CLEARVIEW WEALTH LIMITED - AGM Information 2008

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COMPANY ANNOUNCEMENT

Date: 17 September 2008

Market Update, Capital Return and 2008 AGM

On the 26[th] of August 2008 the Board of MMC Contrarian Limited provided a strategy update to the market and announced a proposal involving two transactions being:

a capital return of up to $75million by way of an equal access buyback scheme (the Buy Back ); and
the acquisition by Guinness Peat Group (Australia) Pty Ltd ( GPG ) of HGL Limited’s ( HGL ) remaining shareholding in the Company after HGL's participation in the buyback (the Sale of Shares ).

The Board is pleased to announce that the Company has now prepared an Explanatory Statement and received an Independent Expert's Report in respect of this proposal.

The Independent Expert is of the opinion that the advantages of the Sale of Shares outweigh the disadvantages and the Buy Back is fair and reasonable to shareholders other than HGL, GPGA and any Associates.

The Independent Directors believe shareholders will benefit from GPG’s ongoing support for the Company’s strategy and its experience in the wealth management industry and recommend that shareholders vote in favour of the Buy Back and Sale of Shares.

The Directors also recognise that the Company’s shares have generally traded at a discount to NTA and this proposal provides an opportunity to efficiently return excess capital to those shareholders who want to reduce their investment in the Company at full pre-tax NTA value.

The Company's 2008 Annual General Meeting will be held on 23 October 2008 to consider the Buy Back and the Sale of Shares resolutions and other business. The Notice of 2008 Annual General Meeting and the Explanatory Statement (including the Independent Expert's Report) in relation to the Buy Back and Sale of Shares is attached to this announcement and will be delivered to shareholders early next week.

Some important points contained in the Explanatory Statement that shareholders may wish to consider include:

the Buy Back price will be the NTA Amount (as described in the Explanatory Statement) of a share as of 30 September 2008;
the Company will announce the NTA amount on or before 15 October 2008;
both the Buy Back and Share Sale require shareholder approval if either is to take affect
the Record Date for the Buy Back is 3 October 2008;

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Buy Back booklets (including Acceptance Forms) will be sent to shareholders shortly after the Record Date of 3 October 2008; and
Buy Back Offers may be made by shareholders beginning on 7 October 2008.

For the information of shareholders the pre-tax NTA has increased from 71.7 cents per share as at 31 July 2008 to 71.8 cents per share as at the 31[st] of August 2008.

I look forward to seeing you at the Annual General Meeting on 23 October 2008. If you choose not to attend, proxy forms and instructions on how to appoint a proxy are included in the information being sent to you early next week.

KJ Eley Chairman MMC Contrarian Limited

MMC Contrarian Limited

ABN 83 106 248 248

Notice of 2008 Annual General Meeting and Explanatory Statement

This Booklet gives notice of the 2008 Annual General Meeting of MMC Contrarian Limited to be held at 9.30am Sydney time on Thursday, 23 October 2008 at the Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney, New South Wales

This is an IMPORTANT DOCUMENT and requires your immediate attention.

If you are in doubt as to how to deal with this document, please consult your financial or other professional adviser.

Important Notices

Important dates

Important dates
Date of this Booklet	16 September 2008
Shares quoted "ex" entitlement to participate in	Monday 29 September 2008
Buy Back on ASX
Record Date for participation in Buy Back	Friday 3 October 2008
Buy Back tender opens	Tuesday 7 October 2008
Last time by which proxy forms for the Annual	9.30am Sydney time on Tuesday 21 October 2008
General Meeting can be lodged
Voting entitlement time, ie, time for determining	7.00pm Sydney time on Tuesday 21 October 2008
entitlements to vote at the Annual General
Meeting
Annual General Meeting	9.30am Sydney time on Thursday 23 October 2008
Last time by which Buy Back Acceptance Forms	5.00pm Monday 27 October 2008
can be lodged
Results of Buy Back announced, Buy Back	Wednesday 29 October 2008
Agreements entered into, and Shares bought back
cancelled
Dispatch of Buy Back payment to participating	Friday 31 October 2008
Shareholders

Meeting to be held at the Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney, New South Wales on Thursday 23 October 2008, commencing at 9.30am Sydney time.

Your vote is important. Please take action by voting in person or by proxy.

Defined terms

Defined terms are used in this Booklet. The defined terms are in the Glossary at the end of this Booklet.

Responsibility for contents

The information contained in this Booklet (excluding the Independent Expert's Report and information provided by Guinness Peat Group (Australia) Pty Ltd ( GPGA ) or by HGL Limited ( HGL ) (described below)), including information as to the opinions and decisions of the directors of MMC Contrarian Limited ( Company ) has been provided by the Company ( Company Information ) and is the responsibility of the Company. None of GPGA, or any of its related entities, directors, officers, employees, contractors, advisers, or agents, assumes any responsibility for the accuracy or completeness of any Company Information.

The information concerning the current and intended shareholding of GPGA and its Associates contained in the Chairman's Letter, in sections 1, 2.10, 2.19, 2.25, 3.1, and 3.12 of the Explanatory Statement, and information as to

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the opinions, intentions and decisions of the directors of GPGA in this Booklet (excluding the Independent Expert's Report), including in section 3.11, and the statements concerning GPGA and its nominee director in sections 2.19, 3.13 and 3.16 and the list of GPGA's Associates in Appendix A has been provided by GPGA ( GPGA Information ) and is the responsibility of GPGA. None of the Company, or any of its related entities, directors, officers, employees, contractors, advisers, or agents, assumes any responsibility for the accuracy or completeness of any GPGA Information.

The information concerning the current and intended shareholding of HGL and its Associates contained in the Chairman's Letter, in sections: 1, 2.10, 2.19, 2.25, 2.26, 3.1, 3.5, and 3.16 of the Explanatory Statement, and information as to the opinions, intentions and decisions of the directors of HGL in this Booklet (excluding the Independent Expert's Report) and the statements concerning HLG and its nominee director, including in sections 2.19, 2.26, 3.5, 3.13 and 3.16, has been provided by HGL ( HGL Information ) and is the responsibility of HGL. None of the Company, or any of its related entities, directors, officers, employees, contractors, advisers, or agents, assumes any responsibility for the accuracy or completeness of any HGL Information.

Investment decisions and forward looking statements

This Booklet contains general advice only and does not take into account the individual investment objectives, financial situation or particular needs of any Shareholder or other person. Shareholders may wish to seek independent financial and taxation advice before deciding whether and how to vote on the Resolutions.

This Booklet contains forward looking statements which have been based on current expectations about future events. These forward looking statements are, however, subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described in such forward looking statements. These factors include matters not yet known to the Company or not currently considered by the Company to be material.

Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement and such deviations are both normal and to be expected. None of the Company, any of its officers or any person named in this Booklet or involved in the preparation of this Booklet makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, and you are cautioned not to place undue reliance on those statements.

The forward looking statements in this Booklet reflect views held only as at the date of this Booklet.

Date

This Booklet is dated 16 September 2008.

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	Page
IMPORTANT NOTICES	2
CHAIRMAN'S LETTER	5
NOTICE OF MEETING	9
EXPLANATORY STATEMENT	14
GLOSSARY	38
APPENDIX A - LIST OF GPGA's ASSOCIATES	41
APPENDIX B – INDEPENDENT EXPERT'S REPORT	44

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Chairman's letter

Dear Shareholder

I invite you to attend the 2008 Annual General Meeting of MMC Contrarian Limited ( Company ), to be held in the Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney, New South Wales, at 9.30am Sydney time on Thursday 23 October 2008. This Booklet comprises the Notice of Meeting and accompanying documents which detail the business to be dealt with at the Annual General Meeting.

Most importantly, on 26 August 2008, the Company announced a proposal comprising the following two transactions (the Proposal ) both of which require Shareholder approval if either is to take effect:

a Buy Back (as defined in the Explanatory Statement) of Shares, under which the Company will buy back up to a maximum of $75 million of its shares each at a price equal to their NTA Amount (as defined in the Explanatory Statement) as at 30 September 2008 ( Buy Back Price ), from shareholders who elect to participate; and
a Sale of Shares (as defined in the Explanatory Statement), under which Guinness Peat Group (Australia) Pty Ltd ( GPGA ) will acquire from HGL Limited ( HGL ), which currently holds approximately 14% of the Company's shares, all shares in the Company that HGL still holds after it has participated in the Buy Back, for a price equal to the Buy Back Price less a discount of 12.66%, multiplied by 34,383,611 and less the total amount that HGL would have been entitled to receive from the Company under the Buy Back if HGL had made Buy Back Offers for 30,030,645 shares. (Effectively, a result of the Buy Back and the Sale of Shares is that HGL would receive an amount equal to the Buy Back Price for those shares less a discount of 12.66% for its entire shareholding in the Company.)

The Proposal would result in:

A the Company buying back up to $75 million of its Shares each for a price equal to the NTA Amount;
B HGL ceasing to be a shareholder in the Company;
C GPGA and its Associates (which currently hold approximately 15.59% of the Company's shares) holding between 26% and 30.4% of the Company's shares (if Buy Back Offers are made for at least 30% of the Shares not held by HGL, GPGA and their Associates and HGL makes Buy Back Offers for 30,030,645 of its Shares) ; and
D the pre tax net tangible asset value of the Company's shares not changing as a result of the Proposal.

The Company will announce the Buy Back Price on or by 15 October 2008.

As the Company's shares have generally been trading at a discount to their net tangible asset value, the Buy Back presents an opportunity to shareholders who want to realise a portion of their investment at its NTA Amount.

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The two resolutions are interdependent and are both supported by the Independent Directors (comprising Messrs Kellerman and Wade) because:

the Buy Back permits the Company to efficiently return excess capital, resulting in a capital structure appropriate for its wealth management strategy, and will therefore benefit all shareholders, whether or not they participate in the Buy Back. It is designed to ensure that all shareholders who want to participate can do so to the extent possible (subject to any pro rata scale back);
the Independent Directors believe that implementation of the Share Sale Agreement is very important for the Company. It will result in the Company having a major shareholder which is experienced in the wealth management industry and which supports the Company's wealth management strategy; and
HGL and GPGA entered into the Share Sale Agreement on the basis that the Buy Back would proceed.

If you want the Proposal to be implemented, you should vote in favour of the Proposal, that is, vote in favour of both Resolution 1 and Resolution 2. The Independent Directors recommend you vote in favour of both Resolution 1 and Resolution 2.

All directors who hold shares and are entitled to vote them intend to vote those shares in favour of the Proposal (ie. Resolutions 1 and 2). (I am not entitled to vote the shares I control, so will abstain from voting.)

If the Proposal is implemented, I intend to resign as a director later in the year as HGL will no longer own any shares in the Company.

Also, to assist in your consideration of the Proposal, the Company's Independent Directors commissioned PKF Corporate Advisory (East Coast) Pty Limited ( Independent Expert ) to provide an independent expert’s report which is included in the Booklet. On the basis of the matters discussed in its report, the Independent Expert is of the opinion that:

the advantages of the Sale of Shares outweigh the disadvantages;
the Buy Back is fair and reasonable to shareholders other than HGL, GPGA and any Associates;
the Buy Back will not materially prejudice the Company's ability to pay its creditors.

Shareholders will be posted a separate booklet containing further details of the Buy Back and an acceptance form shortly after the record date of Friday 3 October 2008. You will need to use that acceptance form if you want to participate in the Buy Back. If the Proposal is not approved at the Annual General Meeting on 23 October 2008, the Company will not buy back any shares, and will disregard any acceptance forms already received.

Other business to be discussed and voted on at the Annual General Meeting includes adoption of the formal reports for the financial year, re-election of directors, the remuneration report, and an increase in the total sum for remuneration of non-executive directors to accommodate reasonable increases in line with the market.

The Company's 2008 Annual Report and Notice of Meeting are available on its web site at www.mmccontrarian.com.au.

I urge you to consider this Booklet carefully and, if you are in any doubt as to the action you should take, please contact your financial, taxation or other adviser immediately.

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I look forward to seeing you at the Annual General Meeting. If you choose not to attend, proxy forms and instructions on how to appoint a proxy are enclosed in the Booklet.

Yours sincerely

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Kevin Eley Chairman

16 September 2008

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Your vote is im rtant. po

The Independent Directors recommend that Shareholders consider and vote in favour of the Proposal. If you want the Proposal to be implemented, you must vote in favour of BOTH Resolution 1 and Resolution 2.

What do you need to do?

STEP 1

READ THIS ENTIRE BOOKLET CAREFULLY

Any queries? Contact our helpline on 1800 211826 (inside Australia) or +61289869354 (outside Australia) or consult your financial or other professional advisor.

STEP 2

VOTE IN PERSON OR BY PROXY

To vote in person come to the Annual General Meeting on Thursday, 23 October 2008 To vote by proxy, lodge it online at www.investorvote.com.au or

complete the enclosed proxy form and return it before 9:30am on 21 October 2008

You should return the proxy form by:

using the enclosed reply paid envelope
or delivering the proxy form to:

MMC Contrarian Limited Share Registry

c/- Computershare Investor Services Pty Limited GPO Box 242 Melbourne VIC 3001 Australia

or to: the Company's registered office at Level 8, 34 Hunter Street, Sydney NSW 2000, Australia

or faxing the proxy to:

Computershare Investor Services Pty Limited on facsimile number +61 (3) 9473 2555 or the Company on + 61 (2) 9233 2275.

THE CHAIRMAN INTENDS TO VOTE ALL PROXIES OVER WHICH HE HAS DISCRETION IN FAVOUR OF ALL RESOLUTIONS .

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Notice of Annual General Meetin g

MMC CONTRARIAN LIMITED ABN 83 106 248 248

Notice is hereby given that the Annual General Meeting of Shareholders of MMC Contrarian Limited ( Company ) will be held on Thursday 23 October 2008 at 9.30am Sydney time at the Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney, New South Wales.

Agenda

Defined Terms

Unless the context otherwise requires, capitalised terms used in this Notice of Meeting have the meaning given to them in the Glossary in the Explanatory Statement accompanying this Notice of Meeting.

Business

Resolution 1 - Share Buy Back

To consider and, if thought fit, to pass with or without modification the following resolution as an ordinary resolution:

'That, conditional upon Resolution 2 being authorised and approved, the Company authorises and approves:

(a) the terms of the Buy Back Agreements (as defined in the Explanatory Statement) described in the Explanatory Statement which accompany this Notice of Meeting, for all purposes, including for the purposes of:
(i) Part 2J.1 of the Corporations Act 2001 (Cth) and the ASIC Exemption (as defined in the Explanatory Statement);
(ii) the Listing Rules (including Listing Rule 10.1);
(b) each Buy Back Agreement, entered in those terms and during the 12 months commencing from the date of this resolution to the extent that:
(i) approval is required under Part 2J.1 of the Corporations Act 2001 (Cth) and the ASIC Exemption (as defined in the Explanatory Statement);
(ii) approval of such Buy Back Agreements would not result in the Company buying back more than A$75 million of the Company's fully paid ordinary shares at the price per share equal to the NTA Amount (as defined in the Explanatory Statement); and
(iii) approval is required under Listing Rule 10.1.'

Voting Exclusion: The Company will disregard any votes cast on this resolution by HGL, GPGA and any of their Associates. However, the Company need not disregard a vote if it is cast by:

a person as proxy for another person who is entitled to vote, in accordance with the directions on the proxy form (or provided electronically); or
the chairman as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form (or provided electronically) to vote as the proxy decides.

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2. Resolution 2 - Approval of acquisition by GPGA of Shares from HGL

To consider and, if thought fit, to pass with or without modification the following resolution as an ordinary resolution:

'That, conditional upon Resolution 1 being authorised and approved, the Company authorises and approves the acquisition by Guinness Peat Group (Australia) Pty Ltd of up to 34,383,611 of the Company's fully paid ordinary shares from HGL Limited for the Purchase Price (as defined in the Explanatory Statement) and for all purposes including for the purposes of section 611 item 7 of the Corporations Act.'

Voting Exclusion: The Company will disregard any votes cast on this resolution by HGL, GPGA and any of their Associates. However, the Company need not disregard a vote if it is cast by:

a person as proxy for another person who is entitled to vote, in accordance with the directions on the proxy form (or provided electronically); or
the chairman as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form (or provided electronically) to vote as the proxy decides.

3. Financial Statements

To receive and consider the financial statements, directors' report and the auditor's report for the financial year ended 30 June 2008.

4. Directors

To consider and, if thought fit, to pass with or without modification the following resolutions as ordinary resolutions:

Resolution 3 – Re-election of Ray Kellerman as a Director

(i) 'That Ray Kellerman who retires as a Director by rotation, being eligible and having offered himself for re-election as a Director in accordance with Rule 6.4 of the Company's constitution, be re-elected as a Director.'

Resolution 4 – Re-election of Anthony Eisen as a Director

(ii) 'That Anthony Eisen who was appointed a Director on 12 November 2007, being eligible and having offered himself for re-election as a Director in accordance with Rule 6.2 of the Company's constitution, be re-elected as a Director.'

Resolution 5 – Re-election of Peter Wade as a Director

(iii) 'That Peter Wade who was appointed a Director on 31 October 2007, being eligible and having offered himself for re-election as a Director in accordance with Rule 6.2 of the Company's constitution, be re-elected as a Director.'

5. Resolution 6 – Adoption of Remuneration Report .

To consider and, if thought fit, to pass with or without modification the following resolution as an ordinary resolution:

'That the Remuneration Report for the financial year ended 30 June 2008 be adopted.'

Note that the vote on this item is advisory only and does not bind the Directors or the Company.

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Resolution 7 - Increase the maximum aggregate remuneration of non-executive directors

To consider and, if thought fit, to pass with or without modification the following resolution as an ordinary resolution:

'That, with effect from and including the financial year commencing 1 July 2008, the Company authorises and approves the aggregate maximum sum available for the remuneration of non-executive directors being increased by A$150,000 per year to A$450,000 per year, for all purposes including for the purposes of Listing Rule 10.17'.

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a Director and any of his or her Associates. However, the Company need not disregard a vote if it is cast by:

a person as proxy for another person who is entitled to vote, in accordance with the directions on the proxy form (or provided electronically); or
the chairman as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form (or provided electronically) to vote as the proxy decides.

By order of the Board

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Brian Wright

Company Secretary 16 September 2008

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Notice of Meeting and Explanatory Statement

The details of the Resolutions contained in the Explanatory Statement accompanying this Notice of Meeting should be read together with and form part of this Notice of Meeting.

Determination of entitlement to attend and vote

In accordance with section 1074E(2)(g)(i) of the Corporations Act and regulation 7.11.37 of the Corporations Regulations, the Company has determined that for the purposes of the meeting all Shares in the capital of the Company will be taken to be held by the persons who held them as registered holders at 7.00pm Sydney time on Tuesday 21 October 2008. Accordingly, share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

Proxies

If you are a Shareholder entitled to attend and vote, you are entitled to appoint one or two proxies. Where two proxies are appointed, you may specify the number or proportion of votes that each may exercise, failing which each may exercise half of the votes. A proxy need not be a Shareholder of the Company.

If you want to appoint one proxy, you can use the form provided. If you want to appoint two proxies, please follow the instructions on the proxy form.

The Company's constitution provides that on a show of hands, every person present and qualified to vote shall have one vote.

If you appoint a proxy who is also a Shareholder or is also a proxy for another Shareholder, your directions may not be effective on a show of hands. Your directions will be effective if a poll is required and your proxy votes.

Where to lodge a proxy

You may lodge a proxy online at the web site address (below) of our share registry, Computershare Investor Services Pty Limited ( Computershare ), by following the instructions set out on the web site. Shareholders who elected to receive their notice of meeting and proxy electronically will have received an email with a link to the Computershare site.

To be effective the proxy form or electronic proxy appointment must be received by Computershare at the postal or web site address or facsimile number below or by the Company at its registered office, Level 8, 34 Hunter Street, Sydney, NSW 2000, Australia, not later than 9.30am Sydney time on Tuesday 21 October 2008.

Computershare Investor Services Pty Limited

GPO Box 242 Melbourne VIC 3001

Australia

Facsimile: +61 3 9473 2555

You can arrange to receive shareholder information electronically, or obtain a replacement proxy form or a special proxy form to appoint a second proxy, by contacting Computershare on 1300 850 505 (within Australia) or + 61 3 9415 4000 (outside Australia) or go to www.computershare.com.au (Investor Centre). You can lodge a proxy online at www.investorvote.com.au

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Admission to meeting

Shareholders who will be attending the Annual General Meeting and not appointing a proxy, are asked to bring their proxy form (if you still have one) to the meeting to help speed admission.

If you do not plan to attend the Annual General Meeting, you are encouraged to complete and return a proxy form or lodge a proxy online, for your holding(s) of the Shares.

Questions and comments by shareholders at the meeting

In accordance with the Corporations Act and the Company's past practice, a reasonable opportunity will be given to Shareholders at the meeting to ask questions about, or make comments on, the management of the Company.

Similarly, a reasonable opportunity will also be given to Shareholders at the meeting to ask Deloitte Touche Tohmatsu, the Company's auditor, questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the Company in relation to the preparation of the financial statements, and the independence of the auditor in relation to the conduct of the audit.

Written questions for Deloitte Touche Tohmatsu relevant to the conduct of the audit and the content of the auditor's report must be received no later than 5.00pm Sydney time on Tuesday 21 October 2008 at Computershare (at the address or fax number for lodgement of proxies). Alternatively, the questions may be sent to The Company Secretary, MMC Contrarian Limited, Level 8, 34 Hunter Street, Sydney, NSW 2000. A list of questions to the auditor will be available at the meeting.

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Ex lanator Statement p y

This Explanatory Statement is included in, and forms part of, the Notice of Meeting.

1. Overview of the Proposal

The Company has previously announced that an important component of the Board's strategy is to continue with its participation in the wealth management industry but to evolve the Company from one that relies on volatile investment earnings to an operating company producing sustainable recurring earnings. The evolution would be achieved in part by aiming to develop a broader presence in the wealth management industry.

The Company has capital in excess of that required for its current or proposed operations and strategy, and which can be returned to Shareholders most efficiently by means of a share buy back.

HGL Limited ( HGL ), which holds approximately 14% of the Shares, invested in the Company during a time when the Company's strategy was to invest in equities and funds management businesses. Given the Company's intended evolution, HGL indicated that it intended to dispose of its Shares.

Guinness Peat Group Australia Pty Ltd ( GPGA ), which (with its Associates) holds approximately 15.59% of the Shares, indicated its willingness to support the Company's strategy and to acquire those Shares in the Company held by HGL after the proposed Buy Back. HGL and GPGA subsequently entered into a Share Sale Agreement, the terms of which are set out in section 3. This will result in HGL disposing of all of its shareholding in the Company via the Buy Back and the Sale of Shares, and effectively receiving the Buy Back Price less a discount of 12.66% for that shareholding.

The Proposal would therefore result in:

A the Company buying back up to $75 million of its Shares each for a price equal to the Buy Back Price;
B HGL ceasing to be a Shareholder in the Company;
C GPGA and its Associates holding between 26% and 30.4% of the Shares (if Buy Back Offers are made for at least 30% of the Shares not held by HGL, GPGA and their Associates and HGL makes Buy Back Offers for 30,030,645 of its Shares); and
D the pre tax net tangible asset value of the Shares not changing as a result of the Proposal

As the Shares generally have been trading at a discount to their net tangible asset value, the Buy Back presents an opportunity to Shareholders who want to realise a portion of their investment at its NTA Amount.

The Buy Back Resolution (Resolution 1) and the Sale of Shares Resolution (Resolution 2) are interdependent and are both supported by the Independent Directors (comprising Messrs Kellerman and Wade) because:

the Buy Back permits the Company to efficiently return excess capital, resulting in a capital structure appropriate for its wealth management strategy, and will therefore benefit all Shareholders, whether or not they participate in the Buy Back. It is designed to ensure that all Shareholders who want to participate can do so to the extent possible (subject to any pro rata scale back);

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the Independent Directors believe that implementation of the Share Sale Agreement is very important for the Company. It will result in the Company having a major Shareholder which is experienced in the wealth management industry and which supports the Company's wealth management strategy; and
HGL and GPGA entered the Share Sale Agreement on the basis that the Buy Back would proceed.

The Buy Back and the Sale of Shares are subject to Shareholders, other than GPGA, HGL and their Associates, approving both transactions.

2. Share Buy Back

2.1 Introduction

The Company proposes to buy back up to a maximum of $75 million of Shares at a price per Share equal to the NTA Amount, on the terms set out in section 2.3 of this Explanatory Statement. Pursuant to the ASIC Exemption granted by ASIC, the Company must ensure that the terms of the Buy Back are approved by Shareholders by way of ordinary resolution. Approval is also required as substantial shareholders may participate in the Buy Back.

As at the date of this Booklet, the Company has 248,407,825 Shares on issue. The number of Shares to be bought back is estimated in section 2.4 of this Booklet.

For illustrative purposes, the Company's pre-tax NTA as at 31 July 2008 was 71.7 cents per Share, and if the Buy Back used that pre-tax NTA, a total of 104,602,510 Shares would be bought back under the Buy Back (if Shareholders offered that many), representing 42.11% of the Shares on issue.

2.2 Ongoing capital management

The Buy Back is part of the Company's capital management strategy. This strategy includes the return of excess funds to Shareholders after providing for the Company's ongoing working capital requirements and ensuring there is adequate flexibility to fund growth opportunities.

The Company has had in place since December 2003 an on market share buy back, under which a total of 20,339,809 Shares have been bought back (as at the date of this Booklet) for a total of $19,125,990. During the year ended 30 June 2008, 6,814,797 Shares were bought back at an average price of $0.86 cents, for a total amount of $5,835,687 under that Previous Buy Back.

On 22 February 2008 the Company returned $0.10 a Share as a capital return. The total amount then returned to Shareholders was $24.6 million.

The Board considered a range of alternative ways of returning further capital to Shareholders, and decided that the Buy Back could return sufficient capital in an effective manner.

2.3 Terms of the Buy Back

Subject to the following, the Company proposes to invite Shareholders to offer to sell up to 100% of their Shares to the Company under the Buy Back at a price per Share equal to the NTA Amount.

If a Shareholder holds less than 250 Shares and wishes to make a Buy Back Offer, the Shareholder must Offer to sell all of the Shareholder's Shares.

If the Company receives Buy Back Offers for more than A$75 million worth of Shares, a scale back will operate as follows:

(a) if a Shareholder Offers up to 250 Shares, the Company will Buy Back all of the nominated Shares;

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(b) if a Shareholder Offers more than 250 Shares, the Company will Buy Back the first 250 Shares and will then scale back on a pro-rata basis all Offers of more than 250 Shares so that the total amount payable by the Company for the Shares is no more than A$75 million; and
(c) in calculating the number of Shares which will be bought back, all fractions will be rounded down.

The Company will announce the details of any scale back shortly after the Closing Date.

Shareholders who offer to sell Shares under the Buy Back will be entitled to withdraw or amend their Buy Back Offers provided they do so before the Closing Time.

The Buy Back Invitation will not be made to Excluded Foreign Shareholders.

Further terms of the Buy Back, including how to make a Buy Back Offer to the Company, will be sent to Shareholders shortly after the Record Date.

2.4 Number of Shares to be bought back

As the Buy Back is to be conducted at a price per Share equal to the NTA Amount which is calculated as at 30 September 2008, the number of Shares to be acquired under the Buy Back is uncertain as at the date of this Booklet, but will be certain before the date of the Annual General Meeting. The Company will advise the market of the NTA Amount as soon as it is calculated, which will be on or before 14 October 2008.

The table below sets out a range of possible outcomes, for illustrative purposes:

NTA Amount as at 30 September 2008 (cents)	Maximum Number of Shares which could be bought back at that NTA Amount	% of Company's issued share capital which could be bought back at that NTA Amount	Total value of Shares bought back
74.0	101,351,351	40.80 %	$75 million
73.0	102,739,726	41.36 %	$75 million
72.0	104,116,667	41.93 %	$75 million
71.0	105,633,802	42.52 %	$75 million
70.0	107,142,857	43.13 %	$75 million

2.5 Timetable and payment

The Company anticipates the Buy Back will take effect in accordance with the following timetable.

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Event	Date
Shares quoted "ex" entitlement to participate in Buy Back on ASX	Monday 29 September 2008
Record Date	5.00pm Friday 3 October 2008
Buy Back Invitations open	Tuesday 7 October 2008
Annual General Meeting	Thursday 23 October 2008
Closing Time for Buy Back	5.00pm Monday 27 October 2008
Buy Back Agreements entered into	Wednesday 29 October 2008
Dispatch of Buy Back payment	Friday 31 October 2008

Payments will be made into specified accounts of participating Shareholders who have provided valid instructions for crediting of payments before 27 October 2008, and by cheque to other participating Shareholders.

2.6 Amount per Shareholder

The amount each participating Shareholder will receive under the Buy Back will depend on the total number of Shares Offered by all participating Shareholders and the NTA Amount. The amount received by a participating Shareholder will be the number of their Shares bought back by the Company, multiplied by the NTA Amount.

The table below sets out a range of possible outcomes in relation to each 1,000 Shares Offered, for illustrative purposes:

% of all Shares eligible to be Offered1which are in fact Offered by all Shareholders2	Number of Shares bought back per 1000 Shares Offered if NTA Amount is 71 cents	Amount received per 1000 Shares Offered if NTA Amount is 71 cents	Number of Shares bought back per 1000 Shares Offered if NTA Amount is 72 cents	Amount received per 1000 Shares Offered if NTA Amount is 72 cents
100%	439	$312	433	$312
70%	627	$445	618	$445
43.88% or less	1,000	$710	986	$710

2.7 Shareholders who do not Offer any Shares

Shareholders who do not Offer to sell any of their Shares in the Buy Back will have the same number of Shares after the Buy Back as before the Buy Back. However, the number of Shares they hold as a

1 The maximum number of Shares capable of being tendered into the Buy Back by all eligible Shareholders is 245,107,825 Shares.

2 HGL has indicated to the Company that it will not tender 4,352,966 of its total holding of 34,383,611 Shares. On this basis, the 4,352,966 Shares that HGL has indicated that it will not tender has been subtracted from the 245,107,825 capable of being tendered into the Buy Back by all eligible Shareholders, with the effect that the 100% of Shares amount in this table means 240,754,859 Shares.

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percentage of the total number of Shares on issue will increase when the Shares bought back from other Shareholders under the Buy Back are cancelled.

2.8 How many Shares can a Shareholder Offer to be bought back?

Shareholders can elect to Offer all of their Shares, some of their Shares, or none of their Shares into the Buy Back.

2.9 Do Shareholders have to Offer any Shares at all?

No. Shareholders can choose not to participate at all in the Buy Back.

However even if Shareholders do not intend to participate, the Independent Directors recommend they vote in favour of Resolution 1 so that other Shareholders can participate.

2.10 Majority holders

As at the date of this Booklet:

HGL owned 34,383,611 Shares in the Company, being approximately 13.84% of the Shares and the voting power; and
the GPG Group owned 38,715,465 Shares in the Company, being approximately 15.59% of the Shares and the voting power.

HGL has advised the Company that it intends to make Buy Back Offers to the Company for 30,030,645 Shares (being 87.34% of its Shareholding).

GPGA has agreed that:

(a) the GPG Group will not make Buy Back Offers to the Company unless Shareholders (other than itself and HGL) have made Buy Back Offers to the Company for 30% or more of the Shares (other than the Shares held by itself and HGL); and
(b) the GPG Group will make that number of Buy Back Offers to the Company necessary to ensure that it does not hold more than 30.4% of the Shares following completion of the Buy Back and Sale of Shares.

GPGA has also advised the Company that the GPG Group is targeting a minimum holding of 26% of the Shares following completion of the Buy Back and Sale of Shares (but can not guarantee to the Company that it will achieve or maintain such a minimum holding). This would result in GPGA and its Associates holding between 26% and 30.4% of the Shares (if Buy Back Offers are made for at least 30% of the Shares not held by HGL, GPGA and their Associates and HGL makes Buy Back Offers for 30,030,645 of its Shares)..

As for all other Shareholders, the amount HGL receives under the Buy Back will depend on the NTA Amount, and the total number of Buy Back Offers made by all Shareholders. The following table sets out, for illustrative purposes, the amount which would be received by HGL assuming varying numbers of Buy Back Offers made by all eligible Shareholders and varying NTA Amounts:

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% of all Shares eligible to be Offered3which are in fact Offered by all Shareholders4	Pro rata number of HGL Shares which would be bought back if NTA Amount is 71 cents	Amount received by HGL if NTA Amount is 71 cents	Pro rata number of HGL Shares which would be bought back if NTA Amount is 72 cents	Amount received by HGL if NTA Amount is 72 cents
100%	13,176,271	$9,355,152	12,993,267	$9,355,152
70%	18,823,244	$13,364,503	18,561,810	$13,364,503
43.88% or less	30,030,645	$21,321,758	29,613,555	$21,321,758

If not all of HGL's Shares are bought back by the Company under the Buy Back, the remaining balance will immediately be acquired by GPGA under the Share Sale Agreement, so that HGL would not thereafter hold any Shares.

As for all other Shareholders, the amount the GPG Group receives under the Buy Back will also depend on the NTA Amount and the total number of Buy Back Offers made by all Shareholders.

2.11 Australian tax implications for Shareholders

The following information is a general summary of the Australian income tax implications for Australian resident and non-resident Shareholders who participate in the Buy Back. These comments do not apply to Shareholders who hold their Shares on revenue account or as trading stock, for example Shareholders who carry on a business of trading in shares. The taxation consequences of the Buy Back for these Shareholders may differ considerably from those set out in this summary.

This summary is provided only as a guide and is not intended to be advice and should not be relied upon by Shareholders as such. Accordingly, it is important that Shareholders seek independent taxation advice based on their own specific circumstances on the relevant income tax implications of participating in the Buy Back.

This discussion is based on Australian income tax laws as at 3 September 2008. These laws, and their interpretation by the Courts and the ATO, are subject to change at any time, including potentially with retrospective effect.

The Company has applied to the ATO for a Class Ruling to confirm the tax implications for Australian and non-resident Shareholders who participate in the Buy Back. This ruling is expected to confirm a number of statements contained in this summary. While it is not anticipated to be the case, it is possible that the ruling will express views contrary to those contained in this summary.

(a) Nature of Buy Back

The Buy Back will constitute an ‘off-market’ buy back for income tax purposes. Generally, the amount received by Shareholders under an off-market buy back will be treated as a dividend to the extent that there is a difference between the Buy Back Price and the amount debited against the Company's share

3 The maximum number of Shares capable of being tendered into the Buy Back by all eligible Shareholders is 245,107,825 Shares.

4 HGL has indicated to the Company that it will not tender 4,352,966 of HGL's total holding of 34,383,611 Shares. On this basis, the 4,352,966 Shares that HGL has indicated that it will not tender has been subtracted from the 245,107,825 capable of being tendered into the Buy Back by all eligible Shareholders, with the effect that the 100% of Shares amount in this table means 240,754,859 Shares.

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capital account in respect of the Shares acquired.

The Company will debit the entire Buy Back Price against its untainted share capital account and, accordingly, the Company considers there should not be a dividend component to the Buy Back Price.

The Company will not have any profits which it is able to distribute at the time of the Buy Back Announcement. In these circumstances, it appears unlikely that the Commissioner would exercise his discretion under sections 45A or 45B of the Tax Act to treat any component of the capital return as a deemed dividend.

The above matters are the subject of the Class Ruling being sought from the ATO on behalf of Shareholders and should be confirmed in due course.

(b) CGT Consequences - Disposal of Shares

A Shareholder who elects to participate in the Buy Back will be taken to have disposed of their Shares on the Buy Back Date. This is expected to be on 29 October 2008.

Australian Resident Shareholders – Individuals, Companies and Complying Superannuation Funds

A Shareholder will make a capital gain where the tax cost base of a Share is less than the capital proceeds received on disposal. Conversely, a Shareholder will derive a capital loss where the capital proceeds received on disposal are less than the Shareholder's tax cost base of the Share.

Generally, the tax cost base will be the amount the Shareholder paid to acquire a Share, plus any incidental costs of acquisition, for example, stamp duty and brokerage, and adjusted for any capital reductions or issues of bonus shares.

A Shareholder will be taken to have disposed of each Share for capital proceeds consisting of the Buy Back Price of the NTA Amount. This is on the basis that a higher amount of deemed consideration is not required to be calculated under section 159GZZZQ of the Tax Act and substituted as the consideration proceeds on sale. That is, because the Buy Back Price is expected to exceed the amount that would otherwise have been the market value of the Shares at the time of the Buy Back Offer (i.e. calculating the estimated market value of the Shares as if the Offer did not occur and was never proposed to occur).

A capital gain may be reduced where the Shareholder has held a Share for more than 12 months:

in the case of an individual or trust – the capital gain is reduced by a discount of 50%; and
in the case of a complying superannuation fund – the capital gain is reduced by a discount of 33.33%

The CGT discount will not apply if the Shareholder is a company or has held a Share for less than 12 months.

Non-Resident Shareholders

A non-resident Shareholder who holds their Shares on capital account may disregard any capital gain or capital loss arising in respect of the disposal of the Shares where the Shares do not qualify as Taxable Australian Property. The Shares should not qualify as Taxable Australian Property and, accordingly, should not be subject to CGT because of one of the following:

(i) a non-resident shareholder has not, together with their Associates, held 10% or more of the issued shares in the Company (including any options to acquire shares) for a period of 12 months at any time during the previous 24 months; or

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(ii) a majority of the assets of the Company (measured by market value and including 'indirect Australian real property interests' of the Company) are not interests in Australian real property and therefore any Shares are not indirect interests in Australian real property.

However, a non-resident Shareholder should obtain independent Australian tax advice in respect of the CGT treatment where any Shares have been used at any time in carrying on a business through a permanent establishment in Australia or the Shareholder chose to disregard a capital gain or loss on ceasing to be an Australian resident as a result of an election under section 104-165 of the Tax Act.

2.12 ASIC relief

ASIC granted the Company an exemption ( ASIC Exemption ) under section 257D(4) of the Corporations Act from the operation of section 257D on 8 September 2008.

The effect of the exemption is to allow the Company to:

(a) conduct the Buy Back similarly to an equal access scheme but to allow the Company to make Buy Back Invitations rather than offers to buy back Shares;
(b) require Shareholders who hold 250 Shares or less to nominate all their Shares to be bought back by the Company if they wish to participate in the Buy Back;
(c) utilise the scale back mechanism described in section 2.3; and
(d) not make Buy Back Invitations to Excluded Foreign Shareholders.

One of the conditions for the ASIC Exemption is that the Buy Back must be approved by shareholders of the Company by way of an ordinary resolution at a general meeting of the Company to be held prior to 31 October 2008.

2.13 ASX Waivers

ASX granted the Company waivers from the Listing Rules (the ASX Waivers ) on 4 September 2008 which have the effect:

(a) of permitting the timetable for the Buy Back to depart from paragraph 9 of Appendix 7A of the Listing Rules and in particular, for the Record Date to be on that date; and
(b) so that the Company does not need to lodge an Appendix 3E in connection with the Buy Back, and to permit the Company to give an Appendix 3F in relation to the Buy Back no later than the second business day after the Closing Date.

2.14 Impact of the Buy Back

(a) Impact on Share Capital : All Shares bought back under the Buy Back will be cancelled in accordance with the Corporations Act.
(b) Impact on Balance Sheet : The table below sets out a summary of the Company's consolidated balance sheet:
as at 30 June 2008; and
on a pro-forma basis following the Buy Back, assuming (i) A$75 million of share capital is bought back by the Company under the Buy Back, and (ii) transaction costs of $200,000.

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	Audited June 2008 $'000	Buy Back $'000	Pro forma after the Buy Back $'000
Fixed interest and cash Securities Receivables Total current assets Property, plant and equipment Deferred tax asset Total non current assets Total assets Payables Current tax liabilities Total current liabilities Net assets Issued capital Retained losses Asset revaluation reserve Executive share plan reserve Equity attributable to parent Minority Interest Total equity	105,522 66,856 3,219 175,597 36 9,162 9,198 184,795 1,149 364 1,513 183,282 220,233 (38,038) 504 121 182,820 462 183,282	(75,200) 0 0 (75,200) 0 0 0 (75,200) 0 0 0 (75,200) (75,000) (200) 0 0 (75,200) 0 (75,200)	30,322 66,856 3,219
			100,397
			36 9,162
			9,198
			109,595
			1,149 364
			1,513
			108,082
			145,233 (38,238) 504 121
			107,620 462
			108,082

(c) Impact on Earnings per Share

The precise impact of the Buy Back on earnings per Share cannot be determined until the Closing Date, when the number of Shares remaining on issue can be determined. On a pro forma basis the Buy Back will change the Company’s earnings per Share as shown in the following table, which assumes (i) $75 million of capital is returned, (ii) that the $75 million of cash is currently earning interest at 7.5% per annum, and (iii) that the NTA Amount is 71.7 cents.

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Item		Actual 30 June 2008	Pro forma after Buy Back
1	Normalised net profit for year5	$8,537,000	$4,599,500
2	Weighted average number of Shares on issue	248,115,000	141,101,000
3	Normalised earnings per Share (being Item 1 divided by Item 2)	3.44 cents	3.26 cents

(d) Impact on pre-tax Net Tangible Assets per Share

The pre-tax net tangible assets per Share will be unchanged after the Buy Back.

2.15 How will the Buy Back be funded and how will it affect the Company?

The Buy Back will be funded from existing cash reserves. The Board believes that after the Buy Back, the Company will remain in a strong financial position.

2.16 What effect will the Buy Back have on trading?

The Buy Back is not expected to have a material effect on trading in Shares.

2.17 Information regarding Share price

The closing price of Shares on ASX on 29 August 2008 was $0.62.

The following table provides information in relation to the market prices of Shares on ASX over the last 6 months:

Month	Low	High
March 2008	$0.575	$0.755
April 2008	$0.585	$0.63
May 2008	$0.565	$0.60
June 2008	$0.58	$0.61
July 2008	$0.55	$0.595
August 2008	$0.57	$0.635

5 Normalised net profit (Item 1) is calculated as follows:

		$000
Net (loss)forthe year		(42,767)
Impairment of intangibles		30,251
Impairment of investments		21,053
Normalisednet profit		8,537
In addition, unrealised losses of $9 million, after tax, were recognised in the asset revaluation reserve

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2.18 Information regarding net tangible assets

The following table provides information in relation to the pre-tax net tangible assets, per Share over the last 6 months:

Month	Actual
March 2008	$0.739
April 2008	$0.735
May 2008	$0.740
June 2008	$0.709
July 2008	$0.717
August 2008	$0.718

2.19 The interests of any Director who may participate in the Buy Back

The Directors are entitled to participate in the Buy Back and may do so according to their own particular circumstances. As at the date of this Booklet, the Directors of the Company held or had a relevant interest in the following Shares:

Director	Number of Shares held directly	Number of Shares held indirectly	Total
Kevin Eley	nil	200,000	200,000
Anthony Eisen	nil	nil	nil
Ray Kellerman	nil	307,669	307,669
Peter Constable	4,240,392	nil	4,240,392
Peter Wade	nil	50,000	50,000

Kevin Eley is a director of and a substantial shareholder in HGL. As at the date of this Booklet HGL owns 34,383,611 Shares in the Company.

Anthony Eisen is an executive of GPGA. He does not own any shares in GPGA. As at the date of this Booklet GPGA owns 38,715,465 Shares in the Company.

Of the 307,669 Shares indirectly held by Ray Kellerman, 250,000 Shares were issued under the Company's executive share plan, and are not eligible for participation in the Buy Back under the rules of the plan.

All directors (other than Ray Kellerman) who hold Shares have indicated that they intend to make Buy Back Offers in respect of all of their Shares. Ray Kellerman has indicated that he intends to make Buy Back Offers in respect of all his eligible Shares (being the 57,669 Shares not issued under the executive share plan, see section 2.22 below).

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Kevin Eley must abstain from voting his Shares in respect of Resolution 1. Anthony Eisen holds no Shares. Messrs Kellerman, Constable and Wade intend to vote all of their Shares in favour of Resolution 1.

2.20 Agreements or arrangements with Directors

There is no agreement or arrangement made between any Director and any other person, in connection with or conditional upon, the outcome of the Buy Back.

2.21 Other interests of Directors

Except as set out in this Booklet, no Director has any other interest whether as a Director, member or creditor of the Company or otherwise, material to the Buy Back.

2.22 Executive share plan

As at the date of this Booklet 3,300,000 Shares have been issued to employees of the Company under its executive share plan (or to associated entities, such as family or superannuation trusts). These shares are not eligible to participate in the Buy Back, and are not included in the number of Shares used in the denominator for calculating the NTA Amount. After the Buy Back, assuming that $75 million of capital is returned, Shares issued under the employee share plan will account for approximately 2.3% of the Company's issued capital.

2.23 Advantages and disadvantages of the Buy Back

The advantages of conducting the Buy Back include the following:

(a) the Buy Back permits the Company to efficiently return excess capital to Shareholders who want to realise a portion of their investment at its NTA Amount, which is greater than the recent market price;
(b) the Buy Back results in a more efficient and appropriate capital structure for the Company's strategy;
(c) all eligible Shareholders have an equal opportunity to participate in the Buy Back and can choose whether and to what extent they participate (subject to any pro rata scale back);
(d) the Buy Back should allow the Company to buy back a greater number of Shares within a shorter period than under an on-market buy back (such as the Previous Buy Back);
(e) the Buy Back should enable Shareholders to sell a large volume of Shares without depressing the market price of Shares;
(f) Shareholders should not have to pay brokerage or appoint a stockbroker to sell their Shares in the Buy Back;
(g) the Buy Back permits the Sale of Shares, thereby resulting in:
(i) the Company having a major shareholder which is experienced in the wealth management industry and supports the Company's wealth management strategy; and
(ii) the removal of any overhang from the market, which may depress the Company's share price, caused by HGL holding approximately 13.84% of the Shares in circumstances where HGL believes it is in its interest to realise its investment (refer to section 3.5).

The potential disadvantages of conducting the Buy Back are:

(a) there will be a reduction in the number of Shares on issue, which may decrease liquidity on the ASX; and

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(b) by returning surplus capital, the Company may not be able to respond quickly to any investment opportunities in the future if it has to raise further funds in order to do so. The greater the amount returned, the less capital that will be available for investment in the future.

Overall, the Board is of the opinion that the advantages of the Buy Back outweigh the disadvantages.

2.24 Shareholder approval for the Buy Back

Pursuant to the ASIC Exemption, Shareholder approval is required before the Buy Back may proceed.

2.25 Listing Rule 10.1 and Independent Expert Report

Listing Rule 10.1 states that an entity must not acquire a substantial asset from a substantial holder without the approval of holders of the entity's ordinary securities. Listing Rule 10.10 requires a report from an independent expert in the case where a company acquires a substantial asset from a substantial holder of the company's shares.

An asset is substantial if its value, or the value of the consideration for it is 5% or more of the equity interests of the Company as set out in its latest accounts given to ASX. Each of HGL (as the holder of approximately 13.84% of the Shares) and the GPG Group (as the holder of approximately 15.59% of the Shares) is a substantial holder of the Shares. The Company may acquire Shares of a value of 5% or more of the equity interests of the Company from each of them under the Buy Back. Accordingly:

Shareholder approval is being sought for the purposes of Listing Rule 10.1 under the Buy Back resolution so that the GPG Group and HGL may participate in the Buy Back; and
a report from an independent expert has been obtained, and is set out in Appendix B.

Listing Rule 10.10.2 requires that the report from the independent expert must state whether the transaction is fair and reasonable to the holders of the Shares whose votes are not to be disregarded when approving the transaction.

The Independent Expert's Report states that the Buy Back is fair and reasonable to shareholders other than HGL, GPGA and their Associates (that is, the holders of Shares whose votes are not to be disregarded when approving the transaction).

2.26 What happens if the Buy Back does not proceed?

If the Buy Back does not proceed,

the Sale of Shares from HGL to GPGA cannot proceed;
the Company will not return $75 million of capital to Shareholders;
HGL will hold approximately 13.84% of the Shares in circumstances where HGL believes it is in its interest to realise its investment (refer to section 3.5) could result in an overhang in the market, which may depress the Company's share price;
the Company will not efficiently return excess capital; and
the Shares are likely to trade at a larger discount to their net tangible asset value than if the Buy Back proceeded.

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3. Approval of Sale of Shares from HGL to GPGA

3.1 Introduction

As at the date of this Booklet:

HGL owned 34,383,611 Shares in the Company, being approximately 13.84% of the Shares and the voting power; and
the GPG Group owned 38,715,465 Shares in the Company, being approximately 15.59% of the Shares and the voting power.

On 25 August 2008, GPGA entered into the Share Sale Agreement with HGL which provides that GPGA will acquire from HGL at the Purchase Price all Shares in the Company HGL still holds after it has participated in the Buy Back . The Company, GPGA and HGL concurrently entered into an Implementation Agreement setting out the implementation procedures to be undertaken by the parties with respect to the Sale of Shares and the Buy Back.

GPGA is a 100% subsidiary of Guinness Peat Group plc ( GPG ) an investment holding company with a diversified range of strategic interests in a number of businesses, mainly in Europe and Australasia.

GPG is listed on the London, Australian and New Zealand Stock Exchanges. As at 31 December 2007, it had a market capitalisation of approximately £854 million and shareholders’ funds of £951 million. GPG’s successful track record spans investments in various sectors including financial services, thread manufacture, foodstuff manufacture and building services. GPG’s investment portfolio covers a spread of investments and is widely diversified both geographically and sectorially.

GPG has a small but experienced group of prudent and professional executives operating with strong teamwork and close communication, which has been a proven formula for achieving steady growth in the value of shareholders’ funds.

The independent expert, PKF Corporate Advisory (East Coast) Pty Limited, has reviewed the Sale of Shares and concluded that the Company's Shareholders not associated with the Sale of Shares will be better off if the Sale of Shares is approved because, on balance, the advantages of the Sale of Shares outweigh the disadvantages from the perspective of the Company's Shareholders not associated with the Sale of Shares (see section 3.7 below).

The Independent Directors believe that the economic alignment between the Company and GPGA that will result from the Sale of Shares will create a successful working relationship and is in the interests of the Company and its Shareholders.

3.2 Details of Sale of Shares

(a) Sale of Shares by HGL to GPGA

Under the Share Sale Agreement between HGL and GPGA entered on 25 August 2008:

(i) HGL will sell to GPGA 34,383,611 Shares in the Company less any Shares bought back by the Company in the Buy Back, for a purchase price of the NTA Amount (less a discount of 12.66%) multiplied by 34,383,611, less the total amount HGL would have been entitled to receive from the Company if HGL had made Buy Back Offers for 30,030,645 Shares;
(ii) the Sale of Shares is conditional on:

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(A) Resolution 1 (the Buy Back resolution) and Resolution 2 (the Sale of Shares Resolution) being duly passed at the Annual General Meeting;
(B) FIRB approval being obtained in respect of the proposed acquisition by GPGA (or the Treasurer of the Commonwealth of Australia does not object, or is deemed not to have objected to that acquisition);
(C) the NTA Amount (less a discount of 12.66%) being $0.58 or more (although HGL may waive this condition);
(D) the Escrow Securities having been released from the Escrow Arrangements (as described in section 3.13 below);
(iii) completion of the Sale of Shares would occur two Business Days after the above conditions are satisfied or when the proceeds of the Buy Back are paid to participating Shareholders (whichever is later), or such later date if agreed by HGL and GPGA;
(iv) HGL agreed not to dispose of Shares in the three months following the date of the agreement, other than 30,030,645 Shares in the Buy Back or to GPGA under the agreement; and
(v) if Resolution 1 (the Buy Back resolution) and Resolution 2 (the Sale of Shares Resolution) are duly passed at the Annual General Meeting, and before completion of the Sale of Shares, HGL would to the extent permitted by law, exercise its voting rights attached to the Shares until completion on any Shareholders' resolution relating to the appointment of a director of the Company nominated by GPGA in favour of that appointment.

Assuming that the Buy Back and the Sale of Shares are duly approved by Shareholders at the Annual General Meeting, and all other conditions in the Share Sale Agreement are met or waived, (i) HGL will dispose of all of its 34,383,611 Shares to the Company (under the Buy Back) and/or GPGA (under the Share Sale Agreement) and (ii) GPGA will acquire the following numbers of Shares from HGL for the total consideration set out in the table below, assuming an NTA Amount of 71 cents per Share:

% of all Shares eligible to be Offered6which are in fact Offered by all Shareholders7	Number of Shares held by HGL acquired under Buy Back	Balance of Shares held by HGL, after the Buy Back, acquired by GPGA	Total amount to be paid to HGL by GPGA for that balance	Amount per Share
100%	13,176,271	21,207,340	$11,966,606	$0.56
70%	18,823,244	15,560,367	$7,957,255	$0.51
43.88% and below	30,030,645	4,352,966	$nil	$nil

6 The maximum number of Shares capable of being tendered into the Buy Back by all eligible Shareholders is 245,107,825 Shares.

7 HGL has indicated to the Company that it will not tender 4,352,966 of HGL's total holding of 34,383,611 Shares. On this basis, the 4,352,966 Shares that HGL has indicated that it will not tender has been subtracted from the 245,107,825 capable of being tendered into the Buy Back by all eligible Shareholders, with the effect that the 100% of Shares amount in this table means 240,754,859 Shares.

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Assuming that the Buy Back and the Sale of Shares are duly approved by Shareholders at the Annual General Meeting, and all other conditions in the Share Sale Agreement are met or waived, GPGA and its Associates will hold between 26% and 30.4% of the Shares, following the Sale of Shares and the Buy Back (if Buy Back Offers are made for at least 30% of the Shares not held by HGL, GPGA and their Associates and HGL makes Buy Back Offers for 30,030,645 of its Shares).

(b) Implementation Agreement

Under the Implementation Agreement between the Company, HGL and GPGA, the Company agreed to:

(i) commission the Independent Experts Report;
(ii) take all steps necessary to duly convene a Shareholders' meeting at which Shareholders would be asked to consider and if thought fit pass the Buy Back resolution and the Sale of Shares resolution (including obtaining the Relief, and preparing this Booklet and its contents);
(iii) do all other things as may be reasonably necessary or expedient to ensure that the Buy Back resolution and the Sale of Shares resolution are passed by the requisite majority of Shareholders;
(iv) subject to the Independent Expert concluding that the Sale of Shares is fair and reasonable to Shareholders, include a statement in this Explanatory Statement that each member of the Company's Board without a material personal interest in Resolution 2 considers that the Sale of Shares is in the best interests of the Company and recommends that the Shareholders vote in favour of Resolution 2;
(v) not issue any further Shares before the completion date set out in the Share Sale Agreement; and
(vi) release the Escrow Shares from the Escrow Agreements (see section 3.13 below).

3.3 Benefits of the Sale of Shares

The Independent Directors believe that the Sale of Shares is in the interests of all Shareholders not associated with the Sale of Shares for the following reasons:

it will result in the Company having one major shareholder which is experienced in the wealth management industry and supports the Company's wealth management strategy; and
it will result in the removal of any overhang of the market, which may depress the Company's share price, caused by HGL holding approximately 13.84% of the Shares in circumstances where HGL believes it is in its interest to realise its investment (refer to section 3.5).

3.4 Disadvantages of the Sale of Shares

The potential disadvantages of the Sale of Shares are:

the GPG Group's increased Shareholding to between an estimated 26% to 30.4% of the Shares (if Buy Back Offers are made for at least 30% of the Shares not held by HGL, GPGA and their Associates and HGL makes Buy Back Offers for 30,030,645 of its Shares)will be significant and could adversely impact any potential for a takeover bid for the Company;

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if the GPG Group increases its Shareholding above 25% it could block special resolutions;
as a result of the Buy Back proceeding:
there will be a reduction in the number of Shares on issue, which may decrease liquidity on the ASX; and
by returning surplus capital, the Company may not be able to respond quickly to any investment opportunities in the future if it has to raise further funds in order to do so. The greater the amount returned, the less capital that will be available for investment in the future.

The Independent Directors have considered these potential disadvantages and believe that they are outweighed by the benefits that the Sale of Shares would deliver.

3.5 What happens and what are the risks if the Sale of Shares does not proceed?

First, the Buy Back will not proceed. Secondly, HGL will be left with a Shareholding in the Company which it may seek to sell in the short to medium term. As announced by HGL on 26 August 2008, HGL believes it is in its interest to realise its investment in the Company as the Company has decided to broaden its presence in the wealth management industry. This parcel of Shares (currently representing approximately 13.84% of the Shares) may overhang the market and thereby depress the Company's Share price. It is unclear at this stage what strategy HGL may adopt in relation to its Shareholding if the Sale of Shares is not approved.

3.6 Shareholder approvals required for the Sale of Shares to proceed

In order for the Sale of Shares to proceed, Shareholders (other than HGL, GPGA and their Associates) must approve the Sale of Shares for the purposes of section 611 item 7 of the Corporations Act (for further detail of the requirements of section 611 item 7 see section 3.15).

Section 611 item 7 of the Corporations Act prohibits HGL, and the GPGA Group and their Associates from voting on the Sale of Shares resolution.

(As previously set out in this document, Shareholders must also approve the Buy Back resolution for the Sale of Shares resolution to take effect.)

3.7 Independent Expert considers the advantages of Sale of Shares outweigh the disadvantages

The Independent Expert has provided an opinion on the Sale of Shares. The Independent Expert has concluded that the advantages of the Sale of Shares outweigh the disadvantages. A copy of the Independent Expert's Report is contained in Appendix B. You are encouraged to read that report in full.

3.8 Independent Directors' recommendations and voting intentions

Each of your Independent Directors believes that the Sale of Shares provides substantial benefits to the Company and, accordingly, Shareholders not associated with the Sale of Shares are better off if the Sale of Shares is approved. Having regard to the findings of the Independent Expert, your Independent Directors unanimously recommend that Shareholders vote in favour of Resolution 2. Each of the Independent Directors intends to vote in favour of Resolution 2 in respect of any Shares they hold or control.

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3.9 Effect of the Sale of Shares on the Capital Structure of the Company

There will be NO changes to:

the capital structure of the Company, or
your percentage interest in the Company,

as a result of the Sale of Shares.

3.10 Effect of the Sale of Shares on the Board of Directors of the Company

The chairman, Mr Kevin Eley has indicated an intent to resign as a Director later in the year if the Sale of Shares is completed.

3.11 Future intentions of GPGA for the Company

Other than as disclosed in this Booklet, if the Sale of Shares is completed GPGA, in its capacity as a Shareholder:

has no current intention of making any changes to the nature of the existing business of the Company;
has no current intention to inject further capital into the Company;
has no current intention to rationalise the Company's present employees;
does not presently intend that any property be transferred between the Company and GPGA or any person associated with it;
has no current intention to redeploy the fixed assets of the Company; and
has no current intention to change the Company's existing financial or dividend policies.

The above intentions are based on the existing operations of the Company, the facts and information regarding the Company and the general business environment known to GPGA as at the date of this Booklet. If circumstances change or new information becomes available in the future, GPGA's intentions could change.

3.12 Information about GPGA, including the effect of the Sale of Shares on GPGA's shareholding and voting power

As noted above, GPGA is a 100% subsidiary of listed company, Guinness Peat Group plc. The only Associates of GPGA in relation to its investment in the Company are other members of the GPG Group. A list of GPGA's Associates is contained in Appendix A of this Explanatory Statement.

GPGA currently has a relevant interest in 38,715,465 Shares (excluding any deemed relevant interest in HGL’s Shares as a result of the Share Sale Agreement). Accordingly, the current voting power of GPGA and its Associates is 15.59% (again excluding any deemed relevant interest in HGL’s Shares as a result of the Share Sale Agreement) based on 248,407,825 Shares on issue.

The particulars of their relevant interests held are as follows:

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Holder of relevant interest	Registered holder of securities	Nature of relevant interest	Class and number of securities	Votes
GPG Group	GPGA	Beneficial owner	22,842,604 Ordinary	22,842,604
GPG Group	Bell Potter Nominees Limited	Beneficial owner	11,082,394 Ordinary	11,082,394
GPG Group	GPG Australia Nominees Limited	Beneficial owner	3,349,286 Ordinary	3,349,286
GPG Group	Merrill Lynch (Australia) Nominees Limited	Beneficial owner	1,441,181 Ordinary	1,441,181

The maximum extent of the increase in the voting power of GPGA and its Associates in the Company as a result of the Buy Back and Sale of Shares will be 14.81% (being from an existing voting power of 15.59% to a maximum of 30.4%). GPGA expects that if at least 30% of the Shares held by Shareholders other than HGL and the GPG Group are tendered into the Buy-Back, and HGL makes Buy Back Offers for 30,030,645 of its Shares) the voting power of GPGA and its Associates following completion of the Buy Back and Sale of Shares will be at least 26% and in any case, not greater than 30.4%. However, the voting power of GPGA and its Associates may be less than 26% depending on the number of Buy Back Offers made by other Shareholders.

3.13 Related agreements and proposed agreements

Other than the Implementation Agreement between the Company, HGL and GPGA (described in section 3.2 above) and the Escrow Agreement (described below), there are no agreements or proposed agreements between the Company and any of GPGA, HGL or their Associates, which are conditional upon, or directly or indirectly dependent on, the Sale of Shares.

In November 2006 a Share Purchase Agreement (the Escrow Agreement ) was entered into between Evanalex Holdings Pty Ltd, HGL, HGL Company Two Pty Ltd, Peter Constable, Western Pacific Investments Pty Ltd, Eric Metanomski, the Company, and MMC Asset Management Limited. That agreement contained escrow or restriction arrangements in favour of the Company in relation to certain Shares (the Escrow Shares ). On 25 August 2008, the Board resolved (any director with an interest in the Escrow Shares abstaining) to release the Escrow Shares from the escrow or restriction arrangements conditional on Resolution 1 and Resolution 2 being duly approved by Shareholders, and with effect from that time. Under the Implementation Agreement, the Company also agreed to release all affected Escrow Shares (and their holders) from the restrictions imposed on them under the Escrow Agreement.

3.14 No proposal to transfer of property

There is no proposal whereby any property will be transferred between the Company and GPGA, HGL or any of their Associates.

3.15 Legal and regulatory requirements

The information in this Explanatory Statement is given to the Company's Shareholders in compliance with section 611 item 7 of the Corporations Act and ASIC Regulatory Guide 74 (in

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respect of acquisitions to be approved by shareholders in accordance with section 611 item 7 of the Corporations Act) - described further below.

Section 606(1) of the Corporations Act contains a general prohibition on the acquisition of a Relevant Interest in shares in a listed company, or an unlisted company with more than 50 members, if as a result of the acquisition:

(a) the person's or someone else's voting power in the company increases to more than 20%; or
(b) the person's or someone else's voting power is above 20% and below 90%.

In broad terms, a person has a Relevant Interest in shares if they hold shares or have the power to control the right to vote or dispose of the shares. A person's voting power in a company is the number of the voting shares in which the person (and its Associates) has a Relevant Interest, expressed as a percentage of the total number of voting shares in the company.

GPGA's increased voting power in the Company (see section3.12) because of the Sale of Shares would contravene section 606(1) unless a relevant exception is available.

Section 611 item 7 of the Corporations Act contains an exception to the general prohibition where an acquisition has been approved in advance by a resolution passed at a general meeting of the company in which the acquisition is made. Accordingly, Shareholders are being asked to approve the acquisition by GPGA of Shares under the Share Sale Agreement by voting on Resolution 2.

Resolution 2 is an ordinary resolution. An ordinary resolution requires a simple majority of votes cast by members entitled to vote on the resolution. On a poll, each Shareholder will be entitled to one vote for each the Company Share they hold. For the purposes of section 611 item 7, no votes may be cast in favour of Resolution 2 by GPGA, HGL or their Associates. HGL and GPGA have each advised the Company that HGL and members of the GPG Group which hold or control the Company shares (respectively) intend to abstain from voting on Resolution 2.

3.16 Interests of directors in the Shares

The following table sets out the number of Shares in which each Director currently has a Relevant Interest, and the number of Shares in which each Director will have a Relevant Interest if the Sale of Shares is implemented (ignoring any participation in the Buy Back). No Director currently has any Relevant Interest in any option, or will so have if the Sale of Shares is implemented.

Name	Current Relevant Interests in	Relevant Interests in Shares if the
	Shares	Sale of Shares is implemented
Kevin Eley	200,000	200,000
Anthony Eisen	nil	nil
RayKellerman	307,669	307,669
PeterConstable	4,240,392	4,240,392
PeterWade	50,000	50,000

No Director has an interest in the outcome of Resolution 2 to approve the Sale of Shares other than:

(a) his interest as a Shareholder (directly or indirectly) of the Company; and
(b) in the case of Kevin Eley, his interest as the holder (directly or indirectly) of approximately 3.2 million shares in HGL or 6% of its issued capital.

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Messrs Kellerman, Constable and Wade intend to vote all of their Shares in favour of Resolution 2 (concerning the Sale of Shares). Mr Eley intends to abstain from voting his Shares in respect of Resolution 2 (concerning the Sale of Shares). Mr Eisen holds no Shares so can not vote.

3.17 Independent expert's report

The Independent Directors have appointed PKF Corporate Advisory (East Coast) Pty Limited as the Independent Expert for the purposes of section 611 item 7 of the Corporations Act and having regard to ASIC Regulatory Guides 111 and 112.

Essentially, the Independent Expert is required to identify the advantages and disadvantages of the Sale of Shares to shareholders not associated with the Sale of Shares and state whether, in its opinion, having regard to the interests of Shareholders not associated with the Sale of Shares:

(a) the advantages of the Sale of Shares outweigh the disadvantages; or
(b) the disadvantages of the Sale of Shares outweigh the advantages.

In forming this opinion, the Independent Expert has considered:

(a) whether the non-associated shareholders may be foregoing the opportunity to share in a takeover premium by approving the Sale of Shares;
(b) the extent to which the GPG Group is to receive a premium for control;
(c) whether the Sale of Shares might deter the making of a takeover bid for the Company; and
(d) the extent to which further transactions are planned between the Company and the GPG Group.

On the basis of the matters discussed in its report, the Independent Expert has formed the opinion that the advantages of the Sale of Shares outweigh the disadvantages.

The Independent Expert's Report is contained in Appendix B of this Explanatory Statement and Shareholders should read the report in full. More detail on the purpose of the Independent Expert's Report and the basis of the assessment made by the Independent Expert is contained in section 2 of that report.

3.18 Resolution to put Sale of Shares to Shareholders

At a meeting of Directors held on 25 August, the Independent Directors unanimously resolved to put the Sale of Shares to Shareholders. At a meeting of Directors held on 16 September 2008, after considering the Independent Experts Report, the Independent Directors unanimously resolved to approve the publication and circulation of this Explanatory Statement.

3.19 Consents and disclaimers

(a) The following persons have given and have not, before the date of issue of this Explanatory Statement, withdrawn their consent to be named in this Explanatory Statement in the form and context in which they are named:
(i) PKF Corporate Advisory (East Coast) Pty Limited - as the Independent Expert;
(ii) Computershare Investor Services Pty Limited - as the Share Registry;
(iii) HGL;
(iv) GPGA; and

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(v) Guinness Peat Group plc (in respect of section 3 only).
(b) GPGA has given, and has not, before the date of issue of this Explanatory Statement, withdrawn, its consent to the inclusion of the information concerning the current and intended shareholding of GPGA and its Associates contained in the Chairman's Letter, in sections 1, 2.10, 2.19, 2.25, 3.1, and 3.12 of the Explanatory Statement, and information as to the opinions, intentions and decisions of the directors of GPGA in this Booklet (excluding the Independent Expert's Report), including in section 3.11, and the statements concerning GPGA and its nominee director in sections 2.19, 3.13 and 3.16 and the list of GPGA's Associates in Appendix A, and to the references to that information in the form and context in which they are included in this Explanatory Statement.
(c) HGL has given, and has not, before the date of issue of this Explanatory Statement, withdrawn, its consent to the inclusion of the information concerning the current and intended shareholding of HGL and its Associates contained in the Chairman's Letter, in sections 1, 2.10, 2.19, 2.25, 2.26, 3.1, 3.5, and 3.16 of the Explanatory Statement, and information as to the opinions, intentions and decisions of the directors of HGL in this Booklet (excluding the Independent Expert's Report) and the statements concerning HGL and its nominee director, including sections 2.19, 2.26, 3.5, 3.13 and 3.16, and to the references to that information in the form and context in which they are included in this Explanatory Statement.
(d) PKF Corporate Advisory (East Coast) Pty Limited has given, and has not, before the date of issue of this Explanatory Statement, withdrawn, its consent to the inclusion of the Independent Expert's Report and the references to that report in the form and context in which they are included in this Explanatory Statement.
(e)
Each person referred to in this section 3.19:
(i) does not make, or purport to make, any statement in this Explanatory Statement other than those statements referred to above as consented to by that person; and
(ii) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Explanatory Statement other than as described in this section with that person's consent.

4. Financial Statements

The Company's annual report 2008 (which includes the financial report, the directors' report and the auditor's report) will be presented to the meeting. Shareholders can access a copy of the annual report on the Company's web site at: www.mmccontrarian.com.au. As permitted by recent legislation, a printed copy of the Company's annual report 2008 has been sent only to those Shareholders who have elected to receive a printed copy.

During this item, Shareholders will be given a reasonable opportunity to ask questions about, and make comments on, the reports and the Company's management, businesses, operations, financial performance and prospects.

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5. Directors

5.1 Re-election of Ray Kellerman as Director

Pursuant to Rule 6.4 of the Company's constitution, at each Annual General Meeting, one third of the Directors (or, if their number is not a multiple of 3, then the number nearest to one third) must retire from office. The Directors retire by rotation, with the Directors who have been the longest in office being the Directors who must retire in any year.

The Company's constitution ensures that no Director is able to remain in office for longer than three years without facing re-election. Each Director is entitled to offer himself for re-election as a Director at the Annual General Meeting that coincides with his or her retirement.

Ray Kellerman retires by rotation and being eligible for re-election, offer himself for re-election as a Director.

Ray is an Independent Director as defined by the ASX Corporate Council's principles. Ray has a legal background and was head of compliance services at the Corporate Trust division of Perpetual Trustees Australia where he spent 10 years before establishing his own compliance consulting and advisory business in 2001. Ray currently acts as a director, audit and risk committee member and compliance committee member for a number of major fund managers and financial institutions. He is chairman of Credit Suisse Asset Management Australia, a director of Goodman Funds Management Australia and a member of compliance committees for Macquarie Bank and Suncorp. He is a principal partner and director of Quentin Ayers Pty Limited, an implemented asset consultant in the alternative assets sector.

Ray is the chairman of the audit committee and a member of the nomination and remuneration committee. He was appointed to these committees on 18 April 2007.

Ray was appointed a director on 10 April 2007. Age 44.

5.2 Re-election of Anthony Eisen and Peter Wade as Directors

Pursuant to Rule 6.2(c) of the Company's constitution, each Director holds office until the first general meeting after his or her appointment, at which time the Director may offer themselves for re-election.

Anthony Eisen and Peter Wade, who were appointed Directors on 12 November 2007 and 31 October 2007 respectively, seek confirmation of their appointment and re-election at this Annual General Meeting in accordance with the Corporations Act and the Company's constitution. As Anthony Eisen and Peter Wade are entitled and eligible for re-election, they each offer themselves for re-election as a Director.

Anthony Eisen

Anthony has over 14 years of experience in commerce and financial services and is currently an Investment Manager at Guinness Peat Group (Australia) Pty Ltd. Prior to joining GPGA , Anthony commenced his career as an accountant with Price Waterhouse, and has been an investment banker in Australia with Caliburn Partnership and in the United States with Credit Suisse. Anthony currently represents the interests of the GPG Group on the boards of Tower Limited and Capral Limited. Anthony was appointed to the Company's investment committee on 28 November 2007. Anthony was appointed a director on 12 November 2007. He is 37.

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Peter Wade

Peter is independent as defined by the ASX Corporate Council's principles. For the past 25 years he has worked in the Australian and international equity markets. For 24 of these years Peter worked for Goldman Sachs JB Were (previously JB Were) in Melbourne, London, New York and Sydney. Peter was Managing Director, Sydney and joint head of global institutional sales, and a member of the JB Were board prior to JB Were merging with Goldman Sachs in 2003. Peter then became joint head of the equities products group and was on the board and management committee of the merged group. In 2004 Peter joined JP Morgan where he became Managing Director, Head of Australian Equities, and a member of its management committee. Peter has served on boards and committees of a number of security industry-related organisations.

Peter was appointed to the Company's investment committee, its nomination and remuneration committee and its audit committee, on 28 November 2007. He was appointed a director on 31 October 2007. He is 51.

6. Remuneration report

Directors of listed companies, such as the Company, are required to provide detailed disclosures of director and senior executive remuneration in their directors' reports. These disclosures are set out in the remuneration report (which forms part of the directors' report) on pages 9 to 14 of the Company's annual report 2008. As mentioned above, Shareholders can access a copy of the annual report on the Company's web site; printed copies of the annual report have been sent to those Shareholders who elected to receive a copy in this form; and the annual report will be presented to the Annual General Meeting.

The remuneration report includes:

discussion of the Board's policy in relation to the nature and level of remuneration of the directors, chief executive officer and key management personnel of the Company;
discussion of the relationship between the Board's remuneration policy and the Company's performance over the five financial years up to and including the year ended 30 June 2008;
information about performance hurdles applicable to the short-term and long-term incentive components of the remuneration of the chief executive officer and key management personnel; and
details of the remuneration provided to the non-executive directors and key management personnel for the year ended 30 June 2008.

There will be a reasonable opportunity for Shareholders at the meeting to comment on, and ask questions about, the remuneration report.

The vote on Resolution 6 is advisory only and will not bind the Directors or the Company, however, the Board will take the outcome of the vote into consideration when reviewing remuneration practices and policies.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 6.

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7. Increase the maximum aggregate remuneration of non-executive directors

The remuneration payable by the Company to Directors is determined by Shareholders in general meeting and may not be increased without the prior approval of Shareholders – as required under Rule 6.3(c) of the Company's constitution and Listing Rule 10.17. The maximum aggregate sum (or cap) for the remuneration of non-executive directors is currently A$300,000 per year. This cap includes all fees, superannuation contributions and any retirement benefits paid to non-executive directors and was approved by Shareholders at the general meeting of shareholders held on 29 January 2007.

The Company seeks to adequately remunerate non-executive directors at market levels for their time, commitment and responsibilities.

The Board seeks Shareholder approval of a new maximum aggregate sum of $450,000 per year (representing an increase of $150,000 per year). This increase will allow the Board to:

recognise increases in both the workload and responsibilities of Directors on the Board and its committees;
provide for effective succession planning by attracting strong candidates and permitting effective transition arrangements;
attract and maintain high-calibre directors in a marketplace where there is very strong competition for talented, highly competent individuals; and
allow for the expansion of the Board if required.

If the proposed maximum is approved by Shareholders, the Company will not utilise the whole of the revised fee pool in the current year. The Company expects that the proposed maximum will enable it to respond appropriately to the market and the Company's needs in subsequent years.

As each of the Directors has a personal interest in Resolution 7, it is not appropriate for them to make any recommendation as to how Shareholders should vote on this Resolution.

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Glossary

$ means Australian currency.

Acceptance Form means the form supplied by the Company which Shareholders must use to make Buy Back Offers to the Company in response to the Company's Buy Back Invitation.

Accounting Standards means the accounting standards applicable under the Corporations Act, and to the extent any matter is not covered by those accounting standards, means generally accepted accounting standards in Australia, in each case as consistently applied by the Company.

Annual General Meeting means the annual general meeting of Shareholders convened by the Directors to consider and vote on the Resolutions.

ASIC means the Australian Securities and Investments Commission.

ASIC Exemption means the exemption granted by ASIC under section 257D(4) of the Corporations Act from the operation of section 257D as described in section 2.12.

Associate has the meaning given in the Corporations Act.

ASX means the ASX Limited ACN 008 624 691.

ASX Waivers means the waivers granted by ASX from the Listing Rules described in section 2.13.

ATO means the Australian Taxation Office.

Board means the board of Directors of the Company.

Booklet means this Booklet, including the Notice of Meeting, Explanatory Statement, Schedules and Appendices.

Business Day means a weekday on which trading banks are open for business in Sydney.

Buy Back means the buy back up to a maximum of A$75 million of Shares, each at a price per Share equal to the NTA Amount and on terms set out in section 2.3 of the Explanatory Statement.

Buy Back Agreements means the agreements under which the Company may Buy Back Shares under the Buy Back.

Buy Back Date means the date on which the Company accepts the Buy Back Offers made by Shareholders.

Buy Back Invitations means the invitations by the Company to Shareholders to offer to sell up to 100% of their Shares to the Company under the Buy Back at a price per Share equal to the NTA Amount on the terms set out in section 2.3 of the Explanatory Statement.

Buy Back Offers or Offers means offers by Shareholders in response to Buy Back Invitations.

Buy Back Price means a price per Share equal to the NTA Amount.

CGT means Capital Gains Tax.

Closing Date means the date on which Buy Back Invitations must be received, expected to be 7 October 2008

Closing Time means 5pm Sydney time on the Closing Date.

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Commissioner means the Commissioner of Taxation.

Company means MMC Contrarian Limited ABN 83 106 248 248.

Company Share Register means the register of Shareholders maintained by Computershare Investor Services Pty Limited.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Escrow Agreement and Escrow Shares have the meanings set out in section 3.13.

Excluded Foreign Shareholder means any Shareholder:

(a) to whom the Company would be prohibited from paying money under:
(i) the Banking (Foreign Exchange) Regulations 1959 (Cth);
(ii) Part 4 of the Charter of the United Nations Act 1945 (Cth);
(iii) the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002 (Cth);
(iv) the Charter of United Nations (Sanctions – Afghanistan) Regulations 2001 (Cth);
(v) the Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003 (Cth);
(vi) the Criminal Code Act 1995 (Cth); or
(vii) any other Act, rule, or regulation prohibiting the Company from making payments to foreign persons; or
(b) whose address in the Company's register of shareholders is outside Australia, unless the Company is satisfied that it is lawful and practicable to extend the Buy Back Invitations into such jurisdictions; or
(c) who the Company is aware resides in a foreign jurisdiction where it would be illegal under the law of that jurisdiction to permit shareholders residing in that jurisdiction to participate in the Buy Back.

Explanatory Statement means the explanatory statement contained in this Booklet forming part of the Notice of Meeting.

FIRB means the Foreign Investment Review Board.

GPGA means Guinness Peat Group (Australia) Pty Ltd ABN 13 052 245 191.

GPG Group means Guinness Peat Group plc and its controlled entities.

HGL means HGL Limited ABN 25 009 657 961.

Implementation Agreement means the Implementation Agreement between the Company, HGL and GPGA dated 25 August 2008.

Independent Directors means the following Directors who are independent of GPGA, HGL and their Associates, or who have not been employed in an executive capacity by the Company in the past three years: Ray Kellerman and Peter Wade.

Independent Expert means PKF Corporate Advisory (East Coast) Pty Limited.

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Independent Expert's Report means the report prepared by PKF Corporate Advisory (East Coast) Pty Limited which is contained in Appendix B.

Listing Rules means the Listing Rules of ASX.

Notice of Meeting means the notice of annual general meeting contained in this Booklet.

NTA Amount means the Company's net tangible assets before tax (plus the amount of any acquisition goodwill or other intangibles in respect of any business legally and beneficially acquired between 30 July 2008 and 30 September 2008) determined on the NTA Calculation Date, as calculated and announced to ASX by the Company using the same calculation method the Company has utilised in calculating its NTA for the six month period ending on 31 August 2008 (but for the goodwill and other intangibles calculation which will be determined by the auditor of the Company in accordance with Accounting Standards), divided by the number of issued Shares (but excluding any Shares issued to employees of the Company under its executive share plan).

NTA Calculation Date means 30 September 2008.

Opening Date means the date the Buy Back opens for receipt of Buy Back Invitations, expected to be 7 October 2008.

Previous Buy Back means the on-market buy back for an unlimited duration commencing from 30 December 2003 as announced to the ASX on 16 December 2003.

Proposal means the proposed transactions described and summarised in sections 2 and 3 of the Explanatory Statement.

Purchase Price means the NTA Amount (less a discount of 12.66%) multiplied by 34,383,611, less the total amount HLG would have been entitled to receive from the Company if it had made Buy Back Offers for 30,030,645 Shares.

Record Date means Friday, 3 October 2008.

Relief means the ASIC Exemption and the ASX Waivers.

Relevant Interest has the meaning given in the Corporations Act.

Resolution means a resolution set out in the Notice of Meeting.

Sale of Shares means the proposed acquisition by GPGA of up to 34,383,611 of the Shares from HGL for the Purchase Price, as described in section 3.

Share Sale Agreement means the Share Sale Agreement between HGL and GPGA dated 25 August 2008.

Share Registry means Computershare Investor Services Pty Limited.

Shareholder means each person who is registered in the Company Share Register as the holder of Shares.

Shares means fully paid ordinary shares in the Company.

Tax Act means the Income Tax Assessment Act 1936 or Income Tax Assessment Act 1997 .

Voting Entitlement Time means 7pm Sydney time on 21 October 2008. An adjournment of the Annual General Meeting will not affect the Voting Entitlement Time.

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A ndix A- List of GPGA's Associates ppe

ACS Nominees Pty Limited Inversiones Coats Chile Limitada Aeneid Thirteen Limited Inversiones Coats S.A. Allied Mutual Holdings Pty. The Central Agency Limited - Chile Limited Coats Opti Shenzhen Limited Allied Mutual Insurance Services Coats Shenzhen Limited Ltd Dalian Coats Co Limited Anfield 1 Limited Guangying Spinning Company Anfield 2 Limited Limited Arcona Verbrauchsguter GmbH Guangzhou Coats Limited Arrow HJC Qingdao Coats Limited ASC Equities Pty Limited Shanghai Coats Limited Australian Country Spinners Tianjin Jinying Spinning Co Ltd Limited Coats Cadena SA - Colombia B. M. Estates Limited Hilos de Norte America S.A. (Costa Bilquiz Pty. Limited Rica) Blackwood Hodge Limited COATS CZECHO spol. sr.o Blackwood Hodge Overseas Coats Danmark A/S Holdings Limited Coats HP A/S Bocusi Investments BV Hilos Cadena Ecuador SA Boffin Pty. Limited Coats Egypt for manufacturing and Bowpine Pty. Limited dyeing sewing thread SAE Brown Shipley Asset Management Coats El Salvador, S.A. de C.V. Limited A. L. Paul Limited Brown Shipley Holdings Limited Allen, Solly & Company Limited Brown Shipley Investment Armitage & Rigby Limited Management Associated Thread Sales Limited BSH Acquisition Limited Atkins Group Limited Cal-Matrix Technical Services Inc. Barbour Campbell Threads Limited Canberra Investment Corporation Barlow & Jones (1978) Limited Limited Chain Insurance Company Limited Capral Limited Chobic Limited Capenza Investments BV Coats (UK) Limited Cardpad Limited Coats Finance Co. Limited CE (Predecessors) Limited Coats Holding Company (No. 1) Centaurea Holding BV (in Limited liquidation) Coats Holding Company (No. 2) CFA Sales Pty Limited Limited CIC Crace Pty Limited Coats Holdings Investments Limited CIC Deakin Pty Limited Coats Holdings Ltd CIC Developments Pty Limited Coats Industrial Thread Brands CIC Northgate Pty Limited Limited CIC (Port Geo) Pty Limited Coats Overseas (Holdings) Limited CIC Projects Pty Limited Coats Pensions Trustee Limited CIC Woden Project Pty Limited Coats Property Management Coats (VH) Limited Limited Coats Group Limited Coats Shelfco (A) Limited Coats Holdings Limited Coats Shelfco (BDA) Limited Coats plc Coats Shelfco (CV Nominees) Coats Cadena S.A. - Argentina Limited Coats Australian Pty Ltd Coats Shelfco (CVG) Limited Coats Harlander GmbH Coats Shelfco (CVY) Limited Coats Bangladesh Limited Coats Shelfco (PE) Limited Coats Crafts Bangladesh Limited Coats Shelfco (VV) Limited Coats NV Coats Shelfco (WM) Limited Coats Corrente Ltda Coats Shelfco (WMB) Limited Coats Corrente Textil Ltda Coats Shelfco Precision Limited Coats Bulgaria Eood Coats Treasury Investments Limited Coats Canada Inc Corah Limited Coats Cadena Ltda CV Woven Fabrics Limited Inmobiliaria Bajos de Mena S.A. - D. Byford & Co Limited Chile Dorma Sheets Limited

Edward E. Lazarus Limited Hicking Pentecost Limited Hockley Investment Co Limited Horrockses Limited I.P. Clarke & Company Limited John Murgatroyd Limited Jonas Brook & Brothers, Limited Mansfield Knitwear Limited Meritina Limited Needle Industries Limited Optilon Limited Pasolds Wrightwear Fabrics Limited Patons & Baldwins Limited Patons Limited Reliable Hosiery Limited Reliance Industrial Holdings Limited Seville Limited Simpson, Wright & Lowe, Limited Sir Richard Arkwright & Co. Limited Springfield (Nottingham) Limited The Coats Trustee Company Limited The International Thread Company Limited Thomas Burnley & Sons, Limited Tootal (SL) Limited Tootal Clothing Limited Tootal Group Limited Tootal Limited Tootal Nominees Limited Tootal Textiles Holdings Limited Tootal Thread Limited Vantona Limited Walter Evans & Company Limited West Riding Worsted And Woollen Mills Limited Coats Eesti AS - Estonia Coats Opti Crafts Oy Coats Opti Oy Coats France SAS Coats Sartel Loisirs SAS Coats Steiner SAS Coats Deutschland GmbH Coats GmbH Coats Opti Germany GmbH Coats Service GmbH Coats Thread Germany GmbH Schachenmayr, Mann & Cie GmbH Schwanenwolle Tittel & Krueger AG i. L Wollbaer Erwin Baer GmbH Centraltex de Guatemala, S.A. Coats de Guatemala, S.A. Hilos y Cierres de Coats Guatemala, S.A. Sandhurst International Limited Coats Honduras, S.A. China Thread Development Company Limited

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ME_77038738_13 (W2003)

Coats (China) Limited Coats China Holdings Limited Coats Hong Kong Limited Coats Investment (East Asia) Limited Coats Opti Hong Kong Limited Coats Thread HK Limited Coats Crafts Hungary Ltd Coats Magyarorszag Cernagyarto es Ertekesito Korlatolt Felelossegu Tarsasag Coats Mintabolt Kereskedelmi es Szolgaltato Kft. (Coats Millshop Ltd) Kor Investments Private Limited Madura Coats Private Limited Vaigai Investments Private Limited PT. Coats Rejo Indonesia Barbour Threads Limited - Eire Irish Sewing Ltd Youghal Carpet (Yarns) Limited Coats (Israel) Ltd Coats Cucirini S.R.L. Fil Service Srl Coats Kenya Pvt Ltd Coats Korea Co., Limited Coats Latvia SIA Coats Lietuva UAB Coats (Madagascar) International Coats (Madagascar) S.AR.L (EPZ) Coats Thread (Malaysia) Sdn. Bhd. J & P Coats (Manufacturing) SDN BHD Coats Indian Ocean Holding Co Limited Coats Mauritius International Co Ltd J & P Coats (Mauritius) Ltd Administraciones Timon SA de CV Coats Assets de Mexico SA de CV Coats Mexico S.A. de C.V. Grupo Coats Timon S A de C V Coats Maroc Mercerie Industrielle de Casablanca Precision Processes Textiles SARL Coats BV Coats Industrial Thread Holdings B.V Coats Northern Holdings B.V. Coats South America Holdings B.V. Coats South Asia Holdings B.V. Coats Southern Holdings B.V Coats Patons (New Zealand) Ltd Coats de Nicaragua SA Coats Shelfco (CV Estates 8) Limited CV Homewares Ltd Coats Knappehuset AS (new) Coats Norge A.S. J & P Coats Pakistan (Pvt) Limited Centraltex S.A. Sarsam Inc Soparcol Inc Coats Cadena SA - Peru Allied Thread Co., Inc. Coats Manila Bay Inc

Coats Thread Philippines Coats Polska Spolka z oganiczona odpowiedzialnoscia Companhia de Linha Coats & Clark S.A. S.C. Coats Odorhei S.R.L. SC Coats Romania Impex SRL Coats LLC Barbour Campbell Textiles Limited Barbour Threads Limited Clark and Company, Limited Coats Patons Limited CV Childrenswear Ltd Dalkeith Knitwear (Scotland) Limited Easgan Fisheries Limited J. & P. Coats (U.K.) Limited J.& P. Coats, Limited Pasolds Limited The Central Agency Limited Coats International Pte Limited Coats s.r.o Coats South Africa Proprietary Limited Cotnat Properties (Proprietary) Limited Coats Fabra SA Coats Invers S.L.U. Compania Nacional de Hilaturas S.A.U. Coats Thread Exports (Private) Limited Coats Thread Lanka (Private) Limited Coats Expotex AB Coats Sverige AB Coats Stroppel AG Coats Threads (Thailand) Ltd Coats Industrial Tunisie Coats Trading Tunisie Coats (Turkiye) Iplik Sanayii AS Coats Ukraine Ltd Coats International plc Coats Thread (UK) Limited W. M. Briggs & Company Limited Calico Printers Association (USA) Limited Coats & Clark Inc Coats & Clark's Sales Corporation Coats American Inc Coats American, LLC Coats Garments (USA) Inc Coats Holdings Inc Coats North America Consolidated Inc Coats North America de Republica Dominica Inc Coats Puerto Rico Inc Jaeger Sportswear Ltd Westminster Fibers, Inc. Coats Cadena S.A. - Uruguay Cambridge Medical Production CA (Cameproca) Coats Cadena SA - Venezuela Coats Moderm Accessories C.A. (Comaca)

Cothilca S.A. Distribuidora El Costurero, S.A. (DICOSA) Hilanderia San Joaquin, S.A. Hilos Cadena, S.A. Hilos Elefante C.A. Hilos Francia S.A. Informatica Robox, S.R.L International Kroob CA Representaciones Glenifa, S.A. Venexport S.R.L Coats Phong Phu Co Ltd Coats Andean Limited Coats Zimbabwe (Pvt) Limited Coats Treasury Investments Limited Contractors' Aggregates Limited Crace Developments Pty Limited Delica Limited Embergrange Ltd ENZA Commercial Holdings Limited ENZACor Pty Limited ENZA Finance Limited ENZA Fresh Inc. ENZAFruit Products Inc ENZAFruit New Zealand (UK) Limited ENZAFruit New Zealand Continent BV ENZA Group Services Limited ENZA Investments USA, Inc. ENZA Limited ENZA Orchards Limited ENZA Pipfruit Limited ENZA Tree Limited ENZAFOODS New Zealand Limited ENZAFRUIT Marketing Limited ENZAFRUIT New Zealand International Limited Fibe Holdings NV Firence Investments BV Forde Developments Pty Limited Fruit Distributors Limited GM Group Finance Googong Development Corporation Pty Limited Gosford Quarry Holdings Limited GPG (Australia Finance) Pty. Limited GPG (Australia Investments) Pty. Limited GPG (Australia Trading) Pty. Limited GPG (No. 8) Pty Limited GPG (No.1) Pty Ltd GPG (No.2) Pty Ltd GPG (No.3) Pty Ltd GPG (No.4) Pty. Limited GPG (No.5) Pty. Limited GPG (No.6) Pty Limited GPG (No.7) Pty Limited GPG (UK) Holdings plc GPG (UK) Limited GPG Acquisitions no. 3 plc GPG Acquisitions No. 5 Limited

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GPG ACS Holdings B.V. Lyons Development Corporation GPG Australia (Holdings) Pty Ltd Pty Limited GPG Australia Financing Limited Marshaide Limited GPG Australia Nominees Limited MCG Limited GPG Avenue Guarantee Limited MEM Group Limited GPG Broking Pty Ltd Messina Investments BV GPG Coats Finance Limited MFC (Predecessors) Limited GPG Finance plc Milton Cres N.V. GPG Finance (Cook Islands) New Union Holdings Limited Notron (No.153) Pty. Limited GPG Forests Limited Notron (No.154) Pty. Limited GPG Holdings I B.V. Notron (No.156) Pty. Limited GPG Holdings II B.V. NUH No. 1 Limited GPG Holdings III B.V. NUH No.2 Limited GPG Holdings IV B.V. Performance Tyre Limited GPG Investment Holdings (UK) Piemonte Group BV GPG Limited Pienza International BV GPG March 2004 Limited Premium Brands P/L GPG Nominees Pty Ltd Raphoe Pty Limited GPG NZ Financing Limited Retford Resources NL GPG Pension Investments Trustees S G Warburg Group Limited Limited Sabatica Pty Limited GPG Pension Trustees Limited Safer Food Technologies Limited GPG Securities Limited Sardegna Investments BV GPG SECURITIES TRADING Silvara Pty Limited LTD SIRBS Pension Trustee Limited GPG Services Pty Limited St. Paul's capital investments GPG Tyndall Holdings Pty. Limited limited GPG US Financing Limited Status Produce Limited GPG U S Holdings inc. Staveley 2005 No 3 Limited Greens General Foods P/L Staveley Consultants Limited Griffin SA Ltd Staveley Guarantee Company Guinness Brewing Company Pty Limited Limited Staveley Inc Guinness Peat CH Limited Staveley Industries plc Guinness Peat Group (Australia) Pty Staveley Instruments, Inc. Limited Staveley Investments Inc Guinness Peat Group Allied Staveley Limited Services BV Staveley Real Estate Fund A, Inc. Guinness Peat Group International Staveley Real Estate Fund B, Inc Holdings BV Staveley Sensors, Inc. Guinness Peat Group Management Staveley Services Canada Inc. BV Staveley Services Limited Guinness Peat Group New Zealand Tafmo Limited Limited Tafmo Australia Pty Limited GUINNESS PEAT GROUP PLC Thomas Robinson Industrial Guinness Peat Group Shares Controls Limited Limited Tod Limited Guinness Peat Group UK Limited Tomorrow Holdings Pty Limited Guinness Peat International Capital Tomorrow B2B Pty Limited Assets Limited Touch Networks Pty Limited Guinness Peat Overseas Holdings Tucan Financial Inc. Limited Turners & Growers Limited Haladin Pty Limited Turners & Growers Horticulture Horticultural Access Solutions Limited Limited Turners Flower Exports Limited Husky NDT Technologies Limited Valley Fixings Limited International Fruit Services Limited WHS Limited (in liquidation) Ithaca (Custodians) Limited WHS Hong Kong Limited (in Ithaca Investments Limited liquidation) Kerifresh Limited Willie Nille Pty Limited Kuvondo Limited Willow Valley Products P/L Littleport Pty. Limited Worldwide Fruit Limited Lowan Australia Limited Z E (Predecessors) Limited Lowan Whole Foods P/L

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A ndix B- In ndent Ex rt's R rt ppe depe pe epo

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MMC Contrarian Limited

Independent expert’s report

16 September 2008

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16 September 2008

The Independent Directors MMC Contrarian Limited Level 8, 34 Hunter Street Sydney NSW 2000

Dear Sirs

INDEPENDENT EXPERT’S REPORT

Introduction

MMC Contrarian Limited (“ MMA ” or the “ Company ”) is to issue a notice to its shareholders in relation the following proposals (“ Proposals ”):

the sale by HGL Limited (“ HGL ”) (“ Acquisition ”) of up to 34,383,611 fully paid ordinary shares (“ Shares ”) in MMA, (“ Sale Securities ”) to Guinness Peat Group (Australia) Pty Limited (“ GPGA ”), an entity that is wholly owned by Guinness Peat Group plc (“ GPG ”);
The consideration for the Acquisition (“ Consideration ”) per Share will effectively comprise cash equal to the Buy-back Tender Price (refer below), discounted by 12.66% but only if such price is 58 cents or greater per Share (see purchase price in paragraph 1.1 below); and
an equal access Share buy back (“ Buy-back Tender ”) on the following terms:
up to $75 million of Shares at a price per Share (“ Buy-back Tender Price ”) comprising cash equal to the net tangible asset backing (“ NTA ”) per Share before tax (plus the amount per Share of goodwill and other intangibles in respect of any business acquired between 30 July 2008 and 30 September 2008) as at either 30 September 2008 or 31 October 2008 (depending upon the date of the general meeting of MMA to consider the Proposals) (“ NTA Calculation Date ”);
a scale back mechanism may apply whereby, if a shareholder of MMA (“ Shareholder ”) nominates more than 250 Shares, MMA will buy back the first 250 Shares and will then scale back pro rata all acceptances of more than 250 Shares so that the total price of all Shares bought back at the Buy-back Tender Price does not exceed $75 million;
shareholders who hold 250 Shares or less will be required to nominate all their Shares to be bought back if they wish to participate in the Buy-back Tender; and
otherwise on an equal access basis.

The Proposals are conditional on (among other matters):

MMA's Shareholders other than HGL, GPGA and their associates (“ Non Associated Shareholders ”) duly authorising in general meeting (“ Shareholders Meeting ”) by ordinary resolution (“ Resolutions ”) each of the following:

PKF is a national association of independent chartered accounting and consulting firms, each trading as PKF. PKF Australia Ltd is also a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

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the Acquisition pursuant to exception Item 7 of Section 611 of the Corporations Act 2001 (Cth) (“ Act ”) (“ Acquisition Resolution ”); and
MMA to conduct the Buy-back Tender (“ Buyback Resolution ”).

In addition to the above, the MMA board is to release on or before the date the Resolutions are duly passed by MMA's members all affected shares (and their holders) from the remaining restrictions imposed on them under the Share Purchase Agreement entered into in November 2006 between Evanalex Holdings Pty Limited, HGL, HGL Company Two Pty Limited, Peter Constable, Western Pacific Investments Pty Limited, Eric Metanomski, MMA and MMC Asset Management Limited).

The independent directors of MMA have requested PKFCA to prepare an independent expert’s report (this report (“ Report” )) to provide to Shareholders to assist them in assessing the merits of the Proposals and to satisfy the requirements of the Act and Australian Stock Exchange (“ ASX ”) listing rules (“ Listing Rules ”) – refer to paragraph 2.1 below.

Summary of Conclusions

In the opinion of PKFCA:

the advantages of the Acquisition outweigh the disadvantages;
the Buy-back Tender is fair and reasonable to the Non Associated Shareholders; and
the Buy-back Tender will not materially prejudice MMA’s ability to pay its creditors.

In forming this opinion, PKFCA considered the following:

Assessment of the fairness of the Consideration – Sale Securities

We have assessed the value of the Sale Securities to be in the range of a low of 62.70 cents per Share to a high of 66.86 cents per Share, with a midpoint of 64.78 cents per Share. This compares to our current estimate of the Consideration for one Sale Security of 62.07 cents per Share. We note that the assessed value of a Sale Security is marginally higher than the assessed value of the Consideration per Share.

In forming our opinion, we note the following:

we have assessed the value of the Consideration as 21 August 2008, being the latest date of available information prior to the finalisation of this Report. We note that given the nature of MMA’s assets, it is likely that there would be a change in the value of MMA’s underlying assets and accordingly, the value of both the Shares and the Consideration is likely to vary between the date of the information contained in this Report and both the NTA Calculation Date and completion of the Proposals. However, based on the valuation methodology (as outlined in our Report) adopted in valuing the Sale Securities, we would not expect that our opinion would alter; and
in valuing the Sale Securities we have taken into consideration a suitable allowance for significant influence. The allowance reflects GPG’s increased percentage shareholding of MMA from 15.59% to approximately 29.13% (assuming that GPG participates fully in the Buyback Tender or a maximum of 30.4% (under the terms of the Implementation Agreement (refer paragraph 1.1 below) depending upon acceptances of the Buy-back Tender.

In our opinion, if the Proposals are implemented:

GPG will not obtain control of MMA and accordingly, whether or not GPG is paying a control premium is not a relevant consideration;

MMC Contrarian Limited – Independent Expert Report

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GPG will obtain a position of influence over MMA. As the assessed value of the Sale Securities is somewhat less than the assessed value of a Share (on a basis of a premium for significant influence), in our opinion, this indicates that while GPG is paying some premium for obtaining a position of significance over MMA, it is not paying what we would regard as a full premium for such influence.

Assessment of the fairness of the Buy-back Tender

We have assessed the amount to be paid to all Shareholders (excluding the employees) under the Buy-back Tender to be 70.64 cents per Share. This amount represents the pre tax NTA per Share (excluding Executive Share Plan (“ ESP ”) Shares) as at the date of this Report that will be paid to Shareholders accepting the Buy-Back. By comparison, our assessment of a minority value of a Share, which is the value applicable to the Shares of the Non-Associated Shareholders, is in the range of 59.72 cents (low) and 62.49 cents (high) with a mid-point of 61.10 cents per Share. On this basis, the Buy-back Tender is fair, as the Buy-back Tender Price exceeds our assessed value.

Advantages of the Proposals to Non Associated Shareholders

In forming our opinion as to whether or not the advantages outweigh the disadvantages in relation to the Proposals, we have taken into consideration the current strategy of the Company which is to diversify itself from its existing operations into a broader wealth management company. With this background, we set out below the following advantages and disadvantages.

Elimination of potential overhang of HGL shares

HGL currently owns the Sale Securities (i.e. approximately 13.84% of all Shares), which it has advised that it wishes to dispose. In our opinion, the disposal of the Sale Securities to GPG in the agreed form as set out in the Proposals, provides for an orderly realisation of the Sale Securities and avoids the potentially adverse impact on the Share price of these Shares being sold in the market place, particularly given MMA’s historical trading volumes of Shares over the last twelve months trading of MMA Shares, during which there was turnover in the Shares of approximately 22%.

GPG as the new major shareholder with a proven track record in financial services

GPG is a major public listed company with a market capitalisation of $1.59 billion (as at 5 September 2008). GPG has had a long and successful history of investing in a diversity of businesses and in particular in investing in companies in the financial services sector,

Up until April 2007, GPG was a significant shareholder with board representation of a public company known as Australian Wealth Management Limited (“ AWM ”), a large independent provider of financial services. During the period of GPG ownership, AWM significantly increased its FUM and profitability which generally resulted in strong returns for AWM shareholders.

Prior to the investment in AWM, GPG was the major shareholder of a former listed company known as Tyndall Australia Limited (“ Tyndall ”). Tyndall operated in the area of funds management and life insurance and GPG ownership period extended from 1991 to 1999. Tyndall experienced strong growth in its business lines and profitability in the period of GPG’s ownership and was ultimately the subject of a successful takeover offer which delivered strong financial returns for most shareholders.

As set out in this Report, GPG has a demonstrated track record of providing support and guidance to financial services companies with a resultant positive outcome for a number of those shareholders.

Based on the above , GPG is considered to be an entity which is capable of making a contribution to MMA, not only in the form of provision of capital, but also, management and board expertise, all of which should assist in MMA’s medium to long term success.

MMC Contrarian Limited – Independent Expert Report

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Participate in an evolution in strategy

The MMA executive team recently has changed significantly and the current executive team have a history in the wealth management business. This experience is different from the traditional listed investment corporation (“ LIC ”) business (“ LIC Business ”). The MMA board has announced that they intend MMA to undertake an evolution in strategy whereby MMA diversifies itself from being a largely LIC Business and moves to become an integrated financial services company. This strategy is supported by GPG and as noted above, GPG has had a history of success in this particular area.

Our Report undertakes a review of the LIC, funds management and financial planning industries. Based on this review of the three industries it is clear that the financial planning industry potentially offers the greatest opportunity for growth and expansion and more importantly, is considered to be subject to the least amount of business volatility.

We note that the diversification of MMA through the establishment or acquisition of a financial services business or businesses is not expected to be adversely impacted by the reduction in capital arising via the Buy-back Tender. It is expected that the remaining assets within MMA should be sufficient to allow it to proceed with this strategy. It is also noted that MMA has no debt facilities in place which will enable it to finance any potential future acquisitions. Based on a review of GPG’s history, it has a propensity to support its associates and or controlled entities in the financing of certain acquisitions.

Ability for Non-Associated Shareholders to realise part of their investment in MMA, without transaction costs

By approving the Proposals, the Non-Associated Shareholders will allow the Buy-back Tender to be implemented and Non-Associated Shareholders will have the opportunity to reduce their investment in MMA by an effective 70.64 cents per Share bought back. This will allow Non-Associated Shareholders to realise part of their investment with no transaction costs and to redeploy such funds into other activities, whilst at the same time allowing them to retain an investment in MMA, albeit at a reduced level.

Avoiding market discount

As outlined in this Report, MMA like all other LICs trades at a discount. The implementation of the Buy-back Tender will allow the Non-Associated Shareholders to receive part of their investment without incurring the above discount.

Minimal impact to current operations

We understand that GPG has no intention to alter the operations of MMA and as a result MMA will continue its current strategy of participation in wealth management business.

Minimise the potential impact in the future from volatile earnings

The current state of capital markets both in Australia and around the world suggests that volatility will continue in the short to medium term. The approval of the Proposals will affirm the board and the management strategy of expanding its current operations by diversifying into the wealth management business that has the potential to provide sustainable revenue streams.

Potential improvement to Earnings per Share

The Proposals have the potential to improve the earnings per Share as the recently announced business strategy may outperform the previous business strategy.

Positive impact on the post tax NTA

The effect of the Proposals will increase the post tax NTA per Share from 74.19 cents (before the Buyback Tender) to 76.72 cents (after Buy-back Tender is implemented).

MMC Contrarian Limited – Independent Expert Report

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Disadvantages to Non Associated Shareholders

Reduced cash resources

Implementing the Proposals, and in particular the Buy-back Tender, will reduce the cash resources of MMA. This will reduce the level of funds invested and as noted in this Report, the market trading prices of shares in LICs that have a smaller capital base generally suffer a greater level of discount to NTA per share. This may have adverse consequences for MMA going forward, if the new business strategy is not successful or is delayed in implementation.

Potential reduction of Share liquidity

Implementing the Proposals will increase GPG’s Shareholding to an estimated 29.13% (assuming all Shareholders participate equally in the Buy-back Tender) and a capped amount of 30.4% (that may vary depending upon the participation of Shareholders in the Buy-back Tender). As a result, the trading liquidity of MMA Shares may reduce, although it is acknowledged that with the current arrangements of GPG and HGL being the major shareholders of MMA it is arguable as to whether or not there would be any detrimental effect on the Share price. However, if the Sale Securities were sold to other investors this would be likely to have the effect of improving liquidity in Share trading.

Disincentive for future takeover

GPG’s increased Shareholding to between an estimated 29.13% (assuming all Shareholders participate equally in the Buy-back Tender) and a capped amount of 30.4% (that may vary depending upon the participation of Shareholders in the Buy-back Tender), will be significant and could adversely impact any potential for a future takeover bid for MMA.

Potential for achieving value for MMA as a listed vehicle

MMA is a listed entity that may provide a number of advantages to participants in the financial services industry that may wish to list their business in the future. Accordingly, there may be an opportunity for Shareholders to obtain value from such prospective parties. The diversification of MMA’s operations may affect the ability to realise such value. It is noted that as at the date of this Report, there are no proposals or offers for such an arrangement.

Implications if the Proposals do not proceed

If the Proposals do not proceed, HGL will remain as a shareholder of MMA. It is unclear as to what HGL’s plans then may be in relation to its Sale Securities. However, based on the fact that HGL has indicated a strong willingness to sell the Sale Securities, we believe that it is more likely than not that the Share price will be adversely affected in the short to medium term as HGL will be considered as a seller and the Sale Securities will form an “overhang” of Shares, until they are sold. In addition, under such circumstances it is not clear as to whether or not HGL would support any future change of business strategy (including acquisitions) that may be proposed by management and/or the rest of the board. This could also have an adverse effect on MMA.

If the Proposals do not proceed, in the absence of any other compelling alternate proposal, the market trading price of the Shares may fall.

Conclusion

Based on the above, in our opinion, the advantages of the Proposals to Non Associated Shareholders outweigh the disadvantages.

The Proposals have the effect of bringing stability to the Shareholder base, some management expertise and past experiences in previous investments of a similar nature made by GPG, which will assist in the long term growth of MMA. As noted above, not approving the Proposals could potentially impact upon MMA implementing the board’s desired strategy of diversifying the business.

MMC Contrarian Limited – Independent Expert Report

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This Report has outlined the various advantages and disadvantages for Non Associated Shareholders of accepting the Proposal. In particular, we note that the directors have actively sought, reviewed and investigated alternative transactions for some time and that currently there is no alternative proposal that the board considers appropriate to submit to Shareholders.

Non Associated Shareholders circumstances

PKFCA has not considered the effect of the Proposals on the particular circumstances of individual Non Associated Shareholders. Some individual Non Associated Shareholders may place a different emphasis on various aspects of the Proposals from that adopted in this Report. Accordingly, individuals may reach different conclusions as to whether or not the Proposals are in their individual best interests.

The decision of an individual Non Associated Shareholder in relation to the Proposals may be influenced by their particular circumstances and accordingly, Non Associated Shareholders are advised to seek their own independent advice.

Other Matters

This Report has been requested by the Independent Directors to assist the Non Associated Shareholders in their decision to accept or reject the Proposals. This Report should not be used for any other purpose and PKFCA does not accept any responsibility for its use outside this purpose. Except in accordance with the stated purpose, no extract, quote or copy of this Report, in whole or in part, should be reproduced without our prior written consent, as to the form and context in which it may appear.

PKFCA has provided its consent for this Report to accompany the notice of meeting and Explanatory Statement (“ Explanatory Statement ”) to be provided to Shareholders by the Directors. Apart from this Report, PKFCA is not responsible for the contents of the Explanatory Statement or any other document associated with the Proposal. PKFCA acknowledges that this Report may be lodged with ASX.

Report

This Summary should be read in conjunction with the Report that sets out in full the purpose, scope, basis of evaluation, limitations, valuation analysis and our findings.

A financial services guide is attached.

Yours sincerely

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Vince Fayad Director

MMC Contrarian Limited – Independent Expert Report

Page 7 of 92

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INDEPENDENT EXPERT’S REPORT .................................................................................................................... 2	INDEPENDENT EXPERT’S REPORT .................................................................................................................... 2	INDEPENDENT EXPERT’S REPORT .................................................................................................................... 2
1	OVERVIEW .................................................................................................................................................... 10
	1.1	AGREEMENTS......................................................................................................................................... 10
	1.2	CONDITIONALITY OFPROPOSALS.............................................................................................................. 11
	1.3	SHARES INCLUDED IN CALCULATION OF NET ASSETS(“NA”)AND NET TANGIBLE ASSETS(“NTA”)PERSHARE.... 12
	1.4	GPG GROUPSHAREHOLDING AFTERPROPOSALS...................................................................................... 14
2	PURPOSE AND SCOPE OF THE REPORT .................................................................................................. 16
	2.1	PURPOSE OF REPORT.............................................................................................................................. 16
	2.2	BASIS OF ASSESSMENT............................................................................................................................ 20
	2.3	RELIANCE ONINFORMATION..................................................................................................................... 22
	2.4	CURRENTMARKETCONDITIONS............................................................................................................... 22
	2.5	SOURCES OFINFORMATION...................................................................................................................... 22
3	INDUSTRY REVIEW ...................................................................................................................................... 23
	3.1	INTRODUCTION....................................................................................................................................... 23
	3.2	LIC ....................................................................................................................................................... 23
	3.3	FUNDSMANAGEMENT.............................................................................................................................. 26
	3.4	GENERAL FINANCIAL PLANNING AND INVESTMENT ADVICE............................................................................ 32
4	MMC	CONTRARIAN LIMITED ...................................................................................................................... 37
	4.1	OVERVIEW............................................................................................................................................. 37
	4.2	COMPANYOBJECTIVES............................................................................................................................ 37
	4.3	INVESTMENTPHILOSOPHY....................................................................................................................... 39
	4.4	PROFILE OFCURRENTPORTFOLIO............................................................................................................ 39
	4.5	FUNDSMANAGEMENTBUSINESSES.......................................................................................................... 43
	4.6	KEY PERSONNEL..................................................................................................................................... 44
	4.7	STRENGTHS,WEAKNESSES,OPPORTUNITIES AND THREATS......................................................................... 45
	4.8	CAPITALSTRUCTURE.............................................................................................................................. 46
	4.9	SHARE PRICE ANALYSIS........................................................................................................................... 47
	4.10	CONCLUSION ONMMA SHAREPRICEPERFORMANCE............................................................................ 50
5	MMC	CONTRARIAN LIMITED FINANCIAL INFORMATION ........................................................................ 51
	5.1	PROFITABILITY........................................................................................................................................ 51
	5.2	BALANCE SHEET..................................................................................................................................... 52
	5.3	CASHFLOWS........................................................................................................................................... 53
6	BACKGROUND TO GPG .............................................................................................................................. 54
	6.1	OVERVIEW............................................................................................................................................. 54
	6.2	MATERIAL INVESTMENTS.......................................................................................................................... 56
	6.3	KEY PERSONNEL..................................................................................................................................... 57
	6.4	GPG - SHARE PRICE............................................................................................................................... 58
	6.5	REVIEW OFGPGPAST INVESTMENTS....................................................................................................... 60
7	VALUATION METHODOLOGIES .................................................................................................................. 62
	7.1	VALUATION APPROACH............................................................................................................................ 62
	7.2	DEFINITION OF VALUE.............................................................................................................................. 62
8	VALUATION OF MMA ................................................................................................................................... 63
	8.1	NETREALISABLEASSET(NRA) VALUATION.............................................................................................. 63
	8.2	VALUATION OF THELIC BUSINESS............................................................................................................ 63
	8.3	PREMIUM/DISCOUNT TONTA ................................................................................................................... 68
	8.4	VALUATION OF THELIC BUSINESS............................................................................................................ 73
	8.5	VALUATION OFMANAGEMENTRIGHTS....................................................................................................... 73
	8.6	PREMIUM FOR SIGNIFICANT INFLUENCE...................................................................................................... 75
	8.7	VALUATION CONCLUSION......................................................................................................................... 76
	8.8	SHAREVALUATIONCROSSCHECK........................................................................................................... 77

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9	IMPACT	ON CREDITORS ............................................................................................................................. 78
	9.1 BASIS OF ASSESSMENT............................................................................................................................ 78
	9.2 ASSESSMENT......................................................................................................................................... 78
	9.3 CONCLUSION.......................................................................................................................................... 78
10	EVALUATION ................................................................................................................................................ 79
	10.1	COMPARISON OF VALUES– SALESECURITIES........................................................................................ 79
	10.2	ASSESSMENT OF THE FAIRNESS RELATING TO THEBUY-BACKTENDER..................................................... 79
	10.3	ADVANTAGES AND DISADVANTAGES OF THEPROPOSALS TONONASSOCIATEDSHAREHOLDERS................. 79
	10.4	_DISADVANTAGES_TONONASSOCIATEDSHAREHOLDERS......................................................................... 81
	10.5	IMPLICATIONS IF THEPROPOSALS DO NOT PROCEED............................................................................... 82
	10.6	CONCLUSION..................................................................................................................................... 82
11	QUALIFICATIONS DECLARATIONS AND CONSENTS .............................................................................. 83
	11.1	QUALIFICATIONS................................................................................................................................. 83
	11.2	INDEPENDENCE.................................................................................................................................. 83
	11.3	DISCLAIMER....................................................................................................................................... 84
APPENDIX 1		SOURCES OF INFORMATION .................................................................................................. 85
APPENDIX 2		VALUATION METHODS............................................................................................................. 86
APPENDIX 3		LIC AVERAGE PREMIUMS/DISCOUNTS TO NTA ................................................................... 88
APPENDIX 4		LIC PREMIUM/DISCOUNT TO NTA ........................................................................................... 89
APPENDIX 5		FUND MANAGEMENT TRANSACTIONS .................................................................................. 91
APPENDIX 6		LIC TRANSACTIONS ................................................................................................................. 92

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1 OVERVIEW

1.1 Agreements

MMA, GPGA and HGL have entered into an Implementation Agreement and GPG Australia and HGL have entered into a Share Sale Agreement (“ SSA ”).

Implementation Agreement

Under the Implementation Agreement, in summary among other things:

MMA must undertake all necessary steps to arrange for a Shareholder meeting to consider the Proposals, and if approved, implement the Buy-back Tender;
GPGA may not tender any Shares into the Buy-back Tender unless and until the total number of Shares tendered into the Buy-back Tender by all Shareholders who are able to participate in the Buy-back Tender other than HGL and GPGA (“ Other Shareholders ”) exceeds 30% of all Shares held by Other Shareholders.
if, immediately following completion of:
the Buy-back Tender (including any scale back that may be implemented under the terms of the Buy-back Tender); and
the Acquisition,

GPGA would hold more than 30.4% of the Shares, then GPGA must tender such number of Shares into the Buy-back Tender that will ensure that GPGA does not hold more than 30.4% of the Shares following completion of the Buy-back Tender (including any scale back that may be implemented under the terms of the Buy-back Tender) and the Acquisition; and

MMA must:
withdraw the Acquisition Resolution and the Buyback Resolution if the SSA is terminated prior to the holding of the Shareholders Meeting;
not give effect to the Buyback Resolution if the Acquisition Resolution is not passed by Shareholders;
not give effect to the Acquisition Resolution if the Buyback Resolution is not passed by Shareholders; and
enter into a deed with HGL on the Completion Date to terminate the HGL agreement dated 1 February 2007.

SSA

Under the SSA, in summary among other things:

HGL will sell to GPGA and GPGA will purchase the Sale Securities (minus any shares bought back from HGL by MMA pursuant to the Buy-back Tender), on the terms and conditions contained in the SSA if, and only if:
the NTA Amount (less a discount of 12.66%) per Sale Security on the NTA Calculation Date is $0.58 or greater; and
MMA’s members resolve:
- (i) to conduct the Buy-back Tender on the terms set out in the SSA; and
- (ii) approve the Acquisition; and
the effective Purchase Price for the Sale Securities is the NTA amount less a discount of 12.66%, multiplied by 34,383,611 less the total amount HGL would have been entitled to receive from MMA if HGL had it tendered 30,030,645 shares into the buy back;
HGL may tender up to 30,030,645 Sale Securities (“ Tender Securities ”) into the Buyback Tender; and

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the MMA board releases the various escrowed shares referred to in paragraph 4.8 below.

1.2 Conditionality of Proposals

We note that the Proposals are conditional upon the necessary Resolutions being approved by the Non Associated Shareholders and the Acquisition and Buy-back Tender proceeding once the Resolutions are approved.

We note that clause 2.1 of the SSA provides for a number of conditions precedent, including the following:

The provisions of this agreement, other than this clause 2, and clauses 6 to 7 to (inclusive) do not bind the parties until the following conditions are fulfilled:

		*Party* *entitled*
	*Conditions*	*to benefit*
1	The NTA Amount less a discount of 12.66% is 58 cents or greater.	The Vendor
2	The board of the Company resolves to:	The Vendor and
	(1) call a meeting of the Company's members to consider approving the	the Purchaser
	Resolutions; and
	(2) release all Escrow Securities from the Escrow Arrangements on or before the
	date the Resolutions are duly passed by the Company in general meeting.
3	Each of the Resolutions is duly passed by the Company in general meeting.	The Vendor and
		the Purchaser
4	In summary, no objections under foreign investment regulations	The Purchaser

Clause 2.2(b) of the SSA provides:

For clarity, if the NTA Amount less a discount of 12.66% on the NTA Calculation Date is not 58 cents or greater, and the Vendor does not waive that condition precedent, the Vendor shall not be obliged to sell and the Purchaser shall not be obliged to purchase the Sale Securities and this agreement shall terminate automatically.

Clause 2.4 of the SSA provides:

Either party may terminate this agreement by written Notice to the other if the Conditions Precedent are not fulfilled by 5.00pm on the Target Date [being 3 months after the date of the SSA] .

Right of ESP Shares to participate in the Buy-back Tender

MMC has issued Shares under the MMC Contrarian Limited ESP governed by Plan Rules dated 23 May 2007 (“ ESP Rules ”).

We note that clauses 8.2 and 8.3 of the ESP Rules provide:

8.2 If Shares are issued under this Plan, they will, from the date of allotment, rank equally with all other issued Shares in all respects including with respect to voting rights and entitlements to participate in dividends, future rights and bonus issues. These rights apply even if the Shares are subject to the Holding Lock.

8.3 If the Shares are listed on the ASX or another stock exchange the Company will make application to the ASX or the other stock exchange for official quotation of Shares issued under the Plan in accordance with Applicable Law.

We understand that while the Act requires that invitations under the Buy-back Tender must be extended to all participants who hold ESP Shares, these participants will not be able to accept the invitation as they are bound by the contractual terms of the ESP Rules that impose a “holding lock” for a period (clause 9 of the ESP Rules) that is in place for a period of up to ten (10) years

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from the date the ESP Shares are allocated to the participant. While the holding lock is in place, participants may not transfer or deal with their ESP Shares.

1.3 Shares included in calculation of net assets (“NA”) and net tangible assets (“NTA”) per Share

The latest available Australian Securities and Investments Commission (“ ASIC ”) Form 484 Issue and Cancellation of Shares dated 28 July 2008 lodged by MMA with the ASX indicates that MMA has 248,407,825 Shares currently on issue (“ Total Shares ”). Accordingly, the Sale Securities represent 13.84% of the Total Shares (34,383,611 ÷ 248,407,825). From various announcements made by MMA to the ASX, we calculate that the Total Shares are allocated as follows:

Table 1: Shares

	Number
Total Shares as at 28 July 2008 Less: Current ESP Shares Total non-ESP Shares	248,407,825 3,300,000
	245,107,825

Source: MMA

We note that clause 1.1 of the SSA provides as follows:

Purchase Price means the NTA Amount less a discount of 12.66%, multiplied by 34,383,611 less the total amount that HGL would have been entitled to receive from MMA if it had tendered the maximum possible number of the Tender Securities into the Buy-Back.

NTA Amount means the Company's net tangible assets before tax (plus the amount of any acquisition goodwill or other intangibles in respect of any business legally and beneficially acquired between [30 July 2008] and NTA Calculated Date [30 September 2008] ) determined on the NTA Calculated Date [30 September 2008] as calculated and announced to ASX Limited by the Company using the same calculation method the Company has utilised in calculating its NTA for the six month period ending on 31 August 2008 (but for the goodwill and other intangibles calculation which will be determined by the Auditor in accordance with Accounting Standards), divided by the number of issued Securities.

Security means one issued ordinary share in the capital of the Company, but excluding any ordinary shares issued to employees of the Company under the Company's executive share plan.

We note that the monthly announcements to the ASX by MMA of net assets and net tangible assets exclude the ESP Shares from the per Share calculations.

We understand that it is intended under the Proposals that the pre-tax NTA calculation per Share for the purposes of calculating the Purchase price will exclude ESP Shares.

For the purposes of this Report:

all calculations herein involving provisions of the Act include the ESP Shares, as they are classified as voting shares under the Act;
we understand that under the Proposals, the ESP Shares are excluded from the Buyback Tender and relevant calculations herein exclude the ESP Shares; and
our per Share valuation analysis includes those ESP Shares that we consider have met or are likely to meet the relevant performance criteria.

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We note that the ESP Rules allow for MMC to provide “Financial Assistance’ to ESP participants in the form of an interest-bearing loan that is repayable as follows:

11.6 The amount repayable will be calculated as follows:

(a) If Financial Assistance provided to a Participant becomes repayable after the Performance Conditions have been satisfied, the Company shall accept in full and complete satisfaction of the Participant’s indebtedness in relation to the Financial Assistance:

(i) the total amount of all moneys owing by the Participant to the Company in relation to the Financial Assistance; or

(ii) the transfer of the Shares held by the Participant to the Company; and

(b) if Financial Assistance provided to a Participant becomes repayable as a consequence of the Dismissal of the Participant or if the Performance Conditions have not been satisfied, the Participant must transfer the Participant’s Plan Shares to the Company. In such circumstances the Participant forfeits any entitlement to the surplus of the value of the Plan Shares over the Financial Assistance (if any) or any other benefit in respect of the Plan Shares.

11.7 If the value of the Shares transferred is less than the total amount of moneys owing under the Financial Assistance then no further amount of monies shall be repayable by the Participant to the Company and no further amount in relation to the Financial Assistance shall at any time be recoverable by the Company from the Participant.

11.8 If the Company sells any Shares in order to pay any money owing by the Participant to the Company and the proceeds of sale exceed the total amount owing to the Company by the Participant, the surplus shall be paid by the Company to the Participant.

By adopting the pre tax NTA as set out in paragraph 8.2 below, we set out below the number of Shares applicable to the Buy-back Tender:

Table 2: Buy-back Tender number of Shares calculation

Ref	Ref	Ref
Maximum Buy-back Tender amount ($’000s) Pre-tax NTA per Share (Cents) Number of Shares cancelled (000s)	8.2 8.2	75,000 70.64 106,176
Source: MMA Explanatory Statement, PKFCA analysis Note 1: The above makes no provision for the potential where HGL may not tender 4,352,966 Shares in the Buy- back Tender. Note 2: The number of Shares calculated above includes rounding effects.

We note that paragraph 2.6 of the Explanatory Statement sets out a worked example illustrating the number of shares that may be cancelled under the Buy-back Tender assuming a different pre-tax NTA.

Summary in regard to ESP Shares

We understand and have assumed that:

the ESP Shares will not participate in the Buy-back Tender;
the ESP Shares are accounted for as equivalent to employee share options under AASB 2 Share-based Payment . As part of this treatment, we understand that:
the assets comprising loans to employees to take up ESP Shares are not recorded as assets of MMC and are excluded from the calculation of NA and NTA;
the ESP Shares are excluded from the calculation of the NA and NTA per Share;

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it is intended under the Proposals that the pre-tax NTA calculation per Share for the purposes of calculating the Buy-back Tender Price and Discounted Buy back price will exclude ESP Shares (from the number of Shares) and the associated loans to employees (from the NA and NTA calculations); and
in all other respects, especially as regards dividend and voting rights, (and particularly for calculating percentages of voting shares under the Act), they will be treated (and included in any analysis) as if they are equivalent to a Share (refer clause 8.2 of the ESP Rules).

1.4 GPG Group Shareholding after Proposals

The Buy-back Tender of $75.0 million of Shares at a price of 70.64 cents per Share (at pre tax NTA) will result in approximately 106,175,851 Shares being bought back (75,000,000 ÷ 0.7064), representing approximately 42.74% of the Total Shares, as follows:

Table 3: Buy-back Tender Shares

As at 28 July 2008	Number
Total Shares Less: ESP Shares Shares eligible for Buy-back Tender (Eligible Shares) Buy-back Tender Shares Buy-back Tender Shares as % Total Shares Buy-back Tender Shares as % Eligible Shares	248,407,825 3,300,000
	245,107,825
	106,175,851 42.74% 43.32%
Source: MMA Management / PKFCA analysis

From the above, we note that the number of Share eligible for Buy-Back Tender excluding the ESP Shares amount to 245,107,825 (“ Eligible Shares ”). We understand from MMA management that GPG and its subsidiaries (“ GPG Group ”) has a relevant interest in 38,715,465 Shares (excluding the Sale Securities) (“ Existing Shares ”) representing 15.59% of the Total Shares (38,715,465 ÷ 248,407,825) and 15.8% of the Eligible Shares (38,715,465 ÷ 245,107,825).

If the Resolutions are passed and the Acquisition and Buy-back Tender are completed in accordance with their terms, the combined effect will be approximately as set out below.

assuming that all eligible Shareholders (including both HGL and GPG Group) participate equally in the Buy-back Tender, then (prior to the Acquisition occurring) GPG’s relevant interest in MMA would fall slightly to 15.43% (as a result of only the Eligible Shares participating in the Buy-back Tender); and
assuming the above and that the Acquisition occurs, then GPG’s relevant interest in MMA would increase from the existing 15.59% to 29.13%, calculated as in the table below:

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Table 4: All eligible Shareholders (including both HGL and GPG Group) participate equally in the Buy-back Tender

		Number of shares
Total Shares Less: Buy-back Tender Shares Revised Total Shares GPG Group Shareholding (Existing Shares) Less: Buy-back Tender Existing Shares after Buy-back Tender Sale Securities Less: Buy-back Tender Sale Securities after Buy-back Tender GPG Group Shares after Proposals GPG Group Shares after Proposals as % Revised Total Shares	43.32% of Eligible Shares 43.32% of Eligible Shares	248,407,825 (106,175,851)
		142,231,974 38,715,465 (16,770,772)
		21,944,693 34,383,611 (14,894,299)
		19,489,312
		41,434,005
		29.13%
Source: MMA Management / PKFCA analysis

We note that if GPG Group does not participate in the Buy-back Tender, but all other eligible Shareholders (including HGL) participate equally in the Buy-back Tender and the maximum Buyback Tender amount of $75.0 million is expended, then, but for the provision in the Implementation Agreement requiring GPG to tender Shares into the Buy-back Tender so as to limit GPG’s relevant interest to no more than 30.4% of the Shares (refer paragraph 1.1 above), GPG’s relevant interest in MMA would increase from the existing 15.59% to 38.96%, as calculated in the table below:

Table 5: GPG Group does not participate in Buy-back Tender

		Number of shares
Total Shares Less: Buy-back Tender Shares Revised Total Shares GPG Group Shareholding (Existing Shares) Sale Securities Sale Securities in Buy-back Tender GPG Group Shares after Proposals GPG Group Shares after Proposals as % Revised Total Shares	51.44% of holdings	248,407,825 (106,175,851)
		142,231,974
		38,715,465 34,383,611 (17,688,199)
		55,410,877
		138.96%
Source: MMA Management / PKFCA analysis Note 1: This calculation ignores GPG’s intent of having no more than 30.4% shareholding in MMA

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2 PURPOSE AND SCOPE OF THE REPORT

2.1 Purpose of report

2.1.1 Acquisition of more than 20% of MMA by GPG Group

Section 606 of the Act (“ Section 606 ”) restricts a person from acquiring a relevant interest in shares such that they would control 20% or more of the voting shares in a company without making a takeover offer.

Item 7 of Section 611 of the Act (“ Section 611 ”) provides an exception to Section 606 if the acquisition is approved at a general meeting by Non Associated Shareholders.

Section 611 does not require that an independent expert’s report be obtained in relation to such transactions. However, Section 611 specifies that shareholders are to be provided with all relevant information known to the person making the acquisition, their associates or MMA, which is material to the proposal. ASIC Regulatory Guide 111 “ Content of Expert Reports ” (“ RG 111 ”) specifies that a company may commission an expert report to supply all the material information to the shareholders or a director’s report to the same standard as an expert report if the directors have the expertise to do so.

2.1.2 Takeover offers

In the context of a takeover offer Section 640 of the Act requires an independent expert report (stating whether, in the expert's opinion, the takeover offers are fair and reasonable and giving the reasons for forming that opinion) to accompany a target’s statement if the bidder in a takeover offer is relevantly connected with the target:

the bidder's voting power in the target is 30% or more; or
for a bidder who is, or includes, an individual - the bidder is a director of the target; or
for a bidder who is, or includes, a body corporate--a director of the bidder is a director of the target.

The Act does not define the expression “fair and reasonable”. RG 111 defines the term and draws a distinction between the meaning of the terms “fair” and “reasonable”. An offer is “fair” if the value of the consideration is equal to, or greater than, the value of the securities subject to the offer. The comparison must be made assuming 100% ownership of the target company, irrespective of the percentage holding of the bidder or its associates in the target company.

RG 111 considers an offer to be reasonable if:

the offer is “fair”; or
despite not being fair, the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher offer.

RG 111 sets out some of the factors that an expert might consider in assessing the reasonableness of a proposal, including:

whether the vendor is to receive a premium for control;
whether the proposal offers a better long-term profit outlook (such as the incoming shareholder offering superior management skills);
whether there are further transactions planned for the entity and if any are contemplated, whether those transactions are arm’s length transactions; and
whether any proposed acquisition by way of sale, if approved, might deter the making of a takeover bid for the entity.

In the context of a takeover offer, RG 111.24 provides that there may be circumstances in which a party will acquire 20% or more of the voting power of the securities in the company but does not obtain a practical measure of control over that company.

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If the expert believes that the party has not obtained control over the company as a practical matter, then the expert could take this outcome into account in assessing whether the transaction price per Share is ‘reasonable’ if the expert has assessed the price as being ‘not fair’ applying the test in RG 111.10.

2.1.3 Control transactions involving purchase of securities other than by takeover offer

RG 111 impliedly assumes that obtaining 20% or more of an entity is equivalent to obtaining “control” of the entity. RG 111 requires that in a “control transaction”, a proposal should be analysed as if it was a takeover. We note that the Proposals will not result in a takeover offer for all Shares. However, the Proposals will result in GPG acquiring more than 20% of MMA.

In such circumstances, RG 111.39 and RG 111.40 provide that in the case of seeking approval under item 7 of s611 for a sale of securities that would otherwise contravene Section 606, the expert should:

identify the advantages and disadvantages of the proposal to Non Associated Holders; and
provide an opinion either that:
the advantages of the proposal outweigh the disadvantages; or
the disadvantages of the proposal outweigh the advantages; and
determine whether the vendor is to receive a premium for control.

RG 111.41 provides that the greater the control premium, the greater the advantages of the transaction to the non associated share holders would need to be to support a finding that the advantages of the proposal outweighed the disadvantages. These other advantages may come, for example, from a better long-term profit outlook as the incoming security holder offers superior management skills.

RG 111.42 provides that the expert should also inquire whether further transactions are planned between the entity, the vendor or any of their associates. If any are contemplated, the expert should determine whether those transactions would be on an arm’s length basis. If not, an implication arises that they may compensate a vendor for a price that is too low.

RG 111.43 provides that the expert should also consider whether any proposed acquisition by way of sale, if approved, might deter the making of a takeover bid for the entity.

In considering the advantages and disadvantages of the Proposals to the Non Associated Shareholders, we will consider the factors specified above and the following factors:

whether GPG will obtain or increase effective control over MMA as a practical matter;
a review of the potential impact of the Proposals upon:
the business operations of MMA;
the financial position of MMA;
MMA’s prospective earnings and dividends;
the level, liquidity and volatility of the MMA share price (including a review of the likely level, liquidity and volatility of the MMA share price in the absence of the Proposals);
the likelihood of a new business direction or potential transactions in the near future that would impact upon the value of the investment in MMA of Non Associated Shareholders;
the terms and conditions of the Buy-back Tender, including the value and form of consideration for the Buy-back Tender;
the likely consequences to Non Associated Shareholders of rejecting the Proposals; and

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an assessment of any other identified the advantages and disadvantages of the Proposals to Non Associated Shareholders and whether or not the advantages of the Proposals outweigh the disadvantages.

2.1.4 Buy-back Tender

The Buy-back Tender will be governed by:

Section 257D of the Act; and
the ASX Listing Rules (including Listing Rule 10.1).

2.1.5 The Act

Section 257A of the Act provides that a company may buy back its own shares if:

the buy-back does not materially prejudice the company's ability to pay its creditors; and
the company follows the procedures laid down in Division 2 of Part 2J.1 (the buy-back provisions) of the Act.

We understand that the Buy-back Tender will proceed subject to an exemption from the operation of Section 257D of the Act being granted to MMA under s 257D(4) of the Act, permitting MMA to:

conduct the buy back similarly to an equal access scheme but to allow MMA to make invitations rather than offers to buy back the Shares;
require Shareholders who hold 250 Shares or less to nominate all their Shares to be bought back by MMA if they wish to participate in the Buy-back Tender;
utilise a scale back mechanism whereby, if a Shareholder nominates more than 250 Shares, MMA will buy back the first 250 Shares and will then scale back pro rata all acceptances of more than 250 Shares so that the total price of Shares bought back does not exceed $75 million; and
not make buy back offers to Shareholders who reside in, or have a registered address in, foreign countries other than in those countries where MMA is aware that the laws of that country would allow the buy back offer or acceptances of the buy back offer.

Sub-section 257D (2) of the Act provides that a company must include with the notice of the meeting a statement setting out all information known to the company that is material to the decision how to vote on the resolution. However, the company does not have to disclose information if it would be unreasonable to require the company to do so because the company had previously disclosed the information to its shareholders.

Section 257D of the Act does not require that an independent expert’s report be obtained in relation to such transactions. However, ASIC Regulatory Guide 110 “ Share buy backs ” (“ RG 110 ”) paragraphs 110.18 and 110.20 of RG 110 indicate that if a company proposes to buy back a significant percentage of securities or the holdings of a major shareholder, it should consider providing an independent expert report with a valuation of the relevant shares and a report by its independent directors about whether shareholders should vote in favour of the buy-back, particularly regarding how much the company is paying for the shares and it is usually appropriate for shareholders to have the benefit of independent advice on whether to vote for a buy-back.

We note that the Buy-back Tender proposes buying back up to approximately 43.32% of the Total shares, which we consider is a significant percentage of securities of MMA. Further, it is possible that part of the holdings of GPG will be bought back, which we consider would involve buying back a significant percentage of the holdings of a major shareholder.

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Accordingly, RG 110 strongly encourages the provision of an independent expert report that provides:

a valuation of the relevant shares; and
independent advice on whether to vote for a buy-back.

2.1.6 The Listing Rules

ASX Listing Rule 10.1 requires the approval of an entity’s shareholders where it is proposed to acquire a substantial asset from, or dispose of a substantial asset to:

a related party or an associate of a related party;
a subsidiary or an associate of a subsidiary; or
a substantial shareholder or an associate of a substantial shareholder. A substantial shareholder is defined by the Listing Rules as a shareholder with a relevant interest at any time in the six months prior to the proposed transaction, in at least 5% of the total votes attached to the voting securities.

An asset is substantial if its value, or the value of the consideration for it, is or in ASX's opinion is, greater than 5% of the total (consolidated) equity interests of the entity as at the date of the last accounts given to ASX under the listing rules.

The following table sets out the equity interests of MMA as extracted from the MMA results for the year to 30 June 2008 (that will be the last accounts given to the ASX by the time of the meeting to consider the Proposals):

Table 6: MMA Equity Interests as at 30 June 2008

Equity	$’000
Issued capital Retained profits Asset revaluation reserve ESP reserve Equity attributable to equity holders of the parent Minority Interest Total Equity	220,233 (38,038) 504 121
	182,820 462
	183,282

Source: MMA Annual Report FY2008

Five percent (5%) of the “Equity attributable to equity holders of the parent” (of $182.82 million) is $9.1 million.

We note that under the Proposals, it is possible that part of the holdings of GPG will be bought back. The GPG Group currently has a relevant interest in 38,715,465 Shares (the Existing Shares).

On the assumption that GPG Group participates equally in the Buy-back Tender, up to approximately 16,770,772 Shares may be bought back from GPG, which at an assumed value of 70.64 cents each, constitutes an asset with a total value of approximately $11.8 million. This is more than the 5% limit of $9.1 million calculated above and would involve MMA acquiring a substantial asset from a substantial shareholder or an associate of a substantial shareholder. However, it is possible that GPG Group could sell more Shares under the Buy-back Tender, if other Shareholders do not participate to the maximum extent possible.

If GPG Group sold all its Existing Shares at the Buy-back Tender Price, then their value would be

approximately $27.3 million.

We also note that using this analysis, as part of HLG’s holding of 34,383,611 Shares will be bought back, that acquisition will be subject to approval under Listing Rule 10.1.

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Accordingly, we understand that as Listing Rule 10.1 will apply to the Buy-back Tender, MMA wishes to obtain the required Shareholder approval under Listing Rule 10.1.

Listing Rule 10.10 requires the notice of meeting under rule 10.1 must include each of the following:

Listing Rule 10.10.1: a voting exclusion statement; and
Listing Rule 10.10.2: a report on the transaction from an independent expert. The report must state whether the transaction is fair and reasonable to holders of the entity's ordinary securities whose votes are not to be disregarded. Unless the opinion is that the transaction is fair and reasonable, the opinion must be displayed prominently in the notice of meeting and on the covering page of any accompanying documents.

The Listing Rules do not define the term “fair and reasonable” and it is market practice to adopt the definition of that term in relevant ASIC Regulatory Guides.

The assessment of whether a proposed transaction is fair and reasonable to non associated security holders for the purposes of Listing Rule 10.1 has, historically, involved a comparison of the likely advantages and disadvantages for non associated shareholders if the proposed transaction is implemented with the advantages and disadvantages to those shareholders if it is not.

This approach was in accordance with paragraphs 74.20 to 74.29 of ASIC Regulatory Guideline 74. These paragraphs indicated that “fair and reasonable” was a single concept to be judged in all the circumstances of the transaction. RG 111 replaced, amongst other matters, paragraphs 74.20 to 74.29 of ASIC Regulatory Guide 74 and provides that a proposal under Item 7 of Section 611 involving the issue of securities to the vendor of a business should be analysed as if it were a takeover bid (i.e. a distinction is to be drawn between the terms “fair” and “reasonable”). In contrast, in relation to an proposal under Item 7 of Section 611 for the sale of securities, ASIC Regulatory Guide 111 requires an expert to provide an opinion as to whether the advantages of the proposal outweigh the disadvantages (i.e. there is no mention of the phrase “fair and reasonable”).

In our opinion, the most appropriate basis on which to evaluate the Proposals for the purposes of Listing Rule 10.1 is to assess the overall impact of the Proposals on Non Associated Shareholders and to form a judgement as to whether the whether the advantages of the Proposals outweigh the disadvantages to Non Associated Shareholders.

Accordingly, we will assess the proposed Buy-back Tender for the purposes of Listing Rule 10.1 on the same basis as the Proposal in respect of the Acquisition under Item 7 of Section 611 (i.e. to form a judgement as to whether the expected advantages of the Proposal to Non Associated Shareholders outweigh any disadvantages).

2.2 Basis of assessment

2.2.1 Overview

Having regard to the relevant regulatory requirements and the nature of the Proposals, we will evaluate the effect of implementing the Proposals in terms of their overall combined effects, assuming that each Proposal is implemented. However, we will also consider the implications of the Buy-back Tender proceeding in the absence of the Acquisition proceeding, given the previous discussion of the conditionality of the Proposals.

The regulatory requirements above discussed in detail indicate that:

a valuation of the Sale Securities is required;
the expert should:

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identify the advantages and disadvantages of the Proposals to the Non Associated Shareholders whose votes are not to be disregarded in voting on the resolutions relating to the Proposals (i.e. those not associated with a party to the transaction) and provide an opinion as to whether or not the advantages of the Proposals outweigh the disadvantages to Non-associated Holders;
consider whether the Consideration per Share for the Sale Securities is at a “fair” price;
consider whether the Buy-back Tender will be undertaken at a “fair” price;
determine whether the HGL as vendor under the Acquisition is to receive a premium for control from GPG Group as purchaser;
inquire whether further transactions are planned between MMA, the vendor, the purchaser or any of their associates. If any are contemplated, the expert should determine whether those transactions would be on an arm’s length basis. If not, an implication arises that they may compensate a vendor for a price that is too low; and
consider whether the Acquisition, if approved, might deter the making of a takeover bid for MMA.

2.2.2 Fairness test

We will form a view as to whether or not the Consideration for the Sale Securities is commensurate with the fair market value of the Sale Securities.

2.2.3 Advantages and disadvantages of the Proposals to Non Associated Shareholders

We will consider the above factors and an assessment of the advantages and disadvantages of the Proposals to Non Associated Shareholders and whether or not the advantages of the Proposals outweigh the disadvantages, which will include a review of:

whether GPG will obtain or increase effective control over MMA as a practical matter;
a review of the potential impact of the Proposals upon:
the business operations of MMA;
- the financial position of MMA;
MMA’s prospective earnings and dividends;
the level, liquidity and volatility of the Share price (including a review of the likely level, liquidity and volatility of the Share price in the absence of the Proposals);
the likelihood of a new business direction or potential transactions in the near future that would impact upon the value of the investment in MMA of Non Associated Shareholders;
the terms and conditions of the Buy-back Tender, including the value and form of Consideration; and
any other identified advantages and disadvantages of accepting or rejecting the Proposals.

2.2.4 Prejudice to creditors

We will also provide an opinion as to whether the Buy-back Tender would be likely to materially prejudice MMA’s ability to pay its creditors, such that the independent directors may rely on this opinion in their consideration of the Proposals.

In forming our opinion, we will consider factors such as the amount and nature MMA creditors, the pro-forma interest cover, working capital and gearing ratio of MMA assuming that the Proposals proceed.

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2.2.5 Other

We will not consider the effect of the Proposals on the particular circumstances of individual Shareholders. Some individual Shareholders may place a different emphasis on various aspects of the Proposals from those adopted in the report. Accordingly, individuals may reach different conclusions on whether or not the Proposals are fair and reasonable to them.

An individual Shareholder’s decision in relation to the Proposals may be influenced by their particular circumstances and, therefore, Shareholders will be advised in our report that they should seek independent advice.

2.3 Reliance on Information

This Report is based upon financial and other information provided by the Directors. PKFCA has considered and relied upon this information. PKFCA believes the information provided to be reliable, complete and not misleading, and we have no reason to believe that any material facts have been withheld.

The information provided was evaluated through analysis, inquiry and review for the purpose of forming an opinion as to whether the Proposal is fair and reasonable. PKFCA’s procedures involved an analysis of financial information and accounting records. This does not include verification work, nor does it constitute an audit or review in accordance with Australian Auditing and Assurance Standards.

Further, PKFCA does not warrant that its inquiries have identified or verified all of the matters which an audit, extensive examination or “due diligence” investigation might disclose. In any event, an opinion as to whether a corporate transaction is fair and reasonable is in the nature of an overall opinion rather than an audit or detailed investigation and it in is this context that PKFCA advises that it is not in a position nor is it practical for PKFCA to undertake such an extensive verification exercise.

It is understood that the accounting information provided to PKFCA was prepared in accordance with generally accepted accounting principles and, except where noted (including adoption of Australian Equivalents to International Financial Reporting Standards, prepared in a manner consistent with the method of accounting used by MMA in previous accounting periods.

Under the terms of PKFCA’s engagement, MMA has agreed to indemnify the partners, directors and staff (as appropriate) of PKFCA and PKF East Coast Practice and their associated entities, against any claim, liability, loss or expense, costs or damage, arising out of reliance on any information or documentation provided by the Directors which is false and misleading or omits any material particulars, or arising from failure to supply relevant information.

2.4 Current Market Conditions

Our opinion is based on economic, market and other conditions prevailing at the date of this Report. Such conditions can change significantly over relatively short periods of time and such changes may result in our opinion becoming outdated and in need of revision. PKFCA reserves the right to revise any valuation, or other opinion, in the light of material information existing at the date of this Report that subsequently becomes known to PKFCA.

2.5 Sources of Information

Appendix 1 of the Report identifies the information referred to, and relied upon, by PKFCA during the course of preparing this Report and forming our opinion.

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3 INDUSTRY REVIEW

3.1 Introduction

MMA’s LIC Business is primarily focused on Australian and New Zealand publicly listed companies with a secondary focus on the global funds management industry, following the establishment in June 2007 of Contrarian Global Asset Management (“ CGAM” ). MMA has a 50% shareholding in CGAM.

We also note that MMA’s audited financial report for the year ended 30 June 2008 announced a strategy of also entering the wealth management market in Australia.

For the purposes of this Report, PKFCA reviewed the various industries in which MMA may operate. A summary of the outcome of the review is set out below.

3.2 LIC

3.2.1 Overview

LIC are public companies listed on the ASX that provide exposure to a portfolio of investments on behalf of their shareholders. These investments may include Australian shares, international shares, fixed income securities, real estate, and unlisted companies or any combination of the foregoing.

LIC can be classified into four categories:

Australian shares - investing principally in shares listed on the ASX;
international shares - investing principally in shares listed on international stock exchanges;
private equity - investing in Australian or international unlisted private companies; and
specialist - investing in special assets or investment sectors such as wineries, technology companies, resources, real estate and telecommunications.

LIC are one of the oldest forms of managed investments, the first having been listed on the ASX in 1928. In recent years the LIC section of the managed investment sector has grown in size due to two main factors:

the realisation by investors that a listed entity may provide better information on the performance of the funds under management and level of management fees; and
the introduction in 2001 of an amendment to the Taxation legislation that allows LIC to pass onto shareholders discounted capital gains, thereby putting LIC on an equal footing with trust-based managed funds.

The investment techniques and operational characteristics of LIC differ substantially from one product to the next, and their investment approach can range from very conservative to aggressive.

The investment manager may either be internal or external (where a separate organisation is managing the portfolio under contract from the company). LIC are generally “closed-end”, meaning they do not regularly issue new shares or cancel shares as investors join and leave the entity. Instead, investors buy and sell on the ASX. This provides the manager of a LIC with an advantage over the manager of an unlisted investment vehicle. On the other hand, unlisted investment vehicles often are “open ended” with investors able to subscribe additional funds. Withdrawal rights vary and it is possible for managers to freeze redemptions of unlisted investment vehicles.

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3.2.2 Industry Participants

Currently, the LIC sector is dominated by several major players, a summary of which is set out below:

Table 7: Major Participants in the LIC sector

Participant Description	Participant Description
Argo Investments Limited Australian Foundation Investment Company Australian United Investment Company Limited Brickworks Investment Company Limited Carlton Investments Limited Choiseul Investments Limited Djerriwarrh Investments Limited Diversified United Investments Limited Milton Corporation Limited	Argo Investments Limited (“Argo”) was established in 1946 and listed on the ASX in 1950. Argo’s investment strategy is to provide safe, steady growth. Argo achieves this aim by investing in shares and securities of other listed companies and trusts, therefore providing a diversified portfolio. Argo’s goal is to identify well-managed businesses with the potential and ability to generate sustainable and growing returns in the medium to longer term. Argo while also heavily investing in blue chip stocks, also has a good reputation for identifying smaller companies in their growth phase and seeing them develop into larger companies or be taken over by market competitors. The Australian Foundation Investment Company (“AFI”) is Australia’s largest listed investment company that specialises in Australian equities. AFI was established in 1928 as they Were Investment Trust and was listed on the ASX in 1936. According to the AFI website, in relation to its investment philosophy it aims to broadly follow a medium to longer term view based on the certain selection criteria. AFI also has access to lines of credit and also uses options. The Australian United Investment Company Limited (“AUI”) was founded in 1953 and listed on the ASX in 1974. In 1991, AUI joined with Barclay Investments Pty Ltd to sponsor the listing of Diversified United Investment Limited (“DUI”) in order to offer existing investors and potential investors with the option of investing in a new portfolio of investments. AUI aim as an investment company is to reduce risk and improve income from dividends and interest over the longer term. AUI’s funds are primarily invested in Entities listed on the ASX. Brickworks Investment Company Limited (“Brickworks”) was a company formed in 2003 to formally manage the investment portfolio of Brickworks Limited. Brickworks listed on the ASX in 2003 and part of its main objective is to generate an increasing income stream for distribution to its shareholders. Its investment strategy is based around investing in long-term companies, trusts and securities which are well-managed and expect solid dividend and distribution growth. Brickworks is managed by Souls Funds Management Limited (“Souls”), which provides investment advisory services to the Board of Directors and its Investment Committee including day to day administration of the fund and also the implementation and execution of investment decisions. Carlton Investments Limited (“Carlton”) was incorporated in 1928 and was formed for the purpose of acquiring the capital of Carlton Hotel Limited and Ebenezer Investment Company Limited. Carlton subsequently listed on the ASX in 1971. Carlton manages primarily high-yielding blue chip shares which are traded on the ASX. Carlton’s investment strategy is focused around investing in companies with a high, fully franked and sustainable dividend yield. Carlton’s portfolio has a large exposure to the entertainment and leisure sectors. Carlton’s also has a large exposure to the banking sector. Choiseul Investments Limited (“Choiseul”) was established in 1911 and listed on the ASX in 1971. Choiseul invests in Australian shares, unit trusts and interest bearing securities. Choiseul’s investment strategy focuses around investing for the long-term in well managed companies and trusts with a solid profit and dividend history. Choiseul does not engage itself in speculating on assets with capital profits being reinvested by the company for the benefit or shareholders. Djerriwarrh Investments Limited (“Djerriwarrh”) is a LIC, whose investment strategy is to invest in Australian equities with a particular focus on the top 50 ASX shares rated by market capitalisation. Djerriwarrh uses exchange traded options written against the portfolio in order to enhance income returns to its investors. Djerriwarrh operates a diversified portfolio of approximately 60 companies and was established in 1989. Djerriwarrh listed on the ASX in June 1995. Diversified United Investments (“DUI”) was incorporated in 1987 under the name Rambutten Holdings Ltd, and in 1991 it took on the name Diversified United Investments following the Australian United Investment Company’s and Barclay’s Capital’s joint sponsorship of the floatation of DUI. DUI’s investment strategy is to invest in a diversified portfolio of Australian investments which exhibit a potential for long-term growth. DUI’s portfolio is mainly exposed to the Banking and Financial services sector. Milton Corporation Limited (“Milton”) is an investment company which was incorporated in 1938 and listed on the ASX in 1958. Milton’s investment strategy centres around investing in a diversified portfolio of companies, trusts and fixed-income securities and real property within the Australian market. Milton’s aim is to invest in well-managed companies and trusts with a solid profit history and a probability of sound dividend growth. Milton differentiates from other listed investment companies by trading at a reasonable level of liquidity.

Participant
Description

Argo
Investments
Limited
Australian
Foundation
Investment
Company
Australian
United
Investment
Company
Limited
Brickworks
Investment
Company
Limited
Carlton
Investments
Limited
Choiseul
Investments
Limited
Djerriwarrh
Investments
Limited
Diversified
United
Investments
Limited
Milton
Corporation
Limited

Argo Investments Limited (“Argo”) was established in 1946 and listed on the ASX in 1950. Argo’s
investment strategy is to provide safe, steady growth. Argo achieves this aim by investing in
shares and securities of other listed companies and trusts, therefore providing a diversified
portfolio. Argo’s goal is to identify well-managed businesses with the potential and ability to
generate sustainable and growing returns in the medium to longer term. Argo while also heavily
investing in blue chip stocks, also has a good reputation for identifying smaller companies in their
growth phase and seeing them develop into larger companies or be taken over by market
competitors.
The Australian Foundation Investment Company (“AFI”) is Australia’s largest listed investment
company that specialises in Australian equities. AFI was established in 1928 as they Were
Investment Trust and was listed on the ASX in 1936. According to the AFI website, in relation to
its investment philosophy it aims to broadly follow a medium to longer term view based on the
certain selection criteria. AFI also has access to lines of credit and also uses options.
The Australian United Investment Company Limited (“AUI”) was founded in 1953 and listed on
the ASX in 1974. In 1991, AUI joined with Barclay Investments Pty Ltd to sponsor the listing of
Diversified United Investment Limited (“DUI”) in order to offer existing investors and potential
investors with the option of investing in a new portfolio of investments. AUI aim as an investment
company is to reduce risk and improve income from dividends and interest over the longer term.
AUI’s funds are primarily invested in Entities listed on the ASX.
Brickworks Investment Company Limited (“Brickworks”) was a company formed in 2003 to
formally manage the investment portfolio of Brickworks Limited. Brickworks listed on the ASX in
2003 and part of its main objective is to generate an increasing income stream for distribution to its
shareholders. Its investment strategy is based around investing in long-term companies, trusts and
securities which are well-managed and expect solid dividend and distribution growth. Brickworks is
managed by Souls Funds Management Limited (“Souls”), which provides investment advisory
services to the Board of Directors and its Investment Committee including day to day administration
of the fund and also the implementation and execution of investment decisions.
Carlton Investments Limited (“Carlton”) was incorporated in 1928 and was formed for the purpose
of acquiring the capital of Carlton Hotel Limited and Ebenezer Investment Company Limited. Carlton
subsequently listed on the ASX in 1971. Carlton manages primarily high-yielding blue chip shares
which are traded on the ASX. Carlton’s investment strategy is focused around investing in
companies with a high, fully franked and sustainable dividend yield. Carlton’s portfolio has a large
exposure to the entertainment and leisure sectors. Carlton’s also has a large exposure to the
banking sector.
Choiseul Investments Limited (“Choiseul”) was established in 1911 and listed on the ASX in 1971.
Choiseul invests in Australian shares, unit trusts and interest bearing securities. Choiseul’s
investment strategy focuses around investing for the long-term in well managed companies and
trusts with a solid profit and dividend history. Choiseul does not engage itself in speculating on
assets with capital profits being reinvested by the company for the benefit or shareholders.
Djerriwarrh Investments Limited (“Djerriwarrh”) is a LIC, whose investment strategy is to invest in
Australian equities with a particular focus on the top 50 ASX shares rated by market capitalisation.
Djerriwarrh uses exchange traded options written against the portfolio in order to enhance income
returns to its investors. Djerriwarrh operates a diversified portfolio of approximately 60 companies
and was established in 1989. Djerriwarrh listed on the ASX in June 1995.
Diversified United Investments (“DUI”) was incorporated in 1987 under the name Rambutten
Holdings Ltd, and in 1991 it took on the name Diversified United Investments following the
Australian United Investment Company’s and Barclay’s Capital’s joint sponsorship of the floatation
of DUI. DUI’s investment strategy is to invest in a diversified portfolio of Australian investments
which exhibit a potential for long-term growth. DUI’s portfolio is mainly exposed to the Banking and
Financial services sector.
Milton Corporation Limited (“Milton”) is an investment company which was incorporated in 1938
and listed on the ASX in 1958. Milton’s investment strategy centres around investing in a
diversified portfolio of companies, trusts and fixed-income securities and real property within the
Australian market. Milton’s aim is to invest in well-managed companies and trusts with a solid
profit history and a probability of sound dividend growth. Milton differentiates from other listed
investment companies by trading at a reasonable level of liquidity.

Source : Australian Stock Exchange website – www.asx.com.au

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3.2.3 LIC Outlook

Due to current market volatility it is difficult to predict exactly how the LIC industry will perform as a whole in the future. Most LIC have seen a significant devaluation of their FUM asset base since the credit crunch and its repercussions flowed through global economies. Many LIC are adopting a cautious approach to investments as they are waiting to see whether the slowdown in Europe and the USA becomes a full blown recession. Others believe that the global economy is already at its trough with Australia partially insulated due to a strong resources sector and exposure to a burgeoning Asian economy.

3.2.4 LIC and MMA trading performance

The below graphical illustration demonstrates that LIC have performed poorly in the last year compared with the S&P 200 Accumulation Index:

Figure 1

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----- Start of picture text -----

LIC relative performance against S&P 200 Accumulation Index
----- End of picture text -----

Source : ASX announcements

In comparing the share price performance of MMA against LIC for the last 3 years, we note that MMA had been performing better than most of its LIC comparable companies until last year. However, of recent times MMA’s performance has fallen below that of its competitors. This is observed from the graphical illustration below:

Figure 2

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MMA vs. LICs vs. ASX Accumulated All Ordinaries
Source : Bloomberg
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3.3 Funds Management

3.3.1 General

Funds management is the investment of money on behalf of the Fund Manager’s clients in order to realise a positive return on monies invested in superannuation funds, insurance companies, unit trusts and various other funds. There are two basic types of funds:

passive funds: these funds select a portfolio of assets whose value is dependent upon a particular index such as the S&P ASX 100. These funds will then be tracked against any movements in the S&P ASX 100 with the value dependent on these movements;
active funds: active fund managers buy and sell various financial products in order to gain a profit by outperforming the rest of the market.

Managed Funds invest in shares, property, bonds and other products, offering those with limited expertise in investing to have access to superior investing knowledge and the ability to have their money managed full-time by an experienced fund manager. Investors in managed funds are also able to access a portfolio of securities through one investment because the assets of many investors are combined.

3.3.2 Australian Fund Management Industry Overview

Since the Australian Government introduced compulsory superannuation contributions in 1992, the Australian Fund Management industry has grown at a rapid rate.

Below is a graphical representation of the most significant product segmentation of industry:

Figure 3

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----- Start of picture text -----

Australian Financial Investors in Australia – Products and Service Segmentation - 31 March 2007
Unlisted Equity Trusts - 49.9%
Cash Management Trusts -
16.8%
Listed Equity Trusts - 11%
Other Public Unit Trusts - 8.6%
Common Funds - 4.6%
Listed Investment Companies -
3.2%
Mortgage Trusts - 3%
Friendly Societies - 2.9%
----- End of picture text -----

Source : IBISWorld

We note the following in relation to the figure above:

unlisted equity trusts is the largest segment in the industry, comprising almost half the total assets in the industry;

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cash management trusts are the second most popular product. Cash Management trusts mainly invest in short-term Bank or Government backed securities, loans to or secured by the Federal or State governments and deposits with or loans to or secured by Australian or major overseas banks trading in Australia. These trusts offer secure and liquid investments;
listed equity trusts are listed on the ASX;
other public unit trusts include investing in a number of investment options that include:
Australian and overseas equities, Australian and overseas fixed interest, cash and mortgages or a combination of all of these;
various diversified portfolios with varying risk/return profiles, known as capital guaranteed, capital stable and growth funds;
some trusts may concentrate on particular asset classes (such as property, small companies etc.);
common funds are similar in operation to term deposit accounts offered by banks and other financial institutions except their objective is to provide fixed term investments with capital security and stability by investing in various portfolios such as mortgage and securities portfolios;
LIC are companies that mainly invest in a diversified portfolio of equities;
mortgage trusts allow investors to pool money in a trust to lend to individuals and companies secured against residential and/or commercial property. The trust will then distribute the interest, less charges, as income to investors. Most mortgage trusts will also invest a percentage of money in cash and fixed interest products in order to maintain a cash reserve if mortgage investments are not available;
friendly societies are mutual organisations. Their aim is to provide members with services. An example of a Friendly Society Fund is a health insurance fund which offers health insurance products.

Set out in the table below is a chart showing the main Financial Asset Investors:

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----- Start of picture text -----

Figure 4
----- End of picture text -----

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----- Start of picture text -----

Australian Financial Investors in Australia – Major Market Segments
Rest of the World - 28.2%
Pension funds - 26.8%
Households - 18.4%
Life Insurance Groups - 7%
Other - 6.6%
Banks - 5.6%
Financial Intermediaries n e c
Source : IBISWorld
----- End of picture text -----

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From the above chart it is noted that foreign firms and individuals constitute the largest market for Australian Financial Asset Investors.

The second largest market is pension funds. This sector has expanded significantly due to the introduction of compulsory superannuation in the past decade coupled with its increase to 9%. Moreover, expansion in pension funds have increased due to legislation enacted in 2005 allowing employees to choose their own superfund.

Households are the third highest contributors into the Financial Asset Investor market. This sector has grown steadily since 2003 following a decline in equities over the three years to 2003. In the current market with rising interest rates and the decline in equity, the market share of households is expected to fall.

‘Other’ consists of market segments for governments (federal, state, local etc.), other insurance corporations, other deposit taking corporations and other public non-financial corporations.

3.3.3 Industry Participants

Below are the major industry participants that make up the Australian Financial Asset Industry:

Table 8: Major Participants in the Australian Financial Asset Industry

Participant Description	Participant Description
The Commonwealth Bank of Australia Macquarie Bank Limited AMP Limited	The Commonwealth Bank of Australia (“CBA”) was founded under legislation and through various mergers became the largest bank in Australia. CBA listed on the ASX in 1991. In February 2002, an organisational restructure occurred and its Premium Financial Services division incorporated its funds management business with CBA’s takeover of Colonial First State Limited in 2000 further expanding this business. CBA offers a diverse range of investment product and superannuation. An investor can choose to directly invest in a range of investment funds offered by the bank or can obtain a wider investment choice through the Bank’s FirstChoice products. CBA offers investment options in not only in Australian shares, but in international shares, listed property, fixed interest, credit, infrastructure, private equity and cash. There is no single strategy that CBA adopts with its approach to investing as it has hundreds of fund options available all depending on the level of risk desired by the investor. According to IBISWorld CBA had 14% of market share in the Australian Financial Assets Industry in 2007. Macquarie Bank Limited (“Macquarie”) was established in 1969 under the name Hill Samuel Australia, a wholly owned subsidiary of the British merchant bank and began operations in Sydney in 1970 with only three staff. In 1985 the Federal Treasurer granted authority for Hill Samuel to become Macquarie Bank and become a trading bank. In July 1996 Macquarie listed on the ASX. Macquarie offers investors a range of investment funds and services. Macquarie has over 25 years of experience in the Financial Asset industry and manages funds in all major asset classes, such as cash, currency, fixed interest, equities, property and private equity. Macquarie does not limit itself to placing investments only in the Australian market. Macquarie’s approach centres around managing risk and delivering tailored solutions to its investors depending on each individual’s needs. Macquarie also has a range of its own listed funds in which it invests in specifically in the infrastructure, technology, real estate and renewable energy sectors. According to the IBISWorld report Macquarie has a share of 7.5% in the Financial Assets Industry. AMP Limited (“AMP”) began in 1849 under the name the Australian Mutual Provident Society as an organisation offering solely life insurance. AMP evolved over the 150 years since diversifying its business and in 1998 AMP demutualised and listed on the ASX. AMP operates its funds management business through its subsidiary AMP Capital investors. As at 31 March 2008 AMP Capital had $104 billion worth of funds under management. AMP Capital has specialised division concentrating on certain types of investment classes. According to the IBISWorld report, AMP Capital held 4% of industry market share in 2007.

Participant
Description

The
Commonwealth
Bank of
Australia
Macquarie
Bank Limited
AMP Limited

The Commonwealth Bank of Australia (“CBA”) was founded under legislation and through various
mergers became the largest bank in Australia. CBA listed on the ASX in 1991. In February 2002, an
organisational restructure occurred and its Premium Financial Services division incorporated its
funds management business with CBA’s takeover of Colonial First State Limited in 2000 further
expanding this business.
CBA offers a diverse range of investment product and superannuation. An investor can choose to
directly invest in a range of investment funds offered by the bank or can obtain a wider investment
choice through the Bank’s FirstChoice products. CBA offers investment options in not only in
Australian shares, but in international shares, listed property, fixed interest, credit, infrastructure,
private equity and cash. There is no single strategy that CBA adopts with its approach to investing
as it has hundreds of fund options available all depending on the level of risk desired by the
investor. According to IBISWorld CBA had 14% of market share in the Australian Financial Assets
Industry in 2007.
Macquarie Bank Limited (“Macquarie”) was established in 1969 under the name Hill Samuel
Australia, a wholly owned subsidiary of the British merchant bank and began operations in Sydney
in 1970 with only three staff. In 1985 the Federal Treasurer granted authority for Hill Samuel to
become Macquarie Bank and become a trading bank. In July 1996 Macquarie listed on the ASX.
Macquarie offers investors a range of investment funds and services. Macquarie has over 25 years
of experience in the Financial Asset industry and manages funds in all major asset classes, such as
cash, currency, fixed interest, equities, property and private equity. Macquarie does not limit itself to
placing investments only in the Australian market. Macquarie’s approach centres around managing
risk and delivering tailored solutions to its investors depending on each individual’s needs.
Macquarie also has a range of its own listed funds in which it invests in specifically in the
infrastructure, technology, real estate and renewable energy sectors. According to the IBISWorld
report Macquarie has a share of 7.5% in the Financial Assets Industry.
AMP Limited (“AMP”) began in 1849 under the name the Australian Mutual Provident Society as an
organisation offering solely life insurance. AMP evolved over the 150 years since diversifying its
business and in 1998 AMP demutualised and listed on the ASX.
AMP operates its funds management business through its subsidiary AMP Capital investors. As at
31 March 2008 AMP Capital had $104 billion worth of funds under management. AMP Capital has
specialised division concentrating on certain types of investment classes.
According to the IBISWorld report, AMP Capital held 4% of industry market share in 2007.

Source : PKFCA Analysis

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3.3.4 Industry concentration

According to the IBISWorld, the level of industry concentration is low with the four largest establishments accounting for around 30% of industry assets.

Over the ten year period to 2007-08 the following has occurred:

industry revenue has been growing at 7% per annum;
industry gross product grew at an average of 6.3% per annum;
the number of industry participants grew at an estimated 0.3% per annum.

However due to the global credit crunch beginning in mid to late 2007 and its related flow on effects, both large and small firms need to sell assets in order to remain liquid and solvent. Furthermore, the risk of bankruptcy has increased with many firms being forced to write-down its assets, thus fuelling the possibility of mergers and acquisitions.

3.3.5 Market size

According the Australian Bureau of Statistics (“ ABS ”) the consolidated assets in the Financial Assets Industry (classed as Public Unit Trusts and other managed funds) has fallen by 4.2% from the December 2007 to the March 2008 quarter from $344.7 billion to $334 billion. The chart below represents the movements of consolidated assets in the industry for the year to the March 2008 quarter and the quarter December 2007 to March 2008:

Figure 5

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Movements in consolidated assets in the year from March 2007 to March 2008
355,000
350,000
345,000
340,000
335,000
330,000
325,000
320,000
315,000
310,000
Consolidated Assets as per quarters under analysis
Linear (Consolidated Assets as per quarters under analysis)
Mar-07 Dec-07 Mar-08
----- End of picture text -----

Source : Australian Bureau of Statistics (www.abs.gov.au)

Public unit trusts decreased by $15.3 billion or 5%. This reflected the downturn in the equities market during the period with the S&P/ASX 200 falling 15.5% in the corresponding period. Included in this decline were overseas assets which decreased by 8% following the decline of foreign shares by 9.9%. This decline in Public unit trusts was somewhat cushioned by an increase in cash and cash deposits and land and buildings which both increased by 2%. Other managed funds increased slightly in the quarter with the Cash Management Trusts rising 1%.

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3.3.6 Industry Performance

The Performance of the industry as whole can be split into the following:

the managed funds sector has grown at an average rate of 10% per annum from the period 1990 – 2007 to be $1.33 trillion in 2007. This high growth rate reflects on the changing of the superannuation laws over this period coupled with a desire for investors to obtain more growth than that traditionally achieved in deposit taking institutions.

The majority of managed funds are held as superannuation funds (over 70% of total funds under management). Over the period 1990 – 2007, assets in superannuation funds increased to nearly $1 trillion. This growth was largely due to the introduction of an employer funded superannuation benefit in industry awards in 1986 and also the introduction of compulsory superannuation in 1992.

public unit trusts comprise of around 20% of the remaining funds under management. Equities and unit trusts are the largest asset class held by public unit trusts, accounting for up to 40% of all public unit trusts in 2007-08.
cash management trusts (CMT): the amount invested in CMT doubled in the late 1990s to 5%. However, this growth has declined in recent years due to increased competition. The CMT market is dominated by the major banks and they are able to offer competitive returns due to a low cost structure. CMT were very popular in the two years to 2003 where there was a dip in the equities market and a high level of uncertainty and with the current increase in interest rates CMT are expected to grow by around 3.2% in the forthcoming years.
other managed funds make up the remainder of the sector. Other managed funds include common funds, friendly societies and listed investment vehicles. Common funds and friendly societies have lost market share in the past ten years as the growth in superannuation funds skyrocketed. Friendly societies declined at a rate of 8.8% per annum over the five year period until 2007. This is due to friendly societies being perceived as inefficient and having a strong low risk-low return strategy.

IBISWorld believes that listed investment vehicle assets constitute just over 3% of the industry although it has no official statistics to support this. The other managed funds sector is expected to continue to provide a small proportion of assets and industry related revenue in the future.

3.3.7 Industry consolidation activity

With the effects of the global credit crunch becoming more established it is expected that more takeover activity will occur as smaller fund managers struggle with the rising costs of servicing debt and the declining value of their assets.

Due to the integration of the funds management industry which is expected to continue over the next five years, there is an expectation that smaller fund managers will have to enter into niche markets or will be acquired by larger retail fund managers.

3.3.8 Demand determinants

The key demand drivers for Financial Assets Industry in Australia are as follows:

the level of household savings. This is dependent on the level of economic activity, the growth in real wages, house hold investment income and employment growth. The lower residual income left over after disposable income has been distributed to consumption expenditure, the lower the investment in non-financial assets;
real and after-tax investment returns. The returns offered on investments by Financial Asset Investors will have a significant impact on the demand for products offered by financial asset investors. Taxation will also have a major impact on investment flows as some investments may not be subject to any tax (for example exemptions on capital gains tax for owner occupied homes) while others may be subject to a significant amount;

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changes in Government superannuation laws. Any changes to Government superannuation laws for example changes to the taxation of superannuation assets and benefits and/or changes to eligible superannuation contributions could result in increased incentive for investors to invest more heavily in the industry;
market sentiment. The current market sentiment felt by investors will have a significant impact on the demand for the products and services in the industry. If investors have little confidence in the market they will be reluctant to invest in firms within the industry due to a perceived higher exposure to risk. This is particularly evident in firms specialising in equity or property funds/trusts; and
Government policy. Government policy also has a major bearing on the demand determinants listed above. The Reserve Bank of Australia (RBA) cash rate which is a direct indicator of bank interest rates will mean that companies or households will have a higher or lower debt servicing cost and hence will have a higher or lower amount of net disposable income available for investments.

3.3.9 Barriers to Entry

There are medium to high barriers to entry which limit the threat of new entrants, based on the following challenges faced by new entrants, including:

Skilled staff - In order to operate successfully in this industry it is necessary to have a highly skilled and experienced workforce.
Reputation - A Fund Manager is required to have a proven track record in the Financial Asset Industry in order to attract a significant volume of investors.
Technology - Technology including the ability to continually update systems and software. In terms of the data links that are used in order to update the financial position of each fund, these links must be continually functional and free from any threats to its integrity.

3.3.10 Industry Outlook

It is expected that the total assets of financial asset investors will grow at an average real rate of 5.6% per annum in the five years to 2012-13 increasing to over $330 billion. Revenue is expected to increase to around $22 billion representing an average real rate of growth of 3.3% per annum.

The growth in the world economy is expected to be uncertain in 2008-09 with an increasing likelihood of a recession in the USA economy. With changes to superannuation taxation and contributions in the Federal Budgets, there is expected to be an increased demand for eligible superannuation funds which will drive down demand for the industry’s investment vehicles.

With the industry exposed to the equity markets, there is an expectation that growth in revenue will be volatile. However due to the increase in interest rates, cash management trusts should see an increase in size which will further add to the volatility of revenue growth. IBISWorld expects revenue growth to be 5.2% in 2008-09 with growth falling to 0.7% in 2009-10 as the global economy slows down. However, this is expected to pick up again from 2010-11 onwards as the economy recovers and market sentiment is restored.

3.3.11 Conclusions

Key conclusions from the above are as follows:

there is expected growth in the Financial Assets Industry in both revenue and assets in the next five years;
growth over the next two to three years is expected to be curtailed as the effects of the credit crunch and also the downturn in equities become more embedded in the market;
competition within the industry is classed as medium to high while competition from outside the industry is classed as high. Barriers to entry are also classed as medium to high;

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superannuation funds are major investment vehicles used in the industry, holding about 70% of market share; and
there is expected to be a small amount of consolidation activity.

3.4 General financial planning and investment advice

3.4.1 Introduction

Financial Planning and Investment Advice (“ Financial Planning ”) is the provision of customised investment advice to fee paying clients.

The major products and services in this industry are:

investment advice;
retirement planning;
superannuation advice;
tax advice;
salary packaging;
master trust services;
estate planning; and
financial planning following redundancy.

3.4.2 Australian Financial Planning and Investment Advice Industry Overview

The Australian Financial Planning and Investment Advice Industry can be split into the product and service segments according to the following chart:

Figure 6

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Investment Advice – Products and Service Segmentation - June 2008
Investment Advice - 25%
Retirement Planning - 20%
Superannuation Advice -
20%
Tax Advice - 10%
Salary Packaging - 8%
Master Trust Services - 8%
Estate Planning - 6%
Financial Planning
following Redundancy - 3%
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----- Start of picture text -----

Source : IBISWorld
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We note the following in relation to the figure above:

investment advice represents the most significant product or service offered in the industry;
the proportion of retirement planning services has grown significantly in recent years and this is largely due to Australia’s ageing population;
since the introduction of compulsory superannuation in 1992, superannuation has become the major retirement provision in Australia. As compulsory contributions increased from the initial 3% to the current 9% figure in 2002, the level of superannuation planning has seen solid growth. Compulsory superannuation coupled with strong gross domestic product (“ GDP ”) and equities growth has seen an increase in the level of investment, making Australia the country with the highest level invested in managed funds per capita than any other country. At the end of June 2008, 44% of the funds placed with investment managers were from superannuation funds;
as Australia has a high personal tax rate and a complex tax system it has meant that tax advisory services remain an important service offered by financial planners;
the other products and services offered in the industry are minimal compared to those listed above.

The Financial Planning and Investment Advice Industry is currently in a growth stage due to the following reasons:

industry revenue and value added are expected to be above real GDP growth over the foreseeable future;
there has been, and continues to be, strong growth in superannuation assets;
the industry is undergoing consolidation, while also attracting new entrants; and
the number and complexity of financial products available to retail investors is increasing.

3.4.3 Industry concentration

According to the IBISWorld Financial Planning and Investment Advice Industry report the level of industry concentration is medium, with the top four industry participants holding a combined market share of 42.5%.

The industry is primarily structured in the form of dealer groups, or financial advisory networks. These networks provide the financial planners associated with it a range of support services including the management of compliance, regulatory matters, administration, product research and information technology.

As forming networks has provided greater efficiency and economies of scale, there is now a small number of self-employed financial planners with most networks being attached to financial institutions. The current trend is for dealer groups to have a large number of financial planners within their company structure. This trend has been strengthened due to the benefit to larger financial institutions in that they can operate less distribution channels for their products. The shortage of financial planners has also fostered the idea that growth is achieved by consolidation rather than internal growth within the business.

3.4.4 Market size

IBISWorld expects the following statistics to be reported for the financial year 2007-09:

the industry will have revenue of $8.2 billion, a 135% increase on revenue earned in 2006-07; and
the industry will have value added (IVA) of $4.2 billion a 10.6% increase over 2006-07.

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Changes to superannuation taxation laws that came into effect in June 2007 have been expected to have bolstered growth in the industry in 2007-08, with superannuation assets at December 2007 being $1,001 billion compared to the June 2003 figure of $400.6 billion. The Financial Planning Association estimates that around $630 billion is invested through its 12,000 members as at August 2008.

3.4.5 Industry performance

Industry performance can be split into the following categories:

Revenue

Revenue in this industry comes from fees and commissions received from the provision of financial planning and investment advisory services. There are various fee models that are implemented in the industry as follows:

the fee-for-service model - fees are based on either a fixed fee or an hourly charge;
the commission model - the advisor receives a commission generally from a financial institution for selling their particular product; and
fee based on a percentage of funds under advice – this method seldom used.

Financial Advice for the Superannuation Industry

The main growth driver in the industry is the regulatory change occurring in the superannuation industry. The increase in the value of Superannuation can be seen in the following table:

Table 9: Superannuation Asset June 2003 – June 2007

Year Ending June Billion Dollars Net contribution inflow Billion Dollars Net Investment Income Billion dollar Total Assets	Year Ending June Billion Dollars Net contribution inflow Billion Dollars Net Investment Income Billion dollar Total Assets	Year Ending June Billion Dollars Net contribution inflow Billion Dollars Net Investment Income Billion dollar Total Assets	Year Ending June Billion Dollars Net contribution inflow Billion Dollars Net Investment Income Billion dollar Total Assets	Percent Growth	No. of member Accounts (millions)
2003 2004 2005 2006 2007	32.8 42.6 41.7 51.7 36.0	3.3 68.7 87.6 104.9 101.9	546.8 643 762.9 912 1143.2	N/C 17.6% 18.6% 19.5% 25.4%	25.1 26.7 27.7 29.1 N/A

Source : Australian Prudential Regulation Authority (www.apra.com.au)

From the above table it is evident that the amount of superannuation contribution inflow has been strong over the 5 years to 2007. This has been due to an increase in the compulsory superannuation rate to 9% (2002-03) and employees being able to choose their superannuation fund (2005). Changes to the superannuation legislation effective July 2007 is expected to further increase these figures as it has become more beneficial to make voluntary contributions to superannuation.

3.4.6 Industry consolidation activity

Industry consolidation has increased over recent years with larger financial institutions acquiring smaller financial advisory businesses in order to expand their advisory networks or other entities looking to obtain a financial planning/investment advisory arm. Consolidation is expected to continue in the forthcoming years due to a lack of qualified professionals meaning those larger companies wishing to expand will need to acquire businesses with the professionals already in the target network.

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3.4.7 Barriers to Entry

There are medium barriers to entry which limit the threat of new entrants, based on the following challenges faced by new entrants:

finding skilled personnel; and
having a reputation of proven success.

To operate in this industry a financial planner must hold an AFS license from ASIC.

There are high fixed costs associated with the operation of a small scale financial planning business. This is due to services and equipment required to operate a financial advice business are extensive and include:

continually updating and monitoring compliance and licensing requirements
having access to investment product research; and
ensuring that IT services are continually functional including client management software and any client facing websites or servers.

3.4.8 Industry Participants

Currently, the Industry is dominated by several major players. A summary of these participants and their operations is set out below:

Table 10: Major Participants in the Financial Planning and Investment Advice Industry

Participant Description	Participant Description
AMP National Australia Bank Limited (“NAB”) ING Australia Holdings Limited (“ING”) AXA Asia Pacific Holdings Limited (“AXA”) Zurich Financial services Australia Limited (“Zurich”)	AMP is one of Australia’s largest financial planning networks with more than 1,200 authorised and accredited financial planners across Australia. AMP is an industry leader in terms of training, support, research and ongoing development provided to their planners. AMP is a principal member of the Financial Planning Association of Australia, has over 40 fund managers and insurers and subjects it planners to rigorous annual assessments. NAB has over 220 financial planner locations throughout Australia, with it being able to potentially operate a financial planning business out of every branch it operates. NAB also boasts 470 planners with around $13 billion in funds under management. NAB also utilises its wealth management business MLC in its specialist research. ING offers a broad range of financial products and services through its network of professional advisers and financial institutions, which include banks and advice groups such as RetireInvest, Tandem, Millenium3 and ING Financial Planning. AXA has over 1,500 qualified investment advisors in over 400 practices across Australia. In 2001 AXA acquired Sterling Grace Portfolio Management Group and leading investment advisory and financial planning business. At September 2007 the company had approximately $15 billion funds under management. Zurich offers general insurance solutions to commercial customers primarily through brokers. Its financial planning arm operates as a distribution channel for its life risk and investment solutions to both corporate and personal customers. Zurich has the advantage of being neither owned nor backed by a bank therefore they have no obligation to promote any products other than their own.

Participant
Description

AMP
National Australia Bank
Limited (“NAB”)
ING Australia Holdings
Limited (“ING”)
AXA Asia Pacific Holdings
Limited (“AXA”)
Zurich Financial services
Australia Limited
(“Zurich”)

AMP is one of Australia’s largest financial planning networks with more than 1,200
authorised and accredited financial planners across Australia. AMP is an industry
leader in terms of training, support, research and ongoing development provided to
their planners. AMP is a principal member of the Financial Planning Association of
Australia, has over 40 fund managers and insurers and subjects it planners to rigorous
annual assessments.
NAB has over 220 financial planner locations throughout Australia, with it being able to
potentially operate a financial planning business out of every branch it operates. NAB also
boasts 470 planners with around $13 billion in funds under management. NAB also utilises
its wealth management business MLC in its specialist research.
ING offers a broad range of financial products and services through its network of
professional advisers and financial institutions, which include banks and advice groups
such as RetireInvest, Tandem, Millenium3 and ING Financial Planning.
AXA has over 1,500 qualified investment advisors in over 400 practices across Australia.
In 2001 AXA acquired Sterling Grace Portfolio Management Group and leading
investment advisory and financial planning business. At September 2007 the company
had approximately $15 billion funds under management.
Zurich offers general insurance solutions to commercial customers primarily through
brokers. Its financial planning arm operates as a distribution channel for its life risk and
investment solutions to both corporate and personal customers. Zurich has the advantage
of being neither owned nor backed by a bank therefore they have no obligation to promote
any products other than their own.

Source : PKFCA Analysis

3.4.9 Industry Outlook

Revenue growth in the Financial Planning and Investment Advice industry is expected to increase at a steady rate in the next five years. Growth is expected to be high in the next year or so with it reaching a plateau of around 5% in 2011-12. Revenue growth is expected to be strong due to further growth in managed funds (especially superannuation funds), growth in sophisticated investments, managed funds and investment products. These factors together with Australia’s ageing population should sustain revenue growth in the future.

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The value of superannuation funds is expected to increase over the outlook period as the number of people seeking superannuation advice is expected to increase. This is due to the number of people reaching retirement age or nearing this age bracket. The Australian Bureau of Statistics estimates that by 2025, Australia will have over 20% of its population over the age of 65 compared to 13.1% in 2005 with this percentage increasing as life expectancy rises. Changes to the superannuation laws which were effective 1 July 2007 have also fostered this growth and the Self Managed Superannuation Fund Professionals’ Association of Australia estimates that assets in self managed super funds will grow by $100 billion in the next five years.

3.4.10 Conclusions

Key conclusions from the above are as follows:

the Financial Planning and Investment Advice Industry has become a ‘one-stop shop’ for both individuals and companies;
the industry is driven by high net worth individuals, retirees and those nearing retirement;
the industry is dominated by large financial institutions and financial planners with networks. In the coming years consolidation activity should see an even larger shift in market concentration to these two industry classes;
the growth in the industry has been largely attributed to the growth in superannuation funds and associated complexities and regulations;
there are medium barriers to entry with it being the most difficult for smaller or sole trader entities to enter the industry; and
the industry outlook remains strong with revenue being largely supported by Australia’s ageing population and related mandated superannuation funds growth driven by superannuation legislation.

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4 MMC CONTRARIAN LIMITED

4.1 Overview

MMA is a funds management company that listed on the ASX in December 2003. MMA’s recently announced strategy is to:

acquiring strategic stakes in existing strategic funds management businesses; and
acquiring stakes in select wealth management businesses, by seeking partnerships/franchises with institutions.

Currently MMA owns two funds management businesses:

MMC Asset Management Limited (100% owned); and
CGAM (50% owned).

Set out below is the corporate structure of MMA

Figure 7: Corporate structure

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MMC Contrarian
(ASX Code: MMA)
MMC Asset Management Contrarian Global Asset
A Contrarian Company Management
100% A Contrarian Company
50%
Australian Equities Global Equities
$132 million FUM (includes $0.5m FUM (includes external
external funds only) funds only)
----- End of picture text -----

Source : MMA Management

4.2 Company Objectives

MMA’s objectives are to maintain its existing operations of funds management business together with forming a wealth management business in order to diversify its revenue streams.

4.2.1 December 2003 – February 2007

In December 2003, MMA was founded as a LIC raising $200 million from approximately 8,000 investors. MMA was the product of a joint venture between HGL and MMC Asset Management (“ MMC ”) with the aim of focussing on out of favour, undervalued or overlooked stocks. HGL acquired a major shareholding in MMC in December 2002. We note that MMC was established in 1993 by Erik Metanomski and under the joint venture agreement acted as the investment manager of MMA.

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4.2.2 February 2007 – Present

In February 2007, MMA completed its acquisition of all the shares in MMC. At the time, the Chairman of MMA, Mr Simon Rowell stated that the company had been considering various strategies to pursue future growth with the key advantages of the acquisition of MMC being:

significant potential additional profit for MMA shareholders arising from the funds management business operated by MMC;
improved earnings per share;
close alignment between MMA and the key executives of MMC; and
continued involvement of HGL’s key executives in MMA, both on the board and part of the investment process.

In April 2007, MMA formed a joint venture with Charles L. Heenan to form CGAM, a boutique global equities fund manager. Today, MMA’s holding constitutes 50% in CGAM. This acquisition was in line with MMA’s growth strategy and also offered MMA a stronger opportunity to expand into the global funds management space as CGAM holds a worldwide mandate.

The key terms of the CGAM shareholding are as follows:

MMC subscribed for 51 A shares at £51 and Mr. Heenan subscribed for 49 B Shares at £49. This entitled MMC to appoint and maintain 2 A Directors until authorisation is given pursuant to the Financial Services and Markets Act and thereafter MMC will be allowed 1 A director. Mr Heenan has the right to appoint and maintain office as the one B director; and
the arrangements are to remain in place until an effective resolution is passed or the parties agree in writing to terminate the arrangements or an order is made for the winding up of the CGAM, whichever is the earlier.

4.2.3 MMA in the Future

In March 2008 the Board of Director’s of MMA appointed a new Chief Executive Officer Alex Hutchison. Mr. Hutchison has vast experience in wealth management.

As a result of a review of the current operations, the board has decided to implement a strategy that has the objective of transforming MMA from relying on volatile investment earnings to operating businesses that have sustainable recurring earnings.

MMA’s aim is to become a vertically integrated financial services company, which will invest in both funds managers and financial services distribution services and this will be achieved by the following:

acquiring strategic stakes in existing strategic funds management businesses; and
acquiring stakes in select wealth management businesses, by seeking partnerships/franchises with institutions.

The benefits of the proposed vertical integration strategy to MMA Shareholders is that they will hold an investment in a business of larger scale and diversified earnings streams, whilst at the same time reducing the level of capital required.

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4.3 Investment Philosophy

MMA owns two funds management businesses and each has similar investment philosophies as listed below:

Table 11: Each fund’s investment philosophy

Business Investment Philosophy	Business Investment Philosophy
MMC Asset Management Contrarian Global Asset Management	MMC’s investment philosophy is based on aiming to preserve capital. MMC believes that preserving capital is important to the creation and retention of wealth. MMC Asset management implements analysis of desirable investment criteria before company is considered for inclusion in a Fund’s portfolio. Essentially MMC aims to buy into companies whose value according to the share market is considerably less than its fair value. CGAM operates on almost identical premises to MMC with its core investment philosophy being preserving capital for the creation and retention of wealth. CGAM operates on a ‘contrarian' style of investing with a capital preservation mindset. Specifically CGAM focuses on a number of key criteria’s some of which include the following: • a strong long-term franchise, which includes predictable and growing cashflows; • the ability to have high cash levels and a concentrated number of holdings is needed; and • low turnover.
Source: PKFCA Analysis

Business
Investment Philosophy

MMC Asset Management
Contrarian Global Asset
Management

MMC’s investment philosophy is based on aiming to preserve capital. MMC believes that
preserving capital is important to the creation and retention of wealth. MMC Asset
management implements analysis of desirable investment criteria before company is
considered for inclusion in a Fund’s portfolio. Essentially MMC aims to buy into
companies whose value according to the share market is considerably less than its fair
value.
CGAM operates on almost identical premises to MMC with its core investment
philosophy being preserving capital for the creation and retention of wealth.
CGAM operates on a ‘contrarian' style of investing with a capital preservation mindset.
Specifically CGAM focuses on a number of key criteria’s some of which include the
following:
•
a strong long-term franchise, which includes predictable and growing cashflows;
•
the ability to have high cash levels and a concentrated number of holdings is
needed; and
•
low turnover.

Source: PKFCA Analysis

4.4 Profile of Current Portfolio

As stated above MMA owns MMC and has a holding in CGAM of 50% who operate as fund managers for MMA. The analysis of MMC’s and CGAM’s portfolio as at June 2008 is as follows:

4.4.1 MMC Asset Management Limited

MMC Asset Management currently manages four unit trusts on behalf of investors. The Value Growth Trust, the Australian Share Fund, the Small Companies Fund and the MMC Concentrated Fund (which is operated for Officium Capital Limited (“ Officium ”)).

MMC Asset Management has approximately $131.7 million of externally managed funds under management (“ FUM ”).

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The summary of each fund’s portfolio is table below:

Table 12: Summary of MMC’s Major Portfolio Holdings as at 30 June 2008

Stock	Value Growth Trust	Australian Share Fund	Small Companies Fund
1 2 3 4 5 6 7 8	Stock Weighting Telstra Corporation 6.50% James Hardy 4.64% Mainfreight Ltd NZ 4.62% Telecom Corp of New Zealand 4.52% News Corporation 3.81% Australia & New Zealand Banking Group 3.36% Dark Blue Sea 3.23% Connecteast Group 2.88%	Stock Weighting Telstra Corporation 7.02% James Hardy 4.74% Mainfreight Ltd NZ 4.5% Telecom Corp of New Zealand 4.34% News Corporation 4% Australia & New Zealand Banking Group 3.19% Dark Blue Sea 3.15% Connecteast Group 3.09%	Stock Weighting Independent Practioner Network 10.30% Ent. Media & Telecoms Corp. Ltd 9.23% Calliden Group 5.31% Everyday Mining Services 4.58% Espreon Limited 4.5% M2 Telecommunic ations 4.17% Dark Blue Sea 3.87% Regional Express Holdings 3.38%

Source : MMC Asset Management Quarterly Investment Report – June 2008

Table 13: Summary of Officium Capital Limited’s top ten portfolio holdings held on behalf of MMC as at 30 June 2008 (MMC Concentrated Fund)

Stock	Value Growth Trust	Value Growth Trust
1 2 3 4 5 6 7 8 9 10	Stock Independent Practioner Network Limited Entertainment Media & Telecoms Corporation Telstra Corporation Limited Everyday Mines Services Limited Norfolk Group Limited James Hardy Calliden Group Limited Regional Express Holdings Ltd Peoplebank Australia Ltd McPherson’s Limited	Weighting 10.2% 6.62% 5.55% 4.61% 3.65% 3.37% 3.31% 3.04% 2.92% 2.84%

Source : Officium Capital Limited Quarterly Investment Report – June 2008

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4.4.2 CGAM

CGAM assists MMC to manage the Global Value Fund. As at the date of this Report, CGAM has approximately $0.5 million of externally managed FUM. The portfolio summary of the fund is tabled below:

Table 14: Summary of CGAM’s top eight portfolio holdings held on behalf of MMC as at 30 June 2008

Stock Value Growth Trust	Stock Value Growth Trust	Stock Value Growth Trust	Stock Value Growth Trust
1 2 3 4 5 6 7 8	Stock Johnson & Johnson Tradelink GlaxoSmithKline Lerado Gold Bullion Munich Re MobileOne Kingmaker Footwear Other	Country USA Hong Kong UK Hong Kong NA Germany Singapore Hong Kong Various	Weighting 6.76% 5.48% 5.30% 5.20% 5.03% 4.77% 4.71% 4.61% 40.28%

Source : Global Value Fund Quarterly Investment Report – June 2008

The asset allocations of each fund are shown in the table below:

Table 15: Asset Allocation

Stock Value Growth Trust (%) Australian Share Fund (%) Small Companies Fund (%) MMC Concentrate Fund (%) Global Value Fund (%)	Stock Value Growth Trust (%) Australian Share Fund (%) Small Companies Fund (%) MMC Concentrate Fund (%) Global Value Fund (%)	Stock Value Growth Trust (%) Australian Share Fund (%) Small Companies Fund (%) MMC Concentrate Fund (%) Global Value Fund (%)	Stock Value Growth Trust (%) Australian Share Fund (%) Small Companies Fund (%) MMC Concentrate Fund (%) Global Value Fund (%)	Stock Value Growth Trust (%) Australian Share Fund (%) Small Companies Fund (%) MMC Concentrate Fund (%) Global Value Fund (%)	Stock Value Growth Trust (%) Australian Share Fund (%) Small Companies Fund (%) MMC Concentrate Fund (%) Global Value Fund (%)
Cash Shares Total	Jun 08 Jun 07 33 47 67 53 100 100	Jun 08 Jun 07 35 55 65 45 100 100	Jun 08 Jun 07 19 17 81 83 100 100	Jun 08 Jun 07 30 40 70 60 100 100	Jun 08 Sep 07 18 35 82 65 100 100

Source : MMC Asset Management Quarterly Investment Report – June 2008 & Officium Capital Limited Quarterly Investment Report – June 2008

Revenue is earned by MMA through Management and Investment performance fees. The fees earned for FUM are as follows:

Australian Share Fund and the Small Companies Fund

Set out below a table disclosing the management and performance fees for the Australian Share Fund and the Small Companies Fund:

Table 16: Management and Investment performance fees for the Australian Share Fund and the Small Companies Fund

Type of fee Amount How and when paid	Type of fee Amount How and when paid	Type of fee Amount How and when paid
Management Fees Investment performance fee	• 1.28% per annum of the Fund’s net asset value for the Australian Share Fund • 2.06% per annum of the Fund’s Net Asset Value for the Small Companies Fund 15% of the Fund’s performance over their respective benchmark. The respective benchmarks for each fund are: • the S&P/ASX All Ordinaries Accumulation Index for the Australian Share Fund • the S&P/ASX Small Ordinaries Accumulation Index for the Small Companies Fund	Management fees consist of administration costs, the investment management fee and the investment performance fee. The investment performance fee is calculated daily and paid out of the Funds assets once a year shortly after the end of June.

Source : MMA Product Disclosure Statement for the Australian Share Fund and Small Companies Fund

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Value Growth Trust

The fund manager is entitled to a performance fee of 15% of the net asset growth less the aggregate of the management fees paid in the relevant financial year. The net asset growth must be greater than 15%. Net asset growth represents the net assets at the end of the year less the net assets at the beginning of the year. The net asset growth is reset on an annual basis, essentially past losses (if any) are ignored and are not considered as part of the calculation.

MMC Concentrated Fund

For the MMC Concentrated Fund, MMC receives a performance fee only. The performance fee is calculated as 20% times the net asset movement (“ NAM ”) for the period and MMC receives 80% of that. The other 20% is received by Officium. The negative value of the performance fee is added to any performance shortfall carried forward. NAM represents the closing net asset value less opening net asset value for the year.

Global Value Fund

Set out below a table disclosing the management and performance fees for the Global Value Fund:

Table 17: Management and Investment performance fees for the Global Value Fund

Type of fee Amount How and when paid	Type of fee Amount How and when paid	Type of fee Amount How and when paid
Management Fees Investment performance fee Compensation Fee	Administration costs and the investment management fee are capped at 2.05% per annum of net asset value 15% of the Fund’s performance over the benchmark which is the MSCI All countries Would ex Australia index (unhedged) This represents: • any fees payable and not yet paid or which have been deferred as at the date of retirement or removal and • an additional 12 months management fee from the date of removal or retirement	Management costs consist of administration costs, investment management fee and the investment performance fee. The administration costs and investment management fee are accrued daily and paid monthly in arrears out of the Fund’s assets. The amount of the investment management fee can be negotiated in certain circumstances. The investment performance fee is calculated daily and paid out of the Fund’s assets once a year shortly after the end of June The additional twelve months management fees are calculated by the retiring or removed trustee on the gross asset value of the trust at the date of removal or retirement and is payable from the assets within 10 business days of removal or retirement.

Source : Global Value Fund Product Disclosure Statement

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4.5 Funds Management Businesses

4.5.1 MMC Asset Management

Set out below is a summary of FUM for MMC Asset Management:

Table 18: Funds under management

FUM Description Funds managed 2008 $’000	FUM Description Funds managed 2008 $’000	FUM Description Funds managed 2008 $’000
MMC Australian Share Fund MMC Value Growth Trust (closed to new investors) MMC Small Companies Fund MMC Concentrated Fund (Managed on behalf of Officium Capital Limited)	Provides investors with a portfolio of Australian equities, listed property securities and cash that aims to achieve a rate of return of 3-4% in excess of medium-term government bond interest rates over the long- term. Provides investors with a portfolio of Australian equities, listed property securities and cash that aims to achieve a rate of return of 3-4% in excess of medium-term government bond interest rates over the long- term. Provides Investors with a portfolio of high quality small company securities that aims to achieve a rate of return of 4-5% in excess of medium-term government bond interest rates over the long-term. The objective of the MMC Concentrated Fund is to provide positive returns over the long term (five years plus) by investing in a portfolio of Australian securities. The Investment Manager focuses on identifying financially strong, easily understood, well-managed businesses that can be purchased at prices that offer an attractive return over the long run.	93,400 13,400 29,400 na

Source : MMC Asset Management Limited (www.mmcfunds.com.au) & Officium Capital Limited (www.officiumcapital.com.au)

Below are the historical returns from the FUM:

Table 19: Funds performance

FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %
MMC Value Growth Trust (Closed to new investors) MMC Australian Share Fund MMC Small Companies Fund MMC Concentrated Fund Global ValueFund	(25.8) (19.64) (37.12) (21.13) (16.73)	(2.74) (1.07) (6.03) N/A N/A	4.33 4.95 5.29 N/A N/A	15.94 8.44 18.18 7.54 (17.29)

Source : MMC Asset Management and Officium Capital Limited websites

4.5.2 CGAM

Set out below is a summary of FUM for CGAM:

Table 20: Funds under management

FUM Description Funds managed 2008 $’000	FUM Description Funds managed 2008 $’000	FUM Description Funds managed 2008 $’000	FUM Description Funds managed 2008 $’000
Global Value Fund	The fund’s objective is to maximise long term capital appreciation and capital preservation by providing investors with a concentrated portfolio of international equities, bonds and cash that aims to achieve a rate of return in excess of the Morgan Stanley Capital International (MSCI) All Countries World ex Australia index (unhedged)in$Aover rolling three yeartimeframes.		18,000
Source: Contrarian Global Asset Management Limited website		(www.contrarian.co.uk )

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Table 21: Funds performance

FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %	FUM 1-year % 3-year % 5-year % Since Inception %
Global Value Fund	(16.73)	N/A		N/A	(17.29)
Source: Contrarian Global Asset Management Limited website			(www.contrarianan.co.uk )

4.6 Key personnel

Currently, MMA has an experienced board and management team as follows:

Table 22: Summary of Key Personnel

Personnel Name Position Description	Personnel Name Position Description	Personnel Name Position Description
Kevin Eley Peter Constable Anthony Eisen Ray Kellerman Peter Wade Alex Hutchison Brian Wright	Chairman Non- executive Director Non- executive Director Independent Director and Chairman of Audit Committee Independent Director and Member of the Investment Committee Chief Executive Officer Chief Financial Officer and Company Secretary	If the Proposals are implemented, Mr Eley intends to resign from the Board later in the year. Mr Eley has been a director and CEO of HGL since joining HGL in 1985. Prior to joining HGL, he had gained over 10 years of business experience in management consulting, financing and corporate advice at a major international firm of Chartered Accountants and two Investment Banks. In addition to HGL’s investment in MMA, it is also the second largest shareholder in Hunter Hall International Limited (an ASX listed boutique manager). Mr Constable has worked in the funds management industry for some 16 years and was the Chief Investment Officer until 1 July 2008. Mr Eisen has over 14 years experience in commerce and financial services and is currently an investment manager of GPGA. Prior to joining GPGA, Anthony was an investment banker in Australia with Caliburn Partnership and in the United States with Credit Suisse. Mr Eisen commenced his professional career as an accountant with Price Waterhouse. Mr Eisen currently represents the interests of the GPG Group on the board of Tower Limited and Capral Limited. Mr Kellerman has a legal background and was Head of Compliance at the Corporate Trust division of Perpetual Trustees Australia where he spent 10 years before establishing his own compliance consulting and advisory business in 2001. Mr Kellerman currently acts as a director, audit and risk committee member and compliance committee member for a number of major fund managers and financial institutions including Chairman of Credit Suisse Asset Management Australia, Director of Goodman Funds management Australia and member of Compliance Committees for Macquarie Bank, Suncorp, IAG and Allco. He is a shareholder and Director of Quentin Ayers Pty Limited, an implemented asset consultant in the Alternative Assets sector. For the past 25 years, Mr Wade has worked in the Australian and international equity markets. 24 of these years Peter worked for Goldman Sachs JB Were (previously known as JB Were) in Melbourne, London, New York and Sydney. Mr Wade was Managing Director, Sydney and Joint Head of Global Institutional Sales, and a member of the JB Were Board prior to merging with Goldman Sachs in 2003. Mr Wade then became Joint Head of the Equities Products Group and was on the Board and Management Committee of the merged group. In 2004, Mr Wade joined JP Morgan where he became Managing Director, Head of Australian Equities and a member of the management committee before retiring from full time employment. Mr Hutchison was appointed to the role of CEO at MMA on 25 March 2008. Mr Hutchison has over 17 years of financial services experience which included stints at the State Bank of NSW, ASIC and Colonial. In 2004, Mr Hutchison was appointed CEO of Bridges. Mr Hutchison holds a Bachelor of Laws, is a Master Stockbroker MSDIA and is a member of IFSA’s Financial Advisory Network Committee. Mr Wright became CFO and Company Secretary of MMA in 2003. Prior to this, Brian worked for Bankers Trust as an Operations Manager responsible for Derivatives and Foreign Exchange and also as a Business Manager responsible for Equities, Currency and International Bonds within BT funds Management. Prior to Bankers Trust, Brian was an Audit Manager at KPMG. For the past three years, Mr Wright has worked as the CFO and COO for Red Centre Capital, a Global Macro hedge fund based in Sydney. Brian has over 24 years of accounting and funds management experience.

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Personnel Name Position Description	Personnel Name Position Description	Personnel Name Position Description
Justin McLaughlin Donna McKell	Chief Investment Officer Donna McKell- Head of Advice Support	Mr McLaughlin was appointed CIO of MMA in June 2008. Prior to this he worked as Head of Research at Australian Wealth Management for 8 years. In this capacity he oversaw teams which researched direct equities, managed funds and the team responsible for analysis of super legislation and advice and para planning. Mr McLaughlin began his funds management career at the Federal Government Superannuation Scheme and held various senior roles with United Funds Management and Advance Asset Management. Mr McLaughlin holds an honours degree in economics from the University of Western Australia. Ms McKell was appointed Head of Advice support of MMA on 21 July 2008. Prior to joining MMA, Ms McKell was employed by Australian Wealth Management Limited in the role of Head of Financial Planning Business Support. Ms McKell has occupied senior roles over the past 12 years in all aspects of supporting financial planning practices. Ms McKell has over 25 years of experience in the financial services sector.

Source : MMA Management

4.7 Strengths, weaknesses, opportunities and threats

An analysis of MMA’s strengths, weaknesses, opportunities and threats (“ SWOT ”) is provided in the table below:

Table 23: MMA SWOT analysis

	Strengths		Weaknesses
•	MMA has a sound reputation in the market	•	the current executive management team has been
• • •	MMA has a global arm in the form of CGAM which helps to spread its exposure and open its business up to global markets the Executive management has a significant number of shareholdings therefore aligning executive goals with shareholder goals MMA’s listing provides its shareholders with	•	employed for a relatively short amount of time. The new team consists of executives with a focus on wealth management backgrounds with limited funds management experience the Australian Share Fund is MMA’s most heavily invested in this fund therefore adverse movements in this fund will have a major impact on the whole business
•	transparency, allows it to access new funding and provides individual shareholders with liquidity The overall investment strategy for MMA’s is to have	•	with a concentration on small to mid cap stocks and with a low number of stocks in the portfolio there is not sufficient diversification on offer to current
	a small number of concentrated stocks in their funds		members
• •	with a small to mid cap bias, creating a specialist niche for the funds MMA’s investments are moderately not exposed to the US market MMC is the investment manager with over 15 years of experience in the funds management industry	• •	MMA’s operations are highly influenced by the market which is outside MMA’s sphere of influence revenue is volatile and dependent on how much money investors are putting into MMA’s funds which in turn is dependent on market sentiment, household income and the general economic environment
	Opportunities		Threats
•	With MMA’s new executive panel there is a solid	•	with a concentration on small to mid cap stocks and
	basis of knowledge for its proposed expansion in the		with a low number of stocks in the portfolio there is a
	wealth management industry		risk that if there are adverse movements directly
•	MMA is well positioned as a Funds Management business to incorporate a wealth management limb		targeting small to mid cap stocks in the market MMA is left directly exposed to them
	into its existing framework	•	current negative market sentiment could see a further
•	the diversification into the wealth management		devaluation of MMA’s FUM
	business in essence will provide MMA with a
	constant revenue stream

Source : MMA management; PKFCA analysis

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4.8 Capital Structure

As at the date of this report, MMA had approximately 248.41 million Shares on issue, including the ESP. Set out below are the top 10 shareholders:

Table 24: Top 10 Shareholders as at 21 August 2008

Shareholder	Number of shares held (‘000s) % of total issued shares	Number of shares held (‘000s) % of total issued shares
GPG HGL Limited Cogent Nominees Pty Limited Avanteos Investments Limited RBC Dexia Investor Services Australia Nominees Pty Ltd Officium Investments Pty Ltd Mr Peter Constable Citicorp Nominees Pty Limited	38,715,465 34,383,611 11,419,853 11,678,361 4,910,841 4,751,233 4,232,392 3,895,639	15.59% 13.84% 4.60% 4.70% 1.98% 1.91% 1.70% 1.57%
HSBC Custody Nominees (Australia) Limited	3,239,576	1.30%
MF Custodians Limited	2,482,990	1.00%
Total top 10 shareholders Others Total shares on issue	119,709,961 128,697,864	48.19% 51.81%
	248,407,825	100.00%

Source : MMA Management

We note the following in relation to the shareholders of MMA:

the top 10 shareholders account for approximately 48% of the issued shares;
the top 4 shareholders account for approximately 39% of the issued shares; and
beyond the above, the Share register is well spread.

There are 7,162,016 Shares in voluntary escrow and the escrow period ends on 1 February 2009 which will be released from escrow if Acquisition Resolution and Buyback Resolution are passed at the annual general meeting.

Of the total 248.41 million Shares on issue, the Directors (excluding GPG/HGL representatives) collectively hold more than 4,500,000 Shares or 1.81% of MMA. This figure is largely made up of Peter Constable who owns 4,232,392 shares or 1.7% of MMA alone. Peter Constable became a non-executive director on 9 July 2008 after serving as Chief Investment Officer until July 2008.

4.8.1 Employee share plan

MMA executives hold the following unlisted shares that were granted to them under the ESP:

Table 25: ESP Shares

Executive	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)
RK Sydney Pty Ltd on behalf of ATF RK Family Trust Brendan Burgess Daniel Cuthbertson Alex Hutchison Brian Wright Justin McLaughlin Total	250,000 1,000,000 50,000 1,000,000 500,000 500,000	1.036 1.036 1.036 0.597 1.059 0.589	26 Oct 2012 1 Jun 2012 1 Jun 2012 16 Apr 2013 5 Oct 2012 30 Jun 2013	- - - 597,000 - 294,500
	3,300,000			891,500

Source: MMA

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As at 8 September 2008, the closing Share price was $0.605 and based on the above table, Mr Alex Hutchison and Mr Justin McLaughlin’s ESP are in-the-money. As such, the total potential proceeds to be received by MMA if they exercise the ESP are approximately $0.89 million.

4.9 Share price analysis

The price at which an entity’s shares trade on a public exchange is an appropriate basis for valuation (on a minority interest basis) where the shares trade in an efficient market place where willing buyers and sellers readily trade the securities on an informed basis and the market for the entity’s shares is active and liquid.

In order to assess the reliability of the market price as a basis for determining the value of Shares, PKFCA considered:

recent market trading of Shares on the ASX, for the period of one year to the day before the 26 August 2008 (“ Announcement Date ”), being the date of announcement of the Proposals (“ Trading Period ”);
the liquidity of the Shares (that is, the level of trading activity as a percentage of the total quoted shares, and the frequency of trades) over the Trading Period;
the ‘spread’ of Shareholders and the total number of Shares held by individual Shareholders, taking into account any trading restrictions applicable to outstanding Shares;
the frequency of unusual and/or abnormal trading;
the existence of any factors indicative of significant speculative trading;
the level of knowledge and information available to buyers and sellers; and
the following statistics relating to the trading activity of Shares over the Trading Period:
the daily high, low and closing prices;
the daily volume; and
the volume weighted average price (“ VWAP ”).

The chart below illustrates daily share prices and volumes in Shares since the listing of MMA on 11 December 2003 until the latest practicable date before the finalisation of this Report:

Figure 8

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----- Start of picture text -----

MMA Share Price, All Ordinaries Accumulation Index and Trading Volume History since listing
----- End of picture text -----

Source : Bloomberg, ASX Announcements

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The chart below illustrates daily share prices and volumes of Shares from 15 August 2007 until the latest practicable date before the finalisation of this Report:

Figure 9

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----- Start of picture text -----

MMA Share Price, All Ordinaries Accumulation Index and Trading Volume History in the last 12 months
----- End of picture text -----

Source : Bloomberg, ASX Announcements

Notable events disclosed in MMA announcements during the Trading Period which may have impacted Share price movements and trading volumes are set out as follows:

Table 26: MMA recent ASX announcements

Date	Chart reference	Announcement details
15-Aug-07	A	Increase in shareholding by GPG from 9.31% to 10.92%
20-Sep-07	B	Increase in shareholding by GPG from 10.92% to 11.97%
17-Oct-07	C	Notice from MMA of ceasing to be a substantial holder in Costa
		Exchange Ltd
29-Oct-07	D	Quarterly Investment Update - portfolio return of +0.27% and equity
		component of portfolio returning -0.97%
29-Oct-07	X	On market share buy-back tender
30-Oct-07	E	Increase in shareholding by HGL Limited from 12.54% to 13.54%
31-Oct-07	E	Increase in shareholding by HGL Limited from 12.54% to 13.54%
22-Jan-08	X	On market share buy-back tender
22-Jan-08	F	Resignation of Andrew Fairweather as the CEO of MMA
30-Jan-08	G	Return of capital timetable announced
11-Feb-08	H	Increase in shareholding by GPG from 13.11% to 14.14%
26-Feb-08	I	Interim Dividend of 4.0 cents per share
25-Mar-08	J	Mr Alex Hutchison was appointed as Chief Executive Officer
24-Jun-08	K	Appointment of new Chief Investment Officer, Justin McLaughlin and
		new Portfolio Manager, Paul Frost

Source : ASX

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The table below sets out price trends in Shares over the Trading Period:

Table 27: MMA Share Price Summary

Period High ($) Low ($) VWAP ($)	Period High ($) Low ($) VWAP ($)	Period High ($) Low ($) VWAP ($)	Period High ($) Low ($) VWAP ($)
As at 25 August 2008 1 month to 25 August 2008 3 months to 25 August 2008 6 months to 25 August 2008 12 months to 25 August 2008	0.605 0.610 0.620 0.775 0.984	0.600 0.570 0.550 0.550 0.550	0.601 0.588 0.584 0.605 0.739

Source : Bloomberg

We note the following with respect to the Share price over the Trading Period:

the VWAP of Shares on 25 August 2008 (the day immediately prior to the Announcement Date) was $0.60;
the Shares traded from a high of $0.984 in August 2007 to a low of $0.55 in August 2008 reflecting an overall downwards trend;
the Shares have been generally trading consistently with the movement in the All Ordinaries Accumulation Index even after allowance for the capital returns; and
the Shares generally traded within a range of $0.86 to $1.00 prior to the global credit crunch impact in late 2007 and then between $0.55 and $0.63 in recent months.

The VWAP for the Trading Period was $0.739, while for the six months and one month prior to the Announcement Date the VWAP was $0.605 and $0.588 respectively.

Set out below a summary of trading activity in Shares:

Table 28: Trading Statistics of Share

Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)
As at 25 August 2008 1 month to 25 August 2008 3 months to 25 August 2008 6 months to 25 August 2008 12 months to 25 August 2008	84,373 229,223 240,618 209,401 247,748	50,683 134,856 140,430 126,629 183,137	0.04% 2.43% 7.66% 12.82% 30.34%	1.7% 1.8% 1.7% 1.7% 1.3%

Source : Bloomberg

We observed from Figure 9 above, that there are high volumes traded on certain days although there has been no significant price sensitive news apart from shareholders’ purchases and share buy backs during the Trading Period. From Table 26 above, we note that there have been various contributing factors to such activity:

share buy-backs in relation to the on-market share buy-back scheme dated 16 December 2003 (“ Share Buy-Backs ”); and
material on-market purchases made by GPG and HGL during the Trading Period (“ Shareholders’ Purchases ”).

After adjusting for the Share Buy-Backs and Shareholders’ Purchases, we have arrived at the following summary of trading activity in Shares:

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Table 29: Trading Statistics of Shares

Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)	Period Average daily volume (shares) Average daily value ($) Turnover (% of issued shares) Average Bid Ask Spread (%)
As at 15 August 2008 1 month to 15 August 2008 3 months to 15 August 2008 6 months to 15 August 2008 12 months to 15 August 2008	84,373 229,223 212,285 192,767 186,803	50,683 134,856 123,719 116,511 134,562	0.04% 2.43% 6.76% 11.81% 22.88%	1.7% 1.8% 1.7% 1.7% 1.3%

Source : Bloomberg

We note the following in relation to Shares trading:

the total traded volume during the Trading Period (excluding Share Buy-Backs and Shareholders’ Purchases) was approximately 22.88% of the weighted average number of shares on issue during the year; and
during the Trading Period the average bid-ask spread was 1.3%.

4.10 Conclusion on MMA Share Price Performance

Based on the above, in our opinion, despite that the fact there has been substantial trading in the Shares since its listing date, the Shares are illiquid. Our reasons for this opinion are as follows:

the top 10 Shareholders hold approximately 50.51% of the Shares, and the two largest shareholders collectively control approximately 29.43% of the Shares;
the average bid-ask spread over the Trading Period of 1.3% compares less favourably with a spread of less than 1% for highly liquid shares. The Share Buy-Backs and Shareholders’ Purchases that recurred over the Trading Period may have contributed to the lower spread than otherwise; and
the total turnover of Shares during the Trading Period after adjusting for Share Buy-Backs and Shareholders’ Purchases was approximately 22.88%.

As the Shares are assessed to be illiquid, the Share price is therefore not necessarily an appropriate indicator of value.

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5 MMC CONTRARIAN LIMITED FINANCIAL INFORMATION

5.1 Profitability

The summary consolidated and aggregated historical financial performance of MMA from FY2005 to FY2008 is set out below:

Table 30: MMA historical consolidated financial performance

($’000s unless otherwise indicated)	2005 Audited	2006 Audited	2007 Audited	2008 Audited
Revenue Management fees Dividends from listed securities Interest income Trust distributions Other Realised capital gains Impairment of investments - available for sale Impairment of subsidiary Impairment of goodwill Impairment of intangible Other expenses (Loss)/Profit before income tax expense Income tax (benefit)/expense Net (Loss) profit for the year Attributable to: Equity holders of parent Minority Interest *Key ratios* Revenue growth Net Profit growth Basic earnings per share (cents) Dividends per share (cents) Dividend payout ratio Assets under management in funds ($'million)	- - 1,851 2,515 971 350 2,472 3,733 7,127 8,207 9,216 8,313 1,632 1,959 966 674 102 40 182 737
	9,832 10,556 14,687 15,972 - 22,655 19,509 1,690 - - (30,077) - - - - - (28,175) - - (2,076) (3,764) (3,968) (4,774) (5,973) 6,068 29,243 29,422 (48,639) (1,736) (8,266) (9,097) 5,872
	4,332 20,977 20,325 (42,767)
	4,332 20,977 20,325 (42,661) - - - (106)
	4,332 20,977 20,325 (42,767)
	na 7% 39% 9% na 384% (3%) (310%) 2.09 9.74 8.87 (17.19) 3.50 6.00 8.00 4.00 168% 62% 90% na 360 140

Source : MMA Annual Reports

We note the following in relation to the consolidated financial performance of the MMA as set out above:

in FY2007, revenue for MMA increased by 39% mainly due to growth through acquisition of MMCA and income from realised capital gains has been declining since FY2006;
as a result of the downturn in the equity markets in FY2008, the Board recognised a charge of approximately $30.0 million for the decline in the value of investments and wrote-off $31.2 million for the impairment of intangibles in relation to the acquisition of MMCA;
funds under management decreased from $360 million as at 30 June 2006 to $140 million as at 30 June 2008; and
interim franked dividends were paid during the year.

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5.2 Balance sheet

The consolidated balance sheets of MMA as at 30 June 2005, 30 June 2006, 30 June 2007, 30 June 2008 and 31 July 2008 are set out below:

Table 31: MMA Balance Sheet

As at ($’000s unless otherwise indicated)		30 Jun 05 Audited	30 Jun 06 Audited	30 Jun 07 Audited	30 Jun 08 Audited	31 Jul 08 Unaudited
Current Assets Cash and cash equivalents Receivables Fixed interest deposits Securities Total Current Assets Non Current Assets Property, plant & equipment Deferred tax asset Goodwill Other intangible assets Total Non-Current Assets TOTAL ASSETS Current Liabilities Payables Current Tax Liabilities Total Current Liabilities Non Current Liabilities Deferred Tax Liabilities Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS *Key ratios* Shares on issue at year end ('000s) Net assets per share (cents) NTA per share (cents)	48,515 17,515 30,888 24,051 39,797 1,166 3,581 3,061 3,219 833 85,526 118,091 128,053 81,471 77,970 106,530 103,783 100,970 66,856 57,877
	241,737 242,970 262,972 175,597 176,477 - - 101 36 35 - - - 9,162 8,039 - - 28,175 - - - - 2,524 - -
	- - 30,800 9,198 8,074 241,737 242,970 293,772 184,795 184,551 1,414 992 2,217 1,149 1,339 2,842 3,174 5,798 364 (498)
	4,256 4,166 8,015 1,513 841 3,950 2,428 3,881 - -
	3,950 2,428 3,881 - - 8,206 6,594 11,896 1,513 841 233,531 236,376 281,876 183,282 183,710 216,087 214,386 249,503 245,108 245,108 108.07 110.26 112.97 74.78 74.95 108.07 110.26 100.67 74.78 74.95

Source : MMA Annual Reports, MMA management accounts

We note the following with respect to the MMA balance sheets:

cash and cash equivalents have decreased as a result of repayment of capital and share buy backs; and
post tax NTA per Share has decreased from $1.08 as at 30 June 2005 to $0.75 as at 30 June 2008 and at 31 July 2008, largely as a result of the decline in the value of securities held, the capital returns and the fully franked interim dividend paid.

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5.3 Cashflows

A summary of MMA’s historical cash flows is set out below:

Table 32: MMA Consolidated Cash Flows

($’000s unless otherwise indicated)		2005 Audited	2006 Audited	2007 Audited	2008 Audited
Cash flows from operating activities Dividends and trust distributions received 2,182 1,988 3,645 4,732 Interest received 7,077 7,812 9,929 8,303 Management fees received - - 2,066 2,141 Administration and other operating costs paid (3,768) (3,933) (5,121) (5,565) Income taxes paid (2,796) (7,840) (6,490) (7,868) Other receipts 102 36 182 634 Net cash (used in)/provided by operating activities 2,797 (1,937) 4,211 2,377 Cash flow from investing activities Net cash movement due to subsidiary acquisition - - (500) - Payments for listed securities (71,954) (89,505) (88,930) (100,388) Fixed interest deposits (14,371) (32,562) (8,386) 44,758 Proceeds from sale of securities 70,285 105,346 121,432 93,723 Cash held by acquired entity - - 830 - Payments for property, plant and equipment - - (12) (2) Other payments - - - (164) Net cash (used in) provided by investing activities (16,040) (16,721) 24,434 37,927 Cash flows from financing activities Receipt from capital raising 24,735 - - 591 Capital return - - - (24,611) Payment for share buy back (9,411) (3,829) (45) (5,807) Dividends paid (4,499) (8,513) (15,227) (17,314) Net cash used in financing activities 10,825 (12,342) (15,272) (47,141) Net increase/(decrease) in cash and cash equivalents (2,418) (31,000) 13,373 (6,837) Cash and cash equivalents at the beginning of the financial year 50,933 48,515 17,515 30,888 Cash and cash equivalents at the end of the financial year 48,515 17,515 30,888 24,051
Source: MMA Annual Reports

We note the following with respect to the cashflow statements:

cash flows from operations improved since FY2007 as a result of the contributions from MMCA which was acquired on 1 February 2007; and
positive cashflow from investing activities in FY2008 was utilised in the repayment of capital and share buy backs.

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6 BACKGROUND TO GPG

6.1 Overview

GPG is an investment holding company with a diversified range of strategic interests in a number of businesses primarily in Europe and Australasia. GPG is listed on the Australian, New Zealand and London Stock Exchanges. As at 5 September 2008, GPG had a market capitalisation of $1.59 billion.

GPG invests in sectors such as financial services, thread manufacture, foodstuff manufacture and building services. In 1990 GPG came under the control of Brierley Investments Limited which restructured and then sold all of GPG’s then existing businesses. Since that time GPG’s net assets have grown to 1.026 billion pounds sterling as at 30 June 2008.

Below is a graphical representation of GPG’s trading results:

Figure 10

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----- Start of picture text -----

Earnings – Sales, EBITDA and NPAT – as at December 2005, 2006 and 2007
3500
3000
2500
2000
1500
1000
500
0
Year ended 31 December
EBITDA Sales NPAT
$AUD (millions)
2005 2006 2007
----- End of picture text -----

Source : Bloomberg Note : The above earnings have been translated at the annual average AUD:GBP exchange rates.

The following figures were applied when charting the table above:

EBITDA was A$164 million, A$179 million and A$158 million in the year ended 31 December 2005, 2006, 2007 respectively;
sales were A$2,851 million, A$3,316 million and A$3,154 million in the year ended 31 December 2005, 2006 and 2007 respectively; and
net profit after tax was A$229 million, A$88 million and A$308 million in the year ended 31 December 2005, 2006 and 2007 respectively.

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The summary of GPG’s consolidated financial position at recent balance dates is set out below:

Table 33: Summary of Financial Position – GPG as at December 2007, 2006 and 2005

Account	2007 Audited $’million 2006 Audited $’million 2005 Audited $’million
Assets Current Assets Inventories Trade and other receivables Cash and cash equivalents Other current assets Total current assets Non-current assets Intangible Assets Property, plant and equipment Non-current investments Other non-current assets Total non-current assets Non-current assets classified as held for sale Total Assets Liabilities Current liabilities Trade and other payables Capital Notes Other borrowings Other current liabilities Total current liabilities Non-current liabilities Trade and other payables Capital notes Other borrowings Retirement benefits obligations: Funded Schemes Unfunded Schemes Other non-current liabilities Total non-current liabilities Total Liabilities Net Assets Equity Shareholders Funds Minority Interests Total Equity	515 536 568 576 591 645 721 630 596 39 55 75
	1,850 1,811 1,884
	462 491 520 938 970 1,003 440 345 207 888 1,189 798
	2,729 2,995 2,529
	11 7 42
	4,590 4,814 4,456
	666 630 667 188 - 233 213 305 266 222 238 224
	1,290 1,174 1,390
	34 52 57 301 499 198 381 372 511 2 35 68 116 144 155 97 136 125
	932 1,238 1,114
	2,221 2,412 2,504
	2,369 2,402 1,952
	2,155 2,174 1,696 213 228 257
	2,369 2,402 1,952

Source : www.gpgplc.com/accounts Note: Exchange rates are translated at year end sourced from Reserve Bank of Australia

As noted above, GPG has had a major growth in its balance sheet and has reasonable working capital and net asset positions.

Below is a chart of GPG’s dividend history as percentage of its share price:

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Figure 11
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Earnings – Sales, EBITDA and NPAT – as at December 2005, 2006 and 2007
5%
0%
Date Dividend Declared
Dividend as a percentage of price
Ratio of dividend to share price (%)
2003 2004 2005 2006 2007 2008
----- End of picture text -----

Source : Bloomberg

The above chart shows the cash dividends paid over the previous ten years (31/08/98 – 31/08/08). GPG Group has a sound dividend history, paying out a cash dividend in each of the previous five years at an average yield of just under 2%.

6.2 Material investments

GPG’s material investments are set out in the following table:

Table 34: Summary of GPG holdings

Country Company GPG Holding 31 December 2007	Country Company GPG Holding 31 December 2007	Country Company GPG Holding 31 December 2007
United Kingdom New Zealand Australia	Coats Group Ltd Newbury Racecourse plc Autologic Holdings plc Young & Co’s Brewery P.L.C. (‘A’ Shares) Ashley House plc Dawson International PLC Nationwide Accident Repair Services plc Turners & Growers Ltd Tower Ltd Turners Auctions Ltd Canberra Investment Corporation Ltd Capral Ltd TAFMO Ltd Rattoon Holdings Ltd The Maryborough Sugar Factory Ltd Tower Australia Group Ltd Green’s General Foods Pty Ltd Australian Country Spinners Ltd Gosford Quarry Holdings Ltd Tooth & Co. Ltd eServGlobal Ltd Tandou Ltd Intellect Holdings Ltd	100% 29% 21.7% 10.2% 9.5% 6.8% 5.6% 63.2% 19.8% 19.4% 68% 53.1% 56% 44.4% 27.1% 26.9% 72.5% 50% 29.2% (90.17% as at March 2008) 24.9% 18.7% 17% 15.7%

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Country Company GPG Holding 31 December 2007	Country Company GPG Holding 31 December 2007	Country Company GPG Holding 31 December 2007
U.S.A. France Singapore	MMA MYOB Ltd Farm Pride Foods Ltd NSX Ltd Capilano Honey Ltd AV Jennings Ltd Symex Holdings Metals X Ltd GME Resources Ltd Stavely Inc. Santa Fe Financial Corporation Dolfus Mieg et Cie Pertama Holdings Ltd	14.1% (15.59% as at August 2008) 13.6% 13.2% 9.9% 9.4% 9.1% 8.8% 8% 5.6% 100% 6.4% 24.3% 14%

Source: Guinness Peat Group (www.gpgplc.com)

From the above table it can be seen that GPG has a diversified range of businesses and equity ownerships.

6.3 Key personnel

GPG has an experienced board and management team as follows:

Table 35: Summary of Key Personnel

Personnel Name Position Description	Personnel Name Position Description	Personnel Name Position Description
Sir Ron Brierley A.I. Gibbs B.A. Nixon Dr Gary H Weiss	Chairman Executive Director Executive Director Executive Director	Sir Ron Brierley founded Brierley Investments Limited in 1961. Sir Ron took the position of Chairman of GPG in 1990. Mr. Tony Gibbs has a wide range of experience with public company boards and professionally within transactions work. Mr. Gibbs is Chairman of Tower Limited, Turners & Growers Ltd and Stavely Inc. He is also a director of Coats plc. Mr Blake Nixon has extensive corporate experience in both the UK and Australia. He is a director of Coats plc and also a director of Stavely Inc. Dr Gary Weiss has considerable experience in the Australian and international business scene. He is Chairman of Coats plc and a director of various public companies including Capral Limited and Westfield Group.
Source: MMA Management

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6.4 GPG - Share price

The chart below illustrates daily share prices and trading volumes in GPG shares on the ASX during the Trading Period:

Figure 12

GPG Share Price and Trading Volume History in the last 12 months Source : Bloomberg, ASX Announcements The above share trading captures only GPG shares traded on ASX.

Notable events disclosed in GPG announcements during the Trading Period which may have impacted share price movements and trading volumes are set out as follows:

Table 36: GPG recent ASX announcements

Date	Chart reference	Announcement details
04-Sep-07	A	Announcement by AV Jennings in relation to the election of Board
		seats by GPG
15-Nov-07	B	Notice of intention to make a takeover offer for Newbury Racecourse
		Plc in the UK
23-Jan-08	C	Increase and Extension of Offer for Newbury Racecourse Plc
04-Feb-08	D	Bidder`s Statement re Newbury Racecourse Plc
28-Feb-08	E	Preliminary Final Report FY2007
19-Mar-08	F	On - Market Bid for Gosford Quarry Holdings Limited - Automatic 2
		week extension
02-Apr-08	G	End of Offer Period for On Market Bid for Gosford Quarry Holdings
		Limited
28-May-08	H	Partial Offer for Shares in Tower Ltd in New Zealand
08-Aug-08	I	Sale of Shareholding in Tower Australia Group Limited
14-Aug-08	J	Change in substantial holding in Tower Australia Group Limited

Source : ASX

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The table below sets out price trends in GPG share trading on the ASX (which take account a number of bonus issues) over the Trading Period:

Table 37: GPG Share Price Summary

Period High ($) Low ($) VWAP ($)	Period High ($) Low ($) VWAP ($)	Period High ($) Low ($) VWAP ($)	Period High ($) Low ($) VWAP ($)
As at 25 August 2008 1 month to 25 August 2008 3 months to 25 August 2008 6 months to 25 August 2008 12 months to 25 August 2008	1.220 1.260 1.340 1.409 1.618	1.160 1.030 1.000 1.000 1.000	1.199 1.119 1.125 1.189 1.283

Source : Bloomberg The above share trading captures only GPG shares traded on ASX.

We note the following with respect to the GPG share price over the Trading Period:

the VWAP of Shares on 25 August 2008 (the day immediately prior to the day of the Announcement Date) was $1.20;
the Shares traded from a high of $1.618 to a low of $1.00 during the Trading Period; and
the VWAP for the Trading Period was $1.283, while for the six months and one month prior to the Announcement Date, the VWAP was $0.189 and $0.119 respectively.

Set out below a summary of trading activity in GPG shares listed on ASX, London Stock Exchange and the New Zealand Stock Exchange:

Table 38: Trading Statistics of GPG share

Period Average daily volume (shares) Turnover (% of issued shares) Average Bid Ask Spread1 (%)	Period Average daily volume (shares) Turnover (% of issued shares) Average Bid Ask Spread1 (%)	Period Average daily volume (shares) Turnover (% of issued shares) Average Bid Ask Spread1 (%)	Period Average daily volume (shares) Turnover (% of issued shares) Average Bid Ask Spread1 (%)
As at 25 August 2008 1 month to 25 August 2008 3 months to 25 August 2008 6 months to 25 August 2008 12 months to 25 August 2008	716,651 2,221,072 1,947,404 1,608,322 1,716,820	0.05% 3.47% 9.27% 14.97% 31.97%	0.7% 0.9% 0.9% 0.9% 0.8%
Source: Bloomberg; GPG interim results for 6 months to 30 June 2008 Note 1: Average bid ask spread is based on the New Zealand Stock Exchange

We note the following in relation to GPG shares trading:

the total traded volume of GPG shares listed on all 3 stock exchanges during the Trading Period was approximately 32% of the weighted average number of shares on issue; and
during the Trading Period the average bid-ask spread of GPG shares trading on the New Zealand Stock Exchange (which is the exchange on which the shares trade most actively) was 0.8%.

The above suggests that the GPG shares are reasonably liquid, particularly on the New Zealand Stock Exchange, should GPG undertake any capital raising exercise. We also note that according to GPG’s accounts as at 30 June 2008, GPG held cash balances of 240 million pounds sterling.

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6.5 Review of GPG past investments

6.5.1 Introduction

As a diversified investor, GPG has a history of investing in other companies with a view to improving their performances, including investment and funds management businesses. In particular, we note that GPG has held significant investments in AWM and Tyndall.

Below is a summary profile of GPG’s track record with Tyndall and AWM.

6.5.2 Tyndall

GPG acquired an interest in Tyndall in 1992 when the company had a market capitalisation of $10 million and eventually acquired a controlling 50% shareholding in Tyndall. GPG sold its investment in Tyndall in May 1999 to Royal & Sun Alliance, at which time Tyndall was valued at $738 million.

GPG aided Tyndall to become a funds management, superannuation and trustee services business.

Tyndall was a multi-specialist investment manager of Australian investment funds. Tyndall managed funds on behalf of institutional, superannuation funds and private clients and specialised in Australian shares, Australian fixed interest and International fixed interest and is now part of the Suncorp-Metway Limited group.

Set out below is the graphical illustration of the share trading of Tyndall during the period in which GPG held the investment:

Figure 13

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Share trading in Tyndall whilst GPG was a major shareholder
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Source : Bloomberg

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6.5.3 AWM

AWM is a leading provider of wealth creation products and services in Australia.

GPG became a direct shareholder of AWM in early 2005 when Tower Limited spun-off its wealth management arm (AWM) as a separately listed Australian company. At this point GPG held 19.9% of AWM shares. In March 2005 GPG increased its shareholding to 31.54%, at which time AWM had a market capitalisation of $328 million. In April 2007, GPG sold its stake in AWM, at which time AWM’s market capitalisation had increased to approximately $1.4 billion.

Over the period that GPG had significant influence over AWM, AWM grew from being solely a provider of financial planning services to one that also provided investment management advice and trustee services. As at June 2005 AWM had $18.8 billion funds under management, advice and administration (“ FUMA ”) and profit of $29.3 million.

In 2006, AWM merged with Select Managed Funds Limited which resulted in a sizeable increase in FUMA and also helped AWM expand and strengthen its operations in Australia.

Set out below the graphical illustration of the share trading of AWM during the period in which GPG held the investment:

Figure 14

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Share trading in AWM whilst GPG was a major shareholder
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Source : Bloomberg

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7 VALUATION METHODOLOGIES

7.1 Valuation approach

Set out in Appendix 2 are the various valuation methodologies considered by PKFCA.

MMA currently has two (2) businesses being the LIC Business and the FUM activities. Having regard to the nature of the above assets, we have valued the Sale Securities by undertaking a fair valuation of each of the above businesses and we have adopted the net realisable value (“ NRV ”) on a going concern basis methodology as the most appropriate method to value the above businesses.

Set out below are the broad steps used to arrive at the fair value:

assess the fair market value of the underlying assets which make up the LIC Business, which comprise of direct listed equities, using the latest available market values and adding cash. Given the nature of the LIC Business, which typically trades at a premium or discount to NTA, we have assessed what may be a fair premium/discount by reference to peer companies whose principal business is that of a LIC. In arriving at our assessment of the LIC Business, we have not applied any discount for marketability or negotiability given that the nature of the underlying assets are largely liquid and cash; and
determine the fair market value of the management rights attaching to the FUM (“ Management Rights ”) on the basis that the management rights FUM can be sold to a third party on a standalone basis. This approach involves considering the amount of FUM attaching to the management rights available for sale and what a third party may pay for the management rights having regard to the fact that it is more likely than not that no costs/overheads would be assumed by the third party purchaser and as a result the revenue stream assumed by the buyer would be incremental to its existing operations. In arriving at our overall value of FUM activities, we have taken into consideration what may be an appropriate discount for lack of marketability and negotiability given that such business is not readily realisable.

Given that the overall approach is to value MMA as a going concern, no deduction for shut down costs has been taken into account.

We have aggregated the total value of the businesses determined on a minority interest basis and added an appropriate premium for significant influence given that GPG’s shareholding increases to a level which will enable it to have a level of significant influence over the affairs of MMA. The amount of premium for significant influence would be a lesser amount than a premium for control, as there are no synergy or other benefits that could be achieved for such a shareholding by GPG or any other potential third party.

In view of the fact that the Acquisition and the Buy-back Tender are interdependent, we have assessed the fair value of the Sale Securities on the assumption that the Buy-back Tender will be approved by the Shareholders and that all Shareholders participate equally in the Buy-back Tender.

We have cross-checked the valuation conclusion by reference to the Share price. As noted in paragraph 4.10 above, we have concluded that trading in the Shares is not sufficiently liquid for the purposes of enabling us to rely upon the Share price as the primary valuation method of a minority Share. However, it is considered to be a useful cross-check for our valuation opinion.

7.2 Definition of value

For the purposes of our opinion, the term “value” will be interpreted as meaning “fair market value”, which is defined as the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing, but not anxious purchaser and a knowledgeable, willing, but not anxious vendor, acting at arm’s length.

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8 VALUATION OF MMA

8.1 Net Realisable Asset (NRA) Valuation

As noted in paragraph 7.1 above, our valuation approach for MMA is to rely on the net realisable assets. This approach involves the following:

separating and valuing the two business; and
ascribing a premium for significant influence.

8.2 Valuation of the LIC Business

In undertaking the valuation of MMA’s LIC Business, we had regard to:

the financial position of MMA as at 31 July 2008; and
updating the carrying value of the assets to reflect their market value as at 21 August 2008, being the closest date possible to the finalisation of this Report.

We then adjusted the balance sheet to take into account the effects of the Buy-back Tender, which results in a proforma balance sheet as at 21 August 2008 (“ Proforma Balance Sheet ”).

Set out below is a Proforma Balance Sheet taking account of the above matters:

Table 39: MMA Proforma Balance Sheet

As at ($’000s unless otherwise indicated)	Ref	31 Jul 08 Unaudited	Adjustments	Proforma Balance Sheet as at 21 Aug 08 “BS 1”	Buyback	Proforma Balance Sheet as at 21 Aug 08 after Buyback “BS 2”
Current Assets Cash and cash equivalents Receivables Fixed interest deposits Securities Total Current Assets Non Current Assets Property, plant & equipment Deferred tax asset Goodwill Other intangible assets Total Non-Current Assets TOTAL ASSETS Current Liabilities Payables Current Tax Liabilities Total Current Liabilities Non Current Liabilities Deferred Tax Liabilities Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS	8.2.1 8.2.2 8.2.4 8.2.5	39,797 833 77,970 57,877	499 - 455 (2,427)	40,296 833 78,425 55,450	- - (75,200) -	40,296 833 3,225 55,450
		176,477 35 8,039 - -	(1,473) - 709 - -	175,004 35 8,748 - -	(75,200) - - - -	99,804 35 8,748 - -
		8,074 184,551 1,339 (498)	709 (764) - -	8,783 183,787 1,339 (498)	- (75,200) - -	8,783 108,587 1,339 (498)
		841 -	- -	841 -	-	841 -
		- 841	- -	- 841	- -	- 841
		183,710	(764)	182,946	(75,200)	107,746

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As at ($’000s unless otherwise indicated)	Ref	31 Jul 08 Unaudited	Adjustments	Proforma Balance Sheet as at 21 Aug 08 “BS 1”	Buyback	Proforma Balance Sheet as at 21 Aug 08 after Buyback “BS 2”
Equity Issued capital Retained (losses)/profits Asset revaluation reserve ESP reserve Equity attributable to equity holders of the parent NTA post tax NTA pre tax Number of shares NTA post tax per share (cents) NTA pre tax per share (cents)	8.2.6 8.2.7 8.2.8	220,233 (39,547) 2,893 130	892 (1,655) - -	221,125 (41,202) 2,893 130	(75,200) - - -	145,925 (41,202) 2,893 130
		183,710	(764)	182,946	(75,200)	107,746
		183,710 175,671 245,108 74.95 71.67	(764) (1,473) 1,500	182,946 174,198 246,608 74.19 70.64	(75,200) (75,200) (106,176)	107,746 98,998 140,432 76.72 70.50

Source : MMA Annual Reports, MMA management accounts, PKFCA analysis Note : The above may not add due to rounding.

Set out below are the adjustments made to the unaudited 31 July 2008 Balance Sheet so as to arrive at the Proforma Balance Sheet after the Buy-back Tender – BS 2.

8.2.1 Cash and cash equivalents

Proceeds from the exercise of ESP

As set out in paragraph 4.8.1 above, Mr Alex Hutchison and Mr Justin McLaughlin’s ESP are “inthe-money”. As such, we have adjusted for the potential proceeds from the exercise of the ESP of approximately $0.89 million:

Table 40: Proceeds from exercise of ESP

Executive	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)	Number of options / shares Exercise Price ($) Expiry Date Potential Exercise Proceeds ($)
Alex Hutchison Justin McLaughlin Total	1,000,000 500,000	0.597 0.589	16 Apr 2013 30 Jun 2013	597,000 294,500
	1,500,000			891,500

Source : MMA management, PKFCA analysis

Operating Costs

We understand that MMA’s annual operating costs are approximately $7.5 million (pre-tax). For the purposes of this Report, we have taken into account 1/12th of this amount in calculating the NTA.

In addition to the proceeds from the exercise of ESP, the Company has incurred a number of operating costs which are estimated to be approximately $0.6 million per month. These costs have been deducted from the operating profit.

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Interest income

For the purposes of this Report, we have calculated interest on the cash balance for one month a rate of 7.0%, representing an estimate of rates payable on such balance. This results in an amount of $0.2 million.

Movement in cash at balance

Below is a movement in the cash at bank balance:

Table 41: Cash movement

Executive	$’000 $’000	$’000 $’000
Opening balance Add: Proceeds from ESP Add: Interest income Less: Operating costs Total	892 232 (625)	39,797 499
		40,296

Source : MMA management, PKFCA analysis

8.2.2 Fixed interest deposit

We note the following in relation to the fixed term interest-bearing deposits:

the deposits mature within 30 days and yield an average floating interest rate of 7.0% per annum. In recognising the interest income for the month, we adjusted for the interest on the deposit and tax effected the adjustment; and
assuming the Buy-back Tender occurs as at Proforma Balance Sheet date, the deposits will be reduced by the allocated $75.0 million and $200,000 for transaction costs.

Calculations of the above adjustments are as follows:

Table 42: Fixed interest deposit adjustments

Ref	Ref	$’000s
Fixed interest deposits Add: Interest = Fixed interest deposits x Average floating interest rate ($77.97 million x 7.0%/12) BS 1 Less: Buy-back Tender payments (inclusive of transaction costs) BS 2	8.2 8.2.5 8.2 8.2	77,970 455
		78,425 (75,200)
		3,225

Source: PKFCA analysis NB: The tax effect is calculated separately in paragraph 8.2.5 below

8.2.3 Fee income

We have based our estimate of management fees based on the overall 30 June 2008 results. For the purposes of this Report, we have taken into account management fee income of $0.2 million (that is, annual fees of $2.5 million divided by 12).

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8.2.4 Securities

We have taken the market value of the securities held as investments by MMA as at 31 July 2008 and re-valued them to 21 August 2008. In addition, we have allowed for transaction costs at 0.8% in relation to the disposal of the shares owned by MMA as at the date of valuation, that is, 21 August 2008. Set out below is reconciliation in the movement of the value:

Table 43: Adjustments to securities

Ref	Ref		$’000s
Decrease in market value of securities Market value of securities as at 21 August 2008 Less: Market value of securities as at 31 July 2008 Transaction costs assuming sale of securities = Market value of securities as at 31 July 2008 x transaction costs [$57.877 million x 0.8%] Total adjustment to securities	8.2 8.2.5	55,913 (57,877)	(1,964)
			(463)
			(2,427)
Source: PKFCA analysis

8.2.5 Deferred tax asset

Set out below are the tax effect adjustments arising from the revaluation movements in fixed interest deposits and securities:

Table 44: Tax effect adjustments

Ref	Ref	$’000s $’000s	$’000s $’000s
Deferred tax (benefit) /liability as at 31 July 2008 Deferred tax asset = Operating expense (as calculated in Table 41) x tax rate [$0.625 million x 30%] Deferred tax liability = Interest (as calculated in Table 41) x tax rate [$0.232 million x 30%] Deferred tax liability = Interest (as calculated in Table 42) x tax rate [$0.455 million x 30%] Deferred tax asset = Diminution in value of securities x tax rate [$2.427 million x 30%] Deferred tax benefit / (liability) - BS 1 & 2	8.2 8.2.1 8.2.1 8.2.2 8.2.4 R8.2	188 (70) (136) 728	8,039 709
			8,748

Source : PKFCA analysis Note : The above may not add due to rounding.

8.2.6 Issued Capital

Set out below is the movement in the issued capital of MMA taking into account the Buy-back Tender and the exercise of “in-the-money” ESP:

Table 45: Adjustments to the issued capital

Ref	Ref	$’000s
Issued capital as at 31 July 2008 Exercise of ESP BS 1 Less: Buy-back Tender and transaction costs BS 2	8.2.1 8.2 8.2.2 8.2	220,233 892
		221,125 (75,200)
		145,925

Source: MMA Explanatory Statement, PKFCA analysis

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8.2.7 Retained earnings

Set out below is the movement in retained earnings having regard to the movement in the various profit and loss items noted above:

Table 46: Adjustments to the retained earnings

Ref	Ref	$’000s
Retained earnings as at 31 July 2008 Adjustments: (a) Interest income (being $0.232 million + $0.455 million) (b) Diminution in value of investments (c) Operating expenses (d) Net tax effect on (a), (b) and (c) Retained earnings - BS 1 & 2	8.2 8.2.1/8.2.2 8.2.4 8.2.1 8.2.5 8.2	(39,547) 687 (2,427) (625) 709
		(41,202)

Source : MMA Explanatory Statement, PKFCA analysis Note : The above may not add due to rounding.

8.2.8 NTA per Share

Set out below is the pre and post tax NTA per Share assuming the following scenarios:

Before the Buy-Back Tender is approved

Table 47: Adjustments to NTA per Share before Buy-back Tender is approved

Ref	Ref	’000s Post-Tax $’000s Pre-Tax $’000s	’000s Post-Tax $’000s Pre-Tax $’000s	’000s Post-Tax $’000s Pre-Tax $’000s
NTA – Proforma Balance Sheet Divided by: Number of Shares on issue as at 31 July 2008 (excluding ESP Shares) Add: number of “in-the-money” ESP shares BS 1 NTA per Share (cents)	8.2 8.2 8.2.1	245,108 1,500	182,946 74.19	174,198 70.64
		246,608

Source : MMA Explanatory Statement, PKFCA analysis

Buy-back Tender is approved

Table 48: Adjustments to NTA per Share after Buy-back tender is approved

	Ref	’000s	Post-Tax $’000s	Pre-Tax $’000s
NTA – Proforma Balance Sheet Divided by: Number of Shares on issue as at 31 July 2008 (excluding ESP Shares) Add: number of “in-the-money” ESP shares BS 1 Less: Buy-back Tender (being $75.0 million of Shares equal to pre tax NTA per share as at 30 September 2008) BS 2 NTA per Share(cents)	8.2 8.2 8.2.1 Note 1	245,108 1,500	107,746 76.72	98,998 70.50
		246,608 (106,176)
		140,432

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Source : MMA Explanatory Statement, PKFCA analysis

Note 1 : The above number of shares to be bought back is calculated based on the pre tax NTA per Share of 70.64 cents per Share (including “in-the-money” ESP Shares) per the Proforma Balance Sheet (as at 21 August 2008) prior to the Buy-back Tender (i.e. BS 1) and is subject to change on 30 September 2008. The amount calculated for the Buy-back Tender includes those HGL Shares of 4,352,966 per Table 2. For the purposes of this Report, we have assumed that the HGL Shares will be included in the Buy-back Tender, albeit that HGL have indicated that it will most likely not participate such shares.

8.3 Premium/Discount to NTA

LIC Businesses are valued taking into account the value of the underlying assets adjusted for either a premium or discount to the market value of the NTA. In arriving at the premium/discount, the following matters are taken into consideration:

the life of the fund;
the size;
efficiency of management fees charged;
whether or not the fund is externally or internally managed;
the returns derived by the fund; and
prevailing market conditions.

A list of LIC in Australia can be found in Appendix 4 . Set out below is a list of the LICs that are considered to be comparable to MMA:

Table 49: Peer comparison - Premiums/Discounts to NTA

Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA	Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA	Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA	Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA	Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA	Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA	Data as at 31 July 2008 Market capitalisation $’million Last Price$ Pre-Tax NTA $ Prem/Disc % Pre-Tax NTA Post-Tax NTA $ Prem/Disc % Post Tax NTA
Australian Foundation Argo Investments Milton Corporation Djerriwarrh Investments Australian United Investment Diversified United Investments Choiseul Investments Carlton Investments Brickworks Investment Mirrabooka Investments Century Australia MMC Contrarian Contango MicroCap Huntley Investment Van Eyk Three Pillars Whitefield Amcil WAM Capital Aberdeen Leaders Wilson Investment Fund Ironbark Capital Australian Leaders Fund Limited	4,867 4,041 1,639 871 732 468 421 443 355 217 197 146 138 128 127 219 116 117 96 86 74 67	5.02 7.09 19.38 4.27 7.70 3.34 5.16 16.71 1.22 1.85 1.06 0.58 1.18 0.75 0.95 3.14 0.67 1.11 1.67 0.71 0.47 0.85	4.96 5.54 18.61 3.98 7.49 3.33 5.32 18.75 1.46 1.89 1.03 0.72 1.52 0.77 1.03 3.49 0.65 1.41 1.55 0.95 0.54 1.06	1.21 27.98 4.14 7.29 2.80 0.30 (3.01) (10.88) (16.44) (2.12) 2.91 (19.11) (22.37) (2.70) (7.77) (10.03) 3.08 (21.56) 7.74 (25.18) (13.28) (19.67)	4.27 5.83 16.49 3.72 6.43 2.92 4.46 16.74 1.46 1.77 1.08 0.75 1.49 0.77 1.03 3.54 0.65 1.39 1.49 0.93 0.54 1.05	17.56 21.61 17.53 14.78 19.75 14.38 15.70 (0.18) (16.44) 4.52 (1.85) (22.67) (20.96) (2.31) (7.77) (11.30) 3.08 (20.71) 12.08 (23.94) (13.28) (18.82)

Source : ASX announcements

NB : The above table only focuses on entities who operate solely as LIC

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Based on the companies listed above and using market capitalisation as the appropriate benchmark, we consider the following companies as most comparable to MMA:

Amcil;
Huntley Investment;
Van Eyk Three Pillars;
WAM Capital; and
Contango MicroCap.

The average and median premium/ (discount) for the above companies are (9.7%) (average) and (7.7%) (median). The above compares to MMA’s discount of (22.67%).

In order to assess an appropriate premium/ (discount) to NTA, using the selected companies in Table 49, we have undertaken the following analysis.

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to incorporate company specific factors: Table 50: MMA multiple analysis Factor Impact on MMA post-tax NTA (Discount/Premium)
	We have added to the starting discount an additional amount for MMA’s relatively short life compared to other investment funds.
	Life of the investment funds As noted in this graph, there is direct correlation between the life of a fund and its premium/discount. In other words, the longer the life of the fund the lesser the discount applied and in fact in certain cases there is a premium. As will be noted in this graph MMA has one of the shortest lives and its discount to NTA is correspondingly higher.

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	We have added to the starting discount an additional amount to take into account MMA’s smaller size.	We have added to the starting discount an additional amount to take into account MMA’s potential inefficiency in its fees relative to its investment value.
Impact on MMA post-tax NTA (Discount/Premium)

Factor	Size by Market Capitalisation This graph shows that the greater the market capitalisation, the lower the discount to NTA. As MMA is one of the smallest LIC it suffers a higher discount.	Management Fee Another key feature of assessing performance of a LIC is its management fee. The graph shows that there is some correlation between fees relative to market capitalisation. MMA has been adversely affected by its relatively high fees as a percentage of FUM.

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	We have deducted from the starting discount an amount to reflect the fact that MMA is now internally managed.	We have added to the starting discount an additional amount to take into account MMA’s relatively poor returns compared to its peers.
Impact on MMA post-tax NTA (Discount/Premium)

Factor	Internally vs. Externally managed LICs The graph shows that those LIC that are internally managed tend to achieve a premium over NTA. MMA has a discount despite the fact that its management was recently internalised.	Returns achieved by an LIC No doubt this is one of the most significant aspects to determining the level of premium/discount and as noted in this graph the poorer the return the higher the discount to NTA.

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Based on the analysis set out above, PKFCA is of the opinion the appropriate discount to NTA to be applied is a low of 24% and a high of 21%. In our opinion, this reflects the above key considerations and also approximates MMA’s existing discount as reflected in Share trading on the ASX.

8.4 Valuation of the LIC Business

Based on the above, we have valued the LIC Business as follows:

Table 51: Valuation of LIC Business

Ref	Ref	Low value $’000 High value $’000	Low value $’000 High value $’000
Equity value of the LIC Business Less: Discount to NTA Sub-total Less: Discount for marketability Equity value of LIC Business (Minority Basis)	8.2 8.3 8.3	107,746 (25,859) 24.0%	107,746 (22,627) 21.0%
		81,887 -	85,119 -
		81,887	85,119

Source : PKFCA analysis

Note : Marketability discount – No discount has been applied given that the nature of the underlying assets represents marketable securities and/or cash which are readily tradeable in the market place.

8.5 Valuation of Management Rights

We have assessed the market value of MMA’s Management Rights based on the percentage of FUM method. This percentage of FUM is based on a ‘rule of thumb’ used within the funds management industry.

In our opinion an earnings based approach is not relevant given the relatively small size of MMA’s FUM and the most likely scenario of the FUM being sold to an existing entity that would be able to add MMA’s Management Rights to the FUM for little incremental cost. Typically in this scenario, the acquirer is looking for greater economies from their own operations and acquisitions such as MMA’s Management Rights are considered to be the most efficient way in which to achieve greater economies.

8.5.1 FUM

As set out in paragraph 4.4.1 above, MMA has $131.7 million of external FUM as at 31 July 2008 and this FUM is detailed as follows:

Table 52: FUM

External FUM	$’000
Australia Share Fund Small Companies Fund Value Growth Trust Western Pacific Concentrated Fund Global Value Fund Total external FUM	76,700 20,200 12,200 22,100 500
	131,700

Source : MMA management

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8.5.2 Selection of percentage applicable to the FUM

We have estimated an appropriate percentage of FUM by reference to the implied percentages of FUM of listed companies similar to MMC, (being the portfolio manager of approximately 97% of total external FUM of MMA).

The tables below list the implied percentages of FUM of comparable listed companies and their description:

Table 53: Implied percentages of FUM of comparables

Company	Enterprise value1 $’million	Market capitalisation1 $’million	FUM2 $’million	Market Capitalisation Implied % of FUM
DKN Financial Group Ltd Everest Babcock & Brown Ltd HFA Holdings Limited Hunter Hall International Ltd K2 Asset Management Holdings Platinum Asset Management Treasury Group Ltd Average (excluding outliers) Median (excluding outliers)	115 113 684 232 59 1,837 168 262 168	110 122 581 243 65 2,008 187 249 187	8,060 2,500 7,873 2,352 582 14,557 12,491 6,655 7,873	1.4% 4.5% 8.7% 9.9% 10.2% 12.6% 1.3% 5.2% 4.5%

Source : Bloomberg / ASX announcements Note * : Outliers Note 1 : Analysis performed as at 27 August 2008 Note 2 : Data extracted based on latest available announcements by companies

Table 54: Comparable company description

Name
Description

DKN Financial Group Ltd
Everest Babcock & Brown Ltd
HFA Holdings Limited
Hunter Hall International Ltd
K2 Asset Management Holdings
Platinum Asset Management
Treasury Group Ltd

DKN provides integrated financial services and products in Australia. The Group
offers financial management and advisory services, consulting and bureau
services, share trading, funds management and insurance.
Everest is an absolute return investment fund manager. The Company manages a
number of absolute return funds and funds that invest directly in subordinated debt
and equity co-investments. Everest Babcock & Brown is not associated or
affiliated with the Bermuda-based Everest Capital.
HFA is a specialist funds management company that provides absolute fund
products to retail, wholesale, and institutional investors throughout Australia.
Hunter Hall is an ethical fund manager whose investment policy restricts
investment in companies involved in activities such as tobacco, armaments,
gambling, destruction of the environment or cruelty to animals.
K2 is an Australian based fund holding company. The Company through its
subsidiary manages mutual funds.
Platinum is a fund management company that specialises in global equities.
Treasury Group is an Australian investment and funds management company.
The Company is developing a wholesale funds management service.

Source : Bloomberg

The above analysis is consistent with the average percentage of FUM of 4% as observed in fund management transactions set out in Appendix 5 . However, we have applied a percentage of 2.0% to 2.5% which takes into account the following:

the lack of continuity of senior fund management personnel;

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the smaller size of the FUM relatively to the companies considered to be comparable; and
the overall declining level of FUM and rate of withdrawals.

8.5.3 Discount for Lack of Marketability

A discount for a lack of marketability has been applied as shares in unlisted companies are valued at a significant discount to shares in comparable listed companies. In practice marketability discounts range between 35% and 50% based on USA studies. Generally, Management Rights to FUM are more liquid than the businesses identified in the above studies and such would not incur such a discount. However, given the relatively small size of the FUM, we have adopted a discount for marketability of 25% (low value) and 20% (high value).

8.5.4 FUM Valuation

Based on the above PKFCA's valuation of the external FUM is as follows:

Table 55: Valuation of external FUM

	Ref	Low Value $000	High Value $000
Current external FUM Valuation percentage of FUM Equity value of FUM Less: Discount for marketability - % Less: Discount for marketability - $ Discounted equity value of FUM	8.5.1 8.5.2 8.5.3	131,700 2.00%	131,700 2.50%
		2,634 25% (659)	3,293 20% (659)
		1,976	2,634

Source: PKFCA analysis

8.6 Premium for significant influence

As noted above, our valuations of the LIC Business and the Management Rights have been based on minority interest valuations. However, in our opinion as a result of the Proposals, GPG will have an increased shareholding ranging from approximately 26% to 30% of MMA and would thereby gain significant influence over MMA.

We have not applied a premium for control in assessing the value of the Shares, but rather an allowance for the level of significant influence that would be afforded to GPG as a result of the Proposals.

In assessing the level of premium that would be applicable we have taken into account the following:

GPG will have one out of five board seats, with a potential to increase its representation by a further one member; and
as set out in paragraph 4.8 above, MMA has a fairly diverse spread of shareholders and as such GPG will be able to dominate the decision making process. However, GPG’s increased shareholding will not entitle it to control of MMA.

We note that premiums for influence are not generally observable in the market. As a result, we have considered premiums for control in similar transactions in arriving at a premium for influence. Appendix 6 sets out control premiums that can be observed in recent transactions within the Industry. We note the acquisition premiums based on the value of the offer and the following share prices:

last price before the announcement of the offer - range from 5.0% to 5.9%, with an average of 5.4%;
one week before the announcement of the offer - range from 6.4% to 10.9%, with an average of 8.1%;

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one month before the announcement of the offer - range from 7.7% to 9.6%, with an average of 8.9%; and
three months before the announcement of the offer - range from 7.0% to 8.7% with an average of 7.9%.

Having regard to the above, we applied a premium for significant influence in the range of 5.0% to 7.0%. In our opinion, this premium is appropriate to reflect:

implied premiums in Appendix 6 represent control premiums;
the peer comparables in Appendix 6 are of similar business size to MMA; and
taking into account the likely evolution of MMA’s strategy of further diversifying its operations.

8.7 Valuation conclusion

Assuming MMA will continue as a going concern and the assets realised as under normal conditions, PKFCA’s value of MMA is summarised as follows:

Table 56: Summary of Valuation – significant influence

	Ref.	Low Value $000	High Value $000
Equity value of the LIC Business Add: Equity value of Management Rights Equity value on a minority basis Add: Premium for significant influence - % Add: Premium for significant influence - $ Number of shares Equity value with significant influence (cents per Share)	8.4 8.5.4 8.6 8.2.8	81,887 1,976	85,119 2,634
		83,863 5.0% 4,193	87,753 7.0% 6,143
		88,056 140,432	93,896 140,432
		62.70	66.86

Source: PKFCA analysis

We have assessed the equity value of MMA (with significant influence) per Share to be in the range of 62.70 cents to 66.86 cents, with a mid-point of 64.78 cents.

For the purposes of assessing the Buy-back Tender, we have also undertaken a minority valuation calculation and set out below our valuation assessment:

Table 57: Summary of Valuation – minority value

	Ref.	Low Value $000	High Value $000
Equity value of the LIC Business Add: Equity value of Management Rights Equity value on a minority basis Number of shares Equity value at minority interest (cents per Share)	8.4 8.5.4 8.2.8	81,887 1,976	85,119 2,634
		83,863 140,432	87,753 140,432
		59.72	62.49

Source : PKFCA analysis

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8.8 Share Valuation Cross Check

We have assessed the reasonableness of the NRV valuation of MMA by reference to the Share trading analysis.

Based on our analysis of recent market trading activity in paragraph 4.10 above, in our opinion, the market value of a Share on a minority basis is in the range of 59.72 cents to 62.49 cents per Share, with a mid-point of 61.10 cents. MMA last traded Share price as at the 8 September 2008 being 60.5 cents per Share. We also note that the VWAP for the last three months as set out in Table 27 is 58.4 cents per Share.

Based on our mid-point valuation of the Sale Securities with significant influence of 64.78 cents per Share, we set out below the premium/ (discount) to the MMA Share price:

Table 58: Assessment of Premium to Share price versus PKFCA valuation

Price % Premium/Discount	Price % Premium/Discount	Price % Premium/Discount
3 months VWAP Last traded Share price	58.4 60.5	10.9% 7.0%
Source: PKFCA Analysis

In our view, the last traded Share price takes into consideration the likelihood of the Proposals being implemented and consequently, the receipt of the proceeds under the Buy-back Tender without suffering a discount. Accordingly, this supports our valuation conclusion.

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9 IMPACT ON CREDITORS

9.1 Basis of assessment

In forming our opinion as to whether or not the Buy-back Tender would materially prejudice MMA’s ability to pay creditors, we have considered the following:

the nature of its existing operations and need for capital;
its current working capital position; and
its exposure to any borrowings, contingent liabilities and any other liability.

9.2 Assessment

As note in paragraph 8.2 above, following implementation of the Proposals, MMA would retain approximately $99.8 million of cash and listed securities, which exceeds its total liabilities of $0.8 million. In addition, we also understand that MMA has no other external liabilities or commitments.

9.3 Conclusion

Based on the above, it is our opinion that the creditors of MMA will not be materially prejudiced as a result of the approval of the Buy-back Tender.

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10 EVALUATION

10.1 Comparison of values – Sale Securities

As noted in paragraph 8.7 above our valuation conclusion for the Sale Securities is a low of 62.70 cents per Share to a high of 66.86 cents per Share, with a mid-point of 64.78 cents per Share.

The effective purchase price under the SSA is NTA per Share less a discount of 12.66% or no less than 58.0 cents per Share unless HGL waives its rights. For the purposes of calculating the NTA amount being paid, we have taken the pre-tax NTA per share (excluding any dilution effect the exercise of the ESP) which is 71.07 cents per Share and deducted from that value the agreed discount of 12.66% and compared the amount to our assessed valuation range. Below is our calculation:

Table 59: Analysis of Sale Securities

	Low Mid-point High	Low Mid-point High	Low Mid-point High
Pre tax NTA per Share Discount Value for Sale Securities PKFCA assessed value - significant influence Value of the Sale Securities as compared to PKFCA’s assessed valuation - Premium/ (Discount)	71.07 12.66%	71.07 12.66%	71.07 12.66%
	62.07 62.70 (1.01%)	62.07 64.78 (4.18%)	62.07 66.86 (7.16%)

Source : Proposals; PKFCA

Based on the above, the amount offered for the Sale Securities is assessed as being less than our assessed valuation range of a Share taking into account a premium for significant influence.

We note that the final amount to be paid for the Sale Securities will be determined after the approval of the Proposals by Shareholders. We have assumed that any increase or decrease in NTA per Share between the date of this Report and the NTA Calculation Date less the agreed discount would still fall within our valuation range, assuming that the parameters adopted in our Report (that is the level of discount to NTA and premium for significant influence) remain applicable at the NTA Calculation Date.

In our opinion if the proposals are implemented:

GPG will not obtain control of MMA and accordingly, whether or not GPG is paying a control premium is not a relevant consideration;
GPG will obtain a position of influence over MMA. As the assessed value of the Sale Securities is somewhat less than the assessed value of a Share (on a basis of a premium for significant influence), in our opinion, this indicates that while GPG is paying some premium for obtaining a position of significance over MMA, it is not paying what we would regard as a full premium for such influence.

10.2 Assessment of the fairness relating to the Buy-back Tender

As set out in paragraph 8.2.8 above, the pre-tax NTA amount to be paid to all Shareholders (excluding the employees) under the Buy-back Tender is 70.64 cents per Share. Our assessment of a minority Share, which is that applicable to the Non-Associated Shareholders is in the range of 59.72 cents (low) and a high of 62.49 cents with a mid-point of 61.10 cents per Share. On this basis, the Buy-back Tender is fair.

10.3 Advantages and disadvantages of the Proposals to Non Associated Shareholders

In addition to the above, we have considered the following advantages and disadvantages for approving the Proposals:

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Elimination of potential overhang of HGL shares

GPG as the new major shareholder with a proven track record in financial services

Up until April 2007, GPG was a significant shareholder with board representation of a public company known as AWM, a large independent provider of financial services. During the period of GPG ownership, AWM significantly increased its FUM and profitability which generally resulted in strong returns for AWM shareholders.

Prior to the investment in AWM, GPG was the major shareholder of a former listed company known as Tyndall. Tyndall operated in the area of funds management and life insurance and GPG ownership period extended from 1991 to 1999. Tyndall experienced strong growth in its business lines and profitability in the period of GPG’s ownership and was ultimately the subject of a successful takeover offer which delivered strong financial returns for most shareholders.

As set out in this Report, GPG has a demonstrated track record of providing support and guidance to financial services companies with a resultant positive outcome for a number of those shareholders.

Participate in an evolution in strategy

The MMA executive team recently has changed significantly and the current executive team have a history in the wealth management business. This experience is different from the traditional LIC Business. The MMA board has announced that they intend MMA to undertake an evolution in strategy whereby MMA diversifies itself from being a largely LIC Business and moves to become an integrated financial services company. This strategy is supported by GPG and as noted above, GPG has had a history of success in this particular area.

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Ability for Non-Associated Shareholders to realise part of their investment in MMA, without transaction costs

By approving the Proposals, the Non-Associated Shareholders will allow the Buy-back Tender to be implemented and Non-Associated Shareholders will have the opportunity to reduce their investment in MMA by an effective 70.64 cents per Share bought back. This will allow NonAssociated Shareholders to realise part of their investment with no transaction costs and to redeploy such funds into other activities, whilst at the same time allowing them to retain an investment in MMA, albeit at a reduced level.

Avoiding market discount

Minimal impact to current operations

We understand that GPG has no intention to alter the operations of MMA and as a result MMA will continue its current strategy of participation in wealth management business.

Minimise the potential impact in future from volatile earnings

Potential improvement to Earnings per Share

The Proposals have the potential to improve the earnings per Share as the recently announced business strategy may outperform the previous business strategy.

Positive impact on the post tax NTA

The effect of the Proposals will increase the post tax NTA per Share from 74.19 cents (before Buy-back Tender) to 76.72 cents (after Buy-back Tender is implemented).

10.4 Disadvantages to Non Associated Shareholders

Reduced cash resources

Implementing the Proposals, and in particular the Buy-back Tender, will reduce the cash resources of MMA. This will reduce the level of funds invested and as noted in this Report, the value of traded shares of LICs that have a smaller capital base generally suffer a greater level of discount to NTA per share. This may have adverse consequences for MMA going forward, if the new business strategy is not successful or is delayed in implementation.

Potential reduction of Share liquidity

Implementing the Proposals will increase GPG’s shareholding to an estimated 29.13% (assuming all Shareholders participate equally in the Buy-back Tender) and a capped amount of 30.4% that may vary depending upon the participation of Shareholders in the Buy-back Tender. As a result, this may reduce the trading liquidity of MMA Shares, although it is acknowledged that with the current arrangement of GPG and HGL being the major shareholders of MMA, it is arguable as to whether or not there would be any detrimental effect on the Share price. However, if the Sale Securities were sold to other investors this would be likely to have the effect of improving liquidity in Share trading.

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Disincentive for future takeover

GPG’s increased Shareholding to an estimated 29.13% (assuming all Shareholders participate equally in the Buy-back Tender) and a capped amount of 30.4% (that may vary depending upon the participation of Shareholders in the Buy-back Tender), will be significant and could adversely impact any potential for a future takeover bid for MMA.

Potential for achieving value for MMA as a listed vehicle

10.5 Implications if the Proposals do not proceed

If the Proposals do not proceed, in the absence of any other compelling alternate proposal, the market trading price of the Shares may fall.

10.6 Conclusion

Based on the above, in our opinion, the advantages of the Proposals to Non Associated Shareholders outweigh the disadvantages.

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11 QUALIFICATIONS DECLARATIONS AND CONSENTS

11.1 Qualifications

PKFCA is the licensed corporate advisory arm of PKF East Coast Practice, Chartered Accountants and Business Advisers. PKFCA provides advice in relation to all aspects of valuations and has extensive experience in the valuation of corporate entities and provision of expert reports.

Messrs Vince Fayad is an executive of PKFCA primarily responsible for the preparation of this Report.

Mr Vince Fayad B.Bus, CA, is a Director of PKFCA and the head of that practice. Mr Fayad is also a partner of PKF East Coast Practice. Mr Fayad is the Director responsible for this Report. Mr Vince Fayad has over 25 years experience in a number of specialist corporate advisory activities including company valuations, due diligence investigations, preparation and review of business feasibility studies, public company floats, accounting, advising on transactions and acquisitions, preparation of independent expert reports, preparation of information memoranda and other corporate investigations.

11.2 Independence

PKFCA is not aware of any matter or circumstance that would preclude it from preparing this Report on the grounds of independence under regulatory or professional requirements. In particular, PKFCA has had regard to the provisions of applicable pronouncements and other guidance statements relating to professional independence issued by Australian professional accounting bodies and ASIC.

PKFCA has previously been engaged by MMA to prepare a draft report in relation to a failed purchase of Shares and acquisition of a business.

Our report would need to disclose the following in relation to our independence:

the ultimate beneficial owner of PKFCA PKF Charted Accountants & Business Advisers (“ PKF ”) has an ongoing role as taxation advisers and provision of compliance related accounting services with GPGA and its related Australian entities;
PKFCA has previously undertaken valuation and due diligence services for GPG Group. However, PKFCA is not currently acting for GPG Group in any professional manner; and
neither PKFCA nor PKF have advised either MMA or GPG Group on the Proposals.

None of the above services are considered to affect PKFCA’s independence and the Directors of MMA have confirmed that they do not consider that there are any issues arising from the above engagements which will compromise the independence and being seen to be independent by PKFCA.

PKFCA was not involved, as part of, or subsequent to, this prior engagement, in advising on, negotiating, setting, or otherwise acting in any capacity for MMA in relation to the Proposal. Further, PKFCA has not held and, at the date of this Report, does not hold any shareholding in, or other relationship with, MMA that could be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Proposal.

PKFCA considers itself to be independent in terms of RG 112 Independence of experts, issued by ASIC.

PKFCA will receive a fee off approximately $75,000 plus Goods and Services Tax, which represents the time spent in respect of the preparation of this Report. PKFCA will not receive any fee contingent upon the outcome of the Proposal, and accordingly, does not have any pecuniary or other interests that could reasonably be regarded as being capable of affecting its ability to give an unbiased opinion in relation to the Proposal.

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Four (4) drafts of this Report were provided to the independent Directors of MMA and their advisors for review of factual accuracy. Certain changes were made to the Report as a result of the circulation of the draft Report. However, no changes were made to the methodology, conclusions or recommendations made to the Non Associated Shareholders as a result of issuing the draft Report.

11.3 Disclaimer

This Report has been prepared at the request of the Directors and was not prepared for any purpose other than that stated in this Report. This Report has been prepared for the sole benefit of the Directors and Non Associated Shareholders. Accordingly, this Report and the information contained herein may not be relied upon by anyone other than the Directors and Non Associated Shareholders without the written consent of PKFCA. PKFCA accepts no responsibility to any person other than the Directors and Non Associated Shareholders in relation to this Report.

The statements and opinions contained in this Report are given in good faith and are based upon PKFCA’s consideration and assessment of information provided by the Directors, executives and management of all of the entities.

MMA Contrarian Limited – IER

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APPENDIX 1 SOURCES OF INFORMATION

In preparing this Report, PKFCA had access to and relied upon the following principal sources of information:

Public information

Notice of General Meeting;
Explanatory Statement;
MMA audited annual financial statements;
press releases, public announcements (ASX announcements), media and other information in relation to MMA and the Resolutions;
share market data and related information on listed securities;
share market and financial data on selected listed companies engaged in similar activities and industries to MMA sourced primarily from Bloomberg and IBISWorld;
publicly available economic and industry information provided by major research bodies and industry participants in relation to the industries in review;
other independent expert reports in relation to companies operating in the broader financial sector;
publicly available information on GPG, Tyndall and AUW.

Non public information

MMA balance sheet as at 31 July 2008;
MMA funds under asset management as at 31 July 2008;
various confidential board papers, presentations and management reports of MMA;

In addition to the above, PKFCA held various interviews with the management, officers and advisers of MMA. These interviews included discussions regarding the nature of the business, operations, financial position and prospects of MMA, the Resolutions and other matters.

MMA Contrarian Limited – IER

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APPENDIX 2 VALUATION METHODS

Introduction

The appropriate methods to adopt in the valuation of a particular business, security interest or asset will depend on:

the nature of the company's business;
current performance of the company;
its financial position;
the nature and rights of the classes of equity on issue;
the nature and rights of the class of equity being valued;
the proportion of equity being valued;
availability and reliability of forecasts; and
the purpose of the valuation.

It is normally sensible to use or consider more than one method. This is reinforced by ASIC Practice Note 43 which in fact states that it may be appropriate to compare figures derived from one or more methods and comment on any significant differences.

The following describes the various valuation approaches used in the preparation of business valuations and intangible asset valuations.

Business Valuation Methods

Discounted Cash Flow Method

The discounted cash flow (“ DCF ”) method is based on the premise that the value of a business or any asset is represented by the present value of its future cash flows. It requires two essential elements:

the forecast of future cash flows of the business asset for a number of years (usually five to ten years); and
the discount rate that reflects the riskiness of those cash flows used to discount the forecast cash flows back to net present value (“ NPV ”).

DCF is appropriate where:

the businesses’ earnings are capable of being forecast for a reasonable period (preferably 5 to 10 years) with reasonable accuracy;
earnings or cash flows are expected to fluctuate significantly from year to year;
the business or asset has a finite life;
the business is in a 'start up' or in early stages of development;
the business has irregular capital expenditure requirements;
the business involves infrastructure projects with major capital expenditure requirements; or
the business is currently making losses but is expected to recover.

Capitalisation of Future Maintainable Earnings Method

This method involves the capitalisation of estimated future maintainable earnings by an appropriate multiple. Maintainable earnings are the assessed sustainable profits that can be derived by the vendor’s business and excludes any one off profits or losses. An appropriate earnings multiple is assessed by reference to market evidence as to the earnings multiples of comparable companies.

This method is suitable for the valuation of businesses with indefinite trading lives and where earnings are relatively stable or a reliable trend in earnings is evident.

Net Realisable Value of Assets

Asset based valuations involve the determination of the fair market value of a business based on the net realisable value (“ NRV ”) of the assets used in the business.

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Valuation of net realisable assets involves:

separating the business or entity into components which can be readily sold, such as individual business units or collection of individual items of plant and equipment and other net assets; and
ascribing a value to each based on the net amount that could be obtained for this asset if sold.

The NRV of the assets can be determined on the basis of:

orderly realisation : this method estimates fair market value by determining the net assets of the underlying business including an allowance for the reasonable costs of carrying out the sale of assets, taxation charges and the time value of money assuming the business is wound up in an orderly manner. This is not a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value;
liquidation : this is a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value; or
going concern : the net assets on a going concern basis estimates the market value of the net assets but does not take into account any realisation costs. This method is often considered appropriate for the valuation of an investment or property holding company. Adjustments may need to be made to the book value of assets and liabilities to reflect their going concern value.

The NRV of a trading company’s assets will generally provide the lowest possible value for the business. The difference between the value of the company’s identifiable net assets (including identifiable intangibles) and the value obtained by capitalising earnings is attributable to goodwill.

The NRV of assets is relevant where a company is making sustained losses or profits but at a level less than the required rate of return, where it is close to liquidation, where it is a holding company, or where all its assets are liquid. It is also relevant to businesses which are being segmented and divested and to value assets that are surplus to the core operating business. The net realisable assets methodology is also used as a check for the value derived using other methods.

These approaches ignore the possibility that the company’s value could exceed the realisable value of its assets.

Share Trading History

The application of the price that a company’s shares trade on the ASX is an appropriate basis for valuation where:

the shares trade in an efficient market place where ‘willing’ buyers and sellers readily trade the company’s shares; and
the market for the company’s shares is active and liquid.

Constant Growth Dividend Discount Model

The dividend discount model works best for:

firms with stable growth rates;
firms which pay out dividends that are high and approximate free cash flow to equity;
firms with stable leverage; and
firms where there are significant or unusual limitations to the rights of shareholders.

Special Value

Special value is the amount which a potential acquirer may be prepared to pay for a business in excess of the fair market value. This premium represents the value to the potential acquirer of potential economies of scale, reduction in competition or other synergies arising from the acquisition of the asset not available to likely purchases generally. Special value is not normally considered in the assessment of fair market value as it relates to the individual circumstances of special purchases.

MMA Contrarian Limited – IER

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APPENDIX 3 LIC AVERAGE PREMIUMS/DISCOUNTS TO NTA

Table 60: Listed Investment Companies Average Premiums/Discounts to NTA

Sector Average Weighted Sector Average (Note 1)	Sector Average Weighted Sector Average (Note 1)	Sector Average Weighted Sector Average (Note 1)	Sector Average Weighted Sector Average (Note 1)	Sector Average Weighted Sector Average (Note 1)
Average Premium/Discount to NTA Average Premium/Discount to NTA
Month/Year Pre-Tax Post-Tax Pre-Tax Post-Tax
2006 January February March April May June July August September October November December 2007 January February March April May June July August September October November December 2008 January February March April May June July	-12.04 Not Available -12.82 -12.53 -11.43 -12.21 -9.06 -9.44 -10.45 -8.53 -9.06 -7.92 -7.73 -7.53 -9.78 -9.25 -9.70 -8.72 -6.09 -8.51 -9.06 -9.18 -10.20 -9.35 -8.76 -10.31 -13.03 -13.86 -14.18 -16.01 -14.66	-5.08 Not Available -4.29 -4.69 -3.20 -4.16 -1.27 -1.90 -2.78 -0.67 -1.63 -0.34 0.07 0.21 -2.23 -1.54 -1.99 -0.74 1.60 -1.22 -3.30 -1.92 -3.26 -3.11 -4.56 -5.50 -11.54 -9.97 -12.33 -12.48 -11.77	-4.03 Not Available -4.07 -4.58 -1.46 -3.01 0.66 -0.74 -1.95 -0.70 -0.19 -1.02 1.73 -1.55 -5.77 -4.65 -5.97 -5.62 -0.67 -2.30 -4.57 -4.07 -4.41 -2.52 0.07 -1.82 -5.84 -3.92 -3.22 -4.64 1.11	9.33 Not Available 9.67 9.29 12.47 10.41 14.07 12.61 11.23 13.21 14.59 14.20 17.99 14.01 8.90 10.69 9.49 9.57 14.48 12.66 8.54 10.66 10.03 12.44 12.81 10.96 5.15 8.45 9.52 6.74 7.64

Source : ASX Note 1 : Takes into consideration the size of each listed investment company

MMA Contrarian Limited – IER

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APPENDIX 4 LIC PREMIUM/DISCOUNT TO NTA

Table 61: Listed Investment Company Premiums/Discounts to Net Tangible Assets

Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Participant Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA
Australian Shares Aberdeen Leaders Australian Leaders Fund Limited Amcil Argo Investments Australian Foundation Aurora Sandringham Aurora Buy Write Fund Aurora Infrastructure Buy Write Income Trust Australian United Investment Brickworks Investment Carlton Investments Century Australia Choiseul Investments Clime Capital Contango MicroCap Djerriwarrh Investments Diversified United Investments Emerging Leaders Investments Fat Prophets Australia Huntley Investment Hyperion Flagship Investments Ironbark Capital Milton Corporation Mirrabooka Investments MMC Contrarian Orion Equities Limited Premium Investors Scarbourgh Equities Limited Van Eyk Three Pillars WAM Active Limited Wallace Absolute Return WAM Capital Whitefield Wilson Investment Fund International Shares AMP Capital China Growth Asian Masters Fund Bentley International Global Masters Fund Ellerston GEMS Fund	96 67 116 4041 4867 41 13 15 732 355 443 197 421 34 138 871 468 37 32 128 38 74 1639 217 146 16 178 12 127 137 31 117 219 86 268 45 11 11 427	1.67 0.85 0.67 7.09 5.02 9.22 8.45 7.05 7.7 1.22 16.71 1.06 5.16 0.9 1.18 4.27 3.34 0.97 0.98 0.75 1.4 0.47 19.38 1.85 0.58 0.9 0.8 0.61 0.95 0.89 0.36 1.11 3.14 0.71 0.88 0.9 0.27 0.75 1.78	1.55 1.06 0.65 5.54 4.96 1.17 7.04 9.26 7.49 1.46 18.75 1.03 5.32 1.11 1.52 3.98 3.33 1.11 1.05 0.77 1.44 0.54 18.61 1.89 0.72 1.94 0.98 0.91 1.03 0.99 1.41 3.49 0.95 1.17 0.86 0.4 0.96 2.33	7.74 -19.67 3.08 27.98 1.21 -23.85 20.01 -23.85 2.8 -16.44 -10.88 2.91 -3.01 -18.92 -22.37 7.29 0.3 -12.61 -7.42 -2.7 -2.91 -13.28 4.14 -2.12 -19.11 -53.73 -18.7 -33.57 -7.77 -10.11 -21.56 -10.03 -25.18 -24.79 5.26 -32.42 -21.47 -23.61	1.49 1.05 0.65 5.83 4.27 1.17 7.08 9.26 6.43 1.46 16.74 1.08 4.46 1.11 1.49 3.72 2.92 1.11 1.07 0.77 1.29 0.54 16.49 1.77 0.75 1.77 1.03 0.9 1.03 0.99 1.39 3.54 0.93 1.17 0.86 0.4 0.94 2.33	12.08 -18.82 3.08 21.61 17.56 688.03 19.38 -23.87 19.75 -16.44 -0.18 -1.85 15.7 -18.92 -20.96 14.78 14.38 -12.61 -8.75 -2.31 8.95 -13.28 17.53 4.52 -22.67 -49.15 -22.34 -32.79 -7.77 -9.76 -20.71 -11.3 -23.94 -24.79 5.26 -32.42 -20.02 -23.61

MMA Contrarian Limited – IER

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Participant	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA	Size ($mil) Mkt Cap Price ($) Last Price ($) Pre-Tax NTA ($) Prem/Disc% Pre-tax NTA Post-Tax NTA ($) Prem/Disc % Post Tax NTA
Hunter Hall Global Value India Equities Fund Ltd Magellan Flagship Fund Peters Macgregor Investments Platinum Capital Templeton Global Growth Private Equity ING Private Equity Access Souls Private Equity Specialist Adelaide Managed Funds Global Mining Investments International Wine Invest LinQ Resources Fund Multi Fund Manager Sylvastate Absolute Return Funds LinQ Resources Fund Cadence Capital Everest Babcock & Brown Alt. Equities & Freehold Limited GoldLink IncomePlus HFA Accelerator Plus Hastings High Yield Fund Katana Capital Macquarie Winton Global Trojan Equity van Eyk Blueprint Alternatives Sector Average Weighted Sector Average		303 46 214 16 156 135 41 95 129 417 23 309 67 25 24 576 4 20 178 154 40 52 38 46	0.83 0.6 0.57 0.72 1.23 0.93 0.68 0.16 1.48 2.05 0.87 1.36 3.8 8 0.88 3.21 0.13 0.16 0.94 1.4 0.96 1.25 0.83 9.3	0.96 0.79 0.8 1.02 1.23 1.09 1.11 0.25 1.95 1.99 1.2 1.44 3.93 7.77 1.03 3.74 0.64 1.15 1.89 0.99 1.22 1.02 9.24	-13.78 -24.05 -29.38 -29.75 -0.64 -14.68 -38.74 -36.25 -24.18 3.02 -27.92 -5.56 -3.31 2.99 -14.24 -14.17 -80.38 -18.26 -25.93 -2.83 2.72 -18.95 0.66 -12.82 3.7	0.99 0.84 0.71 0.97 1.25 1.09 1.11 0.25 1.95 1.79 1.19 1.44 4.08 7.77 1.02 3.74 0.64 1.14 1.89 0.97 1.22 1.02 9.24	-16.45 -28.57 -20.42 -25.7 -2.15 -14.68 -38.74 -36.25 -24.18 14.53 -27.55 -5.56 -6.86 2.99 -13.38 -14.17 -80.38 -17.76 -25.93 -0.52 2.72 -18.95 0.66 3.95 10.09
Source: Australian Stock Exchange	(www.asx.com.au )

MMA Contrarian Limited – IER

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Consideration/FUM	1.3% 2.1% 5.7% 1.6% 9.6%	4.1% 2.1%		Source:Company Announcements, Bloomberg, PKFCA Analysis	We note the following with respect to the above: • On 31 March 2008, Equity Trustees Limited acquired 100% of the issued capital of Holdfast Fund Services Pty Limited ("HFS") for cash consideration of $4,150,000. The principal activity of the business is the provision of sponsorship and administration services to managed investment scheme clients. HFS has $310 million FUM as at February 2008. • On 3 December 2008, Becton Property Group announced it has acquired Lachlan Property Group (“Lachlan”). Lachlan was formed in 1997 and is based in Sydney. It is a property fund manager of six unlisted funds with approximately 2,200 investors. • MMA had on 17 November 2006 announced its proposed acquisition of MMC at approximately $33 million. • On 12 September 2007, Wilson HTM Investment Group announced that its subsidiary, Pinnacle Investment Management Ltd acquires 40% equity interest in Resolution Capital Ltd ("RCL"). RCL is an Australian based fund manager specialising in Australian and global securitised real estate. • On 12 July 2006, OFM Investment Group Ltd acquired 100% equity interests in Century Funds Management Ltd ("Century") for $42.2 million. Century is a group of privately-owned property funds management company.	MMC Contrarian Limited – IER Page 91 of 92
FUM $’million	310 2,000 575 2,900 440
% acquired	100% 100% 100% 40% 100%
Consideration $’million	4.15 42.4 33.0 18.8 42.4
Announcement Date	Mar-08 Dec-07 Nov-06 Sep-07 Jul-06
Acquired by	Equity Trustees Limited Becton Property Group MMA Pinnacle Investment Management Ltd OFM Investment Group Ltd
Target Company	Holdfast Fund Services Pty Limited Lachlan Property Group MMC Asset Management Limited Resolution Capital Ltd Century Funds Management Ltd Average (excluding outlier) Median (excluding outlier)

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	7.0% -3.9%* 8.7%	7.9% 7.9%
Implied Acquisition Premium (3 months VWAP) $

	7.7% 9.5% 9.6%	8.9% 9.5%
Implied Acquisition Premium (1 month VWAP) $

	6.4% 10.9% 6.9%	8.1% 6.9%
Implied Acquisition Premium (1 week VWAP) $

	5.9% 5.0% 5.4%	5.4% 5.4%
Implied Acquisition Premium (Last Price) $

Offer per share $	0.86 3.36 0.27
Currency	AUD AUD AUD
Effective Date	Aug-07 Dec-07 Aug-04
Acquired by	Sunsuper Pty Ltd Magellan Financial Group Ltd Brickworks Investment Co Ltd
Target Company	Colonial First State Private Company New Privateer Holdings Ltd Pacific Strategic Investment	Average (excluding outlier) Median (excluding outlier)

AI assistant

CLEARVIEW WEALTH LIMITED — AGM Information 2008

64733_rns_2008-09-16_c2594d1b-76f1-47d1-9a57-e336995d23ff.pdf

COMPANY ANNOUNCEMENT

Market Update, Capital Return and 2008 AGM

MMC Contrarian Limited

Important Notices

Important dates

Meeting to be held at the Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney, New South Wales on Thursday 23 October 2008, commencing at 9.30am Sydney time.

Your vote is important. Please take action by voting in person or by proxy.

Defined terms

Responsibility for contents

Investment decisions and forward looking statements

Date

Contents

Chairman's letter

Dear Shareholder

If you want the Proposal to be implemented, you should vote in favour of the Proposal, that is, vote in favour of both Resolution 1 and Resolution 2. The Independent Directors recommend you vote in favour of both Resolution 1 and Resolution 2.

The Independent Directors recommend that Shareholders consider and vote in favour of the Proposal. If you want the Proposal to be implemented, you must vote in favour of BOTH Resolution 1 and Resolution 2.

What do you need to do?

STEP 1

READ THIS ENTIRE BOOKLET CAREFULLY

STEP 2

VOTE IN PERSON OR BY PROXY

THE CHAIRMAN INTENDS TO VOTE ALL PROXIES OVER WHICH HE HAS DISCRETION IN FAVOUR OF ALL RESOLUTIONS .

Notice of Annual General Meetin g

MMC CONTRARIAN LIMITED ABN 83 106 248 248

Agenda

Defined Terms

Business

2. Resolution 2 - Approval of acquisition by GPGA of Shares from HGL

3. Financial Statements

4. Directors

Resolution 3 – Re-election of Ray Kellerman as a Director

Resolution 4 – Re-election of Anthony Eisen as a Director

Resolution 5 – Re-election of Peter Wade as a Director

5. Resolution 6 – Adoption of Remuneration Report .

Notice of Meeting and Explanatory Statement

Determination of entitlement to attend and vote

Proxies

Where to lodge a proxy

Admission to meeting

Questions and comments by shareholders at the meeting

Ex lanator Statement p y

1. Overview of the Proposal

2. Share Buy Back

2.1 Introduction

2.2 Ongoing capital management

2.3 Terms of the Buy Back

2.4 Number of Shares to be bought back

2.5 Timetable and payment

2.6 Amount per Shareholder

2.7 Shareholders who do not Offer any Shares

2.8 How many Shares can a Shareholder Offer to be bought back?

2.9 Do Shareholders have to Offer any Shares at all?

2.10 Majority holders

2.11 Australian tax implications for Shareholders

(a) Nature of Buy Back

(b) CGT Consequences - Disposal of Shares

Australian Resident Shareholders – Individuals, Companies and Complying Superannuation Funds

Non-Resident Shareholders

2.12 ASIC relief

2.13 ASX Waivers

2.14 Impact of the Buy Back

(c) Impact on Earnings per Share

(d) Impact on pre-tax Net Tangible Assets per Share

2.15 How will the Buy Back be funded and how will it affect the Company?

2.16 What effect will the Buy Back have on trading?

2.17 Information regarding Share price

2.18 Information regarding net tangible assets

2.19 The interests of any Director who may participate in the Buy Back

2.20 Agreements or arrangements with Directors

2.21 Other interests of Directors

2.22 Executive share plan

2.23 Advantages and disadvantages of the Buy Back

2.24 Shareholder approval for the Buy Back

2.25 Listing Rule 10.1 and Independent Expert Report

2.26 What happens if the Buy Back does not proceed?

3. Approval of Sale of Shares from HGL to GPGA

3.1 Introduction

CLEARVIEW WEALTH LIMITED AGM Information 2008