SEQUOIA FINANCIAL GROUP LTD — Interim / Quarterly Report 2011

Jan 30, 2012

31 January 2012

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ASX Announcement & Media Release

MDS Financial Group Limited

Appendix 4C: December 2011 Quarter

ACN 091 744 884

Level 37

Rialto South Tower 525 Collins Street Melbourne VIC 3000 T: +61 3 9617 0600 F: +61 3 9617 0699 asx@mdsfi nancial.com.au

MDS Financial Group has today released its Appendix 4C consolidated statement of cash fl ows for the quarter ending 31 December 2011.

Cash receipts from customers for the quarter of $2,175,000 represents a 50.5% increase from the previous year’s corresponding period of $1,445,000. The increase is largely a result of the activation of D2MX Pty Ltd as an ASX trading participant and growth in institutional, wholesale and high frequency traders executing orders through the D2MX platform.

ASX Code: MWS

Directors

Net operating cash outfl ows of $397,000 during the quarter includes $150,000 deposited by D2MX Pty Ltd to its third-party clearing agent as a recoverable Bond as well as costs associated with system upgrades and an infrastructure review of the software and data business. This is inline with the implementation of the Software and Data Agreement announced November 30th 2011. The agreement with Iress Market Technologies will have a positive impact on future cash fl ows.

Sean Rothsey

Chairman and Non Executive Director

Wayne Johnson Deputy Chairman and Executive Director

Expenses that have occurred during the quarter that are one off relate to the relocation of data centres, software upgrades and the engagement of a project manager to ensure that the rollout of the new upgraded software solutions for our software, charting and data clients is completed in a way that exceeds our clients’ expectations.

Damian Isbister

Executive Director and CEO

Richard Symon

D2MX, our wholly owned subsidiary and ASX trading Participant, has maintained positive growth during the quarter despite signifi cantly lower trading volumes on the ASX during the quarter.

Executive Director

Jamie Khoo

Independent Non-Executive Director

Secretary

Through D2MX, MDS now has a robust platform that with increasing new business will provide a greater contribution to the company’s profi tability without material increases in expenses. This is unique in the stock broking industry in Australia at present and is a result of MDS, with its D2MX branded broking business, having a state of the art technology solution without expensive legacy systems to maintain. It is this platform and business structure that sets MDS apart from its competitors and provides the foundation for continued growth, even in a declining market.

Tony Iremonger

Company Secretary and CFO

312.3 million listed shares 12.5 million unlisted options

It is expected that the company’s cash balances will stabilise over the next quarter during the completion and consolidation of the new direction of the software business. These initiatives will result in a much reduced expense profi le which will improve operating cash fl ow from the 4th quarter onwards irrespective of revenue growth for the group.

MDS directors believe that with the signifi cant changes occurring in the broking industry and launch of the new software and data product, MDS is well poised to participate in what will be the shaping of a new Australian stockbroking industry.

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Page 1 of 2

31 January 2012

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ASX Announcement & Media Release

ABOUT MDS FINANCIAL GROUP

MDS Financial Group is a full-service corporate advisory and capital markets specialist with clients in Australia and the Asia-Pacifi c region. Listed on the Australian Securities Exchange (ASX), MDS Financial Group is also an ASX market participant, with institutional and third-party wholesale brokerage facilities underpinned by substantial retail online trading and market data services.

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Sean Rothsey Chairman

END

For more information please contact:

Wayne Johnson Deputy Chairman MDS Financial Group Limited Phone: +61 2 8226 3330 Mobile: +61 411 544 449

Damian Isbister Executive Director and CEO MDS Financial Group Limited Phone: +61 3 9617 0605 Mobile: +61 404 028 114

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Page 2 of 2

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/00. Amended 30/9/01, 24/10/05,17/12/10.

Name of entity
MDS Financial Group Limited
ABN 90 091 744 884	Quarter ended (“current quarter”)
90 091 744 884	31 December 2011

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Current quarter $A’000	Year to date (6 months) $A’000
	2,175 (590) (13) - - (1,814) - 2 (7) - (150)	4,421 (1,141) (53) - - (3,767) - 5 (9) - -
	(397)	(544)

• See chapter 19 for defined terms.

Appendix 4C Page 1

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $A’000	Year to date (6 months) $A’000
1.8 Net operating cash flows (carried forward)	(397)	(544)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows	- - (36) - - 34 - - - - -	- - (103) - - 63 - - - - -
	(2)	(40)
	(399)	(584)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other - Payment for share buy-back Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end of quarter	(399) 707 -	(584) 892 -
	308	308

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

1.24 Aggregate amount of payments to the parties included in item 1.2 1.25 Aggregate amount of loans to the parties included in item 1.11	Current quarter $A'000
	141

• 1.26 Explanation necessary for an understanding of the transactions

Other cash flows related to operating activities (included in item 1.7) represents payment of a recoverable settlement bond to third-party clearing agent.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

N/A

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other (provide details)	308	707
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.23)	308	707

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))
	N/A	N/A
	N/A	N/A
	N/A	N/A
	N/A	N/A
	N/A	N/A

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does ~~/does not*~~ (delete one) give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: ............................ (Director/Company secretary)

Print name: .........................................................

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in this report.

3. Accounting Standards. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

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