MYSTATE LIMITED — Management Reports 2010

Mar 22, 2010

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C H A I R M A N ’ S L E T T E R T O S H A R E H O L D E R S - 2 3 M A R C H 2 0 1 0

Dear MyState Limited Shareholders,

This time last year, many financial service providers throughout the world were facing challenges at a level of intensity not seen in recent memory. During this very same turbulent period, known as the Global Financial Crisis, Directors of MyState Financial and Tasmanian Perpetual Trustees commenced the process of merging these two iconic Tasmanian financial institutions to benefit customers, shareholders, members and the Tasmanian community.

It therefore now gives me great pleasure to report on the progress of the merger and of MyState Limited – the name for the public company that was created to give effect to the merger. Let me state at the outset that I believe we are well on the way to achieving the goals your Directors set for this merger some 18 months ago.

MyState Limited is many things. In a strictly business sense, it is the non-operating holding company which owns and operates MyState Financial and Tasmanian Perpetual Trustees.

MyState Financial, an authorised deposit-taking institution with retail banking operations and Tasmanian Perpetual Trustees, a trustee and wealth management company, have very different backgrounds. However, it is the strong common points of interest and the complementary nature of their operations, that are the ties that bind. The Directors are committed to ensuring that MyState Financial and Tasmanian Perpetual Trustees, which each hold a unique place in the hearts and minds of Tasmanians, will continue to operate as separate businesses with their distinctive products and services.

It is therefore pleasing to be able to report that, in the face of the recent economic challenges, MyState Limited, the combined entity, has emerged as a positive and strong Company. This is clearly demonstrated by our half-year financial results released to the Australian Securities Exchange late last month. These results have

“...to continue to provide financial products and services that lead the way in the financial services sector in Tasmania and to provide sound returns to shareholders, is a challenge that inspires and drives all involved in MyState Limited.”

been favourably received by the market with increasing levels of interest and demand for our stock, underpinning the share price which has outperformed the market rising from $3.00 in September 2009 at the time of listing to $3.63 as of 22 March 2010.

In the current global and local financial environment, the Company half-year result was very solid and is a credit to the management team and all employees. It is also testimony to the early success of the merger.

Key milestones of the merger to date

August 2009 - MyState Financial members and Tasmanian

• Perpetual Trustees shareholders vote overwhelmingly in favour of the merger

• 17 September 2009 – Implementation date for the merger – shares allocated

• 24 September 2009 - MyState Limited ( ASX Code: MYS ) starts trading on the Australian Securities Exchange – closing price first day trading $3.00

• 27 November 2009 – MyState Limited shareholders receive “final” 2009 dividend

• 10 December 2009 – MyState Limited Managing Director - John Gilbert appointed

• 11 January 2010 – MyState Limited Executive Team announced

• 27 January 2010 – Business restructured and senior managers appointed

• 23 February 2010 – MyState Limited half-year results released

• 23 March 2010 – MyState Limited Annual General Meeting

• 31 March 2010 – MyState Limited “interim” 2010 dividend to be paid to shareholders

Importantly, throughout the entire merger process, the key phrase that really inspired all involved was “Stronger Together”; it is this logic that drove the merger and that will determine our future. By being “Stronger Together”, our ability to service our customers and clients and meet their needs and exceed their expectations is greatly enhanced.

I encourage all shareholders to take an interest in the progress of the Company by logging on to the ASX website and reviewing the published announcements on the MyState Limited (ASX Code: MYS) section of the site.

Key financial features of the half-year result to 31 December 2009 – released on 23 February 2010

Revenue from ordinary activities $71.7 million Net profit $8.2 million Interim dividend 10 cents per share fully franked Earnings per share 13.9 cents Total assets $1.92 billion Deposits of $1.7 billion

Net assets of $196 million

Loans under management of $2.0 billion Funds under management or advice of $1.78 billion 82,000 shareholders

Financial commentary

The financial performance of the business post merger, indicates that we are currently on track to exceed earlier expectations. Specifically, we have achieved anticipated cost saving synergies more rapidly than initially budgeted and we have been further assisted by an improvement in our margins. When combined, these two factors have contributed significantly towards the positive result that we have reported.

Also impacting the results for the first half was a profit of $0.68 million resulting from the sale of Tasmanian Banking Services and one-off merger related expenses of $2.9 million that included staff redundancy costs and prior merger related stamp duty.

Our people

One of the major features of both MyState Financial and Tasmanian Perpetual Trustees is the quality of people that are employed in the separate businesses. Following the merger, this tradition of excellence has continued and the Executive Team that is charged by the Board with the responsibility to maintain and grow the business consists of:

John Gilbert

• Managing Director, MyState Limited

staff and in this regard we are most fortunate. Post merger, we will continue to treat our staff with respect, provide a challenging and rewarding work environment and encourage a high performance culture.

Our commitment to customers

Gained over many years, the reputation of MyState Financial was based on the quality of service to its customers and now that MyState Limited is a public company, this commitment will not waiver. Just as Tasmanian Perpetual Trustees was successful in balancing the needs of customers and shareholders for many years, MyState Limited will continue this tradition, knowing that the entire success of the business will be based on service delivery excellence. Our commitment to our vision remains strong – to be the leading provider of financial products and services in Tasmania and to provide these services in a manner that recognises the changing needs, demands and desires of our customers. This is a challenge that inspires and drives all involved in MyState Limited.

The future

Indications are that the current momentum will continue over the months ahead and, while we remain cautious, we are optimistic for the remainder of the year. This optimism is also based on a clear improvement in local and international financial markets.

I believe we have the people, the services and the products to continue the path we have embarked upon over recent months. Shareholders can be assured that every resource is being harnessed to continue to grow the value and realise the full potential of the Company and customers can be assured of on-going high service levels.

Dr Michael Vertigan AC Chairman

David Benbow

• General Manager, Wealth Management and Trustee Services Colin Kent

• General Manager, Brands, Communications, People and Development

Tim Rutherford

• General Manager, Technology and Operations Darren Turner

• General Manager, Retail Banking and Distribution Paul Viney

• Chief Financial Officer and Company Secretary

The reputation of MyState Financial and Tasmanian Perpetual Trustees as viewed by our customers is almost entirely dependant on the standard of service they receive from our

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MyState Limited is a non-operating holding company with MyState Financial and Tasmanian Perpetual Trustees as wholly owned subsidiaries