Perpetual Limited — Management Reports 2011

May 31, 2011

==> picture [146 x 51] intentionally omitted <==

1 June 2011

Shareholder update from the Chief Executive Officer

Dear Shareholder

I am writing to you, following my first 100 days as the Managing Director and Chief Executive Officer of Perpetual, to provide you with my views on how your company is placed and my plans for its future.

In previous years, you have received a letter from our Chairman. Given that this is my first opportunity to write to you and taking into account the announcement we made on 26 May 2010, the Chairman and I agreed that instead of the Chairman’s letter, shareholders would be better served this year by receiving a detailed account of the briefing we provided on that day.

Firstly, I should introduce myself. I have been active in the financial services industry, specialising in wealth management, for over 30 years. Having spent the early part of my career in Australia’s then fledgling funds management sector, I spent the last 15 years in Asia where I held regional CEO roles for global asset managers, Fidelity International and ING.

I joined Perpetual because the Australian wealth management sector is one of the most well developed and competitive markets in the world, and because this company has some unique qualities and some real opportunities ahead of us.

Since I arrived, I have conducted an intensive review of all of our businesses and operations, including the competitive environment, market trends and the impact of Government regulation. This involved intensive discussions with management, clients, regulators, and industry analysts.

This process confirmed to me that we have a company with a great brand, scale, independence, diverse earnings streams and a strong balance sheet. Our award-winning investment capability, highend financial advisory services, and specialist trustee services for both corporates and individuals, are highly regarded by both our clients and our industry peers.

However, it also became clear to me that we need to do more to translate these great strengths into sustainable shareholder returns. What we need is a step-up in terms of business management discipline and focus on activities that add real value for clients and shareholders. We want to run what is a great Australian company to international standards.

Allow me to explain my plans in more detail.

Portfolio review

All of Perpetual’s product lines, services and infrastructure were assessed to determine whether they are best managed for growth, profit or exit.

In the Perpetual Investments business, we will use our well recognised strengths in developing and managing Australian equities, income and multi-sector funds to develop new strategies and products. Demand and opportunities also exist for our involvement in the international asset classes, which is

Angel Place, Level 12, 123 Pitt Street Tel +612 9229 9000 Sydney NSW 2000, Australia Fax +612 8256 1494 GPO Box 4172, Sydney NSW 2001, Australia investor.relations@perpetual.com.au

Perpetual Limited ABN 86 000 431 827

continuing to grow as a proportion of investor portfolios. We currently manage funds in international equities, global resources and Asian equities, and we need to redefine our approach to this asset class.

In Private Wealth, our clear focus on key sectors within the High Net Worth client segment, together with increased scale through both organic growth and acquisitions, will enable us to broaden the services we provide and generate additional revenue. The Fordham and Grosvenor acquisitions are performing well and will make a good contribution to our full year profit.

The Corporate Trust securitisation trustee business continues to hold a leading market position, generates good margins, and can pursue opportunities in emerging asset classes as its operational environment improves. Similarly, we are looking at options to profitably grow our specialised fund services and improve margins in our mortgage processing business.

Cost and efficiency drive

We are moving to a much more active management of our costs by building greater flexibility and efficiency into our cost base. We have reduced staff numbers in some areas and appointed more people in areas we intend to grow. We expect these actions will generate annual cost savings of approximately A$9 million before tax from next financial year onwards.

We are also considering which existing functions are best suited to perform in-house and which processes are best performed by external providers. For example, we are currently reviewing proposals to outsource our platform administration services for Private Wealth clients. The resulting efficiencies will allow us to make further investments in client services.

Moving towards a more variable cost base will enable us to take advantage of any improvement in our operating environment and revenue, as well as provide the means to better manage our costs during downturns. To this end, I have appointed Richard Vahtrick as Group Executive Operations. Richard joins us from IBM in June and he will have a company-wide mandate to implement the variable cost structure and transform our IT architecture to a more competitive cost model.

We will also allocate most of our Group and Support Services expenses to the business lines to increase transparency and management discipline.

Distribution focus

We have recognised that we can sharpen our product distribution capability. We have a great brand and our fund managers deliver outstanding performance for investors, but we are facing challenges in distribution to some key client segments. We need to develop the agility to strategically develop new products and services to capitalise on growth opportunities and invest in the resources required to succeed.

To address this I have created two new Group Executive roles. Brian Henderson, who is a seasoned industry professional I worked with at Fidelity International, will join us in June as Group Executive Marketing. We are also well advanced with the appointment of a Group Executive Sales. Together these two new Group Executives will ensure we take a more strategic and focused approach to sales and marketing across the company.

Active capital management

We are taking a more active approach to managing our capital. The first measure has been to reduce the Group’s risk-based capital requirements to A$140 million in response to our continued reduction in risk assets and improved market conditions. The methodology applied to this revision is aligned with comparable regulatory guidelines, including APRA and Basel. This new capital requirement is well covered by the A$236 million of cash and liquid investments on the balance sheet as at 31 March 2011.

We are also lowering the amount of shareholder capital currently invested in certain seed funds by around A$10 million and implementing a more disciplined approach to funding incubation strategies. We will continue to reduce our balance sheet exposure to capital guaranteed products.

2

If we have suitable opportunities to create value for shareholders, we will deploy capital for that purpose. If not, we will return it to our shareholders in an efficient and timely manner.

Operational and regulatory environment

While the market environment continues to be challenging with subdued fund flows and demand for some of our services, I am positive about the longer term outlook.

The proposed increase in superannuation contributions will increase demand for asset management. Equally, with the ageing of the population and increasing number of High Net Worth individuals, we are already seeing increased demand for quality advice, products and services to meet their needs.

Perpetual supports the Government’s plan to reform financial advice with higher professional standards, for which we are already very well positioned. A greater focus on client interests in the industry should also direct financial advisers towards our independent, high quality products.

2011 Earnings 0utlook

Perpetual’s Underlying Profit After Tax (UPAT) for the 12 months ending 30 June 2011 is expected to be broadly in line with the A$72.8 million result achieved in the previous year. UPAT for the six months ending 30 June 2011 will reflect lower than expected inflows into our asset management businesses and the significant reduction in mortgage servicing levels as a result of the softer demand for housing finance. It will also include the A$2 million cost incurred as a result of the senior management transition and A$2 million in costs associated with the outsourcing projects, both before tax.

Our Net Profit After Tax (NPAT) for the 12 months ending 30 June 2011 will be impacted by an after tax restructuring provision of approximately A$4.7 million, incurred to generate the annualised cost savings before tax of approximately A$9.0 million mentioned previously. Full Year NPAT will also reflect recoveries from our Exact Market Cash Fund of approximately A$9.5 million after tax, as well as the previously recorded private equity takeover response costs (A$3.0 million after tax) and smartsuper goodwill impairment (A$10.6 million after tax).

Our final dividend for the 2011 financial year is expected to be around 90 cents per share fully franked, and is expected to be paid in late September. Our strong capital position and ability to generate cash from operations has enabled us to pay above our normal payout policy, which is to pay 80-100% of NPAT on an annualised basis.

This guidance assumes no other impairments and is subject to there being no material deterioration in financial markets and business conditions over the remainder of the 2011 financial year.

Perpetual’s future

In conclusion, the initiatives I have outlined are part of a continued effort to drive better outcomes for our clients and shareholders. We want to create an immediate impact, but we also want to put ourselves in a better position to take future opportunities.

Clearly, subdued investor confidence has affected flows in the industry and in our case, other distractions have hampered business. The latter are now behind us and the slowing rate of redemptions would suggest a possible turn in market sentiment is coming closer. Although the timing of a clear recovery in investor confidence remains hard to call, we are aiming to enhance our market leverage by focusing on the relevant activities in our portfolio, introducing a more flexible cost structure and improving the way we approach distribution. That way, we will take advantage of an improvement in the operational environment.

The initiatives will enhance our business discipline and focus, and are a first step to further lift our practices to international standards. More can and will be done to achieve improved performance on an ongoing basis and I look forward to keeping you informed as we take additional measures in the pursuit of this objective.

3

You will be able to find further detail on our plans in the ASX announcement we made on 26 May 2011, as well as in the accompanying market briefing presentation. Both can be found on our website, at http://shareholders.perpetual.com.au

I am excited about the opportunities ahead for this great company.

Thank you for your continued support.

Yours faithfully

==> picture [79 x 58] intentionally omitted <==

Chris Ryan Managing Director and Chief Executive Officer

4