SIETEL LIMITED — Annual Report 2003

Dec 23, 2003

To: Company:From.	Manager Company Announcements OfficeAustralian Stock ExchangeRichard Rees - Managing Director Sietel Ltd	Date:Fax No.	24 Dec, 20031900 999 279
Subject:	Annual audited accounts for year ended 30/9/03	No. of pages(including this sheet)	29

Please find the following attached:-

1. Annual financial statements to be lodged with the ASIC by 31 December, 2003.

This includes the Audited accounts, Audit report and Directors Statement as at

30 September, 2003 and notice of the Annual General Meeting.

1. List of the top 20 shareholders for both ordinary and preference shareholders.

2. Other documents required to be lodged with ASIC.

Yours faithfully,
Mr Richard Rees
Managing Director
Sietel Limited

PRIVACY & CONFIDENTIALITY NOTICE:

The information contained in this facsimile is intended for the named recipients only. It may contain privileged and confidential information and if you are NOT an intended recipient, you must not copy, distribute or take any action in reliance on it. If you have received this facsimile in error, please notify us immediately on any of the numbers listed below.

Sietel Limited Address: 463-467 Warrigal Rd, Moorabbin, Victoria, Australia Postal Address: PO Box 1195 Moorabbin, Victoria 3189 ACN 004 217 734 ABN 75 004 217 734 Telephone: (03) 9553 5740 Fax: (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....................................

0f....................................

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

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

......................................

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

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 2004 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.

I/WE INSTRUCT MY/OUR PROXY TO VOTE AS INDICATED BELOW IN RESPECT OF:-FOR. AGAINST Adoption of Reports and Accounts Election of a Director - Mr. D. G. Rees

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.

$\mathcal{P}^{\pm}$

2003

Fifty Seventh Annual Report

FOR THE YEAR ENDED 30 SEPTEMBER 2003

SIETEL LIMITED and Controlled Entities

A.B.N. 75 004 217 734

Sietel HMMSP.

AQUAMAX

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BOARD OF DIRECTORS

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

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

REGISTERED AND

AUDITORS

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

SECRETARY

R. Rees, B. Comm., C.A.

SOLICITORS Brian Ward and Partners Eqgleston Whelan Prior and Prior

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

SHARE REGISTER

Douglas Heck & Burrell Registries GPO Box 35 Brisbane QLD 4001 Australian Company No. 004 217 734 ABN 75 004 217 734

NOTICE OF MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Sietel Limited will be held at 11.00am on Thursday 29th January 2004 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, 2003 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.

To transact any other business as may legally be brought forward. 3.

By Order of the Board.

R. Rees

B. Comm., CA

Moorabbin, 17 December 2003

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 Company's Constitution 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 2003

In accordance with a resolution of the Directors dated 17 December 2003, 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 2003 and the state of affairs as at 30 September 2003.

The Directors of the Chief Entity in office at the date of this report are:- Delwyn Garland Rees, Richard Rees, and Geoffrey Ernest 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 financed and 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 overall 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 expansion of the new range of vitreous enamel storage electric water heaters which were released this year.

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.

OPERATING RESULTS:

The consolidated profit of the Economic Entity after providing for income tax amounted to $1,089,861 (2002 $1,998,783).

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.

Sietel MATED

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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 2003.

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 77Diploma 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 22 whichis to be read as forming part of this report.
MR. RICHARD REESQualifications	MANAGING DIRECTOR Age 53Bachelor 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 22 which is tobe read as forming part of this report.
MR. GEOFFREYNANSCAWEN	DIRECTOR Age 55
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 held	Meetings attended
D.G. Rees	8	8
R. Rees	8	8
G. E. Nanscawen	8	я

Sietel WITED

AQUAMAX

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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.

NAME	OFFICE	SALARY/FEES	BENEFITS	TOTAL
D. G. Rees	Director	The Contract of Contract of the Contract of The Contract of The Contract of The Contract of The Contract of The Contract of The Contract of The Contract of The Contract of The Contract of The Contract of The Contract of T
R. Rees	Director	153,478	---115,303	268,781
G. E. Nanscawen	Director	136,593	58.880	195,473
				464.7

DIPECTOP'S REMUNERATION

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, 17 December 2003

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. $\overline{a}$
• Review operations and have direct contact with staff and consultants. $\overline{a}$
• 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. $\overline{a}$
• 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 for the year ended 30 September 2003 as set out on pages 6 to 21. The directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members.

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 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 whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements in Australia and relevant statutory requirements so as to present a view which is consistent with our understanding of the groups financial position, the results of its operations and its cash flows.

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

Audit Opinion

In our opinion, the financial report presents fairly in accordance with:

• the Corporations Act 2001, including: $(a)$
  • giving a true and fair view of Sietel Limited and controlled entities financial position as at $(i)$ 30 September 2003 and the results of its operations and its cash flows for the year then ended.
  • complying with Accounting Standards and the Corporations Regulations; and $(ii)$
• other mandatory professional reporting requirements in Australia. $(b)$

McDONALD CARTER HPW

BUSINESS ADVISORS AND CHARTERED ACCOUNTANTS

G.S.PARKER PARTNER

Dated this 19 day of December, 2003 Melbourne

z

A

DIRECTORS' DECLARATION

The directors declare that:

• The attached financial statements and notes (pages 7 to 21) thereto comply with accounting standards; $a)$
• 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 $\mathbf{c}$ ) Corporations Act 2001; and
• In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as d) 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, 17 December 2003

PAGE 10 A

Sietel WWTED

$\mathcal{S}$

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 SEPTEMBER 2003

Note		Economic Entity			Chief Entity
	2002	2003		2003	2002
	$	$		$.	$
20	19,904,903	21,734,123	Revenues from ordinary activities	4,657,327	3,288,081
21	18,309,956	20,395,966	Expenses from ordinary activities	2,761,010	2,532,715
21	232,958	226,513	Borrowing expenses	226,479	232,707
21	1,361,989	1,111,644	Profit (loss) from ordinary activities beforeincome tax expense	1,669,838	522,659
22	(636, 794)	21,783	Income tax expense/(revenue) relating toordinary activities	(182, 711)	(501, 200)
	1,998,783	1,089,861	Profit (loss) from ordinary activities afterincome tax expense	1,852,549	1,023,859
			Total revenues, expenses and valuationadjustments attributable to members of theparent entity and recognised directly inequity.
	1,998,783	1,089,861	Total changes in equity other than thoseresulting from transactions with owners asowners.	1,852,549	1,023,859
32	24.96	13.61	Earnings per share - Basic (cents per share)
32	24,72	13.48	Earnings per share - Diluted (cents per share)

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

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Sietel LIMITED

STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2003

Note	Economic Entity			Chief Entity
	2002$	2003$		2003$	2002$
			Current Assets
	1,296,608	1,901,250	Cash assets	43,641	67,325
$\mathbf{z}$	1,176,723	1,449,253	Receivables	33,369	38,472
3			Other financial assets	2,478,409	842,823
4	1,494,033	2,392,984	Inventories
5	97,533	85,225	Other	84,856	97,525
	4,064,897	5,828,712	Total Current Assets	2,640,275	1,046,145
			Non-Current Assets
6	125,132	85,123	Receivables	85,123	125,132
7	28,587	28,587	Other financial assets	1,186,298	1,186,298
8	11,698,412	11,348,707	Property, plant and equipment	9,242,725	9,992,183
9	418,597	384,622	Intangibles
10	867,650	942,787	Deferred tax assets	852,381	728,724
11	525,637	318,836	Other
	13,664,015	13,108,662	Total Non-Current Assets	11,366,527	12,032,337
	17,728,912	18,937,374	Total Assets	14,006,802	13,078,482
			Current Liabilities
12	1,705,752	2,293,931	Payables	119,854	46,693
13	1,911,150	1,318,212	Interest bearing liabilities	1,318,212	1,911,150
14	2,604,992	3,030,526	Provisions	658,200	517,251
15	218,671	336,793	Current tax liabilities	102,419	227,524
	6,440,565	6,979,462	Total Current Liabilities	2,198,685	2,702,618
			Non-Current Liabilities
16	1,492,044	1,071,746	Interest bearing liabilities	1,071,746	1.492,044
	1,492,044	1,071,746	Total Non-Current Liabilities	1,071,745	1,492,044
	7,932,609	8,051,208	Total Liabilities	3,270,431	4,194,662
	9,796,303	10,886,166	Net Assets	10.736,371	8,883,820
			Equity
18	4,257,129	4,257,129	Contributed equity	4,257,129	4,257,129
19	1,223,241	1,223,241	Reserves	1,223,241	1,223,241
	4,315,933	5,405,796	Retained profits	5,256,001	3,403,450
	9.796.303	10.886.166	Total Shareholders' Equity	10.736.371	8.883,820

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

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Sietel WWW.ED

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STATEMENT OF CASH FLOWS FOR YEAR ENDED 30 SEPTEMBER 2003

Note	Economic Entity			Chief Entity
	2002	2003		2003	2002
	$	$		$	$
			Cash flows from Operating Activities
	20,684,653	22,420,733	Receipts from customers	5,003,173	4,227,881
	(17, 934, 139)	(19, 413, 867)	Payment to suppliers and employees	(1,872,439)	(2,895,007)
	(12, 185)	(53,798)	Income Tax Paid	(66,051)
	38,652	51,226	Interest received	1,238	2,896
	(140, 532)	(111, 360)	Borrowing costs	(226, 479)	(232, 707)
31(ii)	2,636,449	2,892,934	Net cash provided by/(used in) operatingactivities	2,839,442	1,103,063
			Cash flows from Investing Activities
			Cash paid for investments
	55,591	23,800	Proceeds from sale of property, plant andequipment	8,800	4,091
	683,636		Proceeds from sale of investments		683,636
	(582, 804)	(1,290,831)	Payment for property, plant andequipment	(223, 883)	84,594
	(26, 182)	(9,585)	Payment for Research and Developmentand Intangibles
	1,371	1,560	Dividends received	780	711
	131,612	(1,275,056)	Net cash provided by/(used in )investingactivities	(214, 303)	773,032
			Cash flows from Financing Activities
			Loans (to)/repaid by Controlled Entities	(1,635,587)	(968, 635)
			Proceeds from borrowings
	(2,569,238)	(1,013,236)	Repayment of borrowings	(1,013,236)	(967, 289)
	(2,569,238)	(1,013,236)	Net cash provided by/(used in) financingactivities	(2,648,823)	(1,935,924)
∕	198,823	604,642	Net increase/(decrease) in cash held	(23, 684)	(59, 829)
	1,097,785	1,296,608	Cash as at 1 October 2002	67,325	127,154
31(i)	1,296,608	1,901,250	Cash as at 30 September 2003	43,641	67,325

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

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

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.

$(A)$ Significant Accounting Policies

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.

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

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.

$(C)$ Inventories

All entities in the economic entity have:

• Valued stocks at the lower of cost and net realisable value (i)
• $(ii)$ Calculated costs by including all variable manufacturing cost, and an appropriate portion of fixed 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.

$(E)$ Research and Development Expenditure

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.

$(F)$ Employee Entitlements

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service 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.

₽

Sietel UMITED

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

$(G)$ 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 guaranteed 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.

Comparative Figures $(H)$

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.

Recoverable Amount of Non-Current Assets $(\mathsf{J})$

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 Pavable

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 23 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.

Provision for Warranties $(N)$

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

Income Tax $(O)$

Z

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 tiability 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 deductibility imposed by the law. $\overline{11}$

38,472 $\frac{10}{38,472}$

842,823

842,823

97,525

125,132

$125, 132$

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24/12/200311:42	61-3-9532-5244		AQUAMAX		PAGE.
Sietel Angel
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003
			Economic Entity		Chief Entity
		2003$	2002$.	2003$	2002$
Note 2 CURRENT RECEIVABLES
Trade Receivables		1,413,884	1,129,338
Other		35,369	47,385	33,369	38,472
		1,449,253	1,176,723	33,369	38,472
Note 3 OTHER FINANCIAL ASSETS
Investments in controlled entities- Loans
				2,478,409	842,823
				2,478,409	842,823
Note 4 CURRENT INVENTORIES
Raw materials and stores		996,824	423,100
Work in progress		772,047	356,961
Finished goods		624,113	713,972
		2,392,984	1,494,033
Note 5 OTHER CURRENT ASSETS
Pre-payments		85,225	97,533	84.856	97,525
Note 6 NON-CURRENT RECEIVABLES
Receivables		85,123	125,132	85,123	125,132
		85,123	125,132	85,123	125,132

NOTE 7 NON-CURRENT OTHER FINANCIAL ASSETS

Investments in controlled entities
- Loans at Cost			400.000	400,000
- Shares at Cost			.713771	771,713
			.171.713	,171,713
Investments in other companies
- Shares at cost	28.587	28.587	14.585	14,585
	28,587	28,587	14,585	14,585
	28,587	28,587	1,186,298	186,298

Note 8 PROPERTY PLANT AND EQUIPMENT

$\cdot$

Plant and Equipment at cost	12,676,752	11,461,394	5,314,395	5,136,510
Less Accumulated depreciation	(9,545,670)	(8.525, 892)	(4,289,295)	(3,907,237)
	3,131,082	2,935,502	1,025,100	1,229,273
Leased Plant and Equipment	2,079,967	2,079,967	2.079,967	2,079,967
Less Accumulated depreciation	(815.914)	(399,926)	(815, 914)	(399,926)
	,264,053	1,680,041	1,264,053	1,680,041
Total Plant and Equipment	4,395.135	4 6 1 5 , 5 4 3	2,289,153	2,909,314
Property
Land at Directors Valuation 1998*	3,702,937	3.702,937	3,702,937	3,702,937
Land at Cost*	1,273,568	1,273,568	1,273,568	1,273,568
Total Land	4,976,505	4.976,505	4,976,505	4,976,505
Buildings at Directors Valuation 1998*	1,989.750	1.989,750	1,989,750	1,989,750
Buildings at Cost*	674.457	379,659	674.457	379,659
Additions at Cost*		294,799		294,799
Less Accumulated depreciation	(687.140)	(557,844)	(687,140)	(557,844)
Total Buildings	1,977.067	2,106,364	1,977,067	2,106,364
Total Property	6,953,572	7.082,869	6,953,572	7,082,869
Total Property Plant and Equipment	11.348.707	11,698,412	9,242,725	9,992,183

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

* In 2001 the Directors resolved to leave the current book value for the Group properties at this stage at 1998 Directors valuations or 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. $9,160,000 Valuation November 2001 $7,600,167 WD Book Value as at 30 September 2001 Less property 16 Powlett St (sold November 2001) $ 388,000 $1.947,833 Net Gain 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. ad alant Total $\equiv$ $\overline{1}$ $\mathbf{r}$

	Land	Buildings	Plant andEquipment	Leased plantandEquipment	1 OLOH
Balance at the beginning of the year	4,976,505	2.106,364	2,935,502	1.680,041	11,698,412
Additions			1.290.831		1,290,831
Disposals			(3, 105)		(3, 105)
Depreciation expense		(129, 297)	(1,092,146)	(415,988)	(1,637,431)
Transfers to plant and equipment
Transfers from leased plant andequipment
Transfers to plant and equipment(depreciation)
plantandleasedTransfersfromequipment (depreciation)					r
_______________________________________	A ATE CAC	1.077.087	2.131.042	1.264.053	11 348.707

Carrying amount at the end of the year	4.976.505	. 977.067	3.131.082	1.264.053	11.348.707
		Econo mic Entity		Chief Entity
		2003	2002	2003	2002

Note 9 INTANGIBLES
Goodwill at cost	679,495	679,495
Accumulated amortisation	(294, 873)	(260,898)
Total intangibles	384,622	418,597
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	942,787	867,650	852,381	728,724
	942,787	867,650	852,381	728,724
Note 11 OTHER NON-CURRENT ASSETSResearch and Development ExpenditureRef Note 1 (e)Balance 1 st OctoberCapitalised during the yearBalance 30 th SeptemberLess accumulated amortisation	2,559,3109,5852,568,8952,250,059318,836	2 5 3 3 1 2 826,1822,559,3102,033,673525,637
Note 12 CURRENT ACCOUNTS PAYABLEUnsecured:Trade Creditors	2,036,778257,153	1,327,426378,326	29.49890.356	2,45744,236
Sundry CreditorsAmounts payable to controlled entities whollyowned
				.

2,293,931

46,693

119,854

$\overline{\phantom{a}}$

1,705,752

1,223,241

1,223,241

$\tilde{\mathcal{A}}$

$\boldsymbol{\mathsf{A}}$

$\bar{z}$

Sietel WATED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003	Economic Entity			Chief Entity
	2003s	2002s	2003$	2002
Note 13 INTEREST BEARING LIABILITIESUnsecured:				$
Secured:Bank Overdraft (i)Commercial Bills (i)Finance Lease Liabilities (ii)	900,000367,251	1,500,000363,388	900,000367,251	1,500,000363,388
Hire Purchase Creditors (ii)Less Unexpired term changes	58,283(7, 322)50,9611,318,212	58,283(10,521)47,7621,911,150	58,283(7, 322)50,9611,318,212	58,283(10, 521)47,7621,911,150
(i) Bank overdraft and commercial bills securedby 1 st ranking registered mortgage over free holdproperty and 1 st ranking debentures overundertaking of the chief entity.
(ii) Effectively secured over the assets leased orhired.
Note 14 CURRENT PROVISIONSEmployee entitlements :
Annual Leave	797,959	563,906	484,720	338,437
Long Service LeaveSick Pay	482,567$\blacksquare$	144,26579,821	158,480	86,469
Directors' Fees	25,000	92,000	15,000	10,34582,000
Other: Provision for Warranty	1,725,0003.030,526	1,725,0002,604,992	658,200	517,251
Total No. of employees	122	118	12	9
Note 15 CURRENT TAX LIABILITIESCurrent
- Income Tax	336,793	218,671	102,419	227,524
Note 16 NON-CURRENT BORROWINGSSecured:
Lease Liability (ii) above in Note 13	993,655	1,358,134	993,655	1,358,134
Hire Purchase Creditor	82,568	145,708	82,568	145,708
Less Unexpired term charges	(4, 477)78,091	(11,798)133,910	(4, 477)	(11,798)
	1,071,746	1492,044	78,0911,071,746	133,9101,492,044
Note 17 NON-CURRENT PROVISIONSEmployee Entitlements Long service leave
Note 18 SHARE CAPITALIssued and Paid Up Capital8,007,479 Ordinary Shares fully
Paid (2002 8,007,479)75,000 Preference Shares 5% Cumulative fullypaid (2002 75,000)	4,107,129150,000	4,107,129150,000	4,107,129150,000	4,107,129150,000
	4,257,129	4,257,129	4,257,129	4,257,129

Note 19 RESERVES
Asset revaluation - Land and Buildings	1,223,241	1,223,241was a management on	1,223,241
As per Balance Sheet	$-1,223,241$	1.223.241	----1.223.241

Sietel LIMITED

$\sim$

AQUAMAX

$\mathbf{A}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003 Economic Entity

	Economic Entity			Chief Entity
	2003$	2002S	2003$	2002$
Note 20 REVENUE FROM ORDINARY ACTIVITIES
Operating:
Sales Revenue	20,525,685	18,549,557
Dividends
- Controlled Entities			1,650,000
- Other Corporations	1,560	1,371	780	711
Interest Received
- Controlled Entities			50,000	50,000
- Other Corporations	51,226	38,652	1,238	2,896
Rent Revenue
- Controlled Entities			573,048	573,048
- Other Corporations	291.200	294,497	291,200	294,497
Internal Leases
- Controlled Entities			613,742	572,750
Management Fees
- Controlled Entities			1,110,945	1,110,945
Other Revenue	840,652	281,599	357,574	4,313
	21,710,323	19,165,676	4,648,527	2,600,354
Non Operating:
Proceeds on disposal
- property, plant and equipment	23,800	59,227	8,800	7,727
- investments		680,000		680,000
	23,800	739,227	8,800	687,727
Total Revenue from ordinary activities	21,734,123	19,904,903	4,657,327	3,288,081
Note 21 EXPENSES(a) Operating profit before income tax has beendetermined after:
Cost of goods sold	9,949,042	9,563,400
Overheads	5,756,778	4,708,421	2,583,142	1,982,304
Administration expenses	662,468	918,128	24,850	117,964
Selling expenses	3,596,790	2,827,948	13,482	16,069
Finance expenses	430,888	292,059	366,015	416,378
Total expense from ordinary activities	20,395,966	18,309,956	2,987,489	2,532,715
Depreciation included above:
- Buildings	129,297	132,923	129,297	132,923
- Plant and equipment owned	1,092,146	983,818	428,057	446,322
- Plant and equipment leased	415,988	314,236	415,988	314,236
Amortisation of:
- Goodwill	33,973	33,974
- Research and development costs	216,386	132,102		۰
	1,887,790	1.597,053	973,342	893,481
(b) Borrowing expenses:- Interest paid
Other corporations	111,360	140,532	111,326	140,281
Finance leases	115,153	92,426	115,153	92,426
	226,513	232,958	226,479	232,707
(c) Net transfers to (from) provisions for:
- Employee entitlements	425.534	106,165	140,949	89,362
- Provision for doubtful debts
(d) Research and Development Costs	2,294,174	2,014,298

A

Sietel Linuxen

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

	Economic Entity		Chief Entity
	2003S	2002	2003	2002
Note 22 INCOME TAX REVENUE		$	5	$
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	1,111,644	1,361,989	1,669,838
Prima Facie income tax expense applicable to				522,659
Operating Profit at 30% (2002 30%)	333,493	408,597	500,952
Add/Deduct tax effect of:				156,798
Permanent differences
Amortisation of Goodwill	3,000	3,000
Depreciation on Buildings	16,590		16.590
Legal Expenses		46,060
Entertainment Expenses	11,387	6,834
Research and Development Expenditure	(172,063)	(151, 073)
S46 Dividend Rebate			(495,000)
Timing differences (not brought to account since1988)		(807,070)		(782, 953)
Tax losses not previously recognised now broughtto account		(143, 142)
Tax losses transferred from 100% owned entity to			(35, 157)	124,955
Chief Entity
Reclassification of brought forward timing
differences and over provision for tax	(170, 624)		(170,096)
Income Tax Expense/(Revenue) per Accounts	21,783	(636, 794)	(182, 711)	(501, 200)

Note 23 CONTROLLED ENTITIES

(a) Entities controlled by ultimate parent entitySietel Ltd 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
	2003%.	2002%	2003	2002	2003	2002
Cooks Body Works PtyLtd	100	100	(140, 508)	(323.964)	290,000	290.000
The Cylinder Co Pty Ltd	100	100	(2, 342)	4.564
Agua-Max Pty Ltd	100	100	860.914	1,262,670	481,713	481,713
Sietel Limited	N/A	N/A	371,797	1,055,513
			1,089,861	1.998.783	771,713	771.713
.

$\bullet$ All companies incorporated in Australia.

(b) Statement of Operations by Business

	Assets		Revenue		Results
	2003	2002	2003	2002	2003	2002
Manufacturing Vehicle BodiesManufacturing Hot Water	1.048,043	654,523	2.173.675	1,817,206	(140, 508)	(323,964)
Services	3,882,528	3,995,907	19,000,856	17,232,108	860,914	1,262,670
Equipment services	$\overline{ }$			16,329	(2,342)	4,564
Total Manufacturing	4,930,571	4,650,430	21,174,531	19,065,643	718,064	943.270
Investment	14.006.803	13,078,482	559,592	839.260	371.797	1,055,513
Total Investment	14,006,803	13.078.482	559,592	839,260	371,797	1.055.513
	18.937.374	17,728,912	21,743,123	19,904,903	1.089,861	1,998,783
*All businessee encoded within Australia

All businesses operated within Australia.

Non-current liability

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

	Economic Entity		Chief Entity
	2003S	2002S	20035	2002$
Note 24 DIVIDENDS PAID ANDPROPOSED
5% Cumulative PreferenceA preference dividend was last paid forthe half year ended 31 st March 1987.	NIL.	NIL.	NIL	NIL
Adjusted Franking Account Balance	$66,051	Nil	$66.051	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: $447,049 (2002 $354,427), including superannuation as disclosed helow.

Income received or due and receivable by all directors of the Chief Entity from the Chief Entity and any related bodies corporate $447,049 (2002 $354,427) 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:

	2003	2002
$0 - $9,999		w
$180,000 - $189,999
$190,000 - $209,999
$260,000 - $269,999

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: $75,000 (2002 - $25,000)

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 2003 2002 2003 2002 $ $ $ $ Note 26 AUDITORS REMUNERATION Amount received or due and receivable by the Chief Entity Auditors for: - Auditing the accounts 23,000 21,525 8.050 7,534 - Other services 23,000 $21,525$ 8.050 7,534 Note 27 CAPITAL AND LEASING EQUIPMENT (a) Finance leasing Commitments Payable - not later than one year 455,678 475,616 455,678 475,616 - later than one year and not later than five years 1,082,892 1,082,892 1,538,078 1,538,078 Minimum lease payments 1,538,570 2,013,694 1,538,570 2,013,694 Less future finance charges 177.664 292,172 177,664 292,172 Total finance lease liability 1,360,906 1,721,522 1,360,906 1,721,522 Represented by: Current liability Note 13 367,251 363,388 363,388 367,251 Non-current liability Note 16 993,655 1.358,134 1,358,134 993,655 (b) Hire purchase commitments Payable - not later than one year 58,283 63,140 58,283 63,140 - later than one year and not later than five years 82,568 140,851 82,568 140,851 Minimum hire purchase payments 203,991 140,851 203,991 140.851 Less future finance charges 11,798 11,798 22,319 22,319 Total hire purchase liability 129,053 129,053 181,672 181,672 Represented by: Current liability Note 13 47,762 50,961 47,762 50.961

78,091

133,910

78.091

Note 16

133,910

Sietel WWTED

٨

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

	Economic Entity		Chief Entity
	2003	2002	2003	2002
Note 28 STANDBY ARRANGEMENTS ANDUNUSED CREDIT FACILITIES
Standby arrangements with banks to provide fundsand support facilities
Credit facilityAmount Utilised	6,350,0002,389,959	6,350,0003,403,194	6,350,0002,389,959	6.350.0003,403.194
Unused credit facility	3,960,041	2,946,806	3,960,041	2,946,806

The major facilities are as follows:

Lease Facilities $3,000,000 (2002 $3,000,000)

Commercial Bill Facility

$2,500,000 (2002 $2,500,000) variable interest rate facility provided by an Australian bank. As at 30 September 2003 $900,000 (2002 $1,500,000) 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 and other industry based superannuation plans 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.

$\pmb{\wedge}$

Sietel LIMITED

	Economic Entity20032002		Chief Entity2003	2002
	$	$	$	$
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 fromMr. R. Rees	14,000	11,000	14,000	11,000
- Consulting fees are paid to a company of which Mr.D. G. Rees is a Director for financial and managementservices provided.- Directors of entities within the economic entity are	20,500	25,000	20,500	25,000
able to receive goods and services at discountedprices and participate in field testing of new products.(b) Controlling entities- Personnel charges by Chief Entity to :
Cooks Body Works Pty Ltd			254,400	254,400
Agua-Max Pty Ltd			856,545	856,545
Interest Received:
Cooks Body Works Pty Ltd			50,000	50,000
Aqua-Max Pty Ltd
Rent received from premises for:
Cooks Body Works Pty Ltd			120,000	120,000
Agua-Max Pty Ltd			453,048	453,048
Lease rentals for plant:
Cook's Body Works Pty Ltd			60,000	60,000
Aqua-Max Pty Ltd			553,742	512,750
Data Processing:
Aqua-Max Pty Ltd			20,000	50,000
Equipment rental:
Agua-Max Pty Ltd			80,000	80,000
Increase in provision for doubtful debts of $250,000 in			250,000	500,000
Cooks Body Works Pty Ltd
-Guarantees and Indernnities given by Chief Entity to
controlled entities banker for facilities:
Cooks Body Works Pty Ltd	50,000	50,000	50,000	50,000
Aqua-Max Pty Ltd	100,000	100,000	100,000	100,000
- Guarantees and indemnities given by Controlled
Entity to Chief Entity's banker for facilities:Directors acquired 2,711 ordinary shares in Sietel	3,750,000	3,750,000	3,750,000	3,750,000

Ltd, the Chief Entity. Directors sold 0 ordinary shares.

$\sim 10^6$

$\mathcal{A}$

Sietel LUMITED

$\boldsymbol{\mathcal{A}}$

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

	Economic Entity2003$	2002$	Chief Entity2003	2002
Note 31 NOTES TO THE STATEMENT OF CASH			$	$
FLOWS
(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	1,901,250	1,296,608	43,641	67,325
Bank overdrafts- Secured
- Unsecured
	1,901,250	1,296,608	43,641	67,325
(ii) Reconcillation of cash flows from operations
with Operating Profit after Income Tax
Operating Profit after Income Tax	1,089,861	1,998,783	1,852.551	1,023,859
Cash flows in Operating Profit attributable to Non-
Operating activities
Dividends Received	(1,560)	(1, 371)	(780)	(711)
Non-cash flows in Operating Profit
- Amortisation	250,360	166,081
- Depreciation	1,637,431	1,430,977	973,342	893,479
- Bad Debts
- Income TaxCharges to provisions	21,783	(636, 794)	(182, 711)	(501, 200)
- tax
- employee entitlements	(53, 798)425,534	(12, 185)	(66.051)
(Profit)/Loss on sale of Plant and Equipment	(20, 695)	106,163(17, 778)	140,950	89,361
(Profit)/Loss on sale of Investments		(295, 625)	(8,800)	(7, 727)
Changes in assets and liabilities				(295, 625)
(Increase)/Decrease trade debtors	(232, 520)	254,678	45,113	22,404
(Increase)/Decrease in pre-payments	12,309	(25, 215)	12,668	(25, 277)
(Increase)/Decrease in inventories	(898, 951)	(190, 638)	$\overline{a}$
Increase/(Decrease) in trade creditors	663,180	(140, 627)	73,160	(95,500)
	2,892,934	2,636,449	2,839,442	1,103,063
(iii) Net cash provided by operating activities
the statement of cash flows should be road in

the statement of cash flows should be read inconjunction with Note 28- Standby Arrangements and

Unused Credit Facilities

	Economic Entity
	2003	2002
Note 32 EARNINGS PER SHARE
Basic earnings per share (cents per share)	13.61	24.96
There were NIL options on issue at the end of the year. Options thatwere on issue expired February 2002. (2001 NIL)
Diluted earnings per share (cents per share)	13.48	24.72
The weighted average number of ordinary shares on issue used in thecalculation of basic earnings per share.	8.007.479	8,007,479

Sietel www.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2003

Note 33 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 $\sim$ Dec Oer

eeb interest ivate option Agreement.
Contracts	Principal Amount	Cap Rate	Maturity Date	Premium Amount
10 JAN 2001	2,500,000	7.00% PA	9 AUGUST 2005	44.200
(c) Interest Rate Risk
	The following details the economic entity's exposure to interest rate risk as at the reporting date.
	2003.	2003.	2002	2002
	Average	Total	Average	Total
	Interest		Interest
	Rate %	s	Rate %	$
Financial Assets
Trade receivables (net)		1,413,884		1,129,338
Other receivables		35.369		47.385
Cash	2.0	1,901,250	2.8	1,296,608
		3,350,503		2.473.331
Financial Liabilities
Trade Payables		2.036,778		1,327,426
Lease liabilities	7.5	1,360,906	7.5	1,721,522
Other liabilities	$\qquad \qquad \blacksquare$	3,011,205		3,784,997
Employee entitlements		1,305,526		879,993
		7.714.415		7,713,938

(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 carrving 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 3149Douglas Heck & Burrell RegistriesGPO Box 35Brisbane Old 4001
Website:		www.dhb.com.au; Share Enquiries
Douglas Heck & Burrell (	Chartored AccountantsShere HealthingConsultants

Sietel WWED

STATEMENT IN COMPLIANCE WITH AUSTRALIAN ASSOCIATED STOCK EXCHANGES LISTING REQUIREMENTS.

DIRECTORS' INTEREST IN ORDINARY SHARES AS AT 30TH SEPTEMBER 2003

Director	Ordinary Shares inname of Director	Ordinary shares in whichDirectors
D. G. ReesR.Rees	28.237465.961	may have relevant interest5.101.9565.825.601

The Company issued 400,000 options with an exercise price of 50 cents per option and all were taken up with a total exercise value of $2,000. All options expired on 28 February 2002.

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 2003

The twenty largest Ordinary Shareholders of the Company held 6,835,312 Ordinary Shares representing 85.36% 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 2003

	Number of Shareholders	Number of Shares Held
Ord	Pref
-319	45	Up to $1,000$
206	з	1,001 to 5,000
17		5,001 to 10,000
41		$10,001$ and over

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

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LIMITEDSHARES HELD 28.37 8.60 $\frac{5}{3}$ نوهب $\frac{1}{\pi}$ $\frac{4}{3}$ $\frac{2}{3}$ -न á ŧ JARY SHARES HELD PERC.NO. SHARES HELD PERC. $2, 271, 666$ 689,000 590,000560,000 $219,645$ $121,450$ $\begin{array}{c} 0.00000 \ 0.00000 \ 0.00000 \ 0.00000 \ \end{array}$ 68,865 $101, 250$ 385,250 353,800 337,250 334,750 $120,000$ 110,161 333,000 AZHOLDER RANKINGRANKING

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END OF REPORT -*-* ■科■桥

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$24/1$ 27 2003'

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ASIC registered agent number
lodging party or agent name		3831/218 March 2002
office, level, building name or PO Box no.
street number & name
Suburb/city
telephone	state/territorypostcode
facsimile
DX number	suburb/city	۸S.$RED-R$CASH.
		PROC.
	Australian Securities & Investments Commission
		form 388
	copy of financial statements and reports	Corporations Act 2001294, 295, 298-300, 307, 308, 319, 321, 322Corporations Regulations1.0.08
Name	SIETEL
ACN / ARBN / ARSN/PIN	LIM ITED
	700₹⊬
tick the appropriate box M	Reason for lodgement of statements and reportsA public company or a disclosing entity which is not a registerad scheme or prescribed interest undertakingA registered scheme"	(A)
	Amendment of financial statements or directors' report (company)	(B)
	Amendment of financial statements or directors' report (registered scheme)*	$\left(\mathrm{C}\right)$
	A large proprietary company that is not a disclosing entity	(D)
	A small proprietary company that is controlled by a foreign company for all or part of the period and where the	(H)
	company's profit or loss for the pariod 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	O)
	A prescribed interest undertaking that is a disclosing entity	$\left( \mathrm{J}\right)$
		(K)
Dates on which financial year begins	( 10/200230 /9 / 2003and ends	(c/m/y)
Date of Annual General Meeting (if applicable) 29	72004$Q$ $N$ $Q$ $\alpha$ $N$
Details of large proprietary company
	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 statements relate:
	A What is the consolidated gross operating revenue of the large proprietary company and the entities that it controls?$21.734.123
	B What is the value of the consolidated gross assets of the large proprietary company and the entities that it controls?
	*18.937.374
C.	How many employees are employed by the large proprietary company and the entities that it controls?
	122
	5 How many members does the large proprietary company have?
Auditor report
Were the financial statements audited?	No Yes IV
	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
	details of the deficiency, fallure or shortcoming concerning any matter referred to in section 3077	NoMMoYes
	If no: Is there a class order exemption current for audit relief?	NoYes
	* NOTE: Where a new auditor has been appointed to a Registered Scheme, Form 5137 - Appointment of Scheme Auditor must be lodged

388 $2/2$ 18 March 2002

The auditor can be a person or a firm.
		building name
		postcode
orlice		building name
QUEENS256	STREE T
suburb/city MELBOURNE	state / territory$\vee$ ic	3000postcode
Business Registration number (if applicable)		State / Territory registered in
date of appointment (d/m/y) 22 / 2 / 1999
	officename of firm いくりっしゅしり	levelstate / territoryCARTERHbnlevel ul

statement of financial performance for the year (profit and loss statement) statement of financial position as at the end of the year (balance sheet) 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 5297)

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 ( $H$ ) are a true copy of the annual reports required under Section 319.

print rame				Capacity MANAC INCDIRECTORA DOMESTIC AND RESIDENCE____
sign here	____	date	. .	VECEMBER,2003

* NOTE: Where a new auditor has been appointed to a Registered Scheme, Form 5137 - Appointment of Scheme Auditor must be lodged

. Small Business (less than 20 employees), please provide an estimate of the time taken to complete this form
IncludeThe time actually spent reading the instructions, working on the question and obtaining the informationThe time spent by all employees in collecting and providing this information
minshrs