PEET LIMITED — AGM Information 2011

Oct 13, 2011

PEET LIMITED

A.B.N. 56 008 665 834

NOTICE OF ANNUAL GENERAL MEETING

AND

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

A PROXY FORM IS ENCLOSED

Please read the Notice and Explanatory Memorandum carefully.

If you are unable to attend the meeting please complete and return the enclosed proxy form in accordance with the specified instructions.

PEET LIMITED

A.B.N. 56 008 665 834

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Peet Limited ("the Company") will be held at the Parmelia Hilton Hotel, 14 Mill Street, Perth, Western Australia on Tuesday, 15 November 2011 at 10.00 am (AWST).

Agenda items

Ordinary Business

1 Financial report

To receive and consider the financial report of the Company and the reports of the directors and auditor for the year ended 30 June 2011.

2 Re-election of directors

To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:

• a) "That Stephen Francis Higgs, being a director of the Company who retires by rotation under rule 8.1(d) of the Company's constitution, and being eligible, is re-elected as a director of the Company.
• b) That Anthony James Lennon, being a director of the Company who retires by rotation under rule 8.1(d) of the Company's constitution, and being eligible, is re-elected as a director of the Company."

3 Adoption of Remuneration Report

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That the Company's Remuneration Report for the year ended 30 June 2011 be adopted."

Note: The vote on this item is advisory only and does not bind the directors or the Company.

Voting exclusion statement – Corporations Act

The Company will disregard any votes cast on Resolution 3 (in any capacity) by or on behalf of a member of the Company's key management personnel, details of whose remuneration are included in the Remuneration Report, or their closely related parties. A "closely related party" is defined in the Corporations Act 2001 (Cth) ("Corporations Act") as any spouse, dependant and certain other close family members of a member of the key management personnel, as well as any companies controlled by a member of the key management personnel. However, the Company need not disregard a vote if the person does so as a proxy appointed in writing that specifies how the proxy is to vote on the resolution and the vote is not cast on behalf of a member of the key management personnel or their closely related parties.

Special Business

4 Approval for grant of FY12 Performance Rights under the Peet Limited Performance Rights Plan to Brendan Gore

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"For the purposes of ASX Listing Rule 10.14 and for all other purposes, approval is given to grant 1,137,500 FY12 Performance Rights to Brendan Gore (a director of the Company) under the Peet Limited Performance Rights Plan, as amended from time to time, and on the terms and conditions set out in the Explanatory Memorandum accompanying the notice of this meeting."

Voting exclusion statement – ASX Listing Rules and Corporations Act

The Company will disregard any votes cast on Resolution 4 by:

• a director of the Company except one who is ineligible to participate in any employee incentive scheme in relation to the Company; and
• any of their associates.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the Chairman of the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

In addition, the Company's key management personnel and their closely related parties are not permitted to cast a vote as a proxy for a person, unless that person is permitted to vote and has directed the proxy how to vote on Resolution 4 in the proxy form.

5 Approval for grant of FY12 Performance Rights under the Peet Limited Performance Rights Plan to Anthony James Lennon

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"For the purposes of ASX Listing Rule 10.14 and for all other purposes, approval is given to grant 144,375 FY12 Performance Rights to Anthony James Lennon (a director of the Company) under the Peet Limited Performance Rights Plan, as amended from time to time, and on the terms and conditions set out in the Explanatory Memorandum accompanying the notice of this meeting."

Voting exclusion statement – ASX Listing Rules and Corporations Act

The Company will disregard any votes cast on Resolution 5 by:

• a director of the Company except one who is ineligible to participate in any employee incentive scheme in relation to the Company; and
• any of their associates.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the Chairman of the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

In addition, the Company's key management personnel and their closely related parties are not permitted to cast a vote as a proxy for a person, unless that person is permitted to vote and has directed the proxy how to vote on Resolution 5 in the proxy form.

6 Ratification of issue of securities in the past year

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That for the purposes of ASX Listing Rule 7.4 and for all other purposes the Company ratifies the allotment and issue in June 2011 of 500,000 Convertible Notes, with a face value of $100 each."

Voting exclusion statement – ASX Listing Rules

The Company will disregard any votes cast on Resolution 6 by:

• any person who participated in the issue; and
• their associates.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the Chairman of the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

7 Approval to amend the calculation of Return on Equity in respect of Performance Conditions attaching to FY11 Performance Rights

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That, in respect to the FY11 Performance Rights granted to certain of the Company's executives, the calculation of relative ROE will be measured as the average net operating profit after tax (net profit after tax, excluding the write-down or write-up in carrying value of inventories and development costs) over the FY11 Performance Period, divided by the average starting and ending equity, as amended by the Directors."

Voting exclusion statement – ASX Listing Rules and Corporations Act

The Company will disregard any votes cast on Resolution 7 by:

• any person who holds FY11 Performance Rights; and
• any of their associates.

However, the Company need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the Chairman of the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

In addition, the Company's key management personnel and their closely related parties are not permitted to cast a vote as a proxy for a person, unless that person is permitted to vote and has directed the proxy how to vote on Resolution 7 in the proxy form.

8 Approval of payment and/or benefits to Brendan Gore on termination of his employment agreement

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That for the purposes of section 200B and section 200E of the Corporations Act 2001 (Cth), approval is given for the payment of amounts or the giving of benefits to Brendan Gore in connection with his termination of employment with the Company, including the amounts referred to in clauses 7.8 and 12.2 of his Executive Employment Agreement dated 5 August 2011, as set out in the Explanatory Memorandum."

Voting exclusion statement – Corporations Act

The Company will disregard any votes cast on Resolution 8 by or on behalf of Mr Gore and his associates. However, the Company need not disregard a vote if it is cast by a person as proxy appointed in writing that specifies how the proxy is to vote on Resolution 8 and is not cast on behalf of Mr Gore or an associate of Mr Gore.

In addition, the Company's key management personnel and their closely related parties are not permitted to cast a vote as a proxy for a person, unless that person is permitted to vote and has directed the proxy how to vote on Resolution 8 in the proxy form.

9 Other Business

To transact any other business which may be brought before the meeting in conformity with the Corporations Act 2001 (Cth) and the Company's constitution.

Explanatory Memorandum

Shareholders are referred to the Explanatory Memorandum accompanying and forming part of this notice of meeting.

Entitlement to vote

It has been determined that under regulation 7.11.37 of the Corporations Regulations, for the purposes of the Annual General Meeting, shares will be taken to be held by the persons who are the registered holders at 10.00am (AWST), Sunday, 13 November 2011. Accordingly, share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

Proxies

A shareholder entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the shareholder. A proxy need not be a shareholder.

Members of the Company's key management personnel (which includes each of the Directors and the Company Secretary) will not be able to vote as proxy on Resolutions 3, 4, 5, 7 or 8 unless you tell them how to vote. If you intend to appoint a member of the Company's key management personnel (such as one of the Directors or the Company Secretary) as your proxy, you should ensure that you direct that person how to vote on Resolutions 3, 4, 5, 7 and 8.

As a member of the Company's key management personnel, the Chairman of the Meeting is not permitted to vote undirected proxies on Resolutions 3, 4, 5, 7 and 8. If you intend to appoint the Chairman of the Meeting as your proxy, you can direct the Chairman how to vote by either marking the boxes for each of Resolutions 3, 4, 5, 7 and 8 (for example, if you wish to vote 'for', 'against' or to 'abstain' from voting), or by marking the Chairman's box on the proxy form (in which case the Chairman will vote in favour of those Resolutions).

A shareholder that is entitled to cast two (2) or more votes may appoint up to two (2) proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half of the shareholder's votes.

A Proxy Form (with signing instructions) accompanies this Notice and to be effective must be received at the Company's share registry, Computershare Investor Services,

• In Person: to Level 2, 45 St Georges Terrace, Perth WA
• By Mail: to GPO BOX 242, Melbourne, Vic 3001
• By Facsimile: 1800 783 447 or +61 3 9473 2555 (outside Australia) , or
• Custodian voting For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions,

by no later than 10.00am (AWST), Sunday, 13 November 2011

By Order of the Board Dated: 11 October 2011

Dom Scafetta Group Company Secretary

PEET LIMITED

A.B.N. 56 008 665 834

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

This Explanatory Memorandum has been prepared to assist shareholders to understand the business to be put to shareholders at the forthcoming Annual General Meeting.

1 Financial report

The Corporations Act 2001 (Cth) ("Corporations Act") requires:

• The reports of the directors and auditor; and
• The annual financial report, including the financial statements of the Company for the year ended 30 June 2011,

to be laid before the Annual General Meeting. The Corporations Act does not require a vote of shareholders on the reports or statements. However, shareholders will be given ample opportunity to raise questions or comments on the reports and statements at the meeting.

Also, a reasonable opportunity will be given to members as a whole at the meeting to ask the company's auditor questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit.

2 Re-election of directors

ASX Listing Rule 14.4 provides that a director (other than the Managing Director) must not hold office (without re-election) past the third Annual General Meeting following his or her appointment or 3 years, whichever is longer.

Further, rule 8.1(d) of the Company's constitution provides that, if after excluding the Managing Director and directors appointed since the last Annual General Meeting, the number of directors is five or less, then two of the remaining directors must retire from office.

Stephen Francis Higgs and Anthony James Lennon each retire by rotation and offer themselves for re-election.

The experience, qualifications and other information about the candidates are shown on the next page.

STEPHEN FRANCIS HIGGS, BEc (Syd) (Age 64), is an Independent Non-executive Director of the Company.

Stephen Higgs joined the board of the Company as a Director in June 2004.

Mr Higgs has held a series of board roles with high-profile Australian companies, including UBS Investment Bank, with which he worked for 20 years to cement a leadership position in the private equity market.

He is also Chairman of the Juvenile Diabetes Research Foundation Australia, a role he has undertaken since 2002.

Mr Higgs' commitment to the community has extended to include positions working as a Councillor at St Andrew's College at Sydney University and Trustee of Redkite (formerly the Malcolm Sargent Cancer Fund for Children in Australia).

ANTHONY JAMES LENNON, BA, Grad Dip Bus Admin, MAICD (Age 45), is an Executive Director of the Company.

Anthony Lennon joined the Company in 1991 and became a Director in 1996.

He moved to Victoria over a decade ago to establish the Company's operations in Australia's eastern states and has overseen significant expansion since that time.

Before joining the Company, Mr Lennon worked in the United Kingdom, where he completed his post-graduate Diploma in Business Administration while on a graduate management training scheme with major international construction and development company, John Laing PLC. His time with this global company saw him gain valuable experience in property planning, marketing, feasibility analysis and project management.

Mr Lennon's responsibilities since joining the Company have included project management, broadacre acquisitions, marketing, financing and a six-year stint as Chairman of one of WA's largest conveyancing businesses.

Currently the Company's National Business Development Director, he has previously held the positions of Director of Marketing and Director of Eastern States Operations, responsible for projects in Victoria, Queensland and New South Wales.

He is a board member of the Urban Development Institute of Australia (Victoria).

Directors' recommendation regarding the re-election of Mr S F Higgs With Mr S F Higgs abstaining, the Directors unanimously recommend you vote in favour of the re-election of Mr S F Higgs.

Directors' recommendation regarding the re-election of Mr A J Lennon With Mr A J Lennon abstaining, the Directors unanimously recommend you vote in favour of the re-election of Mr A J Lennon.

3 Adoption of Remuneration Report

Section 250R(2) of the Corporations Act requires a resolution adopting the Remuneration Report be put to the vote.

Shareholders are advised that the vote on this item is advisory only and does not bind the directors or the Company.

Under recent amendments to the Corporations Act, if the Company's remuneration report receives a "no" vote of at least 25% at two consecutive annual general meetings, a resolution must be put to shareholders at the second annual general meeting as to whether another meeting of shareholders should be held within 90 days at which all Directors (other than the Managing Director) who were in office at the date of the relevant Directors' Report must stand for re-election.

The Remuneration Report is set out on pages 36 to 49 of the 2011 Annual Report.

A reasonable opportunity will be given to shareholders as a whole at the meeting to ask questions about or make comments on the Remuneration Report.

4 Resolutions 4 and 5 - Approval for the grant of FY12 Performance Rights to Brendan Gore ("Gore") and Anthony James Lennon ("Lennon") under the Peet Limited Performance Rights Plan ("PRP")

Shareholder approval is sought for the purposes of ASX Listing Rule 10.14 and all other purposes for the granting of 1,137,500 FY12 Performance Rights to Gore and 144,375 FY12 Performance Rights to Lennon under the PRP.

A summary of the terms of the FY12 Performance Rights proposed to be granted to Gore and Lennon is shown below:

Security	VestingTerm	Exercise Price	Performance Conditions1
Performance Rights	3 years	$0.00	FUM GrowthROE

1. Refer to discussion following on Performance Conditions.

Performance Conditions

The Performance Conditions will be measured over a three-year period from 1 July 2011 to 30 June 2014 ("FY12 Performance Period").

The measures used to determine performance are Funds under Management ("FUM") Growth and Relative Return on Shareholders' Equity based on the S&P/ASX 200 Industrials ("ROE").

The vesting of 50% of the FY12 Performance Rights granted to Gore and Lennon will be subject to the FUM Growth condition, while the remaining 50% of the FY12 Performance Rights will be subject to the ROE condition.

FUM Growth

FUM Growth will be measured as the cumulative value of properties:

• acquired by the Company on balance sheet and subsequently sold into a Peet syndicate; or
• funded by way of a Peet syndicate; or
• for which the Company has been appointed development manager (including under a joint venture arrangement),

during the FY12 Performance Period.

The aggregate of the FUM Growth during the FY12 Performance Period is then compared to the FUM Growth target set by the Board.

The Board will review the FUM Growth targets each year and determine what particular activities can or can't be included in such targets, for the subsequent three-year performance period.

Of the half of the FY12 Performance Rights to be issued subject to the FUM Growth condition, the proportion to vest will be as follows:

Performance Level	Aggregate FUM Growth targetduring FY12 Performance Period	Proportion of PerformanceRights that may be eligible tovest
Less than the target	Less than $60 million	0%
Target	$60 million	50%
Target - Maximum	$60 million – $100 million.	Pro-rata between 50% & 100%
Maximum	Greater than $100 million	100%

ROE

ROE will be measured as the average net operating profit after tax ("NOPAT") over three years (i.e. the FY12 Performance Period), divided by the average starting and ending equity. The calculation of ROE is based on "underlying" NPAT. That is it does not include either write-downs of inventories and/or development costs or increases in the carrying value of inventories.

The Board will have discretion to amend the calculation of ROE to take account of capital raisings, approved by the Board for the long term benefit of the Company, but which would impact the calculation of ROE.

The Company's ROE will then be compared to the ROE of the S&P/ASX 200 Industrials.

Of the half of the FY12 Performance Rights to be issued subject to the ROE condition, the proportion to vest will be as follows:

Performance Level	ROE result compared to S&P/ASX200 Industrials	Proportion of PerformanceRights that may be eligible tovest
Less than the target	Below 50th percentile	0%
Target	Equal to 50th percentile	50%
Target - Maximum	Between 50th and 70th percentile	Pro-rata between 50% & 100%.
Maximum	Greater than 70th percentile	100%

ASX Listing Rule 10.14 approval

Broadly, ASX Listing Rule 10.14 provides that a company must obtain shareholder approval if it wishes to grant Performance Rights under an "employee incentive scheme" to a director of the company.

For the purposes of ASX Listing Rule 10.14, the PRP is an "employee incentive scheme". Accordingly, the grant of Performance Rights (i.e. the FY12 Performance Rights and shares issued following the vesting of those Performance Rights under the PRP) to Gore and Lennon requires separate shareholder approval for the purposes of ASX Listing Rule 10.14.

For the purposes of ASX Listing Rule 10.15, the following information is provided:

(i) If the person to whom the securities will be issued is not a director, a statement of the relationship between the person and the director

• Gore is the Managing Director and Chief Executive Officer of the Company.
• Lennon is an executive director carrying the title of National Business Development Director.

(ii) The maximum number of securities that may be acquired by all persons for whom approval is required and the formula for calculating the number of securities to be issued

The maximum aggregate number of securities that may be issued to Gore and Lennon if Resolutions 4 and 5 are passed is 1,281,875 Performance Rights.

Level of participation

The level of participation offered to Gore and Lennon under the PRP has been determined with reference to market practice and within the Company's remuneration policies as set out in the Remuneration Report.

• The Long Term Incentive amount for Gore is 100% of his current fixed pay of $910,000.
• The Long Term Incentive amount for Lennon is 30% of his current fixed pay of $385,000.

The number of FY12 Performance Rights allocated to Gore and Lennon was determined by dividing their respective Long Term Incentive amount by the estimated fair value of a Performance Right at 9 September 2011, which was calculated to be $0.80.

Valuation

The Company commissioned an external adviser to provide an indicative value of the FY12 Performance Rights the subject of Resolutions 4 and 5.

The fair value of a FY12 Performance Right is based on a Black-Scholes enhanced discrete dividend model. This has then been discounted to reflect the probability of achieving the relevant performance hurdles, as at the date of the valuation.

A summary of the inputs and assumptions adopted by the external adviser in determining the fair value of a Performance Right are contained in the following table:

Assumed	Underlying	Exercise	Dividend	Risk Free	Volatility
Exercise Date	Share Price	Price	Yield	Rate
9 September 2014	$1.25	$0.00	9.44%	4.04%	42%

(iii) The price, or the formula for calculating the price, for each security to be acquired under the PRP

No payment is required for the grant of a FY12 Performance Right or for the issue of the relevant shares upon vesting of the same.

(iv) The names of all persons referred to in ASX Listing Rule 10.14 who received securities under the PRP since the last approval, the number of the securities received, and acquisition price for each security

None of the persons referred to in ASX Listing Rule 10.14 have received securities under the PRP since the last approval date.

The Directors mentioned in the table below are the only persons referred to in Listing Rule 10.14 who have previously received securities under the PRP.

The Performance Rights referred to in the table below do not form part of the Performance Rights the subject of Resolutions 4 and 5:

Issued to	Grant date	Quantity	Exercise Price	Status
Gore	18/12/2008	120,000	$0.00	Not yet vested
	11/02/2010	869,121	$0.00	Not yet vested
	24/12/2010	826,045	$0.00	Not yet vested
Lennon	18/12/2008	35,000	$0.00	Not yet vested
	24/12/2010	230,343	$0.00	Not yet vested

(v) The names of all persons referred to in ASX Listing Rule 10.14 entitled to participate in the PRP

Gore and Lennon are the only persons referred to in ASX Listing Rule 10.14 entitled to participate in the grants under the PRP being considered at this meeting.

(vi) Voting exclusion statement

Refer to the "voting exclusion statements" in the Notice of Meeting to which this Explanatory Memorandum is attached.

(vii) The date by which the Company will grant the securities

The FY12 Performance Rights will be granted as soon as practicable after shareholder approval is obtained and in any event no later than 3 months after this meeting.

(viii) Details of loans provided in respect to the grant of securities

No loans will be provided to Gore or Lennon in respect to the grant of FY12 Performance Rights.

Other information

The table below sets out:

• The existing interests of Gore and Lennon in the Company's shares and other securities;
• The maximum number of securities (i.e. Performance Rights and shares issued following the assumed vesting of the Performance Rights) that may be issued to Gore and Lennon under the PRP; and
• The interests of Gore and Lennon after the Performance Rights have been issued (assuming they have been issued the maximum number of Performance Rights under the PRP).

	Existing Interests			Proposed Grant		Interests after Proposed Grant
Director	No ofPerf.Rights	No. ofShares 1, 2	% ofShares 3	Max. Noof Perf.Rights	Max. Noof Shares	Max. Noof Perf.Rights	Max. Noof Shares	Max. %ofShares 4
Gore	1,815,166	-	N/A	1,137,500	1,137,500	2,952,666	2,952,666	0.93%
Lennon	265,343	976,799	0.31%	144,375	144,375	409,718	1,386,517	0.44%

1. Gore also holds 2,500,000 unlisted options.

2. Lennon's shareholding is based on the Appendix 3Y lodged 21 April 2011; he also holds 400,000 unlisted options.

3. Based on 318,038,544, shares on issue at the date of the 2011 Annual Report.

4. Based on 318,038,544, shares on issue at the date of the 2011 Annual Report and assuming that all existing interests in Performance Rights, but not Options, vest and are converted to ordinary shares.

Trading history

In the 12 month period before the date of this Notice of Meeting, the highest price of the Company's shares was $2.04 in November 2010 and the lowest price was $1.10 in August 2011. The volume weighted average price on the ASX over the 10 business days prior to the date of this Notice of Meeting was $1.17. The closing price on the trading day prior to the date of this Notice of Meeting was $1.20.

Remuneration

Details of Gore's and Lennon's total remuneration are shown in the Company's 2011 Remuneration Report forming part of the 2011 Annual Report. For those shareholders that have elected not to receive the 2011 Annual Report, an electronic copy can be found on the Company's website at www.peet.com.au/annualreport.

Directors' recommendation in respect of Resolutions 4 and 5

Gore has a material personal interest in the outcome of Resolution 4, and accordingly abstains from making a recommendation in respect of the Resolution.

Lennon has a material personal interest in the outcome of Resolution 5, and accordingly abstains from making a recommendation in respect of the Resolution.

The Board (with Gore abstaining) recommends that shareholders vote in favour of Resolution 4.

The Board (with Lennon abstaining) recommends that shareholders vote in favour of Resolution 5.

These recommendations are made on the basis that several benefits will flow to the Company by issuing Performance Rights to Gore and Lennon under the PRP, including the following:

• (i) PRPs are a common and effective means of motivating and improving the performance of senior executives.
• (ii) It will ensure that the interests of executives, such as Gore and Lennon, are aligned with the interests of shareholders.
• (iii) The PRP is designed to provide an incentive for future performance with restrictions on securities vesting under the PRP Rules encouraging executives, such as Gore and Lennon, to remain with the Peet Group.

The Board considers the targets set for the vesting conditions to have a balance between being:

• (i) achievable and therefore incentivising Gore and Lennon; and
• (ii) challenging to ensure Gore's and Lennon's performance is appropriately remunerated and their interests are aligned to those of shareholders.

5 Resolution 6 - Ratification of issue of securities in the past year

During June 2011, the Company raised $50 million by the issue of 500,000 convertible notes with a face value of $100 ("Peet Notes").

Broadly, Listing Rule 7.1 prohibits an entity issuing or agreeing to issue equity securities that, in any rolling 12-month period, amount to more than 15% of its ordinary securities (calculated in accordance with a prescribed formula) unless it gets shareholder approval or an exception applies.

Given the Peet Notes' convertibility into ordinary shares, in accordance with the terms and conditions of their issue, they are considered an equity security for the purposes of Listing Rule 7.1.

Pursuant to ASX Listing Rule 7.4, where a company in general meeting ratifies a previous issue of securities which was made without approval under ASX Listing Rule 7.1 and the previous issue did not breach ASX Listing Rule 7.1, those securities shall be deemed to have been made with shareholder approval for the purposes of ASX Listing Rule 7.1.

Accordingly, in order to preserve its capacity to issue new securities under ASX Listing Rule 7.1, the Company is seeking ratification by shareholders of the issue of Peet Notes.

Listing Rule 7.5 requires that the following information be provided to shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

(i) The number of securities allotted

500,000 Peet Notes were allotted. Assuming all issued Peet Notes are converted into ordinary shares (in accordance with the terms and conditions of issue) will result in an additional 22,222,222 ordinary shares in the Company.

(ii) The price at which the securities were issued

The Peet Notes were issued at a face value of $100 per note which raised $50 million.

(iii) The terms of the securities

The key terms of the Peet Notes are as follows. The Peet Notes:

• carry an interest rate of 9.5% per annum fixed coupon, payable semi-annually (16 June and 16 December) in arrears;
• are due for maturity in five years (16/06/2016) if they are not already converted or redeemed;
• are unsecured;
• convertible into ordinary shares at a price of $2.25 (subject to adjustment for certain capital transactions), which was a 25% premium to the 5 day arithmetic average of the daily VWAPs prior to the announcement date; and
• are ASX listed.

The full terms of the Peet Notes can be found in the prospectus lodged with the ASX on 1 June 2011.

(iv) The names of the allottees or the basis on which the allottees were determined

The offer of Peet Notes was underwritten to $40 million by Evans and Partners Limited, National Australia Bank and Merrill Lynch International (Australia) Limited.

Under the offer of Peet Notes, a $45 million cornerstone process was undertaken, which was well supported and closed oversubscribed. Accordingly, no general public offer of Peet Notes was made.

(v) The use (or intended use) of the funds raised

The use of the Peet Notes was to fund acquisitions and new developments, including the acquisition of a 50% interest in Flagstone West (a 1,244 hectare property located 38km south west of Brisbane) from the Motor Trades Association of Australia Superannuation Fund.

(vi) Voting exclusion statement

Refer to the "voting exclusion statements" in the Notice of Meeting to which this Explanatory Memorandum is attached.

Directors' recommendation in respect of Resolution 6

All of the Directors recommend that shareholders vote in favour of Resolution 6.

6 Resolution 7 - Approval to amend the calculation of Return on Equity in respect of Performance Conditions attaching to FY11 Performance Rights

At the 2010 AGM, shareholders approved the granting of FY11 Performance Rights to Gore (826,045) and Lennon (112,245). A summary of the terms of the FY11 Performance Rights granted to Gore and Lennon, as approved by shareholders, is shown below:

Vesting Term	Exercise Price	PerformanceConditions1	Performance Period
3 years	$0.00	FUM GrowthROE	1 July 2010 to 30 June 2013

1. Refer to discussion following on Performance Conditions.

A further 840,379 FY11 Performance Rights have been granted to other Company executives on the same terms as those granted to Gore and Lennon.

Existing definition of Performance Conditions for FY11 Performance Rights

FUM Growth

The FUM Growth Performance Condition is as defined in section 4 above of this Explanatory Memorandum. No change is proposed to this definition.

ROE

The Return on Equity ("ROE") Performance Condition applying to the FY11 Performance Rights, as approved by shareholders at the 2010 AGM in respect of the Performance Rights held by Gore and Lennon, will measure the average net profit after tax ("NPAT"), over three years (i.e. the FY11 Performance Period), divided by the average starting and ending equity. The calculation of NPAT does not add back any write-downs in inventories or development costs or deduct any write-ups in inventory.

The Board will have discretion to amend the calculation of ROE to take account of capital raisings, approved by the Board for the long term benefit of the Company, but which would impact the calculation of ROE.

The Company's ROE will then be compared to the ROE of the S&P/ASX 200 Industrials.

Proposed change to the definition of ROE

In setting performance conditions around executives' remuneration incentives, the Directors are mindful in ensuring that such performance conditions have the dual effect of retaining and incentivising the executives.

To achieve this dual effect, the Company's Board sets performance conditions that have a balance between being achievable - and therefore incentivising – and challenging – to ensure performance is appropriately remunerated and is aligned to the interests of shareholders.

A key factor in setting achievable, but challenging performance conditions is to ensure that those employees subject to such performance conditions have as much control as possible in delivering on the performance conditions.

On its current definition, ROE is affected by write-downs in the carrying value of inventories and development costs. The decision to book write-downs is ultimately for the Board to make, in accordance with their statutory obligations under accounting standards and the Corporations Act.

In assessing potential write-downs, the Directors are guided by independent mortgage valuations generally undertaken on an annual basis. These valuations are impacted by many external factors beyond the control of both the Board and management – for example natural disasters, consumer and business sentiment and general economic down turns.

Overall in FY11, the independent bank mortgage valuations of Company-owned landholdings increased to $586 million, resulting in a 10.5% increase in net tangible assets ("NTA") to $1.37 per share. This NTA does not include the value attributed to the Company's Funds Management business.

However, the Company recorded write-downs in the carrying value of inventories and development costs of $31.3 million (before tax) for the year. These related predominantly to longer-dated assets in the Company's Queensland portfolio where the market has declined due to the widespread economic impact of natural disasters and deteriorating business and consumer confidence.

While the over-all value of the Company's land-holding increased, accounting standards prevent it from recognising this increase in its profit and loss account – other than write-ups of previously written-off amounts. Only the write-downs as detailed in the above paragraph can be recognised in the Company's profit and loss account.

Potential impact of proposed change

To address this, the proposed change will see the calculation of ROE based on Net Operating Profit After Tax, rather than Net Profit After Tax. That is, the ROE calculation will ignore the impacts of write-downs in the carrying value of inventories and development costs and the write-ups of previously written-off amounts.

The amendment to the ROE calculation does not automatically entitle Gore, Lennon or other executives of the Company to a higher number of underlying shares, as the amended calculation may increase or decrease ROE, depending on the extent of write-downs and write-ups in the relevant financial year. However, to the extent it increases ROE, this may potentially improve the Company's ranking against the S&P/ASX 200 Industrials for the purposes of assessing satisfaction of the performance conditions and so potentially increase the number of performance rights that vest at the end of the relevant three-year period.

Directors' recommendation in respect of Resolution 7

Accordingly, for the above reasons (and with Gore and Lennon abstaining) the Directors recommend that the definition of ROE in respect of the FY11 Performance Rights be changed so that it is measured as the average net operating profit after tax (net profit after tax, excluding the write-down in carrying value of inventories and development costs and excluding the write-ups of previously written-off amounts) over the FY11 Performance Period, divided by the average starting and ending equity, as amended by the Directors.

7 Resolution 8 - Approval of payment to Brendan Gore ("Gore") on termination of his employment agreement

The Corporations Act restricts the benefits which can be given to employees who hold a managerial or executive office on termination of their employment with the Company.

Under sections 200B and 200E of the Corporations Act, the Company is prohibited from giving a director or other member of the key management personnel of the Company a benefit in connection with that person's retirement from office or position of employment that exceeds their annual base salary (averaged over the three years prior to cessation), unless shareholder approval is given or the benefit is exempt from the need for shareholder approval.

Termination Benefits for which approval is sought

Shareholder approval is being sought for the purposes of sections 200B and 200E of the Act for any termination benefits that may be provided to Gore under:

• Gore's Executive Employment Agreement dated 5 August 2011 ("Agreement");
• Peet's Performance Rights Plan ("PRP"); and
• Peet's Employee Share Option Plan ("ESOP"),

in addition to any payments or amounts that may be provided to Gore which are excluded from the operation of section 200B, such as statutory entitlements to accrued annual and long service leave and other amounts required to be paid by law.

The amount and value of the termination benefits for which the Company is seeking approval is the maximum benefit that could be provided to Gore under the PRP, ESOP and the Agreement.

Agreement

On 5 August 2011, the key terms and conditions of the Agreement were notified to the market.

Approval is being sought in respect of benefits that may be given to Gore in the event of his employment terminating in the following circumstances.

In accordance with clause 7.8 of the Agreement, if the Company terminates Gore's employment (other than for cause), Gore will receive (subject to any necessary shareholder approval having been given):

• (i) an amount (in cash or shares) equal to 100% of the maximum short term incentive opportunity for that financial year;
• (ii) all deferred equity components of any previous short term incentive awards which will vest immediately; and

(iii) 100% of the maximum long term incentive opportunity for that financial year and all unvested equity in respect of previous years' long term incentives (which will be released and vest immediately).

In accordance with clause 12.2 of the Agreement, Gore may immediately resign within one month of a Prescribed Event (i.e., without his agreement the Company relocates its head office or materially changes his employment status). If Gore resigns in these circumstances, he will receive (subject to any necessary shareholder approval having been given) the benefits set out above plus a payment equal to 100% of his fixed annual remuneration.

It is important to note that these benefits do not apply if Mr Gore resigns in any other circumstances.

The purpose of clauses 7.8 and 12.2 is to compensate Gore in the event the Agreement is terminated due to no fault of his own or a material change in the circumstances referred to above and which existed at the time the Agreement was made.

PRP

Under the PRP, the Directors have discretion where a participant in the PRP ceases to be an employee of the Company before a Performance Right has vested by reason of his or her death, disability, bona fide redundancy or other reason and at that time the participant continues to satisfy any other relevant conditions imposed by the Board at the time of grant, to determine the extent to which Performance Rights granted to the participant vest.

ESOP

Under the ESOP, the Directors have discretion where a participant in the ESOP ceases to be an employee of the Company before an Option has vested by reason of his or her death or other reason to determine the extent to which Options granted to the participant vest.

Amount or value of the termination benefits

The amount or value of the termination benefits that may be given to Gore cannot be ascertained in advance, due to various matters, events or circumstances, including:

• level of fixed annual remuneration of Gore may change from time to time, which impacts on the quantum of any short-term and long-term incentives he is eligible for;
• the circumstances of termination, as disclosed above;
• Directors' discretion under the PRP and ESOP;
• the market price of the Company's shares at the relevant time; and
• the number of Options that may have vested prior to termination, but not yet exercised.

Directors' recommendation in respect of Resolution 8

Each of the Directors, other than Mr Gore, believe that the potential termination benefits that may be payable to Mr Gore for which approval is sought are reasonable in all the circumstances. Accordingly, the Directors, other than Mr Gore, recommend that shareholders vote in favour of Resolution 8.

Mr Gore does not give a recommendation in view of his personal interest in the resolution.

Peet Limited | ACN 008 665 834

000001 000 PPC MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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Proxy FormPlease markto indicate your directionsSTEP 1Appoint a Proxy to Vote on Your BehalfI/We being a member/s of Peet Limited hereby appointPLEASE NOTE: Leave this box blank ifthe Chairmanyou have selected the Chairman of theORof the MeetingMeeting. Do not insert your own name(s).or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxyto act generally at the meeting on my/our behalf and to vote in accordance with the following directions at the Annual General Meeting of PeetLimited to be held at the Parmelia Hilton Hotel, 14 Mill Street, Perth, Western Australia on Tuesday, 15 November 2011 at 10:00am (AWST) andat any adjournment of that meeting.Important for Items 3, 4, 5, 7 and 8 - If the Chairman of the Meeting is your proxy or is appointed as your proxy by defaultBy marking the box in this section, you are directing the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions onItems 3, 4, 5, 7 and 8 as set out below and in the Notice of Meeting. If you do not mark the box in this section, and you have not directed yourproxy how to vote on Items 3, 4, 5, 7 and 8, the Chairman of the Meeting will not cast your votes on Items 3, 4, 5, 7 and 8 and your votes willnot be counted in computing the required majority if a poll is called on these Items. If you appoint the Chairman of the Meeting as your proxy youcan direct the Chairman how to vote by either marking the boxes in Step 2 below (for example if you wish to vote against or abstain from voting)or by marking the box in this section (in which case the Chairman of the Meeting will vote in favour of Items 3, 4, 5, 7 and 8).The Chairman of the Meeting intends to vote all available proxies in favour of Items 3, 4, 5, 7 and 8 of business.I/We direct the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions on Items 3, 4, 5, 7 and 8 (exceptwhere I/we have indicated a different voting intention below) and acknowledge that the Chairman of the Meeting may exercise my proxyeven though Items 3, 4, 5, 7 and 8 are connected directly or indirectly with the remuneration of a member of key managementpersonnel.PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on yourItems of Businessbehalf on a show of hands or a poll and your votes will not be counted in computing the required majority.ORDINARY BUSINESSItem 6Ratification of issue ofItem 2aRe-election of directors :securities in the past yearStephen Francis HiggsItem 7Approval to amend theRe-election of directors :Item 2bcalculation of Return on EquityAnthony James Lennonin respect of performanceAdoption of RemunerationItem 3conditions attaching to FY11ReportPerformance RightsItem 8Approval of payment and/orItem 4Approval for grant of FY12benefits to Brendan Gore onPerformance Rights under thetermination of his employmentPeet Limited PerformanceagreementRights Plan to Brendan GoreItem 5Approval for grant of FY12Performance Rights under thePeet Limited PerformanceRights Plan to Anthony JamesLennonThe Chairman of the Meeting intends to vote all available proxies in favour of each item of business.Signature of Securityholder(s)This section must be completed.	FLAT 123123 SAMPLE STREETTHE SAMPLE HILLSAMPLE ESTATESAMPLEVILLE VIC 3030			mark this box and make thebroker (reference numberyour broker of any changes.	correction in the space to the left.Securityholders sponsored by acommences with 'X') should advise	I9999999999I9999999999		I
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