KORVEST LTD — AGM Information 2012

Oct 25, 2012

==> picture [213 x 163] intentionally omitted <==

ABN 20 007 698 106

CHAIRMAN’S ADDRESS TO SHAREHOLDERS

Delivered at the Annual General Meeting on Friday 26[th] October 2012 7[th] Floor, 151 Pirie Street Adelaide SA 5000

Ladies and Gentlemen,

Welcome to the 42[nd] Annual General Meeting of Korvest Ltd. Today we present for your approval the financial statements for the year ended 30 June 2012 together with the reports of the Directors and Auditor.

FINANCIAL RESULTS

The revenue from trading activities including financial revenues for the year under review was $72.3m, up 7.3% on the previous year. Profit after tax was up by 46.4% to a record $6.2 million. The year started strongly with a record first half which was underpinned by a small number of large projects and laid a strong foundation for the full year result. The second half returned to more subdued levels of activity as all of the large projects that drove the first half result were largely completed. Despite the lack of sizable project work in the second half the result was a 5.6% improvement on the prior year comparable period. All of the Korvest businesses improved their results compared to the prior year.

In the Industrial Products group the EzyStrut cable and pipe support business supplies products to contractors for small industrial developments and also supplies products for major infrastructure developments. During the year a number of major projects in the Eastern States and in Western Australia contributed positively to the improved performance of the business. The level of project activity was not consistent around the country and therefore not all states were able to improve on their prior year performance. Unfortunately in May 2012 the Hastie Group was placed into administration. At that time various Hastie Group companies owed Korvest a total of $564,000 and this has been fully provided for. This detracted from what was otherwise an excellent result. Operationally the focus of the business has been on improving manufacturing and logistics performance to produce higher quality products at improved lead times.

Included in the Industrial Products group is the Indax grating and handrail business. Indax’s performance improved however further improvement is required to achieve a satisfactory performance. Margin pressure was evident for much of the year however there was some evidence in the latter part of the year that surplus capacity in the market was diminishing and prices were responding accordingly. Sales from the Western Australian market improved over the course of the year and contributed positively to the Indax performance. Operations on the Kilburn site in South Australia have been reorganised during recent months to provide more capacity for Indax.

In the Production group the Galvanising business improved. The level of project work in the South Australian market increased during the year. In addition, local fabricators competed strongly on the national stage and secured work for projects from other states resulting in increased fabrication, and therefore galvanising, within South Australia. Overall plant volumes were up for the year with the improved performance in the Industrial Products

2

segment providing increased internal volumes. The spin plant volumes also increased due to project wins by Korvest’s major customers and this contributed positively to the overall improved result for the business.

DIVIDEND

We have announced a fully franked final dividend of 30 cents per share. The full year dividend in relation to the 2012 year was 53 cents including the 5 cent interim special dividend. This compares to a full year dividend of 26 cents per share for the previous year.

Having regard for the strength of the Korvest balance sheet, the cash reserves and the available franking credits, the Directors revised the dividend payout policy to 100% of after tax profits. The finial dividend of 30 cents per share reflected this new payout policy.

The final dividend was paid on 6[th] September 2012.

RE-ELECTIONS

In accordance with our Articles of Association Peter Brodribb retires by rotation and seeks re-election. Our new director, Ted Pretty, seeks re-election having been appointed to fill a casual vacancy since our last Annual General Meeting.

KORVEST PEOPLE

Korvest is fortunate to have a strong and dedicated team of people. The improved financial results are due to the work of all staff across the country and I am sure that all here today join with me and the Directors in thanking management and staff for their efforts over the past financial year.

In September 2012, Graham Twartz retired from the Korvest Board after serving since 1999. I would like to thank Graham for the significant contribution that he made to Korvest during his time as a Director.

CORPORATE GOVERNANCE

Korvest’s approach to Corporate Governance is a practical one determined by the nature and size of our business and the risks identified in our operating environment. Our practises are set out in detail in the Annual Report.

CURRENT YEAR TO DATE AND OUTLOOK

The first quarter trading results are in line with those achieved in the second half of last financial year. As we advised with the full year result it is expected that this level of activity will continue for the remainder of the first half producing a first half result in line with the second half result of the 2012 financial year.

3

However, because of the impact of large project work in the first half of last year mentioned previously, when compared to the same period last financial year, it is expected that the first half’s result will be approximately $1.3 million after tax below the profit of the prior year’s record first half.

The Company is vigorously pursuing additional project work whilst the day-today construction demand remains subdued and outlook is uncertain. Large project work has the potential to have a significant positive impact on results for the second half. However, the availability and timing of major contracts remains uncertain. Further guidance will be provided in January 2013 in relation to the full year result.

SHARE BUY-BACK

A year ago the Company announced an on-market share buy-back for up to 10% of the issued capital. The period for that buy-back ends today. As outlined at last year’s meeting the purpose of initiating the buy-back was to give the board the flexibility to purchase significant available parcels of shares at times when the opportunity presented. No such parcels became available during the year and accordingly no shares were bought back.

P.W. STANCLIFFE Chairman 26 October 2012

4