SCHOOLBLAZER LIMITED — AGM Information 2006

Jan 30, 2006

Phone: +612 9221 7155 Fax: +612 9233 2713 Email: hol@hol.com.au Web: www.hgl.com.au

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CHAIRMAN'S ADDRESS TO AGM 31 JANUARY 2006

Ladies and Gentlemen, welcome to the one hundred & second Annual General Meeting of HGL Limited.

Corporate Strategy

Last year my address highlighted the HGL Corporate strategy and again I would like to focus on the subject.

We aim to consistently increase recurring profits and the board and management believe that this will be best achieved through

• Growing the profitability from our current import and distribution businesses, which may include bolt on strategic acquisitions
• Acquiring import and distribution businesses in line with our well documented acquisition criteria $\bullet$ as set out on page 13 of the annual report
• Utilising our funds management skills by presently supporting MMC Asset Management Limited with its development and with the management of MMC Contrarian Limited and
• Investing in publicly listed companies where appropriate

Your Board and management believe these strategies developed and laid in place over the last three years continues to strengthen and increase recurring profits which in turn increases the net worth of the company and ultimately shareholder wealth.

Recurring profit is the profit derived from three sources:

• Our share of the profits from our import and distribution businesses
• A 39% shareholding in MMC Asset Management combined with management fee income from $\bullet$ MMC Contrarian: and
• Dividend income from our listed securities

Phone: +612 9221 7155 Fax: +612 9233 2713 Email: hol@hol.com.au Web: www.hal.com.au

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Import & Distribution

HGL has investments in optical, beauty care, graphics, fabric and haberdashery, headwear, specialist lighting, pharmacy products and promotional solutions and point of sale industries.

HGL specialises in developing the potential of Australian businesses that import branded goods and to achieve this is we:

• Enter into partnerships with the people who run the businesses in which we invest. This ownership principle enables each enterprise to remain focused on its goals
• Provide majority of the finance, ensure proper financial and business processes are in place and $\bullet$ support each chief executive in running the business in a manner to create long term value
• Build the value of the brands these businesses import in conjunction with our partners
• Where possible assist these businesses enter into medium to long term distribution agreements $\bullet$ with suppliers which provides the suppliers with the comfort that we are prepared to make a long term commitment to their brands
• Actively seek new acquisitions. Management conducts thorough due diligence on each potential acquisition and whilst these procedures result in most being discarded they do give a high level of confidence that acquisitions proceeded with are sound and capable of increasing recurring earnings. This is evidenced by the fact that HGL has invested $30m in acquisitions during the past three years which collective have achieved our 20% earnings hurdle rate.

The diversity of the businesses in which we have made our investments mitigates the risk that we have in a single industry sector and underpins the robustness of our earning streams.

Funds Management

HGL's history of investing in companies listed on the ASX for over 20 years has given the company funds management skills. HGL utilises these skills to assist with the management of the Listed Investment Company MMC Contrarian Limited. This provides HGL with the opportunity to leverage its listed investment skills across a larger capital base and generate recurring profits.

Phone: +612 9221 7155 Fax: +612 9233 2713 Email: hol@hol.com.au Web: www.hgl.com.au

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HGL also has a 39% investment in MMC Asset Management Limited, an unlisted boutique fund manager which currently has $580million funds under management.

Yearly Results

Let me now turn to the results for the year.

The underlying results as detailed in the annual report were generally pleasing

• Recurring profit increased by $1.7 million or 30% to $7.3 million
• Recurring earnings per share increased by 28% to 14.5 cents per share $\bullet$
• Dividends per share increased by 11% to 10.2 cents fully franked per share $\bullet$
• Reported profit was $9.2 million compared to $10.5 million last year. The decrease was in the $\bullet$ main the result of a decrease of capital profits and revaluations
• Earnings per share of 18.2c per share compared to 21.2c per share last year

Dividend

Of importance to shareholders is the dividend they receive from HGL.

The Board has decided to amend the dividend policy to take into account the affects of IFRS on our reported profit. Future dividends shall be based on distributing between 70 and 80% of recurring profits (reported under IFRS) before any amortisation of goodwill or intangibles. The board considers that this will lead to an increase in the dividend.

Phone: +612 9221 7155 Fax: +612 9233 2713 Email: hol@hol.com.au Web: www.hal.com.au

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Outlook

Subsequent to the year end HGL acquired 100% of JSB, a specialty lighting importer for an estimated $8.5million. An initial payment of $3.6million was paid in October 2005 and we expect to pay a further $4.9 million over the next three years depending on the performance of the business over this period. After a short initial settling in period we expect JSB will meet HGL's 20% pre tax and amortisation return on capital target, based on an expected total investment of $8.5 million.

For the first quarter of 2006 we are ahead of last year and budget and should economic conditions remain relatively stable we anticipate an increase in profitability and dividends in 2006.

HGL currently has a strong balance sheet with minimal debt, listed investments of $22million and undrawn bank facilities of $18million.

Management continues to search for acquisitions that meet our criteria and the board remains confident that further acquisitions will be concluded in this financial year.

I now take this opportunity to thank our joint venture partners, management and staff for their efforts.

Thank you.

PG Miller Chairman HGL Limited