Company

News 2010

Dear Shareholder,

On behalf of the Board and management of Port Bouvard Limited, I would like to thank you for your patience and support in recent months as we have successfully obtained the renewal of our banking facilities and commenced execution of our capital management strategies.

We thought it would be appropriate at this time to provide an update on the Company's projects and operations.

Oceanique apartments

42 luxury apartments have been unconditionally contracted for sale for a total value of $112 million (incl. GST). The $100 million building contract is 87% complete, with all scaffold nearly removed and internal fit out well progressed to ensure completion by June 2010. The builder, Doric, has advised that the project is on schedule and within budget. The remaining 25 apartments will be marketed later this year.

Point Grey

The approval process for the 2,700 lot Point Grey project is now well advanced. The land was rezoned from Urban Deferred to Urban in April 2009. This was a significant approval milestone for the Company. Further environmental work is continuing and the process to seek final approval for the marina component is expected to be finalised later this year, following which the Company anticipates it would be in a position to commence marketing of Stage 1 and then civil construction by mid 2011.

Gidgegannup

A detailed masterplan submission was lodged with the City of Swan and the WAPC late last year. The masterplan submission provides the basis for an amendment to the Metropolitan Region Scheme. This amendment has not yet been initiated by the WAPC, however very clear direction as to the issues to be addressed in respect of the project have now been provided and initiation is anticipated by April 2010.

Port Bouvard, Eastport Stage 5

Eastport Stage 5 marks the end of Port Bouvard Estate. The Company is delighted to announce that 46 of the 47 green title standard canal lots have been sold. 45 lots have now settled and 1 lot is due to settle by the end of February.

All 34 canal lots on the exclusive survey strata island have been sold and installation of services is nearing completion. $8 million in gross sales is scheduled to settle by 30 June 2010 with proceeds to be applied towards reduction of bank debt.

Dawesville

The Dawesville land was sold in 2009 for $4.95 million (incl. GST), and is due to settle in June 2010. The transaction is now unconditional. The proceeds will be applied towards reduction of bank debt.

Melros

The Company's Melros site has now received subdivision approval for 43 residential strata lots. On the back of the successful sales campaign for Eastport 5 the Company is now preparing for the presale offering of these premium ocean front lots in March this year. The low maintenance cottage lots will be attractive to a larger market seeking affordable coastal living.