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Annual General Meeting Wednesday, 15 October 2008

Annual General Meeting Wednesday, 15 October 2008. Agenda . Welcome Introduction of Board Confirm quorum Confirmation of notice of meeting Reading of proxies (Company Secretary) Chairman’s address Chief Executive Officer’s address Financial statements and reports General questions

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Annual General Meeting Wednesday, 15 October 2008

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  1. Annual General Meeting Wednesday, 15 October 2008

  2. Agenda Welcome • Introduction of Board • Confirm quorum • Confirmation of notice of meeting • Reading of proxies (Company Secretary) • Chairman’s address • Chief Executive Officer’s address • Financial statements and reports • General questions • Resolutions • Close of formal business • General discussion and update on future prospects • Refreshments

  3. Board and Senior Management Board of Directors • Nigel Chamier OAM (Executive Chairman) • Peter Dowling AM • The Hon. Dr David Hamill (to 15 October 2008) • John McAuliffe AM • James Whitelaw (from 1 July 2008) • Thomas Nulty (Apology) Chief Executive Officer & Company Secretary • Leon Stephan

  4. Chairman’s Address Change in Board composition The Hon. Dr. David Hamill • Resigning from the Board after the AGM James Whitelaw • Appointment effective 1 July 2008 • Resolution 3 addresses confirmation of this appointment 4

  5. Chairman’s Address Admission papers and proxies Admission papers • Required for voting on the motions being put to the meeting Reading of proxies • Resolution 1 – re-election of Nigel Chamier • Resolution 2 – re-election of Tom Nulty • Resolution 3 – confirmation of James Whitelaw appointment • Resolution 4 – change of company name 5

  6. Chairman’s Address (cont.)Corporate Structure- Current

  7. Chairman’s Address (cont.)Corporate Structure- Proposed 7

  8. Chairman’s Address (cont.)Results

  9. Chairman’s Address (cont.) Balance Sheet Snapshot

  10. Chairman’s Address (cont.)Achievement of 2007/08 Strategy

  11. Chairman’s Address (cont.) New businesses To further mitigate risk we sought to grow additional revenue streams under the Paridian business model. Property Trust • Paridian Securities obtained its varied AFSL from ASIC in May 2008 • While delaying the acquisition of any significant asset due to current market conditions, there are benefits to Paridian in acquiring a smaller asset. We are currently exploring such opportunities. Paridian Consulting • Undertook the first assignment in 07/08 being services to Government re Boggo Road

  12. Chairman’s Address (cont.) Debt and Equity • Current issues in global capital markets have affected our ability to increase equity and debt • A further 847,000 shares were issued in a tough market • $1.96m in notes raised during year, more in progress • BOSIAL warehouse loan facility remains at $60m, not fully drawn due to capital constraints • Quick statistics snapshot at 30 June: • Interest cover 1.9 times • Net debt to equity 143% • Equity capital ratio 30% • We target 10% margin on funds borrowed. Risks are: • Non-recoverable loans • Changes in the warehouse loan facility covenants • An unexpected increase in the cost of debt • To mitigate risks: • Strict due diligence before loan approval and monthly monitoring throughout course of loan. Loans are actively managed to protect recoverability • Locked in BOSIAL facility in mid 2007 for three years • Interest on most debt is fixed until early 2009 through interest rate swaps

  13. CEO’s Address Loan Activity

  14. CEO’s Address (cont.) Overview of Loan Portfolio 30 June * Project selling down, hence facility reduced

  15. ICA (St Vincent Holdings) Pty Ltd:Wirrina Cove, SA

  16. Bargara Property Developments Pty Ltd:Dwell Residential Units, Bargara Proposed

  17. Trident Sebel Pty Ltd:The Sebel, Maroochydore

  18. CEO’s Address (cont.)Overview of Loan Portfolio

  19. CEO’s Address (cont.) Overview of Loan Portfolio

  20. CEO’s Address(cont.) Paridian’s key points of difference Paridian is well placed to succeed during these tough market conditions: • Maintaining and exploiting our key points of difference: • Paridian is not a developer • Loans only provided to developers who are independent of Paridian • Builders are independent of developers* • Strict lending criteria, due diligence and monitoring process • We have established processes • Diversification of portfolio/risk – across product, geographic location and developers • Strong corporate governance • Direct and supporting security taken to ensure performance of borrower’s obligations • Loans are short term, with an established exit strategy • Active management of all loans *One loan has one common shareholder in the development company and building company

  21. CEO’s Address (cont.) Activity subsequent to Year End • Matters being reviewed: • Residential sales are slow • South Australian and Toowoomba loans require restructuring • New loans under due diligence • Palm Beach mixed use (Gold Coast), Kawana residential (Sunshine Coast) • Loans repaid • Trilogy • Consulting Engagements • In September we were appointed by Queensland Transport to assist their negotiations with developers, commencing with Brunswick Street Station. We were also engaged to assist South Bank Corporation in negotiations with a potential tenant in the South Bank precinct. • Property Trust activity • Reviewing opportunities.

  22. CEO’s Address (cont.) Priorities for 2008/09 • 2008 results reflect our commitment to the growth strategy established in 2006 • Our priorities in 2008/09: • Increase the funding base, although difficult in this market. • Further diversify the loan portfolio • Ensure loan funds are fully employed • Ensure new loans are priced appropriately to reflect increased market risk • Grow the consulting revenue streams • Seek appointment for stage 2 of Boggo Road, progress Queensland Transport and South Bank engagements, secure project management advisory roles with developers • Continue reviewing opportunities for the Property Trust • Chairman will address the challenges of the year ahead following the formal business of the meeting

  23. Formal Business Annual General Meeting

  24. Financial Statements and Reports 30 June 2008

  25. Resolution 1 Re-election of Director Nigel Chamier

  26. Resolution 2 Re-election of Director Tom Nulty

  27. Resolution 3 Confirmation of Appointment James Whitelaw

  28. Resolution 4 Change of company name Paridian Group Limited

  29. General Business

  30. Close of Formal Business Annual General Meeting

  31. The Year Ahead

  32. The year aheadKey points • Issues now facing the market • How Paridian is managing increased risk • Expected events • Our commitment • Conclusion

  33. The year aheadIssues now facing the market • Facts • Investor confidence is shattered • Credit is often impossible to obtain regardless of price • Sales of development stock have slowed and in some cases stopped. Many projects have had no sales for a year • The market cannot absorb all the distressed property that could be up for sale in the next year • Is this a typical downturn in the normal business cycle, or a “1 in 100” year event? • Will the issues facing our funder BOSIAL and the sale of BankWest to CBA impact on our business?

  34. The year aheadHow Paridian is managing increased risk • Be realistic, stay calm and focussed • Accept that many factors are beyond our control • New loans will be in areas of greatest growth • SE, central and north Queensland (notably Mackay) • South Australia is a growth market, Sydney (but not just yet) • Work with our clients and first mortgagees • Consider taking over first mortgages • Acknowledge that developers are often best placed to work out a project • Take additional security wherever possible

  35. The year aheadExpected events • Interest rates will fall quickly • Mergers in banking sector will strengthen balance sheets • Most investors will avoid companies with complex financial structures lacking in transparency • Many investors will feel more comfortable with real estate • The markets will recover as real estate investment returns outshine returns on cash, and become cash flow positive

  36. The year aheadOur commitment • The majority of directors have made additional investment in Paridian since 30 June 2008 • We will continue to be diligent in managing the existing portfolio • We will carefully investigate business acquisitions that add value • We will seek to grow other revenue streams, and management of other funds • We acknowledge that it will be a very difficult year ahead

  37. The year aheadConclusion • We have significant upside in one project • We have to manage each loan as particular circumstances arise • We all have money in the business • We welcome your feedback and will keep you informed by way of regular newsletters • First quarter (Jul to Sep) pre tax profit of $0.85 million is in line with last year • We cannot give earnings guidance

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