SEQUOIA FINANCIAL GROUP LTD — Capital/Financing Update 2008

Oct 16, 2008

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ACN 091 744 884 Level 4, 72 Pitt Street Sydney NSW, 2000 Australia

ASX Announcement

17 October 2008

Shareholder update

MDS Financial Group Limited (“MDS Financial” or “the Company”) advises today that it has been approached by various parties wishing to hold discussions regarding the Company’s business.

These approaches are preliminary in nature and may or may not result in a formal proposal being made to MDS Financial regarding a merger or the acquisition of either the Company’s business or another party’s business by MDS Financial.

Non Disclosure Agreements have been executed with three separate credible parties for differing proposals including:

• a merger of part or all of another company into the MDS Financial business;

• the acquisition of part of MDS Financial’s business; and/or

• an interest in acquiring a significant shareholding in MDS Financial, either through:

  • the proposed Placement to Investors (pursuant to the Notice of Extraordinary General Meeting of 25 September 2008) as approved by shareholders at that meeting, to raise capital through the issue of up to 30,000,000 new shares, along with up to another 20,000,000 shares under ASX Listing Rule 7.1; and/or

  • the possibility of a new placement, which would be put to shareholders, to include the acquisition of two more companies.

Given the current state of capital markets, the Board of MDS Financial considers that it is appropriate that it carefully evaluate all of the indicative proposals. The Board confirms that it proposes to do this paying regard to an overall strategic review currently being undertaken by the Company to ensure the best possible preservation, use and enhancement of its working capital whilst still allowing the Company to grow its various business units and other potential strategies to enhance shareholder value.

The Board has significant confidence in the Company’s short and long term future as indicated in the 2008 annual report.

The Board wishes to stress that none of the indicative proposals it has received are yet formal offers and that there is no guarantee that any formal offer will ultimately be received by the Company.

The Board confirms that subsequent to indicative proposals being received and considered, both the Company and external parties have exchanged or provided confidential information.

Should any formal binding offer be received by the Company, the Board confirms that it will carefully evaluate it in the context of the results of the Company’s strategic review and consider any formal offer against all alternative options (including internal initiatives) before any recommendation is put to shareholders.

The Board has not yet retained any advisors to assist it in analysing the strategic review and will advise shareholders of further developments, as and when appropriate.

The Board has decided that it will appoint an advisor and lead manager for the proposed placement of up to 50,000,000 shares to Sophisticated Investors and expects to conclude this and release an Information Memorandum shortly.

The Company will keep shareholders and the market advised of any further material developments.

For more information please contact:

Sean Rothsey Allan Shek Chairman Director and Company Secretary MDS Financial Group Limited MDS Financial Group Limited

Phone: 07 54426080 Mobile: 0419 712 685

Phone: 02 9300 3500