INVESTSMART GROUP LIMITED — Regulatory Filings 2008

Mar 10, 2008

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Level 33 2 Park St Sydney NSW 2000 02 8258 0015 fatfund@fatprophets.com.au

6 March 2008

IMPORTANT NOTICE – EXPIRY OF 20 APRIL 2008 OPTIONS

Dear Option Holder,

The 20 April 2008 Options issued by Fat Prophets Australia Fund Limited (“ FPAFL ” or the “ Company ”) [ ASX Code: FATO] are due to expire on 20 April 2008. In accordance with the terms and conditions of the option issue and the ASX Listing Rules, the Company is required to give you notice at least 20 business days before the 20 April 2008 expiry date.

In accordance with the ASX Listing Rules, the Company advises as follows:

1. The latest date for the exercise of the options and for payment of the exercise price is Friday 18 April 2008.

2. The exercise price of the options is $1.00 per option.

3. The consequence of non-payment of the exercise price is that the options will lapse.

4. The latest available market price of the Company’s shares on the ASX ( ASX Code : FAT) prior to the date of this letter was $0.965 per share on 5 March 2008.

5. The highest and lowest market price of the Company’s shares during the three months prior to 6 March 2008 are set out below:

6. i. Highest: $1.06 per share on 7-12 December 2007 and 2 January 2008;

7. ii. Lowest: $0.93 per share on 22 January 2008.

8. The last date of quotation of the options on the ASX will be Friday 11 April 2008.

Option holders should be aware that whilst the prevailing share price of FPAFL is marginally below that of the $1.00 option exercise price, the net asset backing (“ NTA ”) per share of FPAFL at 31 January 2008 was above the exercise price of the options. As at 31 January 2008, NTA per FPAFL share was as follows:

	NTA per share before tax	NTA per share after tax
Undiluted for options	$1.2747	$1.2318
Fully diluted for options	$1.1405	$1.1185

Updates of the NTA per share as at 29 February 2008 and 31 March 2008 will be released to ASX prior to the 15[th] day of the following month, and can be accessed at the ASX website (www.asx.com.au) using the ticker code FAT or at www.fatprophets.com.au.

Enclosed is a “ Notice of Exercise of Options Expiring 20 April 2008 ”.

To convert your options into FPAFL shares, complete the “ Notice of Exercise of Options Expiring 20 April 2008” form in full, sign it and send it to the Company’s share registry with the appropriate remittance amount by cheque made payable to “Fat Prophets Australia Fund Limited” and crossed “Not Negotiable”.

The postal address of the Company’s share registry is:

Registries Limited PO Box R67 Royal Exchange NSW 1223

If you have any queries in relation to this letter please do not hesitate to contact Registries Limited on +61 2 9290 9600.

Yours sincerely,

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Clare Porta Company Secretary

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ABN: 62 111 772 359

Notice of Exercise of Options Expiring 20 April 2008

«NameAddress_1» «NameAddress_2» «NameAddress_3» «NameAddress_4» «NameAddress_5» «NameAddress_6»

I/We being the registered holders of «Options» Options (expiring 20 April 2008) each to acquire one Fully Paid Ordinary Share in Fat Prophets Australia Fund Limited hereby give notice of the exercise of Options and attach hereto my/our cheque payable to “Fat Prophets Australia Fund Limited” at $1.00 per Option in payment of such exercise.

I/We agree to my/our name/s being placed on the Register of Members in respect to the number of Shares allotted and to be bound by the Constitution of the Company.

Accordingly, I/We enclose a cheque for the sum of A$___ being the correct amount for the exercise of ___ Options.

Please Sign Here:

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Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual)
Sole Director & Sole Company Secretary Director Director / Company Secretary
Business Telephone No. ( ) Date
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Please return to Fat Prophets Australia Fund Limited C/- Registries Limited PO Box R67 Royal Exchange NSW 1223

TERMS OF OPTIONS

Fat Prophets Australia Fund Limited

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 Unstapling Date.

Transfer/Transmission

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

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 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.

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 – 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.

Glossary of Terms

ASX means Australian Stock Exchange Limited (ACN 008 624 691).

Business Day means a day, other than a Saturday or Sunday, on which banks are open for general banking business in Sydney. Company means Fat Prophets Australia Fund Limited (ACN 111 772 359).

Corporations Act means Corporations Act 2001 (Cth) .

Listing Rules means the official listing rules of ASX.

Option means 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 above.

Share means a fully paid ordinary share in the capital of the Company.

Unstapling Date means 20 April 2006.