft and commercial bills securedby 1st ranking registered mortgage over free holdproperty and 1st ranking debentures overundertaking of the chief entity.
(ii) Effectively secured over the assets leased orhired.
Note 14 CURRENT PROVISIONSEmployee entitlements :
Annual Leave	563,906	505,300	338,437	267,081
Long Service LeaveSick Pay	144,265	114,688	86,469	83,620
Directors' Fees	79,82192,000	73,83980,000	10,345	7,188
Other: Provision for Warranty	1,725,000	1,725,000	82,000$\qquad \qquad -$	70,000
	2,604,992	2,498,827	517,251	$\blacksquare$427,889
Note 15 CURRENT TAX LIABILITIESCurrent
- Income Tax	218,671		227,524
Note 16 NON-CURRENT BORROWINGSSecured:
Lease Liability (ii) above	1,358,134	533,847	1,358,134	533,847
Hire Purchase Creditor	145,708		145,708
Less Unexpired term charges(ii) Ref Note 13 above	(11,798)		(11,798)
	133,9101,492,044		133,910
		533,847	1,492,044	533,847
Note 17 NON-CURRENT PROVISIONSEmployee Entitlements Long service leave
Note 18 SHARE CAPITALIssued and Paid Up Capital8,007,479 Ordinary Shares fully
Paid (2000 8,007,479)	4,107,129	4,107,129	4,107,129	4,107,129
75,000 Preference Shares 5% Cumulative fullypaid (2000 75,000)	150,000	150,000	150,000	150,000
	4,257,129	4,257,129	4,257,129	4,257,129
Note 19 RESERVES
Asset revaluation - Land and Buildings	1,223,241	1,223,241	1,223,241
As per Balance Sheet	1,223,241	1,223,241	1,223,241	1,223,2411,223,241

$\hat{\boldsymbol{\beta}}$

$\mathbf{b}_\mathbf{f}$

$\mathbf{z}_i$

$\sim$ $\sim$

Sietel MATED (බ)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2002

		cconomic Entity		Chief Entity
	2002	2001	2002	2001
	$	s	$	$
Note 20 REVENUE FROM ORDINARY ACTIVITIES
Operating:
Sales Revenue	18,549,557	17,693,145
Dividends
- Other Corporations	1,371	1,992	711
Interest Received				1,452
- Controlled Entities			50,000
- Other Corporations	38,652	69,644	2,896	50,00015,845
Rent Revenue
- Controlled Entities			573,048	436,800
- Other Corporations	294,497	392,621	294,497	392,621
Other Revenue	281,599	548,541	1,679,202	1,739,503
	19,165,676	18,705,943	2,600,354	2,636,221
Non Operating:
Proceeds on disposal
- property, plant and equipment	59,227	167,535	7 7 2 7	167,535
investments	680,000	41,697	680,000	41,697
	739,227	209,232	687,727	209,232
Total Revenue from ordinary activities	19,904,903	18,915,175	3,288,081	2,845,453
Note 21 EXPENSES
(a) Operating profit before income tax has been
determined after:
Cost of goods sold	9,563,400	9,731,980
Overheads	4,708,421	4,034,508	1,982,304	2,008,218
Administration expenses	918,128	1,807,366	117,964	109,789
Selling expenses	2,827,948	2,691,723	16,069	22,623
Finance expenses	292,059	294,288	416,378	6,369
Total expense from ordinary activities	18,309,956	18,559,865	2,532,715	2,146,999
Depreciation of:
- Buildings	132,923	142,401	132,923	142,401
- Plant and equipment owned	983,818	958,024	446,322	442,373
- Plant and equipment leased	314,236	103,473	314,236	103,473
Amortisation of:
- Goodwill	33,974	33,974
- Research and development costs	132,102	105,274
	1,597,053	1,343,146	893,481	688,247
(b) Borrowing expenses:
- Interest paid
Other corporations	140,532	156,643	140,281	156,386
Finance leases	92,426	22,334	92 4 26	22,334
	232,958	178,977	232,707	178,720
(c) Net transfers to (from) provisions for:
- Employee entitlements	106,165	31,135	89,362	4,688
- Provision for doubtful debts				300,000
(d) Research and Development Costs	2,014,298	1,535,247

	Economic Entity		Chief Entity
	2002$	2001£	2002$.	2001$
Note 22 INCOME TAX REVENUE
a) The prima facie tax on operating profit is
reconciled to the income tax expense (benefit) in
the accounts as follows:
Operating profit (loss) before income tax	1,361,989	176,333	522,659	949,827
Prima Facie income tax expense applicable to
Operating Profit at 30% (2001 34%)	408,597	59,953	156,798	322,941
Add/Deduct tax effect of:
Permanent differences
Residual depreciation		20,400		20,400
Amortisation of Goodwill	3,000	3,400
Depreciation on Buildings		19,257		19,257
Legal Expenses	46,060	58,757
Entertainment Expenses	6,834	4,560
Research and Development Expenditure	(151,073)	(189, 594)
Prepayments		(51,738)		(51,738)
Timing differences (not brought to account since1988)	(807,070)	8,014	(783, 253)	2,010
Tax losses not previously recognised now broughtto account	(143, 142)	66,991		(312, 870)
Tax losses transferred from 100% owned entity toChief Entity			124,955	312,870
Income Tax Expense/(Revenue) per Accounts	(636, 794)		(501, 500)
Future Income Tax benefits not brought to
account the benefits of which will only be realised
if the conditions for deductibility occur
- Timing differences at 30% (2001 34%)		85,424		147,107
- Tax losses at $30%$ (2001 $34%$ )		92,172
		177,596		147,107

The Economic Entity and company at the 30 September 2002 for the first time since 1988 recognised the future tax benefit of timing differences and carried forward losses.

This charge has resulted in the recognition of deferred tax assets of $867,650 and $728,724 for the Economic Entity and Company respectively (refer Note 10).

The above recognition has resulted in a once off gain of $636,794 and $501,200 for the economic entity and company respectively as set out in the Statement of Financial Performance for the current year.

Note 23 CONTROLLED ENTITIES

(a) Controlled entities and contribution to Consolidated Profit(Loss)

Name of controlledEntity of Sietel Limited	Beneficially Owned bySietel Ltd		Contribution to consolidatedoperating Profit (loss) afterincome tax attributable tomembers of the chief entity		Investment by Sietel Ltd at cost.
	2002%	2001%	2002	2001s	2002£	2001
Cooks Body Works PtyLtd	100	100	(323, 964)	(406, 836)	290,000	290.000
The Cylinder Co Pty Ltd	100	100	4,564	379
Aqua-Max Pty Ltd	100.	100	1.262.670	(367,037)	481,713	481.713
Sietel Limited	N/A	N/A	1.055.513	949,827
			,998,783	176,333	771,713	771.713

* All companys' incorporated in Australia.

(b) Statement of Operations by Business

	Assets			Revenue		Results
	2002	2001	2002	2001	2002	2001
		S
Manufacturing Vehicle BodiesManufacturing Hot Water	654,523	424,364	1,817.206	2,050,958	(323, 964)	(406,836)
ServicesEquipment services	3,995,907	5 5 5 1 , 4 1 2	17,232,108	16,088,697	1,262,670	(367,037)
		17.992	16.329		4.564	379
Total Manufacturing	4,650,430	5,993,768	19,065,643	18,139,655	271,991	(773,494)
Investment	13,078,482	10,504,967	839,260	775,520	1,055,513	949,827
Total Investment	13,078,482	10,504,967	839,260	775,520	.055,513	949,827
	17,728,912	16,498,735	19,904,903	18,915,175	.998,783	176.333

*All businesses operated within Australia.

	Economic Entity		Chief Entity
	2002$	2001s	2002S	2001$
Note 24 DIVIDENDS PAID AND
PROPOSED
5% Cumulative Preference	MIL	NIL	NIL.	ΝIL
A preference dividend was last paid for-
the half year ended 31 et March 1987.
Adjusted Franking Account Balance	NIL.	nil	NIL.	NIL

Note 25 REMUNERATION OF DIRECTORS AND EXECUTIVES

Income received or due and receivable by all directors of each entity in the Economic Entity from all entities in the Economic Entity and any related bodies corporate : $354,427 (2001 $360,103), including superannuation as disclosed below.

Income received or due and receivable by all directors of the Chief Entity from the Chief Entity and any related bodies corporate $354,427 (2001 $360,103), including superannuation as disclosed below.

Number of Chief Entity Directors whose income from the Chief Entity and related bodies corporate was within the following bands:

	2002	2001
$0 - $9,999
$180,000 - $189,999
$190,000 - $209,999

Retirement and Superannuation payments paid on retirement from office or to prescribed superannuation funds for the provision of retirement benefits of Directors of the Chief Entity : $25,000 (2001 - $26,000)

The names of Chief entity directors who have held office during the financial year:

Mr Delwyn Garland Rees Mr Richard Rees Mr. Geoffrey Ernest Nanscawen

	Economic Entity		Chief Entity
	2002	2001	2002	2001
Note 26 AUDITORS REMUNERATION
Amount received or due and receivable by the Chief
Entity Auditors for:
- Auditing the accounts	21.525	20,500	7.534	7.175
- Other services
	21,525	20,500	7,534	7,175

Note 27 CAPITAL AND LEASING EQUIPMENT

(a) Finance leasing Commitments Dovable

ravaue
- not later than one year		475,616	227,657	475,616	227,657
- later than one year and not later than five years		1,538,078	622,890	1,538,078	622,890
Minimum lease payments		2,013,694	850,547	2,013,694	850,547
Less future finance charges		292,172	135,055	292,172	135,055
Total finance lease liability		1,721.522	715,492	1,721,522	715,492
Represented by:
Current liability	Note 12	363,388	181,645	363,388	181,645
Non-current liability	Note 14	1,358,134	533,847	1,358,134	533,847
(b) Hire purchase commitments
Payable
- not later than one year		63,140	20,557	63,140	20,557
- later than one year and not later than five years		140,851		140,851
Minimum hire purchase payments		203,991	20,557	203,991	20,557
Less future finance charges		22,319	380	22,319	380
Total hire purchase liability		181,672	20,177	181,672	20,177
Represented by:
Current liability	Note 12	47,762	20,177	47,762	20,177
Non-current liability	Note 14	133,910		133,910
(c) Capital Commitments-Capital Expenditure
Project-not later than 1 year			780,681		780,681
(d) Contingent Liabilities
Guarantee on other Bodies Corporate
Equipment
Lease and Hire purchase agreement
Note 28 STANDBY ARRANGEMENTS AND

UNUSED CREDIT FACILITIES

Standby arrangements with banks to provide funds

and sunnort facilities.

ana aabbarraamaaCredit facility	6.350.000	5.050.000	6.350.000	5.050.000
Amount Utilised	3.403.194	2.715,492	3,403,194	2.715.492
Unused credit facility	2946.806	2.334.508	2.946.806	2.334.508

The major facilities are as follows:

Lease Facitlities $3,000,000 (2001 $1,800,000)

Commercial Bill Facility

$2,500,000 (2001 $2,500,000) variable interest rate facility provided by an Australian bank. As at 30 September 2002 $1,500,000 (2001 $2,000,000) was utilised.

Banking Overdrafts - Bank overdraft facilities are arranged with an Australian bank with the general terms and conditions being set and agreed to from time to time.

Finance will be provided under all facilities provided the company and the economic entity have not breached any borrowing requirements and the required financial ratios are met.

Note 29 SUPERANNUATION COMMITMENTS

Sietel Ltd, Cook's Body Works Pty Ltd and Aqua-Max Pty Ltd each sponsor a Colonial Select Superannuation plan for their respective employees. The benefits are the accumulation of contributions by the employer and if applicable the employees which become available on retirement, death or total and permanent disability. Contributions are made in accordance with the Superannuation Guarantee Charge Act. The relevant company has a legal obligation to contribute to its superannuation fund in accordance with relevant requirements of the Superannuation Guarantee legislation. Sietel Ltd also has another fund called the Senior Staff Superannuation fund where the benefits are the accumulation of contributions by the employer and if applicable the employees which become payable on retirement, death or total and permanent disability. Contributions are at the discretion of the employer or the employee.

61-3-9532-5244

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2002

Economic EntityChief Entity2002200120022001$$$$Note 30 RELATED PARTY TRANSACTIONSTransactions between related parties are on normalcommercial terms and conditions unless otherwisestated.(a) Transactions with directors and director-relatedentities -- Motor vehicles are leased by the Chief Entity from11,00049,50011,00049,500Mr. R. Rees- Consulting fees are paid to a company of which Mr.25,00010,40025,00010,400D. G. Rees is a Director for financial and management
services provided.
- Directors of entities within the economic entity are
able to receive goods and services at discounted
prices and participate in field testing of new products.
(b) Controlling entities
- Personnel charges by Chief Entity to:
Cooks Body Works Pty Ltd254,400235,200
Aqua-Max Pty Ltd860,803803,040
Interest Received:
Cooks Body Works Pty Ltd50,00050,000
Aqua-Max Pty Ltd
Rent received from premises for:
Cooks Body Works Pty Ltd120,00067,503
Aqua-Max Pty Ltd453,048369,297
Lease rentals for plant :
Cook's Body Works Pty Ltd60,00060,000
Aqua-Max Pty Ltd512,750354,893
Data Processing:
Agua-Max Pty Ltd50,00050,000
Equipment rental.
Aqua-Max Pty Ltd80,00080,000-Guarantees and Indemnities given by Chief Entity to
controlled entities banker for facilities:
Cooks Body Works Pty Ltd
50,00050,00050,00050,000Agua-Max Pty Ltd100,000100,000100,000
100,000- Guarantees and Indemnities given by Controlled
Entity to Chief Entity's banker for facilities:3,750,0005,005,0003,750,0005,005,000
Directors acquired 79,962 ordinary shares in Sietel
Ltd, the Chief Entity. Directors sold 0 ordinary shares.

Note 31 EMPLOYEE SHARE OPTION PLAN

The company extended an invitation to certain employees and executives to apply for options to be issued in accordance with the TrustDeed of the Sietel Limited "A Staff Equity Participation Plan" in February 1998. These e for up to a specified maximum number of options for ordinary shares in the company at a specified maximum purchase price of .5 cents per option. A total of 400,000 share options were available and all were taken up for a total exercise value of $2,000. All options expired on 28 February 2002.

	Economic Entity			Chief Entity
	2002	2001	2002	2001
	$	$	$	$
Note 32 NOTES TO THE STATEMENT OF CASHFLOWS
(i) Reconciliation of cash for the purpose of the
statement of cash flows
Cash includes:
(a) Cash on hand and at call deposits with banks or
financial institutions
(b) Investments in money market instruments with
less than 14 days to maturity
Cash at the end of the year is shown in the balance
sheet as:
Cash on hand	1,296,608	1,116,177	67,325	127, 154
Bank overdrafts- Secured		(18, 392)
- Unsecured
	1,296,608	1,097,785	67,325	124,154
(ii) Reconcillation of cash flows from operations
with Operating Profit after Income Tax
Operating Profit after Income Tax
Cash flows in Operating Profit attributable to Non-
Operating activities	1,998,783	176,333	1,023,859	819,734
Dividends Received	(1, 371)	(1,992)	(711)	(1,452)
Non-cash flows in Operating Profit
- Amortisation	166,081	33,974
- Depreciation	1,430,977	1,309,172	893,479	688,247
- Bad Debts	(636, 794)		(501, 200)
- Income TaxCharges to provisions
- tax	(12, 185)
- employee entitlements	106,163	317,660	89,361	100,690
(Profit)/Loss on sale of Plant and Equipment	(17, 778)	(167, 535)	(7, 727)	(167, 535)
(Profit)/Loss on sale of investments	(295, 625)	414	(295, 625)	414
Changes in assets and liabilities
(Increase)/Decrease trade debtors	254,678	1,167,193	22,404	393,116
(Increase)/Decrease in pre-payments	(190, 638)	19,926	(25, 277)	19,998$\blacksquare$
(Increase)/Decrease in inventories	(25, 215)	(212, 280)(462, 189)	(95, 500)	7,857
Increase/(Decrease) in trade creditors	(140, 627)2,636,449	2,180,676	1,103,063	1,861,069
(iii) Net cash provided by operating activitiesthe statement of cash flows should be read in
conjunction with Note 24- Standby Arrangements
and Unused Credit Facilities
(iv) Non Cash Financing and Investing Activities
During the financial year, the economic entity and
chief entity acquired property, plant and equipment
with an aggregate fair value of $1,432,817(2001 $596,255) by means of finance leases and
hire purchase. These acquisitions are not reflected
in the statement of cash flows.
		Economic Entity
		2002	2001
Note 33 EARNINGS PER SHARE
Basic earnings per share (cents per share)		24.96	2.20
There were NIL options on issue at the end of the year. Options that
were on issue expired February 2002. (2001 NIL)		24.72	2.10
Diluted earnings per share (cents per share)
The weighted average number of ordinary shares on issue used in the		8,007,479	8,007,479
calculation of basic earnings per share.

Sietel umre

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2002

Note 34 FINANCIAL INSTRUMENTS

(a) Significant Accounting Policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the accounts.

(b) Significant Terms and Conditions

Cap interest Hate Option Agreement
Contracts	Principal Amount	Cap Rate	Maturity Date	Premium Amount
10 JAN 2001	2,500,000	7.00% PA	9 AUGUST 2005	46.200
(c) Interest Rate Risk
	The following dataile the according overlays overaging to interest sets stake as at the consistent data.

me forlowing details the economic entity's exposure to interest rate risk as at the reporting date.

	Average	Variable	Non-
	Interest	Interest	Interest	Total
	Rate	Rate	Bearing
	$%$	$.	S	$
Financial Assets
Trade receivables (net)			1,129,338	1,129,338
Other receivables			47.385	47.385
Cash	2.8	1,296,608		1,296,608
		1,296,608	1,176,723	2,473,331
Financial Liabilities
Trade Payables			1 300,239	1,300,239
Lease liabilities		715.492		715.492
Other liabilities		$\mathcal{D}$	2,543,549	2.543,549
Employee entitlements			773,827	773.827
		715.492	4.617.615	5.333.107

(d) Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the economic entity. The economic entity has adopted the policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The economic entity measures credit risk on a fair value basis.

(e) Net Fair Value

The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in note 1 to the accounts.

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Telephone:Facsimile:Correspondence:	(07) 3228 4219(07) 3221 3149GPO Box 35Brisbane Old 4001	Douglas Heck & Burrell Registries
Website:		www.dhb.com.au; Share Enquiries
Douglas Heck & Burrell I		Glasnikered AducumburtsShare Registries
		Geneditants

STATEMENT IN COMPLIANCE WITH AUSTRALIAN ASSOCIATED STOCK EXCHANGES LISTING REQUIREMENTS.

DIRECTORS' INTEREST IN ORDINARY SHARES AS AT 30TH SEPTEMBER 2002

Director	Ordinary Shares inname of Director	Ordinary shares in whichDirectors
		may have relevant interest
D. G. Rees	28 237	4.591.693
R.Rees	463.250	5,828,051

The Company has issued 400,000 options with an exercise price of 50 cents per option and all were with a total exercise value of $2,000. All options have an expiry date on or before 28 February 2002. Mr. R. Rees has 230,000 outstanding share options with an exercise price of 50 cents per option.

Substantial Shareholders

Triple Two Investments Pty. Ltd and Delvest Pty.Ltd. of Suite 3, 15 Tintern Avenue, Toorak, Lyntina Pty. Ltd. of Suite 3, 15 Tintern Avenue Toorak and The Three Pumpkins of Suite 3, 15 Tintern Avenue Toorak are shown in the Substantial Shareholder Register as holding 2,310,891; 652,000;689,000 and 560,000 Ordinary shares respectively.

20 Largest Shareholders at 30th September 2001

The twenty largest Ordinary Shareholders of the Company held 6,790,151 Ordinary Shares representing 84,80% of the voting shares of the Company. The twenty largest preference Shareholders of the Company held 71,300 Preference Shares which attract votes on the basis of four for each $2 Preference Share held while there are Dividends in arrears as is the present situation.

List of the twenty largest Shareholders for each class of Shares have been supplied to The Stock Exchange of Melbourne Limited.

Directors

There were no loans to Directors during the financial year nor do any loans to Directors exist, except for a housing loan of $7,000 to Mr. G. E. Nanscawen. The Company has not entered into any service agreement with any Director or with a Company in which a Director has a direct or indirect interest, except for a service and option agreement with the Managing Director, lease of a motor vehicle and supply of motor vehicles. There is no contingent liability or termination under this agreement.

Distribution of Shareholding as at 30th September 2002

	Number of Shareholders	Number of Shares Held
Ord	Pref
327	45	Up to 1,000
214	З	1,001 to 5,000
16		5,001 to 10,000
41		10,001 and over

The number of shareholders holding less than marketable parcels is : 319 Ordinary 45 Preference

"I certify that this is a true copy of all accounts and Group accounts (if any) required to be laid before the Company at the Annual General Meeting together with a copy of every other document required by Section 16 to be laid before the Annual General Meeting."

Oles 0 2002 Richard Rees

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AQUAMAX

ASIC registered agent number		388	1/2
lodging party or agent name
office, level, building name or PO Box no.
street number & name
suburb/city	state/territorypostcode
telephone
lacsimile				REQ A
DX number	suburb/city			15 October 1998ASS.CASH.REQ-PPROC.294, 295, 298-300, 307, 308, 319, 321, 322₩(8)$\theta$ i)U)(C/D)$11.00$ arr2003
	Australian Securities & Investments Commissioncopy of financial statements and reports	form 388Corporations Law
Name	muzo
ACN / ARBN / ARSN	31O۵
	Reason for lodgement of statements and reports
tick the appropriate box $\overline{\mathsf{M}}$	A public company or a disclosing entity which is not a registered scheme
	A registered scheme
	A large proprietary company that is not a disclosing entity
	A small proprietary company that is controlled by a foreign company for all or part of the period and where the company's (I)profit or loss for the period is not covered by the statements lodged with ASIC by a registered foreign company, company,registered scheme, or disclosing entity
	A small proprietary company that is requested by ASIC to prepare and lodge statements and reports
	Amendment of financial statements or directors' reports previously lodged
	Financial year ended (d/m/y) 30 /9 / 2002)Date of Annual General Meeting (if applicable)
	If the company is a large proprietary company that is not a disclosing entity, please complete the following information as at theend of the financial year for which the financial accounts relate:A What is the consolidated gross operating revenue of the large proprietary company and the entities that it controls?чB What is the value of the consolidated gross assets of the large proprietary company and the entities that it controls?ျာ့53C How many employees are employed by the large proprietary company and the entities that it controls?D How many members does the large proprietary company have?
Details of Auditor & audit reportname (family & given names)Auditor Registration no:
oΓ
if a firm, name of firm	HPVO٢
office	building namelevel
street number & name	ω. ορ.
suburb / city	state / territoryص در د	postcode
Business Registration number (if applicable)date of appointment (d/m/y)(2)	State / Territory registered in
Were the financial statements audited?	No 1Yes 1
	If yes: Does the auditor's report (section 308) for the financial year contain a statement of:
	reasons for the auditor not being satisfied as to the matters referred to in section 307?	Yes	No.
	details of the deficiency, failure or shortcoming concerning any matter referred to in section 307?	Yes L	No
	If no: Is there a class order exemption current for audit relief?	Yes	No I

AQUAMAX

388

Statements and reports to be attached to this form

Financial statements for the year (as per ss295(2)) profit and loss statement for the year balance sheet as at the end of the year statement of cash flows for the year if required by accounting standards - consolidated profit & loss statement, balance sheet and statement of cash flows

Notes to financial statements (as per ss295(3)) disclosures required by the regulations notes required by the accounting standards any other information necessary to give a true and fair view (see s297)

The directors' declaration about the statements and notes (as per ss 295(4))

The directors' report for the year (as per s 298 to 300)

Auditor's report required under sections 308 and 314

Certification

I certify that the attached documents marked ( ) are a true copy of the annual reports required under Section 319.

HANAGING DIRECTOR 3. Aee x 7 print name сарасту sign here date ా