PHOSLOCK ENVIRONMENTAL TECHNOLOGIES LIMITED — AGM Information 2012

Nov 21, 2012

ASX ANNOUNCEMENT

Annual General Meeting

22 November, 2012

Chairman's Address to Shareholders

Good morning.

This is my second year addressing you as Chairman.

I'm pleased to take this opportunity to report to you on the progress we've made as a company – in what has been a difficult year for business globally.

Our results show that we are delivering on our core business strategy of steadily achieving global commercialisation through widespread product awareness and accreditation. I am pleased to say that Phoslock is gaining increasing worldwide acceptance as one of the most effective clean water solutions for phosphorus and treating Harmful Algal Blooms.

Since I became Chairman, I have been fully focused on achieving the highest possible accreditation for Phoslock in order to accelerate commercial sales around the world.

Late last year, Phoslock reached a significant milestone – we were awarded the US and Canadian Drinking Water Certification by the Water Quality Association. This certification is internationally recognised as the highest standard set by water authorities. It confirms that Phoslock is safe to apply to water reservoirs used for human consumption and recreation. This gold standard recognition is now visible on Phoslock product packaging as a gold seal.

At last year's AGM, I talked about how I wanted to achieve widespread awareness and commercial success, restricting our focus to Europe, North America, and Australia.

To that end, we completed our largest and most high-profile project to date in the UK.

The Royal Parks in London contracted us to treat three iconic water bodies in Hyde Park, including the Serpentine as well as Round Pond and The Long Water in the adjacent Kensington Gardens. These lakes are famous tourist destinations, attracting millions of visitors each year.

Importantly, Lake Serpentine hosted two swim events for the 2012 Olympic Games – the triathlon swim leg and the open water marathon event.

I am very pleased to report that the treatments were very successful at a time when the whole world was watching – and I must say, the Serpentine looked in fantastic condition.

ASX Code:	PHK
Share Price:	A$0.047
52 Week High:	A$0.08
52 Week Low:	A$0.038
Issued Shares:	213.5m
Market Cap:	A$10.0m

Address: Suite 302 110 Pacific Highway St Leonards Sydney NSW 2065

P: +61 2 9439 7715 F: +61 2 9460 8973

www.phoslock.com.au www.phoslock.eu

This gave us unparalleled exposure – and I'm pleased to report that it has facilitated significant interest in the product among lake managers and has helped to generate a number of new sales leads.

In terms of European operations, the financial crisis on the continent has proven difficult for us. Sales, particularly in the second half of the financial year, were impacted by the slowdown. However, this is not just the case for us – a large number of companies are feeling the pinch.

Against this challenging backdrop, we have broadened our scope in Europe, and this year have in fact, completed several contracts in Germany, the Netherlands, Finland and Italy. Sales have not stopped, they just have slowed – and I believe that industry accreditations and positive case studies have supported us during these tough times.

Encouragingly, Phoslock Europe anticipates sales to increase considerably over the next six months. Robert Schuitema, our Managing Director, will talk about that in more detail.

Now looking to North America – the bright spot for Phoslock.

I would like to acknowledge the significant efforts of our US partner, SePRO, in helping build a s significant business throughout the US.

We completed a number of highly successful applications in California, Florida, the Tri-States, Washington State and Michigan.

Unfortunately, dealing with semi-government authorities means that approval processes can sometimes prove to be an obstacle, so several projects we had scheduled for Financial Year 2012 have been delayed due to local approval procedures. The good news is however, that these projects are not lost – they have just been rescheduled. Several permits have been received with several other important permits currently nearing finalisation.

Canada has also proved to be a good environment. Again, Rob will fill you in on the detail.

SePRO is currently undertaking work on approvals for projects in the US totalling in excess of $1 million.

In terms of Australian operations, the landscape here has proved a difficult one. There are however, a number of opportunities for us on a local scale this financial year.

In Asia we have been approached in both Korea and Malaysia for initial treatment of private aquaculture farms, which we expect to become more sizeable contracts once the initial applications are successful. This will further enhance Phoslock's footprint across Asia and help consolidate our relevance to the aquaculture industry.

I remain convinced Phoslock has huge global commercial potential, with the expectation that we will become the 'go-to' solution for Phosphate rich water bodies.

I should point out that I have been a consistent buyer of shares much of the year, having made 14 separate purchases, totalling approx 2.8 shares and over the past 12 months have increased my holding to just under 19.0%.

I would like to take this opportunity to thank the team for their support, hard work, and commitment to the Company this year.

At the end of the meeting Robert Schuitema, will discuss Phoslock's results and business progress in more detail.

Laurence Freedman AM Chairman