FAT PROPHETS AUSTRALIA FUND LIMITED A. 11 77 353

TO RAISE UP TO \$40,000,000

EACH STAPLED SECURITY CONSISTS OF ONE (1) FULLY PAID ORDINARY SHARE AND ONE (1) OPTION EXERCISABLE AT 1
\$1.00 PER SHARE THAT ARE JOINED TOGETHER (or stapled)
AND TREATED AS ONE SECURITY CUOTED ON ASX.

HAN HAND

2 EACH STAPLED SECURITY WILL BECOME UNSTAPLED ON 20 APRIL 2006 AT WHICH TIME THE ORDINARY SHARE AND OPTION WILL TRADE SEPARATELY

3 EACH OPTION CAN BE CONVERTED INTO AN ORDINARY SHARE AFTER UNSTAPLING BUT BEFORE THE EXPIRY DATE OF 20 APRIL 2008

THIS OFFER IS NOT UNDERWRITTEN

ENTRADE AUSTRALIA

IMPORTANT NOTICES

This Prospectus is dated 9 February 2005 and was lodged with ASIC on that date. No responsibility for the contents of this Prospectus is taken by the ASIC or ASX or any of their officers.

This document is important and requires your immediate attention. It should be read in its entirety. You may wish to consult your professional adviser about its contents.

No person is authorised to give any information or make any representation in connection with the Offer which is not contained in this Prospectus. Any information or representation not so contained or taken to be contained. may not be relied on as having been authorised by the Company in connection with the Offer.

Defined terms and abbreviations included in the text of this Prospectus are set out in the Glossary in Section 11.

This Prospectus does not constitute an offer of Stapled Securities in any place in which, or to any person to whom, it would not be lawful to do so.

Offers under this Prospectus will be made pursuant to an arrangement between the Company and Australian Financial Services Licensees (Licensees) pursuant to Section 911A(2)(b) of the Corporations Act. The Company will only authorise Licensees to make offers to people and arrange for the issue of Stapled Securities by the Company under the Prospectus and the Company will only issue Stapled Securities in accordance with such offers if they are accepted.

Any Application received which does not bear a Licensee's stamp will be forwarded to the Share Registrar for processina.

The Share Registrar will deposit and deal with the Application Monies pursuant to this Prospectus.

The Sponsoring Brokers' function should not be considered as an endorsement of the Offer or a recommendation of the suitability of the Offer for any Applicant. The Sponsoring Brokers do not guarantee the success or performance of the Company or the returns (if any) to be received by investors. Neither the Sponsoring Brokers nor any other Licensee is responsible for or caused the issue of this Prospectus. The Company reserves the right to enter into similar agreements to those with the Sponsoring Brokers with other Licensees.

This Prospectus may be viewed and is available in Australia at the following address (Electronic Prospectus): www.fatprophets.com.au/fatfund/prospectus

The Offer or invitation to which the Electronic Prospectus relates is only available to persons receiving the Electronic Prospectus in Australia and New Zealand.

If you download the Electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. The Stapled Securities to which the downloaded Prospectus relates will only be issued on receipt of a printed copy of the electronic Application Form. The Electronic Prospectus has an option whereby it is possible to apply for Stapled Securities via an online paperless application.

The Company will send to a person a copy of the paper Prospectus and paper Application Form free of charge if the person asks during the Offer period.

This can be obtained by calling 1300 88 11 77.

PAT PROPER AUSTRALIA PUNU E SAN ING ANG ING KALIMITANG KALIMITANG KALIMITANG KALIMITANG KALIMITANG KALIMITANG KALIMITANG KALIMITANG KALIM ENTERNATIONAL PROPERTY ABLISHED TO PROVIDE INVESTORS EST BENEFITS ACCESS TO THE TH WI OF INVESTMENTS IN THE SHARE ARKET. THIS IS MADE WI TH M OET HE MANAGER AND HEI THE $\mathbf P$ ISING THE FAT PROPHETS REPORT AS AN INPUT TO THE INVESTMENT PROCESS

IMPORTANT DATES	Z
CHAIRMAN'S LETTER	Cali
1 INFORMATION FOR INVESTORS	4
2 FAT PROPHETS AUSTRALIA FUND LIMITED	$\mathbb{Q}$
3 INFORMATION ON THE MANAGER	16
4 FINANCIAL INFORMATION	20
5 DIRECTORS AND CORPORATE GOVERNANCE	24
6 RISK FACTORS	29
7 INDEPENDENT ACCOUNTANT'S REPORT	32
8 TAXATION REPORT	37
9 MATERIAL CONTRACTS	42
10 ADDITIONAL INFORMATION	49
11 GLOSSARY	58

INDICATIVE TIMETABLE

Date of Prospectus	9 February 2005
Expected expiry of exposure period	16 February 2005
Offer to open	17 February 2005
Offer expected to close	8 April 2005
Proposed allotment date	15 April 2005
Trading of Stapled Securities expected to commence on ASX	21 April 2005

The above dates are indicative only and may vary, subject to the requirements of the Eisting Rules and the Corporations Act.

Fat Prophets Australia Fund Limited (Company) may vary the dates and times of the Offer (including closing the Offer early) without notice. Accordingly, investors are encouraged to submit their applications as early as possible.

No application for Stapled Securities under this Prospectus will be accepted (and no Stapled Securities will be issued or transferred under this Prospectus) until the period of seven days after the fodgement of this Prospectus has ended. The Australian Securities and Investments Commission (ASIC) may extend that period to not more than 14 days, by notice in writing to the Company.

No Stabled Securities will be issued on the basis of this Prospectus later than the expiry date of this Prospectus being the date 13 months after the date of this Prospectus. The Company will apply to the Australian Stock Exchange (ASX) for the Stapled Securities to be listed for quotation on ASX within seven days after the date of this Prospectus.

HOW TO APPLY

An application for Stapled Securities under this Offer can only be made by completing and lodging the Application Form attached to this Prospectus. Detailed instructions on completing the Application Form accompany the Application Form.

Certain Brokers will make the Prospectus available on their websites and may have an online application facility. Investors wishing to use these online application facilities should follow the instructions on how to apply on those websites.

Applications must be made for a minimum of 5,000 Stapled Securities at \$1.00 each for a total of \$5,000 (being 5,000 Stapled Securities at \$1.00 each). A larger number of Stapled Securities may be applied for in multiples of 100 Stapled Securities for \$100.

Applications must be accompanied by payment in Australian currency of \$1.00 per Stapled Security. Cheques should be made payable to "Fat Prophets Australia Fund Limited -Applications Account" and crossed "Not Negotiable". Payments by cheque will be deemed to have been made when the cheque is honoured by the bank on which it is drawn. Alternatively you can make payment online as part of a paperless application process. The amount payable on each Application will not vary during the period of the Offer and no further amount is payable on allotment.

No brokerage or stamp duty is payable by Applicants.

Completed Application Forms and Application Monies may be lodged with:

Fat Prophets Australia Fund Limited -Applications Account c/- Registries Limited

Level 2, 28 Margaret Street

SYDNEY NSW 2000

WHEN TO APPLY

Completed Applications must be received by the Share Registrar prior to 5pm AEDT (Australian Eastern Daylight Time) on the Closing Date. The Directors may close the Offer at any time after expiry of the exposure period without prior notice or extend the Offer period in accordance with the Corporations Act. Early lodgement of your application is recommended as the Offer may be closed early.

The Directors reserve the right to allocate any lesser number of Stapled Securities than those for which an Applicant has applied. Where the number of Stapled Securities allotted is fewer than the number applied for, surplus Application Monies will be refunded without interest within seven days of the Closing Date.

FNOURIES

Investors with questions on how to complete the Application Form or who require additional copies of the Prospectus should contact the Company on 1300 88 11 77 or via www.fatprophets.com.au/fatfund.

PRIVACY

If you apply for Stapled Securities, you will be providing personal information to the Company and the Share Registrar.

The Company and the Share Registrar will collect, hold and use your personal information in order to assess your Application. service your needs as an investor and carry out appropriate administration.

Tax and Company law requires some of the information to be collected. If you do not provide the information requested, your Application may not be efficiently processed, or not processed at all.

CHAIRMAN'S LETTER

Fat Prophets Australia Fund Limited Level 33, 2 Park Street Sydney NSW 2000

9 February 2005

Dear Investor.

On behalf of the Board of Directors, it is my pleasure to invite you to become a Stapled Security holder in Fat Prophets Australia Fund Limited (Company).

The Company is an investment company that has been established to provide investors with exposure to a value investment style similar to that behind the successful Fat Prophets report.

The Fat Prophets report was established in 2000 by Mint Financial Group Pty Limited as primarily an equities based research report and it has quickly grown its subscriber base.

The Manager, initially Mint Financial Group Pty Limited and then Fat Prophets Funds Management Australia Pty Limited, will be responsible for managing the proceeds raised, with the principal objective to provide Stapled Security holders with long term capital growth and income by investing in companies that are perceived to be undervalued.

The Manager will use the research provided by the Fat Prophets report as well as conduct its own research efforts to obtain a basket of suitable investment opportunities. A portfolio will be constructed, taking individual stock and industry sector risks into consideration, with the objective of out-performing the S&P/ASX 300 Accumulation Index.

While the Manager will use the Fat Prophets report as a component in the investment process and interests associated with the founders of the Fat Prophets report are associated with the Manager and the Company in certain capacities, the past performance of investments made in accordance with recommendations contained within the Fat Prophets report are not indicative as to the future performance of the Company.

Key features of the Company include:

n
M The stapling of Shares and Options, via the Stapled Security issued pursuant to this Prospectus, until the Unstapling Date of 20 April 2006.
n
N An opportunity to invest in a fund that uses the Fat Prophets report as an input to its investment process - research that has provided valuable investment advice.
ु
छ Alignment of interests of the Manager with the Company and Shareholders through the implementation of a performance fee structure that:
rewards the Manager for investment performance that exceeds its benchmark, the S&P/ASX 300 Accumulation Index: and
is not payable following under-performance until the under-performance has been made up by subsequent out-performance.
e
Ta An independent Chair of the Board and majority of independent Directors on the Board and the Audit committee of the Board.
ng
Sa Capital management aimed at maximising Stapled Security holder value. The Board may authorise the buy back of Stapled Securities in the Company if Stapled Securities in the Company trade at a substantial discount to net tangible asset value.

The information in this Prospectus is important. I encourage you to read it carefully and in its entirety and to seek independent professional accounting or other advice before deciding to invest.

Together with my fellow directors, I commend this Offer to you and look forward to welcoming you as a Stapled Security holder in Fat Prophets Australia Fund Limited.

Yours sincerely,

t. Bolts

Robert Bolton

Chairman

FAT PROPHETS ADSTRALIA FUND LIMITED.

This is a summary only. This Prospectus should be read in full before making any decision to apply for Stapled Securities.

The performance of the Company is not guaranteed by the Board, the Manager, or any adviser to the Company.

1.1 BUSINESS OVERVIEW AND OBJECTIVE

The Company is an investment company established to provide investors with access to the benefits of investments in the share market made with the help of the Manager and utilising the Fat Prophets report as an input to the investment process.

While the Manager will use the Fat Prophets report as a component in the investment process and interests associated with the founders of the Fat Prophets report are associated with the Manager and the Company in certain capacities, the past performance of the investment recommendations contained within the Fat Prophets report should not be seen as being indicative as to the future performance of the Company.

The Company will predominately invest in Securities included in the S&P/ASX 300 Accumulation Index (ASX 300). The Company's Portfolio will be managed with a strong philosophy of capital preservation and a focus on achieving a superior rate of capital appreciation over the medium to long term.

The investment objective of the Company is to provide long-term capital growth and the payment of dividends by investing in undervalued Australian companies. See Section 2 for details.

It is intended that the Company will satisfy the criteria to be considered a listed investment company (LIC) for the purposes of the Income Tax Assessment Act 1997 (Cwlth). If the company is considered a LIC, tax concessions may be available to Stapled Security holders which allow the benefit of the discount capital gains regime to "flow through" to them in a similar way that would be available if the Company had been established in a trust structure.

The ability of Stapled Security holders to enjoy these tax concessions, provided the Company is considered a LIC for the purposes of the Income Tax Assessment Act 1997 (Cwith), is dependent, among other things, on the nature of the Company's investments and the time period in which the Company holds those investments. See Sections 4.7 and 8 for details.

The actual taxation implications applicable to investors will vary from investor to investor. The Company, its advisers and its Directors and officers do not accept any responsibility or liability for any taxation consequences. As a result, investors should consult their own professional tax advisers in connection with subscribing for Stapled Securities under this Prospectus.

1. INFORMATION FOR INVESTORS

1.2 THE OFFER

The Company will offer for subscription up to 40,000,000 Stapled Securities at \$1,00 per Stapled Security to raise up to \$40,000,000. For each Stapled Security issued, subscribers will receive one (1) Share and one (1) Option to subscribe for a Share at an exercise price of \$1.00 exercisable by 20 April 2008. The Company reserves the right to accept over subscriptions.

A Stapled Security consists of one (1) Share and one (1) Option that are joined together (or Stapled) and treated as one security quoted on ASX.

On 20 April 2006 (the Unstapling Date) the Stapled Securities will "unstaple" and trade separately on ASX as Shares and Options.

An Option holder may exercise an Option at any time during the two years between 20 April 2006 and 20 April 2008. Each Option received via a Stapled Security comes attached to a Share and cannot be traded separately prior to the Unstapling Date.

If fully subscribed, the Offer will result in the issue of 40,000,000 Stapled Securities and will raise \$40 million. If the Offer is over subscribed, and the Company decides not to accept over subscriptions, the Company's decision as to which Applicants are issued less than the number of Stapled Securities applied for, and the number of Stapled Securities to be issued to those Applicants, is final.

1.3 PRIORITY ALLOCATION

Up to 15,000,000 Stapled Securities have been set aside for the Priority Allocation to existing subscribers of the Fat Prophets report. The Priority Allocation will be restricted to subscribers who lodge applications by 28 February 2005. These applicants should use the online Application Form found within the online Fat Prophets members area. For further details, Fat Prophets report subscribers should contact Fat Prophets on 1300 88 11 77.

Stapled Securities in the Priority Allocation that are not taken up will be allocated by the Company or, subject to fulfilment of the minimum subscription, not issued at the election of the Company.

1.4 MANAGEMENT OF THE PORTFOLIO

It is proposed that the Company's portfolio of investments will be managed by Fat Prophets Funds Management Australia Pty Limited (Proposed Manager) (ACN 112 466 887). A summary of the key terms of the Management Agreement is set out in Section 9.1.

The Proposed Manager is a new management company owned by interests associated with the co-founders of the Fat Prophets report, being Angus Geddes and Jason McIntosh.

The Proposed Manager is a newly incorporated company and does not presently hold an Australian Financial Services Licence (AFSL) and so cannot presently provide these management services. Until an AFSL is granted, management of the Portfolio will be undertaken by Mint Financial Group Pty Limited (Interim Manager), presently a holder of an AFSL. An application for an AFSL has been lodged by the Proposed Manager.

Throughout this Prospectus, references to "Manager" are references to the Interim Manager and the Proposed Manager as the context requires.

The Manager's strategy is to invest in companies trading below their value as assessed by the Manager. For further details refer to Section 2.

Management Fee

The Manager will receive a management fee representing 1.25% per annum of the net value of the portfolio of the Company, calculated on a monthly basis and payable monthly in arrears.

The Company will also pay any applicable GST in respect of the above.

Performance Fee

The Manager will receive a performance fee if the investment performance of the Company's Portfolio has exceeded the benchmark, being the performance of the S&P/ASX 300 Accumulation Index (ASX 300).

The performance fee is 15% of the gross total return of the Portfolio that is in excess of the ASX 300, calculated monthly and payable monthly in arrears. Should the return on the Portfolio be less than the corresponding return from the ASX 300 then no performance fee is payable until the historic under-performance has been made up.

The Company will also pay any GST payable in respect of any of the above fee.

Further details of the management fee and the performance fee are set out in Section 9.1.

1.5 RISK FACTORS

An investment in the Company is speculative and involves a number of risks. While the Manager intends to use prudent investment management techniques and expertise to minimise the risks to Stapled Security holders, no assurances can be given by the Company as to the success or otherwise of its business.

Investors should consider the risk factors identified in this Prospectus, particularly those identified in Section 6, before applying for Stapled Securities.

1.6 OFFER NOT UNDERWRITTEN

The Offer is not underwritten.

1.7 MINIMUM SUBSCRIPTION

The minimum total subscription for the Offer is \$16,000,000, being receipt of valid Applications for not less than 16,000,000 Stapled Securities. If this minimum subscription is not achieved and the Application Price for these Stapled Securities is not received by the Company by the date four months after the Opening Date, the Company will repay all money received from Applicants within seven days after that date, without interest.

1.8 APPLICATIONS FOR STAPLED SECURITIES

Applications for Stapled Securities must be made and will only be accepted on the Application Form issued with and attached to this Prospectus or accompanying the Electronic Prospectus.

An Application Form must be completed in accordance with instructions set out on the reverse side of the Application Form. Applications must be made for a minimum of 5,000 Stapled Securities for a total of \$5,000. Applications may be made for additional Stapled Securities in multiples of 100 Stapled Securities for \$100.

Applications must be accompanied by payment in Australian currency of \$1.00 for each Stapled Security applied for. Cheques should be made payable to "Fat Prophets Australia Fund Limited - Applications Account" and crossed "Not Negotiable". Payments by cheque will be deemed to have been made when the cheque is honoured by the bank on which it is drawn. Alternatively you can make payment online as part of a paperless application process. No brokerage or stamp duty is payable by Applicants. The amount payable on Application will not vary during the period of the Offer and no further amount is payable on allotment.

Completed Application Forms and accompanying cheques may be lodged with:

Fat Prophets Australia Fund Limited - Applications Account

c/- Registries Limited Level 2, 28 Margaret Street SYDNEY NSW 2000

A binding contract to issue Stapled Securities will only be formed at the time Stapled Securities are allotted to Applicants.

Application Forms will be accepted at any time after the issue of this Prospectus and prior to the close of business on the Closing Date.

Applications may also be made online through the websites of certain Licensees.

All Applicants should read this Prospectus in its entirety before deciding to complete and lodge an Application Form.

Investors are encouraged to submit their Application Forms as soon as possible after the Offer opens as the Offer may be closed before the indicated Closing Date without prior notice.

1.9 ASX LISTING

Application will be made to ASX within seven days after the date of this Prospectus for the Company to be listed on ASX and for quotation of the Stapled Securities issued pursuant to this Prospectus and all other Stapled Securities on issue as at the date of such quotation.

The fact that ASX may list the Company is not to be taken as an indication of the merits of the Company or the Stapled Securities, ASX quotation, if granted, will commence as soon as practicable after holding statements are dispatched.

The Directors do not intend to allot any Stapled Securities unless and until ASX grants permission for the Stapled Securities to be listed for quotation unconditionally or on terms acceptable to the Directors. If permission is not granted for the Stapled Securities to be listed for quotation before the end of three months after the date of this Prospectus or such longer period permitted by the Corporations Act with the consent of ASIC, all Application Monies received pursuant to the Prospectus will be refunded without interest to Applicants in full within the time prescribed by the Corporations Act.

1.10 ALLOTMENT

The Company expects that the Stapled Securities will be allocated ASX code of "FATS" having pre-registered this ASX code with ASX.

No allotment of Stapled Securities will be made until the minimum subscription has been received and permission has been granted by ASX for quotation of Stapled Securities unconditionally or on terms acceptable to Directors. It is expected that the allotment of the Stapled Securities will take place on 15 April 2005.

The Company will forward all Application Forms which do not bear a Licensee's stamp it receives to the Share Registrar. All Application Monies held pursuant to this Offer will be held in a subscription account until allotment.

An Application constitutes an offer by the Applicant to subscribe for Stapled Securities on the terms and subject to the conditions set out in this Prospectus. Where the number of Stapled Securities allotted is less than the number applied for or where no allotment is made, the surplus Application Monies will be returned by cheque within seven days of the Closing Date, Interest will not be paid on the refunded Application Monies.

1.11 CHESS

The Company will apply to ASX to participate in the Securities Clearing House Electronic Subregister System known as CHESS. CHESS is operated by ASX's Settlement and Transfer Corporation Pty Limited (ASTC) in accordance with ASX Listing Rules and the ASTC Settlement Rules. Under CHESS, the Company will not issue certificates to investors. After allotment of Stapled Securities holders will receive a CHESS statement.

CHESS statements, which are similar to bank statements, will set out the number of Stapled Securities allotted to each holder pursuant to this Prospectus. The statement will also advise holders of their Holder Identification Number (HIN) and explain for future reference the sale and purchase procedures under CHESS.

Further statements will be provided to holders which reflect any changes in their Stapled Security holding in the Company during a particular month.

It is the responsibility of Applicants to determine their allocation prior to trading Stapled Securities and after the Unstapling Date, Shares and Options.

The Company will not issue certificates to Stapled Security holders.

FAT PROPHETS AUSTRALIA FUND LIMITED

1.12 TAXATION IMPLICATIONS

Refer to Section 8 of the Prospectus as to the potential taxation implications which might apply to different types of potential investors investing in the Stapled Securities of the Company. The Company, its advisers and its Directors and Officers do not accept any responsibility or liability for any taxation consequences. As a result, investors should also consult their own professional tax advisers in connection with subscribing for Stapled Securities under this Prospectus.

1.13 OVERSEAS AND NON-RESIDENT STAPLED SECURITY HOLDERS

The Offer does not constitute an offer in any place in which, or to any person to whom, it would be unlawful to make such an offer.

This Offer will be extended to investors in New Zealand by way of this Prospectus and an Investment Statement which, together with associated documents, will be lodged with the New Zealand Companies Office to enable the Offer to be made to New Zealand investors.

1.14 BROKER AND ADVISER HANDLING FEES

Where the Application Form of an Applicant who receives Stapled Securities under the Offer is received from a licensed dealer in securities the Company will pay that participating organisation a handling fee of an amount equal to 3.0%, including GST, of the total amount paid by the Applicant for Stapled Securities received under the Application.

1.15 ENOUIRIES

Potential investors with questions on how to complete the Application Form or who require additional copies of the Prospectus should contact the Company on 1300 88 11 77 or visit www.fatprophets.com.au/fatfund.

2.1 OVERVIEW

Fat Prophets Australia Fund Limited was incorporated on 12 November 2004, ACN 111 772 359 (Company).

The Company has been formed to provide investors with the opportunity to invest in an actively managed portfolio of listed Australian public companies that utilises a value investment style and the Fat Prophets report as a major input to its investment process.

The Company will invest predominantly in Securities included in the S&P/ASX 300 Accumulation Index.

The Company has no performance history as it is a new company, incorporated in November 2004.

It is intended that once invested, the Company's investment Portfolio will comprise investments in a minimum of 25 entities. The Manager believes that sufficient diversification of the Portfolio will be achieved by investing in 25 to 80 companies.

The Benchmark is the S&P/ASX 300 Accumulation Index. The Manager will have the discretion to invest up to 30% of the value of the Portfolio outside the Benchmark, excluding the initial period post listing when investments are being acquired.

The Company intends to seek classification by ASX as an investment company and is unlikely to seek to exert influence over the affairs of the majority of companies it invests in. The Company intends to be a patient investor unless individual investment circumstances dictate otherwise and accordingly, the Company anticipates that it will likely be considered a listed investment company for the purposes of the Income Tax Assessment Act.

FAT PROPHETS AUSTRALIA FUND LIMITED

2.2 RFI ATIONSHIP WITH FAT PROPHETS

The Company is a separate entity not directly related to the writing or publishing of the Fat Prophets report. The Company is an investment company that will outsource the investment management process to a Manager, being initially Mint Financial Group Pty Limited.

Mint Financial Group Pty Limited, the owner of the Fat Prophets trade mark in Australia, is primarily involved with the production and distribution of the Fat Prophets report. Mint Financial Group Pty Limited and its shareholders have been involved with the creation of the Company ahead of listing on ASX.

Mint Financial Group Pty Limited has established a separate funds management unit staffed by seconded executives of Fat Prophets Funds Management Australia Pty Limited.

The future performance of the Company's investment portfolio cannot be directly compared to the performance of the Fat Prophets report. Executives of the funds management unit of the Proposed Manager are not executives associated with writing the Fat Prophets report.

2.3 INVESTMENT OBJECTIVES

The investment objectives of the Company are to provide long-term capital growth and the payment of dividends by investing in undervalued Australian companies.

2.4 INVESTMENT PHILOSOPHY

The fundamental investment philosophy is that the share market is not perfect in the short term at determining the appropriate price for every security (or there would not be share price volatility). Rather, business fundamentals revealed over time are the drivers of long term share price movements. By analysing the current long term worth of a company amidst the short term share price volatility there is an opportunity to ignore companies that are presently perceived to be over priced and attempt to purchase companies that are presently perceived to be good value.

To do this successfully takes an investment process that incorporates a regime of analytical rigour, dispassionate risk analysis and disciplined portfolio construction.

Analysis involves a focus on five key areas, and their interactivity:

y Industry and demographics;
n
Ta Company;
$\frac{w}{d}$ People (management and board);
n
W Risk: and
n
Ta Valuation.

Investment decisions will be based on a reqular assessment of which investment opportunities are likely to maximise capital appreciation and or dividend income generation.

The Manager intends to utilise input from the Fat Prophets report as one source of potential investment ideas. The Manager has full discretion to disregard recommendations sourced from the Fat Prophets report, as it does from all other sources of investment ideas.

The Manager will also source investment ideas from efforts of its own staff: interviewing company management, visiting company assets, talking with competitors of companies, building financial models on companies and conducting industry and demographic research.

The Manager will also receive research from stockbrokers, the media, industry publications and other sources.

2.5 INVESTMENT STRATEGY - "VALUE"

The Company's investment strategy is to search for stocks that it believes are undervalued.

"Value" - relates to an equity investment style whereby there is a focus on purchasing securities in companies that are perceived to be cheaper than the overall market. Value is perceived in many forms, including among other things, high dividend payout, high interest cover, low price earnings ratio, low price to net tangible assets ratio, or a combination of these and other factors.

Investment decisions will be based on a reqular assessment of which investment opportunities are likely to maximise capital appreciation and or dividend income generation.

2.6 INVESTMENT STYLE - "ACTIVE"

The investment style is "active" - creating a portfolio of securities that are different in make-up to the Benchmark. Hence the return of such a Portfolio will be different (the aim is better) from that of the Benchmark. The use of the word "active" in this context does not refer to an intention to rapidly trade investments held within the investment portfolio.

2.7 INVESTMENT PROCESS

The investment process is multi-staged incorporating ideas generation, analysis, opportunity rankings, risk analysis and portfolio construction. The investment process is illustrated by the following diagram:

(a) Investment Universe

The investment Universe comprises all permitted investments outlined in Section 2.9.

(b) Ideas Generation

Investment ideas are obtained from a variety of sources, including but not limited to;

n
W Recommendations contained within the Fat Prophets report;
$\frac{m_{\rm{B}}}{m^2}$ Analysis conducted by the Manager, including interviews with company management, visits to assets, interviews with customers and competitors, economic, industry, demographic and geo-political analysis;
n
Ta Opportunities identified via investment filters and stock ranking screens that attempt to rank securities on the basis of investment fundamentals and price movement; and
ni
M Ideas sourced or stimulated by stockbroker's research, the media, industry publications and other sources.

All investment ideas are assessed to produce a list of priority targets.

The Manager has full discretion to disregard investment recommendations sourced from any Fat Prophets report, as it does from all other sources of investment ideas.

The past performance of the investment recommendations contained within the Fat Prophets report should not be seen as being indicative as to the future performance of the Company.

(c) Stock Ranking Screens

Financial and price data relating to stocks is manipulated in a series of stock ranking screens that rank stocks from best to worst on various criteria, among other things:

n
W Recent share price movements;
n
Ta Financial strength:
n
T Value characteristics (dividend yield and price earnings ratio);
n
T Price to net tangible assets ratio: and
n
W Liquidity (a measure of the value of stock traded each day).

(d) Analysis of Priority Targets

Analysis of potential investments involves a focus on five key areas, and their interactivity:

n.
Ta Industry and demographics;
n
T Company;
y People (management and board);
n.
Ta Risk: and
n
W Valuation.

The analytical effort is varied, and not limited to: Interviews with company management, customers, competitors, financial modelling, industry and demographic analysis, risk analysis and valuation analysis both absolute and relative to other investible securities.

The analytical effort is both quantitative and qualitative and is designed to rank new priority investment possibilities with the present securities held within the Portfolio.

Senior staff of the Manager will consider all priority investment proposals uncovered for a final investment decision and determine proposed target portfolio weightings.

(e) Investment Committee

The investment committee is made up of the senior investment executives of the Manager.

The investment committee's role is to review the existing Portfolio and analyse the merits of adding or removing Securities from the existing Portfolio.

The investment committee is to provide a high level review of the composition of the Portfolio on a weekly basis, having regard to market and sector trends and the risk profile of the Company. In addition, members of the investment committee will provide assistance in selecting and assessing investments in permitted investments.

The investment committee's role also includes ensuring the Manager adheres to the Company's Ethical Investment Policy (refer Section 2.8). Where the Manager identifies material ethical issues associated with any investment in the Portfolio both the investment and the material ethical issue will be communicated regularly to the Company.

(f) Portfolio Construction and Risk Constraints

individual securities weightings within the Portfolio are determined by the interaction of attractiveness of the investment and portfolio risk constraints.

Portfolio construction involves analysis of both the potential size of individual investments within the Portfolio but also analysis of the make-up of the Portfolio in terms of the difference in its overall stock and industry exposures against a portfolio that replicates the "Benchmark Index", being the S&P/ASX 300 Accumulation Index.

Portfolio risk constraints implemented by the Manager will be conveyed in regular reports to the Company, and will likely include, among other things:

na nga the minimum and maximum number of different securities held within the Portfolio:
n
Ta the maximum holding above the index weight of any one Security within the Portfolio;
n
A the maximum holding above the index weight of any major sub index of the Benchmark Index; and
ng Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndh
Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher Kalèndher the maximum holdings in entities outside the Benchmark index.

The Company has no right to dictate the portfolio risk constraints to be implemented by the Manager.

Risk analysis of the Portfolio will likely include, but not be limited to, analysis of the risk taken against the Benchmark Index with regard to Securities exposure, sector exposure, industry exposure and capitalisation exposure (i.e. does the Portfolio have a large or small capitalisation bias). The Manager will also analyse the risk of the Portfolio, with the outcome of analysis to be provided to the Company on a monthly basis.

Finally, the Portfolio will be reviewed to ensure it is invested in a manner consistent with the terms of the management agreement and the interim management agreement, as the case may be.

(g) Sell Discipline

The disciplined adherence to risk constraints, stock selection and portfolio construction combine to focus a "sell discipline" on the Manager.

For example, a stock that is considered cheap (i.e. ranks well on screens) is analysed and subsequently purchased. Over time its price moves up relative to the market (so its relative ranking on screens moves down). At the same time the active position (bet against the market) increases.

The Manager is repeatedly encouraged to begin the sell down process as the stock becomes expensive by (a) the growing size of the absolute and relative position within the Portfolio, and (b) the reducing attractiveness of the stock within the stock ranking screens.

2.8 ETHICAL INVESTMENT POLICY

The Manager will run an ethical investment screen as part of the broader investment process to identify potential investment opportunities that may be of concern due to broader ethical issues.

The ethical investment screen will attempt to highlight investments that have potential corporate governance issues and or derive revenue associated with, but not limited to, asbestos, tobacco, armaments, child labour, damage to the environment, cruelty to animals and poor occupational health and safety standards.

The possible effect of any ethical concerns will be incorporated into company and industry analysis where applicable and where possible.

Where the Manager has identified material ethical issues associated with any investment in the Portfolio both the investment and the material ethical issue will be communicated regularly to the Board.

2.9 PERMITTED INVESTMENTS

Under the Management Agreement, the Manager is permitted to undertake investments on behalf of the Company without Board approval. However, if the proposed investment is not in accordance with the investment principles outlined above, Board approval for the investment is required.

Subject to this, the Manager may make the following investments:

(a) listed securities, being any security quoted on ASX and other global markets including, without limitation, shares, stapled securities, units or notes which are redeemable, preference or deferred, fully or partly paid, with or without any right, title or interest thereto or therein (including a right to subscribe for or convert to any such security and including a right to subscribe for or convert to any such security if it is unlisted and there are plans to list);
(b) warrants, options and ASX Indices to purchase any investment and warrants, options and ASX Indices to sell any investment which is a permitted investment;
(c) cash, including cheques, bank deposits, bank transfers, bank drafts and bills of exchange;
(d) debentures, unsecured notes and bonds of a corporation of at least an investment grade credit rating granted by a recognised credit rating agency in Australia;
(e) units or other interests in cash management trusts;
futures or derivatives contracts over Australian shares or equity Indices or any other kind of foreign currency (1) hedging: and
(g) any other financial products which the Manager may use in the management of the Portfolio in accordance with its Australian Financial Services Licence (AFSL).

See Section 9.1 for further details.

2.10 DIVIDEND POLICY

The Company's objective is to provide Stapled Security holders and, after the Unstapling Date, Shareholders with long-term capital growth and the payment of dividends.

The Board is mindful that efficient wealth transfer to Stapled Security holders and, after the Unstapling Date, Shareholders is a function of tax effective dividends and appreciation of the Stapled Securities and, after the Unstapling Date, Shares of the Company.

The Board intends to determine the suitability of declaring a dividend every six months, at its discretion. Any dividends paid will be franked to the extent that available franking credits permit.

2.11 CAPITAL STRUCTURE POLICY

The Company does not presently intend to gear the Portfolio.

Circumstances may occur whereby short term borrowing is deemed beneficial, and should this eventuate, the Company may borrow. The Company intends that borrowing and non-debt liabilities will be limited to 30% of the tangible assets of the Company.

2.12 CAPITAL MANAGEMENT

The Company will focus on active capital management.

The Board may instruct the Manager to consider a buying-back of its Stapled Securities or post the Unstapling Date its Shares should the Stapled Securities or Shares trade at a sizeable discount to net tangible asset backing.

The Company may also consider other capital management alternatives such as, but not limited to, the issue of other Securities through bonus issues, rights issues and option issues, with a view to enhancing the value of Securities held by investors. The Company may also consider buying Options over Shares in the Company post the Unstapling Date.

2.13 DIVIDEND REINVESTMENT PLAN

The Company intends offering a Dividend Reinvestment Plan following the Unstapling Date, and this is described in Section 10.9 in further detail

The Dividend Reinvestment Plan will allow Shareholders to reinvest part or all of their dividends in the Company's Shares at parity or a discount to the market value of the Shares at the time of the dividend payment. The size of any discount and the period over which the price will be determined will be announced to Shareholders at the time.

2.14 NET TANGIBLE ASSET REPORTS TO SHAREHOLDERS

To assist Stapled Security holders and, after the Unstapling Date. Shareholders to assess the value of Stapled Securities and Shares and to comply with ASX Listing Rules, within fourteen (14) days after the end of each month the Company will release to Stapled Security holders and, after the Unstapling Date, Shareholders through ASX a statement of the net tangible asset ("NTA") backing of its Stapled Securities and, after the Unstapling Date, Shares as at the end of the preceding month.

The NTA figure released can be interpreted as an unaudited measurement of the underlying value of the Company.

The calculation of the net tangible asset backing of Stapled Securities and, after the Unstapling Date, Shares will be made in accordance with ASX Listing Rules.

The Company will provide to holders of Stapled Securities and after the Unstapling Date Shareholders on request, free of charge, a copy of statements to Stapled Security holders and Shareholders through ASX of the net tangible asset backing of Stapled Securities and Shares from time to time.

3.1 INTRODUCTION

The Proposed Manager is Fat Prophets Funds Management Australia Pty Limited, ACN 112 466 887. The Proposed Manager was incorporated on 12 January 2005.

The Proposed Manager does not presently hold an AFSL and so may not provide portfolio management services for the Company or any other party. An AFSL application was lodged with ASIC on 24 January 2005. The Proposed Manager has no reason to believe that an AFSL will not be granted. If the Proposed Manager is not able to obtain an AFSL by 31 December 2005, the management agreement with the Proposed Manager automatically terminates and management of the portfolio will remain with the Interim Manager, Mint Financial Group Pty Limited.

Until an AFSL is granted to the Proposed Manager, portfolio management services will be provided to the Company by the Interim Manager. Details of the interim management agreement with the Interim Manager are set out in Section 9.2. Details on the Interim Manager are set out in Section 3.7.

The Proposed Manager has agreed to initially make available the services of David Shearwood, Drew Wilson and Steve O'Hanna to act as the executives responsible for carrying out the investment management function of the Interim Manager under the interim management agreement. In return for making available the services of these executives, the Proposed Manager will receive a fee equal to 75% of the management and performance fees payable to the Interim Manager under the interim management agreement.

3.2 BUSINESS OF THE PROPOSED MANAGER

The Proposed Manager was incorporated to undertake the management of investment companies and funds. The Proposed Manager is a management company owned by entities associated with the co-founders of the Fat Prophets report, Angus Geddes and Jason McIntosh. The Proposed Manager is not directly involved with researching or publishing the Fat Prophets report. The Proposed Manager uses the name "Fat Prophets" under a licensing arrangement with Mint Financial Group Pty Limited (see Section 9.6 for further details). The "Fat Prophets" name is also used by entities involved with writing and publishing the Fat Prophets report however the Proposed Manager has no historic or future direct relationship with the performance of the recommendations contained within the Fat Prophets report.

As at the date of this Prospectus, the Proposed Manager does not provide management services to any other entities, nor has it done so in the past.

3. INFORMATION ON THE MANAGER

3.3 PERFORMANCE HISTORY

As the Proposed Manager was incorporated on 12 January 2005 and has not conducted business to date, no performance history in providing investment management services is available. The Company has no performance history available as it has yet to commence trading.

The Proposed Manager will manage the Portfolio of the Company using the investment strategies outlined in Section 2 of this Prospectus.

The past performance of the investment recommendations contained within the Fat Prophets report should not be seen as being indicative as to the future performance of the Company.

3.4 USE OF FAT PROPHETS REPORT

. . . . . . . . . . . . . . . . . . . . The Proposed Manager is a separate legal entity and will be provided with the research from the Fat Prophets report at the same time as all subscribers of the Fat Prophets report by accessing the Fat Prophets website.

Mint Financial Group Pty Limited is the legal entity responsible for the production and publication of the Fat Prophets report (see further details below).

There are no restrictions on when or whether the Proposed Manager can choose to implement a recommendation contained within the Fat Prophets report. Practically speaking the Proposed Manager is restricted in the timing of implementing Fat Prophets report recommendations, should it choose to do so, by the time the Proposed Manager requires to independently analyse the merits of any recommendation sourced from a Fat Prophets report.

The possible or actual use or non-use by the Proposed Manager of investment recommendations contained within a Fat Prophet report is neither an endorsement nor criticism of the Fat Prophets report service.

While Mint Financial Group Pty Limited is the legal entity responsible for the production and publication of the Fat Prophets report, the investment management function to be performed by it under the interim management agreement will be carried out entirely by executives seconded from the Proposed Manager who will be provided with research from the Fat Prophets report at the same time as all subscribers to the Fat Prophets report by accessing the Fat Prophets website.

3.5 KEY PERSONNEL OF THE PROPOSED MANAGER

Board

The board of the Proposed Manager presently comprises Angus Geddes, Jason McIntosh (Chair) and David Shearwood, David Shearwood is also a Director of the Company, with Angus Geddes and Jason McIntosh as his alternates. Their profiles can be found in Section 5.1.

Senior Executives

The Proposed Manager will employ experienced investment professionals to help manage the Company's portfolio of investments.

Senior executives of the Proposed Manager currently comprise Steve O'Hanna. David Shearwood and Drew Wilson.

3. INFORMATION ON THE MANAGER

David Shearwood – Chief Executive Officer – Bachelor of Engineering (mining, honours), ASIA, GAICD (order of merit)

David has 18 years experience in financial markets across a range of analytical areas covering funds management, investment banking and stockbroking.

David attended the University of Sydney during the period 1981 to 1984 with the aid of a scholarship from Peko Wallsend (now owned by Rio Tinto Limited), who provided vacation employment at the Warrego gold and copper mine in the Northern Territory and the Ellalong coal mine in the Hunter Valley. He joined Dupont in 1985 as an explosives engineer, responsible for marketing technical - Hunter Valley region of NSW.

Between 1986 and 1994 David worked in a variety of roles within stockbroking and corporate finance beginning as an mining equities analyst with Bain & Company (now Deutsche Bank) rising to mining strategist at McIntosh & Company (now Merrill Lynch). During this time he travelled globally analysing companies and speaking to fund managers about the merits of Australian companies.

Between 1994 and 2002 David worked within funds management in a variety of roles covering equities analysis, equities portfolio management, equity and bonds funds management and private equity with Westpac Investment Management, the Infrastructure & Specialised Funds Division of Macquarie Bank and with QBE Insurance Group. In 1997 and 1998 David was voted within the top three fund manager analysts in Australia within the Corpscan survey.

Recently David has acted as a consultant working largely in the managed funds industry, covering business design and analysis, financial modelling and strategic planning.

David is a Director of Christian Children's Fund of Australia ("CCFA", a child sponsorship charity) with additional responsibilities: Chair - Audit, Finance and Risk committee, Chair - Organisation Governance and Board Nominations committee, member - Strategy and CCF International committee,

Previous directorships include, alternate director Airport Motorway (an entity associated with the Eastern Distributor tollway in Sydney), and alternate director Interlink Roads (an entity associated with the M5 tollway in Sydney).

David has an Engineering Degree (mining with honours), a Graduate Diploma in Applied Finance and Investment (Securities Institute of Australia) and is a Graduate (with Order of Merit) Member of the Australian Institute of Company Directors.

David currently holds the position of Chief Executive Officer with the Proposed Manager.

Drew Wilson – Chief Operating Officer – Bachelor of Business Administration (Finance, Marketing) Drew has more than 10 years experience in the Canadian and Australian financial services industries.

Graduating from Bishop's University, Lennoxville, Quebec, Canada at the head of his class (marketing) in 1989, Drew joined the Toronto-Dominion Bank. Over the next five years Drew implemented a variety of initiatives that streamlined the bank's service delivery infrastructure and improved customer service levels.

In 1995 Drew joined TD Asset Management, the managed funds division of the bank. For the next 5 years Drew focused on front-office activities including developing distribution networks, enhancing the company's investor relations capabilities and using online technologies to better serve unit holders.

In 2000 Drew was transferred to Sydney as Managing Director, TD Asset Management (Australia) Pty Limited. Drew imported six US Mutual Funds to the Australian market. Drew was also the Head of Business Development for TDAM's sister company, TD Waterhouse Investor Services Pty Limited.

Drew currently holds the position of Chief Operating Officer with the Proposed Manager.

Steve O'Hanna – Senior Fund Manager – Bachelor of Business

Steve has 9 years' experience working in the financial markets in various roles across funds management, stockbroking and Investment banking.

Steve attended the Australian Catholic University completing a Bachelor of Business in 1994. He commenced working with Rothschild Australia Asset Management Limited in 1995 in a client services role and later continued working for Rothschild in London in a similar capacity. Whilst in the UK, Steve also gained experience working in various trader support roles at JP Morgan Securities Limited between 1997 and 1999 before returning to Australia. Steve joined ABN Amro Equities Australia Limited in early 2000 in trade support of the equities desk.

3. INFORMATION ON THE MANAGER

Steve joined Advance Asset Management Limited in 2001 where he performed both analytical and dealer functions. He was responsible for the global asset allocation model which involved implementing the investment team's global market strategy using derivatives and allocating cash. Steve's roles also encompassed co-managing the Listed Property Trust portfolio, undertaking property trust research, portfolio construction and dealing for the Advance Property Securities Fund,

Steve currently holds the position of Senior Fund Manager at the Proposed Manager.

3.6 FAT PROPHETS

Fat Prophets is a registered trade mark of Mint Financial Group Pty Limited (ACN 094 448 549) in Australia, Mint Financial Group Pty Limited publishes the "Fat Prophets" report and is owned by, or interests associated with, Angus Geddes and Jason McIntosh.

3.7 MINT FINANCIAL GROUP PTY LIMITED

Mint Financial Group Pty Limited (Mint) was incorporated on 12 September 2000.

Mint provides independent research in the form of the Fat Prophets report.

At present Mint produces and publishes the Fat Prophets Australasia report - that predominantly covers Australian equities.

The Fat Prophets report is released to subscribers electronically via the Fat Prophets website (www.fatprophets.com.au) and to a small number of subscribers by direct mail.

The Fat Prophets report investment philosophy combines both fundamental analysis, which involves analysis of an entity's financial statements and future earnings outlook, as well as technical analysis or charting which involves studying the price history of an investment and looking for trends or patterns to gain an insight into possible future performance.

The past performance of the investment recommendations contained within the Fat Prophets report should not be seen as being indicative as to the future performance of the Company.

The Fat Prophets report regularly communicates the cumulative performance of recommendations contained within its report to the public via its website and other forms of media.

On 16 October 2002 ASIC announced it had accepted an enforceable undertaking from Mint relating to the way in which it presented the returns associated with its stock recommendations in the Fat Prophets report. ASIC's concerns related to the inclusion or otherwise of returns generated from the report recommendations in advertising of the past performance of those recommendations. While Mint at all times maintained that it had not breached the law, nevertheless it:

n
W published a notice addressing ASIC's concerns within three weeks and sent a copy of the notice to all past subscribers;
跳跃 invited complaints from its subscribers and past subscribers who believed that they were misled; and
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Ta engaged an independent expert to devise a methodology, with reasonable and appropriate assumptions, to record results in the future which it still uses today.

Results are now independently verified on a monthly basis and Mint is not aware of any concerns regarding reporting of returns from ASIC.

SERTIN 4 FINANCIAL INFORMATION

4.1 USE OF FUNDS

The Company is offering 40 million Stapled Securities (each comprising one Share and one Option) under the Offer, to raise gross funds of up to \$40 million. The Company reserves the right to accept over subscriptions.

4.2 PROCEEDS OF THE ISSUE

The proceeds of the Issue will be used for investment opportunities that meet the Company's investment objectives as set out in Section 2 and to meet the day-to-day operating expenses of the Company.

The Company will have relatively low operational costs. Its major expenditure will be the management fee and performance fee (if applicable) payable to the Manager.

The Company's ongoing expenditure (excluding management and performance fees - where relevant) will include custody fees, printing costs associated with the annual report, annual audit fees, Directors' fees, administration fees, share registry services fees, accounting fees and legal fees. The Company will also incur other minor office expenses including stationery and postage costs. The Company does not expect that these costs will vary or increase significantly from year to year as these costs relate mainly to fulfiling its ongoing compliance obligations.

4. FINANCIAL INFORMATION

4.3 PRO-FORMA STATEMENTS OF FINANCIAL POSITION

The Pro-forma Statements of Financial Position have been prepared for illustrative purposes only to show the financial position of the Company following completion of the Issue. These Pro-forma Statements of Financial Position are illustrative only and may not actually reflect the position of the Company as at the date of the Prospectus or at the conclusion of the Offer.

Pro-forma Statements of Financial Position

	Minimun ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
. .	. .	.	. $\sim$
.	15.194.855	.	.
. .	.	$\begin{array}{cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc$	$\cdots$ .
. . . .	. .	.	.
. . . . . $\ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ld$	355 .	. . $\cdots$	. .
NT/ . . . . . . .	$\cdots$	cents .

A reconciliation of the Pro-forma Statements of Financial Position for cash are as follows:

Pro-forma Cash Position

	Minimum Subscription \$16 million	Subscription \$30 million	Subscription \$40 million
Initial issue subscribers
Proceeds of Offer		30.000.000	1.000.000
. . Expenses of Offer (Refer Section 10.15)	. . 805.146	. .075.096	.362.649.
Estimated Net Cash Position . . . . .	15,194,855 . .	28.924.905 .	38.637,352

These Pro-forma Statements of Financial Position have been prepared on the basis of the following assumptions:

1. Application of the proposed accounting policies and notes to the accounts set out in Section 4.4.
1. In the Pro-forma Statement of Financial Position entitled "Minimum Subscription", reference is to subscription of 16,000,000 Stapled Securities by Applicants under this Prospectus.
1. In the Pro-forma Statement of Financial Position entitled "Subscription \$30 million" reference is to subscription of 30,000,000 Stapled Securities by Applicants under this Prospectus.
1. In the Pro-forma Statement of Financial Position entitled "Subscription \$40 million", reference is to subscription of 40,000,000 Stapled Securities by Applicants under this Prospectus.
1. Initial expenses relating to the Issue includes a handling fee and commission of up to 3% (including GST) of the funds raised that may be paid to an Applicant's Licensee (plus marketing fees). For the purpose of the above Pro-forma Statements of Financial Position, it has been assumed that handling fees of 3% (including GST) will be paid on all but \$5 million of the minimum subscription and all but \$10 million on the \$30 million and \$40 million subscriptions total for all Applications in respect of Stapled Securities issued from Licensees.
1. Expenses of the offer have been paid and recognised as a reduction to the proceeds of equity instruments to which the costs relate. Details of the costs of the Offer are shown in Section 10.15.
1. No oversubscriptions are accepted by the Company.

4. FINANCIAL INFORMATION

4.4 PROPOSED ACCOUNTING POLICIES

A summary of significant accounting policies, which have been adopted in the preparation of the Pro-forma Statements of Financial Position, set out in Section 4.3, and will be adopted and applied in preparation of the Financial Statements of the Company for the year ended 30 June 2005 and subsequent years, is set out below:

(a) Basis of preparation of accounts

The Financial Statements are a general purpose financial report that have been prepared in accordance with applicable Accounting Standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) and the Corporations Act 2001.

The Statements are prepared from the records of the Company on an accruals basis. They are based on historical costs and do not take into account changing money values or, except where specifically stated, current valuation of non-current assets.

(b) Investments

Investments will be revalued constantly and for this reason, cost of sales equals sales revenue when investments are sold. Changes in market value will be recorded directly in the Asset Revaluation Reserve, after deducting a provision for potential capital gains tax. When shares, securities and other investments are disposed of, the balance in the Asset Revaluation Reserve relating to the disposed share, security or other investment is transferred to the Capital Profits Reserve, Investments are valued as follows:

₩ Securities and rights to them listed on a Financial Market - valued at the market value as quoted on relevant exchange.
₩ Securities which are not listed on a Financial Market - valued at their estimated market value.
₩ Derivative Financial Instruments - all derivatives are brought to account at market value and the resulting profit or loss is recognised in the Statement of Financial Performance.

(c) Revenue recognition

Trading income profit and losses realised from the sale of investments and unrealised gains and losses on investments held at market value are included in the Statement of Financial Performance in the year they are incurred.
Dividend income -- dividends and distributions are brought to account on the date that the shares or units are traded "ex-dividend".
₩ Interest income - interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
₩ Other income – other revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and when the revenue can be reliably measured.

4.5 CAPITAL STRUCTURE POLICY AND CAPITAL MANAGEMENT

The Company does not presently intend to gear the Portfolio.

The Company through its Board will regularly review the capital structure of the Company. The Company will actively engage in capital management. For example, if the value of Stapled Securities in the Company falls below net tangible assets, then the Company may elect to buy back Stapled Securities. Similarly, post unstapling, if the value of Shares in the Company falls below net tangible assets, then the Company may elect to buy back Shares.

4.6 DIVIDEND POLICY

The Company may pay dividends from the profit, dividend and interest income it receives from its investments to the extent permitted by law and prudent business practices. Dividends will be franked to the extent that available imputation credits permit. Dividends that are paid from the realisation of a capital gain may be passed on to Stapled Security holders and, post unstapling, to Shareholders.

4. FINANCIAL INFORMATION

4.7 LISTED INVESTMENT COMPANY (LIC)

Tax concessions may be available to Stapled Security holders and post unstapling Shareholders if the Company is considered a LIC for tax purposes.

Due to the nature of the Manager's investment strategy, it is possible that the Company may initially be considered a LIC for tax purposes. Despite this possibility, potential applicants should not make a decision to apply for Stapled Securities under this Prospectus primarily on the basis of any potential taxation concessions. For further details refer to the Taxation Report in Section 8.

In order for the Company to be treated as a LIC for tax purposes, a number of requirements detailed in the tax law must be satisfied. Broadly, the Company must:

₩ be an Australian resident company:
₩ be listed for quotation on the Australian Stock Exchange or other stock exchange approved by the Corporations Act 2001: and
₩ have at least 90% of the market value of its capital gains tax assets being permitted investments, such as shares, options, units, financial instruments and certain asset types which has the main use of deriving passive income such as interest, annuities, rent royalties or foreign exchange gains.

Broadly, for ownership interests to be permitted investments of the Company the Company must not, directly or indirectly, own more than 10% of the investee company or trust.

In the event that the Company does not continue to satisfy these requirements, other than where there is a temporary breach of the 90% permitted investment requirement that is outside of the control of the Company, the company will cease to be a LIC for tax purposes.

The tax concessions discussed in the Taxation Report in Section 8 will not be available in respect of gains made by the Company after it has ceased to be an LIC.

4.8 ADOPTION OF AUSTRALIAN EOUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

Australia is currently preparing for the introduction of International Financial Reporting Standards (IFRS) effective for financial years commencing 1 January 2005. The adoption of IFRS will be first reflected in the Company's financial statements for the year ended 30 June 2006 and will require the production of accounting data for the 30 June 2005 comparative year.

The Company's Directors are assessing the significance of these changes and preparing for their implementation. The Company currently expects that the most significant impacts will be in the areas described below. Reliable estimation of the impacts of these changes in accounting policies is impracticable as the actual impacts will depend on the particular circumstances and conditions prevailing at the time of application of IFRS.

4.8.1 Asset and financial instrument valuation

Pending Accounting Standards 132, 136 and 139 will provide significant quidance on the valuation of assets and financial instruments. Under these Standards, various measurement, recognition and disclosure prescriptions are likely to change. This will potentially impact the Company's accounting treatment of investments and investment-related income, including the following:

₩ Treatment of realised gains and losses on disposal of investments - realised gains and losses net of tax will be transferred from the Asset Revaluation Reserve directly to the income statement. The current intended policy (Refer to Section 4.4) is to transfer realised gains and losses, net of tax to the Capital Profits Reserve. The Company intends to transfer the realised capital gains and losses from the income statement to the Capital Profits Reserve, hence it is unlikely to have any effect on the Company's Retained Profits.

4.8.2 Income tax

Currently, the Company intends to adopt the liability method of tax-effect accounting whereby the income tax expense is based on the accounting profit adjusted for any permanent differences. Timing differences are currently brought to account as either a provision for deferred income tax or future income tax benefit. Under the Australian equivalent to IAS 12, the Company will be required to adopt a balance sheet approach under which temporary differences are identified for each asset and liability rather than the effects of the timing and permanent differences between taxable income and accounting profit.

SETTIM R DIRECTORS AND CORPORATE GOVERNANCE

5.1 DIRECTORS

Robert Bolton - Independent Chair - Bachelor of Engineering (civil), MBA

Robert has over 20 years of executive management and project management experience in the construction, mining, IT, financial services and consulting sectors. He holds a Bachelor of Engineering (civil) from the University of Sydney and a MBA from Ashridge Management College United Kingdom.

Following graduation as a Civil Engineer from the University of Sydney, Robert worked with Leighton Contractors on a number of different building, civil and mining projects. These included the Sydney Harbour Tunnel, Hume Highway duplication (NSW), Parliament House development (Canberra), Darling Harbour Redevelopment (Sydney) and the London Victoria goldmine (NSW).

In 1990 as part of his MBA program in the United Kingdom, he reviewed the "New Product Development Strategies" within Land Rover, Rover and Honda with the aim of

comparing project management techniques. This work resulted in the introduction of new metrics for determining program resources.

Between 1991 and 1996, Robert held leadership positions with Alexander Proudfoot/Phillip Crosby and then Price Waterhouse Urwick as a management consultant focused on productivity improvement and innovation. Clients included NZ Post, GRE Insurance, Argyle Diamond Mines, GIO Life, JNA Telecommunications, British and American Tobacco (Wills) and Worsley Alumina.

In 1996 Robert founded "Probative Solutions" to provide innovative constraint management solutions. Clients have included Westpac, JNA Lucent, P&O Services, Memorex Telex, Worsley Alumina, Kaltim Prima Coal, Normandy Mining and Iluka Resources.

More recently he has led a number of business development teams in start-up environments in roles encompassing innovative business and project turnaround often in an interim executive and director capacity.

Robert is a leading Australian advocate of the Theory of Constraints International Certification Organisation (TOC-ICO) approach to management and complex systems operations and has been actively involved in the development of the TOC project management solution "Critical Choice". He is certified in the TOC Thinking Process Operations Management, Project Management and Finance and Measurement fields.

Robert became a Director and Chair of the Company in January 2005.

As a non-executive Director of the Company, his involvement in this capacity will be limited to attending board meetings of the Company (expected to be held at least quarterly), and to providing strategic advice and assistance to the Board from time to time. The Board anticipates that the average time to be made available by Robert to the affairs of the Company should not exceed 20 hours per month.

Bruce Holman – Independent Director – Bachelor of Engineering (mining), Grad Dip Geoscience, ASIA, GAICD

Bruce has 14 years' experience in Australian equities funds management, as an analyst, portfolio manager and fund manager.

Bruce attended the University of Sydney between 1980 and 1983 completing a degree in Mining Engineering, with the aid of a scholarship from the NSW Joint Coal Board. Between 1984 and 1988 Bruce worked for ACIRL (Australian Coal Industry Research Laboratory) undertaking research and consultancy across a range of mines in NSW and Queensland.

Between 1989 and 1994 Bruce worked as a mining and commodity analyst with CBA Financial Services, the funds management arm of the Commonwealth Bank. In 1994 Bruce moved to Prudential Portfolio Management Australia as an analyst and then Assistant Director, covering a range of sectors within the equities market, as well as

managing a property trust portfolio. Between 1996 and 2002 Bruce worked with Westpac Investment Management as an analyst and portfolio manager, where he had responsibility for a range of industry sectors. Following a merger of Westpac Investment Management with Rothschild Australia Asset Management in 2002 to form Sagitta Wealth Management and a subsequent merger with BT Financial Group, Bruce also worked with these firms during 2002 and 2003 as an analyst.

Bruce was ranked within the Reuters surveys of 1998, 1999 and 2000, whereby the top 100 listed Australian companies were asked to rank the best analysts within funds management.

Bruce has an Engineering Degree (mining), a Graduate Diploma in Applied Finance and Investment (Securities Institute of Australia), a Graduate Diploma in Geoscience (mineral economics) from Macquarie University and is a graduate member of the Australian Institute of Company Directors (AICD).

Bruce became a Director of the Company in November 2004.

As a non-executive Director of the Company, his involvement in this capacity will be limited to attending board meetings of the Company (expected to be held at least quarterly), and to providing strategic advice and assistance to the Board from time to time. The Board anticipates that the average time to be made available by Bruce to the affairs of the Company should not exceed 20 hours per month.

FAT PROPHETS AUSTRALIA FUND LIMITED

David Shearwood - Director - Bachelor of Engineering (mining, honours), ASIA, GAICD (order of merit)

David became a Director of the Company in November 2004. Further details on David's background can be found at Section 3.5.

David will be available on a part time basis to manage the affairs of the Company subject to his aforementioned obligations and his duties as a member of the Investment Committee of the Proposed Manager and Chief Executive Officer ("CEO") of the Proposed Manager.

Angus Geddes - Alternate Director - Bachelor of Commerce, ASIA

Angus has 15 years' experience in the international and domestic financial markets in stockbroking, investment banking and research. Angus's investment track record began in 1982 at the young age of 13. In 1986 he received a "highly commended" award from the New Zealand Chamber of Commerce for increasing an initial investment of \$200 to \$35,000 on the New Zealand, Australian and London stock exchanges.

Majoring in Economics, Angus completed a Bachelor of Commerce degree at Otago University, New Zealand in 1990. Angus commenced his professional career in 1990 when joining the graduate program at the Bank of New Zealand. For nearly three years he worked as a money market dealer in the Treasury division.

Between 1993 and 1995, Angus worked for Investor Associates, a Wall Street stockbroking firm, and consulted to a number of large investment banks such as Salomon Brothers. BZW, Mercury Asset Management and Nomura in London.

At the beginning of 1996, Angus joined Bankers Trust Australia as a stockbroker before moving to JB Were & Son in 1999.

In 2000, Angus co-founded Mint Financial Group Pty Limited - which publishes the Fat Prophets report. Angus currently holds the position of Chief Executive Officer at Mint Financial Group Pty Limited.

Angus has a Commerce Degree and a Graduate Diploma in Applied Finance and Investment (Securities Institute of Australia).

Angus is an Alternate Director for David Shearwood.

Jason Mcintosh - Alternate Director - Bachelor of Arts (Economics)

Jason has 14 years' experience in the financial industry as an analyst and trader.

Majoring in Economics, Jason completed a Bachelor of Arts degree at the University of Sydney in 1991. He also holds a Certificate in Financial Markets from the Securities Institute of Australia (1990-1991).

From 1991 to 1999, Jason worked at Bankers Trust Australia where he achieved the position of Vice President in 1998. Commencing in the Charting Department, Jason was later promoted to the Foreign Exchange desk. As a senior trader, his responsibilities included currency dealing and proprietary trading in local and international financial markets.

In 2000, Jason co-founded Mint Financial Group Pty Limited - which publishes the Fat Prophets report. Jason currently holds the position of executive director of Mint Financial Group Pty Limited.

Jason is an Alternate Director for David Shearwood.

5.2 CORPORATE GOVERNANCE STATEMENT

The Board has the responsibility to ensure that the Company is properly managed so as to protect and enhance Stapled Security holders and post unstapling Shareholders interests in a manner which is consistent with the Company's responsibility to meet its obligations to all parties with which it interacts. To this end, the Board has adopted what it believes to be appropriate corporate governance policies and practices having regard to its nature of activities and size

The Company will not satisfy all of the best practice recommendations set by ASX Corporate Governance Council,

The Company does have an Independent Chair and a maiority of Independent Directors, and its Audit Committee will have an Independent Director as Chair and a majority of Independent Directors as members. On matters that could benefit the Manager. Directors associated with the Manager may not be entitled to vote.

The Board has no direct involvement with the management of the Portfolio. Although the Board will closely monitor the compliance of the Manager with the terms of the management agreement and the interim management agreement, the performance of the Company is dependent upon the performance of the Manager.

Some members of the Board or interests associated with them, not classified as Independent Directors, do have involvement with management of the portfolio in their executive roles as employees of the Manager. Some members of the Board, or interests associated with them have shares or options over shares in the Manager.

The main corporate governance policies are summarised below.

Appointment and Retirement of Non-Executive Directors

The Board will not establish a Nominations Committee. It is the Board's policy to determine the terms and conditions relating to the appointment and retirement of non-executive Directors on a case-by-case basis and in conformity with the requirements of the Listing Rules and the Corporations Act.

Directors' Access to Independent Professional Advice

For the purposes of the proper performance of their duties, Directors are entitled to seek independent professional advice at the Company's expense, unless the Board determines otherwise.

It is the Board's policy that any committees established by the Board should:

₩ Operate in accordance with the terms of reference established by the Board;
₩ Be entitled to obtain independent professional or other advice at the cost of the Company, unless determined otherwise by the Board; and
₩ Be entitled to obtain such resources and information from the Company including direct access to employees of and advisers to the company as they might require.

Conflicts of Interest - Policy

The Board is mindful of the need to identify issues pertaining to actual, potential and perceived conflicts of interest and has adopted a Conflicts of Interest Policy.

The conflict of interest policy aims to ensure that all employees and the Board of the Company are engaged in a business that is not significantly compromised by conflicts of interest as outlined in ASIC's Policy Statement 181 "Licensing: Managing Conflicts of Interest" (in the lead-up to changes in the Corporations Law following CLERP 9 that took effect on 1 January 2005). This will be achieved in part by having adequate mechanisms in place to manage conflicts of interest.

There is an obligation for disclosure of conflicts of interest (or potential conflicts of interest) by all employees and Directors of the Board to each other and other external stakeholders.

All employees, customers and other stakeholders are entitled to be treated fairly without fear of mistreatment due to disclosed conflicts of interest.

The Company will use three mechanisms for managing conflicts of interest.

(i) Controlling

The Company aims to identify conflicts of interest relating to its business.

The Company assesses and evaluates any identified conflicts of interest.

The Company decides upon and implements an appropriate response to those conflicts.

(ii) Avoiding

Where conflicts of interest are likely to have a serious impact on the Compary or its clients, and the conflicts cannot be adequately managed in other forms, the Company may choose to avoid altogether circumstances and situations that would allow such conflicts of interest to occur.

(iii) Disclosing

Where conflicts of interest are likely to have a material impact on the Company, or the perception of the Company by an outside party, these will be disclosed to the parties concerned in a timely fashion.

Audit Committee

The members of the Audit Committee are Bruce Holman (Independent Chair), Robert Bolton (Independent Director) and David Shearwood. The Committee's main responsibilities include assessing and monitoring:

the adequacy of the Company's internal controls and procedures to ensure compliance with all applicable legal $\mathbf{1}$ . obligations:
1. compliance by the Manager with the interim management agreement and the management agreement;
1. the adequacy of the financial risk management processes; and
1. the appointment of the external auditor, any reports prepared by the external auditor and liaising with the external auditor.

The Audit Committee intends to meet with the external auditors as required.

Remuneration Committee

The Board has not established a Remuneration Committee, nor does it intend to, at this stage. A remuneration committee will be established in the event the Board deems it necessary.

Remuneration

The initial maximum total remuneration payable by the Company to the Directors is \$135,000 per annum to be dividend amongst them in such proportions as the Board agrees.

5.3 SHAREHOLDING QUALIFICATIONS

The Directors are not required to hold any Stapled Securities or Shares or Options after unstapling in the Company under the Company's constitution.

6.1 GENERAL RISK FACTORS

The principal risks are described below. Whilst some of these risks can be mitigated by appropriate safeguards and systems, some risks are outside the control of the Company.

You should carefully consider the risks and uncertainties set out below and the information contained elsewhere in this Prospectus before you decide whether to invest in the Company. The risks outlined may be understated, there may be additional unmentioned risks, or there may be a cumulative combination of mentioned and unmentioned risks that have an undesirable effect.

The value of shares, stapled securities and options listed on ASX can change considerably over time and your investment can go up or down with the value of the Company's investment portfolio. This fluctuation in value is known as volatility and the level of volatility depends on the type of investment. Generally, in order of risk for asset classes, shares are the riskiest, then fixed interest, then cash. As with most investing, performance is not guaranteed. These risks may result in loss of income and principal invested.

You can do some things to reduce the impact of risk. Firstly, get professional advice - advice suitable to your investment objectives, financial situation and particular needs. Nothing in this Prospectus can replace or offer that, Secondly, invest for at least the time frame recommended by your professional adviser.

The following matters, as well as others described elsewhere in this Prospectus, should be carefully considered in evaluating the Company and its prospects. Risks for the company include but are not limited to:

Individual investment risk

Individual investments within the investment portfolio could (and sometimes likely will) fall in value for many reasons such as changes in the entity's internal operations, management, or in its business environment. If this occurs the value of the NTA of the Company will fall and likely result in a fall in the Stapled Security price or after the Unstapling Date, a fall in the Share and Option price.

FAT PROPHETS AUSTRALIA FUND LIMITED

6. RISK FACTORS

Market risk

Economic, technological, political or legal conditions, and even market sentiment, can (and sometimes do) change and this can mean the equity investments purchased in those markets can change in value. In addition exogenous shocks, natural disasters and acts of terrorism can (and sometimes do) add to equity market volatility as well as impact directly individual entities, assets and human beings.

Interest rate risk

Changes in interest rates can have an impact directly or indirectly on investment valuations and share, stapled security and option prices.

Company risk

Risks particular to the Company include that the Company may give different after-tax results than investing individually because of income or capital gains accrued in the Company.

Derivatives risk

The risk of loss associated with derivatives can be substantial due to the leverage associated with these financial instruments. Importantly, the Company will not use any form of derivative to leverage its net assets. Accordingly, the primary risks associated with the use of derivatives by the Company are that they may perform differently and be less liquid than the underlying Securities.

Price: NTA risk

The risk of loss associated with the Stapled Securities price not trading at the NTA backing. The Stapled Securities and after the Unstapling Date the Shares of the Company may trade at a premium or discount to its NTA backing and the level of any premium or discount will likely fluctuate over time.

Liauidity

The Company will be a listed entity, therefore the ability to sell Stapled Securities or Shares and Options (post the Unstapling Date) will be a function of the turnover of the Company's Stapled Securities, Shares or Options at the time of sale. Turnover is itself a function of the size of the Company and also the cumulative investment intentions of all current and possible investors in the Company at any one point in time.

Industry Risk

There are a number of industry risk factors that may affect the future operational performance of the Company. These factors are outside the control of the Company. Such factors include increased regulatory and compliance costs, unforeseen Government legislation, and collapse in equity markets.

Reliance on Key Personnel

The Company has instructed the Manager to put in place systems and processes to mitigate the risk of losing key people, however the loss of key personnel both within the Company and the Manager could have a negative impact on the Company.

Licensing Reguirements

The ability of the Manager to continue to manage the Portfolio in accordance with this Prospectus and the Corporations Act is dependent on the maintenance of the Manager's AFSL and its continued solvency. Maintenance of the AFSL depends, among other things, on the Manager continuing to comply with the ASIC imposed licence conditions and the Corporations Act.

Financial Market Volatility

A fall in global or Australian equity markets, global or Australian bond markets or a rapid change in the value of the Australian dollar against other major currencies may discourage investors from moving money into or out of equity markets. This may have a negative effect on the Company's Stapled Security or Share and Option (post the Unstapling Date) prices.

6. RISK FACTORS

Performance of Other Asset Classes

Good performance, or anticipated performance, of other asset classes can encourage individuals to divert money away from equity markets. This may have a negative impact on the price at which the Company's Stapled Securities or Shares or Options (post the Unstapling Date) trade.

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Taxation and changes to tax systems can have an effect on returns but also the relative merit of putting monies in various asset classes and in an individual security. All of these items may have a negative impact on the Company or the price of its Securities.

6.2 INVESTOR CONSIDERATIONS

The Company aims to manage the impact of many of the aforementioned risks by instructing the Manager to use a prudent and disciplined investment process. The Company's investment process attempts to control risk by selecting investments and levels of relative exposure after analysis and allowing for share market liquidity, historic volatility and likely performance correlation factors.

Investors should be aware that the risks might result in loss of income and principal invested. Neither the Company, the Manager, nor any of their associates guarantee the repayment of capital or the payment of distributions from the Company.

Before deciding to subscribe for Stapled Securities, Applicants should consider whether Stapled Securities are a suitable investment. There are general risks associated with any investment in the stock market. The value of Stapled Securities listed on ASX may rise or fall depending on a range of factors beyond the control of the Company.

6.3 TAX CONSIDERATIONS

There may be tax implications arising from the application for Stapled Securities, the receipt of dividends (both franked and unfranked) from the Company, participation in the dividend re-investment plan of the Company, participation in any on market Stapled Security or, post the Unstapling Date, Share buy-back and on the disposal of Stapled Securities and post the Unstapling Date Shares or Options. Applicants should carefully consider these tax implications and obtain advice from an accountant or other professional tax adviser in relation to the application of tax legislation.

If you are in doubt as to whether you should subscribe for Stapled Securities, you should seek advice on the matters contained in this Prospectus from a stockbroker, solicitor, accountant or other professional adviser immediately.

SEDTIMM T INDEPENDENT ACCOUNTANT'S REPORT

MOORE STEPHENS WI

CHARTERED ACCOUNTANTS

FINANCIAL SERVICES GUIDE

Moore Stephens WI Pty Limited carries on business at Level 5, 14 Martin Place Sydney NSW 2000. Moore Stephens WI Pty Limited holds Australian Financial Services Licence No 236886 authorising it to provide financial product advice on securities and interest in managed investments schemes to wholesale and retail clients.

The Corporations Act 2001 requires Moore Stephens WI Pty Limited to provide this Financial Services Guide ("FSG") in connection with its provision of an Independent Accountant's Report and Independent Taxation Report ("Reports") which is included in a document ("Prospectus") provided by Fat Prophets Australia Fund Limited ("FPAF"/ the "Entity") for which Moore Stephens WI Pty Limited prepared the Reports.

When providing the Reports. Moore Stephens WI Pty Limited's client is the Entity to which it provides the Report. Moore Stephens WI Pty Limited receives its remuneration from the Entity.

No related body corporate of Moore Stephens WI Pty Limited, or any of the directors or employees of Moore Stephens WI Pty Limited of any of those related bodies or any associate receives any remuneration or other benefit attributable to the preparation and provision of the Reports.

MSWI is required to be independent of FPAF. The following information in relation to the independence of MSWI is stated in section 10 of our Independent Accountant's Report.

Moore Stephens WI Pty Limited is only responsible for its Reports and this FSG. Complaints or questions about the Prospectus should not be directed to Moore Stephens WI Pty Limited which is not responsible for that document.

If you have a complaint about Moore Stephens WI Pty Limited's Reports or this FSG you should take the following steps.

1. Contact the Enquiries and Complaints Officer of Moore Stephens WI Pty Ltd on (02) 8236 7700 or put your complaint in writing and send it to us at Level 5, 14 Martin Place, Sydney NSW 2000. We will try and resolve your complaint quickly and fairly.
1. If you still do not get a satisfactory outcome, you have the right to complain to the Financial Services Complaints Resolution Scheme at PO Box 386 Collins St West, Melbourne, Victoria 3007. [Telephone (03) 9620 7666]. We are a member of this scheme.
1. The Australian Securities & Investments Commission (ASIC) also has a freecall Infoline on 1300 300 630 which you may use to make a complaint and obtain information about your rights.

Moore Stephens WI Pty Limited ABN 34 098 199 118 CML Building, Level 5, 14 Martin Place, Sydney NSW 2000 AUSTRALIA Tel: +61 2 8236 7700 Fax: +61 2 9233 4636 Web: www.mswi.com.au A Member of Moore Stephens International Limited Group of Independent Firms

MOORE STEPHENS WI CHARTERED ACCOUNTANTS

7 February 2005

The Directors Fat Prophets Australia Fund Limited Level 33 2 Park Street Sydney NSW 2000

Dear Sirs

7. INDEPENDENT ACCOUNTANT'S REPORT

1.0 Purpose

$1.1$ This report has been prepared for inclusion in a prospectus to be dated on or about 7 February 2005 relating to the issue by Fat Prophets Australia Fund Limited ACN: 111 772 359 (the "Company") of up to 40,000,000 stapled securities at an offer price of \$1.00 per stapled security. The minimum subscription is 16,000,000 stapled securities. The issue has not been underwritten.
$1.2$ A stapled security consists of one (1) share and one (1) option to subscribe for a share at an exercise price of \$1.00, exercisable between the unstapling date of 20 April 2006 and 20 April 2008.
The Company may at its discretion accept oversubscriptions. $1.3$
$1.4$ Expressions defined in the Prospectus have the same meaning in this report.
This report considers the pro-forma statement of assets and liabilities at 1.5 completion of the proposed capital raising immediately after the allocation of stapled securities.

Background $2.0$

$2.1$ The Company was incorporated on 12 November 2004 with 1 ordinary share at \$1.00 and has not issued shares since incorporation. The share is held by Mr Angus Geddes. Further to this, an option has been issued to Mr Angus Geddes, and will be stapled to the ordinary share, forming a "stapled security". Refer to section 1.2 of the Prospectus for further information.
The Company intends to invest the proceeds of the Prospectus offering in $2.2$ securities predominantly comprising of securities quoted on the ASX, bills of exchange, other negotiable investments, debentures, warrants, futures, derivative contracts and other investments, as set out in section 2.9 of the Prospectus.

MOORE STEPHENS WI

CHARTERED ACCOUNTANTS

There have been no significant activities conducted by the Company since 2.3 incorporation as it is in the initial phase of operations. The Company has however incurred costs associated with establishing the business.
Mint Financial Group Pty Limited ACN 094 448 549 is the Interim Investment $24$ Manager as set out in section 3.7 of the Prospectus. The Interim Manager will receive a management fee and performance fee as set out in section 9.2 of the prospectus.
Fat Prophets Funds Management Pty Limited ACN 112 466 887 will be appointed 2.5 Investment Manager, as set out in section 3.1 of the Prospectus upon the issue of an Australian Financial Services Licence. The Investment Manager will receive a management fee and performance fee as set out in section 9.1 of the prospectus.
The first balance date of the Company will be 30 June 2005. $2.6$

$3.0$ Scope of our Report

$31$ This report deals with the pro-forma financial information included in the Prospectus at section 4.3.
The pro forma Statements of Financial Position have been prepared to illustrate $3.2$ the financial position of the Company on completion of the issue and have been prepared on the basis of the assumptions, notes and accounting policies as set out in sections 4.1 to 4.4 of the Prospectus. As the Company may accept capital from the minimum of $$16,000,000$ to a maximum of $$40,000,000$ , a number of scenarios have been set out in section 4.3 of the prospectus.
The directors of the Company are responsible for the preparation and presentation $3.3$ of the pro forma Statements of Financial Position including the assumptions, notes and accounting policies on which they are based.
$3.4$ The directors are not making any forecasts for earnings by the Company.

4.0 Review of Financial Information

We have conducted our review of the pro-forma Statements of Financial Position $4.1$ in accordance with Auditing Standards AUS902 "Review of Financial Reports" and AUS804 "The Audit of Prospective Financial Information". Our procedures consisted primarily of enquiry and comparison and such other analytical procedures we, in our professional judgement, considered necessary so as to adequately evaluate whether the assumptions and estimated expenses appear reasonable in the circumstances.

These review procedures were substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and accordingly do not express an audit opinion.

MOORE STEPHENS WI CHARTERED ACCOUNTANTS

5.0 Statement of Financial Information

$5.1$ Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that:
a. the pro forma financial information has not been properly prepared on the basis of the pro forma transaction:
b. the pro forma transactions do not form a reasonable basis for the pro forma information; and
c. the assumptions, notes, accounting policies and estimated expenses of the offer made by directors, do not provide a reasonable basis for the preparation of the pro forma statements of Financial Position.

6.0 Related Parties

Directors' entitlements under the issue 6.1

Mr Angus Geddes, an alternate director of the Company owns one subscriber share in the Company. The directors have no special entitlement to stapled securities due to their position as directors. The directors may subscribe for stapled securities under the terms offered to the public under the Prospectus.

Directors' remuneration and other benefits. 6.2

The Directors will be entitled to receive the benefits as set out in section 10.11 of the prospectus.

7.0 Working Capital

As required by ASX Listing Rule 1.3.3, we advise that in our opinion, the Company will have enough working capital to carry out it's stated objectives.

Subsequent events 8.0

8.1 Apart from the matters dealt with in this report, and having regard to the scope of our report, to the best of our knowledge and belief no material transactions or events outside of the ordinary business of the Company have come to our attention that would require comment on, or adjustment to, the information referred to in our report or that would cause such information to be misleading or deceptive.

9.0 Sources of Information

We have made enquiries of the directors of the Company and other parties as $9₁$ considered necessary during the course of our analysis. We have also referred to the Prospectus and material documents which will relate to the operations of the Company.

We have no reason to believe the information supplied is not reliable.

MOORE STEPHENS WI

CHARTERED ACCOUNTANTS

10.0 Declarations

$10.1$ Moore Stephens WI Pty Limited has prepared this report for inclusion in the Prospectus. We have not acted in any other capacity to the Prospectus, and have not been involved in the preparation of any part thereof. White Funds Management Pty Limited, an associated entity, have been appointed the "backoffice" administrators of Fat Prophets Australia Fund Limited.
10.2 Other than a fee for the preparation of this report and the Independent Taxation Report no pecuniary or other benefit, direct or indirect, has been received by Moore Stephens WI Pty Limited for or in connection with the making of this report.
10.3 This report has been prepared on behalf of Moore Stephens WI Pty Limited by Scott Melville Whiddett, who is a director of Moore Stephens WI Pty Limited and a director of White Funds Management Pty Limited. Mr Whiddett is an associate of the Institute of Chartered Accountants and a Registered Company Auditor. Mr Whiddett has over 13 years of experience including audit of public companies, detection of fraud, valuations, economic loss calculations, due diligence and the preparation of Independent Expert's Reports.
$104$ Moore Stephens WI, a chartered accounting firm associated with Moore Stephens WI Pty Limited have consented to be appointed auditors and provide accounting and taxation services to the Proposed Manager, Fat Prophets Funds Management Australia Pty Limited.
Other than as disclosed above, Mr Whiddett, the other directors and the staff 10.5 involved with the preparation of this report have, at the date of this report, no interest or financial relationship with Fat Prophets Australia Fund Limited, Mint Financial Group Pty Limited or Fat Prophets Funds Management Australia Pty Limited.

Yours faithfully. MOORE STEPHENS WI PTY LIMITED

the Shiddeth

S. M. WHIDDETT Director

SETTIM 1 INDEPENDENT TAXATION REPORT

7 February 2005

The Directors Fat Prophets Australia Fund Limited Level 33 2 Park Street Sydney NSW 2000

Dear Sirs

8. INDEPENDENT TAXATION REPORT

We have been requested to provide a report on the income tax issues affecting Fat Prophets Australia Fund Limited (the "Company") and its stapled security holders. The report has been prepared for inclusion in a Prospectus to be dated on or about 7 February 2005 under which investors will be invited to subscribe for a minimum of 16,000,000 Stapled Securities paid to \$1.00. For each stapled security issued, subscribers will receive one (1) Share and one (1) Option to subscribe for a share at an exercise price of \$1.00 exercisable between 20 April 2006 and 20 April 2008. They are joined together (or stapled) and treated as one security quoted on the Australian Stock Exchange (ASX) until 20 April 2006 (the Unstapling Date), when they will "unstaple" and trade separately on the Australian Stock Exchange (ASX) as shares and options. This report should be read in conjunction with the Prospectus issued.

Our advice is based on the relevant taxation laws as presently incorporated in the Income Tax Assessment Act 1936, Income Tax Assessment Act 1997 and Income Tax Rates Act 1986 (all of which are referred to collectively herein as "Tax Act").

This opinion only provides a general overview of the income tax consequences to investors. It is not intended to be a detailed analysis of all such issues. Individual investors should consult their own taxation adviser about their specific taxation circumstances

Shareholders in a public company are generally taxed on the dividends received and are subject to income tax upon the disposal of their shares in the company.

PROSPECTUS

MOORE STEPHENS WI

CHARTERED ACCOUNTANTS an an dan dan dan dan dan dan dan dan da

1. Dividends

Dividends received by an Australian resident shareholder (either directly or indirectly through a partnership or trust) are included in the taxable income of the shareholder.

To the extent that dividends are franked, then the imputation credits attached to the franked dividend are also included in the taxable income of the shareholder

Shareholders are then entitled to a tax credit equivalent to the imputation credit received. Dividends received by a non-resident shareholder will be subject to 15% withholding tax. to the extent the dividends received are unfranked. No withholding tax is paid on franked dividends.

Where shareholders receive franked dividends from the Company, the shares in the Company need to be held 'at risk' (as defined) for a period of 45 days before being entitled to franking credits.

Dividends attributable to LIC Capital Gains

Under Subdivision 115-D of the Tax Act a Listed Investment Company ("LIC") may make a "LIC Capital Gain" where it sells a post September 1985 asset after 1 July 2001, where that asset has been held for more than 12 months. We have assumed that the company will meet the definition of a "Listed Investment Company".

In accordance with current tax law, this gain will be taxable to the LIC at 30%.

Assuming the LIC transfers the "LIC Capital Gain" profit (after tax) to a Discount Capital Gains Reserve, a dividend paid from this reserve would attract concessional tax treatment in the hands of the shareholder.

The dividend paid from the Discount Capital Gains Reserve would be frankable and subject to the regular franking rules. Certain shareholders are entitled to a tax deduction in respect to the "attributable part" of the dividend.

The tax deduction amounts to 50% (for individual shareholders) or 33 $1/3$ % (for superannuation fund shareholders) of the "attributable part" of the dividend.

The "attributable part" of the dividend is calculated by a formula but is equal to the dividend amount plus the tax paid at the company level. In practice this is equal to the grossed up value of the dividend (100/70 x dividend amount).

MOORE STEPHENS WI CHARTERED ACCOUNTANTS

www.communication.com/www.com/www.com/www.com/www.com/www.com/www.com/www.com/ww

In this way the effect on an individual of a dividend paid from a Discount Capital Gains Reserve would be calculated as follows:

Dividend paid from Reserve	70.00
Plus imputation credits	30.00
Less Tax deduction allowable	(50.00)
Net taxable income	50.00

Income Tax $(a)$ 48.5% (maximum rate)	24.25
Less imputation credit	(30.00)
Tax refund	5.75
Summary
Dividend Received	70.00
Tax refund	5.75
Value of dividend after tax	75.75
Effective tax rate on capital gain
incurred by investment company	24.25%

In this way the effect on a superannuation fund would be calculated as follows:

Dividend paid from Reserve	70.00
Plus imputation credits	30.00
Less Tax deduction allowable	(33.33)
Net taxable income	66.67

Income Tax $(a)$ 15% (maximum rate)	10.00
Less imputation credit	(30.00)
Tax refund	20.00

Summary
Dividend Received	70.00
Tax refund	20.00
Value of dividend after tax	90.00
Effective tax rate on capital gain
incurred by investment company	10.00%

For corporate shareholders who are not LICs themselves, the receipt of a franked dividend paid from a discount capital gains reserve will be treated in the same way as any other dividend. That is, the franking credit will be added to the company's assessable income, and allowed as a credit to reduce the company's tax payable. Further, the franking credit will be added to the company's franking account.

MOORE STEPHENS WI CHARTERED ACCOUNTANTS

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Corporate shareholders cannot pass on the discount capital gain to their own shareholders

2. Tax treatment of profits on sale of investments

Where the Company makes a profit or a loss on the sale of an investment, that profit or loss may be on revenue account (ordinary income) or on capital account (capital gain or loss). There are many factors that need to be considered by the Company in assessing which tax treatment is appropriate for each investment. A detailed analysis of those factors is outside the scope of this report.

Where the Company determines that a profit is on capital account, then such a profit may be treated as a "LIC Capital Gain" as outlined above. Where the Company determines that a profit is on revenue account, then the profit will be ordinary income and will not be treated as a "LIC Capital Gain".

Accordingly, although a company may satisfy the definition of a LIC, the company may not have any eligible LIC capital gains to pass on to shareholders.

3. Gains from Disposal of Stapled Securities in the Company

Where stapled securities in the Company are acquired on revenue account by a shareholder, any gain or loss on sale is taxable as ordinary income.

Where stapled securities in the Company are acquired on capital account by a shareholder, any gain or loss on sale is taxed in accordance with the Capital Gains Tax rules. Where stapled securities in the Company are held for more than 12 months, a CGT discount of 50% would be available to individual shareholders (33.33% for superannuation funds).

Any CGT loss incurred is quarantined and only able to be offset against capital gains derived.

4. Unstapling date

We note that there will be no taxation implications for holders of stapled securities when they are unstapled to enable the separate trading of shares and options on the ASX. The acquisition of shares and options on revenue or capital account will generally be derived from the acquisition of the stapled securities.

MOORE STEPHENS WI CHARTERED ACCOUNTANTS estenta antaraktat terta antarat terta antarat terta antarat terta antarat antarat antarat antarat terta anta

Gains from Disposal of Shares in the Company

Where shares in the Company are acquired on revenue account by a shareholder, any gain or loss on sale is taxable as ordinary income.

Where shares in the Company are acquired on capital account by a shareholder, any gain or loss on sale is taxed in accordance with the Capital Gains Tax rules. Where shares in the Company are held for more than 12 months, a CGT discount of 50% would be available to individual shareholders (33 $1/3$ % for superannuation funds).

Any CGT loss incurred is quarantined and only able to be offset against capital gains derived

6. Gains from Disposal of Options in the Company

Any gain on sale of options will either give rise to a capital gain (if held on a capital account) or ordinary income if held as trading stock.

There will be no cost base of options issued under this Prospectus as they are being issued for no consideration. There would therefore be no Capital Gains Tax loss on the sale of the options issued pursuant to the Prospectus.

Any options acquired after the initial issue will have a cost base equivalent to the acquisition price.

On exercise of the option, a shareholder will be required to pay \$1.00 to the Company in return for the issue of one share. There are no tax consequences to the Company for the issue of the share.

A shareholder who exercises an option will acquire a share in the Company. The taxation consequences from the disposal of the share are as outlined above.

Yours faithfully, MOORE STEPHENS WI PTY LIMITED

Wen Blackwell

A. D. BLACKWELL Director

The Directors consider that the material contracts described below and elsewhere in this Prospectus are the contracts which an investor would reasonably regard as material and which investors and their professional advisers would reasonably expect to find described in this Prospectus for the purpose of making an informed assessment of the Offer.

This report only contains a summary of the material contracts and their substantive terms.

9.1 MANAGEMENT AGREEMENT

9.1.1 Parties

The Company and the Proposed Manager.

9.1.2 Appointment

The Company has appointed the Proposed Manager to manage the Portfolio. This appointment commences on the date the Proposed Manager is granted an AFSL with all the authorisations necessary to enable the Proposed Manager to perform its portfolio management services on behalf of the Company under the management agreement. If the Proposed Manager is unable to obtain an AFSL by 31 December 2005, the management agreement with the Proposed Manager automatically terminates and management of the Portfolio will remain with the Interim Manager.

9.1.3 Powers of Manager

Subject to the Corporations Act and Listing Rules, the Proposed Manager will from time to time on behalf of the Company invest money constituted in or available to the Portfolio in making, holding, realising and disposing of investments.

Provided it continues to manage the Portfolio in accordance with the investment approach outlined in this Prospectus (as amended from time to time with the approval of the Company), the Proposed Manager has absolute and unfettered discretion to manage the Portfolio and to do all things considered necessary or desirable in relation to the Portfolio. If a proposed investment is not consistent with the investment approach or strategy outlined in this Prospectus, the Proposed Manager requires the prior written approval of the Company.

The powers of the Proposed Manager in relation to the Portfolio include:

(i) investigation of, negotiation for, acquisition of, or disposal of every investment;
(ii) to sell, realise or deal with all or any of the investments or to vary, convert, exchange or add other investments in lieu of those investments;
(iii) if any investments are redeemed or the capital paid on it is wholly or partly repaid by the entity by which that investment was created or issued, to convert that investment into some other investment or accept repayment of the capital paid or advanced on the investment and any other monies payable in connection with that redemption or repayment and to reinvest any of those monies;
(iv) retain or sell any shares, debentures or other property received by the Company by way of bonus, or in lieu of, or in satisfaction of, a dividend in respect of any investments or from the amalgamation or reconstruction of any company; and
(v) to sell all or some of the rights to subscribe for new securities in an investment, to use all or part of the proceeds of sale of such rights for the subscription for securities or to subscribe for securities pursuant to those rights, to accept cash or securities including unlisted securities and securities domiciled outside Australia in return for a takeover offer.

9.1.4 Permitted Investments

The Proposed Manager is permitted to make investments in the following:

listed securities, being any security quoted on ASX and other global markets including, without limitation, shares, stapled securities, units or notes which are redeemable, preference or deferred, fully or partly paid, with or without any right, title or interest thereto or therein (including a right to subscribe for or convert to any such security and including a right to subscribe for or convert to any such security if it is unlisted and there are plans to list);
(ii) warrants, options and ASX Indices to purchase any investment and warrants, options and ASX Indices to sell any investment which is a permitted investment;
(iii) cash, including cheques, bank deposits, bank transfers, bank drafts and bills of exchange;
(iv) debentures, unsecured notes and bonds of a corporation of at least an investment grade credit rating granted by a recognised credit rating agency in Australia;
(v) units or other interests in cash management trusts;
(vi) futures or derivatives contracts over Australian shares or equity indices or any other kind of foreign currency hedging; and
(vii) any other financial products which the Proposed Manager may use in the management of the Portfolio in accordance with its AFSL.

9.1.5 Monthly Valuations

The Proposed Manager must arrange for calculation of the value of the Portfolio at least monthly or at such more frequent times as may be agreed between the Proposed Manager and the Company.

9.1.6 Management Fee

In return for its performance of duties as Manager of the Company's Portfolio, the Proposed Manager is entitled to be paid a monthly management fee equal to 0.1035746% of the value of the Portfolio calculated on the last Business Day (comparable to a fee of 1.25% per annum of the value of the Portfolio) of each month (management fee). The management fee is to be paid monthly in arrears within 30 days of the end of the month.

9.1.7 Performance Fee

The Proposed Manager will be entitled to be paid and the Company must pay to the Proposed Manager (which remuneration is to be obtained for the use and benefit of the Proposed Manager) a fee (performance fee) in respect of each Performance Calculation Period, subject to paragraphs (ii) and (iv) below, of 15% of BA payable monthly in arrears where BA is calculated in accordance with the following formula:

$BA = (FV - IV) - (IV \times (Fl - 1))$ $\mathbf{B}$

Where:

BA is the base amount to be used in calculating the Performance Fee outlined above:

FI is the level of the S&P/ASX 300 Accumulation Index (ASX 300) published by ASX on the last Business Day of the relevant Performance Calculation Period;

FV is the value of the Portfolio calculated on the last Business Day of the relevant Performance Calculation Period:

Il is the ASX 300 published by ASX on the last Business Day of the preceding Performance Calculation Period (or if there is no preceding Performance Calculation Period, the commencement date of the agreement):

IV is the value of the Portfolio calculated on the last Business Day of the preceding Performance Calculation Period (or if there is no preceding Performance Calculation Period, the commencement date of the agreement).

When BA is negative in a particular performance period the dollar value is to be carried forward and used to reduce 俤 the value of BA determined in the next calculation period. The carried forward amount will be adjusted downward to take into account any reduction in size of the Portfolio associated with any capital reduction.
(iii) The Performance Fee is to be paid monthly in arrears within 30 days of the end of month.
(iv) Performance Calculation Period is:
(a) the first Performance Calculation Period is the period from the end of the last Performance Calculation Period or if there is no such period, the commencement date under the management agreement to the next month end;
(b) subject to (c) below, the period from the first day after the preceding Performance Calculation Period to month end of the succeeding calendar month; and
(c) if the term expires on a day other than the last day of a month, the last Performance Calculation Period is the period from the first day after the preceding Performance Calculation Period and the date the Management Agreement is terminated.

Where ASX or equivalent authority ceases to publish the ASX 300 then the published index which most closely resembles it must be used for the purposes of the calculation.

In calculation of the Performance Fee for a Performance Calculation Period, changes in the value of the Portfolio as a result of the issue of Securities by the Company, capital reductions by the Company, Stapled Security and Share buy-backs by the Company and dividend distributions by the Company or any other capital changes will be disregarded or adjusted in a manner determined by the auditor of the Company at the conclusion of that Performance Calculation Period.

The Company may request that its auditor review the calculation of the Performance Fee prior to payment.

The Company must also pay any GST payable in respect of any Management Fee or Performance Fee due to the Proposed Manager.

9.1.8 Expenses

The Company is liable and must pay out of the Portfolio or reimburse the Proposed Manager the following fees, costs and expenses when properly incurred in connection with the investment and management of the Portfolio or the acquisition, disposal or maintenance of any investment:

fees payable to any securities exchange, the ASIC and other regulatory body; fi}-
all costs, stamp duties, financial institutions duties, bank account debits tax and legal fees and other duties, taxes, 盛 fees, disbursements and expenses, commissions and brokerage incurred by the Company or the Proposed Manager in connection with:
(a) the acquisition and negotiation of any investment or proposed investment;
(b) any sale or proposed sale, transfer, exchange, replacement or other dealing or proposed dealing with or disposal or proposed disposal of any investment;
(c) the receipt of income or other entitlements from the Portfolio:
(d) the engagement of a custodian to hold any investment on behalf of the Company; or
(e) all costs associated with the Company's share register.
(iii) outgoings in relation to the Portfolio such as rates, levies, duties, taxes and insurance premiums;
(iv) all accounting and audit costs of the Company whether or not in relation to the Portfolio; and
(v) all costs associated with the provision of information and other assistance to a regulator relating to the Portfolio, if a requiator requires the information or other assistance under law.

Notwithstanding the above, the Proposed Manager is solely responsible for payment of the fees of any investment manager engaged by the Proposed Manager to assist in undertaking its duties under the management agreement.

9.1.9 Term

The management agreement is for a term of 25 years commencing on the later of the date that the Proposed Manager is granted an AFSL or the date the Company allots and issues not less than 16,000,000 Stapled Securities, unless terminated earlier in accordance with its terms.

9.1.10 Termination

The Proposed Manager may terminate the management agreement at any time:

(a) after the date five years after commencement of the management agreement; or
(b) where the Company undertakes the liquidation or part liquidation of the Portfolio to effect a return of capital to the Company's Shareholders resulting in a material adverse change to the Management Fees and the Performance Fees payable to it under the management agreement,

by giving to the Company at least six months' written notice.

The Company may immediately terminate the management agreement if:

(a) an insolvency event occurs with respect to the Manager:
(b) the Proposed Manager is in default or breach of its obligations under the management agreement in a material respect, such default or breach is rectifiable and is not rectified within 30 days after the Company has notified the Proposed Manager in writing to rectify that default or breach;
(c) the Proposed Manager's AFSL is suspended or cancelled at any time in accordance Subdivision C, Division 4 of Part 7.6 of the Corporations Act;
(d) there is a change in control of the Proposed Manager and the Company has not previously granted its prior written consent (which must not be unreasonably withheld or delayed); or
(e) the Manager persistently fails to ensure that investments made on behalf of the Company are consistent with the investment process applicable at the time the investment is made.

9.1.11 Termination for Non-Performance

(a) The Company may immediately remove the Proposed Manager and terminate this Agreement by special resolution of the Company's Shareholders in general meeting at any time where BB is less than -0.15, where BB is calculated in accordance with the following formula:

$$
AB = \frac{(FV - IV)}{IV} = \frac{(FI - II)}{II}
$$

Where:

FI is the level of the ASX 300 published by ASX on the last Business Day of the relevant Performance Calculation Period:

FV is the Value of the Portfolio calculated on the last Business Day of a Performance Calculation Period;

Il is the ASX 300 published by ASX calculated on the last Business Day of the preceding Performance Calculation Period: and

IV is the Value of the Portfolio calculated on the last Business Day of the preceding Performance Calculation Period.

(b) Performance Calculation Period is the three year period immediately prior to any calculation date.
(c) Where ASX or equivalent authority ceases to publish the ASX 300 then the published index which most closely resembles it must be used.
(d) In calculating BB, changes in the Value of the Portfolio as a result of the issue of Securities by the Company, capital reductions undertaken by the Company, share buy-backs undertaken by the Company and dividend distributions undertaken by the Company will be disregarded or adjusted in a manner determined by the auditor of the Company at the conclusion of that Performance Calculation Period.
(e) Where BB is less than -0.15 and the Cornpany proposes to remove the Proposed Manager by way of special resolution of shareholders in general meeting:
${i}$ the Company must provide the Proposed Manager with written notice of the proposed resolution and the full text of the notice of meeting and any related materials at the same time as the notice of meeting is distributed to the Company's shareholders;
(ii) the Company will, if requested by the Proposed Manager and at the Company's cost, distribute a statement to the Company's shareholders in response to the proposed resolution at least 10 days prior to any meeting. Such statement must not be more than 1,000 words long or defamatory; and
(iii) representatives of the Proposed Manager will be allowed a reasonable amount of time to speak at the meeting in response to the resolution prior to it being tabled for voting.

9.1.12 Company Indemnity

The Company must indemnify the Proposed Manager against any losses or liabilities reasonably incurred by the Manager arising out of, or in connection with, and any costs, charges and expenses fincluding legal expenses on a solicitor/own client basis) incurred in connection with the Proposed Manager or any of its officers, employees or agents acting under the management agreement or on account of any bona fide investment decision made by the Proposed Manager or its officers or agents except insofar as any loss, liability, cost, charge or expense is caused by the negligence, default, fraud or dishonesty of the Proposed Manager or its officers or employees. This obligation continues after the termination of the management agreement.

9.1.13 Manager Indemnity

The Proposed Manager must indemnify the Company against any losses or liabilities reasonably incurred by the Company arising out of, or in connection with, and any costs, charges and expenses incurred in connection with, any negligence, default, fraud or dishonesty of the Proposed Manager or its officers or supervised agents. This obligation continues after the termination of the management agreement.

9.1.14 Assignment

The Proposed Manager may assign all right, title and interest in the management agreement to a third party with the prior written consent of the Company which may not be unreasonably withheld or delayed.

9.2 INTERIM MANAGEMENT AGREEMENT

9.2.1 Parties

The Company and the Interim Manager.

9.2.2 Term

The interim management agreement commences on the date the Company allots and issues not less than 16,000,000 Shares and 16,000,000 Options (together as Stapled Securities) pursuant to the Offer and terminates on the earlier of the date the Proposed Manager receives an AFSL with authorisations necessary to enable it to provide portfolio management services to the Company in accordance with the proposed management agreement and the date 25 years after commencement unless terminated earlier in accordance with its terms. If the Proposed Manager fails to so obtain an AFSL by 31 December 2005, the management agreement with the Proposed Manager terminates and the interim management agreement with the Interim Manager continues until the date 25 years after commencement unless terminated earlier in accordance with its terms.

9.2.3 Licence

The Interim Manager grants to the Company a non-exclusive licence to use the phrase "Fat Prophets" (Phrase) in its Company name and in its business on the following licence terms:

(a) the licence extends until the termination of the interim management agreement and the management agreement;
(b) the Company must pay to the Interim Manager a licence fee of \$1.00 per annum for the term of the management agreement;
(c) following termination of the licence, the Company must cease to use the Phrase in its company name, business or trade names or any other words resembling, or likely to be mistaken for or confused with the Phrase.

If the Company fails to stop using the Phrase or is unable to comply with its obligations to do so for any reason, the Company must pay to the Interim Manager a licence fee equal to \$100,000 per annum on a pro rata basis with respect to the period that the Company is in breach or uses the Phrase (as the case may be).

See also Section 9.6 for further details.

9.2.4 Substantive Terms

Except as set out above, the terms of the interim management agreement are identical to the terms of the management agreement with the Proposed Manager outlined above.

9.3 SHAREHOLDERS' ARRANGEMENTS IN THE MANAGER

9.3.1 Parties

The Interim Manager, the Proposed Manager, Angus Geddes, Jason McIntosh, David Shearwood and Drew Wilson, or entities controlled or associated by them.

9.3.2 Shareholders

Angus Geddes and Jason McIntosh, or entities controlled or associated by them, hold 100% of the issued shares of the Proposed Manager and the Interim Manager. Drew Wilson and David Shearwood are party to a Heads of Agreement whereby they will be granted Options over Shares in the Proposed Manager.

9.3.3 Pre-emptive rights

Each shareholder in the Manager holds pre-emptive rights over the Shares held by the other. No Shares may be disposed of to a third party without the Shares being first offered to the other shareholder.

9.4 DIRECTOR PROTECTION DEEDS

9.4.1 Parties

The Company and each Director.

9.4.2 Access

The Company will provide access to board papers to each Director of the Company while they are a Director and for a period of seven years from when they cease to be officers.

9.4.3 indemnity and Insurance

The Company will indemnify, to the extent permitted by the Corporations Act, each Director in respect of certain liabilities which the Director may incur as a result of, or by reason of (whether solely or in part), being or acting as an officer of the Company. The Company has agreed to use its reasonable commercial endeavours to ensure that a director's and officer's policy of insurance is maintained in favour of each Director for the period that they are an officer and for a period of seven years after the Director ceases to be an officer. The Company has also agreed that prior to it undertaking a voluntary liquidation of its assets or a material reduction of its assets via a buy-back, partial return of capital or any other mechanism, that it will obtain a director's and officer's policy of insurance in favour of each Director for the period that they are an officer and for a period of seven years after the Director ceases to be an officer. The Company estimates that the cost of doing so for each Director or former Director will be approximately \$43,000 per annum.

9.5 REIMBURSEMENT AGREEMENT

The Company has entered into an agreement with Mint Financial Group Pty Limited to reimburse Mint Financial Group Pty Limited for expenses incurred on behalf of the Company in the lead up to listing on ASX. These expenses are expected to total approximately \$475,000 and include such costs as ASX Listing Fees, printing and marketing expenses, on-line marketing expenditure, legal and accounting expenses, fees for professional services and insurance premiums paid.

9.6 FAT PROPHETS TRADE MARK

Mint Financial Group Pty Limited is the registered owner in Australia of the trade mark Fat Prophets (Trade Mark). Mint Financial Group Pty Limited uses the Trade Mark, in the course of providing products and services to its clients. Mint Financial Group Pty Limited has used the Trade Mark outside Australia and asserts its entitlement to do so to the exclusion of others.

The Trade Mark may not be used as a trade mark or in connection with the supply of goods or services similar to those currently supplied by Mint Financial Group Pty Limited by any other person without the prior written permission of Mint Financial Group Pty Limited. Mint Financial Group Pty Limited has developed strict guidelines as to the manner in which the Trade Mark is to be used by authorised users.

Mint Financial Group Pty Limited has granted a non-exclusive licence to the Proposed Manager and the Company to use the Trade Mark, subject to certain termination rights and the terms and conditions of the interim management agreement (refer Section 9.2 for further details).

10.1 INCORPORATION

The Company was incorporated on 12 November 2004.

10.2 BALANCE DATE AND COMPANY TAX STATUS

The accounts for the Company will be made up to 30 June annually.

The Company will be taxed as a public company.

10.3 LICENSEES

The Company does not hold an AFSL. Accordingly, the Company will only issue Stapled Securities pursuant to this Prospectus under an arrangement with Licensees pursuant to Section 911A(2)(b) of the Corporations Act.

10.4 STAPLED SECURITY TRADING AND RETURN RISKS

A Stapled Security consists of one (1) Share and one (1) Option that are joined together (or Stapled) and treated as one security quoted on ASX. The Directors will apply to ASX within seven days after the date of this Prospectus for quotation of the Stapled Securities in respect of the period up until and including the Unstapling Date.

At midnight on 20 April 2006 (Unstapling Date) the Stapled Securities will be unstapled, from which time the Shares and Options (up to the expiry date of the Options) will be separately quoted on ASX.

The rights attaching to the Shares and the terms and conditions attaching to the Options (that make up the Stapled Securities) are summarised below.

The following terms and conditions apply following the issue of Stapled Securities until the Unstapling Date:

(a) no Share or Option is to be issued by the Company unless in the case of the:

(i) Share, an Option; or
(ii) Option, an additional Share,

is issued at the same time to the same person;

(b) the Company will maintain a Stapled Security register which records the names and addresses of the holders of the Stapled Securities: and
(c) the Shares and Options that make up a Stapled Security may only be transferred together as one bundle to the same transferee.

Before deciding to invest in Stapled Securities of the Company that represent one Share and one Option, each potential investor should consider whether Stapled Securities are a suitable investment. There are general risks associated with any investment in the stock market. The value of Stapled Securities can go down or up due to circumstances affecting the stock market generally or a company in particular and may be due to factors beyond the control of the Company. Similarly, the level of dividends paid in respect of the Stapled Securities can go down as well as up. Stapled Securities should generally not be considered as a short term investment.

If you are in doubt as to the course you should follow, you should seek advice on the matters contained in this Prospectus from a stockbroker, solicitor, accountant or other professional adviser immediately.

10.5 RIGHTS ATTACHING TO THE SHARES

Immediately after issue and allotment, the Shares (that form part of the Stapled Securities) will be fully paid ordinary shares. There will be no liability on the part of Shareholders for any calls and the Shares will rank pari passu with Shares currently on issue.

Detailed provisions relating to the rights attaching to the Shares are set out in the Company's constitution and the Corporations Act as summarised below. A copy of the Company's constitution can be inspected during office hours at the registered office of the Company.

Each Share will confer on its owner:

(a) The right to vote at a general meeting of Shareholders (whether present in person or by any representative, proxy or attorney) on a show of hands (one vote per Shareholder) and on a poll (one vote per Share on which there is no money due and payable) subject to the rights and restrictions on voting which may attach to or be imposed on Shares (at present there are none).
(b) The right to receive dividends, according to the amount paid up on the Share;
(c) The right to receive, in kind, the whole or any part of the Company's property in a winding up, subject to priority given to holders of Shares that have not been classified by ASX as "restricted securities" and the rights of a liquidator to distribute surplus assets of the Company (with the consent of members by special resolution); and

subject to the Corporations Act and Listing Rules, Shares are fully transferable. Prior to the Unstapling Date the Share and Option that together make up each Stapled Security cannot be sold separately.

The rights attaching to Shares may be varied with the approval of Shareholders in general meeting by special resolution.

10.6 RIGHTS ATTACHING TO OPTIONS

The terms and conditions of the Options are as follows:

Register

The Company will maintain a register of holders of Options in accordance with Section 168(1)(b) of the Corporations Act, subsequent to the Unstabling Date.

Transfer/Transmission

An Option may be transferred or transmitted in any manner approved by ASX except for the stapling restrictions set out below.

Stapling Restrictions

Up until and including the Unstapling Date:

(a) an Option will remain stapled to a Share in the ratio of one Option to one Share;
(b) each Option and Share which are stapled together will be treated as one Security (Stapled Security);
(c) no Option is to be issued unless one Share is issued at the same time to the same person:
(d) the Shareholders holding the Shares shall be identical to the Option holders:
(e) the Stapled Securities must be registered in the Stapled Security Register and the Company must issue a certificate or holdings statement in accordance with the requirements of the Listing Rules in respect of the Stapled Securities identifying the Stapled Securities to which the holding statement or certificate relates; and
a transfer of an Option will only be accepted if, in addition to any requirements of the Company's constitution, the transfer relates to or is accompanied by a transfer of the Share to which it is stapled in favour of the same transferee. Subject to the Listing Rules the Board must not register a transfer of an Option unless the Stapled Share is also to be transferred simultaneously in this manner. A transfer of an Option which is not accompanied by the requisite transfer of Share will be taken to authorise the Company as agent for the transfer to effect a transfer of the additional Share to the same transferee.

Exercise

An Option may be exercised on any Business Day after the Unstapling Date to 20 April 2008 (inclusive), but not thereafter,

An Option may be exercised by delivery to the Company of a duly completed Notice of Exercise of Options signed by the registered holder of the Option, together with payment to the Company of \$1.00 per Option being exercised and the relevant Option certificate.

A Notice of Exercise of Options is only effective when the Company has received the full amount of the exercise price in cash or cleared funds.

Dividend Entitlement

Options do not carry any dividend entitlement until they are exercised. Shares issued on exercise of Options rank equally with other issued Shares of the Company seven Business Days after their date of issue and are entitled to dividends paid on and from this date.

Participating rights

An Option holder may only participate in new issues of Securities to holders of Shares in the Company if the Option has been exercised and Shares allotted in respect of the Option before the record date for determining entitlements to the issue. The Company must give at least seven Business Days notice to Option holders of any new issue before the record date for determining entitlements to the issue in accordance with the Listing Rules of ASX.

If between the date of issue and date of exercise of an Option the Company makes one or more rights issues (being a pro rata issue of Shares in the capital of the Company that is not a bonus issue), the exercise price of Options on issue will be reduced in respect of each rights issue according to the following formula:

NE =
$$
OE - \frac{E[P - (S+D)]}{(N + 1)}
$$

where:

NE is the new exercise price of the Option:

OE is the old exercise price of the Option;

E is the number of underlying Shares into which one Option is exercisable:

P is the average closing sale price per Share (weighted by reference to volume) during the five trading days ending on the day before the ex rights date or ex entitlements date (excluding special crossings and overnight sales);

S is the subscription price for a Share under the rights issue:

D is the dividend due but not yet paid on each Share at the relevant time; and

N is the number of Shares that must be held to entitle holders to receive a new Share in the rights issue.

If there is a bonus issue to the holders of Shares in the capital of the Company, the number of Shares over which the Option is exercisable will be increased by the number of Shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.

Reconstructions and Alteration of Capital

Any adjustment to the number of outstanding Options and the exercise price under a reorganisation of the Company's share capital must be made in accordance with the Listing Rules.

ASX Listing

The Company must make application for quotation of Shares issued on exercise of the Options on ASX in accordance with the Listing Rules. Shares so issued will rank equally with other issued Shares of the Company.

10.7 ASX WAIVERS

The Company has obtained advice from ASX that ASX would be likely to grant the Company a waiver of:

(a) Listing Rule 15.16 to the extent necessary to allow the Manager to act as the investment manager of the Company's Portfolio in accordance with the interim management agreement and the management agreement for a 25 year term if the Stapled Securities are successfully listed.
(b) Listing Rule 8.10 to the extent necessary to permit the Company to refuse transfers of the Stapled Securities where they are not transferred as a single security.

ASX has advised the Company that it would be likely to confirm that the structure and operations of the Company are appropriate for a listed entity for the purposes of Listing Rule 1.1 condition 1 on the following conditions:

(a) Full details of the following are provided to any person who may subscribe for Stapled Securities under this Prospectus or other disclosure document, and any annual report issued prior to the Unstapling Date provide details of:
n
A the stapling proposal:
n
A the Unstapling Date; and
en 1939.
St a timetable for unstapling (which is set out below);
(b) the Unstapling Date cannot be changed, even with Stapled Security holder approval; and

10. ADDITIONAL INFORMATION

(c) the Company undertakes to ASX that, one month prior to the Unstapling Date, the Company will announce to the market the timetable for the unstapling and provide a clear explanation of the new basis of trading in the Company's Securities.

10.8 TIMETABLE FOR UNSTAPLING OF SHARES AND OPTIONS IN THE COMPANY

A Stapled Security consists of one Share and one Option issued by the Company:

Monday 20 March 2006	Last day to announce Unstapling Date
Thursday 13 April 2006	Quotation of Stapled Securities ends at close of trading (ASX Code: FATS)
Friday 14 April 2006	Ex Date
	Commence deferred settlement trading in Ordinary Shares (ASX Code: FAT) and Options (ASX Code: FATO)
Thursday 20 April 2006	Unstapling Date
	Record Date
Friday 28 April 2006	Despatch date
Monday 1 May 2006	Commencement of normal $T*3$ trading in ordinary Shares (ASX Code: FAT) and Options (ASX Code: FATO)
Thursday 4 May 2006	First settlement of trades conducted on a deferred settlement and T+3 basis

10.9 DIVIDEND REINVESTMENT PLAN

The Company intends offering a dividend reinvestment plan (Plan) following the Unstapling Date, on the following terms:

The Board reserves the right to obtain underwriting for the issue of shares pursuant to the Plan.

Eligible Members

Shareholders who may participate in the Plan comprise Shareholders:

(a) whose address, as it appears in the register of members of the Company, is situated in Australia; or
(b) whose address, as it appears in the register of members of the Company, is situated outside Australia and who have produced to the Company such evidence as the Company may require to satisfy the Company that any necessary approvals of any government or government authority in relation to participation in the Plan have been obtained and that such participation is not contrary to any applicable laws of Australia or any other relevant jurisdiction.

Application

Eligible Shareholders may elect to participate in the Plan in respect of all or part of their Shares in the Company which will comprise that Shareholder's Plan Shares. The Director's may in their absolute discretion accept or refuse any application to participate.

Subscription Price

Shares allotted to participants will be allotted at the weighted average market price of Shares sold on ASX on the book's closing date for the relevant dividend and the three trading days preceding that date. The Directors may discount the issue price in their absolute discretion.

Investment of Dividends

In respect of each cash dividend from time to time due and payable to a participant in respect of the member's Plan Shares, the Directors will on behalf of and in the name of the participant subscribe for Shares being the maximum number of Shares which could be acquired by subscription by the application of that participant's entitlement to dividends in respect of the Plan Shares to the subscription for Shares at the subscription price.

Ranking of Shares

All Shares allotted and issued under the Plan will rank pari passu in all respects with existing Shares.

ASX Listing

The Company will make application promptly after each allotment of Shares for quotation of such Shares on the official list of ASX.

Variation or Termination of Participation

A participant may apply to increase or decrease the number of Plan Shares which the Company may in its absolute discretion approve or refuse. A participant may at any time terminate participation in the Plan by notice in writing to the Company.

10.10 MATTERS RELEVANT TO THE DIRECTORS

The number of Shares and Options held by or on behalf of each Director and their Associates, either via Stapled Securities or directly, at the date of the Prospectus are as follows:

Director	Ordinary Shares
Robert Bolton (Chair)	COVE
. . . Bruce Holman
. . David Shearwood . .	COVE	TOWN.
Angus Geddes* (alternate director)
Jason McIntosh (alternate director) . . . . . . . .	CONTRACT	70711

* It is intended that these become stapled to become a single stapled security following the allotment date

No Director or any Associate of a Director holds any interest in any other Security in the Company.

Directors are not required under the Company's constitution to hold any Stapled Security. Shares, Options or any other Securities in the Company.

It is the intention of all of the Directors and Alternate Directors to apply for Stapled Securities in the Company via this Prospectus.

Except as set out in this Prospectus, there are no interests that exist at the date of this Prospectus and there were no interests that existed within two years before the date of this Prospectus that are or were, interests of a Director or a proposed Director in the promotion of the Company or in any property proposed to be acquired by the Company in connection with its formation or promotion. Further, except as set out in this Prospectus, there have been no amounts paid or agreed to be paid to a Director in cash or Securities or otherwise by any persons either to induce them to become or qualify them as a Director or otherwise for services rendered by him in connection with the promotion or formation of the Company.

Angus Geddes, who is a director of the Proposed Manager and shareholder and director of the Interim Manager, will not be entitled to be paid Directors' fees.

Jason McIntosh, who is a director of the Proposed Manager and shareholder and director of the Interim Manager, will not be entitled to be paid Directors' fees.

David Shearwood, who is an executive officer and director of the Proposed Manager and will become an option holder over shares of the Proposed Manager, will not be entitled to be paid Directors' fees whilst he is an executive officer of the Proposed Manager.

10.11 REMUNERATION OF DIRECTORS

Under the Company's constitution, each Director (other than a Managing Director or an Executive Director) may be paid out remuneration for ordinary services performed as a Director.

Under ASX Listing Rules the maximum fees payable to directors may not be increased without prior approval from the Company at a general meeting. Directors will seek approval from time to time as deemed appropriate.

The Directors will be entitled to receive the following benefits:

(a) the maximum total remuneration of the Directors of the Company has been set at A\$135,000 per annum to be divided amongst them in such proportions as they agree;

(b) Angus Geddes, Jason McIntosh and David Shearwood are directors of the Proposed Manager. The Proposed Manager will receive a management fee and performance fee (where relevant) for managing the Portfolio. Details of the management agreement and all fees payable to the Proposed Manager are set out in Section 9.1;
(c) Angus Geddes and Jason McIntosh are directors of the Interim Manager. The Interim Manager will receive a management fee and performance fee (where relevant) for managing the Portfolio. Details of the management agreement and all fees payable to the Interim Manager are set out in Section 9.2;
(d) Angus Geddes, Jason McIntosh and David Shearwood, or entities associated with them, are shareholders or intended option holders over shares of the Proposed Manager. The Proposed Manager will receive a management fee and performance fee (where relevant) for managing the Portfolio. Details of the shareholder arrangements are set out in Section 9.3. Details of the management agreement and all fees payable to the Proposed Manager are set out in Section 9.1:
(e) Angus Geddes and Jason McIntosh, or entities associated with them, are shareholders of the Interim Manager. The Interim Manager will receive a management fee and performance fee (where relevant) for managing the Portfolio. Details of the management agreement and all fees payable to the Interim Manager are set out in Section 9.2; and
(f) David Shearwood is an executive of the Proposed Manager. The Proposed Manager will receive a management fee and performance fee (where relevant) for managing the Portfolio. Details of the management agreement and all fees payable to the Proposed Manager are set out in Section 9.1.

10.12 RELATED PARTY TRANSACTIONS

As at the date of this Prospectus, the Company is a party to the following transactions with related parties and future related parties:

(a) the Company has entered into an interim management agreement with the Interim Manager. The Interim Manager will receive fees in connection with the provision of services under this agreement. The Interim Manager will receive a management fee and a performance fee (where relevant) for managing the Portfolio of the Company. Details of the interim management agreement and all fees payable to the Interim Manager are set out in Section 9.2. Angus Geddes and Jason McIntosh are Alternate Directors of the Company and directors of the Interim Manager;
(b) the Company has entered into a management agreement with the Proposed Manager. The Proposed Manager will receive fees in connection with the provision of services under this agreement. The Proposed Manager will receive a management fee and a performance fee (where relevant) for managing the Portfolio of the Company. Details of the proposed management agreement and all fees payable to the Proposed Manager are set out in Section 9.1. Angus Geddes and Jason Mointosh are Alternate Directors of the Company and directors of the Proposed Manager. David Shearwood is a Director of the Company and will be granted options over shares in the Proposed Manager, and is an executive and director of the Proposed Manager;
(c) each Director has entered into a Director Protection Deed with the Company. See Section 9.4 for details; and
(d) the Interim Manager has paid the costs of incorporation of the Company and of the preparation of the Prospectus and other expenses associated with the listing of the Company on ASX on behalf of the Company and will be reimbursed by the Company out of the proceeds of the Offer (refer Section 9.5 for further details).

10.13 LEGAL PROCEEDINGS

The Company is not and has not been, during the 12 months preceding the date of this Prospectus, involved in any legal or arbitration proceedings which have had a significant effect on the financial position of the Company. As far as the Directors are aware, no such proceedings are threatened against the Company.

10.14 CONSENTS AND RESPONSIBILITY STATEMENTS

Watson Mangioni has given and before lodgement of the paper Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to be named as solicitors to the Offer in the form and context in which it is so named.

Watson Mangioni has only been involved in the preparation of that part of the Prospectus where they are named as solicitors to the Offer. Watson Mangioni specifically disclaims liability to any person in the event of any omission from, or any misleading or deceptive statement included elsewhere in this Prospectus. While Watson Mangioni has provided advice to the Directors in relation to the issue of the Prospectus and the conduct of due diligence enquiries by the

Company and the Directors, Watson Mangioni has not authorised or caused the issue of the Prospectus and takes no responsibility for its contents.

Grosvenor Schiliro has given and before lodgement of the paper Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as auditor of the Company in the form and context in which it is so named.

Grosvenor Schiliro has only been involved in the preparation of that part of this Prospectus where it is named as auditor of the Company and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Grosvenor Schiliro has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Moore Stephens WI Pty Limited has given and before lodgement of the paper Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as investigating accountant and taxation adviser for the Company in the form and context in which it is so named and the inclusion of its independent accountant's report and independent taxation report in the form and context in which they appear in this Prospectus.

Moore Stephens WI Pty Limited has only been involved in the preparation of that part of this Prospectus where it is named as investigating accountant and taxation adviser for the Company and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Moore Stephens WI Pty Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Fat Prophets Funds Management Australia Pty Limited has given and before lodgement of the Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as Proposed Manager of the Company's portfolio in the form and context in which it is so named.

Fat Prophets Funds Management Australia Pty Limited has only been involved in the preparation of that part of this Prospectus where it is named as Proposed Manager of the Company's Portfolio and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Fat Prophets Funds Management Australia Pty Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Commonwealth Securities Limited has given and before lodgement of the Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as sponsoring broker and dealer to the issue in the form and context in which it is so named.

Commonwealth Securities Limited has only been involved in the preparation of that part of this Prospectus where it is named sponsoring broker and dealer to the Issue and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Commonwealth Securities Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

ETRADE Australia Securities Limited has given and before lodgement of the Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as sponsoring broker and dealer to the Issue in the form and context in which it is so named.

ETRADE Australia Securities Limited has only been involved in the preparation of that part of this Prospectus where it is named as sponsoring broker and dealer to the Issue and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. ETRADE Australia Securities Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Registries Limited has given and before lodgement of the Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as Share Registrar for the Company in the form and context in which it is so named.

Registries Limited has only been involved in the preparation of that part of this Prospectus where it is named as Share Registrar for the Company and specifically disclaims liability to any person in the event of ornission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Registries Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Mint Financial Group Pty Limited has given and before lodgement of the Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its consent to being named in the Prospectus as Interim Manager of the Company's Portfolio in the form and context in which it is so named.

Mint Financial Group Pty Limited has only been involved in the preparation of that part of this Prospectus where it is named as Interim Manager of the Company and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Mint Financial Group Pty Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

10. ADDITIONAL INFORMATION

Australia and New Zealand Banking Group Limited has given and before lodgement of the paper Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as the custodian for the Company in the form and context in which it is so named.

Australia and New Zealand Banking Group Limited has only been involved in the preparation of that part of this Prospectus where it is named as the custodian for the Company and specifically disclaims liability to any person in the event of ornission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Australia and New Zealand Banking Group Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Australia and New Zealand Banking Group Limited has given and before lodgement of the paper Prospectus with ASIC and the issue of the Electronic Prospectus has not withdrawn its written consent to being named in the Prospectus as the bank for the Company in the form and context in which it is so named.

Australia and New Zealand Banking Group Limited has only been involved in the preparation of that part of this Prospectus where it is named as the bank for the Company and specifically disclaims liability to any person in the event of omission from, or a misleading or deceptive statement included elsewhere in the Prospectus. Australia and New Zealand Banking Group Limited has not authorised or caused the issue of this Prospectus and takes no responsibility for its contents.

Each Director has given and not withdrawn their consent to be named in, and to the lodgement of, this Prospectus.

10.15 INTEREST OF EXPERTS

Other than as set out below, no expert or any firm in which such expert is a partner or employee has any interest in the promotion of or any property proposed to be acquired by the Company.

_______________________________________

The anticipated cost of the offer on the basis of subscription for 16,000,000, 30,000,000 and 40,000,000 Stapled Securities is set out below:

	Minimum Subscription	\$30,000,000 Subscription	Maximum Subscription
Handling Fees .	307.500 .	559.091 .	636 .
ASIC Fees and ASX Listing Fees . . .	51.566	.	.933 . .
Accounting and Legal	-44.000 .	.	.റററ
Other . . . .	347.080 .	347.080 .	.080
Total estimated expenses . . .	805.146 . $\cdots$	'75.096 . $\cdots$ 1.1.1	649 . .

Watson Mangioni have acted as solicitors to the Offer and have performed work in relation to negotiating certain of the material contracts, preparing the due diligence program and performing due diligence enquiries on legal matters. In respect of this work, the Company estimates that it will pay amounts totalling \$62,500 (excluding disbursements and GST) to Watson Mangioni.

Moore Stephens WI Pty Limited has prepared the independent accountant's report and independent taxation report included in this Prospectus and has also performed work in relation to the due diligence enquiries on financial matters. In respect of this work, the Company estimates that it will pay up to \$27,500 (excluding disbursements and GST) to Moore Stephens WI Ptv Limited.

Commonwealth Securities Limited has acted as sponsoring broker and dealer to the issue and will receive a fee of 3% including GST on all application monies sourced from its customers. See Section 4 for details.

ETRADE Australia Securities Limited has acted as sponsoring broker and dealer to the Issue and will receive a fee of 3% including GST on all application monies sourced from its customers. See Section 4 for details,

Fat Prophets Funds Management Australia Pty Limited will act as Proposed Manager of the Company and will receive a management fee and a performance fee (where relevant) in return for these services. See Section 9.1 for details.

Mint Financial Group Pty Limited will act as Interim Manager of the Company and will receive a management fee and performance fee (where relevant) in return for these services. See Section 9.2 for details. Mint Financial Group Pty Limited will also receive reimbursements of costs associated with the offer to a maximum of \$475,000. These costs will include marketing and other costs associated with the Offer, which have been included as part of the costs of the Offer in the table above.

Certain partners and employees of the above firms may subscribe for Stapled Securities in the context of the Offer.

Terms and abbreviations used in this Prospectus have the following meaning:

$$$ or AS	Australian Dollars.
AFSL	means an Australian Financial Services Licence issued by ASIC under Part 7.6 of the Corporations Act.
Applicant	a person who submits an Application.
Application	an application for Stapled Securities pursuant to this Prospectus.
Application Form	The application form that accompanies this Prospectus (and includes a copy of the application form printed from the website at which the Electronic Prospectus is located) under which an investor may apply for Stapled Securities under the Offer.
Application Monies	the Application Price multiplied by the number of Stapled Securities applied for.
Application Price	\$1.00 for each Stapled Security applied for.
ASIC	Australian Securities and Investments Commission.
Associate	has the meaning given by Division 2 of the Corporations Act.
ASX	The Australian Stock Exchange Limited (ACN 008 624 691).
ASX 300	S&P/ASX 300 Accumulation Index.
ASTC Settlement Rules	The business rules of the securities clearing house issued by ASX Settlement and Transfer Corporation Pty Limited.
Benchmark	The measuring standard used in a market. For example the S&P/ASX 300 Accumulation Index that includes the largest 300 entities listed on ASX.
Business Day	a day, other than a Saturday or Sunday, on which banks are open for general banking business in Sydney.
CEO	Chief Executive Officer of the Manager.

11. GLOSSARY

CHESS	Clearing House Electronic Subregister System.
Closing Date	the date by which valid acceptances must be received by the Share Registrar being 8 April 2005 or such other date as the Directors may determine in their absolute discretion.
Company	Fat Prophets Australia Fund Limited (ACN 111 772 359).
Corporations Act	The Corporations Act 2001 (Cth).
Directors or Board	the Board of Directors of the Company, including Alternate Directors where the context requires.
Electronic Prospectus	The electronic copy of this Prospectus located at the Company's website at www.fatprophets.com.au/fatfund/prospectus
GST	Goods and Services Tax as defined in A New Tax System (Goods and Services Tax) Act 1999.
Index/Indices	A benchmark level of performance representing a large number of securities. For example the S&P/ASX 300 Accumulation Index represents the performance of a basket of stocks made up of the largest 300 companies by market capitalisation listed on ASX.
IFRS	International Financial Reporting Standards.
	Interim Manager or Mint Mint Financial Group Pty Limited (ABN 62 094 448 549).
Licensee	an Australian financial services licensee.
Listing Rules	the official listing rules of ASX.
Manager	the Manager of the Portfolio on behalf of the Company being the Interim Manager until such time as the Proposed Manager obtains an AFSL at which time it will be the Proposed Manager.
NTA	Net Tangible Assets.
Offer	the offer of up to 40,000,000 Stapled Securities pursuant to and in accordance with this Prospectus with the right to accept any over subscriptions.
Opening Date	expected to be 17 February 2005.
Option	an option to acquire a Share at an exercise price of \$1.00 per Share after the Unstapling Date and on or prior to 20 April 2008 on the terms set out in Section 10.
Portfolio	the Portfolio of investments of the Company from time to time.
Priority Allocation	the allocation of up to 15,000,000 Stapled Securities to subscribers of the Fat Prophets report service who apply by the Priority Allocation Date.
Priority Allocation Date	the date by which Applications and Application Monies must be received from the subscribers of the Fat Prophets report service who wish to qualify for the Priority Allocation and is 28 February 2005.
Proposed Manager	Fat Prophets Funds Management Australia Pty Limited (ACN 112 466 887).
Prospectus	this Prospectus dated 9 February 2005 as modified or varied by any supplementary prospectus made by the Company and lodged with ASIC from time to time.
Securities	has the same meaning as in Section 92 of the Corporations Act.
Share	a fully paid ordinary share in the capital of the Company.
Shareholder	a holder of a Share.
Share Registrar	Registries Limited (ACN 003 209 836).
Stapled Security	Each Stapled Security represents one Share and one Option stapled together.
Unstapling	The event describing the breaking-up of each Stapled Security into its component parts, being one Share and one Option.

مستوسط والمستوس

This Prospectus has been approved by the unanimous resolution of the Board and the Directors have authorised the issue of this Prospectus on behalf of the Company.

Dated: 9 February 2005

dent Bolts

Robert Bolton Independent Chair

But mo

Bruce Holman Independent Director

I heaviered.

David Shearwood Director

APPROVAL

Fat Prophets Australia Fund Limited ACN 111 772 359

Fill out this Application Form to apply for stapled securities in Fat Prophets Australia Fund Limited

Please read the Prospectus dated 9 February 2005.
Follow the instructions to complete this Application Form (see reverse).

muu

Print clearly in capital letters using black or blue pen.

A Number of stapled securities you are applying for

			Broker Reference - Stamp Only

			Broker Code Adviser Code

B Total amount payable

State

Postcode

			$x$ \$1.00 per stapled security =

Minimum of 5,000 stapled securities to be applied for, and thereafter in multiples of 100 stapled securities.

C Write the name(s) you wish to register the securities in (see reverse for instructions) Applicant 1

Name of Applicant 2 or < Account Designation >

Name of Applicant 3 or < Account Designation >

D Write your postal address here

Number/Street

Suburb/Town

E CHESS participant - Holder Identification Number (HIN)

F Enter your Tax File Number(s), ABN, ACN or exemption category

Applicant #1

Applicant #3

G Cheque payment details

Please enter details of the chequels) that accompany this application

	.
Name of Drawer of Cheque	Cheque No. 2018	BSB No.	Account No.	Cheque Amount AS
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H Contact telephone number (daytime/work/mobile)

Lemail address

Applicant #2

By submitting this Application Form, I/we declare that this Application is completed and lodged according to the Prospectus and the instructions on the reverse of the Application form and declare that all details and statements made by me/us are complete and accurate. I/We agree to be bound by the Constitution of Fat Prophets Australia Fund Limited. I/We was/were given access to the Electronic Prospectus together with the Application Form. WVe represent, warrant and undertake to the Company that our subscription for the above Securities will not cause the Company or me/us to violate the securities or other laws of Australia or any other jurisdiction which may be applicable to this subscription for Securities in the Company.

GUIDE TO THE APPLICATION FORM

YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE COMPLETING THIS APPLICATION FORM.

Please complete all relevant sections of the appropriate Application Form using BLOCK LETTERS.

These instructions are cross-referenced to each section of the Application Form.

Instructions

A. If applying for stapled securities insert the number of stapled securities for which you wish to subscribe at Item A (not less than 5,000 and then in multiples of 100).
B. Multiply by A\$1.00 to calculate the total for stapled securities and enter the \$ amount at B.
C. Write your full name, Initials are not acceptable for first names.
D. Enter your postal address for all correspondence. All communications to you from Fat Prophets Australia Fund Limited will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.
E. If you are sponsored in CHESS by a stockbroker or other CHESS participant, you may enter your CHESS HIN if you would like the allocation to be directed to your HIN.
NB: your registration details provided must match your CHESS account exactly.
F. Enter vour Australian tax file number (TFN) or Australian Business Number (ABN) or exemption category, if you are an Australian resident. Where applicable, please enter the TFN/ABN of each joint Applicant. Collection of TFNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form.
G. Complete cheque details as requested. Make your cheque payable to Fat Prophets Australia Fund Limited in Australian currency, cross it and mark it "Not Negotiable". Cheques must be made in Australian currency, and cheques must be drawn on an Australian Bank.
H. Enter your contact details so we may contact you regarding your Application Form or Application Monies.
Enter your email address so we may contact you regarding your Application Form or Application Monies or other L correspondence.

CORRECT FORMS OF REGISTRABLE TITLE

Note that ONLY legal entities can hold the Stapled Securities. The Application must be in the name of a natural person(s), companies or other legal entities acceptable to Fat Prophets Australia Fund Limited. At least one full name and surname is required for each natural person.

Examples of the correct form of registrable title are set out below.

Type of Investor	Correct Form of Registrable Title	Incorrect Form of Registrable Title
Trusts	Mr John David Smith	John Smith Family Trust
Deceased Estates	Mr Michael Peter Smith	John Smith (deceased)
Partnerships	Mr John David Smith & Mr Ian Lee Smith	John Smith & Son
Clubs/Unincorporated Bodies	Mr John David Smith	Smith Investment Club
Superannuation Funds	John Smith Pty Limited	John Smith Superannuation Fund

LODGEMENT

Mail your completed Application Form with cheque(s) attached to the following address:

Delivery address:	Mailing address:
Fat Prophets Australia Fund Limited	Fat Prophets Australia Fund Limited
C/- Registries Limited	C/- Registries Limited
Level 2, 28 Margaret Street	- PO Box R67, Royal Exchange
SYDNEY NSW 2000	SYDNEY NSW 1223

It is not necessary to sign or otherwise execute the Application Form.

If you have any questions as to how to complete the Application Form, please contact Fat Prophets Australia Fund Limited on: Tel: 1300 88 11 77.

Fat Prophets Australia Fund Limited ACN 111 772 359

Fill out this Application Form to apply for stapled securities in Fat Prophets Australia Fund Limited

Please read the Prospectus dated 9 February 2005.
Follow the instructions to complete this Application Form (see reverse).
Print clearly in capital letters using black or blue pen.

	Broker Code	Adviser Code

A Number of stapled securities you are applying for B Total amount payable $x$ \$1.00 per stapled security = Minimum of 5,000 stapled securities to be applied for, and thereafter in multiples of 100 stapled securities. C Write the name(s) you wish to register the securities in (see reverse for instructions) Applicant 1 Name of Applicant 2 or < Account Designation > Name of Applicant 3 or < Account Designation > D Write your postal address here Number/Street State Suburb/Town Postcode E CHESS participant - Holder Identification Number (HIN) X

F Enter your Tax File Number(s), ABN, ACN or exemption category

	$\Delta$ plicant #1 $\Delta$ $\Delta$ pplicant #2 $\Delta$








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G Cheque payment details

Please enter details of the cheque(s) that accompany this application.

Name of Drawer of Cheque	Cheque No.: Cheque No.:	BSB No.	Account No.	Cheque Amount AS








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H Contact telephone number (daytime/work/mobile)

Lemail address

By submitting this Application Form, I/we declare that this Application is completed and lodged according to the Prospectus and the instructions on the reverse of the Application form and declare that all details and statements made by me/us are complete and accurate. I/We agree to be bound by the Constitution of Fat Prophets Australia Fund Limited. I/We was/were given access to the Electronic Prospectus together with the Application Form. IAVe represent, warrant and undertake to the Company that our subscription for the above Securities will not cause the Company or me/us to violate the securities or other laws of Australia or any other jurisdiction which may be applicable to this subscription for Securities in the Company.

GUIDE TO THE APPLICATION FORM

YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE COMPLETING THIS APPLICATION FORM.

Please complete all relevant sections of the appropriate Application Form using BLOCK LETTERS.

These instructions are cross-referenced to each section of the Application Form.

Instructions

A. If applying for stapled securities insert the number of stapled securities for which you wish to subscribe at Item A (not less than 5,000 and then in multiples of 100).
B. Multiply by A\$1.00 to calculate the total for stapled securities and enter the \$ amount at B.
C. Write your full name. Initials are not acceptable for first names.
D. Enter your postal address for all correspondence. All communications to you from Fat Prophets Australia Fund Limited will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.
E. If you are sponsored in CHESS by a stockbroker or other CHESS participant, you may enter your CHESS HIN if you would like the allocation to be directed to your HIN.

NB: your registration details provided must match your CHESS account exactly.

F. Enter your Australian tax file number (TFN) or Australian Business Number (ABN) or exemption category, if you are an Australian resident. Where applicable, please enter the TFN/ABN of each joint Applicant. Collection of TFNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form,
G. Complete cheque details as requested. Make your cheque payable to Fat Prophets Australia Fund Limited in Australian currency, cross it and mark it "Not Negotiable". Cheques must be made in Australian currency, and cheques must be drawn on an Australian Bank.
H. Enter your contact details so we may contact you regarding your Application Form or Application Monies.
Enter your email address so we may contact you regarding your Application Form or Application Monies or other $\pm$ correspondence.

CORRECT FORMS OF REGISTRARI E TITLE

Examples of the correct form of registrable title are set out below.

Type of investor	Correct Form of Registrable Title	incorrect Form of Registrable Title
Trusts	Mr John David Smith	John Smith Family Trust
Deceased Estates	Mr Michael Peter Smith	John Smith (deceased)
Partnerships	Mr John David Smith & Mr Ian Lee Smith	John Smith & Son
Clubs/Unincorporated Bodies	Mr John David Smith	Smith Investment Club
Superannuation Funds	John Smith Pty Limited	John Smith Superannuation Fund

LODGEMENT

Mail your completed Application Form with cheque(s) attached to the following address:

.
Delivery address:	Mailing address:
Fat Prophets Australia Fund Limited-	Fat Prophets Australia Fund Limited
C/- Registries Limited	C/- Registries Limited
Level 2, 28 Margaret Street	PO Box R67, Royal Exchange
SYDNEY NSW 2000	SYDNEY NSW 1223

It is not necessary to sign or otherwise execute the Application Form.

If you have any questions as to how to complete the Application Form, please contact Fat Prophets Australia Fund Limited on: Tel: 1300 88 11 77.

CORPORATE DIRECTORY

DIRECTORS

Robert Bolton (Chair) Bruce Holman David Shearwood Angus Geddes (as Alternate to David Shearwood) Jason McIntosh (as Alternate to David Shearwood)

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COMPANY SECRETARY .
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David Shearwood

REGISTERED OFFICE

Fat Prophets Australia Fund Limited ACN 111 772 359 Level 33 2 Park Street Sydney NSW 2000

SPONSORING BROKERS

Commonwealth Securities Limited AFSL No. 238814 ABN 60 067 254 399 Level 18 363 George Street Sydney NSW 2000

ETRADE Australia Securities Limited AFSL No. 238277 ABN 93 078 174 973 Level 1 10 Bridge Street Sydney NSW 2000

AUDITOR

Grosvenor Schiliro Chartered Accountants ABN 12 225 759 072 Level 2 333 George Street Sydney NSW 2000

CUSTODIAN

Australia and New Zealand Banking Group Limited Custodian Services Level 25, 530 Collins Street Melbourne VIC 3000

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INTFRIM MANAGER

Mint Financial Group Pty Limited AFSL No. 229183 ABN 62 094 448 549 Level 33 2 Park Street Sydney NSW 2000

PROPOSED MANAGER

Fat Prophets Funds Management Australia Pty Limited ACN 112 466 887 Level 33 2 Park Street Sydney NSW 2000

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SHARE REGISTRY

Registries Limited ACN 003 209 836 Level 2 28 Margaret Street Sydney NSW 2000

SOLICITORS TO THE OFFER

Watson Mangioni Level 13 50 Carrington Street Sydney NSW 2000

INDEPENDENT ACCOUNTANT

Moore Stephens WI Pty Limited ACN 098 199 118 Level 5 14 Martin Place Sydney NSW 2000

TAX ADVISER

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BANK

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INVESTSMART GROUP LIMITED — Capital/Financing Update 2006

65130_rns_2006-09-25_0f8d9aea-afb2-4bbc-afc3-9b5117cf3ab3.pdf

FAT PROPHETS AUSTRALIA FUND LIMITED A. 11 77 353

TO RAISE UP TO \$40,000,000

IMPORTANT NOTICES

INDICATIVE TIMETABLE

HOW TO APPLY

WHEN TO APPLY

FNOURIES

PRIVACY

CHAIRMAN'S LETTER

Dear Investor.

1.1 BUSINESS OVERVIEW AND OBJECTIVE

1. INFORMATION FOR INVESTORS

1.2 THE OFFER

1.3 PRIORITY ALLOCATION

1.4 MANAGEMENT OF THE PORTFOLIO

Management Fee

Performance Fee

1.5 RISK FACTORS

1.6 OFFER NOT UNDERWRITTEN

1.7 MINIMUM SUBSCRIPTION

1.8 APPLICATIONS FOR STAPLED SECURITIES

Fat Prophets Australia Fund Limited - Applications Account

1.9 ASX LISTING

1.10 ALLOTMENT

1.11 CHESS

1.12 TAXATION IMPLICATIONS

1.13 OVERSEAS AND NON-RESIDENT STAPLED SECURITY HOLDERS

1.14 BROKER AND ADVISER HANDLING FEES

1.15 ENOUIRIES

2.1 OVERVIEW

2.2 RFI ATIONSHIP WITH FAT PROPHETS

2.3 INVESTMENT OBJECTIVES

2.4 INVESTMENT PHILOSOPHY

2.5 INVESTMENT STRATEGY - "VALUE"

2.6 INVESTMENT STYLE - "ACTIVE"

2.7 INVESTMENT PROCESS

(a) Investment Universe

(b) Ideas Generation

(c) Stock Ranking Screens

(d) Analysis of Priority Targets

(e) Investment Committee

(f) Portfolio Construction and Risk Constraints

(g) Sell Discipline

2.8 ETHICAL INVESTMENT POLICY

2.9 PERMITTED INVESTMENTS

2.10 DIVIDEND POLICY

2.11 CAPITAL STRUCTURE POLICY

2.12 CAPITAL MANAGEMENT

2.13 DIVIDEND REINVESTMENT PLAN

2.14 NET TANGIBLE ASSET REPORTS TO SHAREHOLDERS

3.1 INTRODUCTION

3.2 BUSINESS OF THE PROPOSED MANAGER

3. INFORMATION ON THE MANAGER

3. INFORMATION ON THE MANAGER

3.3 PERFORMANCE HISTORY

3.4 USE OF FAT PROPHETS REPORT

3.5 KEY PERSONNEL OF THE PROPOSED MANAGER

Board

Senior Executives

3. INFORMATION ON THE MANAGER

David Shearwood – Chief Executive Officer – Bachelor of Engineering (mining, honours), ASIA, GAICD (order of merit)

Drew Wilson – Chief Operating Officer – Bachelor of Business Administration (Finance, Marketing) Drew has more than 10 years experience in the Canadian and Australian financial services industries.

Steve O'Hanna – Senior Fund Manager – Bachelor of Business

3. INFORMATION ON THE MANAGER

3.6 FAT PROPHETS

3.7 MINT FINANCIAL GROUP PTY LIMITED

SERTIN 4 FINANCIAL INFORMATION

4.1 USE OF FUNDS

4.2 PROCEEDS OF THE ISSUE

4. FINANCIAL INFORMATION

4.3 PRO-FORMA STATEMENTS OF FINANCIAL POSITION

Pro-forma Statements of Financial Position

Pro-forma Cash Position

4. FINANCIAL INFORMATION

4.4 PROPOSED ACCOUNTING POLICIES

(a) Basis of preparation of accounts

(b) Investments

INVESTSMART GROUP LIMITED Capital/Financing Update 2006