FBR LTD — Regulatory Filings 2011

May 8, 2011

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Dromana Estate Limited

ABN 58 090 000 276

Registered Office and Winery/ Cellar Door Address: 555 Old Moorooduc Road, Tuerong Vic 3933 Postal Address: PO Box 299 Mt Martha Vic 3934 Tel (03) 5974 3899 Fax (03) 5974 1155 Internet address: www.dromanaestate.com.au

Date: 6 May 2011

Mr Minas Frangoulis ASX Compliance Pty Limited Level 45 Rialto South Tower 525 Collins Street Melbourne Vic 3000

Dear Minas

I refer to your letter dated 5 May 2011 and provide the following responses to the questions contained therein:

1. The company’s ongoing cash flow commitments are being funded by Mornington Winery Group Limited, an unlisted public company with the same shareholders and which was demerged from Dromana on 30 June 2010. Dromana’s major asset is its 13.99% interest in Jinalec Pty Ltd which is the owner of the vineyard leased to Mornington Winery Group Limited. Jinalec has been granted a permit to construct a hotel/conference centre, day spa and restaurant on the property which was announced to the market on 27 April 2010.

2. The company expects to have negative operating cash flows whilst it is evaluating its participation in the hotel/conference centre, day spa and restaurant project. When this is decided the Directors will assess the need for future capital raisings to fund the project. The Directors are also looking at other investment opportunities for Dromana to participate in, aside from the development project which can add to shareholder value.

3. The independent Directors of Dromana are in consultation with the Directors of Jinalec pty Ltd, Mr David Craig and Mr Richard Green, to determine the most appropriate way for Dromana and its shareholders to participate in the development project. Before the Independent Directors of Dromana are in a position to determine whether to participate directly in the development project, Jinalec needs to undertake further project evaluations and costings which, once valued, will provide a basis for making an appropriate decision.

4. Yes, the company confirms that it complies with listing rules and in particular listing rule 3.1.

5. The company believes it is in compliance with rule 12.2.

Yours truly

Garry Bell

Company Secretary

5 May 2011

Mr Gary Bell Company Secretary Dromana Estate Limited 555 Old Moorooduc Road Tuerong VIC 3933

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ASX Compliance Pty Ltd ABN 26 087 780 489 Level 45 Rialto South Tower 525 Collins Street Melbourne VIC 3000

GPO Box 1784 Melbourne VIC 3001

Telephone 61 3 9617 8711 Facsimile 61 3 9614 0303 www.asx.com.au

Facsimile: (03) 5974-1155

Dear Gary

Dromana Estate Limited (the “Company”)

I refer to the Company’s Quarterly Report in the form of Appendix 4C for the period ended 31 March 2011, released to ASX Limited ("ASX") on 28 April 2011 (the “Appendix 4C”).

ASX notes that the Company has reported the following.

1. Receipts from product sales and related debtors of $4,000.

2. Net negative operating cash flows for the quarter of $32,000.

3. Cash at end of quarter of $17,000.

In light of the information contained in the Appendix 4C please respond to each of the following questions.

1. It is possible to conclude on the basis of the information provided that if the Company were to continue to expend cash at the rate for the quarter indicated by the Appendix 4C, taking into account future administration costs, the Company may not have sufficient cash to fund its activities. Is this the case, or are there other factors that should be taken into account in assessing the Company’s position?

2. Does the Company expect that in the future it will have negative operating cash flows similar to that reported in the Appendix 4C for the quarter and, if so, what steps has it taken to ensure that it has sufficient funds in order to continue its operations at that rate?

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1. What steps has the Company taken, or what steps does it propose to take, to enable it to continue to meet its business objectives?

2. Can the Company confirm that it is in compliance with the listing rules, and in particular, listing rule 3.1?

3. Please comment on the Company’s compliance with listing rule 12.2, with reference to the matters discussed in the note to the rule.

Listing rule 3.1

Listing rule 3.1 requires an entity to give ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities. The exceptions to this requirement are set out in the rule.

In responding to this letter you should consult listing rule 3.1 and the guidance note titled “Continuous disclosure: listing rule 3.1”.

If the information requested by this letter is information required to be given to ASX under listing rule 3.1 your obligation is to disclose the information immediately.

Your responsibility under listing rule 3.1 is not confined to, or necessarily satisfied by, answering the questions set out in this letter.

Please note that ASX reserves the right, under listing rule 18.7A, to release this letter and the Company’s response to the market. Accordingly, it would be appreciated if you would prepare your response in a form suitable for release to the market and separately address each of the questions asked. If you have any concerns about your response being released, please contact me immediately.

Your response should be sent to me by return email. It should not be sent to the Company Announcements Office.

Unless the information is required immediately under listing rule 3.1, a response is requested as soon as possible and, in any event, not later than 9:30am AEST on Monday, 9 May 2011.

If you are unable to respond by the time requested you should consider a request for a trading halt in the Company’s securities.

If you have any queries in relation to the above, please let me know.

Yours sincerely,

Minas Frangoulis Adviser, Listings

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