SCHOOLBLAZER LIMITED — Capital/Financing Update 2004

Aug 3, 2004

Level 5, 34 Hunter Street Svdnev NSW 2000 GPO Box 4406 Svdnev NSW 2001

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

Further investment in Import & Distribution business

HGL is pleased to announce that it is to acquire the 50% of J Leutenegger Pty Limited (Leutenegger) currently owned by Ian Garrow, the Chief Executive of that business. Leutenegger is a Sydney based fabric and haberdashery importer whose product ranges include the market leading DMC and Prym collections. HGL currently owns 50% of Leuteneager.

The acquisition will be in two stages with 35% being purchased for $3.2m in October 2004 and the final 15% during the 12 months to October 2007 at a price based on a multiple of earnings for the two years to 30 September 2006. HGL anticipates that it will earn a pre tax return of greater than 20% on this investment; this satisfies HGL's investment criteria.

HGL is very grateful to lan Garrow for developing Leutenegger over the past seven years, lan has built a strong team within Leutenegger and we are proud to announce that Chris Roche will become Chief Executive in October 2004. Chris has been with the company for many years and we look forward to working with him and the other managers to continue lan's good work. The handover will be facilitated through assistance from lan who has agreed to continue to support the business into the future as a Director and part time employee of the company.

This acquisition complies with HGL's strategy of investing in easily understood import and distribution businesses and increasing our equity holdings where risk can be properly managed. We continue to review opportunities to invest in businesses in which we currently have no investment. Ideally HGL seeks to acquire easily understood importers of niche branded products that will contribute at least $1.5m pre tax earnings and provide 20% return on investment.

Kevin Elev Chief Executive HGL Limited 4 August 2004

For further information please contact Kevin Eley on 02 9221 7155 or 0414 457 254.