Report from the Leighton Holdings Limited Annual General Meeting

Projects from left to rightRoyal North Shore Hospital Birthing UnitNew South Wales РJohn HollandLiddell Open Cut MineNew South Wales РThiessPort of Brisbane MotorwayQueensland РLeighton ContractorsManjung Power StationMalaysia РLeighton Asia (Southern)׺2002Report from the Leighton Holdings LimitedAnnual General Meeting of 7 November

02//03 Report from the Annual General Meeting November 2002Key Performance Features for the 3 Months Ended 30 September 2002 (Unaudited)Projects from top to bottom rightSorell Causeway Bridge and ApproachesTasmania – John HollandSt Ives Gold MineWestern Australia – Leighton ContractorsEastern Harbour Crossing Housing ProjectHong Kong – Leighton Asia (Northern)Goodwill BridgeQueensland – John HollandFinancial performance information $’000Revenue– group 1,292,367– joint ventures 75,001Total Revenue 1,367,368Operating profit from ordinary activities before income tax 53,785Income tax expense (16,308)Profit from ordinary activities after tax 37,477Net profit attributable to outside equity interests (2,801)Net profit attributable to members 34,676Financial position informationTotal assets 2,178,999Total liabilities 1,332,916Net assets 846,083Net tangible assets 812,757Net tangible assets per ordinary share ($) $3.00Basic earnings per share 12.9¢Number of employees 15,526Address to ShareholdersA Presentation to the 41st Annual General Meeting ofLeighton Holdings Limited by the Chairman Mr John Morschel

IntroductionOn behalf of the Board of directors, I am pleased to reportthat despite the very competitive operating environmentexperienced during the last year the company hassuccessfully delivered shareholders another strongperformance.Financial HighlightsThe results achieved reflect a strong contribution from theAsian operations, an improved result from our propertydevelopment activities and a solid performance across theGroup’s diversified contracting activities in Australia:•Total operating revenue increased by 20 percent to arecord level of $5.2 billion.•The Group’s success in securing some large-scaleprojects such as the Parramatta Rail Link in Sydney andthe Regional Fast Rail contracts in Victoria boosted workin hand at 30 June 2002 to an all-time record level of$8.4 billion - up by 7 percent on the previous year.•Our strategy of diversification by products, geography anddelivery systems continued to yield results. This diversityreduced the impact of the recent construction downturnin Australia and helped lift operating profit before tax by15 percent to $227 million.•Operating profit after tax increased by 8 percent to an alltimerecord level of $169 million. This increase wasachieved after making a provision of $45 million againstthe future investment in Nextgen Networks. The Boardconsidered this a prudent decision given the currentinstability in the telecommunications market.The Group’s balance sheet remained strong with $524 millionof net cash and shareholders’ funds 7 percent higher at$789 million.Leighton’s average return on shareholders’ funds, at22.1 percent in 2001/2002, achieved a ranking of 8th out ofthe top 100 companies listed on the Australian StockExchange.Australia/Pacific OperationsOur Australia/Pacific operations made a strong contribution tothe Group’s performance in the past year. Profit before tax of$141 million was up by 21 percent and total revenue of$3.9 billion was 29 percent ahead of the previous year’sresult.Thiess recorded another good performance in its mining andresources activities. It made a strong contribution toprofitability whilst again increasing its level of uncompletedwork in hand.Leighton Contractors performed well and continued tobroaden its skills base and engineering capabilities intocomplex process and heavy engineering work.John Holland continued to meet its recovery program targetsand made an increased contribution to Group results for theyear.Leighton Properties maintained a good level of activity in itsindustrial and commercial markets along Australia’s easternseaboard and produced a satisfactory result after completingthe sale of a number of development properties.Engineering and infrastructure remained the Group’s largestsource of revenue in Australia at $1.2 billion, which was up onlast year by 19 percent. Increased activity in the rail sectorboosted by major government initiated infrastructure projectsand a continuing good level of new road constructioncontracts boosted work in hand by 79 percent to $2.1 billionat year-end.Mining and resources made a strong contribution to theGroup’s performance with revenue up 46 percent to$1.0 billion. Thiess, Leighton Contractors and John Hollandwere all active participants in this market sector during theyear with overall work in hand levels rising by 5 percent to$2.5 billion at 30 June 2002.While Thiess maintained its leading position in the coal sector,competitive pressures are making this a tough market inwhich to win new work.Revenue from building and property activities was strongerwith revenues up 28 percent to $916 million. Uncompletedwork in hand was up 2 percent to $626 million although thisfigure has been significantly boosted by the awarding of newwork post year-end.Revenue from telecommunications was up 40 percent to$619 million last year but the level of work in hand fell by45 percent to $522 million. This reflected the good progressmade on the construction of the Nextgen fibre-optic cablenetwork, which is expected to be completed ahead ofschedule early next year.While telecommunications is a market in which the Group willmaintain a presence the lack of new capital expenditure inthis sector is constraining opportunities for new work.Revenue from environmental services remained steady at$186 million. With conditions in the waste market remainingvery competitive, work levels reduced by 9 percent to$379 million.Asian OperationsAnother strong performance was recorded by the Group inAsia with revenue of $1.2 billion and profit before tax of$77 million. The results were down marginally on the previousyear due to the appreciation of the Australian dollar.Contract mining in Indonesia, construction in Malaysia and railwork in Hong Kong were the major contributors to the result.Leighton Asia was recently restructured into two businesshubs with the formation of Leighton Asia (Southern) based inKuala Lumpur and Leighton Asia (Northern) based in HongKong. This restructure will facilitate the continued expansionof the Group’s operations throughout the region.DividendDirectors were pleased to announce an increased finalordinary dividend of 26 cents per share. This dividend wasfranked to the extent of 70 percent and was paid toshareholders on 30 September 2002.When added to the interim ordinary dividend of 16 cents pershare paid in March 2002, which was also franked at70 percent, the total ordinary dividend for the year rose by8 percent to 42 cents per share. The dividend payout ratiowas 67 percent.Leighton’s objective is to provide superior total shareholderreturns and in this regard over the last 10 years the Group’stotal shareholder return has exceeded returns providedby the All Ordinaries Accumulation Index by more than300 percent.Corporate GovernanceI would like to take a few minutes to talk about corporategovernance.Leighton has long recognised the need to have in place acomprehensive corporate governance policy.Now more than ever, being ethical, acting with integrity and,above all, being accountable and transparent, are essentialingredients of any company’s business polices. For this reasonI would like to briefly outline some of the key elements ofLeighton’s corporate governance practices to demonstrate theBoard’s determination to ensure that appropriate and highstandards are maintained in the company.In Leighton, where people play such a fundamental role inensuring the company’s success, one of the prerequisites fora good corporate governance structure is the Board’s role insetting and communicating standards for ethical behaviour.The Leighton Board is committed to maintaining a strongethical culture throughout the Group and has had acomprehensive and realistic Code of Ethics in place since1995. As ethics is an evolving discipline the Code of Ethics isan evolving document. Individual Group operating companieshave adapted and expanded the Code of Ethics into their owncodes, which focus more specifically on the ethical challengesthey face. The enforcement of these codes is overseen by aseries of ethics committees formed at both the holding andoperating company levels. Future developments to assist theBoard in monitoring the Group’s ethical performance includethe establishment of an ethical dimension reporting system.This is being undertaken in conjunction with the St JamesEthics Centre and will place Leighton at the leading edge ofAustralian companies in this area.It is Board policy that the Board should comprise a majority ofnon-executive directors. Currently 10 of the 12 directors onthe Board are non-executive directors. Commencing fromSeptember this year it is also Board policy that all Boardcommittees dealing with corporate governance matters,except the nominations committee, are to be constituted witha majority of non-executive directors.The Board continually monitors the business environment forbest practice in corporate governance and has consistentlyimplemented new initiatives in this regard. For example,Leighton was one of the first companies in Australia toestablish an Audit Committee in 1990 to assist the Board infulfilling its responsibilities under the Corporations Act inrelation to financial reporting, risk management and internalcontrol. More recently amendments were made to the termsof reference for the Audit Committee. Membership of theCommittee now comprises a majority of non-executivedirectors and the non-executive members of the Committeemeet with the external auditors on at least two occasionseach year without management in attendance.KPMG is the Group’s principal auditor and was reappointed tothat position by shareholders at last year’s Annual GeneralMeeting. KPMG’s engagement partner responsible for theLeighton Group audit rotates at least every seven years withthe last rotation occurring in February 2001.KPMG has confirmed to the Board that they have maintainedtheir independence throughout the financial year by enforcingstrict internal rules and policies and that they were free fromconflicts of interest when discharging their professionalresponsibilities as statutory auditor for the year ended30 June 2002.

04//05 Report from the Annual General Meeting November 2002Projects from topLoa Janan Coal MineIndonesia – Leighton Asia (Southern)Lavarack Barracks Redevelopment, Stage 2Queensland – ThiessAddress to Shareholders (continued)The Board has a Remuneration Committee which isresponsible for making recommendations to the Board onremuneration arrangements for the executive directors andsenior executives. Our remuneration policy has beenstructured to ensure that remuneration properly reflects therelevant person’s duties and responsibilities, and iscompetitive in attracting, retaining and motivating people ofthe highest quality. In developing this policy the Boardrecognised that the construction sector, both in Australiaand internationally, is an inherently volatile industry, whichrequires the application of exceptional skills in thesuccessful management of risk across a broad range ofdisciplines.The Board also recognises that people are the Group’s mostvaluable asset. An integrated system of training, careerdevelopment and incentives has been established with theaim of retaining and motivating quality staff. This isparticularly important given the large workload of over$9 billion already secured and the emerging upswing in ourtraditional construction markets in Australia. The Group’sincentive schemes include an annual bonus, deferredincentive and share option plans. All these componentshave appropriate performance hurdles in place which areclosely aligned to shareholder interests to ensure that if theemployees benefit from good performance so do theshareholders.The company takes its continuous disclosure obligationsvery seriously and considers them an essential element inmaintaining shareholder confidence and market trust.Accordingly the Group has detailed internal procedures inplace for the gathering and release of price sensitiveinformation to the Australian Stock Exchange. Electroniccommunication plays an integral part in ensuring the Groupachieves its communication objectives. All releases madeby the company to the ASX are now communicatedelectronically and once cleared for release are immediatelyposted on the Leighton Holdings website. The website hasbecome a vital point of reference for shareholders and theinvestment community generally in researching informationabout the Group’s workload, financial performance,capabilities and experience. Webcasts of events such astoday’s Annual General Meeting and the Group’s financialresults presentations are further examples of how thecompany achieves wider disclosure and communicationwith stakeholders.This list is not meant to be exhaustive. There are manyother policies and processes in place which we believe arenecessary to ensure adequate corporate governancestandards at Leighton. These are continuously beingimproved and updated.ConclusionIn concluding my remarks it is most pleasing to report thatthe Group has successfully navigated a substantialdownturn in the industry in Australia and now has a numberof excellent projects in its order book.Group companies are presently undertaking a diverse rangeof billion dollar projects and management’s focus willremain on obtaining successful outcomes for our clientsand shareholders.Operating revenue recorded during the first three months ofthe current financial year was $1.4 billion from which anoperating profit after tax (unaudited) of $35 million hasbeen generated.These first quarter results for the 2002/03 fiscal period arein line with budget expectations. Following the finalisationof contracts for the Stanwell Magnesium plant and SpencerStreet Station redevelopment projects during the quarter,work in hand stood at $9.3 billion with incompletemanagement contracts valued at $553 million. Thiscompares with $8.4 billion of work in hand andmanagement contracts of $517 million at 30 June 2002.Our financial strength remains a competitive advantage andwill be used to sponsor some of the major infrastructureprojects being developed, underpin capital expenditure onplant and equipment, and provide bonds and guaranteesto clients.It will also be used to take advantage of any rationalisationopportunities available in Australia and make otheracquisitions or investments which will add to the Group’sskill base and market presence.As announced recently the company has reaffirmed itscommitment to Nextgen Networks by:•Bringing forward our $92 million commitment tocontribute equity to the project to the current calendaryear;•Converting our revenue guarantee of $50 million to asubordinated loan to be provided to Nextgen in June2003; and•Undertaking to provide an additional $8 million insubordinated debt to Nextgen in January 2003.Nextgen now has increased support for the initialdevelopment of the business and the flexibility to pursueindustry development opportunities.On behalf of the Board, I would like to thank our shareholdersfor their continued support. I also express the Board’sappreciation to members of the Leighton Group’smanagement team and all employees for their excellentwork during the year.Work in hand is, yet again, at record levels and shouldtranslate into a strong increase in revenue. The underlyingperformance of the Group’s operations remains strong.The Board will continue to monitor Nextgen’s performancevery carefully and will review the residual carrying value ofour interests at December this year and at June 2003.The outlook for the next few years is very good with a periodof sustained growth forecast on the back of a higher level ofactivity.Approved Items of BusinessThe following items of business, as set out in the Notice of Meeting dated 1 October 2002,were approved by shareholders at the Annual General Meeting:– Adoption of the Financial and other Reports– Election of M.C. Albrecht, D.S. Adamsas, G.J. Ashton and G.J. Dixon as Directors

Future GrowthA Presentation to the 41st Annual General Meeting of LeightonHoldings Limited by the Chief Executive Officer, Mr Wal King AMAs the Chairman has outlined in his address, we are proud tohave delivered another strong performance for shareholders.We have significantly boosted our work in hand, with somemajor projects such as the Western Sydney Orbital tollroadstill to come. The momentum generated by this level of workshould underpin growth for the next few years in the coreareas of our business.Today I will talk about our business strategy and about somespecific areas of future growth.Business StrategyThe Group’s business strategy is built on three criticalelements: diversity, financial strength and people. It is thesethree elements, working in unison, that are key to oursuccess.Diversity, by geography, by the markets in which we operate,by the companies through which we operate, and the way inwhich services are delivered to clients, increases our marketpresence and our ability to grow.Over the years, we have progressively shifted away frombeing a construction-only entity operating in one market tobeing a multi-faceted contractor in Australia and across theAsian region. And we encourage our people to seekdiversified opportunities where we can apply our contractingand development skills.The Group’s financial strength is an equally fundamental partof our strategy, allowing us to facilitate and invest indevelopment projects and to make opportunistic acquisitions.It also attracts the best business partners. We need to beable to support $1 billion worth of bonds and guarantees andwe have significant working capital requirements. We alsohave a large investment in plant and equipment. To be asuccessful contractor, having a strong balance sheet is not anoption, it’s a necessity.Our people, numbering over 15,000 across our diverseoperations, are critical to our success. We are a servicebased organisation and we succeed or fail because of thequality of that service. It is our people who managerelationships with clients, drive equipment, pour concrete,collect tolls and liaise with the community. We foster aperformance driven culture throughout the Group and rewardperformance against stated objectives through variousincentive schemes.Our decentralised management structure allows a high levelof autonomy. It is a flexible structure that can adapt tochanging market conditions and each of our companies hasits own distinct identity and market position. We announcedyesterday that John Holland has entered into a non-bindingMemorandum of Understanding with Walter Bau AG toacquire the Australian operations of Walter ConstructionGroup. The potential acquisition is part of John Holland’sstrategy to grow the business to a larger, more efficientnational structure. If the deal is done, John Holland will gain$850 million of new work and specialist skills such astunnelling, underground mining and the construction of waterinfrastructure. The Group’s structure will stay the same withWalter merged into John Holland’s operations.Before I talk about some specific opportunities, I will give abrief overview of the market outlook in Australia. The nonresidentialconstruction market is heading for a significantupswing. BIS-Shrapnel is forecasting a strong upturn in boththe non-residential building and engineering markets. Bothsectors are expected to experience sustained growth fromnow until at least 2006, with the engineering market headingfor an historic high.Resources InfrastructureAustralia is expected to experience an upturn in resourcesdue to its vast reserves, competitive exchange rate,reformed taxation system and labour market, and its cheapenergy supply.This positive environment is leading to a surge in capitalspending. Billions of dollars worth of new minerals andenergy projects are being developed or are underconsideration. A number include substantial value adding torefine and process resources.The North West Shelf liquefied natural gas project is a greatexample of adding value to our natural resources. The recentsigning of a $25 billion contract to supply China, makes theNorth West Shelf one of the largest gas suppliers in theworld. A fourth ‘train’, or processing plant, is currently beingbuilt at a cost of $1.6 billion. Both Thiess and John Hollandare currently undertaking civil works on site.Oil and gas developments offshore may provide someopportunities for concrete gravity structures to serviceproduction facilities. Group companies have a track record inthis area. Leighton Contractors developed the Wandooconcrete gravity structure off Dampier in Western Australia.Further afield, John Holland developed one in the Philippinesat Malampaya.The development of Australia’s oil and gas reserves, andproduction of cheap energy, should lead to the developmentof other related industries such as fertilizer production andalumina smelting.In August 2002, Leighton Contractors finalised anengineering, procurement and construction (EPC) contractwith Australian Magnesium Corporation (AMC) to developtheir $1 billion Stanwell magnesium project, nearRockhampton in Queensland. This is the first time anAustralian company has taken on the role of EPC contractorfor such a large scale project.This will see AMC become the world’s largest producer ofmagnesium metal. Magnesium has the potential tosignificantly reduce the weight of motor vehicles, therebyimproving fuel economy. AMC has already signed a 10-yearsupply agreement with the Ford Motor Company in the US.Also, Leighton Contractors in joint venture with Fluor, hasrecently been appointed as interim EPC contractor for the$3.4 billion greenfield aluminium smelter at the AldogaIndustrial Estate at Gladstone.Road InfrastructureI’d now like to talk about some transport infrastructureprojects.Contractors have become integral to the development of thecomplex road infrastructure that we take for granted in ourcities. We are now involved in the roles traditionally providedby government including design, financing, communityconsultation, and operation and maintenance.The Leighton Group has developed a leading position as aprovider of road infrastructure. Leighton Contractorsdeveloped the M5 Motorway in the early 90s and morerecently the Eastern Distributor, both in Sydney. In theseprojects the Group’s financial strength was a key componentof successfully developing large scale, private sector projectsand we expect that it will become more important inthe future.In Queensland, Leighton Contractors recently deliveredBrisbane’s Inner City Bypass eight months early and onbudget, taking over 40 percent of traffic out of the CBD.A number of major road projects are now either in activeplanning or under consideration around the country.

06//07 Report from the Annual General Meeting November 2002Projects clockwise from top leftQAL Stationary Calciner ProjectQueensland – ThiessNo.1 Margaret StreetNew South Wales – Leighton PropertiesAlice Springs – Darwin RailwayNorthern Territory – John HollandPhilip Morris Manufacturing FacilityPhilippines – Leighton Asia (Northern)Future Growth (continued)

Leighton Contractors is a member of the recently announcedpreferred consortium for the first of these major new projects,the $1.5 billion Western Sydney Orbital (WSO). The WSO is acritical component of Western Sydney’s transportinfrastructure linking with the M5 at Prestons, the M4 nearMinchinbury and the M2 at West Baulkham Hills. Nearly40Km in length, it will have a fully automated tolling systemresulting in significantly improved traffic flows. The WesternSydney Orbital brings $750 million worth of work in hand overthe next four years and involves a 10 percent equity stake.Some $6 billion of road projects are likely to proceed over thenext few years. The final link in the orbital road networkaround Sydney is the $850 million Lane Cove Tunnel which iscurrently being bid and is expected to be awarded in the firsthalf of next year. Both Leighton Contractors and Thiess are inconsortiums bidding for this project.In Sydney, two other major road projects are currentlybeing evaluated by government. These projects are the F3connector to the Sydney Orbital, providing freeway accessfrom Sydney to Newcastle, and the M4 City Link, which willcomplete the link from Western Sydney to the city. Theseprojects will both be in excess of $1 billion.In Melbourne, projects being progressed include the$1.8 billion Mitcham-Frankston (Scoresby) Motorway, and thePakenham and Craigeburn bypasses.Rail InfrastructureAfter decades of inertia we are seeing a sustained resurgencein spending on rail infrastructure. The development of newintercity and interstate lines, the privatisation of parts ofAustralia’s interstate track network, and the upgrading of theexisting network is fuelling a mini-boom in the railinfrastructure sector. Expenditure on rail construction isexpected to increase by more than 200 percent over the nextfive years.After 100 years on the drawing board, construction of the1,420Km Alice Springs to Darwin rail line is underway andJohn Holland has a lead role in this project. Track layingstarted in April and is now proceeding at a rate of over4Km a day with some 500Km of track laid.In Sydney, a consortium led by Thiess is designing andconstructing the first leg of the $1.6 billion Parramatta RailLink, a 28Km extension to the Sydney metropolitan railnetwork. The project involves the tunnelling, excavation ofstation caverns, laying of track, signalling and communicationssystems between Chatswood and Epping.The Victorian Government is currently investing $550 millionto provide fast rail links for commuters between Melbourneand four regional centres. Both Thiess and John Holland wereawarded work on these routes, which will terminate at theredeveloped Southern Cross Station in Spencer Street,currently being upgraded by Leighton Contractors.A number of other new rail initiatives are in planning aroundthe country including construction of the Perth to Mandurahrail line in Western Australia, the development of the GoldCoast light rail project, the Epping to Castle Hill link in Sydney,the second stage of the Parramatta Rail Link, and upgrading ofthe Sydney to Newcastle line.While rail construction is experiencing a strong upturn,maintenance and refurbishment of the existing network is alsoproviding good opportunities. John Holland is now the largestrail maintenance contractor in Australia and currentlymaintains over 5,600Km of track in Western Australia, and800Km of track in South Australia and the Northern Territory.Privatisation of Melbourne’s train and tram network hasprovided long-term maintenance work for Thiess Infraco.Also, the Australian Rail Track Corporation has recentlyearmarked $500 million for upgrading of rail infrastructure overthe next five years and the Group is keen to undertake someof this work.Building and PropertyThe Australian non-residential building and property marketappears set to experience a period of growth, with acombination of low interest rates and a strong domesticeconomy expected to stimulate activity. The recovery iscentred on CBD office developments along the easternseaboard, redevelopment of shopping centres and somemajor hotels, as well as continued spending in health,education and defence.The Group has a strong presence in the building and propertysector, recently boosted by Leighton Contractors’ acquisitionof Broad Construction and John Holland’s acquisition ofFletcher Construction. The potential acquisition of WalterConstruction Group would also add to John Holland’sbuilding capability.Leighton Properties is currently developing some selectedoffice projects including the MacArthur Chambersdevelopment in Brisbane and 700 Collins Street in Melbourne.Both have leasing pre-commitments.Other office prospects being progressed by LeightonProperties include the KENS site in Sydney’s CBD and the100 Pacific Highway site in North Sydney. DevelopmentApplications have been lodged for both of these projects.Also, we have developed a strategic partnership with theJames Fielding Group and we are exploring joint developmentopportunities. We have sold one of our completed propertydevelopments, the Mulgrave e-park, into their retailinvestment vehicle.The retail and hotel sectors are providing some goodopportunities. Leighton Contractors has recently commencedwork on the $167 million refurbishment of the Hilton Hotel inSydney’s CBD and John Holland has two shopping centreprojects in New South Wales.Around $6 billion worth of private and public projects areplanned for the health and education sectors. Most of thisactivity is set to occur in New South Wales and Queensland,with some major projects such as a $400 millionredevelopment of Sydney’s Royal North Shore Hospital.Expenditure on defence facilities is expected to continue.Leighton Contractors and Thiess are working at threedefence bases in Townsville and John Holland has a longtermmaintenance contract for defence facilities in NewSouth Wales.AsiaTurning now to our Asian markets, the outlook remainspositive with most markets forecast to recover over the nextfew years. We have recently restructured Leighton Asia toposition it to profit from this recovery.Over the past five years, Leighton Asia, led by John Faulkner,has doubled in size and gained a far broader footprint acrossthe region. We have separated the current operations ofLeighton Asia into two companies.Leighton Asia (Northern), under the leadership of WillHamilton, will be responsible for operations in Hong Kong,the Philippines, Thailand, Vietnam, Taiwan and China.Leighton Asia (Southern), under David Savage, will beresponsible for operations in Malaysia, Indonesia, Singapore,Sri Lanka and India. I congratulate both Will and David ontheir appointments.The key objective of this restructure is to provide greatermanagement strength to enable the business to continuegrowing.Indonesia remains the largest contributor from Asia withwork in hand in excess of $1 billion. Of course, the recenttragedy in Bali has created some concern about ouroperations. Indonesia is a complex country with its ownsocial and political issues. There has been no disruption toour projects and, whilst we continue to closely monitor thesituation, we remain committed to Indonesia.Thiess’ contract mining activities in Kalimantan continue toperform well. Leighton Asia has also developed a solidpresence in Indonesia with contract mining operations inKalimantan and a rail project in West Java. We will continueto review a number of resources opportunities in Indonesia.In Hong Kong, Leighton Asia’s workload has improved withthe award of some major new projects such as the refuellingfacility at the airport in addition to four current rail contracts.The Hong Kong government’s investment in the developmentof rail and other civil engineering infrastructure shouldcontinue to generate work in the future.Leighton Asia’s operations in Malaysia have performedstrongly over the last couple of years on the back of somelarge projects. Whilst new work has been secured, activitylevels in Malaysia have now come off recent highs.Opportunities are being pursued in power generation,telecommunications and general construction.Elsewhere in the region, Leighton Asia has some goodprospects. Construction of the Philip Morris manufacturingfacility has progressed well, boosting activity levels in thePhilippines and some preparatory works have been carriedout on the North Luzon Expressway in Manila.In Vietnam, an improved investment climate is providingopportunities such as a new power station near Ho Chi MinhCity for Siemens. Leighton Asia is now working in Taiwan andis hopeful of securing further work on the High Speed RailLink currently under construction.We have a strong position across much of Asia and theregion remains a fundamental element of our diversitystrategy.ConclusionThe Group has successfully navigated the downturn inAustralian construction markets. Work in hand is at an alltimerecord level of $9.3 billion with a diverse range of majorprojects in hand, and an upswing in activity ahead.However, the continued growth of the Group is not withoutits challenges. Our focus will remain firmly on the profitableexecution of current projects and on managing our exposureto Nextgen Networks given the flat telecommunicationsoutlook. We must also successfully manage our humanresources and continue to win replacement work.The next few years should be a period of strong growth andwe are confident that we have the management, thefinancial strength and the market opportunities tosuccessfully deliver for shareholders.

Significant Current ContractsTotal contract values are shown for all projects including associates and joint ventures.Thiess•$61m alliance contract for mining at Yallourn Mine,Latrobe Valley, Vic, for Yallourn Energy. Thiess’ share is$27m.•$28m contract for the removal of overburden and otherancilliary works at Hazelwood mine, Latrobe Valley, Vic,for Hazelwood Power. Thiess’ share is $12m.° $1.3bn contract for mining and processing operations atMt Owen coal mine, NSW, for Hunter Valley CoalCorporation.° $1.1bn contract for mining operations at Burton coalmine, Qld, for Burton Coal.° $880m contract to design and construct tunnels,stations, track, signal and communications work on theParramatta Rail Link, Sydney, for NSW Department ofTransport. Thiess’ share is $440m.° $584m in alliance contracts for maintenance and renewalof the electrified infrastructure for M>Train andM>Tram, Melbourne, Vic, with National ExpressAustralia. Thiess’ share is $292m.° $564m contract for infrastructure maintenance, mining,washing and loading of coal at Collinsville coal mine, Qld,for Mt Isa Mines and Itochu Coal Resources Australia.° $370m in contracts for underground coal mining atSouthland Colliery, NSW, for Southland Coal.° $361m contract for mining, processing and loadingoperations at North Goonyella coal mine, Red Hill, Qld, forNorth Goonyella Coal Properties.° $329m joint venture contract for earthworks and mobileplant hire at Loy Yang power station, Gippsland, Vic, forSECV. Thiess’ share is $145m.° $242m management contract for redevelopment of RoyalPrince Alfred Hospital, Sydney, NSW, for the Departmentof Public Works and Services.° $200m contract to design, construct and commissiontrack, civil, signal and communications work on theRegional Fast Rail project, between Ballarat and Geelong,Vic, for the Department of Infrastructure. Thiess’ share is$100m.° $171m management contract for construction ofLavarack Barracks Stage 3, Townsville, Qld, forDepartment of Defence.PT Thiess Contractors Indonesia° $1.1bn contract for mining operations at the Satui andSenakin coal mines, South Kalimantan, Indonesia, for PTArutmin Indonesia.° $444m contract for overburden removal and coal haulageat Kideco coal mine, Kalimantan, for PT Kideco JayaAgung.Thiess Services•$33m contract to remediate the Penny’s Bay site, HongKong, for China State Construction Engineering (HK) Ltd.° $832m in fixed plant maintenance andtelecommunications contracts throughout Australia withSiemens as joint venture partner, trading as SilcarMaintenance Services. Thiess’ share is $416m.° $196m in waste collection and recycling services forvarious local government clients in NSW and ACT andthe Waste Service of NSW at Chullora.° $129m in contracts for the operation of transfer stationsand landfills in Brisbane, Qld.° $128m joint venture contract to design and construct allaccess network outsourced activity with Siemens, inareas within Qld and NSW, for Telstra. Thiess’ share is$64m.Hunter Valley Earthmoving° $127m contract for overburden removal, mining andtransport of coal at Liddell open cut mine, NSW, forLiddell Coal Operation Pty Ltd.Leighton Asia (Northern)•$33m contract to remediate the Penny’s Bay site, HongKong, for China State Construction Engineering (HK) Ltd.• Indicates new projects won between 1 July 2002 and 30 September 2002. ° Indicates significant on-going projects.° $264m contract for upgrading and extending an existinglight rail system, Hong Kong, for Kowloon Canton RailwayCorporation.° $249m contract for design and construction of 84km ofexpressway upgrades and expansions, North Luzon,Philippines, for Manila North Tollways Corporation.° $192m contract to construct three 47-storey and three41-storey housing blocks, near the Eastern Harbourcrossing, for Hong Kong Housing Authority.° $187m contract for construction of trackwork from NamCheong Station to Kam Sheung Road Station, HongKong, for Kowloon Canton Railway Corporation’s WestRail project.° $185m management contract for the construction ofFisherman’s Wharf, Macau, for Macau Fisherman’s WharfInternational Investment.° $174m joint venture contract to design and constructtrackwork for the Taiwan High Speed Rail Link, Taipei, forTaiwan High Speed Rail Corporation. Leighton Asia’sshare is $48m.° $151m contract to design and construct an aviation fuelfacility at Hong Kong International Airport, for ECOAviation Fuel Developments Ltd.Leighton Asia (Southern)° $376m contract for construction of 7,200 teachers’apartments and project management for a further 2,800teachers’ apartments, Malaysia, for Encorp ConstructSdn Bhd.° $279m contract for mining, infrastructure, operation andmaintenance at Sebuku coal mine, Indonesia, for PTBahari Cakrawala Sebuku.° $160m contract to mine, remove overburden, transportcoal and maintain haul roads at the ABK Loa Janan coalmine, East Kalimantan, Indonesia, for PT Anugerah BaraKaltim.Leighton Contractors•$1.0bn contract to design and construct the StanwellMagnesium plant, Rockhampton, Qld, for AustralianMagnesium Corporation.•$298m contract to redevelop the Spencer Street Stationand upgrade the track and signalling, Melbourne, Vic, forCivic Nexus.•$167m contract to refurbish and upgrade the SydneyHilton, NSW, for Admiral III.•$78m contract to construct 700 Collins Street,Melbourne, Vic, for Folkstone/Leighton JV.•$14m contract to construct residue and surge ponds atthe Alcoa Area L Stage 2 civil works, Kwinana, WA, forAlcoa of Australia.•$10m contract for mine infrastructure and sample pitconstruction at the Rollerston coal mine, Qld, for MIMHoldings.Vytel•$19m contract to design and construct a fibre-opticnetwork along Victoria’s four new fast rail corridors, forVicTrack Rail Corporation.° $613m contract to build the Nextgen fibre-optic cablenetwork across Australia, for Nextgen Networks.° $143m contract to operate and maintain the Nextgenfibre-optic cable network across Australia, for NextgenNetworks.° $135m contract to rehabilitate the Telstra network,throughout NSW and Vic, for Telstra Corporation.John Holland (70% owned)•$29m management contract for the construction of theNIB Hospital John Hunter campus, Newcastle, NSW, forNIB Private Hospital.° $1.1bn joint venture contract to design and construct theAlice to Darwin railway, NT, for APT. John Holland’s shareis $222m.° $298m contract to design and construct regional raillinks, from Melbourne to Taralgon and Bendigo, Vic, forthe Department of Infrastructure. John Holland’s share is$190m.° $180m joint venture management contract for facilitiesmanagement of defence bases, across NSW, forDepartment of Defence. John Holland’s share is $90m.ACN 004 482 982ABN 57 004 482 982472 Pacific HighwaySt Leonards NSW 2065AustraliaTel: +61 2 9925 6666Fax: +61 2 9925 6005Web: www.leighton.com.au