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

ASX Announcement

15 August 2008

Notice of Extraordinary General Meeting

Attached is the Notice of Extraordinary General Meeting to be held on 25 September 2008.

Allan Shek Director and Company Secretary

For more information please contact:

Sean Rothsey Chairman MDS Financial Group Limited

Phone: 07 54426080 Mobile: 0419 712 685 Allan Shek Director and Company Secretary MDS Financial Group Limited

Phone: 02 9300 3500

MDS Financial Group Limited ACN 091 744 884

Notice of Extraordinary General Meeting to be held on 25 September 2008

Explanatory Memorandum for the Notice of Extraordinary General Meeting

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT THE ACTION YOU SHOULD TAKE PLEASE CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER.

NOTICE OF THE EXTRAORDINARY GENERAL MEETING TO BE HELD AT LEVEL 14, AUSTRALIA SQUARE, 264-278 GEORGE STREET, SYDNEY NSW 2000 AT 9:00AM SYDNEY TIME ON 25 SEPTEMBER 2008 TO BE VALID, FORMS OF PROXY FOR USE AT THE EXTRAORDINARY GENERAL MEETING MUST BE COMPLETED AND RETURNED TO THE COMPANY NO LATER THAN 9:00AM SYDNEY TIME ON 23 SEPTEMBER 2008

Section A - Chairman's Letter 2
Section B - Glossary 4
Section C - Notice of Extraordinary General Meeting 6
Section D - Explanatory Memorandum 10
Section E - Proxy Form 18
Annexure A Top 20 Shareholders before the Selective Buy-Back 20
Annexure B Top 20 Shareholders post Selective Buy-Back 21

Section A - Chairman's Letter

14 August 2008

Dear Shareholder

The Directors of MDS Financial Group Limited ACN 091 744 884 (Company) have convened the Extraordinary General Meeting of Shareholders to be held on 25 September 2008 to obtain the approval of shareholders for a proposed selective share buy-back and the issue of shares to Placement Investors.

Selective Buy-Back

On 18 December 2006, the Company completed its acquisition of The Cube Financial Group Pty (Cube) by receiving transfers for the entire issued share capital of Cube from Baroda Hill Investments Limited (Baroda) and Australian Financial Investments Limited (AFIL) (collectively known as the Cube Shareholders) in consideration for issuing Shares to the Cube Shareholders in accordance with the terms and conditions of a share sale agreement (Share Sale Agreement).

Since its acquisition, the Cube business has underperformed relative to the Company's expectations and made negative contributions to the results of the Company. The Company announced Cube's disappointing financial performance to the market on 1 June 2007 and noted its performance in the Company's Annual Report for 2007.

The Parties subsequently made certain claims against each other regarding the underperformance of the Cube business based on very different views as to the causes of that underperformance.

On 27 February 2008, an agreement was executed by the Parties which set out the terms upon which the various claims would be settled. The Cube Shareholders agreed to compensate the Company for the underperformance of the Cube business by, amongst other things, agreeing to the cancellation of 15 million Shares (in aggregate) (Selective Buy-Back). It was agreed that the Company would buy back these Shares for a notional consideration of $2.00, subject to regulatory approval as follows:

9 million Shares held by Wayne Johnson and/or by an entity(s) controlled by or associated with him (including Baroda) for nominal consideration; and
6 million Shares held by Ian Smith and/or by an entity(s) controlled by or associated with him for nominal consideration,

(Selective Buy-Back).

The completion of the Selective Buy-Back is conditional on the Company obtaining the approval of Shareholders by Special Resolution and satisfying all regulatory requirements.

Issue of up to 30 million Shares to the Placement Investors

In addition to the Selective Buy-Back, the Company seeks approval to raise additional funds by the issue of Shares to Placement Investors. The funds raised from these private placements will provide the Company with working capital to support its growth strategy, provide access to equity capital markets, facilitate corporate transactions, and ultimately provide liquidity for existing Shareholders.

Notice of Extraordinary General Meeting and accompanying documents

This letter is accompanied by a Notice of Extraordinary General Meeting and the Explanatory Memorandum. The Notice of Extraordinary General Meeting sets out the Resolutions that Shareholders are to consider. The Explanatory Memorandum explains in greater detail the background to the proposed Resolutions.

Shareholders are encouraged to read the enclosed Explanatory Memorandum and to attend the Extraordinary General Meeting and vote on the Resolutions. A proxy form is enclosed at Section E to enable any Shareholder who is unable to attend the Extraordinary General Meeting to vote at that meeting.

The Directors support the Resolutions contained in the Notice of Extraordinary General Meeting. We recommend that you vote in favour of the Resolutions, full details of which are contained in the Notice of Extraordinary General Meeting.

Yours faithfully

Sean Rothsey Chairman

1. Definitions

The following definitions are used in the Chairman's Letter, the Notice of Extraordinary General Meeting and the Explanatory Memorandum:

AFIL means Australian Financial Investments Limited CN 1198872 (a company registered in New Zealand);

Associate has the meaning given to that term in Part 1.2, Division 2 of the Corporations Act;

ASX means the ASX Limited ABN 98 008 624 691;

ASX Listing Rules means the official listing rules issued and enforced by the ASX as amended from time to time;

Baroda means Baroda Hill Investments Limited CN 628 076 (a company registered in New Zealand);

Board or Board of Directors means the board of Directors of the Company;

Business means the business of providing financial advice and technology solutions to investors, traders, financial service providers and corporations;

Business Day means a day which is not a Saturday, Sunday or public holiday in Sydney;

Buy-Back Shares means 15 million Issued Shares, comprised of the following:

(a) 9 million Shares currently held by Wayne Johnson and/or by an entity(s) controlled by or associated with him; and
(b) 6 million Shares currently held by Ian Smith and/or by an entity(s) controlled by or associated with him;

Chairman means chairman of the Company appointed by the Board, who is currently Sean Rothsey;

Company or MWS means MDS Financial Group Limited ACN 091 744 884;

Constitution means the constitution of the Company, as amended from time to time;

Corporations Act means the Corporations Act 2001 (Cth);

Cross-Claimants means Baroda, Wayne Johnson and Ian Smith;

Cube means The Cube Financial Group Pty Ltd ACN 074 796 348;

Cube Shareholders means Baroda and AFIL;

Deed of Settlement means the agreement executed by the Parties on 27 February 2008 to settle the claims brought by the Company against the Cube Shareholders and by Cross-Claimants against the Company;

Directors means the directors of the Company;

Explanatory Memorandum means the explanatory memorandum set out in Section D of this document;

Extraordinary General Meeting means the Extraordinary General Meeting of the Company to be held on 25 September 2008 pursuant to this Notice of Extraordinary General Meeting;

Issued Shares means the following:

(a) 35,585,199 Shares in the Company issued to Baroda; and
(b) 27,847,036 Shares in the Company to AFIL,

under the Share Sale Agreement;

IWSFT means IWSFT Corporate Trustee Limited;

MWS or the Company means MDS Financial Group Limited ACN 091 744 884;

Notice of Extraordinary General Meeting or Notice means the notice of Extraordinary General Meeting set out in Section C of this document;

Officially Quoted and Official Quotation means, in relation to Shares, officially quoted by the ASX;

Parties means the Company, Cube and the Cross-Claimants;

Placement Investors means institutional or sophisticated investors, being persons who, because of one or more of sections 708(8), 708(10), 708(11) and 708(12) of the Corporations Act, may subscribe for Placement Shares without receiving a disclosure document issued by the Company in accordance with Part 6D.2 of the Corporations Act;

Placement Shares means up to 30 million Shares to be issued by the Company to the Placement Investors;

Resolution means a resolution passed by the requisite majority of members of the Company on a show of hands or by the requisite majority of votes given on a poll;

Selective Buy-Back means the proposed selective share buy-back by the Company from:

(c) Wayne Johnson and/or by an entity(s) controlled by or associated with him; and
(d) Ian Smith and/or by an entity(s) controlled by or associated with him;

of the Buy-Back Shares in accordance with the terms of the Selective Buy-Back Agreement;

Selective Buy-Back Agreement means an agreement to be settled between the Company and the Cross Claimants setting out the terms and conditions of the Selective Buy-Back;

Share means a fully paid ordinary share in the issued capital of the Company;

Share Sale Agreement means the share sale agreement dated 18 December 2006 between the Company and Cube pursuant to which the Company received transfers for the entire issued share capital of Cube from the Cube Shareholders in consideration for issuing the Issued Shares;

Shareholder means a holder of a Share; and

Special Resolution means a resolution:

(e) of which notice pursuant to section 249L(c) has been given; and
(f) that has been passed by at least 75% of the votes cast by members entitled to vote on the resolution and who are present at the Extraordinary General Meeting in person or by proxy.

2. Interpretation

For the purposes of interpreting the Chairman's Letter, the Explanatory Memorandum and the Notice of Extraordinary General Meeting:

(a) the singular includes the plural and vice versa;
(a) words importing any gender include both genders;
(b) reference to any statute, ordinance, regulation, rule or other law includes all regulations and other instruments and all consolidations, amendments, re-enactments or replacements for the time being in force;
(c) all headings, bold typing and italics (if any) have been inserted for convenience of reference only and do not define limit or affect the meaning or interpretation of the Chairman's Letter, the Explanatory Memorandum and the Notice of Extraordinary General Meeting;
(d) reference to persons includes bodies corporate and government authorities and in each and every case, includes a reference to the person's executors, administrators, successors, substitutes (including without limitation persons taking by novation and assignment); and
(e) reference to $, A$, Australian Dollars or dollars is a reference to the lawful tender for the time being and from time to time of the Commonwealth of Australia.

Section C - Notice of Extraordinary General Meeting

NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting of MDS Financial Group Limited ACN 091 744 884 (MWS or the Company) will be held at Level 14, Australia Square, 264-278 George Street, Sydney on 25 September 2008 at 9:00am (Sydney time).

Defined terms used in this Notice of Extraordinary General Meeting have the meanings given to them in the Glossary accompanying this Notice of Extraordinary General Meeting.

3. Special Business

3.1 Resolution 1: Selective Buy-Back

To consider and, if thought fit, with or without amendment, to pass the following Resolution as a Special Resolution:

"That the purchase by the Company of the Buy Back Shares in accordance with the terms of the Selective Buy-Back Agreement is approved for the purposes of section 257D of the Corporations Act."

3.2 Resolution 2: Issue of Shares to the Placement Investors

To consider and, if thought fit, with or without amendment, to pass the following Resolution:

"That, in accordance with ASX Listing Rule 7.1 and for all other purposes, to the Placement Investors the Company be permitted and authorised to issue and allot up to 30 million Shares at an issue price determined in accordance with the formula set out in paragraph 3(c) of the Explanatory Memorandum (Section D)"

4. Voting exclusion statements

4.1 Resolution 1 – Selective Buy-Back

Resolution 1 proposes a selective buy-back of the Buy-Back Shares. Under section 257D(1)(a) of the Corporations Act, the terms of the Selective Buy-Back Agreement must be approved by either:

(a) a Special Resolution passed at a Extraordinary General Meeting of the Company, with no votes being cast in favour of the resolution by any person whose Shares are proposed to be bought back or by their Associates; or
(b) a Resolution agreed to, at the Extraordinary General Meeting, by all ordinary Shareholders.

The Company has elected to proceed under the alternative set out in sub-clause (a) above. Accordingly, Resolution 1 is proposed as a Special Resolution and in accordance with the notice requirements of ASX Listing Rule 14.11.1, neither Wayne Johnson nor Ian Smith (as the parties whose Shares are to be bought back) nor any of their Associates will be permitted to vote in favour of Resolution 1.

However, the Company need not disregard a vote if:

(c) it is cast by a person as proxy for a person who is entitled to vote and it is cast in accordance with the directions on the proxy form; or
(d) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote and its is cast in accordance with a direction on the proxy form to vote as the proxy decides.

4.2 Resolution 2: Issue of Shares

In accordance with the notice requirements of ASX Listing Rule 7.3.8 for approval under ASX Listing Rule 7.1, and ASX Listing Rule 14.11.1, the Company will disregard any votes cast on Resolution 2 by:

(a) each Placement Investor;
(b) any Associate of that person(s); and
(c) a person who might obtain a benefit, except a benefit solely in the capacity of a Shareholder, if the resolution is passed, and an Associate of any such person.

However, the Company will not disregard a vote if it is cast by:

(d) a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
(e) the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

5. Voting entitlements

For the purpose of determining a person's entitlement to vote at the Extraordinary General Meeting, a person will be recognised as a member of the Company and the holder of Shares if that person is registered as a holder of those Shares at 5:00pm Sydney time on 23 September 2008, being the second Business Day prior to the date of the Extraordinary General Meeting.

6. Votes of members

(a) On a show of hands, each member present in person or by proxy (or, in the case of a body corporate, by a representative) at the Extraordinary General Meeting shall have one vote.
(b) On a poll, every member present in person or by attorney or by proxy (or, in the case of a body corporate, by a representative) shall have one vote for each Share held by him, her or it provided that all Shares are fully paid.

7. Required Majority

Resolution 1 to approve the Selective Buy-Back is proposed as a Special Resolution. As a Special Resolution, Resolution 1 must be passed by at least 75% of the votes cast by Shareholders entitled to vote on Resolution 1.

8. Director's recommendations, reasons and voting

The Directors believe that, taking into account all relevant matters, the Selective Buy-Back under Resolution 1:

(a) is in the best interests of the Company and its Shareholders; and
(b) will not materially prejudice the ability of the Company to pay its creditors.

The Directors unanimously recommend that Shareholders approve the Selective Buy-Back and vote in favour of Resolution 1. The Directors also recommend that Shareholders approve the issue of Shares to the Placement Investors and vote in favour of Resolution 2.

Each Director intends to vote the Shares he holds or controls in favour of the Resolution.

9. Proxies

Please note that:

(a) a member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint no more than two proxies;
(b) an instrument appointing a proxy must be in the form of the proxy form attached to this Notice of Extraordinary General Meeting;
(c) where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member's voting rights if a member appoints two proxies, and the appointment does not specify the proportion of the member's voting rights each proxy may exercise, each proxy may exercise one-half of the voting rights;
(d) a proxy need not be a member of the Company;
(e) a proxy form may specify the manner in which the proxy is to vote in respect of a particular Resolution and, where a proxy form so provides, the proxy is not entitled to vote on the Resolution except as specified in the proxy form;
(f) a proxy has the authority to vote on the member's behalf as he or she thinks fit, on any motion to adjourn the Extraordinary General Meeting, or any other procedural motion, unless the member gives a direction to the contrary;
(g) a valid proxy form will be deemed to confer authority to demand or join in demanding a poll;
(h) to be valid, a proxy form must be signed by the member or the member's attorney or, if the member is a corporation, executed in accordance with the corporation's constitution and the Corporations Act (and may be signed on behalf of the corporation by its attorney); and
(i) to be valid, a proxy form and the power of attorney or other authority (if any) under which it is signed (or an attested copy of it) must be received by no later than 9:00am on 23 September 2008:

by the Company:

	- in person:	MDS Financial Group LimitedLevel 472 Pitt StreetSydney NSW 2000Australia
or	- by fax:	+61 2 9300 3599Attention: Company Secretary
or	- by mail:	MDS Financial Group LimitedP O Box R104Royal ExchangeSydney NSW 1225

By order of the Board:

Company Secretary

Dated: 14 August 2008 Sydney

10. Introduction

This Explanatory Memorandum contains the information needed for the Company's Shareholders to assess the Resolutions to be put to them at the Extraordinary General Meeting of the Company on 25 September 2008. A Notice of Extraordinary General Meeting accompanies this document.

This Explanatory Memorandum, as well as the Notice of Extraordinary General Meeting, should be read carefully and in their entirety.

11. Resolution 1: Selective Buy-Back

11.1 Background

(a) On 18 December 2006, the Company completed its acquisition of Cube by receiving transfers for the entire issued share capital of Cube from the Cube Shareholders in consideration for issuing the Issued Shares in accordance with the Share Sale Agreement.
(b) As at 18 December 2006:
- (i) Wayne Johnson was the sole director of Baroda and Cube; and
- (ii) Ian Smith was the sole director of AFIL.
(c) After the acquisition, Wayne Johnson was appointed as the Chief Executive Officer (CEO) of the Company.
(d) On 18 December 2006, the Issued Shares were transferred to Baroda and AFIL.
(e) Subsequently, Baroda and AFIL made various transfers of parcels of the Issue Shares.
(f) On 25 May 2007, AFIL was struck off the New Zealand Company Register.
(g) Since its acquisition, the Cube business has underperformed relative to the Company's expectations and made negative contributions to the results of the Company. The Company announced Cube's disappointing financial performance to the market on 1 June 2007 and noted its performance in the Company's Annual Report for 2007.
(h) On 19 September 2007, Wayne Johnson retired from his position as Director and CEO of the Company and was appointed Cube's CEO of Corporate Advisory.
(i) In November 2007:
- (i) the Company made certain claims against the Cube Shareholders, Wayne Johnson and Ian Smith (Cross-Claimants) alleging various breaches of the Share Sale Agreement; and
- (ii) Cube terminated the employment of Wayne Johnson as Cube's CEO of Corporate Advisory.

In turn, the Cross-Claimants made certain counter claims against the Company, (collectively, the Claims).

(j) Between November 2007 and February 2008, the Parties negotiated a settlement of the Claims.
(k) On 27 February 2008, the Parties executed the Deed of Settlement to settle the Claims against the Cross-Claimants. The Cross-Claimants agreed, amongst other things, to:
- (i) enter into the Selective Buy-Back Agreement so as to implement the Selective Buy-Back; and
- (ii) make a payment to the Company of $400,000 or to provide commissions or other income to the vale of $400,000.
(l) On 28 February 2008, the Company made an announcement to the ASX disclosing details of the Deed of Settlement.
(m) The Company proposes to enter into the Selective Buy-Back Agreement with Wayne Johnson and Ian Smith to buy back the Buy-Back Shares. In summary, the Selective Buy-Back Agreement is a share sale and purchase agreement under which the Company, subject to Shareholder approval of the Proposed Share Buy-Back in accordance with section 257D of the Corporations Act, will agree to buy back the Buy-Back Shares (free of encumbrances and with all rights, benefits and entitlements attaching or accruing to the relevant Shares) for the following nominal price:
- (i) with regards to the 9 million Shares held by Wayne Johnson and/or by an entity(s) controlled by or associated with him (including Baroda), the buy-back price is $0.000000111 per Share, being a total purchase price of $1.00; and
- (ii) with regards to the 6 million Shares held by Ian Smith and/or by an entity(s) controlled by or associated with him, the buy-back price is $0.00000166 per Share, being a total purchase price of $1.00.
(n) The completion of the sale and purchaser of the Buy-Back Shares under the Selective Buy-Back Agreement will be subject to the satisfaction of two conditions precedent:
- (i) the Company lodging the documents required to be lodged under sections 257D(3) and 257E of the Corporations Act with ASIC and the 14-day waiting period required under section 257F of the Corporations Act after the relevant documents have been lodged with ASIC having expired. This condition has been satisfied by the Company; and
- (ii) the Shareholders in Extraordinary General Meeting approving (by the requisite majority) a Resolution which authorises the Company to purchase the Buy-Back Shares in accordance with the terms of the Selective Buy-Back Agreement and section 257D of the Corporations Act – Resolution 1 is proposed for the purposes of satisfying this condition.
(o) There are no other special or unusual conditions or terms of the Selective Buy-Back Agreement.
(p) If Resolution 1 is approved by the Shareholders, all conditions precedent to the Selective Buy-Back will have been satisfied and the Selective Buy-Back will be unconditional.
(q) Completion under the Selective Buy-Back Agreement must take place within three Business Days of the last of the conditions precedent being satisfied. Accordingly, in the expectation that the Selective Buy-Back will be approved, completion is scheduled for 30 September 2008.

11.2 Regulatory Requirements – Selective Buy-Back

(a) Section 257A of the Corporations Act has the effect that the Company may buy-back its own Shares if:
- (i) the buy-back does not materially prejudice the ability of the Company to pay it's creditors; and
- (ii) the Company follows the relevant procedures laid down in the Corporations Act.
(b) In the opinion of your Directors, the Selective Buy-Back will not materially prejudice the ability of the Company to pay its creditors. This conclusion is based on:
- (i) the nominal cost ($2.00 in aggregate) of the Buy-Back Shares;
- (ii) the Company's financial position as disclosed in its half-year financial statements for the half year ended 31 December 2007; and
- (iii) Appendix 4C lodged by the Company with the ASX on 24 July 2008.
(c) In addition, your Directors were also mindful of:
- (i) the strength of the Company's Business and market position, the outlook for and the earnings and cash flows generated by its Business; and
- (ii) the Company's ability to access new funding and financial markets (if and where necessary).
(d) A buy-back of shares can take a number of forms, such as an 'equal access scheme buy-back', a 'minimum holding buy-back' or an 'employee share scheme buy-back'. In the present case, as the Company is proposing to buy-back the Shares of:
- (i) Wayne Johnson and/or by an entity(s) controlled by or associated with him; and
- (ii) Ian Smith and/or by an entity(s) controlled by or associated with him,

sections 9 and 257B of the Corporations Act have the effect that the proposed buyback of the Buy-Back Shares is a 'selective buy-back'.

(e) Section 257D(1) of the Corporations Act provides that an agreement to undertake a 'selective buy-back' must be approved by either:
- (i) a Special Resolution passed at a Extraordinary General Meeting of the company, with no votes being cast in favour of the Resolution by any person whose shares are proposed to be bought back or by their associates; or
- (ii) a Resolution agreed to, at the Extraordinary General Meeting, by all ordinary shareholders.
(f) The Selective Buy-Back Agreement was entered into by the Company on condition of such Shareholder approval. Resolution 1 must therefore be approved by a Special Resolution.
(g) Under section 257D(1)(a), Wayne Johnson and/or by an entity(s) controlled by or associated with him; and Ian Smith and/or by an entity(s) controlled by or associated with him, (being the registered holders of the Buy-Back Shares) and their associates are:
- (i) not entitled to cast votes in favour of Resolution 1. Any such votes will be disregarded; and
(ii) entitled to vote against or abstain from voting on Resolution 1.
(h) Section 257H(3) of the Corporations Act has the effect that, if the Selective Buy-Back is approved, immediately after the registration of the transfer of the Buy-Back Shares to the Company, those Shares must be cancelled.

11.3 Reasons for the Selective Buy-Back

(a) As previously advised to Shareholders, since its acquisition the Cube business has underperformed relative to the Company's expectations and made negative contributions to the results of the Company.
(b) Given that the initial consideration provided to the Cube Shareholders consisted only of the Issue Shares, the Directors believe that the terms of the Deed of Settlement (including the Selective Buy-Back) are the most feasible and efficient way to reduce the consideration provided to the Cube Shareholders.
(c) The Directors negotiated in good faith to resolve the Claims and sought to avoid:
- (i) further disruption to the financial position of Cube and trading position of the Company; and
- (ii) the substantial costs and time delays associated with resolving the Claims in court.
(d) The Proposed Share cancellation offer is set at a below market nominal purchase price of $2.00 in aggregate for a total of 15 million Issued Shares. If these 15 million Issued Shares were bought back at full market price, the buy-back price would be substantially higher. Therefore, the:
- (i) offer will not reduce the Company's capital base to the detriment of its creditors or increase the Company's risk of insolvency; and
- (ii) Shareholders excluded from the Selective Buy-Back will not suffer any disadvantage or unfairness by being excluded from the Selective Buy-Back.
(e) The Cross-Claimants have made an informed choice to sell their Shares in the Company on these terms in exchange for settling the Claims. They consider settling the Claims in accordance with the Deed of Settlement as an appropriate means of ending the dispute.
(f) The Proposed Share Cancellation will not materially affect an existing Shareholder's ability to control the Company.
(g) Completion of the Proposed Share Buy-back will effect a new capital structure for the Company. The Company believes that the new Share structure will enhance its ability to:
- (i) raise additional working capital (if required) by issuing new Shares; and
- (ii) acquire additional businesses of which new Shares issued by the Company are likely to comprise some or all of the consideration. The Company is actively considering several such transactions at this time.

11.4 Share capital and effect of the Selective Buy-Back on control

(a) As at 21 July 2008 there are 190,296,612 Shares in the Company on issue. If Shareholder approval is obtained for Resolution 1, the total number of Shares on issue post buy-back will be 175,296,612. This represents a 7.8% reduction in the Company's Share capital.

(b) The following table discloses the composition of the Directors' interests in the current issued capital of the Company. The persons listed are the current Directors and former Directors of the Company who were directors at the time that the Company's board of directors resolved to accept the terms of the Deed of Settlement. The table discloses the Shares in which those persons currently have an interest and the Shares in which they will have an interest assuming that Shareholder approval is obtained for Resolution 1:

Director and Former Director shareholdings in the Companyas at 14 August 2008
Name	Current/FormerDirector	Direct/IndirectInterest	No. ofSharespreSelectiveBuy-Back	% of totalSharespreSelectiveBuy-Back	No. ofSharespostSelectiveBuy-Back	% of totalSharespostSelectiveBuy-Back	%changein shareholding
SeanRothsey	Current	Indirect	13,670,000	7.11	13,670,000	7.71	0.60
DavidWhitfield	Current	Indirect	2,479,768	1.29	2,479,768	1.40	0.11
AllanShek	Current	Direct	72,575	0.04	72,575	0.04	0.00
AlunStevens	Former	Indirect	20,923,737	10.88	20,923,737	11.80	0.92
LeonHinde	Former	Both	22,194,722	11.54	22,194,722	12.52	0.98
BarryLittler	Former	Both	4,000,000	2.08	4,000,000	2.26	0.18
Total		63,340,802	32.94	63,340,802	35.73	2.79

In addition, Annexure A lists the Company's Top 20 Shareholders before the Selective Buy-Back and Annexure B lists the pro forma Top 20 Shareholders assuming the Selective Buy-Back has taken place. Annexure B assumes that:

(i) Wayne Johnson will give effect to the Selective Buy-Back by way of a buy-back of 9 million Shares held by Baroda; and
(ii) Ian Smith will give effect to the Selective Buy-Back by way of a buy-back of 6 million Shares held by IWSFT.
(c) In the opinion of the Directors, no change of control of the Company, or of any subsidiary of the Company, will be effected as a result of the completion of the Selective Buy-Back and the subsequent cancellation of the Buy-Back Shares. All details of the Selective Buy-Back and the effect that the Selective Buy-Back will have on the relevant interests of the Company's directors in Shares of the Company will be disclosed to the ASX.

11.5 Advantages and disadvantages of the Selective Buy-Back

(a) The Directors have identified the following advantages of carrying out the Selective Buy-Back:
- (i) it represents a commercially efficient and practical way to recover value from the Cross-Claimants as compensation for the underperformance of the Cube Business following the acquisition of Cube;
- (ii) it prevents further disruption to the financial position of Cube and in turn, the Company, and the trading position of the Company;
(iii) it avoids the substantial costs and time delays associated with resolving the Claims and defending the cross claims threatened by the Cross-Claimants in court;
(iv) it will have the effect of increasing the Company's return on equity ratio and may result in an increase in the Company's Share price (as traded on ASX);
(v) it may increase the prospects of the Company being able to pay future dividends on a consistent basis;
(vi) it represents a return of capital of $450,000 (based on the market Share price of $0.03 as at 21 July 2008); and
(vii) it will effect a new capital structure for the Company. The Company believes that the new Share structure will enhance its ability to:
- (A) raise additional working capital (if required) by issuing new Shares; and
- (B) acquire additional businesses of which new Shares issued by the Company are likely to comprise some or all of the consideration. The Company is actively considering several such transactions at this time.
(b) The Directors have identified a disadvantage of carrying out the Selective Buy-Back in the manner proposed by the Company. If the Claims were to proceed in Court and damages were awarded to the Company, these damages may be greater than the proceeds received by the Company under the Deed of Settlement. That said, there is no guarantee that the Company will achieve such an outcome. For the reasons stated above, the Directors took the view that it is in the Company's interests to settle the Claims on the terms set out in this Explanatory Memorandum.
(c) The Directors believe that the advantages of the Selective Buy-Back materially outweigh any disadvantages which may apply.

11.6 Directors' recommendations and interests

(a) The Directors believe that the Company has more than adequate resources to undertake the proposed Selective Buy-Back (given the nominal consideration payable for the Buy-Back Shares) and that it will not have any material adverse effects on the prospects of the Company or the Shareholders.
(b) None of the Directors has an interest in Baroda, IWSFT or the proposed Selective Buy-Back.
(c) The Directors unanimously recommend that Shareholders approve the Selective Buy-Back and vote in favour of Resolution 1 set out in the Notice of Extraordinary General Meeting.
(d) Each Director who is also a Shareholder intends to vote all Shares he holds or controls in favour of Resolution 1.

12. Resolution 2: Issue of Shares to the Placement Investors

Pursuant to ASX Listing Rule 7.3, the following information is provided regarding ASX Listing Rule 7.1 approval:

(b) ASX Listing Rule 7.3.1: Maximum number of securities to be issued and allotted pursuant to Resolution 2

Up to 30 million Placement Shares will be issued and allotted or granted to Placement Investors for the purposes of raising additional working capital for the Company. The 30 million Placement Shares will represent:

(i) if Shareholder approval is obtained for Resolution 1: 14.47% of the issued capital of the Company; or
(ii) if Shareholder approval is not obtained for Resolution 1: 13.5% of the issued capital of the Company.

No Placement Shares will be issued and allotted to a Placement Investor if, as a result of that issue, the Placement Investor or other person acquires an interest in Shares in breach of section 606 of the Corporations Act.

(b) ASX Listing Rules 7.3.2 and 7.3.7: Date by which securities will be issued and allotted

If Shareholder approval is obtained, the issue and allotment of the Placement Shares to the Placement Investors will occur on a date or dates which is or are no later than three months after the date of this Extraordinary General Meeting or such later time as deemed appropriate by an ASX waiver.

(a) ASX Listing Rule 7.3.3: Issue price of securities

The issue price of the Placement Shares to be issued and allotted to the Placement Investors will be determined at the time of each application for Placement Shares by a Placement Investor. The issue price will be calculated using a discount of no more than 20% to the volume weighted average price of Shares in the five trading days prior to the date on which the application for Placement Shares is made by the relevant Placement Investor. The Directors believe that the current Share price does not reflect the true value of the Company and accordingly expect the Placement Shares to be issued at a premium to the current market value.

(b) ASX Listing Rule 7.3.4: Names of allottees

The allottees are the Placement Investors. The Placement Investors must be persons who are not related parties of the Company.

(c) ASX Listing Rule 7.3.5: Terms of securities

The Company will apply to the ASX to have the Placement Shares issued to the Placement Investors Officially Quoted and these Placement Shares will rank equally with all the other Shares on issue. In all other respects, the rights and entitlements of the holders in respect of the Placement Shares issued to the Placement Investors will be identical to the rights and entitlements of the holders of existing issued Shares.

(d) ASX Listing Rule 7.3.6: Intended use of the funds

The funds raised by the issue and allotment of up to 30 million Placement Shares to the Placement Investors will be used to provide additional working capital to the Company.

(e) ASX Listing Rule 7.3.8: A voting exclusion statement

A voting exclusion statement is included at paragraph 4.2 of the Notice of Extraordinary General Meeting (Section C).

13. Lodgement

(a) A copy of the Notice of Meeting and this Explanatory Memorandum has been lodged with ASIC in accordance with section 257F(2) of the Corporations Act.
(b) A copy of the Selective Buy-Back Agreement has been lodged with ASIC in accordance with section 257E of the Corporations Act.
(c) ASX has been advised of the Selective Buy-Back in accordance with ASX Listing Rule 3.8A.

14. Disclosure to Shareholders

(a) Under section 257D(2) of the Corporations Act, the Company must disclose to Shareholders all information known to it that is material to the decision how to vote on Resolution 1, except for information which it would be unreasonable to require the Company to disclose because it has previously disclosed that information to Shareholders.
(b) The Directors believe that all information known to the Company or its Directors that is material to the decision on how to vote on Resolution 1 is disclosed in this Explanatory Memorandum or has previously been disclosed to Shareholders.
(c) The Company is a 'disclosing entity' for the purposes of the Corporations Act and as such is subject to periodic reporting and continuous disclosure obligations. Specifically, as a listed entity, the Company is subject to the ASX Listing Rules which require continuous disclosure of any information which the Company has concerning itself that a reasonable person would expect to have a material effect on the price or value of the Company's Shares.
(d) Copies of all announcements made by the Company to the ASX are available from the ASX or on the Company's website, http://www.mdsfinancial.com.au/.
(e) In addition, the Company is required to lodge various documents with ASIC. Copies of documents lodged with ASIC by the Company may be obtained from, or inspected at, ASIC offices.

15. Investment Advice

This Explanatory Memorandum does not take into account your investment objectives, financial situation or particular needs. You should obtain independent financial, investment, legal and taxation advice before deciding whether or not to attend and vote at the Extraordinary General Meeting or to vote in favour of or against the Resolutions.

Section E - Proxy Form

MDS Financial Group Limited ACN 091 744 884 (the Company)

I/We (name of member)

(Shareholder Reference Number/Holder Identification Number)

being a member/members of MDS Financial Group Limited appoint:

(Name of the proxy, or name of the office held by the proxy) (Address of the proxy)

or failing him or her, the Chairman of the meeting as my proxy vote on my behalf at the Extraordinary General Meeting of the Company to be held on 25 September 2008 and any adjournment of that meeting.

If two proxies are being appointed, the proportion of the voting rights that this proxy is authorised to exercise is %. (The Company will supply an additional form on request.)

Proxy Instructions:

The Chairman will vote in favour of each Resolution in which he receives undirected proxies.

If the Chairman of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as proxy in respect of a Resolution, please place a mark in the box.

By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the Resolution(s) and votes cast by him other than as proxy holder will be disregarded because of that interest.

If you do not mark this box, and you have not directed your proxy how to vote, the Chairman will not cast your votes on the Resolution, and your votes will not be counted in calculating the required majority if a poll is called on the Resolution.

If you wish to instruct your proxy how to vote, insert X in the appropriate column against each item of business set out below. Otherwise your proxy may vote as he/she thinks fit or abstain from voting.

I/We instruct my/our proxy vote as follows:

		For	Against	Abstain
	Resolution 1
1.	Selective Buy-Back	ˆ	ˆ	ˆ
	Resolution 2
2.	Issue and allotment of Shares to the PlacementInvestors	ˆ	ˆ	ˆ

Where this Proxy Form is signed under power of attorney, the Attorney(s) declare(s) that he/she/they has/have not received any notice of the revocation of such power.

Dated:

Signed****

Name (printed): Name (printed): Capacity **** Capacity ****

If joint holders, each must sign.
Companies must execute:
- under seal; or
- by two Directors signing this Proxy Form; or
- by a Director and a company secretary signing this Proxy Form; or
- (where it is a proprietary company where the sole director is also the sole company secretary) by that director signing this Proxy Form; or
- by authorised officer; or
- by attorney.

Please forward your proxy to MDS Financial Group Limited:
- in person:	Company SecretaryMDS Financial Group LimitedLevel 472 Pitt StreetSydney NSW 2000Australia
or- by fax:	+61 2 9300 3599Attention: Company Secretary
or- by mail:	Company SecretaryMDS Financial Group LimitedP O Box R104Royal ExchangeSydney NSW 1225

Annexure A Top 20 Shareholders before the Selective Buy-Back

Rank	Name	Units	% of IssuedCapital
1	Baroda Hill Investments Limited	23,946,000	12.58
2	Alun Stevens & Associates Pty Ltd	20,923,737	11.00
3	Ms Loetitia Henriette Tibi	18,448,300	9.69
4	Global Equity Management Pty Ltd	15,672,361	8.24
5	Merkin Management Pty Ltd	13,670,000	7.18
6	Mr Stephen John Brady + Mrs Sebastiana Diana Brady<s &="" a="" brady="" c="" d="" family="">	10,154,254	5.34
7	Mr Stiven Razmovski + Mrs Trajanka Razmovski	9,862,552	5.18
8	IWSFT Corporate Trustee Limited	8,017,036	4.21
9	Drae Investments Pty Ltd <d &="" a="" c="" family="" galtieri="">	8,000,000	4.20
10	Mr Rodney James Weston + Mrs Jessica ElizabethWeston	6,854,636	3.60
11	Mr Peter Edmonds + Mrs Diana Edmonds	6,575,034	3.46
12	Leon Hinde	6,522,361	3.43
13	Ms Lay Kee Tay	5,553,700	2.92
14	Mr Ming Chen	4,114,200	2.16
15	Mr Jeffrey Harrington	2,390,000	1.26
16	Mr Charles Whit Chapman + Mrs Morne Chapman	2,097,873	1.10
17	Blueridge Enterprises Pty Ltd	2,000,000	1.05
18	Barry Littler	2,000,000	1.05
19	The Toddlers Manufacturing Company Pty Ltd	1,701,153	0.89
20	Straight Jacket Capital Pty Ltd	1,326,632	0.70
	Top 20 holders of FULLY PAID ORDINARY as at13 August 2008	169,829,829	89.24

Annexure B Top 20 Shareholders post Selective Buy-Back

Rank	Name	Units	% of IssuedCapital
1	Alun Stevens & Associates Pty Ltd	20,923,737	11.94
2	Ms Loetitia Henriette Tibi	18,448,300	10.52
4	Global Equity Management Pty Ltd	15,672,361	8.94
3	Baroda Hill Investments Limited	14,946,000	8.53
5	Merkin Management Pty Ltd	13,670,000	7.80
6	Mr Stephen John Brady + Mrs Sebastiana Diana Brady<s &="" a="" brady="" c="" d="" family="">	10,154,254	5.79
7	Mr Stiven Razmovski + Mrs Trajanka Razmovski	9,862,552	5.63
8	Drae Investments Pty Ltd <d &="" a="" c="" family="" galtieri="">	8,000,000	4.56
9	Mr Rodney James Weston + Mrs Jessica ElizabethWeston	6,854,636	3.91
10	Mr Peter Edmonds + Mrs Diana Edmonds	6,575,034	3.75
11	Leon Hinde	6,522,361	3.72
12	Ms Lay Kee Tay	5,553,700	3.17
13	Mr Ming Chen	4,114,200	2.35
14	Mr Jeffrey Harrington	2,390,000	1.36
16	Mr Charles Whit Chapman + Mrs Morne Chapman	2,097,873	1.20
15	IWSFT Corporate Trustee Limited	2,017,036	1.15
17	Blueridge Enterprises Pty Ltd	2,000,000	1.14
18	Barry Littler	2,000,000	1.14
19	The Toddlers Manufacturing Company Pty Ltd	1,701,153	0.97
20	Straight Jacket Capital Pty Ltd	1,326,632	0.76
	Top 20 holders of FULLY PAID ORDINARY postSelective Buy-Back	154,829,829	88.32