PRIME FINANCIAL GROUP LIMITED — Proxy Solicitation & Information Statement 2009

Jul 5, 2009

This booklet contains The Notice of Extraordinary General Meeting for

Prime Financial Group Limited ACN 009 487 674

DATE AND TIME OF MEETING Tuesday 4th August, 2009 at 9.00am AEST

PLACE OF MEETING Como Hotel 630 Chapel Street South Yarra Vic 3141

You should read this booklet carefully before deciding how to vote

CHAIRMAN'S LETTER

Dear Shareholder,

The Extraordinary General Meeting is being held so shareholders can consider the resolutions contained in the accompanying notice of meeting. In compliance with listing rules and the Corporations Act, the notice and explanatory memorandum set out the resolutions and supporting information but in summary the resolutions cover:

1. The appointment of Webb Audit Pty Ltd (a member of William Buck) being the auditors of the group operating entities, as auditors of the Company. Pitcher Partners currently audits the Company which is a holding company and does not itself trade. The appointment of two auditors is a legacy of the merger between AVFM Ltd and Prime Financial Group Ltd.

The change of auditor will result in one group auditor saving approximately $50,000 in audit fees per annum as this will eradicate unnecessary duplication of work without compromising the quality of service provided.

1. The Company placed 20,000,000 shares to ACN 134 557 636 Pty Ltd. The terms of the placement were first announced to the ASX on 19 March 2009.

The Board is seeking approval of the prior issue of shares, which if approved, will allow for the future placement of up to a further 15% of its capital without prior shareholder approval.

The approval of the resolution provides greater flexibility should the Company deem it desirable to raise additional funding for working capital or to avail itself of other opportunities.

Mr Stuart James Chairman

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is hereby given that an Extraordinary General Meeting of the Shareholders of Prime Financial Group Limited (the Company) will be held at the Como Hotel, 630 Chapel Street, South Yarra, Victoria on Tuesday 4th August 2009 at 9.00am AEST.

The Explanatory Memorandum that accompanies and forms part of this Notice describes the various matters to be considered.

Terms used in this Notice will, unless the context otherwise requires, have the same meaning given to them in the Glossary of Terms contained in the Explanatory Memorandum.

AGENDA

ORDINARY RESOLUTIONS

1. Resolution 1 – Pitcher Partners be Removed as Auditor of the Company

To consider, and if thought fit, to pass the following Resolution as an ordinary Resolution:

"That the Shareholders approve and authorise the removal of Pitcher Partners as the Company's auditor with effect from the date of the meeting."

2. Resolution 2 – Appointment of Webb Audit Pty Ltd (a member of William Buck) as Auditor of the Company

Subject to Resolution 1 being passed, to consider, and if thought fit, to pass the following Resolution as a special Resolution:

"That the Shareholders authorise Webb Audit Pty Ltd of Level 1, 465 Auburn Road, Hawthorn East Vic 3123 (having been nominated by a member of the Company and consented in writing to act in the capacity of auditor) to be appointed as auditor of the Company."

3. Resolution 3 – Approve a Prior Issue of Shares

To consider, and if thought fit, to pass the following resolution as an ordinary Resolution:

"That, for the purposes of Listing Rules 7.1 and 7.4 and for all other purposes, the Shareholders approve and authorise the Company's prior issue of 20,000,000 Shares at an issue price of $0.12 per Share, to ACN 134 557 636 Pty Ltd as described in the Explanatory Memorandum."

In accordance with Listing Rule 14.11, the Company will disregard any votes cast on this Resolution by ACN 134 557 636 Pty Ltd or its associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

By order of the Board of Prime Financial Group Limited

Mr Campbell Kennedy Company Secretary Dated: 26 June 2009

PRIME FINANCIAL GROUP LIMITED ACN 009 487 674

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at an Extraordinary General Meeting of the Shareholders of Prime Financial Group Limited (the Company) to be held at the Como Hotel, 630 Chapel Street, South Yarra, Victoria on Tuesday 4th August 2009 at 9.00am AEST.

The Extraordinary General Meeting is being held so Shareholders can consider the Resolutions contained in the accompanying Notice of Meeting in compliance with the Listing Rules and the Corporations Act.

Shareholders are urged to read this Explanatory Memorandum and consider all information carefully prior to voting on each of the Resolutions.

This Explanatory Memorandum consists of the following parts:

Part 1 –Resolutions

• Resolution 1: Pitcher Partners be Removed as Auditor of the Company
• Resolution 2: Appointment of Webb Audit Pty Ltd (a member of William Buck) as Auditor of the Company
• Resolution 3: Approve a Prior Issue of Shares

Part 2 – Glossary of Terms

Annexure A – Information For Voting Shareholders (including Proxy Form)

Annexure B – Nomination of Auditor

Important Notice:

This Explanatory Memorandum has been prepared by and is the sole responsibility of the Company.

1. Resolutions 1 and 2 – Pitcher Partners be removed as auditor of the Company and Webb Audit Pty Ltd (a member of William Buck) be appointed as auditor in its place

1.1 Introduction

• 1.1.1 Pitcher Partners currently audits the Company which is a holding company that does not itself trade. Webb Audit Pty Ltd (a member of William Buck) currently audits and has since inception audited the Company's wholly owned subsidiary Prime Development Fund Pty Ltd (PDF). PDF is the holding company of the group's 55 operating entities.
• 1.1.2 The appointment of 2 auditors is a legacy of the merger between AVFM Ltd and Prime Financial Group Limited. The Directors consider that it is no longer necessary or desirable to engage 2 auditors and are of the view that the removal of Pitcher Partners will eradicate unnecessary duplication of work and deliver cost savings to the Company without compromising the quality of service provided. The decision to remove Pitcher Partners and to retain Webb Audit Pty Ltd was arrived at following the Board's review of competitive tenders that were submitted for the provision of audit services for the financial year. The removal of Pitcher Partners and the appointment of Webb Audit Group to audit the Company (in addition to PDF) will save approximately $50,000 in audit fees per annum.
• 1.2 Corporations Act Requirements for Removal of Auditor
  • 1.2.1 Section 329(1) of the Corporations Act provides that an auditor may be removed from office by an ordinary resolution provided that the company has been notified of the intention to move such a resolution prior to the general meeting. Stephen Bennett, a Director of the Company, gave the Company a notice of intention to remove Pitcher Partners as the Company's auditor on 23 April 2009.
  • 1.2.2 The Company has consulted with Pitcher Partners who has not objected to being removed as auditor.

1.3 Corporations Act Requirements for Appointment of Auditor

• 1.3.1 In accordance with section 328B(1) of the Corporations Act, Peter Madder, a director and Shareholder of the Company, has nominated Webb Audit Pty Ltd to be the Company's auditor by providing the Company with written notice of the nomination. In accordance with Section 328B(3) of the Corporations Act, a copy of this nomination has been sent to:
  • (a) Webb Audit Pty Ltd;
  • (b) Pitcher Partners; and
  • (c) is attached to this notice as Annexure B.
• 1.3.2 Webb Audit Pty Ltd has consented to act as auditor of the Company and at the date of this Notice has not withdrawn such consent.

2. Resolution 3 – Approve a Prior Issue of Shares

2.1 Introduction

The Company is seeking the Shareholders' approval for a prior issue of 20,000,000 Shares to ACN 134 557 636 Pty Ltd, an entity associated with RI Group Ltd. The terms of the placement were first announced to the ASX on 19 March 2009.

• 2.2 Listing Rule Requirements

  • 2.2.1 Under Listing Rule 7.4 an issue of securities made without approval under Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if the issue did not breach Listing rule 7.1 and shareholder approval is subsequently obtained. Under Listing Rule 7.1 an entity must not issue, or agree to issue, more than fifteen percent (15%) of its capital without the approval of its shareholders.
  • 2.2.2 By obtaining Shareholder approval for the issue of the Shares the subject of Resolution 3, the Company retains the ability to issue up to fifteen per cent (15%) of its capital to take advantage of any capital raising opportunities or to avail itself of other opportunities.

• 2.2.3 In compliance with Listing Rule 7.5, Shareholders are advised as follows:

  • (a) the Company issued the 20,000,000 Shares that are the subject of this Resolution on 20 March 2009;
  • (b) the Shares the subject of this Resolution were issued at a price of $0.12 per Share;
  • (c) the Shares the subject of this Resolution rank equally with, and enjoy the same rights as, all the Company's existing Shares;
  • (d) the Shares the subject of this Resolution were allotted and issued to ACN 134 557 636 Pty Ltd;
  • (e) the Shares the subject of this Resolution were issued to raise $2,400,000 to fund the reduction of debt, further acquisitions, and the Company's working capital requirements.

PART 2: GLOSSARY OF TERMS

In this Explanatory Memorandum and Notice of Extraordinary General Meeting and Proxy Form, the following expressions have the following meanings, unless stated or unless the context requires otherwise:

$ means Australian dollars.

ASX means ASX Limited ACN 008 624 691.

ASIC means the Australian Securities and Investment Commission.

Board means the board of Directors of the Company.

Chairman means the chairman of the Meeting.

Company means Prime Financial Group Limited ACN 009 487 674.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Memorandum means this Explanatory Memorandum that accompanies and forms part of the Notice.

Listing Rules means the Listing Rules of the ASX.

Meeting means the Extraordinary General Meeting convened by the Notice.

Notice or Notice of Meeting means the notice of meeting accompanying this Explanatory Memorandum.

Resolution means a resolution as set out in the Notice.

Section means a section of the Explanatory Memorandum.

Share means a fully paid ordinary share in the Company.

Shareholder means a shareholder of the Company.

ANNEXURE A

INFORMATION FOR VOTING SHAREHOLDERS

How to Exercise Your Right to Vote

You can vote in either of two ways:

• by attending the Extraordinary General Meeting and voting in person or, if you are a corporate Shareholder, by having a corporate representative attend and vote for you; or
• by appointing a proxy (such as the Chairman of the Meeting) to vote for you, by completing the proxy form provided with this Notice.

For the purpose of determining a person's entitlement to vote at the Meeting, a person will be recognised as a Shareholder if that person is registered as a holder of Shares at 9.00am AEST on Sunday 2nd August.

The proxy form (and the power of attorney or other authority, if any, under which a proxy form is signed) must be completed and returned to the Company by:

In	Computershare Investor Services Pty Limited – 452 Johnston Street,
Person:	Abbotsford, Melbourne VIC 3067
By Mail:	Computershare Investor Services Pty Limited – GPO Box 242,
	Melbourne VIC 3001
By Fax	Computershare Investor Services Pty Limited
	(within Australia) 1800 783 447 or (outside Australia) +61 3 9473 2555

not less than 48 hours before the time for holding the Meeting, or adjourned Meeting as the case may be, at which the individual named in the proxy form proposes to vote.

Statement Regarding Undirected Proxies

It is the intention of the Chairman of the Meeting to vote any undirected proxies in favour of all resolutions. Pursuant to the Listing Rules the proxy form is required to contain certain disclosures regarding the voting intentions of the Chairman regarding undirected proxies. Shareholders are advised to read the proxy form carefully.

Voting Entitlement

On a poll, Shareholders have one vote for every Share held.

Special Resolution

Resolution 2 is proposed as a special Resolution. To be passed, at least 75% of the votes cast on the Resolution by Shareholders (by number of Shares) must be in favour of the Resolution.

ANNEXURE B

NOMINATION OF AUDITOR