INVESTSMART GROUP LIMITED — Capital/Financing Update 2011

May 30, 2011

Merricks Capital Special Opportunity Fund Limited ACN 111 772 359

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Level 1, 600 Chapel Street South Yarra VIC 3141 Australia Telephone +613 8319 8111 Fax +613 9827 9145

31 May 2011

Companies Announcements Office ASX Limited 20 Bridge Street Sydney New South Wales 2000

Merricks Capital Special Opportunity Fund Limited (MEF) provides $6.1 of mezzanine funding to Digital Harbour Holdings for the construction of the new headquarters of Melbourne Water Corporation

The property is located at 990 LaTrobe Street on the Digital Harbour precinct (Melbourne Docklands).

The facility will be provided for a minimum of 15 months and accrue at an interest rate of 17% per annum.

As announced at last year’s AGM the Manager of MEF was pursuing several opportunities to provide loans to highly credit worthy counter parties as it felt the lack of lending by the major commercial banks created a gap in the market for excellent risk adjusted returns.

The Manager believes this project is of high quality and has the following key attributes:

• 97% of the building is pre-leased to Melbourne Water Corporation on a 15 year lease

• The completed building is pre-sold to Motor Accident Commission of South Australia

• The building is being constructed by Equiset Construction (part of the Grollo Australia Group) under guaranteed maximum price design & construct contract

• Construction began in November 2010 and as at the most recent builders report is on schedule and budget for timely delivery (completion is scheduled for mid 2012)

• The Manager believes the high quality of the developer, builder, tenant and purchaser under pins the value of the project and provides strong security for the MEF loan

Impact on the MEF portfolio:

• The loan represents approximately 20% of the portfolio. Subject to ongoing stability within the MEF portfolio income from this investment alone should underpin a 4 cents per share fully franked dividend for the 2012 financial year to June 30

• It is the Board’s intention to pay dividends from realised income from the portfolio

• Consistent with the Board’s mandate to support a healthy dividend, the Manager is endeavoring to build a portfolio that is balanced with both deep value opportunities and highly cash flow generative investments that will allow both dividends and capital gains

MEF - 2011.05.31 - 990 LaTrobe.docx