Ann: Managing Director's Address to Shareholders, page-10

G’day Terrible Tadpole,

As far as legacy, yes I think the ongoing success must be a reflection of the quality of system and process put in place over the years.

In terms of success post my days, I think there is enough information in the public domain regarding what has been spent on infrastructure project in the past half a dozen years, versus the revenue growth of Korvest to make your own conclusion regarding its success during this period.

In terms of management, David Simmons finished up as the Korvest Chairman in December 2008, the same year in which he left the role of Hills Industries Managing Director (Hills of course owned 40 something percent of Korvest).

Now of course, one would think that the intent of Hills was to move onto bigger and better things, however it
does not appear that things are playing out in that manner.

As far as the future goes, well my view is much less optimistic.

You rightly point out that the future is changing and there is absolutely no question that the past strategy will not deliver the same results into the future. In my opinion, they are no doing what needs to be done as the market leader to deliver improved shareholder returns for the future, hence the return of capital recently.

The operational improvements implemented in the past few years are pretty basic, the sort of stuff you reach for when you are all out of revenue growth ideas. ie if I already sell this many widgets and can buy a machine that reduces the cost by x, here is my return, done!

So you ask why wasn’t this done in my time, well we just weren’t out of front end ideas and hence the long term track record of growth.

And by the way, the front end stuff is much more difficult, like 50 times virtually, I am yet to see any gains in this area, that will be the undoing! (in my opinion)