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Chairman’s Statement

For the year ended 30 June 2009

On behalf of the Board of Directors, I am pleased to present the 2009 Annual Report of AVJennings Limited.

This Statement is a summary only and should be read in conjunction with the Review of Operations in the Directors’ Report.

The past year has been most challenging for the industry and the Company. A combination of poor market conditions, credit tightening, a lack of housing affordability and declining consumer confidence has severely impacted the residential property market. These conditions have adversely impacted the Company’s performance over the past year. As a result, the Company’s major focus has been capital and cash flow management, which has resulted in reduced debt and stronger balance sheet ratios. Additionally, I am pleased to report that the

Company’s main banking facilities have been renewed for a further 12 months. Further details are set out in note 24 to the Financial Statements.

The severity of the Global Financial Crisis (GFC) saw most companies review strategies and operations. The Company continually focuses on strategy, but the extent of the GFC resulted in greater effort undertaking such

reviews. One major outcome was the establishment of a new Executive Team led by Chief Executive Officer,

Peter Summers. The Team, created utilising internal resources and external appointments, has the experience, skills and leadership qualities necessary to enable the Company to meet current market challenges and position itself for the future.

Despite the current market environment and uncertainty for the short term outlook, the Board remains optimistic for the future. The Board has full confidence in the Company’s corporate and operational strategy and, whilst

maintaining a conservative approach to managing the business in the current economic climate, the Company is

well positioned to take advantage of the eventual improvement in the business environment. Both the Board and management expect economic conditions to show improvement during the current year and result in improved financial and operational performance for the Company.

The GFC has not been kind to shareholders generally and particularly to shareholders who have invested in real estate entities. Tight credit availability, particularly relating to the real estate sector, has also impacted the market. As mentioned earlier AVJ has come through the exercise well, arguably stronger than before. I would like to acknowledge our shareholders who have stuck with us through this period and reassure that the Board and new management team are well and truly focussed on improving shareholder value.

Finally, I would like to thank my fellow Directors, management and staff for their commitment and support during what has been a challenging year.

Simon Cheong Chairman

4 AVJennings Limited ABN 44 004 327 771

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