GREAT SOUTHERN MANAGERS AUSTRALIA ... - Ferrier … · dbs/dbs/3089794/975018/aum/1211838358.1 1 explanatory statement for scheme of arrangement under section 411 of the corporations

DBS/DBS/3089794/975018/AUM/1211838358.1 1

EXPLANATORY STATEMENT FOR SCHEME OF

ARRANGEMENT UNDER SECTION 411 OF THE

CORPORATIONS ACT 2001 (CTH)

GREAT SOUTHERN MANAGERS AUSTRALIA

LIMITED (IN LIQUIDATION)

ACN 083 825 405

15 December 2015

DLA Piper Australia

Level 31, 152-158 St Georges Terrace

Perth WA 6000

Australia

Ferrier Hodgson

Level 28, 108 St Georges Terrace

Perth WA 6000

Australia

DBS/DBS/3089794/975018/AUM/1211838358.1 2

IMPORTANT INFORMATION

General

Scheme Creditors should read this Explanatory

Statement in its entirety before deciding

whether to vote for or against the Scheme at

the Scheme Meeting. This Explanatory

Statement and its enclosures, attachments and

schedules are, together, referred to as the

"Scheme Booklet".

If any Scheme Creditor has any doubt as to

how to deal with this Scheme Booklet, the

Scheme Creditor should obtain, legal,

financial, tax and/or other professional advice

immediately.

Unless otherwise indicated, capitalised terms

bear the meanings set out in Schedule 2 to this

Explanatory Statement. Schedule 2 is attached

to this Explanatory Statement, but can also be

accessed by visiting the Ferrier Hodgson

Website, accessing the electronic version of

this Explanatory Statement and clicking on the

following link: [Hyperlink to Schedule 2]

Important notice associated with Court

order under section 411(1) of the

Corporations Act 2001 (Cth)

The fact that under section 411(1) of the

Corporations Act 2001 (Cth) the Court has

ordered that a meeting be convened and has

approved the explanatory statement required to

accompany the notices of the meeting does not

mean that the Court:

(a) has formed any view as to the merits

of the proposed scheme or as to how

members/creditors should vote (on

this matter, members/creditors must

reach their own decision); or

(b) has prepared, or is responsible for,

the content of the explanatory

statement.

ASIC

In accordance with section 412 of the Act, a

copy of this Explanatory Statement has been

provided to ASIC for its review and

examination. Neither ASIC nor its officers are

responsible for the contents of this

Explanatory Statement.

Responsibility statement

This Explanatory Statement is addressed only

to the Scheme Creditor to whom this

Explanatory Statement is initially provided. It

has been prepared by the Liquidators, and is

being provided solely for the Scheme

Creditor's use to decide whether to vote for or

against the Scheme. The Liquidators have not

authorised any other person to make any

representation or warranty, either express or

implied, as to the accuracy or completeness of

the information included in this Explanatory

Statement. This Explanatory Statement

contains only general advice. It does not take

into account the individual investment

objectives, financial circumstances and

particular needs of each Scheme Creditor.

Scheme Creditors should consider obtaining

legal, financial, taxation and/or other

professional advice before deciding whether to

vote for or against the Scheme.

Taxation

Scheme Creditors should obtain their own

independent tax advice on the Scheme and the

consequences of the Scheme being

implemented. The taxation implications may

be complicated, depending on the individual

circumstances of Scheme Creditors. General

information concerning the collapse of

agribusiness managed investment schemes is

contained in the document "Collapse and

restructure of agribusiness managed

investment schemes - participant information"

published on the Australian Taxation Office

website, which may be accessed by visiting

the Ferrier Hodgson Website, accessing the

DBS/DBS/3089794/975018/AUM/1211838358.1 3

electronic version of this Explanatory

Statement and clicking on the following link:

[Hyperlink]

Forward looking statements

Certain statements contained in this

Explanatory Statement concern matters in the

future. Such statements involve known and

unknown risks, uncertainties, assumptions and

other important factors that could cause actual

events to turn out differently from the

expected results, predictions or estimates

expressed or implied by such statements.

These statements reflect views only at the date

of this Explanatory Statement. Neither

GSMAL nor the Liquidators make any

representation or give any assurance or

guarantee that the occurrence of the events

expressed or implied in any forward looking

statements in this Explanatory Statement will

actually take place, and Scheme Creditors are

cautioned not to place undue reliance on such

forward looking statements.

Privacy

GSMAL, the Liquidators and the Scheme

Administrators may collect, use and disclose

personal information. This information may

include the names, contact details and interests

of Scheme Creditors and the names of persons

appointed by Scheme Creditors to act as

proxy, corporate representative or attorney at

the Scheme Meeting. The main purpose of

collecting this information is to assist

GSMAL, the Liquidators and the Scheme

Administrators to convene and conduct the

Scheme Meeting and/or implement the

Scheme in the manner described in this

Explanatory Statement. Personal information

may be disclosed to officers and employees of

the Liquidators, Scheme Administrators,

Related Bodies Corporate of GSMAL

(including GSF and GSS), professional

advisors to the Liquidators and Scheme

Administrators, print and mail service

providers, ASIC and other regulatory

authorities and, in any case, where disclosure

is required by law or by a competent body, or

where Scheme Creditors have consented to the

disclosure. A Scheme Creditor has the right to

access personal information that has been

collected concerning that Scheme Creditor.

The Scheme Creditor should contact the

Liquidators in the first instance, if the Scheme

Creditor wants to exercise this right to access

the personal information collected. Scheme

Creditors who appoint a named person to act

as their proxy, corporate representative or

attorney at the Scheme Meeting should ensure

that they inform that person of the matters set

out above concerning the collection of

personal information by GSMAL, the

Liquidators and the Scheme Administrators.

Hard copies of documents

Hard copies of documents referred to in this

Explanatory Statement will be provided to

Scheme Creditors upon request (but not the

Scheme Creditors Register, which is only

available for inspection at the offices of Ferrier

Hodgson or available online at the Ferrier

Hodgson Website for viewing by Scheme

Creditors (but not downloading or otherwise

making a copy)). Scheme Creditors should

contact the Liquidators if they require hard

copies of documents.

Date of Explanatory Statement

This Explanatory Statement is dated 15

December 2015.

DBS/DBS/3089794/975018/AUM/1211838358.1 4

CONTENTS OF EXPLANATORY STATEMENT

_________________________________________________________________________

Important Dates 6

Overview 7

What You Should Do Next 9

Frequently Asked Questions 13

1. Background

1.1 History of the Great Southern Group

1.2 Court Proceedings in Victoria

1.3 Other proceedings which may relate to the rights (if any) of

Scheme Creditors

1.4 Deed of Settlement

1.5 Conditions applicable to the Deed of Settlement

1.6 Further conditions applicable to the Deed of Settlement

1.7 Scheme proposal

20

20

21

23

24

28

28

29

2. Classes of Scheme Creditors and Voting at the Scheme Meeting

2.1 Purpose of the Scheme

2.2 Approval process for the Scheme

2.3 Four classes of Scheme Creditors

2.4 Position as to claims by the BEN Parties and Javelin against

Scheme Creditors

2.5 Voting at the Scheme Meeting

32

32

32

33

36

37

3. Scheme proposal in detail

3.1 Scheme document

3.2 What will happen if the Scheme is approved?

3.3 What will happen if the Scheme is not approved?

3.4 Key provisions of the Scheme

41

41

41

41

42

4. Advantages and Disadvantages

4.1 Class 1 Scheme Creditors




4.5 Recommendation

47

47

48

50

52

53

5. Other matters that may be relevant to a Scheme Creditor's decision

5.1 Matters relevant to all four classes of Scheme Creditors

5.2 Status of liquidations of GSMAL and GSF

5.3 Insurance policies

55

55

55

56

6. Information required by the Corporations Act 2001 (Cth)

6.1 Material interests of the directors

59

59

DBS/DBS/3089794/975018/AUM/1211838358.1 5

6.2 Rights of debenture holders

6.3 Expected dividend that would be available if the Scheme is put

into effect as proposed

6.4 Expected dividend that would be available if GSMAL is wound up

within 6 months after the date of the hearing of the application to

the Court for an order under subsections 411(1) and (1A) of the

Act

6.5 Names of all known scheme creditors and the claims by, or debts

owed to, those creditors

6.6 Names of the guaranteed creditors and the amounts of their claims

or debts owed

6.7 Names of the internal creditors and the amounts of their claims or

debts owed

6.8 Order to convene Scheme Meeting not an endorsement

6.9 Report as to Affairs

6.10 Certified financial statements

6.11 Not trustee

6.12 Scheme Administrators' remuneration

59

59

60

63

63

63

64

64

65

65

65

Schedule 1 - Notices of Scheme Meeting

Schedule 2 - Definitions

Schedule 3 - Scheme

Schedule 4 - Scheme Creditors Register (not attached, but is available for

viewing on the Ferrier Hodgson Website)

Schedule 5 - Scheme Administrator's Deeds Poll (not attached, but is

available for viewing on the Ferrier Hodgson Website)

Schedule 6 - Report as to Affairs (partial Report attached and the full

Report is available for viewing on the Ferrier Hodgson Website)

DBS/DBS/3089794/975018/AUM/1211838358.1 6

IMPORTANT DATES

Description of Event Date & Time

Date and time by which Proxy Forms must be submitted to

Computershare

10.00 am (AEDT) on 23

January 2016

Date and time of the Scheme Meeting for each class of Scheme

Creditors to vote on the Scheme

10.00 am (AEDT) on 25

January 2016

If approved by the requisite majority of each class of Scheme

Creditors:

Date and time of Court hearing for approval of the Scheme (Scheme

Creditors are entitled to attend this Court hearing and object to the

Scheme being approved by the Court should they wish to do so)

10.00 am on 8 February

2016

If approved by the Court:

Date for lodgement of Court orders with ASIC 8 February 2016 or the

next Business Day

following the date the

Court grants approval for

the Scheme

Date that the Scheme takes effect (subject to the Insurers of GSMAL

making the payments set out in section 3.4 below)

8 February 2016 or the

next Business Day

following the date the

Court grants approval for

the Scheme

Note 1: Unless otherwise indicated, all times referred to in this Explanatory Statement and the

documents contained in its Schedules are to AEDT.

Note 2: The times and dates indicated above are indicative only and are subject to change. The

Liquidators reserve the right to vary these times and dates, subject to the Act and any approvals

required from the Court and/or ASIC.

DBS/DBS/3089794/975018/AUM/1211838358.1 7

OVERVIEW OF THIS EXPLANATORY STATEMENT

What is this Explanatory Statement for?

This Explanatory Statement contains information about the proposed Scheme between Great Southern

Managers Australia Limited (In Liquidation) (referred to as "GSMAL" in this Explanatory Statement)

and its proposed Scheme Creditors. As set out at in section 2.3 below, there are four classes of

Scheme Creditors.

This Explanatory Statement provides Scheme Creditors with information to consider before voting at

the Scheme Meeting. The Scheme Meeting for each class of Scheme Creditors will be held at Park

Room, Melbourne Park Function Centre, Melbourne & Olympic Parks, Batman Avenue, Melbourne,

Victoria at 10.00 am (AEDT) on Monday, 25 January 2016.

If the Scheme is approved, the Insurers of GSMAL will pay the sum of $3,550,000 to the Liquidators,

as Scheme Administrators, to form the Scheme Creditors' Pool.

The Scheme Administrators will distribute the Scheme Creditors' Pool, pro rata, to Scheme Creditors.

Each Scheme Creditor will receive approximately $16.52 per $10,000 invested, in exchange for

which, each Scheme Creditor will release GSMAL, Great Southern Finance Limited (In Liquidation)

(GSF) and various other persons listed in this Explanatory Statement in section 3.4 below, from any

and all PDS Claims.

Scheme Creditors must refer to the definition of PDS Claims set out in Schedule 2 to this

Explanatory Statement, and to the extent they have any questions as to the meaning of that

defined term (or any other defined term), they should obtain legal advice. In essence, a PDS

Claim includes any claim, whether presently known or unknown arising out of, or in connection with,

the contents of or the facts giving rise to, the PDSs, the Loan Agreements and/or the allegations made

in or the facts giving rise to each of the Proceedings.

Why are the Liquidators proposing the Scheme?

As explained in detail in this Explanatory Statement, following the collapse of the Great Southern

Group, various investors commenced a number of class actions and other actions against GSMAL,

GSF and others arising out of allegedly misleading statements made in various product disclosure

statements in respect of the Scheme Creditors' investments in a number of managed investment

schemes (MISs) managed by GSMAL. A large number of those proceedings went to trial before the

Honourable Justice Croft in the Supreme Court of Victoria. Shortly before judgment was to be

delivered, following a mediation and further discussions, those proceedings were settled, and a deed

of settlement was executed (Deed of Settlement). The Deed of Settlement is described in more detail

later in this Explanatory Statement.

The Scheme has no effect on Scheme Creditors' obligations to Bendigo Bank or Javelin. PDS Claims

brought by a number of Scheme Creditors against the BEN Parties (which include Bendigo Bank) and

Javelin were settled on the terms set out at clauses 4 and 5 of the Deed of Settlement. Among other

things, those terms deal with obligations by relevant Scheme Creditors to make payments to the BEN

DBS/DBS/3089794/975018/AUM/1211838358.1 8

Parties and Javelin (such as payment of principal and interest). The terms of those settlements are not

conditional on the Scheme being approved, and are effective regardless of whether or not the Scheme

is approved.

Pursuant to the Deed of Settlement, the Liquidators have agreed to propose the Scheme in order to

allow Scheme Creditors the opportunity to vote as to whether or not they are prepared to compromise

their respective rights on the terms set out in the Scheme. The Scheme incorporates the relevant key

features set out in the Deed of Settlement.

The Liquidators recommend that Scheme Creditors consider obtaining independent legal, financial,

taxation and/or other professional advice on the Scheme and the contents of this Explanatory

Statement, to assist them in deciding whether to vote for or against the Scheme.

For further details regarding the advantages and disadvantages of the Scheme, in relation to each class

of Scheme Creditor, refer to section 4 below.

DBS/DBS/3089794/975018/AUM/1211838358.1 9

WHAT YOU SHOULD DO NEXT

Scheme Creditors should read this Explanatory Statement carefully, consider the information

provided and obtain independent legal, financial, taxation and/or other professional advice to assist

them to make a decision on how to vote at the Scheme Meeting.

The Scheme Meeting for each class of Scheme Creditors will be held at Park Room, Melbourne Park

Function Centre, Melbourne & Olympic Parks, Batman Avenue, Melbourne, Victoria at 10.00 am

(AEDT) on Monday, 25 January 2016.

Notices of Scheme Meeting in respect of the each class of Scheme Creditors are attached at Schedule

1 to this Explanatory Statement. They contain further information on voting procedures and the

Resolution to be voted upon by Scheme Creditors at the Scheme Meeting. The Notices of Scheme

Meeting can also be accessed by visiting the Ferrier Hodgson Website, accessing the electronic

version of this Explanatory Statement and clicking on the following link: [Hyperlink to Schedule 1]

As explained in more detail later in this Explanatory Statement, there are four classes of Scheme

Creditors who are entitled to vote on the Scheme.

The Proxy Form accompanying this Explanatory Statement identifies the particular class to

which a Scheme Creditor belongs for purposes of voting on the Scheme. Please note that the

Proxy Form is both QR coded and colour coded, and is personalised for each individual Scheme

Creditor.

Scheme Creditors who wish to vote on the Scheme may do so:

in person;

by attorney;

by a duly authorised corporate representative (in the case of a corporation); or

by proxy.

Voting in person

To vote in person, a Scheme Creditor should attend the Scheme Meeting, which will be held at Park

Room, Melbourne Park Function Centre, Melbourne & Olympic Parks, Batman Avenue, Melbourne,

Victoria at 10.00 am (AEDT) on Monday, 25 January 2016. All persons entitled to vote will be

required to register at the Scheme Meeting and will be given a voting card.

Voting by proxy

To vote by proxy at the Scheme Meeting, a Scheme Creditor can appoint a proxy to attend the

Scheme Meeting and vote on the Scheme Creditor's behalf by completing the personalised Proxy

Form that accompanies this Explanatory Statement (in accordance with the instructions on the Proxy

Form).

Where the Scheme Creditor is a corporation, the corporation must comply with section 127 of the Act.

Thus, the corporation may execute the Proxy Form without using a common seal if it is signed by:

2 directors;

DBS/DBS/3089794/975018/AUM/1211838358.1 10

a director and a company secretary; or

for a Pty Ltd company that has a sole director who is also the sole company secretary - that

director.

Where the Scheme Creditor comprises more than one individual (such as a husband and wife), all of

the individuals must sign the Proxy Form.

Where the Scheme Creditor is a trust or a trustee of a trust, the trustee must execute the Proxy Form in

accordance with the terms of the trust deed and applicable law.

Completed personalised Proxy Forms must be received by Computershare Investor Services Pty

Limited (Computershare) by 10.00 am (AEDT) on 23 January 2016 in any of the following ways:

by post to Computershare, GPO Box 242, Melbourne, VIC 3001;

by facsimile on 1800 783 447 (if dialled within Australia) or +61 3 9473 2555 (if dialled from

outside Australia); or

online.

If you wish to submit your personalised Proxy Form online, you will need to visit

www.investorvote.com.au on your computer or smartphone. You will need the control number and

scheme creditor number shown on your personalised Proxy Form to submit your Proxy Form online.

To use the smartphone voting service, you will need to scan the QR code which appears at the top of

your Proxy Form and follow the instructions provided or go to www.investorvote.com.au from your

smartphone. In order to scan the code you would need to have already downloaded a free QR code

reader app to your smartphone. Once scanned, the QR code will take you directly to the mobile

voting site.

Proxy Forms received after this time will be treated as invalid.

As each Proxy Form is personalised, hard copies of the Proxy Form are not available to be

downloaded online. If a replacement hard copy of the Proxy Form is required by any Scheme

Creditor, the Scheme Creditor must contact Computershare to obtain a replacement.

A proxy will be admitted to the Scheme Meeting and given a voting card upon providing, at the point

of entry to the Scheme Meeting, written evidence of his or her appointment as proxy and his or her

identity.

Voting by attorney

If a Scheme Creditor wishes to vote by attorney, the relevant power of attorney appointing the

attorney to attend and vote at the Scheme Meeting must be duly executed by the Scheme Creditor.

The appointment may be a standing one.

The original or a certified copy of the power of attorney must be lodged at the registration desk on the

day of the Scheme Meeting or be received by Computershare (at the address specified in the

preceding section 'Voting by proxy') by no later than 10.00 am (AEDT) on 23 January 2016 (or 48

hours prior to the commencement of the Scheme Meeting or any adjournment of that meeting).

http://www.investorvote.com.au/


DBS/DBS/3089794/975018/AUM/1211838358.1 11

An attorney will be admitted to the Scheme Meeting and given a voting card upon providing, at the

point of entry to the Scheme Meeting, written evidence of his or her appointment as attorney and his

or her identity.

Voting by corporate representative

If a Scheme Creditor is a corporation, it may appoint a person to act as its corporate representative to

vote at the Scheme Meeting. A form of certificate of appointment of a corporation may be obtained

from Computershare at the address specified in the preceding section "Voting by proxy" or online at

www.investorvote.com.au under the help tab, "Printable Forms".

The original completed certificate of appointment should be lodged at the registration desk on the day

of the Scheme Meeting or be received by Computershare (at the address specified in the section

"Voting by proxy") by no later than 10.00 am (AEST) on 23 January 2016 (or 48 hours prior to the

commencement of the Scheme Meeting or any adjournment of that meeting).

An authorised corporate representative will be admitted to the Scheme Meeting and given a voting

card upon providing, at the point of entry to the Scheme Meeting, written evidence of his or her

appointment as corporate representative (including any authority under which it is signed), his or her

name and address and the identity of the appointer.

Further information about voting on the Scheme is set out in section 2.5 of this Explanatory Statement

and the Proxy Form.

Queries relating to the Proxy Form

If a Scheme Creditor has any questions concerning the Proxy Form (including updating the Scheme

Creditor's contact information), the Scheme Creditor should contact Computershare (using the

facsimile or postal details specified in the section "Voting by proxy" above).

Other queries

If a Scheme Creditor has any other questions about the Scheme (other than questions relating to the

Proxy Form or updating contact information), the Scheme Creditor may obtain further information by

the following means:

Visit the Liquidators' website at:

http://www.ferrierhodgson.com/au/administrations/great-southern-managers-australia-ltd--

scheme-of-arrangement

Direct questions by post, by facsimile or by email to the Liquidators at:

Ferrier Hodgson


Perth WA 6000

Facsimile: (08) 9214 1400 (if dialled from Australia) or +61 8 9214 1400 (if dialled from

outside Australia)

Email: [email protected]


http://www.ferrierhodgson.com/au/administrations/great-southern-managers-australia-ltd--scheme-of-arrangement


DBS/DBS/3089794/975018/AUM/1211838358.1 12

Telephone the Liquidators at (08) 9214 1414 (if dialled within Australia) or +61 8 9214 1414

(if dialled from outside Australia) between 9:00 am and 5:00 pm (WST), Monday to Friday,

excluding public holidays.

DBS/DBS/3089794/975018/AUM/1211838358.1 13

FREQUENTLY ASKED QUESTIONS

This part of the Explanatory Statement answers some fundamental questions you may have about the

Scheme. It is not intended to address all relevant issues for Scheme Creditors. This section should be

read together with all other parts of the Explanatory Statement.

What is this document? This Explanatory Statement contains information about the proposed

Scheme between GSMAL and the Scheme Creditors.

Scheme Creditors are those persons who invested in any managed

investment scheme in or post 1998 of which GSMAL is or was the

responsible entity, including former scheme members, and who may

have a PDS Claim. You have received the Scheme Booklet, which

includes this Explanatory Statement, Notices of Meeting and a

personalised Proxy Form in your name (which identifies the class of

Scheme Creditors to which you belong), because you are a Scheme

Creditor.

If you are a Scheme Creditor and you have not received the Scheme

Booklet which includes this Explanatory Statement, Notices of Meeting

and a personalised Proxy Form in your name, you should contact the

Liquidators as soon as possible, prior to the Scheme Meeting, using the

contact details in the section "What You Should Do Next" above.

If you are a Scheme Creditor, you are eligible to vote at the Scheme

Meeting.

What is the Scheme? The Scheme is a scheme of arrangement between GSMAL and its

Scheme Creditors to effect a proposed settlement with Scheme Creditors

in relation to any and all PDS Claims those Scheme Creditors may have.

The Scheme is proposed pursuant to the Deed of Settlement.

A scheme of arrangement is a statutory mechanism provided by Part 5.1

of the Act to give effect, relevantly, to a compromise or arrangement

agreed to by a company and its creditors or a class of creditors. This

mechanism addresses the practical difficulties associated with securing

the agreement of each and every member of the classes of creditors

intended to be bound by the terms of the scheme of arrangement. In

addition to approval of the Scheme Creditors, Court approval of the

Scheme is required.

Under the Scheme,

Scheme Creditors will

give up PDS Claims.

What are PDS Claims?

Scheme Creditors must refer to the definition of PDS Claims set out

in Schedule 2 to this Explanatory Statement, and to the extent they

have any questions as to the meaning of that defined term (or any

other defined term), they should obtain legal advice. In essence, a

PDS Claim includes any claim, whether presently known or unknown

arising out of, or in connection with, the contents of or the facts giving

rise to, the PDSs, the Loan Agreements and/or the allegations made in or

the facts giving rise to each of the Proceedings.

What happens if the If the Scheme is approved by Scheme Creditors and the Court, and

proceeds, the Scheme Administrators will administer and give effect to

DBS/DBS/3089794/975018/AUM/1211838358.1 14

Scheme is approved? the Scheme, including by paying dividends from the Scheme Creditors'

Pool to the Scheme Creditors in accordance with the terms of the

Scheme.

For further information, see section 3.2 below.

Terms of the Deed of Settlement which are not conditional upon the

Scheme (such as the rights and obligations contained in the provisions

relating to the BEN Parties and Javelin) remain binding on Group

Members and M+K Counterclaim Claimants, regardless of whether the

Scheme is approved.

When and where will

the Scheme Meeting be

held?

The Scheme Meeting will be held at Park Room, Melbourne Park

Function Centre, Melbourne & Olympic Parks, Batman Avenue,

Melbourne, Victoria at 10.00 am (AEDT) on Monday, 25 January 2016.

Further details are provided in the Notices of Scheme Meeting included

in this Explanatory Statement.

Who is entitled to vote

at the Scheme Meeting?

All Scheme Creditors (and only Scheme Creditors) are entitled to vote at

the Scheme Meeting. As set out in more detail in this Explanatory

Statement, Scheme Creditors are those persons who invested in any

managed investment scheme in or post 1998 of which GSMAL is or was

the responsible entity, including former scheme members, and who may

have a PDS Claim.

For purposes of the Scheme only, all of the persons referred to in the

preceding paragraph will be treated as Scheme Creditors under the terms

of the Scheme, without having to prove a PDS Claim. So long as the

investments of the Scheme Creditors are recorded in the relevant scheme

registers as at 16 May 2009, they do not have to lodge a proof of debt or

take any other step to be recognised as Scheme Creditors in order to vote

at the Scheme Meeting and, in the event the Scheme is approved, receive

their respective distributions.

How do I vote? You can vote:

in person at the Scheme Meeting;

by attorney;

by a duly authorised corporate representative (in the case of a

corporation); or

by proxy (including submitting the proxy online).

Please refer to the section "What You Should Do Next" above for further

information.

Why are there different

Classes of Scheme

Creditors and what are

the Classes of Scheme

Creditors

There are four classes of Scheme Creditors.

The Scheme Creditors have been divided into four classes because the

rights and entitlements of each class, viewed in the totality of the

Scheme's context, are so dissimilar that it would make it impossible for

them to consult together with a view to their common interest. For

DBS/DBS/3089794/975018/AUM/1211838358.1 15

further information concerning the classes, see section 2.3 below.

Which Class am I in? You are in the class identified on your personalised Proxy Form.

Why will each of the

Classes vote separately?

This is because the rights and entitlements of each class, viewed in the

totality of the Scheme's context, are so dissimilar that it would make it

impossible for them to consult together with a view to their common

interest. For further information concerning the classes, see section 2.3

below.

What voting majority is

required for the Scheme

to be approved?

The Scheme must be approved, in respect of each class of Scheme

Creditors, by:

a majority in number of those Scheme Creditors (that is, by more

than 50%) who are present and voting at the Scheme Meeting

(either in person, or by attorney, or by a duly authorised

corporate representative (in the case of a corporation), or by

proxy); and

those Scheme Creditors whose debts or claims amount in

aggregate to at least 75% of the total amount of the debts and

claims of the Scheme Creditors present and voting at the Scheme

Meeting.

How will my vote be

valued?

Each Scheme Creditor will have one vote, the value of which will be the

total face value of the amounts invested by that Scheme Creditor in the

relevant GSMAL managed investment schemes (which amounts do not

include GST or borrowing costs) as recorded in the relevant scheme

registers as at 16 May 2009.

Is voting compulsory? Voting is not compulsory. However, the Liquidators recommend that

Scheme Creditors vote at the Scheme Meeting in accordance with their

individual interests. In that respect, Scheme Creditors should read this

Explanatory Statement carefully, consider the information provided and

obtain independent legal, financial, taxation and/or other professional

advice to assist them to make a decision on how to vote at the Scheme

Meeting.

What if I want to vote,

but cannot attend the

Scheme Meeting in

person?

If you cannot attend the Scheme Meeting in person, you may vote:

by attorney;

by a duly authorised corporate representative (in the case of a

corporation); or

by proxy.

For further information concerning voting, see section 2.5 below.

What happens if I do

not vote?

If you do not vote at the Scheme Meeting, you will still be bound by the

outcome.

Therefore, you will be bound by the Scheme if:

the Scheme is approved at the Scheme Meeting by the requisite

DBS/DBS/3089794/975018/AUM/1211838358.1 16

majorities of each class of Scheme Creditors; and

the Court approves the Scheme; and

the Insurers of GSMAL make the payment referred to in section

1.7 below, under the heading "Requirements for the Scheme to

proceed".

However, you will not be bound by the Scheme if:

the Scheme is not approved at the Scheme Meeting by the

requisite majorities of each class of Scheme Creditors; or

the Court does not approve the Scheme; or

the Insurers of GSMAL do not make the payment referred to in

section 1.7 below.


not vote, and do not

agree with the outcome?

If you do not vote at the Scheme Meeting, you will still be bound by the

outcome (as explained in the answer to the question "What happens if I

do not vote?").

However, if the Scheme is approved at the Scheme Meeting by the

requisite majorities of each class of Scheme Creditors, you are entitled to

attend the Court hearing on 8 February 2016 and object to the Scheme

should you wish to do so.


vote, and do not agree

with the outcome?

If you do vote at the Scheme Meeting, you will be bound by the outcome

(as explained in the answer to the question "What happens if I do not

vote?").

However, if the Scheme is approved at the Scheme Meeting by the

requisite majorities of each class of Scheme Creditors, you are entitled to

attend the Court hearing on 8 February 2016 and object to the Scheme

should you wish to do so.

What are the reasons to

vote for and against the

Scheme?

Each Scheme Creditor may have its own personal, individual reasons as

to whether it should vote for or against the Scheme.

The Liquidators have identified in sections 4 and 5 below, some of the

factors each class of Scheme Creditors may wish to take into account in

deciding whether to vote for or against the Scheme.

Who will be bound by

the Scheme?

If the Scheme is approved and proceeds, all Scheme Creditors will be

bound by the Scheme, regardless of whether they voted for or against the

Scheme or voted at all.

Will my legal costs be

paid if the Scheme is

approved?

Class 1 Scheme Creditors will each receive from M+K Lawyers a pro

rata share of the sum of $19,976,474.61, by way of reimbursement of

legal costs already paid by them to M+K Lawyers.

However, no other Scheme Creditors will receive any part of any legal

DBS/DBS/3089794/975018/AUM/1211838358.1 17

costs they may have incurred.

For further information, see section 4 below.

What happens if the

Scheme is not

approved?

If the Scheme is not approved:

the Insurers of GSMAL will not make the payments set out in

section 1.7 below, and there will be no Scheme Creditors' Pool to

be distributed to the Scheme Creditors;

Justice Croft will formally deliver judgments in the Group

Proceedings and the M+K Counterclaim Proceedings and, in

respect of the claims the subject of those proceedings, Group

Members and M+K Counterclaim Claimants will receive

nothing. As described in section 1.2 below, a draft of the

reasons for judgment (referred to as the Great Southern Reasons)

has already been published;

the releases by the Scheme Creditors in favour of the parties

identified in section 3.4 below will not take effect, and Scheme

Creditors will (subject to the judgments to be delivered by

Justice Croft) retain any PDS Claims they may against those

parties; and

the Scheme will not bind any Scheme Creditors.

Terms of the Deed of Settlement which are not conditional upon the

Scheme (such as the rights and obligations contained in the provisions

relating to the BEN Parties and Javelin) remain binding on Group

Members and M+K Counterclaim Claimants, regardless of whether the

Scheme is approved.

If the Scheme is

approved and proceeds,

what will be the

procedure for making a

claim under the Scheme,

how much will I be paid,

and when will I be paid?

If the Scheme is approved and proceeds:

Regardless of whether they voted for or against the Scheme, all

Scheme Creditors will automatically be accepted as having a

PDS Claim the value of which will be the total face value of the

amounts invested by that Scheme Creditor in the relevant

GSMAL managed investment schemes (which amounts do not

include GST or borrowing costs) as recorded in the relevant

scheme registers as at 16 May 2009.

The Liquidators presently estimate the distribution from the

Scheme Creditors' Pool to be $16.52 per $10,000 invested by

each Scheme Creditor.

The Scheme Administrators will make the distribution to Scheme

Creditors as soon as reasonably practicable after approval of the

Scheme.

What happens to my

claim(s) or potential

claim(s) against

If the Scheme proceeds, in exchange for their pro rata distribution from

the Scheme Creditors' Pool, Scheme Creditors will:

DBS/DBS/3089794/975018/AUM/1211838358.1 18

GSMAL, GSF, related

entities and their

directors and others if

the Scheme proceeds?

give up their rights to prove in, and receive a dividend from, the

liquidations of GSMAL and, where relevant, GSF, in respect of

PDS Claims; and

release the persons identified in section 3.4 below from all PDS

Claims,

but otherwise retain all and any rights they may have in respect of any

Other Claims. If any Scheme Creditor has any doubt as to what happens

to claims or potential claims, the Scheme Creditor should obtain, legal,

financial, tax and/or other professional advice immediately.

How does the Scheme

affect my position in

relation to recovery

actions by Bendigo

Bank and/or Javelin?

PDS Claims by a number of parties against the BEN Parties (which

include Bendigo Bank) and Javelin were settled on the terms set out at

clauses 4 and 5 of the Deed of Settlement. Among other things, those

terms deal with revised obligations by relevant Scheme Creditors to

make payments to the BEN Parties and Javelin (such as payment of

principal and interest).

The terms of those settlements are not conditional on the Scheme being

approved, and are effective regardless of whether or not the Scheme is

approved.

Accordingly, pursuant to the Deed of Settlement, the BEN Parties and

Javelin may commence recovery actions against some Scheme Creditors

in respect of loans owing by those Scheme Creditors. Scheme Creditors

should note that the Scheme may have different implications for different

Scheme Creditors in respect of any loans owing to the BEN Parties

and/or Javelin:

The Scheme does not affect Scheme Creditors' positions if those

Scheme Creditors are parties to the Group Proceedings and/or

the M+K Counterclaim Proceedings. This is because, in respect

of the Scheme Creditors' Investments that are the subject of the

Group Proceedings and the M+K Counterclaim Proceedings,

those Scheme Creditors have, by the terms of the Deed of

Settlement and by reason of the s33V Approval Decision, in

respect of those Investments, already agreed, among other

things, to make payments to the BEN Parties and Javelin (such

as payment of principal and interest).

The Scheme may potentially affect a Scheme Creditor's position

if the Scheme Creditor is not a party to the Group Proceedings or

the M+K Counterclaim Proceedings and, thereby, are not bound

by the terms of the Deed of Settlement or the s33V Approval

Decision. In particular, the Scheme may affect a Scheme

Creditor's position if the Scheme Creditor wishes to raise, in

recovery actions commenced by the BEN Parties and/or Javelin,

any alleged acts or omissions on the part of any company in the

Great Southern Group or any of the directors of those

companies.

Scheme Creditors should contact, relevantly, Bendigo Bank or

DBS/DBS/3089794/975018/AUM/1211838358.1 19

Javelin to discuss any obligations they may have, and obtain

their own legal, financial, taxation and/or other professional

advice in relation to any such obligations as well as the

implications of the Scheme on those obligations.

Who will administer the

Scheme?

The Liquidators will be the Scheme Administrators of the Scheme,

subject to leave being obtained from the Court under section 411(7) of

the Act.

What do I do if I have

further questions?

Please refer to the section "Where to get more information" at page 31

below.

DBS/DBS/3089794/975018/AUM/1211838358.1 20

1. BACKGROUND

This part of the Explanatory Statement provides a summary of the Scheme and some

background explaining why the Scheme is being proposed. However, it is not, and it is not

intended to be, a substitute for reading this Explanatory Statement and its Schedules carefully

and in full. As noted in the section "Important Information" above, unless otherwise

indicated, capitalised terms bear the meanings set out in Schedule 2 to this Explanatory

Statement. So, if you see a term or phrase that you do not understand, check Schedule 2 to

see if it has been defined. Schedule 2 is attached to this Explanatory Statement, but can also

be accessed by visiting the Ferrier Hodgson Website, accessing the electronic version of this

Explanatory Statement and clicking on the following link: [Hyperlink to Schedule 2]

1.1 History of the Great Southern Group

The Great Southern Group was a Perth-based agri-business. GSL, the parent company, was

listed on the Australian Securities Exchange. Through its wholly-owned subsidiary, GSMAL,

it established, sold and managed approximately 45 agricultural MISs. Finance for the MISs

was offered to investors via another wholly owned subsidiary, GSF, and other third parties.

The BEN Parties:

purchased from GSF certain loans made by GSF to Scheme Members; and

provided other loans, originated by GSMAL, directly to Scheme Members.

Javelin purchased from GSF certain loans made by GSF to Scheme Members.

The majority of the Great Southern Group's revenue was raised through the sale of interests in

MISs, and also through the collection of management fees associated with the MISs and

interest charged on loans provided by GSF to MIS investors.

On 16 May 2009, GSL, GSMAL, GSF and other subsidiaries of GSL entered into voluntary

administration. Messrs Jones, Saker, Weaver and Stewart of Ferrier Hodgson were appointed

as the Administrators.

On 18 May 2009, secured creditors appointed McGrath Nicol as the Receivers and Managers

to GSL and GSMAL (as well as other subsidiaries). The Receivers and Managers retired on

18 December 2013.

On 19 November 2009, GSL, GSMAL, GSF and other subsidiaries of GSL were placed into

liquidation. At that time, the Administrators were appointed as Liquidators. Mr Saker retired

as a Liquidator of GSMAL on 13 June 2014, and, subsequently, as a Liquidator of GSL, GSF

and all other subsidiaries of GSL on 31 August 2014.

Immediately before the Great Southern Group went into voluntary administration, GSMAL

had approximately 52,000 investors recorded on its scheme registers, who contributed

approximately $2.2 billion. Further, the group raised:

over $260 million in equity from shareholders;

over $200 million by issuing unsecured convertible notes; and

DBS/DBS/3089794/975018/AUM/1211838358.1 21

over $600 million in secured funding.

Subsequent to the liquidation of the Great Southern Group companies, various court

proceedings were commenced by or against MIS investors arising out of allegedly misleading

statements made in various PDSs in respect of their investments in a number of MISs

managed by GSMAL. These proceedings are referred to in this Explanatory Statement as the

"Group Proceedings" and the "M+K Counterclaim Proceedings". The outcome of these

proceedings, set out in section 1.2 below, may provide you with information or guidance

relevant to your vote on the proposed Scheme.

In addition, there were further relevant proceedings, as set out in section 1.3 below.

1.2 Court Proceedings in Victoria

The Group Proceedings and the M+K Counterclaim Proceedings were the subject of a trial

before Justice Croft, which commenced on 29 October 2012 and concluded on 24 October

2013 (and which extended over 90 hearing days).

The Group Proceedings are representative proceedings within the meaning of Part 4A of the

Supreme Court Act 1986 (Vic). In that regard:

The Lead Plaintiffs brought the Group Proceedings on their own behalf and on behalf

of Group Members.

A useful summary of the claims made by the Lead Plaintiffs is contained in the

"Synopsis" at the commencement of the Great Southern Reasons, which can be

accessed by visiting the Ferrier Hodgson Website, accessing the electronic version of

this Explanatory Statement and clicking on the following link: [Hyperlink to Great

Southern Reasons] (The "Synopsis" is contained at pages 10 to 28 of the Great

Southern Reasons).

In the Great Southern Reasons, Justice Croft noted that the principal claim made by

the Lead Plaintiffs (and the plaintiffs by counterclaim in the M+K Counterclaim

Proceedings, which were also known as the "Individual Proceedings"), was that

GSMAL issued PDSs relating to the offer of interests in its MISs which were

"defective" by reason of the provisions contained in Part 7.9 of the Act, and that the

Lead Plaintiffs had, as a result, suffered loss and damage.

His Honour also noted that, in order for the Lead Plaintiffs to succeed in their

principal claim, they had to establish the following elements:

o the relevant PDSs contained representations (described by the Lead Plaintiffs

as "Misleading PDS Statements") which were misleading or deceptive;

o the relevant PDSs omitted to include information (described by the plaintiffs

as the "Relevant Matters") that was required to be included in the PDSs

pursuant to Division 2 of Part 7.9 of the Act;

o the "Relevant Matters" were "actually known" to the relevant persons under s

1013C(2) of the Act;

o the Lead Plaintiffs relied on the alleged "Misleading PDS Statements" in

applying for interests in the relevant MISs or would not have invested in the

relevant MISs had "Relevant Matters" been disclosed;

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DBS/DBS/3089794/975018/AUM/1211838358.1 22

o the Lead Plaintiffs have suffered loss and damage as a result of being given a

"defective" PDS; and

o the defendants (including GSMAL) are liable for that loss and damage.

However, in the Great Southern Reasons, his Honour makes it plain that, for the

detailed reasons set out in his Honour's "Synopsis" referred to above, the plaintiffs'

cases in the Group Proceedings "must fail" against GSMAL, GSF and other parties

(see, in particular, paragraph 3 of the "Synopsis").

His Honour found (at paragraph 10 of his "Synopsis") that the relevant plaintiffs had

not established that they relied on the relevant PDSs or that they suffered any loss or

damage, nor, if it were established that any loss and damage had been suffered that

their loss or damage arose because of being given a "defective" PDS or that the

defendants (or defendants by counterclaim) were liable for their loss or damage.

Therefore, in the event the Scheme is not approved, Justice Croft will formally

deliver reasons for judgment in the form of the Great Southern Reasons referred to

above, and enter judgment against the plaintiffs in the Group Proceedings, and they

will receive nothing.

Justice Croft's rejection of the PDS Claims made in the Group Proceedings may have

implications for Scheme Creditors who may be considering bringing or pursuing their

own PDS Claims (and, for that reason, may be considering voting against the

Scheme). This will depend on how their PDS Claims are pleaded. In that respect,

Justice Croft noted in the Great Southern Reasons (at paragraph 5 of his Honour's

"Synopsis" referred to above and paragraph 236 of the Great Southern Reasons), that

cases are conducted strictly according to the pleadings, and it is the pleadings which

define the relevant issues in the proceedings. In the Group Proceedings (and M+K

Counterclaim Proceedings), the cases put forward by the plaintiffs were not about

what anyone said or did not say to the plaintiffs, or what anyone advised or did not

advise the plaintiffs. However, his Honour stated (at paragraph 132 of the Great

Southern Reasons), that, by not opting out of the Group Proceedings, Group Members

"must be taken to have accepted that the claims as pleaded in the [G]roup

[P]roceedings represent all of the claims reasonably available to them" and that "it

would not be reasonable for [G]roup [M]embers to raise different claims or defences

in subsequent proceedings." Accordingly, Scheme Creditors should seek their own

legal advice in relation to the effect of the Great Southern Reasons on their individual

circumstances and any claims or potential claims they may have.

The M+K Counterclaim Proceedings are separate proceedings which are not Group

Proceedings. In that regard:

The M+K Counterclaim Proceedings raised issues in common with some or all of the

Group Proceedings.

The defendants by counterclaim in the M+K Counterclaim Proceedings (including

GSMAL and GSF) denied that they were liable to the M+K Counterclaim Claimants,

and further denied that the M+K Counterclaim Claimants were entitled to any relief.

Again, and for the same reasons referred to above, in respect of the M+K

Counterclaim Proceedings, in the Great Southern Reasons, his Honour makes it plain

in his "Synopsis" referred to above, that the cases of the M+K Counterclaim

DBS/DBS/3089794/975018/AUM/1211838358.1 23

Claimants "must fail" against GSMAL, GSF and other parties. Therefore, in the

event the Scheme is not approved, Justice Croft will also dismiss the M+K

Counterclaim Claimants' cases and they will receive nothing. As with the Group

Proceedings, Justice Croft's rejection of the PDS Claims made in the M+K

Counterclaim Proceedings may have implications for Scheme Creditors who may be

considering bringing or pursuing their own PDS Claims (and, for that reason, may be

considering voting against the Scheme). This will depend on how their PDS Claims

are pleaded.

1.3 Other proceedings which may relate to the rights (if any) of Scheme Creditors

The "Uplifted Proceedings" and the "Section 6 Proceedings" are explained below because,

together with the Group Proceedings, M+K Counterclaim Proceedings, and other proceedings

referred to in the definition of "Proceedings" in Schedule 2 to this Explanatory Statement, the

claims the subject of those proceedings will all be released if the Scheme is approved by the

requisite majorities of all the classes of Scheme Creditors and the Court.

The "Uplifted Proceedings": As described by Justice Croft at paragraph 57 of the Great

Southern Reasons referred to in section 1.2 above, many other proceedings were issued

arising out of the collapse of the Great Southern Group, both by growers and financiers, both

in the Supreme Court of Victoria, the County Court of Victoria, and other States. Most of the

proceedings issued in the County Court of Victoria were uplifted to the Supreme Court of

Victoria and stayed (that is, put on hold) pending the outcome of the Group Proceedings and

the M+K Counterclaim Proceedings. Those proceedings are referred to in this Explanatory

Statement and the Deed of Settlement as the "Uplifted Proceedings" and are listed in

Schedule 5 to the Deed of Settlement. Please check Schedule 5 to see whether you are a party

to any of the Uplifted Proceedings. If you are a party to one or more of the Uplifted

Proceedings, you may wish to take into account, and discuss with your legal advisers, your

individual position in respect of those proceedings, in deciding whether to vote for or against

the Scheme. If you are not a party to any of the Uplifted Proceedings, they are not relevant to

your decision whether to vote for or against the Scheme.

The "Section 6 Proceedings": These are, relevantly, High Court of Australia Proceeding No

S188 of 2013 and High Court of Australia Proceeding No S189 of 2013, both of which

involve an appeal against the decision in the New South Wales Court of Appeal Proceeding

No 2013/31425 in relation to the insurance policies referred to in section 5.1 below. Those

insurance policies covered both the legal costs and expenses of the defendants in various

proceedings (including, in respect of the Group Proceedings and M+K Counterclaim

Proceedings, GSMAL and Messrs Rhodes, Butlin, Young, Mews and Patrikeos) and any

liability those parties may have to the plaintiffs in those proceedings (referred to in the Court

of Appeal as "GS Claimants", which included certain named plaintiffs in the Group

Proceedings and certain named plaintiffs in proceedings commenced in the Supreme Court of

Western Australia (WA Proceedings), together with persons whom they represented).

The essential questions in the Court of Appeal were:

whether section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW)

applied to the relevant insurance policies;

whether section 6 afforded priority to the GS Claimants over the defendants in the

relevant proceedings (including GSMAL and Messrs Rhodes, Butlin, Young, Mews

and Patrikeos) in relation to moneys that may be payable under the relevant insurance

policies; and

DBS/DBS/3089794/975018/AUM/1211838358.1 24

whether, under the relevant insurance policies, Insurers could make payments for

which they were liable under a settlement or judgment, without first determining the

competing priorities of the section 6 charge asserted by the GS Claimants and the

section 6 charge asserted by claimants in the WA Proceedings.

The solicitors for the GS Claimants had claimed priority over:

legal expenses incurred by the defendants in defending the various proceedings; and

any insurance monies under the relevant insurance policies which the Insurers might

use to pay a judgment or settlement of the WA Proceedings.

The Court of Appeal held that section 6 does not apply in relation to the claims made by the

solicitors for the GS Claimants.

Proceeding No S188 of 2013 has already been discontinued, and there are no issues

outstanding.

Proceeding No S189 of 2013 is presently stayed (that is, put on hold). Pursuant to clause

6.1.17 of the Deed of Settlement, in the event the Scheme is approved, Proceeding No S189

of 2013 will be dismissed with each party to pay its own costs, and the parties to those

proceedings will release each other in respect of all claims for costs arising from, and all

previous costs orders made in, the Section 6 Proceedings. If the Scheme is not approved, the

stay will be lifted and the matter will, if pursued by the appellants, proceed to a hearing.

The Section 6 Proceedings are relevant to all Scheme Creditors, because in the event the

appellants in Proceeding No S189 of 2013 are successful in their appeal before the High

Court and the plaintiffs in the Group Proceedings and the plaintiffs by counterclaim in the

M+K Counterclaim Proceedings are successful in any appeal(s) against the decision of Justice

Croft (in terms of the Great Southern Reasons), there may potentially be additional cover

available under the relevant professional indemnity insurance policies to respond to relevant

claims by Scheme Creditors. The potential availability of additional insurance cover is also

referred to at section 5.3 below.

1.4 Deed of Settlement - the Group Proceedings, the M+K Counterclaim Proceedings and

other proceedings

In an attempt to settle the proceedings referred to at sections 1.2 and 1.3 above, a mediation

was held before a private mediator, followed by further discussions between the parties. As a

result of those further discussions, on 23 July 2014, shortly before judgment was to be

delivered by Justice Croft in the Group Proceedings and the M+K Counterclaim Proceedings,

parties (including GSMAL, GSF, the Directors, the Non-Executive Directors, the Lead

Plaintiffs and the Liquidators) executed the Deed of Settlement to resolve various disputes

(including the Group Proceedings, the M+K Counterclaim Proceedings and the Uplifted

Proceedings), on the terms and conditions set out in the Deed of Settlement. The Deed of

Settlement can be accessed by visiting the Ferrier Hodgson Website, accessing the electronic

version of this Explanatory Statement and clicking on the following link: [Hyperlink]

This Scheme is being proposed pursuant to the Deed of Settlement.

A summary of the relevant provisions of the Deed of Settlement, as identified by Justice

Croft, is set out in paragraph 57 of the s33V Approval Decision. The effect of the "critical"

provisions of the Deed of Settlement, summarised by the plaintiffs and referred to by Justice

Croft, is set out in paragraph 64 of the s33V Approval Decision:

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DBS/DBS/3089794/975018/AUM/1211838358.1 25

"(1) The insurers of GSMAL will pay $23.8 million, to be disbursed as

follows:

(a) $20 million to M+K Clients, to be disbursed pro rata based upon

amounts paid by each M+K Client to M+K for legal fees and disbursements;

(b) $250,000 to Javelin Asset Management Pty Ltd; and

(c) $3.55 million to be disbursed pro rata to investors who invested pursuant

to a Product Disclosure Statement issued in relation to a scheme managed by

GSMAL, such disbursement to take place in accordance with the terms of a

proposed Scheme of Arrangement.

(2) Group Members’ loans entered into to fund the investments and now held

by Bendigo and Adelaide Bank Limited (or its related entities) will be

admitted as valid and enforceable, and the BEN Parties will waive interest

relating to overdue amounts accrued and unpaid as at the Approval Date.

(3) Group Members’ loans entered into to fund the investments and now held

by Javelin Asset Management Pty Ltd will be admitted as valid and

enforceable, and borrowers with Javelin loans will have 28 days from the

Approval Date to make an election to either:

(a) make payment of the outstanding loan balance in full within 14 days of

making the election and receive a 20% discount on the loan balance (being

the balance as at 1 May 2014); or

(b) agree to a deferred settlement with the loan balance discounted by 17% if

the balance is met by way of 12 equal monthly payments; or

(c) agree to an extended term where the terms are varied so that the first 12

months after the Approval Date are interest free and then 5% per annum for

the remainder of the Revised Term.

(4) The Lead Plaintiffs, on behalf of themselves and on behalf of Group

Members, will release the other parties (and their related entities or persons)

from all Claims arising out of the contents of each Product Disclosure

Statement, the Loan Agreements and or the allegations made in or the facts

giving rise to all the relevant proceedings.

(5) The Group Proceedings will be dismissed with the parties bearing their

own costs."

The s33V Approval Decision (including the Great Southern Reasons) can be accessed by

visiting the Ferrier Hodgson Website, accessing the electronic version of this Explanatory

Statement and clicking on the following link: [Hyperlink].

The Deed of Settlement is not attached to this Explanatory Statement. It is included as

Schedule 1 to the Scheme and can be accessed by visiting the Ferrier Hodgson Website,

accessing the electronic version of this Explanatory Statement and clicking on the following

link: [Hyperlink.] A copy of the Deed of Settlement will also be lodged with ASIC at the

time of lodging the Scheme. If Scheme Creditors have any questions as to the Deed of

Settlement or its implication on their positions, they should obtain legal advice.



DBS/DBS/3089794/975018/AUM/1211838358.1 26

Reimbursement of costs to M+K Clients and payment to Javelin

Relevantly, the Deed of Settlement provided, subject to certain conditions (including approval

of the Scheme), for payment by Insurers of GSMAL of $20,250,000 to the trust account of

M+K Lawyers, to be disbursed by M+K Lawyers as follows:

$20,000,000 to the M+K Clients (being those persons who funded M+K Lawyers,

amongst other things, to commence and prosecute the Group Proceedings and M+K

Counterclaim Proceedings, with each M+K Client receiving the sum calculated pro

rata to the amount paid by each M+K Client to M+K Lawyers (in that respect, after

execution of the Deed of Settlement, M+K Lawyers advised the parties that the actual

amount charged to and paid by M+K Clients totalled $19,976,474.61, pursuant to

"fixed fee" agreements. Whilst the amount of $20,000,000 will be paid by Insurers of

GSMAL to M+K Lawyers consistent with the terms of the Deed of Settlement, M+K

Lawyers has undertaken in writing to Insurers of GSMAL (and provided to the Court

a copy of that undertaking) that it will return to Insurers of GSMAL the sum of

$23,525.39, so as to ensure that no "uplift" occurs); and

$250,000 to Javelin.

Pursuant to the Deed of Settlement, the $19,976,474.61 payable to the M+K Clients if the

Scheme is approved, is not available to Scheme Creditors generally.

It follows that, if the Scheme is not approved (by each class of Scheme Creditors and the

Court), the M+K Clients will not receive reimbursement of their legal costs.

Effect of the Scheme on Scheme Creditors' repayment obligations to Bendigo Bank

and/or Javelin

PDS Claims brought by a number of parties against the BEN Parties (which include Bendigo

Bank) and Javelin were settled on the terms set out at clauses 4 and 5 of the Deed of

Settlement. Among other things, those terms deal with revised obligations by relevant

Scheme Creditors to make payments to the BEN Parties and Javelin (such as payment of


The terms of those settlements are not conditional on the Scheme being approved, and are

effective regardless of whether or not the Scheme is approved. Please refer to the effect of the

"critical" provisions of the Deed of Settlement, summarised by the plaintiffs and referred to

by Justice Croft, and which is referred to on pages 24 to 25 above (including particularly, sub-

paragraph (3)).

Accordingly, pursuant to the Deed of Settlement, the BEN Parties and Javelin may commence

recovery actions against some Scheme Creditors in respect of loans owing by those Scheme

Creditors. Scheme Creditors should note that the Scheme may have different implications for

different Scheme Creditors with respect of any loans owing to the BEN Parties and/or Javelin:

The Scheme does not affect Scheme Creditors' positions if those Scheme Creditors

are parties to the Group Proceedings and/or the M+K Counterclaim Proceedings.

This is because, in respect of the Scheme Creditors' Investments that are the subject

of the Group Proceedings and the M+K Counterclaim Proceedings, those Scheme

Creditors have, by the terms of the Deed of Settlement and by reason of the s33V

Approval Decision, in respect of those Investments, already agreed, among other

things, to make payments to the BEN Parties and Javelin (such as payment of


DBS/DBS/3089794/975018/AUM/1211838358.1 27

The Scheme may potentially affect a Scheme Creditor's position if the Scheme

Creditor is not a party to the Group Proceedings or the M+K Counterclaim

Proceedings and, thereby, are not bound by the terms of the Deed of Settlement or the

s33V Approval Decision. In particular, the Scheme may affect a Scheme Creditor's

position if the Scheme Creditor wishes to raise, in recovery actions commenced by

the BEN Parties and/or Javelin, any alleged acts or omissions on the part of any

company in the Great Southern Group or any of the directors of those companies.

Scheme Creditors should contact, relevantly, Bendigo Bank or Javelin to discuss any

obligations they may have, and obtain their own legal, financial, taxation and/or other

professional advice in relation to any such obligations as well as the implications of

the Scheme on those obligations.

Administration of the Scheme

The Liquidators are required, under the terms of the Deed of Settlement, to propose the

Scheme to the Scheme Creditors pursuant to Part 5.1 of the Act.

It is proposed that the Liquidators, other than Andrew John Saker and Darren Gordon Weaver

(who have retired as Liquidators), be appointed as the Scheme Administrators.

Proposed payments to all Scheme Creditors

Under the terms of the Deed of Settlement, subject, relevantly, to Settlement Approval being

obtained and the Scheme becoming effective:

Insurers of GSMAL will contribute the Scheme Creditors' Pool, being the sum of

$3,550,000, to be distributed by the Scheme Administrators to the Scheme Creditors

on a pro rata basis; and

this will result in a payment to Scheme Creditors of $16.52 per $10,000 invested.

Scheme Costs

Under the terms of the Deed of Settlement, and subject, relevantly, to Settlement Approval

being obtained and the Scheme becoming effective, Insurers of GSMAL and the Liquidators

were to agree on, and the Insurers of GSMAL were to contribute, an amount in respect of the

Scheme Costs which was to constitute the Scheme Costs Pool.

In respect of the payment of the Scheme Creditors' Pool, the Insurers of GSMAL have already

made that payment to their respective solicitors, to be held on trust, together with an

irrevocable direction to their respective solicitors to make payment to the Scheme

Administrators. Therefore, if the Scheme is approved, their solicitors must pay those funds to

the Scheme Administrators no later than 5 (five) Business Days after approval of the Scheme

by the Court.

In respect of the Scheme Costs, the Insurers of GSMAL and the Liquidators have:

entered into the Scheme Costs Deed to govern the payment of the Scheme Costs Pool

by the Insurers of GSMAL to the Liquidators and the manner in which the Scheme

Costs Pool is to be administered by the Liquidators and Scheme Administrators; and

DBS/DBS/3089794/975018/AUM/1211838358.1 28

agreed that any remainder of the Scheme Costs Pool, together with interest accrued

on the Scheme Costs Pool, will be repaid by the Liquidators or the Scheme

Administrators to the Insurers of GSMAL.

1.5 Conditions applicable to the Deed of Settlement

In order for the Deed of Settlement to become binding and effective as against the BEN

Parties and Javelin, the following orders needed to be obtained:

An order pursuant to section 33ZF of the Supreme Court Act 1986 (Vic) nunc pro

tunc (i.e. retrospectively) to the effect that the Lead Plaintiffs had the authority of the

Group Members to enter into and give effect to the Deed of Settlement, and the

transactions contemplated thereby, for and on behalf of the Group Members.

An order pursuant to section 477(2A) and/or section 477(2B) of the Act approving

nunc pro tunc the entry by the Liquidators into the Deed of Settlement.

An order pursuant to section 33V(1) of the Supreme Court Act 1986 (Vic) approving

the settlement of the Group Proceedings on the terms and conditions set out in the

Deed of Settlement.

1.6 Further conditions applicable to the Deed of Settlement

Insofar as it deals with PDS Claims involving the Great Southern Companies (including

GSMAL and GSF, the Directors and their Related Persons, the Non-Executive Directors and

their Related Persons, the Insurers, Related Entities of GSMAL or Related Persons of Related

Entities of GSMAL), the following additional conditions needed to be satisfied in order for

the Deed of Settlement to become binding and effective:

The Liquidators had to receive such other approvals as they considered necessary

under section 477(2A) and (2B) of the Act and directions under section 479(3) of the

Act.

The Court had to approve a scheme of arrangement on the terms described in the

Deed of Settlement or such other terms as are agreed by the parties to the Deed of

Settlement (other than the BEN Parties and Javelin).

The conditions set out in sections 1.5 and 1.6 above, other than Court approval of a scheme of

arrangement, have been satisfied:

The Court made orders pursuant to sections 33ZF and 33V(1) of the Supreme Court

Act 1986 (Vic) on 11 December 2014, for the reasons set out in the s33V Approval

Decision.

The Court made orders pursuant to sections 477(2A) and section 477(2B) and

directions under section 511 of the Act on 17 December 2014.

Therefore, the only condition that remains to be satisfied is the approval of the Scheme by

Scheme Creditors and the Court.

As part of his judgment on the application for approval of the Deed of Settlement, Justice

Croft published the Great Southern Reasons as an annexure to the s33V Approval Decision.

The s33V Approval Decision (including the Great Southern Reasons) can be accessed by

DBS/DBS/3089794/975018/AUM/1211838358.1 29

visiting the Ferrier Hodgson Website, accessing the electronic version of this Explanatory

Statement and clicking on the following link: [Hyperlink]

1.7 Scheme proposal

Who is a Scheme Creditor and who will be covered by the Scheme?

"Scheme Creditors" are those persons who:

invested in any managed investment scheme in or post 1998 of which GSMAL is or

was the responsible entity, including former scheme members; and

have a "PDS Claim".

For purposes of the Scheme, all of the persons referred to as "Scheme Creditors" above will

be treated as Scheme Creditors, without having to prove a PDS Claim. So long as the

investments of the Scheme Creditors are recorded in the relevant scheme registers as at 16

May 2009, they do not have to lodge a proof of debt or take any other step to be recognised as

Scheme Creditors in order to vote on the Scheme and, in the event the Scheme is approved,

receive their respective distributions.

The Scheme, if approved by the requisite majorities of all classes of Scheme Creditors and the

Court, will bind all Scheme Creditors, regardless of whether they voted on the Scheme and

whether they voted for or against the Scheme.

What is a PDS Claim?

Scheme Creditors must refer to the definition of PDS Claims set out in Schedule 2 to this

Explanatory Statement, and to the extent they have any questions as to the meaning of

that defined term (or any other defined term), they should obtain legal advice. In

essence, a PDS Claim includes any claim, whether presently known or unknown arising out

of, or in connection with, the contents of or the facts giving rise to, the PDSs, the Loan

Agreements and/or the allegations made in or the facts giving rise to each of the Proceedings.

In that regard:

"PDS" means a Product Disclosure Statement issued by GSMAL and, in the case of

the Great Southern 2008 Future Forestry Investment Scheme, includes the Product

Disclosure Statement issued by GSMAL and Rural Funds Management Limited

(formerly Great Southern Funds Management Limited);

"Loan Agreements" means the loan agreements under which monies were advanced

to "Scheme Members" to finance their interest in managed investment schemes of

which GSMAL, and (in the case of the Great Southern 2008 Future Forestry

Investment Scheme) GSMAL and Rural Funds Management Limited ACN 077 492

838 (formerly Great Southern Funds Management Limited), is or was the responsible

entity; and

"Proceedings" means the "Group Proceedings", the "Contribution Proceedings", the

"M+K Counterclaim Proceedings", the "Privilege Proceedings", the "Uplifted

Proceedings" and the "Section 6 Proceedings".


DBS/DBS/3089794/975018/AUM/1211838358.1 30

(Please refer to the definitions set out in Schedule 2 to this Explanatory Statement. If you

require an explanation in relation to the "Privilege Proceedings", you should seek legal

advice. The "Privilege Proceedings" are not considered sufficiently relevant or material

to the proposed Scheme to warrant a detailed explanation of those proceedings in this

Explanatory Statement.)

Requirements for the Scheme to proceed

In order for the Scheme to proceed and be implemented:

it must be approved, in respect of each class of Scheme Creditors, by:

o a majority in number of those Scheme Creditors (that is, by more than 50%)

who are present and voting at the Scheme Meeting (either in person, by

attorney, by a duly authorised corporate representative (in the case of a

corporation), or by proxy; and

o those Scheme Creditors whose debts or claims amount in aggregate to at least

75% of the total amount of the debts and claims of Scheme Creditors present

and voting at the Scheme Meeting; and

it must be approved by the Court, with or without modification (provided that any

such modification does not derogate from the key features of the Scheme set out in

clause 3.1 of the Deed of Settlement);

a sealed copy of the order of Court must be lodged with ASIC; and

payment must be made by the Insurers of GSMAL, through their solicitors, of:

o the Scheme Creditors' Pool to the Scheme Administrators; and

o the M+K Trust Account Payment to M+K Lawyers,

no later than 5 (five) Business Days following approval of the Scheme by the Court.

(In that regard, the respective solicitors of the relevant Insurers of GSMAL hold on

trust sufficient funds to enable those payments to be made, together with irrevocable

authorities directing them to make the payments within the specified period, in the

event the Scheme is approved by the requisite majorities of Scheme Creditors and the

Court.)

Subject to the Insurers of GSMAL making the payments set out above and unless the Court

orders otherwise, the Scheme takes effect from the date a sealed copy of the orders made by

the Court approving the Scheme is lodged with ASIC. The orders are usually lodged with

ASIC on the day on which the orders are made by the Court or on the next Business Day.

Steps following approval of the Scheme

If the Scheme is approved by the requisite majorities of Scheme Creditors and the Court, and

the Insurers of GSMAL make the payments set out above, the Scheme Creditors' Pool will be

distributed to the Scheme Creditors in proportion to the face value of relevant investments

made by each Scheme Creditor. If, for any reason, any part of the payments by the Insurers

DBS/DBS/3089794/975018/AUM/1211838358.1 31

of GSMAL is not paid by the due date, the Scheme will not proceed and will not be

implemented.

The Liquidators presently estimate the distribution from the Scheme Creditors' Pool to be

$16.52 per $10,000 invested by each Scheme Creditor.

Release of PDS Claims

Under the terms of the Scheme, Scheme Creditors will compromise and release any and all

"PDS Claims" they may have against GSMAL and the following third parties:

"Related Entities" of GSMAL (including GSF, GSS and current and former directors

of GSMAL and GSMAL's "Related Bodies Corporate");

"Related Persons" of "Related Entities" of GSMAL;

"Directors" and their "Related Persons";

"Non-Executive Directors" and their "Related Persons"; and

each of the "Insurers".

(Please refer to the definitions set out in Schedule 2 to this Explanatory Statement.)

In the event the Scheme does not proceed and is not implemented, the releases by the Scheme

Creditors in favour of the parties identified in the preceding paragraph will not take effect.

To the extent that Scheme Creditors have Other Claims, such claims are not compromised,

released or otherwise affected by the Scheme. Other Claims is defined in Schedule 2 and you

should consider the definition for the purposes of your decision. In essence, an Other Claim,

is any claim other than a PDS Claim.

Where to get more information?

If a Scheme Creditor has any questions on the Scheme or this Explanatory Statement (other

than questions relating to the Proxy Form, which should be addressed to Computershare using

the facsimile or postal details specified above and also set out on the Proxy Form), the

Scheme Creditor can contact the Liquidators by post, facsimile, email or by telephone, in the

manner described in the "What You Should Do Next" section of this Explanatory Statement

above.

An electronic copy of this Explanatory Statement is available online on the Ferrier Hodgson

Website. It enables Scheme Creditors to click on links to various documents referred to in

this Explanatory Statement and the Scheme document. It can be accessed by visiting the

Ferrier Hodgson Website and accessing the electronic version of this Explanatory Statement

by clicking on the following link: [Hyperlink]. If any Scheme Creditor requires a hard copy

of any of the documents referred to in this Explanatory Statement, that Scheme Creditor

should contact the Liquidators.

The Liquidators recommend that Scheme Creditors consider obtaining independent legal,

financial, taxation and/or other professional advice on the Scheme and the contents of this

Explanatory Statement, to assist them in deciding whether to vote for or against the Scheme.

DBS/DBS/3089794/975018/AUM/1211838358.1 32

2. CLASSES OF SCHEME CREDITORS AND VOTING AT THE SCHEME MEETING

2.1 Purpose of the Scheme

A scheme of arrangement is a statutory mechanism provided by Part 5.1 of the Act to

give effect, relevantly, to a compromise or arrangement agreed to by a company and

its creditors or a class of creditors. This mechanism addresses the practical

difficulties associated with securing the agreement of each and every member of the

classes of creditors intended to be bound by the terms of the scheme of arrangement.

The Scheme is proposed to be entered into by GSMAL and the Scheme Creditors.

The Scheme involves three stages:

o On 26 August 2015, the Liquidators made an application to the Court for

approval to convene the Scheme Meeting to enable Scheme Creditors to vote

on the Scheme.

o On 15 December 2015, the Court made an order to convene the Scheme

Meeting on 25 January 2016 for the relevant classes of Scheme Creditors to

consider and vote on the Scheme.

o If, at the Scheme Meeting, the Scheme is agreed to by the requisite majorities

of each class of Scheme Creditors, the matter will return to the Court, and the

Court will consider whether to approve the Scheme. It is at this hearing that

the Court makes its final determination whether to approve the Scheme.

If the Scheme is approved by the Scheme Creditors and the Court, and subject to the

Insurers of GSMAL making the payments set out in section 1.7 above, the Scheme

binds all Scheme Creditors, regardless of whether individual Scheme Creditors voted

on the Scheme and whether they voted for or against the Scheme.

2.2 Approval process for the Scheme

Four classes of Scheme Creditors have been identified for purposes of voting on the

Scheme. For the Scheme to be approved, votes in favour of the Scheme must be

received from:

o a majority in number (that is, more than 50%) of Scheme Creditors of each

class present and voting at the Scheme Meeting (in person, by attorney, by a

duly authorised corporate representative (in the case of a corporation), or by

proxy); and

o those Scheme Creditors who together hold at least 75% of the aggregate face

value of investments held by the Scheme Creditors of each class present and

voting at the Scheme Meeting (in person, by attorney, by a duly authorised

corporate representative (in the case of a corporation), or by proxy).

If the requisite majority of each class of Scheme Creditors does not vote in favour of

the Scheme, the Scheme does not return to the Court for approval, and neither

GSMAL nor the Scheme Creditors will be bound by the terms set out in the Scheme.

DBS/DBS/3089794/975018/AUM/1211838358.1 33

Further, those obligations set out in the Deed of Settlement which are conditional

upon approval being received for the Scheme, such as reimbursement of the legal

costs of M+K Clients, will not become effective.

If the requisite majority of each class of Scheme Creditors votes in favour of the

Scheme, the Scheme will return to the Court for approval by the Court. At this

hearing, dissenting Scheme Creditors and any other interested persons are able to

appear and be heard, without the need to become a party to the application. Any

Scheme Creditors or any other interested persons who are considering appearing at

the hearing should obtain their own independent legal advice.

If the Scheme returns to the Court for approval, the Court will need to be satisfied of

the following matters before it will approve the Scheme:

o The Court has jurisdiction to approve the Scheme.

o The Scheme Meeting was properly convened and conducted.

o The requisite majority of each class of Scheme Creditors voted in favour of

the Scheme.

Notwithstanding the Scheme's compliance with the requirements of the Act and the

Regulations, and notwithstanding the Scheme having been approved by the requisite

majority of each class of Scheme Creditors, the Court retains a discretion as to

whether it will approve the Scheme. The Court may approve the Scheme, or it may

refuse the application for approval, or it may grant approval subject to changes being

made to the Scheme (although, under the Deed of Settlement, neither GSMAL nor the

Liquidators are able to agree to any changes that derogate from the key features of the

Scheme set out in clause 3.1 of the Deed of Settlement).

If the Court does not approve the Scheme, neither GSMAL nor the Scheme Creditors

will be bound by the terms of the Scheme, and none of the releases by the Scheme

Creditors of GSMAL or any of the third parties referred to in section 3.4 below will

become effective. Further, Insurers of GSMAL will not pay the Scheme Creditors'

Pool or the M+K Trust Account Payment.

If the Court approves the Scheme, GSMAL and all Scheme Creditors will, subject to

the Insurers of GSMAL making the payments set out in section 1.7 above, be bound

by the terms of the Scheme, regardless of whether individual Scheme Creditors voted

on the Scheme and whether they voted for or against the Scheme. Further, the

releases by the Scheme Creditors of GSMAL and the third parties referred to in

section 3.4 below will become effective.

2.3 Four classes of Scheme Creditors

The Liquidators have identified four classes of Scheme Creditors for purposes of

voting on the Scheme:

o Class 1 Scheme Creditors, being Scheme Creditors who are M+K Clients.

o Class 2 Scheme Creditors, being Scheme Creditors:

who are not Class 1 Scheme Creditors; and

DBS/DBS/3089794/975018/AUM/1211838358.1 34

all of whose Investments are the subject of claims determined in the

Group Proceedings.

o Class 3 Scheme Creditors, being Scheme Creditors who:

are not Class 1 Scheme Creditors or Class 2 Scheme Creditors;

have one or more Investments which are not the subject of claims

determined in any of the Group Proceedings; and

financed one or more of their Investments which are not the subject

of claims determined in any of the Group Proceedings, with a loan

from GSF.

o Class 4 Scheme Creditors, being Scheme Creditors who:

are not Class 1 Scheme Creditors or Class 2 Scheme Creditors or

Class 3 Scheme Creditors;

have one or more Investments which are not the subject of claims

determined in any of the Group Proceedings; and

did not finance any of their Investments which are not the subject of

claims determined in any of the Group Proceedings, with a loan from

GSF.

Examples

Tom is an M+K Client. Tom is therefore a Class 1 Scheme Creditor.

Roger is not an M+K Client. His investment is the subject of a claim determined in

the Group Proceedings. He does not have any investments in any other projects

managed by GSMAL. Roger is therefore a Class 2 Scheme Creditor.

Caryn is not an M+K Client. She has one investment which is the subject of a claim

determined in the Group Proceedings and another investment which is not the subject

of a claim determined in the Group Proceedings, which she financed with GSF, and

GSF assigned the loans to Bendigo and Adelaide Bank Limited. Caryn is therefore a

Class 3 Scheme Creditor.

Mabel is not an M+K Client. She has one investment which is the subject of a claim

determined in the Group Proceedings and another investment which is not the subject

of a claim determined in the Group Proceedings, which she financed with cash.

Mabel is therefore a Class 4 Scheme Creditor.

Scheme Creditors may have a broad range of PDS Claims that may be affected in

different ways by the Scheme, including, for example:

o PDS Claims that are the subject of the Group Proceedings and those that are

not the subject of the Group Proceedings; and/or

o PDS Claims that involve Investments made with a loan from GSF and those

that were not made with a loan from GSF.

DBS/DBS/3089794/975018/AUM/1211838358.1 35

Division of Scheme Creditors into classes

The Scheme Creditors have been divided into four classes because the rights and

entitlements of each class, viewed in the totality of the Scheme's context, are so

dissimilar that it would make it impossible for them to consult together with a view to

their common interest. In that respect:

Class 1 Scheme Creditors

o As explained below, the entitlements conferred on Scheme Creditors by the

Scheme are created pursuant to the Deed of Settlement.

o Class 1 Scheme Creditors, in respect of any Investments they have which are

the subject of claims determined in any of the Group Proceedings, will be

bound by any judgments entered in the Group Proceedings. However, they

will not be bound in respect of any Investments they have which are not the

subject of claims determined in any of the Group Proceedings.

o Under the Scheme, Class 1 Scheme Creditors have the same entitlements as

other Scheme Creditors in respect of the Scheme Creditors' Pool. However,

Class 1 Scheme Creditors have an additional right, also created under the

Deed of Settlement, to receive a pro rata share of the sum of $19,976,474.61,

to be paid by Insurers of GSMAL on behalf of GSMAL to M+K Lawyers, in

reimbursement of Class 1 Scheme Creditors' legal costs previously paid.

Pursuant to the Deed of Settlement, that right is conditional upon the Scheme

being approved. If the Scheme is not approved, Class 1 Scheme Creditors

will not receive any part of the sum of $19,976,474.61.

o In contrast, Scheme Creditors other than Class 1 Scheme Creditors have no

rights under the Deed of Settlement to have reimbursed to them any legal

costs they may have incurred. These Scheme Creditors will only receive

their pro rata entitlements to the Scheme Creditors' Pool.


o In the event the Scheme is not approved, Justice Croft will formally publish

the Great Southern Reasons and judgments will be entered in each of the

Group Proceedings and the M+K Counterclaim Proceedings. In those

circumstances, Class 2 Scheme Creditors will be bound by those judgments

and all of their claims in those proceedings will be dismissed. Accordingly,

the relevant rights that Class 2 Scheme Creditors will be giving up are their

contingent rights of appeal against any judgments entered in the Group

Proceedings and the M+K Counterclaim Proceedings.

o In that respect, the rights of Class 2 Scheme Creditors against GSMAL differ

from the rights of Class 3 Scheme Creditors and Class 4 Scheme Creditors,

who have one or more Investments which are not the subject of claims

determined in any of the Group Proceedings, and therefore will not be bound

by any judgments entered in the Group Proceedings and the M+K

Counterclaim Proceedings.

DBS/DBS/3089794/975018/AUM/1211838358.1 36


o Class 3 Scheme Creditors, in respect of any Investments they have which are

the subject of claims determined in any of the Group Proceedings, will be

bound by any judgments entered in the Group Proceedings. However, they

will not be bound in respect of any Investments they have which are not the

subject of claims determined in any of the Group Proceedings.

o Class 3 Scheme Creditors may have a PDS Claim against GSF (which would

be compromised and released if the Scheme is approved) which Class 4

Scheme Creditors do not have, because Class 4 Scheme Creditors did not

finance any of their Investments which are not the subject of claims

determined in any of the Group Proceedings, with a loan from GSF.

o In those circumstances, it is appropriate for Class 3 Scheme Creditors to form

a separate class.


o Class 4 Scheme Creditors are in a similar position to Class 3 Scheme

Creditors, in that, Class 4 Scheme Creditors, in respect of any Investments

they have which are the subject of claims determined in any of the Group

Proceedings, will be bound by any judgments entered in the Group

Proceedings. However, they will not be bound in respect of any Investments

they have which are not the subject of claims determined in any of the Group

Proceedings.

o However, as Class 4 Scheme Creditors did not finance any of their

Investments which are not the subject of claims determined in any of the

Group Proceedings, with a loan from GSF, they have no discernible rights

against GSF which they will compromise and release in the event the Scheme

is approved.

o In those circumstances, it is appropriate for Class 4 Scheme Creditors to form

a separate class.

In making orders under section 411 of the Act to convene the Scheme Meeting, the

Court approved the convening of separate meetings for each of the four classes of

Scheme Creditors.

Each class of Scheme Creditors will therefore meet and discuss with Scheme

Creditors of the same class. Each class of Scheme Creditors will vote separately on

the Scheme.

Each Scheme Creditor's personal circumstances may be different, and Scheme

Creditors should consider the Liquidators' recommendation at section 4.5 below in

deciding whether to vote for or against the Scheme.

2.4 Position as to claims by the BEN Parties and Javelin against Scheme Creditors

The Deed of Settlement contains provisions which affect the rights and obligations of

some Scheme Creditors with loans owing to the BEN Parties (clause 4 of the Deed of

Settlement) and Javelin (clause 5 of the Deed of Settlement). The Scheme Creditors

DBS/DBS/3089794/975018/AUM/1211838358.1 37

affected are those whose Investments are the subject of claims determined in the

Group Proceedings. This is because the Scheme Creditors whose Investments are the

subject of claims determined in the Group Proceedings are bound by the Deed of

Settlement as a result of the s33V Approval Decision. To the extent that those

Scheme Creditors owe any obligations to the BEN Parties or Javelin (including as to

principal and interest), those obligations are unaffected by the Scheme. Scheme

Creditors should contact, relevantly, the BEN Parties or Javelin to discuss any

obligations they may have, and obtain their own legal, financial, taxation and/or other

professional advice in relation to any such obligations.

The position of each class of Scheme Creditors is as follows:

o Those Class 1 Scheme Creditors who only have Investments which are the

subject of claims determined in the Group Proceedings, are bound by the

terms of the Deed of Settlement in respect of their position with the BEN

Parties (clause 4 of the Deed of Settlement) and Javelin (clause 5 of the Deed

of Settlement) regardless of whether the Scheme is approved.

o Class 2 Scheme Creditors are bound by the terms of the Deed of Settlement

in respect of their position with the BEN Parties (clause 4 of the Deed of

Settlement) and Javelin (clause 5 of the Deed of Settlement) regardless of

whether the Scheme is approved.

o Class 3 Scheme Creditors are not bound by the terms of the Deed of

Settlement in respect of their position with the BEN Parties (clause 4 of the

Deed of Settlement) and Javelin (clause 5 of the Deed of Settlement)

regardless of whether the Scheme is approved, except in relation to any

Investments they have which are the subject of claims determined in any of

the Group Proceedings and in respect of which they are bound by the terms of

the Deed of Settlement.

o Class 4 Scheme Creditors are not bound by the terms of the Deed of

Settlement in respect of their position with the BEN Parties (clause 4 of the

Deed of Settlement) regardless of whether the Scheme is approved (except in

relation to any Investments they have which are the subject of claims

determined in any of the Group Proceedings, in respect of which they are

bound by the terms of the Deed of Settlement).

2.5 Voting at the Scheme Meeting

The Scheme Meeting will be held at Park Room, Melbourne Park Function Centre,

Melbourne & Olympic Parks, Batman Avenue, Melbourne, Victoria at 10.00 am

(AEDT) on Monday, 25 January 2016. It is intended that the Scheme Meeting will

proceed as follows:

o The Scheme Meeting will open at 10.00 am (AEDT) to consider and vote on

the Resolution. The Resolution is defined in Schedule 2 to this Explanatory

Statement and set out on the Notices of Scheme Meeting at Schedule 1 to this

Explanatory Statement and on the Proxy Form.

o The Chairman of the Scheme Meeting will deliver an address to all Scheme

Creditors.

DBS/DBS/3089794/975018/AUM/1211838358.1 38

o Following this address, there will then be a question and answer session, in

the presence of all Scheme Creditors, during which Scheme Creditors will

have an opportunity to ask general questions regarding the Scheme.

o The Chairman will then:

adjourn the meetings of the Class 2 Scheme Creditors, Class 3

Scheme Creditors and Class 4 Scheme Creditors;

proceed with the meeting of Class 1 Scheme Creditors;

ask whether Class 1 Scheme Creditors object to all Scheme Creditors

remaining in the meeting room whilst the meeting of Class 1 Scheme

Creditors takes place (and will follow this procedure at the

commencement of the meetings of the Class 2 Scheme Creditors, the

Class 3 Scheme Creditors and the Class 4 Scheme Creditors).

o Class 1 Scheme Creditors will consider and vote on the Resolution.

o The Chairman will then:

adjourn the meeting of Class 1 Scheme Creditors;

proceed, sequentially, with the meetings of the Class 2 Scheme

Creditors, the Class 3 Scheme Creditors and the Class 4 Scheme

Creditors.

o After the meeting of the Class 4 Scheme Creditors has taken place, the

Liquidators will adjourn the meeting to enable the votes to be counted.

Each Scheme Creditor who wishes to vote on the Scheme must either:

o attend in person and vote at the Scheme Meeting;

o vote by attorney at the Scheme Meeting;

o attend by a duly authorised corporate representative (in the case of a

corporation) and vote at the Scheme Meeting; or

o vote by proxy at the Scheme Meeting.

In respect of voting in person:

o Scheme Creditors should attend the Scheme Meeting which will be held at

Park Room, Melbourne Park Function Centre, Melbourne & Olympic Parks,

Batman Avenue, Melbourne, Victoria at 10.00 am (AEDT) on Monday, 25

January 2016; and

o all persons entitled to vote will be required to register and will be given a

voting card.

In respect of voting by proxy:

DBS/DBS/3089794/975018/AUM/1211838358.1 39

o a personalised Proxy Form has been provided with this Explanatory

Statement, which form identifies the individual Scheme Creditor and the

particular class to which the Scheme Creditor belongs for purposes of voting

on the Scheme;

o the personalised Proxy Form is also QR coded and colour coded;

o Scheme Creditors can appoint a proxy to attend the Scheme Meeting and vote

on their behalf by completing the personalised Proxy Form that accompanies

this Explanatory Statement (in accordance with the instructions on the form);

o completed personalised Proxy Forms must be received by 10.00 am (AEDT)

on 23 January 2016 in any of the following ways:

by post to Computershare, GPO Box 242, Melbourne, VIC 3001;

by facsimile on 1800 783 447 (if dialled within Australia) or +61 3

9473 2555 (if dialled from outside Australia); or

online;

(If you wish to submit your personalised Proxy Form online, you will need to

visit www.investorvote.com.au on your computer or smartphone. You will

need the control number and scheme creditor number shown on your

personalised Proxy Form to submit your Proxy Form online. To use the

smartphone voting service, you will need to scan the QR code which appears

at the top of your Proxy Form and follow the instructions provided or go to

www,investorvote.com.au from your smartphone. In order to scan the code

you would need to have already downloaded a free QR code reader app to

your smartphone. Once scanned, the QR code will take you directly to the

mobile voting site.)

o any Proxy Forms received after 10.00 am (AEDT) on 23 January 2016 will

be invalid; and

o where the Scheme Creditor is a corporation, it must comply with section 127

of the Act in that the corporation may execute the Proxy Form without using

a common seal if it is signed by:

2 directors;

a director and a company secretary; or

for a Pty Ltd company that has a sole director who is also the sole

company secretary - that director;

o where the Scheme Creditor comprises more than one person (such as a

husband and wife), all of the individuals must sign the Proxy Form;

o where the Scheme Creditor is a trust or a trustee of a trust, the trustee must

execute the Proxy Form in accordance with the terms of the trust deed and

applicable law;



DBS/DBS/3089794/975018/AUM/1211838358.1 40

o a proxy will be admitted to the Scheme Meeting and given a voting card upon

providing, at the point of entry to the Scheme Meeting, written evidence of

his or her appointment as proxy and his or her identity;

o further information about voting on the Scheme is set out in the personalised

Proxy Form.

In respect of voting by attorney:

o the relevant power of attorney appointing the attorney to attend and vote at

the Scheme Meeting must be duly executed by the Scheme Creditor;

o the original or a certified copy of the power of attorney must be lodged at the

registration desk on the day of the Scheme Meeting or be received by

Computershare (at the address specified in the section "Voting by proxy") by

no later than 10.00 am (AEDT) on 23 January 2016 (or 48 hours prior to the

commencement of the Scheme Meeting or any adjournment of that meeting);

and

o an attorney will be admitted to the Scheme Meeting and given a voting card

upon providing, at the point of entry to the Scheme Meeting, written evidence

of his or her appointment as attorney and his or her identity.

In respect of voting by corporate representative:

o if a Scheme Creditor is a corporation, it may appoint a person to act as its

corporate representative to vote at the Scheme Meeting;

o a form of certificate of appointment of a corporation may be obtained from

Computershare at the address specified in the section "Voting by proxy"

above or online at www.investorvote.com.au under the help tab, "Printable

Forms";

o the original completed certificate of appointment should be lodged at the

registration desk on the day of the Scheme Meeting or be received by

Computershare (at the address specified in the section "Voting by proxy"

above) by no later than 10.00 AM (AEDT) on 23 January 2016 (or 48 hours

prior to the commencement of the Scheme Meeting or any adjournment of

that meeting); and

o an authorised corporate representative will be admitted to the Scheme

Meeting and given a voting card upon providing, at the point of entry to the

Scheme Meeting, written evidence of his or her appointment as corporate

representative (including any authority under which it is signed), his or her

name and address and the identity of the appointer.


DBS/DBS/3089794/975018/AUM/1211838358.1 41

3. SCHEME PROPOSAL IN SUMMARY

3.1 Scheme document

A copy of the Scheme is attached to this Explanatory Statement as Schedule 3. The

Scheme can also be accessed by visiting the Ferrier Hodgson Website, accessing the

electronic version of this Explanatory Statement and clicking on the following link:

[Hyperlink.]

The Court may require changes to the Scheme before approving it. However, under

the Deed of Settlement, the Liquidators are not able to agree to any changes that

derogate from the key features of the Scheme set out in clause 3.1 of the Deed of

Settlement.

3.2 What will happen if the Scheme is approved?

If the Court approves the Scheme, a sealed copy of the relevant order of Court will be

lodged with ASIC. Subject to the Insurers of GSMAL making the payments set out

in section 1.7 above and unless the Court otherwise orders, the Scheme becomes

effective on the date the order is lodged with ASIC.

Upon the Insurers of GSMAL making the payments set out in section 1.7 above:

o the terms of the Deed of Settlement which are conditional upon the Scheme

becoming effective, will become unconditional; and

o the Scheme Administrators will administer and give effect to the Scheme,

including by paying dividends from the Scheme Creditors' Pool to the

Scheme Creditors in accordance with the terms of the Scheme.

The Scheme will bind all Scheme Creditors.

PDS Claims by all Scheme Creditors against the parties identified in section 3.4

below (including GSMAL and GSF) will be settled and released, regardless of

whether each individual Scheme Creditor voted on the Scheme and whether the

Scheme Creditor voted for or against the Scheme.

If, for any reason the Insurers of GSMAL do not make the payments set out in section

1.7 above by the due date, the Scheme will not proceed and will not be implemented.

Terms of the Deed of Settlement which are not conditional upon the Scheme (such as

the provisions relating to the BEN Parties and Javelin) remain binding on Group

Members and M+K Counterclaim Claimants, regardless of whether or not the

Scheme is approved. More generally, the rights of the BEN Parties and Javelin, in

relation to the recovery of outstanding loans, are not affected by the Scheme.

3.3 What will happen if the Scheme is not approved?

If the Scheme is not approved:

o the Insurers of GSMAL will not make the payments set out in section 1.7

above, and there will be no Scheme Creditors' Pool to be distributed to the

Scheme Creditors;

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DBS/DBS/3089794/975018/AUM/1211838358.1 42

o Justice Croft will deliver judgments in the Group Proceedings and the M+K

Counterclaim Proceedings;

o the releases by the Scheme Creditors in favour of the parties identified in

section 3.4 below will not take effect, and Scheme Creditors will (subject to

the judgments to be delivered by Justice Croft) retain any PDS Claims they

may against those parties; and

o the Scheme will not bind any Scheme Creditors.

Terms of the Deed of Settlement which are not conditional upon the Scheme (such as

the provisions relating to the BEN Parties and Javelin) remain binding on Group

Members and M+K Counterclaim Claimants, regardless of whether or not the

Scheme is approved. More generally, the rights of the BEN Parties and Javelin, in

relation to the recovery of outstanding loans, are not affected by the Scheme.

3.4 Key provisions of the Scheme

A short summary of some of the key provisions of the Scheme is set out below. For the

avoidance of doubt, this is a summary only and does not purport to be an exhaustive statement

of all the provisions of the Scheme or all the important provisions of the Scheme. Scheme

Creditors must read the Scheme in full and, if necessary or appropriate, obtain legal, financial,

taxation and/or other professional advice, before deciding whether to vote for or against the

Scheme.

Entitlement to dividends

Each Scheme Creditor will receive a pro rata dividend from the Scheme Creditors'

Pool.

o The dividend will be calculated by reference to the total face value of the

amounts invested by each Scheme Creditor in the relevant GSMAL MISs

(which amounts do not include GST or borrowing costs) as recorded in the

relevant scheme registers as at 16 May 2009.

o If a Scheme Creditor's investment is not recorded in the relevant scheme

registers as at 16 May 2009 for any reason whatsoever, including the expiry

of a lease, the Scheme Creditor will not be entitled to receive a pro rata

dividend from the Scheme Creditors' Pool. However, if the Scheme Creditor

provides evidence of its investment to the satisfaction of the Scheme

Administrators within twenty one (21) days of the Scheme Administrators

issuing a notice of intention to declare a dividend and the Scheme

Administrators admit the face value of the Scheme Creditor's investments, the

Scheme Creditor will be entitled to receive a pro rata dividend from the

Scheme Creditors' Pool.

o If a Scheme Creditor's investment is not recorded in the relevant scheme

registers as at 16 May 2009 and the Scheme Creditor does not provide

evidence of its investment to the satisfaction of the Scheme Administrators

within the timeframe stipulated above, the Scheme Creditor will be excluded

from participating in the distribution to which the Scheme Administrators'

notice relates, and the Scheme Creditor irrevocably waives its rights and

entitlements to receive the pro rata dividend.

DBS/DBS/3089794/975018/AUM/1211838358.1 43

o Scheme Creditors whose investments are recorded in the scheme registers as

at 16 May 2009, or whose investments are accepted by the Scheme

Administrators, need not do anything further (including filing a proof of debt)

to establish their entitlement to receive a pro rata dividend from the Scheme

Creditors' Pool.

o If a Scheme Creditor has transferred the Scheme Creditor's interest in any

GSMAL managed investment scheme to another party after 16 May 2009, the

Scheme Creditor must, within seven (7) days of the Scheme becoming

effective, issue a notice in writing to the Scheme Administrators to request

that payment of any dividends be made to the Scheme Creditor and not the

other party. If the Scheme Creditor does not issue such a notice, the Scheme

Administrators may, in their absolute discretion, make payment of that

Scheme Creditor's entitlement to the Scheme Creditor or that other party in

full and final satisfaction and discharge of the Scheme Creditor's entitlement.

Unclaimed dividends

Payment of dividends must be debited against the bank account of GSMAL, which

will be established to hold the Scheme Creditors' Pool, by no later than six (6)

months after the Scheme Administrators have declared the dividend.

If there remain monies in the Scheme Creditors' Pool that are unclaimed for any

reason whatsoever beyond the period referred to in the preceding paragraph,

including but not limited to cheques sent to Scheme Creditors not being debited by

that time, cheques being returned to the Scheme Administrators and the Scheme

Administrators not being able to locate the Scheme Creditors, the Scheme

Administrators will pay the remainder of the monies to ASIC in accordance with

section 544 of the Act.

Upon the Scheme Administrators paying the remainder of the monies to ASIC, the

Scheme Administrators will cease to have any liability whatsoever in respect of those

monies.

Release and Bar

Subject to the Scheme proceeding and being implemented, each Scheme Creditor will

release GSMAL and the following third parties from all PDS Claims:

o Related Entities of GSMAL (including GSF, GSS and current and former

directors of GSMAL and GSMAL's Related Bodies Corporate);

o Related Persons of Related Entities of GSMAL;

o Directors and their Related Persons;

o Non-Executive Directors and their Related Persons; and

o each of the Insurers.

GSMAL's Related Bodies Corporate are listed in Schedule 3 to the Deed of

Settlement. The Deed of Settlement can be accessed by visiting the Ferrier Hodgson

DBS/DBS/3089794/975018/AUM/1211838358.1 44

Website, accessing the electronic version of this Explanatory Statement and clicking

on the following link: [Hyperlink]

The released parties identified above may plead the Scheme in bar to any PDS Claim

(including for costs) brought by any Scheme Creditor or any person who claims

through the Scheme Creditor.

Specific powers

Upon the Scheme becoming effective, the Scheme Administrators are irrevocably

authorised by the Scheme Creditors to execute, on behalf of the Scheme Creditors, a

deed of release of all PDS Claims in favour of the released parties identified above.

Covenant

Each Scheme Creditor irrevocably agrees not to bring or pursue, or encourage a third

party to bring or pursue, or provide financial or other support for, a PDS Claim

against any of the released parties identified above in respect of any matter that is the

subject of the release.

Authority

Each Scheme Creditor irrevocably consents and authorises the Liquidators to consent,

and take the necessary steps, to obtain orders of the Court discontinuing, staying,

dismissing or otherwise disposing of the Proceedings on the basis that there be no

order as to costs or that each party bears its own costs (as may be appropriate), as set

out in clauses 6.1.12, 6.1.13, 6.1.14, 6.1.16 and 6.1.17 of the Deed of Settlement.

Role of the Scheme Administrators

The Scheme Administrators will administer the Scheme in accordance with its terms.

The Scheme Administrators will have the powers and discretions conferred, and the

duties, obligations and responsibilities imposed, by the Scheme, the Act and the

Regulations. The Scheme Administrators may act jointly, severally or jointly and

severally.

Each Scheme Administrator has executed a Scheme Administrator's Deed Poll, each

of which is not attached to this Explanatory Statement, but is included as Schedule 5.

The Scheme Administrators' Deeds Poll can be accessed by visiting the Ferrier

Hodgson Website, accessing the electronic version of this Explanatory Statement and

clicking on the following link: [Hyperlink]

Power of attorney

The Scheme Creditors unconditionally and irrevocably appoint the Scheme

Administrators as their attorney to do anything which, in the Scheme Administrators'

opinion, is necessary, appropriate or expedient to give effect to the Scheme,

including, but not limited to, executing, on behalf of the Scheme Creditors, a deed of

release of all PDS Claims in favour of the released parties identified above.


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DBS/DBS/3089794/975018/AUM/1211838358.1 45

Scheme Administrators' remuneration

The Scheme Administrators will be remunerated at the usual rates charged by Ferrier

Hodgson from time to time (see section 6.12 below) in respect of the exercise of

powers and discretions conferred, and the discharge of duties, obligations and

responsibilities imposed, on the Scheme Administrators by the Scheme, the Act and

the Regulations.

The Scheme Administrators' remuneration in respect of the Scheme will form part of

the Scheme Costs and, accordingly, will be paid from the Scheme Costs Pool in

accordance with the terms of the Scheme Costs Deed.

In no circumstances will the Scheme Administrators' remuneration be paid from the

Scheme Creditors' Pool.

Voting entitlement

Scheme Creditors may attend in person or by attorney or by a duly authorised

corporate representative (in the case of a corporation) or by proxy.

Each Scheme Creditor will have one vote.

The value of each Scheme Creditor's vote will be the total face value of the amounts

invested by each Scheme Creditor in the relevant GSMAL managed investment

schemes (excluding GST and borrowing costs) as recorded in the scheme registers as

at 16 May 2009 or as otherwise accepted by the Scheme Administrators.

If a Scheme Creditor's Investment is not recorded in the scheme registers as at 16

May 2009, the Scheme Creditor will not be entitled to vote on the Scheme. However,

if a Scheme Creditor provides evidence of its Investment to the satisfaction of the

Scheme Administrators at least fourteen (14) days prior to the Scheme Meeting, the

Scheme Creditor will be entitled to vote on the Scheme.

Scheme Creditors whose Investments are recorded in the scheme registers as at 16

May 2009 or whose Investments are accepted by the Scheme Administrators, need

not do anything further to establish their entitlement for the purpose of voting on the

Scheme.

A copy of the Scheme Creditors Register is not attached to this Explanatory

Statement, but is included as Schedule 4 to this Explanatory Statement and can be

viewed (but not copied or downloaded) by visiting the Ferrier Hodgson Website,

accessing the electronic version of this Explanatory Statement and clicking on the

following link: [Hyperlink to Scheme Creditors Register]

Defects and irregularities in Proxy Forms

All questions as to the validity, form, eligibility (including time of receipt),

acceptance and revocation or withdrawal of Proxy Forms will be determined by the

Liquidators in their sole discretion. The Liquidators' determination will be binding on

the Scheme Creditors, subject to any rights of appeal or review that may be available

to the Scheme Creditors under the Act or the Regulations, or otherwise.

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DBS/DBS/3089794/975018/AUM/1211838358.1 46

The Liquidators reserve the rights to reject any Proxy Form not in proper form and to

waive any defects or irregularities or conditions of delivery as to any particular Proxy

Form. The Liquidators' determination, unless otherwise directed by the Court, will be

binding on all parties.

The Liquidators will not be under any duty to provide notification of defects or

irregularities with respect to deliveries of Proxy Forms nor will any of them incur any

liability for failure to provide such notification. Unless otherwise directed by the

Court, delivery of such Proxy Forms will not be deemed to have been made until such

irregularities have been cured or waived. Proxy Forms previously furnished (and as

to which any irregularities have not previously been cured or waived) will be

invalidated.

Notwithstanding the above, unless otherwise directed by the Court, the Liquidators

will also reject any Proxy Forms that are received by Computershare less than 48

hours before the commencement of the Scheme Meeting.

DBS/DBS/3089794/975018/AUM/1211838358.1 47

4. ADVANTAGES AND DISADVANTAGES


Advantages

The Scheme provides for a timely, full and final settlement of all PDS Claims by all

Scheme Creditors (including Class 1 Scheme Creditors), pursuant to which each

Scheme Creditor will receive a pro rata dividend.

If the Scheme is approved:

o in addition to receiving the pro rata dividend estimated to be $16.52 per

$10,000 invested, Class 1 Scheme Creditors will, pursuant to the Deed of

Settlement, be reimbursed their legal costs incurred, totalling $19,976,474.61;

o Class 1 Scheme Creditors will not incur further costs in pursuing their PDS

Claims, including filing any appeals against the judgments of Justice Croft

which will be entered in the Group Proceedings and M+K Counterclaim

Proceedings in the event the Scheme is not approved; and

o the Lead Plaintiffs in the Group Proceedings and the plaintiffs by

counterclaim in the M+K Counterclaim Proceedings will avoid the prospect

of substantial costs orders being made against them by Justice Croft (which

will likely amount to millions of dollars).

Disadvantages

If the Scheme is approved, relevant Class 1 Scheme Creditors will be required to give

up their rights in respect of any appeal against the judgment which would otherwise

be entered by Justice Croft in the Group Proceedings and M+K Counterclaim

Proceedings in the event that the Scheme is not approved.

In return for their pro rata entitlements to a distribution from the Scheme Creditors'

Pool, all Scheme Creditors (including Class 1 Scheme Creditors) will release all PDS

Claims against the persons identified in section 3.4 above (including the Defendants,

the Non-Executive Directors and Insurers), including any rights of appeal, regardless

of the merits of their individual circumstances. This means, for instance, that, in the

event that any of the BEN Parties or Javelin commence or continue recovery

proceedings against any of the Scheme Creditors (including Class 1 Scheme

Creditors), such Scheme Creditors will not be permitted to join the persons identified

in section 3.4 above (including the Defendants, the Non-Executive Directors or

Insurers) as parties to any such proceedings.

The maximum amount that Scheme Creditors (including Class 1 Scheme Creditors)

will receive under the Scheme, in return for releasing all PDS Claims, is limited to the

amount of the Scheme Creditors' Pool. This means that each Scheme Creditor will

only receive a dividend estimated to be $16.52 per $10,000 invested. (Although, as

noted above, if the Scheme is approved, Class 1 Scheme Creditors will, pursuant to

the terms of the Deed of Settlement, receive an additional $19,976,474.61 in

reimbursement of their legal costs incurred). This amount does not take into account

each Scheme Creditor's particular circumstances. This means that a Scheme Creditor

whom the Court has found has no PDS Claim in the Great Southern Reasons, or a

DBS/DBS/3089794/975018/AUM/1211838358.1 48

Scheme Creditor with a unmeritorious PDS Claim, will receive the same

proportionate amount as a Scheme Creditor against whom no findings have been

made and who may have a meritorious PDS Claim. If any Class 1 Scheme Creditor

has any doubt as to whether it has any individual rights, the Scheme Creditor should

obtain legal, financial, tax and/or other professional advice immediately.

In respect of PDS Claims only, the Scheme Creditors (including Class 1 Scheme

Creditors) will have no rights to participate in any dividends that may be declared by

GSMAL or, where relevant, GSF. However, Scheme Creditors' (including Class 1

Scheme Creditors') rights in respect of Other Claims (if any) are not affected. If any

Class 1 Scheme Creditor has any doubt as to whether it has any Other Claims, the

Scheme Creditor should obtain legal, financial, tax and/or other professional advice

immediately.

The amount of any dividend to the remaining Scheme Creditors (including Class 1

Scheme Creditors) would depend on the total number and value of other PDS Claims,

brought by other Scheme Creditors, that are successful. It is simply not possible to

predict how many PDS Claims may be brought, and how many may ultimately be

successful.

In that regard, in the event the Scheme is not approved and a Scheme Creditor

(including a Class 1 Scheme Creditor) succeeds in any particular PDS Claim against

GSMAL and/or, where relevant, GSF, the return to that Scheme Creditor may be

higher than the amount payable under the Scheme (see sections 5, 6.3 and 6.4 below

for further information). However, based on the Great Southern Reasons, the

Liquidators would generally not be inclined to admit any claims which were pleaded

in substantially similar terms to those pleaded in the Group Proceedings. However,

each PDS Claim would be adjudicated by the Liquidators on its merits.

Further, the Liquidators' costs in dealing with such PDS Claims, either in court

proceedings or in adjudicating proofs of debt, would erode (perhaps significantly,

depending on the total number of PDS Claims made) the funds available for

unsecured creditors.


Advantages



Scheme Creditor will receive a pro rata dividend.

It is plain from paragraph 6 of the s33V Approval Decision, that Class 2 Scheme

Creditors have failed "completely and comprehensively" in their claims against

GSMAL, GSF and other parties for the reasons set out in the Great Southern Reasons.

The Great Southern Reasons can be accessed by visiting the Ferrier Hodgson



Therefore, in the event the Scheme is not approved, Justice Croft will enter judgment

against Class 2 Scheme Creditors in the Group Proceedings, and Class 2 Scheme

Creditors will receive nothing. However, if the Scheme is approved, each Class 2


DBS/DBS/3089794/975018/AUM/1211838358.1 49

Scheme Creditor will receive a pro rata dividend estimated to be $16.52 per $10,000

invested.

Disadvantages

If the Scheme is approved, Class 2 Scheme Creditors will be required to give up their

rights in respect of any appeal against the judgment which would otherwise be

entered by Justice Croft in the Group Proceedings and M+K Counterclaim

Proceedings in the event that the Scheme is not approved.

In return for their pro rata entitlements to a distribution from the Scheme Creditors'

Pool, all Scheme Creditors (including Class 2 Scheme Creditors) will release all PDS

Claims against the persons identified in section 3.4 above (including the Defendants,

the Non-Executive Directors and Insurers), including any rights of appeal, regardless

of the merits of their individual circumstances. This means, for instance, that, in the

event that any of the BEN Parties or Javelin commence or continue recovery

proceedings against any of the Scheme Creditors (including Class 2 Scheme

Creditors), such Scheme Creditors will not be permitted to join the persons identified

in section 3.4 above (including the Defendants, the Non-Executive Directors or

Insurers) as parties to any such proceedings.









whom the Court has found has no PDS Claim, or a Scheme Creditor with a

unmeritorious PDS Claim, will receive the same proportionate amount as a Scheme

Creditor against whom no findings have been made and who may have a meritorious

PDS Claim. If any Class 2 Scheme Creditor has any doubt as to whether it has any

individual rights, the Scheme Creditor should obtain legal, financial, tax and/or other

professional advice immediately.

In respect of PDS Claims only, the Scheme Creditors (including Class 2 Scheme

Creditors) will have no rights to participate in any dividends that may be declared by

GSMAL or, where relevant, GSF. However, Scheme Creditors' (including Class 2

Scheme Creditors') rights in respect of Other Claims (if any) are not affected. If any



immediately.





successful.


(including a Class 2 Scheme Creditor, if that creditor successfully appeals against the

decision of Justice Croft in terms of the Great Southern Reasons) succeeds in any

DBS/DBS/3089794/975018/AUM/1211838358.1 50

particular PDS Claim against GSMAL and/or, where relevant, GSF, the return to that

Scheme Creditor may be higher than the amount payable under the Scheme.

However, based on the Great Southern Reasons, the Liquidators would generally not

be inclined to admit any claims which were pleaded in substantially similar terms to

those pleaded in the Group Proceedings. However, each PDS Claim would be

adjudicated by the Liquidators on its merits.

Further, the Liquidators' costs in dealing with such PDS Claims, particularly in court

proceedings, would erode (perhaps significantly, depending on the total number of

PDS Claims made) the funds available for unsecured creditors.


Advantages



Scheme Creditor will receive a pro rata dividend, regardless of whether any Class 3

Scheme Creditor is entitled to make such a PDS Claim (for example, even where the

time period for bringing such a claim has expired).

In respect of any Investments Class 3 Scheme Creditors have which are the subject of

claims determined in any of the Group Proceedings, it is plain from paragraph 6 of

the s33V Approval Decision that, in respect of those Investments, Class 3 Scheme






Therefore, in respect of those Investments, in the event the Scheme is not approved,

Justice Croft will enter judgment against Class 3 Scheme Creditors in the Group

Proceedings, and Class 3 Scheme Creditors will receive nothing in respect of those

Investments. However, if the Scheme is approved, each Class 3 Scheme Creditor will

receive a pro rata dividend.

Disadvantages

In respect of any Investments they have which are not the subject of claims

determined in any of the Group Proceedings, depending on a Class 3 Scheme

Creditor's individual circumstances, that Scheme Creditor may have a meritorious

PDS Claim, which would be released if the Scheme is approved. If any Class 3

Scheme Creditor has any doubt as to whether he or she has a meritorious PDS Claim,

that Scheme Creditor should obtain, legal, financial, tax and/or other professional

advice immediately.

If the Scheme is approved, in return for their pro rata entitlements to a distribution

from the Scheme Creditors' Pool, all Scheme Creditors (including Class 3 Scheme

Creditors) will release all PDS Claims against the persons identified in section 3.4

above (including the Defendants, the Non-Executive Directors and Insurers),

including any rights of appeal, regardless of the merits of their individual

circumstances. This means, for instance, that, in the event that any of the BEN

Parties or Javelin commence or continue recovery proceedings against any of the


DBS/DBS/3089794/975018/AUM/1211838358.1 51

Scheme Creditors (including Class 3 Scheme Creditors), such Scheme Creditors will

not be permitted to join the persons identified in section 3.4 above (including the

Defendants, the Non-Executive Directors or Insurers) as parties to any such

proceedings.















If the Scheme is approved, in respect of the PDS Claims, the Scheme Creditors

(including Class 3 Scheme Creditors) will have no rights to participate in any

dividends that may be declared by GSMAL or, where relevant, GSF. However,

Scheme Creditors' (including Class 3 Scheme Creditors') rights in respect of Other

Claims (if any) are not affected. If any Class 3 Scheme Creditor has any doubt as to

whether it has any Other Claims, the Scheme Creditor should obtain legal, financial,

tax and/or other professional advice immediately.





successful.




higher than the amount payable under the Scheme. However, based on the Great

Southern Reasons, the Liquidators would generally not be inclined to admit any

claims which were pleaded in substantially similar terms to those pleaded in the

Group Proceedings. However, each PDS Claim would be adjudicated by the

Liquidators on its merits.





DBS/DBS/3089794/975018/AUM/1211838358.1 52


Advantages



Scheme Creditor will receive a pro rata dividend, regardless of whether any Class 4

Scheme Creditor is entitled to make such a PDS Claim (for example, even where the

time period for bringing such a claim has expired).

In respect of any Investments Class 4 Scheme Creditors have which are the subject of

claims determined in any of the Group Proceedings, it is plain from paragraph 6 of

the s33V Approval Decision that, in respect of those Investments, Class 4 Scheme






Therefore, in respect of those Investments, in the event the Scheme is not approved,

Justice Croft will enter judgment against Class 4 Scheme Creditors in the Group

Proceedings, and Class 4 Scheme Creditors will receive nothing in respect of those

Investments. However, if the Scheme is approved, each Class 4 Scheme Creditor will

receive a pro rata dividend.

Disadvantages

In respect of any Investments they have which are not the subject of claims

determined in any of the Group Proceedings, depending on a Class 4 Scheme

Creditor's individual circumstances, that Scheme Creditor may have a meritorious

PDS Claim which would be released in the Scheme is approved. If any Class 4

Scheme Creditor has any doubt as to whether he or she has a meritorious PDS Claim,

that Scheme Creditor should obtain, legal, financial, tax and/or other professional

advice immediately.

If the Scheme is approved, in return for their pro rata entitlements to a distribution

from the Scheme Creditors' Pool, all Scheme Creditors (including Class 4 Scheme

Creditors) will release all PDS Claims against the persons identified in section 3.4

above (including the Defendants, the Non-Executive Directors and Insurers),

including any rights of appeal, regardless of the merits of their individual

circumstances. This means, for instance, that, in the event that any of the BEN

Parties commence or continue recovery proceedings against any of the Scheme

Creditors (including Class 4 Scheme Creditors), such Scheme Creditors will not be

permitted to join the persons identified in section 3.4 above (including the

Defendants, the Non-Executive Directors or Insurers) as parties to any such

proceedings.








DBS/DBS/3089794/975018/AUM/1211838358.1 53









If the Scheme is approved, in respect of the PDS Claims, the Scheme Creditors

(including Class 4 Scheme Creditors) will have no rights to participate in any

dividends that may be declared by GSMAL or, where relevant, GSF. However,

Scheme Creditors' rights in respect of Other Claims (if any) are not affected. If any



immediately.





successful.




higher than the amount payable under the Scheme. However, based on the Great

Southern Reasons, the Liquidators would generally not be inclined to admit any

claims which were pleaded in substantially similar terms to those pleaded in the

Group Proceedings. However, each PDS Claim would be adjudicated by the

Liquidators on its merits.





4.5 Recommendation

Each individual Scheme Creditor's circumstances may be different, and the

Liquidators are not in a position to know what those circumstances may be.

Accordingly, the Liquidators are not in a position to make an assessment of the

prospects of success of any PDS Claims that individual Scheme Creditors may have.

In particular, Scheme Creditors may have a broad range of PDS Claims that may be

affected in different ways by the Scheme, including, for example:

o PDS Claims that are the subject of the Group Proceedings and those that are

not the subject of the Group Proceedings; and/or

o PDS Claims that involve Investments made with a loan from GSF and those

that were not made with a loan from GSF.

DBS/DBS/3089794/975018/AUM/1211838358.1 54

It is important that Scheme Creditors take into account the impact of the Scheme on

all of their PDS Claims in making their decision as to how to vote in respect of the

Scheme.

However, in respect of any PDS Claims Scheme Creditors may consider making

which are substantially similar to the claims made in the Group Proceedings, those

claims are likely to fail, for the reasons set out in the Great Southern Reasons.

The Liquidators recommend that Scheme Creditors obtain independent legal,

financial, taxation and/or other professional advice in relation to the proposed Scheme

and the matters set out in this Explanatory Statement (including the Great Southern

Reasons and its implications in respect of each Scheme Creditor's PDS Claims) and

vote in accordance with their individual interests.

DBS/DBS/3089794/975018/AUM/1211838358.1 55

5. OTHER MATTERS THAT MAY BE RELEVANT TO A SCHEME CREDITOR'S

DECISION

5.1 Matters relevant to all four classes of Scheme Creditors

It should be noted that the estimated dividend ranges contained in section 6.4 below

assume that no PDS Claims or Other Claims by Scheme Creditors will, if made, be

successful. Again, if any PDS Claims or Other Claims are in fact made and are

successful, this would erode (perhaps significantly, depending on the total number of

PDS Claims or Other Claims made) the funds available for unsecured creditors, in

terms of both the costs incurred by the Liquidators in dealing with and/or defending

such claims and the amounts admitted by the Liquidators or ordered by a court to be

paid in respect of such claims.

For the avoidance of doubt:

o the Scheme does not release any Other Claims; and

o nothing in the Scheme prejudices any entitlement any Scheme Creditor may

have to participate in respect of any dividends which may be declared by

either GSMAL or GSF in respect of any Other Claims which are admitted by

the Liquidators or are otherwise established by the Scheme Creditor in court.

In respect of Group Members' claims made in the Group Proceedings, Scheme

Creditors should note that Justice Croft stated (at paragraph 132 of the Great Southern

Reasons), that, by not opting out of the Group Proceedings, Group Members "must be

taken to have accepted that the claims as pleaded in the [G]roup [P]roceedings

represent all of the claims reasonably available to them" and that "it would not be

reasonable for [G]roup [M]embers to raise different claims or defences in

subsequent proceedings."

5.2 Status of liquidations of GSMAL and GSF

To date, the various court proceedings referred to in sections 1.2 and 1.3 above have

been commenced against, amongst others, GSMAL or GSF or both. Therefore, the

financial positions of both GSMAL and GSF are relevant to a Scheme Creditor's

decision whether to vote for or against the Scheme. This is because a Scheme

Creditor may have a meritorious PDS Claim in respect of which, if successful, may

entitle that Scheme Creditor to prove in the liquidations (as appropriate) of GSMAL

(all Scheme Creditors) or GSF (Class 3 Scheme Creditors) and receive a greater

return by way of dividend in the liquidation than the distribution from the Scheme

Creditors' Pool available under the Scheme. In relation to a dividend in the

liquidation, please refer to section 6.4 below.

If the Scheme is approved, Scheme Creditors, in respect of PDS Claims, will receive

only a pro rata distribution from the Scheme Creditors' Pool (presently estimated to

be $16.52 per $10,000 invested). They will not be entitled to prove as unsecured

creditors in the estates of GSMAL or (where relevant) GSF, in respect of PDS

Claims.

DBS/DBS/3089794/975018/AUM/1211838358.1 56

Scheme Creditors should have regard to their own personal circumstances and obtain

their own legal advice as to whether they have a meritorious PDS Claim and whether

they should vote for or against the Scheme.

GSMAL

The Liquidators' current estimate of the dividends potentially available to unsecured

creditors of GSMAL (including Scheme Creditors whose PDS Claims or Other

Claims are admitted by the Liquidators or who otherwise establish their PDS Claims

or Other Claims in court) is set out in section 6.4 below.

GSF


creditors of GSF (including Scheme Creditors whose PDS Claims or Other Claims

are admitted by the Liquidators or who otherwise establish their PDS Claims or Other

Claims in court) is set out in section 6.4 below.

5.3 Insurance policies

In the event that Scheme Creditors are considering bringing or pursuing PDS

Claims that would otherwise be released by the Scheme, they may wish to take the

following matters into account

There are insurance policies in place which, collectively, provide the following total

coverage to companies in the Great Southern Group (including GSMAL) and current

and former directors and officers of those companies:

o $100,000,000 in respect of professional indemnity claims; and

o $160,000,000 in respect of directors' and officers' liability claims.

Scheme Creditors may have a claim to which one or more the abovementioned

policies could potentially respond.

Insurers have previously advised that they have concluded that various proceedings

before Justice Croft constitute professional services claims, and that the professional

indemnity policies, not the directors' and officers' policies, provide coverage in

respect of those proceedings. Insurers reserved their right to revisit that

determination in the event that the plaintiffs in those proceedings amended their

pleadings or for any other reason which may require their determination to be

reviewed.

Available limits under insurance policies

Insurers have advised that the limits of the relevant professional indemnity policies

have already been eroded by the payment of defence costs and legal representation

expenses, and the payment of a settlement sum in relation to claims that were made in

proceedings commenced in the Supreme Court of Western Australia, all of which are

not affected by the Scheme.

Insurers have further advised that, as at 27 July 2015, the proposed payment of

$3,550,000 into the Scheme Creditors' Pool, together with the proposed payment of

DBS/DBS/3089794/975018/AUM/1211838358.1 57

$20,250,000 to the trust account of M+K Lawyers, will reduce the available cover

under the relevant professional indemnity policies to $95,563.70. The available cover

could potentially be higher in the circumstances referred to in section 1.3 above.

The Liquidators have also been informed by the Insurers that, as at 27 July 2015,

there remains $108,174,458.15 available cover under the relevant directors' and

officers' liability policies.

Uncertainties concerning available cover

The Liquidators accept that the directors' and officers' liability policies do not cover

the liabilities of GSMAL, GSF or any of the Great Southern Group companies.

However, the Liquidators do not know the precise amounts paid by the Insurers and

whether those amounts have been paid under the correct policies. This issue has not,

at this stage, been the subject of any proceedings or determination by a court.

If any of the Insurers' positions as outlined above is incorrect, funds may potentially

become available to Scheme Creditors that succeed in relevant PDS Claims in court

against GSMAL. This would arise if it is the case that funds previously paid from

cover available under the professional indemnity policies should in fact have been

paid from cover available under the directors' and officers' liability policies. In that

event, the remaining available cover under the directors' and officers' liability policies

would decrease and the remaining available cover under the professional indemnity

policies would increase correspondingly.

Further, if the appellants in Proceeding No S189 of 2013 are successful in their

appeal before the High Court and the plaintiffs in the Group Proceedings and the

plaintiffs by counterclaim in the M+K Counterclaim Proceedings are successful in

any appeal(s) against the decision of Justice Croft (in terms of the Great Southern

Reasons), there may potentially be additional cover available under the relevant

professional indemnity insurance policies to respond to relevant claims by Scheme

Creditors.

Summary

The availability of cover under the relevant insurance policies:

o is not relevant to those Scheme Creditors whose PDS Claims have been

determined in the Great Southern Reasons (subject to any appeal against the

judgments which would otherwise be entered by Justice Croft in the Group

Proceedings and M+K Counterclaim Proceedings in the event the Scheme is

not approved);

o is not relevant to those Scheme Creditors whose PDS Claims have not been

determined in the Great Southern Reasons, but whose PDS Claims must

necessarily fail in light of the Great Southern Reasons;

o is potentially relevant to those Scheme Creditors whose PDS Claims have not

been determined in the Great Southern Reasons, but whose PDS Claims

would not necessarily fail in light of the Great Southern Reasons (for

example, because their cases are pleaded and proven differently); and

o is potentially relevant to any Other Claims Scheme Creditors may have.

DBS/DBS/3089794/975018/AUM/1211838358.1 58

Scheme Creditors should have regard to their own personal circumstances and obtain

their own legal advice in relation to the availability of cover under the relevant

insurance policies, including:

o whether the Great Southern group of companies (including GSMAL) and

current and former directors and officers of those companies would be

entitled to indemnity under the insurance policies in the event any action by

Scheme Creditors against one or more of them were to succeed; and

o the ability of Scheme Creditors to seek direct recourse against the Insurers in

respect of any such judgment if the Insurers maintained their positions as

outlined above.

DBS/DBS/3089794/975018/AUM/1211838358.1 59

6. INFORMATION REQUIRED BY CORPORATIONS ACT

Under section 412 of the Act, where a meeting of creditors is convened for the purpose of

voting on a scheme of arrangement under Part 5.1 of the Act, an explanatory statement must

be sent to each creditor with the notice convening the meeting. The explanatory statement

must contain certain information set out in section 412 as well as information prescribed in

regulation 5.1.01 and Part 2 of Schedule 8 of the Regulations. This section therefore sets out

the information required by the Act and the Regulations.

6.1 Material interests of the directors

The interests of the directors of GSL and GSMAL as Scheme Creditors of GSMAL

are set out below:

Name of Director Face value of

investments ($)*

Estimated dividend ($)

Phillip Charles Butlin 876,500 1,441.28

Cameron Arthur Rhodes 407,000 669.25

John Carlton Young 8,139,850 13,384.82

Alice McCleary 9,000 14.80

* Includes investments by or through Related Entities, Related Persons and

Related Bodies Corporate.

Each of the abovementioned directors has confirmed that they waive any and all

entitlements to receive a dividend from the Scheme Creditors' Pool and, accordingly,

their entitlements will be distributed pro rata among the remaining Scheme Creditors.

Accordingly, the directors of GSMAL have material interests, whether as directors,

members or creditors of the GSMAL or otherwise. However, the proposed Scheme

has no effect on the interests of those directors which are different from the effect on

the like interests of other persons.

6.2 Rights of debenture holders

With respect to any material interests of the trustees of debenture holders of GSMAL,

whether as trustees, members or creditors of GSMAL or otherwise, the proposed

Scheme has no effect on the interests of those trustees which is different from the

effect on the like interests of other persons.

6.3 Expected dividend that would be available if the Scheme is put into effect as proposed

The Liquidators estimate that the dividend will be $16.52 per $10,000 invested by the

Scheme Creditors.

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s9.html#director

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s9.html#member

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s9.html#body

DBS/DBS/3089794/975018/AUM/1211838358.1 60

The dividend is assessed on the basis of there being Scheme Creditors who have

invested the total sum of $2,149,385,350 and who will share the Scheme Creditors'

Pool of $3,550,000 on a pro rata basis by reference to the face value of their

investments. This translates into a dividend of $0.001652 per dollar invested, or

expressed another way, $16.52 per $10,000 invested.

6.4 Estimated dividend in the liquidation of GSMAL

GSMAL and GSF have been in liquidation since 16 November 2009.

As discussed further below, Scheme Creditors should not take the estimated

dividend as the amount likely to be available to them in the event that they

successfully claim in the liquidation, whether in respect of PDS Claims or Other

Claims.

Indeed, Scheme Creditors should be aware that the estimated dividend ranges set out

below are based on the assumption that no PDS Claims or Other Claims by Scheme

Creditors will be accepted by the Liquidators or established in a court. However, to

the extent that any PDS Claims or Other Claims by Scheme Creditors are later

assessed and accepted by the Liquidators or established in a court, this will reduce,

perhaps significantly (depending on the number and value of such claims), the funds

available for all unsecured creditors, including Scheme Creditors.

Given that GSMAL is already in liquidation, ASIC has confirmed that GSMAL is not

required to provide the information required by clause 8201(a) in Part 2 of Schedule 8

to the Regulations.

GSMAL


creditors of GSMAL (including Scheme Creditors whose PDS Claims or Other

Claims are admitted by the Liquidators or who otherwise establish their PDS Claims

or Other Claims in court) is as set out in the table below.

Low

$M

High

$M

Cash at Bank NIL NIL

First Interim Dividend from GSL

(Intercompany Loan)* 8.5 10.8

Total Assets 8.5 10.8

Less Priority payments

Liquidators’ fees incurred but unpaid 2.4 2.4

Funds available to unsecured creditors 6.1 8.4

Unsecured Creditor Claims (estimated)

GSF 47.9 47.9

Scheme Creditors** NIL NIL

Other Related Creditors (being other

companies in the Great Southern Group) 13.0 13.0

Third Party Creditors 6.8 6.8

Total unsecured creditor claims (estimated) 67.7 67.7

Final Dividend to Scheme Creditors and

Third Party Creditors (cents/dollar)* 20.79 56.88

DBS/DBS/3089794/975018/AUM/1211838358.1 61

* Please note that GSL, GSMAL and GSF are unsecured creditors of each other which

results in a ‘round robin’ effect on distributions. Accordingly further interim dividends

would flow from GSL to GSMAL in addition to the First Interim Dividend noted in the

table and results in the final dividend returns to Third Party Creditors.

** Please note that the above analysis excludes any consideration of PDS Claims or Other

Claims by Scheme Creditors against GSMAL or GSF on the basis that, unless and until

each PDS Claim or Other Claim of each Scheme Creditor is either assessed by the

Liquidators or determined by a court, the Liquidators are not in a position to estimate the

likely dividend that may be available to Scheme Creditors through the liquidation process.

Please note that this is an estimate only and remains subject to change while the

outstanding matters are determined. The preceding table does not guarantee or

warrant the future position of GSMAL and/or returns to unsecured creditors. The

estimate is based upon information available to the Liquidators to date.

Unsecured creditor claims are based on formal claims received to date together with

creditors listed in GSMAL's records as owing as at the date of the appointment of the

Administrators to GSMAL. The Liquidators have not undertaken any detailed review

or assessment of those claims and will not do so until they are in a position to declare

a dividend. Additionally, the Liquidators have not undertaken any detailed review or

assessment of claims received by GSL and GSF which will also affect the return to

GSMAL through the intercompany loan with GSL.

The above analysis excludes any consideration of possible PDS Claims or Other

Claims by Scheme Creditors against GSMAL on the basis that, unless and until each

individual PDS Claim or Other Claim of each Scheme Creditor is either assessed by

the Liquidators or determined by a court, the Liquidators are not in a position to

estimate the likely dividend that may be available to Scheme Creditors through the

liquidation process. In particular, please note that:

o the onus of proving the claim would be on the Scheme Creditor and, in order

for a Scheme Creditor to prove in the liquidation, the Scheme Creditor would

need to lodge a proof of debt, which would be adjudicated by the Liquidators;

o if any PDS Claims or Other Claims are made by Scheme Creditors in the

liquidation, this will erode (perhaps significantly, depending on the number

and value of such claims) the funds available for unsecured creditors, in

terms of both the costs incurred by the Liquidators in dealing with and/or

defending such claims and the amounts admitted by the Liquidators or

ordered by a court to be paid in respect of such claims; and

o although each claim would still need to be adjudicated on its merits, based

upon the Great Southern Reasons, the Liquidators would not be inclined to

accept any claims from investors on the same basis pleaded in those

proceedings.

GSF


creditors of GSF (including Scheme Creditors whose PDS Claims or Other Claims

are admitted by the Liquidators or who otherwise establish their PDS Claims or Other

Claims in court) is as set out in the table below.

DBS/DBS/3089794/975018/AUM/1211838358.1 62

Low

$M

High

$M

Cash at Bank 7.8 7.8

Total Assets 7.8 7.8

Less Priority payments

Liquidators’ fees incurred but unpaid 0.3 0.3

Funds available to unsecured creditors 7.5 7.5

Unsecured Creditor Claims (estimated)

GSL 174.5 26.3

Scheme Creditors** NIL NIL

Other Related Creditors (being other

companies in the Great Southern Group) NIL NIL

Third Party Creditors 21.0 21.0

Total unsecured creditor claims (estimated) 195.5 47.3

Final Dividend to Scheme Creditors and

Third Party Creditors (cents/dollar)* 19.32 36.90

* Please note that GSL, GSMAL and GSF are unsecured creditors of each other which

results in a ‘round robin’ effect on distributions. Accordingly dividends would flow from

GSMAL to GSF and results in the final dividend returns to Third Party Creditors.

** Please note that the above analysis excludes any consideration of PDS Claims or Other

Claims by Scheme Creditors against GSMAL or GSF on the basis that, unless and until

each PDS Claim or Other Claim of each Scheme Creditor is either assessed by the

Liquidators or determined by a court, the Liquidators are not in a position to estimate the

likely dividend that may be available to Scheme Creditors through the liquidation process.

Please note that this is an estimate only and remains subject to change while the

outstanding matters are determined. The preceding table does not guarantee or

warrant the future position of GSF and/or returns to unsecured creditors. The

estimate is based upon information available to the Liquidators to date.

Unsecured creditor claims are based on formal claims received to date together with

creditors listed in GSF's records as owing as at the date of the appointment of

Voluntary Administrators to GSF. The Liquidators have not undertaken any detailed

review or assessment of those claims and will not do so until they are in a position to

declare a dividend. Additionally, the Liquidators have not undertaken any detailed

review or assessment of claims received by GSL and GSMAL which will also affect

the return to GSF through the intercompany loan with GSMAL

The above analysis excludes any consideration of possible PDS Claims or Other

Claims by Scheme Creditors against GSF on the basis that, unless and until each

individual PDS Claim or Other Claim of each Scheme Creditor is either assessed by

the Liquidators or determined by a court, the Liquidators are not in a position to

estimate the likely dividend that may be available to Scheme Creditors through the

liquidation process. In particular, please note that:

o the onus of proving the claim would be on the Scheme Creditor and, in order

for a Scheme Creditor to prove in the liquidation, the Scheme Creditor would

need to lodge a proof of debt, which would be adjudicated by the Liquidators;

o if any PDS Claims or Other Claims are made by Scheme Creditors in the

liquidation, this will erode (perhaps significantly, depending on the number

and value of such claims) the funds available for unsecured creditors, in

DBS/DBS/3089794/975018/AUM/1211838358.1 63

terms of both the costs incurred by the Liquidators in dealing with and/or

defending such claims and the amounts admitted by the Liquidators or

ordered by a court to be paid in respect of such claims; and

o although each claim would still need to be adjudicated on its merits, based

upon the Great Southern Reasons, the Liquidators would not be inclined to

accept any claims from investors on the same basis pleaded in those

proceedings.

6.5 Names of all known scheme creditors and the claims by, or debts owed to, those

creditors

The Liquidators maintain a register containing the information referred to in clause

8201(c). Scheme Creditors can access the register by visiting the Ferrier Hodgson


on the following link: [Hyperlink].

ASIC has confirmed that GSMAL is not required to provide the information required

by clause 8201(c) in Part 2 of Schedule 8 to the Regulations, provided that:

o the Liquidators maintain an up-to-date register that contains the information;

o the Liquidators publish that register on the Ferrier Hodgson Website;

o the Liquidators give a hard copy of the register to a Scheme Creditor free of

charge within 7 days of receiving the following:

a written request from the Scheme Creditor for a hard copy of the

register; and

a written undertaking by the Scheme Creditor to only use the register

in connection with the exercise of their rights under the Scheme;

o the Explanatory Statement contain statements that the Scheme Creditors can:

access the abovementioned information via the Ferrier Hodgson

Website; and

obtain a hard copy of the register subject to a request being made to

the Liquidators and an undertaking given by the Scheme Creditor that

the Scheme Creditor will only use the information contained in the

register in connection with the exercise of their rights under the

Scheme.

6.6 Names of the guaranteed creditors and the amounts of their claims or debts owed

No Scheme Creditor is a guaranteed creditor.

6.7 Names of the internal creditors and the amounts of their claims or debts owed

There are no internal creditors.


DBS/DBS/3089794/975018/AUM/1211838358.1 64

6.8 Order to convene Scheme Meeting not an endorsement

This Explanatory Statement has been provided to Scheme Creditors in connection

with the Scheme Meeting to consider the terms of the proposed Scheme between

GSMAL and the Scheme Creditors.

The Scheme Meeting has been convened pursuant to orders of the Court made on 15

December 2015 pursuant to section 411(1) of the Act.

Those orders of the Court under section 411(1) of the Act are not an endorsement of,

or any other expression of opinion on, the Scheme by the Court or ASIC.

6.9 Report as to Affairs

A Form 507 - Report as to Affairs (RATA) prepared for GSMAL as at 19 August

2015, being one month within the date of the application to the Court for an order to

convene the Scheme Meeting of the Scheme Creditors to consider the Scheme, is set

out in Schedule 6 to this Explanatory Statement. The full RATA (including

attachments) is not attached to this Explanatory Statement, but can be accessed by

visiting the Ferrier Hodgson Website, accessing the electronic version of this

Explanatory Statement and clicking on the following link: [Hyperlink to RATA].

ASIC has confirmed that GSMAL is not required, in the RATA set out in Schedule 6

to this Explanatory Statement, to include the information referred to in clause

8201(c), provided that:

o the Liquidators maintain an up-to-date register that contains the information;

o the Liquidators publish that register on the Ferrier Hodgson Website;

o the Liquidators give a hard copy of the register to a Scheme Creditor free of

charge within 7 days of receiving the following:

a written request from the Scheme Creditor for a hard copy of the

register; and

a written undertaking by the Scheme Creditor to only use the register

in connection with the exercise of their rights under the Scheme;

o the Explanatory Statement contain statements that the Scheme Creditors can:

access the abovementioned information via the Ferrier Hodgson

Website; and

obtain a hard copy of the register subject to a request being made to

the Liquidators and an undertaking given by the Scheme Creditor that

the Scheme Creditor will only use the information contained in the

register in connection with the exercise of their rights under the

Scheme.

http://www.ferrierhodgson.com/au/~/media/Ferrier/Files/Documents/Corp%20Recovery%20Matters/Great%20Southern%20Managers%20Australia%20Ltd%20Scheme%20of%20Arrangement/RATA.pdf

DBS/DBS/3089794/975018/AUM/1211838358.1 65

6.10 Certified financial statements

No audited financial statements have been prepared for GSMAL since GSMAL was

placed in liquidation on 16 November 2009.

The Liquidators have formed the view that any financial information in addition to

that presented in this Explanatory Statement would not be of any material assistance

to the Scheme Creditors in deciding whether to approve the Scheme or individually

pursue their PDS Claims.

Having taken into account the views of the Liquidators, ASIC has granted relief from

the obligation to include any financial statements with this Explanatory Statement.

6.11 Not trustee

Except to the extent that it continues to be the Responsible Entity (as defined in the

Act) of a number of Great Southern managed investment schemes, GSMAL is not a

trustee.

6.12 Scheme Administrators' remuneration

The Scheme Administrators will be remunerated at the usual hourly rates charged

from time to time by Ferrier Hodgson (set out below) or at such other rates as the

Scheme Administrators may from time to time charge in respect of any work done by

the Scheme Administrators, and any partner or employee of the Scheme

Administrators, in connection with:

o the conduct of the Scheme up to and after the Commencement Date;

o the exercise of the powers and discretions conferred by the Scheme, the Act

and the Regulations; and

o the performance of their duties, obligations and responsibilities under the

Scheme, the Act and the Regulations.

The relevant hourly rates are set out below:

Position Rate per hour ($)

Partner $650

Executive Director $595

Director $575

Senior Manager $515

Manager $435

Assistant Manager $370

DBS/DBS/3089794/975018/AUM/1211838358.1 66

Senior Analyst $325

Analyst $290

Accountant $260

Junior Accountant $170

Senior Secretary $205

Computer Operator $145

Clerk $175

Typist $110

Office Assistant $110

The Scheme Administrators will also be reimbursed in respect of all costs, fees and

expenses incurred in connection with the foregoing matters.

Payment of the Scheme Costs, including the Scheme Administrators' remuneration,

costs, fees and expenses, will be made from the Scheme Costs Pool in accordance

with the terms of the Scheme Costs Deed. No part of the Scheme Creditors' Pool will

be used to pay the Scheme Costs.

DBS/DBS/3089794/975018/AUM/1209780315.1

Schedule 1: Notices of Scheme Meeting

___________________________________________________________________

Notice of Scheme Meeting - Class 1 Scheme Creditors

NOTICE OF A MEETING OF CLASS 1 SCHEME CREDITORS GREAT SOUTHERN MANAGERS AUSTRALIA LIMITED (IN LIQUIDATION)

ACN 083 825 405 NOTICE is given that, in accordance with an order of the Supreme Court of Victoria (Court) made on 15 December 2015 pursuant to section 411(1) of the Corporations Act 2001 (Cth), a meeting of the Class 1 Scheme Creditors of Great Southern Managers Australia Limited (In Liquidation) ACN 082 825 405 (Company) will be held at 1 Convention Centre Pl, South Wharf, Melbourne, Victoria at 10.00 am (AEDT) on Monday, 25 January 2016. BUSINESS OF THE SCHEME MEETING The purpose of the meeting is to consider and, if thought fit, to agree to the Scheme (with or without modification) proposed to be made between the Company and the Scheme Creditors, the terms of which are contained in the Scheme Booklet (of which this Notice of Meeting forms part), which includes a draft of the Scheme at Schedule 3 to the Explanatory Statement. Resolution to be considered at the Class 1 Scheme Meeting To consider and, if thought fit, to pass the following resolution in accordance with section 411(4)(a)(i) of the Corporations Act 2001 (Cth):

"That pursuant to and in accordance with section 411(1) of the Corporations Act 2001 (Cth), the Scheme, the terms of which are contained in the Scheme Booklet (of which this Notice of Meeting forms part), is agreed to (with or without modification as approved by the Court, provided those modifications do not derogate from the key features of the Scheme set out in clause 3.1 of the Deed of Settlement)."

In this Notice of Meeting, unless otherwise indicated or where the context so requires, capitalised phrases that are not defined have the same meaning as given to them in the Scheme: 1. 'PDS Claim' means any claim, demand, action, suit or proceeding for damages, debt,

restitution, equitable compensation, account, injunctive relief, specific performance, declaratory relief or any other remedy, whether by original claim, cross-claim, claim for contribution or otherwise whether presently known or unknown and whether arising at common law, in equity, under statute or otherwise and whether involving a third party or party to the Deed of Settlement and all liabilities, losses, damages, costs (including legal costs on a full indemnity basis), interest, fees, and penalties of whatever description (whether actual, contingent or prospective) arising out of, in connection with the contents of or the facts giving rise to, the PDSs, the Loan Agreements and/or the allegations made in or the facts giving rise to each of the Proceedings.

2. 'Class 1 Scheme Creditors' means 'Scheme Creditors' who are clients of Macpherson+Kelley Lawyers Pty Ltd trading as M+K Lawyers.

3. 'Investments' means any investment by a Scheme Member in any managed investment scheme

in or post 1998 of which the Company is or was the responsible entity.

4. 'Scheme' means the scheme of arrangement constituted by the document attached as Schedule 3 to the Explanatory Statement in the Scheme Booklet.

5. 'Scheme Creditors' means persons who:

a. made Investments; and

b. have a PDS Claim which relates to or arises out of any product disclosure statement

issued by the Company (and, in the case of the Great Southern 2008 Forestry Investment Scheme, the product disclosure statement issued by the Company and Rural Funds Management Limited (formerly Great Southern Funds Management Limited), including, but not limited to, the issue of any such product disclosure statements or in any statements in or omissions from such product disclosure statements.

(For purposes of the Scheme, the persons who made Investments are treated as Scheme Creditors under the terms of the Scheme, without having to further prove a PDS Claim. So long as the Investments of the Scheme Creditors are recorded in the relevant scheme register(s) as at 16 May 2009, they do not have to lodge a proof of debt or take any other step to be recognised as Scheme Creditors in order to vote on the Scheme.)

Proxies should be completed on the accompanying personalised proxy form and lodged at the office of Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, VIC 3001or by facsimile on 1800 783 447 (if dialled within Australia) or +61 3 9473 2555 (if dialled from outside Australia)or online at www.investorvote.com.au, in accordance with the instructions contained in the proxy form, by 10.00 am (AEDT) on Saturday, 23 January 2016. A corporate creditor can only be represented by proxy or by an attorney pursuant to regulation 5.6.28 and 5.6.31A of the Corporations Regulations 2001 (Cth) or by a representative appointed pursuant to section 250D of the Corporations Act 2001 (Cth). DATED 15 December 2015 By order of the Supreme Court of Victoria

Notice of meeting - Class 2 Scheme Creditors






2. 'Class 1 Scheme Creditors' means 'Scheme Creditors' who are clients of Macpherson+Kelley

Lawyers Pty Ltd trading as M+K Lawyers.

3. 'Class 2 Scheme Creditors' means 'Scheme Creditors': a. who are not Class 1 Scheme Creditors; and

b. all of whose Investments are the subject of claims determined in the Group

Proceedings.

4. 'Group Proceedings' means Supreme Court of Victoria Proceeding Nos SCI 2011 03616, SCI 2011 03431, SCI 2010 02882, SCI 2011 05062, SCI 2011 05049, SCI 2011 04862, SCU 2011 04916, SCI 2011 04476, SCI 2011 04001, SCI 2011 04135, SCI 2011 04071, SCU 2011 04207, SCI 2011 03513, SCI 2011 03992, SCI 2011 03390 and SCI 2011 03614.

5. 'Investments' means any investment by a Scheme Member in any managed investment scheme in or post 1998 of which the Company is or was the responsible entity.


7. 'Scheme Creditors' means persons who: a. made Investments; and



(For purposes of the Scheme, the persons who made Investments are treated as Scheme Creditors under the terms of the Scheme, without having to prove a PDS Claim. So long as the Investments of the Scheme Creditors are recorded in the relevant scheme register(s) as at 16 May 2009, they do not have to lodge a proof of debt or take any other step to be recognised as Scheme Creditors in order to vote on the Scheme.)

Proxies should be completed on the accompanying personalised proxy form and lodged at the office of Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, VIC 3001or by facsimile on 1800 783 447 (if dialled within Australia) or +61 3 9473 2555 (if dialled from outside Australia) or online at www.investorvote.com.au, in accordance with the instructions contained in the proxy form, by 10.00 am (AEDT) on Saturday, 23 January 2016. A corporate creditor can only be represented by proxy or by an attorney pursuant to regulation 5.6.28 and 5.6.31A of the Corporations Regulations 2001 (Cth) or by a representative appointed pursuant to section 250D of the Corporations Act 2001 (Cth). DATED 15 December 2015 By order of the Supreme Court of Victoria



ACN 083 825 405 NOTICE is given that, in accordance with an order of the Supreme Court of Victoria (Court) made on 15 December 2015 pursuant to section 411(1) of the Corporations Act 2001 (Cth), a meeting of the Class 3 Scheme Creditors of Great Southern Managers Australia Limited (In Liquidation) ACN 082 825 405 (Company) will be held at 1 Convention Centre Pl, South Wharf, Victoria at 10.00 am (AEDT) on Monday, 25 January 2016. BUSINESS OF THE SCHEME MEETING The purpose of the meeting is to consider and, if thought fit, to agree to the Scheme (with or without modification) proposed to be made between the Company and the Scheme Creditors, the terms of which are contained in the Scheme Booklet (of which this Notice of Meeting forms part), which includes a draft of the Scheme at Schedule 3 to the Explanatory Statement. Resolution to be considered at the Class 3 Scheme Meeting To consider and, if thought fit, to pass the following resolution in accordance with section 411(4)(a)(i) of the Corporations Act 2001 (Cth):




2. 'Class 1 Scheme Creditors' means 'Scheme Creditors' who are clients of Macpherson+Kelley Lawyers Pty Ltd trading as M+K Lawyers.

3. 'Class 2 Scheme Creditors' means 'Scheme Creditors': a. who are not Class 1 Scheme Creditors; and b. all of whose Investments are the subject of claims determined in the Group

Proceedings.

4. 'Class 3 Scheme Creditors' means 'Scheme Creditors' who: a. are not Class 1 Scheme Creditors or Class 2 Scheme Creditors; b. have one or more Investments which are not the subject of claims determined in any

of the Group Proceedings; and

c. financed one or more of their Investments which are not the subject of claims determined in any of the Group Proceedings, with a loan from Great Southern Finance Pty Ltd (In Liquidation) ACN 009 235 143.

5. 'Group Proceedings' means Supreme Court of Victoria Proceeding Nos SCI 2011 03616, SCI

2011 03431, SCI 2010 02882, SCI 2011 05062, SCI 2011 05049, SCI 2011 04862, SCU 2011 04916, SCI 2011 04476, SCI 2011 04001, SCI 2011 04135, SCI 2011 04071, SCU 2011 04207, SCI 2011 03513, SCI 2011 03992, SCI 2011 03390 and SCI 2011 03614.







Proxies should be completed on the accompanying personalised proxy form and lodged at the office of Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, VIC 3001 or by facsimile on 1800 783 447 (if dialled within Australia) or +61 3 9473 2555 (if dialled from outside Australia) or online at www.investorvote.com.au, in accordance with the instructions contained in the proxy form, by 10.00 am (AEDT) on Saturday, 23 January 2016. A corporate creditor can only be represented by proxy or by an attorney pursuant to regulation 5.6.28 and 5.6.31A of the Corporations Regulations 2001 (Cth) or by a representative appointed pursuant to section 250D of the Corporations Act 2001 (Cth). DATED 15 December 2015 By order of the Supreme Court of Victoria







2. 'Class 1 Scheme Creditors' means 'Scheme Creditors' who are clients of Macpherson+Kelley

Lawyers Pty Ltd trading as M+K Lawyers.

3. 'Class 2 Scheme Creditors' means 'Scheme Creditors': a. who are not Class 1 Scheme Creditors; and

b. all of whose Investments are the subject of claims determined in the Group

Proceedings.

4. 'Class 3 Scheme Creditors' means 'Scheme Creditors' who: a. are not Class 1 Scheme Creditors or Class 2 Scheme Creditors; b. have one or more Investments which are not the subject of claims determined in any


c. financed one or more of their Investments which are not the subject of claims determined in any of the Group Proceedings, with a loan from Great Southern Finance Pty Ltd (In Liquidation) ACN 009 235 143.

5. 'Class 4 Scheme Creditors' means 'Scheme Creditors' who:

a. are not Class 1 Scheme Creditors, Class 2 Scheme Creditors or Class 3 Scheme

Creditors; b. have one or more Investments which are not the subject of claims determined in any


c. did not finance any of their Investments which are not the subject of claims determined in any of the Group Proceedings, with a loan from Great Southern Finance Pty Ltd (In Liquidation) ACN 009 235 143.

6. 'Group Proceedings' means Supreme Court of Victoria Proceeding Nos SCI 2011 03616, SCI

2011 03431, SCI 2010 02882, SCI 2011 05062, SCI 2011 05049, SCI 2011 04862, SCU 2011 04916, SCI 2011 04476, SCI 2011 04001, SCI 2011 04135, SCI 2011 04071, SCU 2011 04207, SCI 2011 03513, SCI 2011 03992, SCI 2011 03390 and SCI 2011 03614.







Proxies should be completed on the accompanying personalised proxy form and lodged at the office of Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, VIC 3001 or by facsimile on 1800 783 447 (if dialled within Australia) or +61 3 9473 2555 (if dialled from outside Australia) or online at www.investorvote.com.au, in accordance with the instructions contained in the proxy form, by 10.00 am (AEDT) on Saturday, 23 January 2016. A corporate creditor can only be represented by proxy or by an attorney pursuant to regulation 5.6.28 and 5.6.31A of the Corporations Regulations 2001 (Cth) or by a representative appointed pursuant to section 250D of the Corporations Act 2001 (Cth). DATED 15 December 2015 By order of the Supreme Court of Victoria

DBS/DBS/3089794/975018/AUM/1209780315.1

Schedule 2: Definitions

___________________________________________________________________

"Act" means the Corporations Act 2001 (Cth);

"ASIC" means the Australian Securities & Investments Commission;

"BEN Parties" means Bendigo and Adelaide Bank Limited ACN 068 049 178 of The

Bendigo Centre, Bendigo VIC 3550 and the other companies listed in Schedule 2 to the Deed

of Settlement;

"Business Day" means a day (other than a Saturday, Sunday or public holiday) on which

banks are open for general banking business in the place where an act is to be performed or a

payment is to be made;

"Butlin" means Phillip Charles Butlin;

"Commencement Date" means the date on which an office copy of the order of the Court

approving the Scheme under section 411(4)(b) of the Act is lodged with ASIC, subject to

payment being made by the Insurers of GSMAL in accordance with paragraph 3.1.4 of the

Scheme;

"Contribution Proceedings" means any claims for contribution which have been made

between the defendant Parties or third Parties in the Proceedings;

"Court" means the Supreme Court of Victoria;

"Deed of Settlement" means the deed of settlement entered into on 23 July 2014 and

included as Schedule 1 to the Scheme; (The Deed of Settlement is not attached to the Scheme

document, but can be accessed by visiting the Ferrier Hodgson Website, accessing the

electronic version of this Explanatory Statement and clicking on the following link:

[Hyperlink]. Further, a copy of the Deed of Settlement will also be lodged with ASIC at the

time of lodgement of the Scheme.)

"Defendants" means GSMAL, GSF, the Directors, the BEN Parties and Javelin;

"Directors" means each of Young, Rhodes and Butlin;

"Ferrier Hodgson Website" means the Liquidators'/Scheme Administrators' website at


scheme-of-arrangement;

"Great Southern Companies" means each of the companies listed in Schedule 3 to the

Deed of Settlement;




DBS/DBS/3089794/975018/AUM/1209780315.1

"Great Southern Reasons" means the Honourable Justice Croft's reasons in respect of the

Group Proceedings and the M+K Counterclaim Proceedings, annexed to the s33V Approval

Decision;

"Group Members" means each person or entity falling within the definition of a group

member in any one or more of the Group Proceedings and who has not opted out of the Group

Proceeding or Group Proceedings;

"Group Proceedings" means Supreme Court of Victoria Proceeding Nos SCI 2011 03616,

SCI 2011 03431, SCI 2010 02882, SCI 2011 05062, SCI 2011 05049, SCI 2011 04862, SCI

2011 04916, SCI 2011 04476, SCI 2011 04001, SCI 2011 04135, SCI 2011 04071, SCI 2011

04207, SCI 2011 03513, SCI 2011 03992, SCI 2011 03390 and SCI 2011 03614;

"GSF" means Great Southern Finance Pty Ltd (in Liquidation) ACN 009 235 143 of c/-

Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth in the State of Western Australia;

"GSMAL" means Great Southern Managers Australia Limited (in Liquidation) ACN 083

825 405 of c/- Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth in the State of

Western Australia;

"GSL" means Great Southern Limited (in Liquidation) ACN 052 046 536 of c/- Ferrier

Hodgson, Level 28, 108 St Georges Terrace, Perth in the State of Western Australia;

"GSS" means Great Southern Securities Pty Ltd (in Liquidation) ACN 009 283 621 of c/-


"GST" means goods and services tax levied under the GST Act;

"GST Act" means A New Tax System (Goods and Services Tax) Act 1999 (Cth);

"Insurers" means each of Chubb Insurance Company of Australia Limited ACN 003 710

647, Liberty Mutual Insurance Company t/as Liberty Insurance Underwriters ARBN 086 083

605, Allianz Australia Insurance Limited ACN 000 122 850, AIG Australia Limited ACN 004

727 753, DUAL Australia Pty Limited ACN 107 553 257, AXIS Speciality Europe Public

Limited Company t/as Axis Speciality Australia ARBN 131 203 122, QBE Insurance

(Australia) Limited ACN 003 191 035, Wesfarmers General Insurance Limited ACN 000 036

279;

"Insurers of GSMAL" means each of the Insurers other than QBE Insurance (Australia)

Limited (ACN 003 191 035);

"Investments" means any investment by a Scheme Member in any managed investment

scheme in or post 1998 of which GSMAL is or was the responsible entity;

"Javelin" means Javelin Asset Management Pty Ltd ACN 136 367 194 of 73 Palmerston

Street, Mosman Park in the State of Western Australia;

DBS/DBS/3089794/975018/AUM/1209780315.1

"Lead Plaintiffs" means Peter Clarke in his capacity as trustee for the Clarke Family Trust,

Samantha Barbara Murray, Raymond Carl Drummond, Laurence David Hogan, Mohetishwar

Vijendra Prasad, Janet Micallef, Jaclyne Edwina Fisher and Glenn Ford;

"Liquidators" means Andrew John Saker (up until his retirement on 13 June 2014 for

GSMAL and on 1 September 2014 for all other Great Southern Companies), Darren Gordon

Weaver (up until his retirement on 7 December 2015 for the Great Southern Companies

(other than GSMAL, GSL, GSF and Great Southern Pine Pty Ltd) and on 18 December 2015

for GSMAL, GSL, GSF and Great Southern Pine Pty Ltd), Martin Bruce Jones and James

Henry Stewart, as joint and several liquidators of the Great Southern Companies;

"Liquidators' Claims" means any claim, demand, action, suit or proceeding for damages,

debt, restitution, equitable compensation, account, injunctive relief, specific performance or

any other remedy, whether by original claim, cross-claim, claim for contribution or otherwise

whether presently known or unknown and whether arising at common law, in equity, under

statute or otherwise, able to be pursued by the plaintiffs in the following Supreme Court of

Western Australia Proceedings CIV 1549 of 2011, CIV 2611 of 2012, CIV 2634 of 2012,

CIV 2635 of 2012 and CIV 2913 of 2013 and any other proceedings commenced by the

Liquidators and/or the Great Southern Companies against third parties;

"Loan Agreements" means the loan agreements under which monies were advanced to

Scheme Members to finance their interest in managed investment schemes of which GSMAL,

and (in the case of the Great Southern 2008 Future Forestry Investment Scheme) GSMAL and

Rural Funds Management Limited ACN 077 492 838 (formerly Great Southern Funds

Management Limited), is or was the responsible entity;

"Mews" means Jeffrey Arthur Sydney Mews;

"M+K Clients" means the persons referred to in Schedule 4 to the Deed of Settlement;

"M+K Counterclaim Claimants" means each of the plaintiffs by counterclaim in the M+K


"M+K Counterclaim Proceedings" means each of the proceedings listed in Schedule 1 to

the Deed of Settlement;

"M+K Trust Account Payment" means the sum of $20,250,000 payable by Insurers of

GSMAL to the M+K Trust Account pursuant to clause 6.1.1.1 of the Deed of Settlement;

"Non-Executive Directors" means Mews and Patrikeos;

"Other Claims" means, in respect of Scheme Creditors, any claim, demand, action, suit or

proceeding for damages, debt, restitution, equitable compensation, account, injunctive relief,

specific performance, declaratory relief or any other remedy, whether by original claim,

cross-claim, claim for contribution or otherwise whether presently known or unknown and

whether arising at common law, in equity, under statute or otherwise and whether involving a

third party or party to the Deed of Settlement and all liabilities, losses, damages, costs

DBS/DBS/3089794/975018/AUM/1209780315.1

(including legal costs on a full indemnity basis), interest, fees, and penalties of whatever

description (whether actual, contingent or prospective), other than a PDS Claim.

"Party" means a party to one or more of the Proceedings and "Parties" means all of them;

"Patrikeos" means Peter John Patrikeos;

"PDS" means a Product Disclosure Statement issued by GSMAL and, in the case of the

Great Southern 2008 Future Forestry Investment Scheme, includes the Product Disclosure

Statement issued by GSMAL and Rural Funds Management Limited (formerly Great

Southern Funds Management Limited);

"PDS Claim" means any claim, demand, action, suit or proceeding for damages, debt,

restitution, equitable compensation, account, injunctive relief, specific performance,

declaratory relief or any other remedy, whether by original claim, cross-claim, claim for

contribution or otherwise whether presently known or unknown and whether arising at

common law, in equity, under statute or otherwise and whether involving a third party or

party to the Deed of Settlement and all liabilities, losses, damages, costs (including legal costs

on a full indemnity basis), interest, fees, and penalties of whatever description (whether

actual, contingent or prospective) arising out of, or in connection with, the contents of or the

facts giving rise to, the PDSs, the Loan Agreements and/or the allegations made in or the facts

giving rise to each of the Proceedings;

"Privilege Proceedings" means Supreme Court of Victoria Proceeding Nos SCI 2012 02658

and APCI 2012 0153;

"Proceedings" means the Group Proceedings, the Contribution Proceedings, the M+K

Counterclaim Proceedings, the Privilege Proceedings, the Uplifted Proceedings and the

Section 6 Proceedings;

"Regulations" means the Corporations Regulations 2001 (Cth);

"Related Bodies Corporate" has the meaning given to that expression in section 50 of the

Act;

"Related Entities" includes all of an entity's current or former directors, officers, employees

and/or agents, all of an entity's Related Bodies Corporate and all current or former directors,

officers, employees and/or agents of an entity's Related Bodies Corporate. For the avoidance

of doubt, the "Related Entities" of GSMAL includes each Insured as defined in the

Department of Financial Institutions Alpha Policy No: 93255855/93255857 for the Policy

Period 30 September 2008 to 30 September 2009 between Chubb Insurance Company of

Australia Limited, Liberty Mutual Insurance Company and GSL;

"Related Person" includes a spouse or de facto spouse, child, parent or other relative of an

individual and any company, partnership, joint venture, association, trust, corporation or other

body corporate controlled by or associated with that individual;

DBS/DBS/3089794/975018/AUM/1209780315.1

"Resolution" means the following resolution: "That pursuant to and in accordance with

section 411(1) of the Corporations Act 2001 (Cth), the Scheme, the terms of which are

contained in the Scheme Booklet (of which this Notice of Meeting forms part), is agreed to

(with or without modification as approved by the Court, provided those modifications do not

derogate from the key features of the Scheme set out in clause 3.1 of the Deed of Settlement)";

"Rhodes" means Cameron Arthur Rhodes;1

"Scheduled Rates" means the rates set out in Schedule 2 to the Scheme;

"Scheme" or "Scheme of Arrangement" means the scheme of arrangement constituted by

the document attached as Schedule 3 to this Explanatory Statement;

"Scheme Administrators" means Martin Bruce Jones and James Henry Stewart as scheme

administrators of the Scheme and it includes such other persons appointed to replace the

proposed Scheme Administrators;

"Scheme Administrator's Deed Poll" means the deed poll executed by each of the Scheme

Administrators in the form set out in Schedule 3 to the Scheme;

"Scheme Costs" means the Liquidators' and Scheme Administrators' reasonable

remuneration, costs and out of pocket expenses incurred in direct relation to proposing,

promoting, implementing and administering the Scheme;

"Scheme Costs Deed" means the deed of settlement and release entered into by the Insurers

of GSMAL and the Liquidators on or about 4 July 2014;

"Scheme Costs Pool" means the sum contributed by the Insurers of GSMAL to meet the

Scheme Costs;

"Scheme Creditors" means persons who:

(a) made Investments; and

(b) have a PDS Claim which relates to or arises out of any product disclosure statement

issued by GSMAL (and, in the case of the Great Southern 2008 Forestry Investment

Scheme, the product disclosure statement issued by GSMAL and Rural Funds

Management Limited (formerly Great Southern Funds Management Limited)),

including, but not limited to, the issue of any such product disclosure statements or in

any statements in or omissions from such product disclosure statements;

"Scheme Creditors' Pool" means the sum of $3,550,000 to be contributed by the Insurers of

GSMAL to be distributed by the Scheme Administrators to the Scheme Creditors;

"Scheme Creditors Register" means the register of Scheme Creditors prepared by the

Liquidators from data contained in the relevant scheme registers as at 16 May 2009, which is

attached as Schedule 4 to this Explanatory Statement;

DBS/DBS/3089794/975018/AUM/1209780315.1

"Scheme Meeting" means the meeting or meetings ordered by the Court to be convened

under section 411(1) of the Act in relation to the Scheme;

"Scheme Members" means the members who invested in any managed investment scheme

in or post 1998 of which GSMAL is or was the responsible entity, including former scheme

members;

"Scheme Period" means the period commencing on the Commencement Date and ending on

the date referred to at clause 10.2 of the Scheme;

"Section 6 Proceedings" means Supreme Court of New South Wales Court of Appeal

Proceedings No. 2013/31425, High Court of Australia Proceeding No S188 of 2013 and High

Court of Australia Proceeding No S189 of 2013;

"Settlement Approval" means the Supreme Court of Victoria approving the settlement of

the Group Proceedings pursuant to section 33V(1) of the Supreme Court Act 1986 (Vic) on

the terms contained in the Deed of Settlement;

"s33V Approval Decision" means the decision delivered by Justice Croft on 11 December

2014 in respect of the application for Settlement Approval, [2014] VSC 516;

"Uplifted Proceedings" means each of the proceedings listed in Schedule 5 to the Deed of

Settlement; and

"Young" means John Carlton Young.

DBS/DBS/3089794/975018/AUM/1209780315.1

Schedule 3: Scheme

_________________________________________________________________________

The Scheme is attached, and can also be accessed by visiting the Ferrier Hodgson Website, accessing

the electronic version of this Explanatory Statement and clicking on the following link: [Hyperlink].

http://www.ferrierhodgson.com/au/~/media/Ferrier/Files/Documents/Corp%20Recovery%20Matters/Great%20Southern%20Managers%20Australia%20Ltd%20Scheme%20of%20Arrangement/Scheme%20Deed.pdf

1

GREAT SOUTHERN MANAGERS AUSTRALIA LIMITED (IN

LIQUIDATION) ACN 083 825 405

SCHEME OF ARRANGEMENT UNDER SECTION 411 OF

THE CORPORATIONS ACT 2001 (CTH)

DLA Piper Australia

Level 31, 152-158 St Georges Terrace

Perth WA 6000

Australia

Ferrier Hodgson


Perth WA 6000

Australia

1

CONTENTS

1. DEFINITIONS AND INTERPRETATION 5

2. COMMENCEMENT OF SCHEME 11

3. SCHEME TO BE APPROVED AND MONIES PAID 11

4. THE SCHEME 12

5. RELEASE BY SCHEME CREDITORS 14

6. SCHEME ADMINISTRATORS' APPOINTMENT, ROLE, POWERS AND

REMUNERATION

15

7. COSTS OF ADMINISTERING SCHEME 17

8. CESSATION OF SCHEME ADMINISTRATORS 18

9. MEETINGS OF SCHEME CREDITORS 18

10. COMPLETION OF SCHEME 20

11. GENERAL 21

12. SCHEDULE 1 - DEED OF SETTLEMENT (NOT ATTACHED) 24

13. SCHEDULE 2 - FERRIER HODGSON'S SCHEDULED RATES 25

14. SCHEDULE 3 - DEED POLL (CLAUSE 6.7 OF SCHEME) 26

15. SCHEDULE 4 - SCHEME ADMINISTRATOR'S DEED POLL (CLAUSES 8.5

AND 8.5 OF SCHEME)

27

DBS/DBS/3089794/975018/AUM/1211844873.1 2

This scheme of arrangement is made under section 411 of the Corporations Act 2001 (Cth)

Between the parties

The Company Great Southern Managers Australia Ltd (In Liquidation)

ACN 083 825 405

c/- Ferrier Hodgson, Chartered Accountants


Perth, Western Australia

Scheme Creditors As defined in the Scheme

Scheme Administrators Martin Bruce Jones and James Henry Stewart

c/- Ferrier Hodgson, Chartered Accountants


Perth, Western Australia

Recitals A GSMAL and GSF are wholly owned subsidiaries of

GSL.

B GSMAL carried on business as the responsible entity

of a number of agricultural and forestry managed

investment schemes.

C GSF carried on the business of providing loans to

Scheme Members.

D GSS held an Australian Financial Services Licence

and used authorised representatives to provide advice

on managed investment schemes issued by any of the

Great Southern Companies.

E Rhodes, Butlin, Young, Mews and Patrikeos were

directors of GSMAL and other Great Southern

Companies.

F The BEN Parties purchased from GSF certain loans

made by GSF to Scheme Members and provided other

loans directly to Scheme Members.

G Javelin purchased from GSF certain loans made by

DBS/DBS/3089794/975018/AUM/1211844873.1 3

GSF to Scheme Members.

H On 16 May 2009, GSMAL and certain of its Related

Bodies Corporate entered into voluntary

administration under Part 5.3A of the Act.

I On 19 November 2009, creditors resolved to appoint

the Liquidators as joint and several liquidators of

GSMAL and certain of its Related Bodies Corporate

pursuant to section 439C of the Act.

J Proceedings have been commenced by or against or

involving Scheme Members (and others) in respect of,

or arising out of, a number of agricultural and forestry

managed investment schemes managed by GSMAL.

K In addition, the Liquidators commenced the

Liquidators' Claims against the defendants referred to

therein, including the Directors.

L On 23 July 2014, the Settlement Parties (including

GSMAL, GSF, the Defendants and the Lead

Plaintiffs) executed the Deed of Settlement to resolve

the entirety of their disputes (save for certain claims,

including the Liquidators' Claims), on the terms and

conditions set out in the Deed of Settlement.

M The Deed of Settlement was subject to and conditional

upon the following conditions precedent being

satisfied (each of which has now been satisfied):

(i) The Court making an order pursuant to

section 33ZF of the Supreme Court Act 1986

(Vic) nunc pro tunc (i.e. retrospectively) to

the effect that the Lead Plaintiffs have the

authority of the Group Members to enter into

and give effect to the Deed of Settlement and

the transactions contemplated thereby for and

on behalf of the Group Members.

(ii) The Court making an order pursuant to

section 477(2A) and/or section 477(2B) of

the Act approving nunc pro tunc the entry

into of the Deed of Settlement by the

Liquidators.

(iii) The Court making an order pursuant to

section 33V(1) of the Supreme Court Act

1986 (Vic) approving the settlement of the

Group Proceedings on the terms and

conditions contained in the Deed of

Settlement.

N Further, insofar as it relates to PDS Claims involving

DBS/DBS/3089794/975018/AUM/1211844873.1 4

the Great Southern Companies (including GSMAL

and GSF), the Directors and their Related Persons, the

Non-Executive Directors and their Related Persons,

the Insurers, Related Entities of GSMAL or Related

Persons of Related Entities of GSMAL, the Deed of

Settlement was subject to and conditional upon the

following additional conditions precedent being

satisfied:

(i) The Liquidators receiving such other

approvals as they consider necessary under

section 477 of the Act and directions under

section 479(3) of the Act (this condition has

now been satisfied).

(ii) The Court approving a scheme of

arrangement on terms which contain the key

features described in clause 3 of the Deed of

Settlement or such other terms as are agreed

by the parties to the Deed of Settlement

(other than the BEN Parties and Javelin).

O The Liquidators are required, under the terms of the

Deed of Settlement, to propose the Scheme to the

Scheme Creditors, pursuant to Part 5.1 of the Act.

P The Deed of Settlement provides that, subject to

Settlement Approval being obtained and the Scheme

becoming effective, the Insurers of GSMAL will:

(i) pay the M+K Trust Account Payment to

M+K Lawyers, to be disbursed by M+K

Lawyers in accordance with clause 6.1.1.1 of


(ii) pay the Scheme Creditors' Pool to the

Scheme Administrators, to be distributed by

the Scheme Administrators to the Scheme

Creditors on a pro rata basis; and

(iii) agree on and pay to the Scheme

Administrators, the Scheme Costs Pool.

Q By the Scheme Costs Deed, the Insurers of GSMAL

and the Liquidators have agreed that the Scheme

Costs Pool will be the sum of $7,000,000. The

Insurers of GSMAL have paid that sum to the

Liquidators to be held on account of the Scheme

Costs. The Insurers of GSMAL and the Liquidators

have also agreed that any remainder of the Scheme

Costs Pool, together with the interest accrued on the

Scheme Costs Pool, will be repaid by the Scheme

Administrators to the Insurers of GSMAL.

DBS/DBS/3089794/975018/AUM/1211844873.1 5

R Subsequent to the Deed of Settlement being entered

into, the Honourable Justice Croft determined (in the

Great Southern Reasons (published as an annexure to

the s33V Approval Decision) that the Group

Proceedings and the M+K Counterclaim Proceedings

would fail.

S On 20 April 2015, the Liquidators' Claims were

settled. The settlement was approved, and directions

given, pursuant to sections 477 and 511 of the Act, by

the Supreme Court of Western Australia on 12 May

2015. Settlement of the Liquidators' Claims is not

affected by the Scheme.

_________________________________________________________________________

1. DEFINITIONS AND INTERPRETATION

Definitions

1.1 The following definitions apply to this Scheme:

"Act" means the Corporations Act 2001 (Cth);

"ASIC" means the Australian Securities & Investments Commission;

"BEN Parties" means Bendigo and Adelaide Bank Limited ACN 068 049 178 of The

Bendigo Centre, Bendigo VIC 3550 and the other companies listed in Schedule 2 to the Deed

of Settlement;

"Business Day" means a day (other than a Saturday, Sunday or public holiday) on which

banks are open for general banking business in the place where an act is to be performed or a

payment is to be made;

"Butlin" means Phillip Charles Butlin;

"Commencement Date" means the date on which an office copy of the order of the Court

approving the Scheme under section 411(4)(b) of the Act is lodged with ASIC, subject to

payment being made by the Insurers of GSMAL in accordance with clause 3.1.4 of the

Scheme;

"Contribution Proceedings" means any claims for contribution which have been made

between the defendant Parties or third Parties in the Proceedings;

"Court" means the Supreme Court of Victoria;

"Deed of Settlement" means the deed of settlement entered into on 23 July 2014 and

included as Schedule 1 to this Scheme; (The Deed of Settlement is not attached to this

Scheme, but can be accessed by visiting the Ferrier Hodgson Website, accessing the

electronic version of the Explanatory Statement and clicking on the following link:

DBS/DBS/3089794/975018/AUM/1211844873.1 6

[Hyperlink]. Further, a copy of the Deed of Settlement will also be lodged with ASIC at the

time of lodging this Scheme.)

"Defendants" means GSMAL, GSF, the Directors, the BEN Parties and Javelin;

"Directors" means each of Young, Rhodes and Butlin;

"Ferrier Hodgson Website" means the Liquidators'/Scheme Administrators' website at


scheme-of-arrangement;

"Great Southern Companies" means each of the companies listed in Schedule 3 to the

Deed of Settlement;

"Great Southern Reasons" means the Honourable Justice Croft's reasons in respect of the

Group Proceedings and the M+K Counterclaim Proceedings, annexed to the s33V Approval

Decision;

"Group Members" means each person or entity falling within the definition of a group

member in any one or more of the Group Proceedings and who has not opted out of the Group

Proceeding or Group Proceedings;

"Group Proceedings" means Supreme Court of Victoria Proceeding Nos SCI 2011 03616,

SCI 2011 03431, SCI 2010 02882, SCI 2011 05062, SCI 2011 05049, SCI 2011 04862, SCI

2011 04916, SCI 2011 04476, SCI 2011 04001, SCI 2011 04135, SCI 2011 04071, SCI 2011

04207, SCI 2011 03513, SCI 2011 03992, SCI 2011 03390 and SCI 2011 03614;

"GSF" means Great Southern Finance Pty Ltd (in Liquidation) ACN 009 235 143 of c/-


"GSMAL" means Great Southern Managers Australia Limited (in Liquidation) ACN 083

825 405 of c/- Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth in the State of

Western Australia;

"GSL" means Great Southern Limited (in Liquidation) ACN 052 046 536 of c/- Ferrier

Hodgson, Level 28, 108 St Georges Terrace, Perth in the State of Western Australia;

"GSS" means Great Southern Securities Pty Ltd (in Liquidation) ACN 009 283 621 of c/-


"GST" means goods and services tax levied under the GST Act;

"GST Act" means A New Tax System (Goods and Services Tax) Act 1999 (Cth);

"Insurers" means each of Chubb Insurance Company of Australia Limited ACN 003 710

647, Liberty Mutual Insurance Company t/as Liberty Insurance Underwriters ARBN 086 083

605, Allianz Australia Insurance Limited ACN 000 122 850, AIG Australia Limited ACN 004

727 753, DUAL Australia Pty Limited ACN 107 553 257, AXIS Speciality Europe Public

Limited Company t/as Axis Speciality Australia ARBN 131 203 122, QBE Insurance




DBS/DBS/3089794/975018/AUM/1211844873.1 7

(Australia) Limited ACN 003 191 035, Wesfarmers General Insurance Limited ACN 000 036

279;

"Insurers of GSMAL" means each of the Insurers other than QBE Insurance (Australia)

Limited (ACN 003 191 035);

"Investments" means any investment by a Scheme Member in any managed investment

scheme in or post 1998 of which GSMAL is or was the responsible entity;

"Javelin" means Javelin Asset Management Pty Ltd ACN 136 367 194 of 73 Palmerston

Street, Mosman Park in the State of Western Australia;

"Lead Plaintiffs" means Peter Clarke in his capacity as trustee for the Clarke Family Trust,

Samantha Barbara Murray, Raymond Carl Drummond, Laurence David Hogan, Mohetishwar

Vijendra Prasad, Janet Micallef, Jaclyne Edwina Fisher and Glenn Ford;

"Liquidators" means Andrew John Saker (up until his retirement on 13 June 2014 for

GSMAL and on 1 September 2014 for all other Great Southern Companies), Darren Gordon

Weaver (up until his retirement on 7 December 2015 for the Great Southern Companies

(other than GSMAL, GSL, GSF and Great Southern Pine Pty Ltd) and on 18 December 2015

for GSMAL, GSL, GSF and Great Southern Pine Pty Ltd), Martin Bruce Jones and James

Henry Stewart, as joint and several liquidators of the Great Southern Companies;

"Liquidators' Claims" means any claim, demand, action, suit or proceeding for damages,

debt, restitution, equitable compensation, account, injunctive relief, specific performance or

any other remedy, whether by original claim, cross-claim, claim for contribution or otherwise

whether presently known or unknown and whether arising at common law, in equity, under

statute or otherwise, able to be pursued by the plaintiffs in the following Supreme Court of

Western Australia Proceedings CIV 1549 of 2011, CIV 2611 of 2012, CIV 2634 of 2012,

CIV 2635 of 2012 and CIV 2913 of 2013 and any other proceedings commenced by the

Liquidators and/or the Great Southern Companies against third parties;

"Loan Agreements" means the loan agreements under which monies were advanced to

Scheme Members to finance their interest in managed investment schemes of which GSMAL,

and (in the case of the Great Southern 2008 Future Forestry Investment Scheme) GSMAL and

Rural Funds Management Limited ACN 077 492 838 (formerly Great Southern Funds

Management Limited), is or was the responsible entity;

"Mews" means Jeffrey Arthur Sydney Mews;

"M+K Clients" means the persons referred to in Schedule 4 to the Deed of Settlement;

"M+K Counterclaim Claimants" means each of the plaintiffs by counterclaim in the M+K


"M+K Counterclaim Proceedings" means each of the proceedings listed in Schedule 1 to


DBS/DBS/3089794/975018/AUM/1211844873.1 8

"M+K Trust Account Payment" means the sum of $20,250,000 payable by Insurers of

GSMAL to the M+K Trust Account pursuant to clause 6.1.1.1 of the Deed of Settlement;

"Non-Executive Directors" means Mews and Patrikeos;

"Other Claims" means, in respect of Scheme Creditors, any claim, demand, action, suit or

proceeding for damages, debt, restitution, equitable compensation, account, injunctive relief,

specific performance, declaratory relief or any other remedy, whether by original claim,

cross-claim, claim for contribution or otherwise whether presently known or unknown and

whether arising at common law, in equity, under statute or otherwise and whether involving a

third party or party to the Deed of Settlement and all liabilities, losses, damages, costs

(including legal costs on a full indemnity basis), interest, fees, and penalties of whatever

description (whether actual, contingent or prospective), other than a PDS Claim.

"Party" means a party to one or more of the Proceedings and "Parties" means all of them;

"Patrikeos" means Peter John Patrikeos;

"PDS" means a Product Disclosure Statement issued by GSMAL and, in the case of the

Great Southern 2008 Future Forestry Investment Scheme, includes the Product Disclosure

Statement issued by GSMAL and Rural Funds Management Limited (formerly Great

Southern Funds Management Limited);

"PDS Claim" means any claim, demand, action, suit or proceeding for damages, debt,





party to the Deed of Settlement and all liabilities, losses, damages, costs (including legal costs

on a full indemnity basis), interest, fees, and penalties of whatever description (whether

actual, contingent or prospective) arising out of, or in connection with, the contents of or the

facts giving rise to, the PDSs, the Loan Agreements and/or the allegations made in or the facts

giving rise to each of the Proceedings;

"Privilege Proceedings" means Supreme Court of Victoria Proceeding Nos SCI 2012 02658

and APCI 2012 0153;

"Proceedings" means the Group Proceedings, the Contribution Proceedings, the M+K

Counterclaim Proceedings, the Privilege Proceedings, the Uplifted Proceedings and the

Section 6 Proceedings;

"Regulations" means the Corporations Regulations 2001 (Cth);

"Related Bodies Corporate" has the meaning given to that expression in section 50 of the

Act;

"Related Entities" includes all of an entity's current or former directors, officers, employees

and/or agents, all of an entity's Related Bodies Corporate and all current or former directors,

DBS/DBS/3089794/975018/AUM/1211844873.1 9

officers, employees and/or agents of an entity's Related Bodies Corporate. For the avoidance

of doubt, the "Related Entities" of GSMAL includes each Insured as defined in the

Department of Financial Institutions Alpha Policy No: 93255855/93255857 for the Policy

Period 30 September 2008 to 30 September 2009 between Chubb Insurance Company of

Australia Limited, Liberty Mutual Insurance Company and GSL;

"Related Person" includes a spouse or de facto spouse, child, parent or other relative of an

individual and any company, partnership, joint venture, association, trust, corporation or other

body corporate controlled by or associated with that individual;

"Rhodes" means Cameron Arthur Rhodes;

"Scheduled Rates" means the rates set out in Schedule 2 to this Scheme;

"Scheme" or "Scheme of Arrangement" means the scheme of arrangement constituted by

this document;

"Scheme Administrators" means Martin Bruce Jones and James Henry Stewart as scheme

administrators of this Scheme and it includes such other persons appointed to replace the

proposed Scheme Administrators;

"Scheme Administrator's Deed Poll" means the deed poll executed by each of the Scheme

Administrators in the form set out in Schedule 4 to this Scheme;

"Scheme Costs" means the Liquidators' and Scheme Administrators' reasonable

remuneration, costs and out of pocket expenses incurred in direct relation to proposing,

promoting, implementing and administering this Scheme;

"Scheme Costs Deed" means the deed of settlement and release entered into by the Insurers

of GSMAL and the Liquidators on or about 4 July 2014;

"Scheme Costs Pool" means the sum contributed by the Insurers of GSMAL to meet the

Scheme Costs;

"Scheme Creditors" means persons who:

(a) made Investments; and

(b) have a PDS Claim which relates to or arises out of any product disclosure statement

issued by GSMAL (and, in the case of the Great Southern 2008 Forestry Investment

Scheme, the product disclosure statement issued by GSMAL and Rural Funds

Management Limited (formerly Great Southern Funds Management Limited)),

including, but not limited to, the issue of any such product disclosure statements or in

any statements in or omissions from such product disclosure statements;

"Scheme Creditors' Pool" means the sum of $3,550,000 to be contributed by the Insurers of

GSMAL to be distributed by the Scheme Administrators to the Scheme Creditors;

DBS/DBS/3089794/975018/AUM/1211844873.1 10

"Scheme Meeting" means the meeting or meetings ordered by the Court to be convened

under section 411(1) of the Act in relation to this Scheme;

"Scheme Members" means the members who invested in any managed investment scheme

in or post 1998 of which GSMAL is or was the responsible entity, including former scheme

members;

"Scheme Period" means the period commencing on the Commencement Date and ending on

the date set out in clause 10.2 of this Scheme;

"Section 6 Proceedings" means Supreme Court of New South Wales Court of Appeal

Proceedings No. 2013/31425, High Court of Australia Proceeding No S188 of 2013 and High

Court of Australia Proceeding No S189 of 2013;

"Settlement Approval" means the Supreme Court of Victoria approving the settlement of

the Group Proceedings pursuant to section 33V(1) of the Supreme Court Act 1986 (Vic) on

the terms contained in the Deed of Settlement;

"Settlement Parties" means the parties to the Deed of Settlement;

"s33V Approval Decision" means the decision delivered by Justice Croft on 11 December

2014 in respect of the application for Settlement Approval, [2014] VSC 516;

"Uplifted Proceedings" means each of the proceedings listed in Schedule 5 to the Deed of

Settlement; and

"Young" means John Carlton Young.

Rules of interpretation

1.2 The headings in this document are for convenience only. They do not affect the interpretation

of this Scheme.

1.3 The following rules also apply in interpreting this Scheme, except where the context makes it

clear that a rule is not intended to apply:

1.3.1 a reference to:

1.3.1.1 a legislative provision or legislation (including subordinate

legislation) is to that provision or legislation as amended, re-enacted

or replaced, and includes any subordinate legislation issued under it;

1.3.1.2 a document (including this Scheme) or agreement, or a provision of a

document (including this Scheme) or agreement, is to that document,

agreement or provision as amended, supplemented, replaced or

novated;

DBS/DBS/3089794/975018/AUM/1211844873.1 11

1.3.1.3 a person includes any type of entity or body of persons, whether or

not it is incorporated or has a separate legal identity, and any

executor, administrator or successor in law of the person; and

1.3.1.4 anything (including a right, obligation or concept) includes each part

of it;

1.3.2 a singular word includes the plural, and vice versa;

1.3.3 a word which suggests one gender includes the other genders;

1.3.4 if a word or phrase is defined, any other grammatical form of that word or phrase

has a corresponding meaning;

1.3.5 all references to time are references to time in Melbourne Victoriaunless

otherwise indicated;

1.3.6 if an example is given of anything (including a right, obligation or concept), such

as by saying it includes something else, the example does not limit the scope of

that thing;

1.3.7 the words "associate", "entity", "officer", "relevant interest" and "subsidiary"

have the same meaning as in section 9 of the Act;

1.3.8 the words "related body corporate" have the same meaning as in section 50 of the

Act;

1.3.9 the word "agreement" includes an undertaking or other binding arrangement or

understanding, whether or not in writing;

1.3.10 where the day on or by which any thing is to occur or be done is not a Business

Day, that thing must be done on or by the next Business Day; and

1.3.11 a reference to $ or dollar is to Australian currency.

2. COMMENCEMENT OF SCHEME

2.1 This Scheme will commence on the Commencement Date.

3. SCHEME TO BE APPROVED AND MONIES PAID

3.1 This Scheme will only proceed and be implemented upon:

3.1.1 approval of the Scheme by the requisite majorities of Scheme Creditors at the

Scheme Meeting;

3.1.2 approval of the Scheme, with or without modification (provided that any such

modification does not derogate from the key features of the Scheme set out in

DBS/DBS/3089794/975018/AUM/1211844873.1 12

clause 3.1 of the Deed of Settlement), by the Court under section 411(4)(b) of the

Act;

3.1.3 lodgement with ASIC of a sealed copy of the order of Court; and

3.1.4 payment by the Insurers of GSMAL of:

3.1.4.1 the Scheme Costs Pool to the Scheme Administrators; and

3.1.4.2 the M+K Trust Account Payment to M+K Lawyers,

by no later than 5 (five) Business Days after lodgement with ASIC of a sealed

copy of the order of Court.

4. THE SCHEME

Application

4.1 This Scheme applies to all Scheme Creditors in respect of any and all PDS Claims the

Scheme Creditors have or may have or have had against GSMAL and the following third

parties:

4.1.1 Related Entities of GSMAL (including GSF, GSS and current and former


4.1.2 Related Persons of Related Entities of GSMAL;

4.1.3 Directors and their Related Persons;

4.1.4 Non-Executive Directors and their Related Persons; and

4.1.5 each of the Insurers.

Scheme Creditors' Pool

4.2 The Insurers of GSMAL will contribute the sum of $3,550,000, and this will constitute the

Scheme Creditors' Pool to be distributed by the Scheme Administrators to the Scheme

Creditors on a pro rata basis.

Entitlement to dividends

4.3 Under this Scheme, each Scheme Creditor will receive, by way of a dividend, a share of the

Scheme Creditors' Pool calculated pro rata by reference to:

4.3.1 the total face value of the amounts invested by each Scheme Creditor in the

relevant GSMAL managed investment schemes (which amounts do not include

GST or borrowing costs), as recorded in the relevant scheme registers as at 16

May 2009; and

4.3.2 any other amounts accepted by the Scheme Administrators pursuant to clause 4.4

below.

DBS/DBS/3089794/975018/AUM/1211844873.1 13

4.4 If a Scheme Creditor's investment is not recorded in the relevant scheme registers as at 16

May 2009 for any reason whatsoever, including the expiry of a lease, the Scheme Creditor

will not be entitled to a receive pro rata dividend from the Scheme Creditors' Pool, unless

within 21 days after the Scheme Administrators issue a notice of intention to declare a

dividend, the Scheme Creditor provides to the Scheme Administrators satisfactory evidence

of the face value of the Scheme Creditor's investment, and the Scheme Administrators admit

the face value of the investment.

4.5 If a Scheme Creditor's investment is not recorded in the relevant scheme registers as at 16

May 2009 and the Scheme Creditor does not provide to the Scheme Administrators

satisfactory evidence of the Scheme Creditor's investment within the timeframe stipulated in

clause 4.4 above, the Scheme Creditor will be excluded from participating in the distribution

to which the Scheme Administrators' notice relates, and the Scheme Creditor irrevocably

waives any and all rights and entitlements to receive the pro rata dividend.

4.6 Scheme Creditors whose investments are recorded in the scheme registers as at 16 May 2009,

or whose investments are accepted by the Scheme Administrators in accordance with clause

4.4 above, need not do anything further (including filing a proof of debt) to establish their

entitlement to receive a pro rata dividend from the Scheme Creditors' Pool.

4.7 Notwithstanding clause 4.4, if a Scheme Creditor transferred the Scheme Creditor's interest in

any GSMAL managed investment scheme to a nominee or third party after 16 May 2009, the

Scheme Creditor must, within 7 days of the Scheme becoming effective, issue a notice in

writing to the Scheme Administrators to request that payment of any dividends be made to the

Scheme Creditor and not the nominee or third party. If the Scheme Creditor does not issue

such a notice, the Scheme Administrators may, in their absolute discretion, make payment of

that Scheme Creditor's entitlement to the Scheme Creditor, nominee or third party in full and

final satisfaction and discharge of the Scheme Creditor's entitlement under the Scheme.

Payment of dividends

4.8 Payments of dividends to Scheme Creditors may be made, in the absolute discretion of the

Scheme Administrators:

4.8.1 by cheque in favour of the Scheme Creditor or the nominee or third party to

whom the Scheme Creditor has transferred its interest as referred to in clause 4.7

above (as may be applicable), and sent through the post at the risk of the Scheme

Creditor to the last known address of the Scheme Creditor, nominee or third

party, or to such other address as such Scheme Creditor, nominee or third party

may from time to time notify in writing to GSMAL or the Scheme

Administrators;

4.8.2 by electronic funds transfer to such bank account as the Scheme Creditor,

nominee or third party concerned may from time to time notify in writing to

GSMAL or the Scheme Administrators; or

4.8.3 in such other manner as the Scheme Administrators may from time to time

determine.

DBS/DBS/3089794/975018/AUM/1211844873.1 14

4.9 Payment under or pursuant to the Scheme will be deemed to have been made on the day that

the cheque is posted or the electronic funds transfer is made by the Scheme Administrators to

the nominated account of the Scheme Creditor, nominee or third party, as the case may be.

Payment of any such cheque by the banker on whom it is drawn will be satisfaction of the

monies in respect of which it was drawn, and receipt of the amount of such electronic funds

transfer into such account will be satisfaction of the monies in respect of which it was paid.

Unclaimed dividends

4.10 Payment of dividends pursuant to clauses 4.8 and 4.9 above must be debited against the bank

account of GSMAL which will be established to hold the Scheme Creditors' Pool, by no later

than 6 months after the Scheme Administrators declaring the dividend.

4.11 If there remain monies in the Scheme Creditors' Pool that are unclaimed for any reason

whatsoever beyond the period stipulated in clause 4.10, (including but not limited to cheques

sent to Scheme Creditors not being debited by that time, cheques being returned to the

Scheme Administrators and the Scheme Administrators not being able to locate the Scheme

Creditors), the Scheme Administrators will pay the remainder of the monies to ASIC in

accordance with section 544 of the Act. Upon the Scheme Administrators paying the

remainder of the monies to ASIC, the Scheme Administrators will cease to have any liability

in respect of those monies.

5. RELEASE BY SCHEME CREDITORS

Release

5.1 Subject to clause 3 above, each Scheme Creditor releases GSMAL and the following third

parties from all PDS Claims:

5.1.1 Related Entities of GSMAL (including GSF, GSS and current and former


5.1.2 Related Persons of Related Entities of GSMAL;

5.1.3 Directors and their Related Persons;

5.1.4 Non-Executive Directors and their Related Persons; and

5.1.5 each of the Insurers.

5.2 In the event that the Scheme does not proceed and is not implemented, the releases by the

Scheme Creditors in favour of the parties identified at clause 5.1 above will not take effect.

Bar

5.3 Subject to clause 3 above, on and from the Commencement Date, each of the parties

identified under clause 5.1 above may plead this clause in bar against any PDS Claim

(including for costs) brought by any Scheme Creditor or any person who claims through the

Scheme Creditor.

DBS/DBS/3089794/975018/AUM/1211844873.1 15

Covenant

5.4 Subject to clause 3 above, on and from the Commencement Date, each Scheme Creditor

irrevocably covenants that it will not bring or pursue, or procure a third party to bring or

pursue, a PDS Claim against any of the parties identified in clause 5.1 above in respect of any

matter which is the subject of the release in that clause.

Authority

5.5 Subject to clause 3 above, on and from the Commencement Date, each Scheme Creditor

irrevocably authorises each of the Liquidators to consent to, and take any other step necessary

to obtain, orders of the Court discontinuing, staying, dismissing or otherwise disposing of the

Proceedings on the basis that there be no order as to costs or that each party bears its own

costs, as set out in clauses 6.1.12, 6.1.13, 6.1.14, 6.1.16 and 6.1.17 of the Deed of Settlement.

5.6 The Liquidators may rely on clauses 5.1, 5.3 and 5.4 above in order to defend any PDS Claim

and prevent the continuation of any of the Proceedings.

5.7 For the avoidance of doubt, the rights under clause 5.5 above are in addition to any other

rights the Liquidators may have to effect a stay or dismissal or to otherwise dispose of the

Proceedings.

6. SCHEME ADMINISTRATORS' APPOINTMENT, ROLE, POWERS AND

REMUNERATION

Appointment

6.1 Provided each of Martin Bruce Jones and James Henry Stewart has, as at the Commencement

Date:

6.1.1 given and has not withdrawn his consent to act as a Scheme Administrator;

6.1.2 executed a Scheme Administrator's Deed Poll, in the form of the deed poll at

Schedule 4 to the Scheme, and delivered it to GSMAL,

they shall be the initial Scheme Administrators from the Commencement Date.

Role of Scheme Administrators

6.2 The Scheme Administrators must administer the Scheme in accordance with its terms.

6.3 The Scheme Administrators will have the powers and discretions conferred, and the duties,

obligations and responsibilities imposed, by the Scheme, the Act and the Regulations.

6.4 The Scheme Administrators may act jointly, severally or jointly and severally.

6.5 Without limiting the powers and discretions conferred on the Scheme Administrators by the

Scheme, the Act and the Regulations, for the duration of the Scheme Period, the Scheme

Administrators will:

DBS/DBS/3089794/975018/AUM/1211844873.1 16

6.5.1 have the power to give effect to and enforce the terms of the Scheme;

6.5.2 engage solicitors and consultants on such terms as the Scheme Administrators, in

their absolute discretion, decide;

6.5.3 have the power to appoint an agent or delegate to carry out any act which the

Scheme Administrators, in their absolute discretion, consider would be done

more effectively or efficiently by an agent or delegate, provided always that the

Scheme Administrators will remain liable for the acts or omissions of any agent

or delegate appointed by the Scheme Administrators;

6.5.4 have the power to do all things necessary, appropriate or incidental for

effectively, efficiently and properly carrying out the powers, duties and

responsibilities of the Scheme Administrators (including taking any legal action);

6.5.5 have the power to do anything that is necessary, appropriate or convenient for

giving effect to the Scheme; and

6.5.6 have the power to apply or to cause or procure GSMAL to apply to the Court in

relation to any matter arising in relation to or arising out of the implementation of

the Scheme (including, but not limited to, the exercise of the Scheme

Administrators' powers and discretions, and the discharge of the Scheme

Administrators duties, obligations and responsibilities) and for directions about

any such matter.

6.6 In exercising the powers conferred by the Scheme or the Act and in undertaking the duties

and functions provided for in the Scheme or the Act, the Scheme Administrators:

6.6.1 act, and are taken to act, as agents for and on behalf of GSMAL; and

6.6.2 do not act as, and do not have any of the duties owed by, a trustee.

Specific powers

6.7 Subject to clause 3 above, on and from the Commencement Date, the Scheme Creditors

irrevocably authorise the Scheme Administrators to execute, on behalf of the Scheme

Creditors, a deed of release of all PDS Claims in favour of the parties identified in clause 5.1

above, in the form of Schedule 3 to the Scheme.

6.8 The authority granted under clause 6.7 above includes the authority to bar, waive, release,

extinguish and covenant not to sue in respect of all PDS Claims in favour of the persons and

entities identified in clause 5.1 above.

Power of Attorney

6.9 The Scheme Creditors unconditionally and irrevocably appoint the Scheme Administrators as

their attorney, with the power to do anything which, in the Scheme Administrators' opinion, is

necessary, appropriate or expedient to give effect to the Scheme, including, but not limited to,

DBS/DBS/3089794/975018/AUM/1211844873.1 17

executing, on behalf of the Scheme Creditors, a deed of release of all PDS Claims in favour of

the parties identified in clause 5.1 above.

Limitation of Scheme Administrators' liability

6.10 In the exercise or performance, or purported exercise or performance, of any of the Scheme

Administrators' functions, powers or duties under this Scheme or the Act or otherwise, the

Scheme Administrators will not be personally liable to any Scheme Creditor for:

6.10.1 any actual, contingent or prospective liability incurred, directly or indirectly, by

any Scheme Creditor; or

6.10.2 any loss or damage caused to or suffered by, directly or indirectly, any Scheme

Creditor,

in consequence of any act, omission, negligence or default of the Scheme Administrators or

any person or entity acting or purporting to act on behalf of the Scheme Administrators,

except for any liability incurred or loss or damage suffered as a consequence of the gross

negligence, dishonesty or wilful default of the Scheme Administrators.

7. COSTS OF ADMINISTERING SCHEME

Scheme costs

7.1 The Scheme Costs will be paid from the Scheme Costs Pool.

7.2 In no circumstances will the Scheme Costs, including the Scheme Administrators' costs, fees

and disbursements in respect of the Scheme, be paid from the Scheme Creditors' Pool.

Scheme Administrators' remuneration

7.3 The Scheme Administrators are entitled to be remunerated at the usual rates charged from

time to time by Ferrier Hodgson in respect of any work done by the Scheme Administrators,

and any partner or employee of the Scheme Administrators, in respect of:

7.3.1 the exercise of their powers and discretions under the Scheme, the Act and the

Regulations; and

7.3.2 the performance of their duties, obligations and responsibilities under the

Scheme, the Act and the Regulations.

7.4 As at the Commencement Date, the Scheduled Rates are the usual rates charged by Ferrier

Hodgson.

7.5 The Scheme Administrators' remuneration in respect of the Scheme will form part of the

Scheme Costs and, accordingly, be paid from the Scheme Costs Pool in accordance with the

terms of the Scheme Costs Deed.

7.6 In no circumstances will the Scheme Administrators' remuneration be paid from the Scheme

Creditors' Pool.

DBS/DBS/3089794/975018/AUM/1211844873.1 18

8. CESSATION OF SCHEME ADMINISTRATORS

Resignation

8.1 A Scheme Administrator may resign from office as scheme administrator by notice in writing

to the Scheme Creditors published on the Ferrier Hodgson Website.

8.2 Any resignation by a sole remaining Scheme Administrator will only take effect upon, and is

subject to, the appointment of one or more persons to replace the resigning Scheme

Administrator in accordance with clauses 8.3 to 8.5 below.

Appointment of new Scheme Administrator

8.3 A new person may be appointed to replace the resigning Scheme Administrator.

8.4 Any such appointment of a new person must be effected by way of an ordinary resolution of

the Scheme Creditors at a meeting convened pursuant to clause 9 below.

8.5 No person will be appointed as a Scheme Administrator until such person:

8.5.1 covenants for the benefit of GSMAL and the Scheme Creditors to carry out the

duties and obligations of the Scheme Administrators under the Scheme; and

8.5.2 executes a Scheme Administrator's Deed Poll in the form of Schedule 4 to the

Scheme and delivers the deed poll to GSMAL.

Death or incapacity

8.6 If any Scheme Administrator dies or becomes unable to act, the Scheme Creditors may

appoint a new person to replace that Scheme Administrator.

8.7 Any such appointment of a new person must be effected by way of an ordinary resolution of

the Scheme Creditors at a meeting convened pursuant to clause 9 below.

8.8 No person will be appointed as a Scheme Administrator until such person:

8.8.1 covenants for the benefit of GSMAL and the Scheme Creditors to carry out the

duties and obligations of the Scheme Administrators under the Scheme; and

8.8.2 executes a Scheme Administrator's Deed Poll in the form of Schedule 4 to the

Scheme and delivers the deed poll to GSMAL.

9. MEETINGS OF SCHEME CREDITORS

Voting entitlement

9.1 Each Scheme Creditor will be entitled to vote in meetings of Scheme Creditors in the manner

set out below:

DBS/DBS/3089794/975018/AUM/1211844873.1 19

9.1.1 Each Scheme Creditor may vote in person or by attorney or by a duly appointed

corporate representative (in the case of a corporation) or by proxy.

9.1.2 Each Scheme Creditor will have one vote.

9.1.3 The value of each Scheme Creditor's vote will be the total face value of the

amounts invested by each Scheme Creditor in the relevant GSMAL managed

investment schemes (which amounts exclude GST and borrowing costs):

9.1.3.1 as recorded in the relevant scheme registers as at 16 May 2009; or

9.1.3.2 as otherwise accepted by the Scheme Administrators.

Place of meetings

9.2 All meetings of Scheme Creditors will be held at such place or places as determined by the

Scheme Administrators and specified in accordance with clause 9.9.1 below.

Convening meetings

9.3 The Scheme Administrators may, at any time, convene a meeting of Scheme Creditors.

9.4 The Scheme Administrators must convene a meeting of Scheme Creditors if a meeting is

requested by not less than 10% in both the number of the Scheme Creditors and the total face

value of the amounts invested by Scheme Creditors.

9.5 A request under clause 9.4 must be in writing signed by the relevant Scheme Creditors or on

their behalf and deposited at the offices of the Scheme Administrators, and must specify the

purpose for which the meeting of the Scheme Creditors is required and the text of any

resolution to be proposed at the meeting.

9.6 Notice

9.7 Notice of a meeting of Scheme Creditors must be given to all Scheme Creditors in accordance

with regulation 5.6.12(2) of the Regulations, to their last known postal address or facsimile

number, by posting a notice on the Ferrier Hodgson Website or, where applicable, by email

sent to Scheme Creditors' email addresses.

9.8 At least 10 Business Days' notice must be given of a meeting of Scheme Creditors.

9.9 The notice of meeting must specify:

9.9.1 the place and time of the meeting; and

9.9.2 the purpose for which the meeting of the Scheme Creditors is required and the

text of any resolution to be proposed at the meeting.

9.10 No resolution may be proposed or passed at a meeting of Scheme Creditors unless the notice

of the meeting sets out the text of each resolution, or an adequate summary thereof.

DBS/DBS/3089794/975018/AUM/1211844873.1 20

9.11 Any accidental omission to give any notice of a meeting to a Scheme Creditor or the non-

receipt by any Scheme Creditor of a notice of meeting will not invalidate the meeting.

Chairperson

9.12 One of the Scheme Administrators will be the chairperson at the meeting of Scheme

Creditors.

Quorum

9.13 At any meeting of Scheme Creditors:

9.13.1 two Scheme Creditors present in person or by a proxy will form a quorum for the

transaction of business; and

9.13.2 no business will be transacted unless the requisite quorum is present at the

commencement of business.

Application of Regulations

9.14 Except to the extent that they are modified or inconsistent with the terms of the Scheme, the

Act and the Regulations applicable to creditors' meetings convened under Part 5.3A of the Act

apply, with such modifications as are necessary to meetings of Scheme Creditors under the

Scheme as if the references to the liquidator, provisional liquidator, chairman, trustee for

debenture holders, as the case may be, are references to the Scheme Administrators.

10. COMPLETION OF SCHEME

Date of completion

10.1 The Scheme will be completed and come to an end when:

10.1.1 the Scheme Creditors' Pool has been distributed or otherwise dealt with in

accordance with this Scheme; and

10.1.2 in the opinion of the Scheme Administrators, all things required to be done in

relation to the Scheme have been done; and

10.1.3 the Scheme Administrators have lodged the requisite notices with ASIC.

Notice of completion

10.2 As soon as practicable following the completion of the Scheme, the Scheme Administrators

will cause a notice to be published on the Ferrier Hodgson Website stating that the Scheme

has been completed and come to an end.

10.3 The notice will remain on the Ferrier Hodgson Website for a period of 6 months following its

original publication.

DBS/DBS/3089794/975018/AUM/1211844873.1 21

11. GENERAL

Relationship between parties

11.1 Except and to the extent the Scheme expressly states so, nothing in this Scheme creates or

otherwise gives rise to any relationship of trust, agency or partnership.

Severability

11.2 If any part of this Scheme is illegal or otherwise unenforceable, it may be severed from the

Scheme.

11.3 In the event of any part of the Scheme being severed, provided that any such severance does

not derogate from the key features of the Scheme set out in clause 3.1 of the Deed of

Settlement, the remainder of the Scheme continues to be in force.

Non-exhaustive rights

11.4 The rights, powers, and remedies in relation to or arising out of this Scheme are cumulative.

11.5 Nothing in this Scheme excludes any other right, power or remedy that may exist apart from

any right, power or remedy conferred by this Scheme.

Consent to further steps

11.6 The Scheme Creditors irrevocably consent to, and authorise, the Scheme Administrators to do

all things and take all steps necessary or incidental to the implementation of the Scheme.

Notices to GSMAL and Scheme Administrators

11.7 Any notice to be given to GSMAL or the Scheme Administrators in relation to this Scheme

must be given in writing.

11.8 Any such notice may be given by hand delivery, pre-paid post, facsimile transmission, email

or such other method determined by the Scheme Administrators from time to time:

11.8.1 Hand delivery or pre-paid post

Ferrier Hodgson, Level 28, 108 St Georges Terrace, Perth or such other address

as the Scheme Administrators may notify to the Scheme Creditors for the purpose

of this clause

11.8.2 Facsimile

(08) 9214 1400 (if dialled from Australia) or +61 8 9214 1400 (if dialled from

outside Australia)

11.8.3 Email

[email protected]

DBS/DBS/3089794/975018/AUM/1211844873.1 22

Notices to Scheme Creditors

11.9 Any notice, document or written communication to be given to the Scheme Creditors

pursuant to this Scheme may be given:

11.9.1 in accordance with regulation 5.6.12(2) of the Regulations, to their last known

postal address, facsimile number or document exchange number (as applicable);

11.9.2 by email to their last known email address; or

11.9.3 by publishing the notice, document or written communication on the Ferrier

Hodgson Website,

as the Scheme Administrators, in their absolute discretion, decide.

11.10 Any such notice, document or written communication will be deemed to have been received

by each Scheme Creditor if:

11.10.1 sent to that postal address, facsimile number, document exchange number or

email address; or

11.10.2 published on the Ferrier Hodgson Website.

Receipt of Notice

11.11 Notice to the Scheme Creditors will be deemed to have been given:

11.11.1 by pre-paid post, on the second Business Day following the day on which it is

posted;

11.11.2 by hand delivery, on the date of delivery if delivered during business hours at the

place of delivery or, if not during business hours, the next Business Day;

11.11.3 by facsimile transmission, on the date of transmission if delivered during business

hours at the place the facsimile is sent to or, if not during business hours, the next

Business Day;

11.11.4 by email, on the date the email was sent if sent during business hours at the place

the email was sent or, if not during business hours, the next Business Day; and

11.11.5 by publication on the Ferrier Hodgson Website, on the date the notice was

published if published during business hours at the place of publication or, if not

during business hours, the next Business Day;

11.12 Notice to GSMAL or the Scheme Administrators will be given on the date the notice is

received by the Scheme Administrators (and will not be deemed to have been given sooner

than that date).

DBS/DBS/3089794/975018/AUM/1211844873.1 23

Governing law

11.13 The Scheme is governed by the laws of the State of Western Australia.

11.14 Each party submits to the exclusive jurisdiction of the courts exercising jurisdiction in the

State of Western Australia, and any court that may hear appeals from any of those courts, for

any proceedings in respect of this Scheme.

DBS/DBS/3089794/975018/AUM/1211844873.1 24

Schedule 1: Deed of Settlement

The Deed of Settlement is not attached, but can be accessed by visiting the Ferrier Hodgson

Website, accessing the electronic version of this Scheme document and clicking on the

following link: [Hyperlink].


DBS/DBS/3089794/975018/AUM/1211844873.1 25

Schedule 2: Ferrier Hodgson's Scheduled Rates

Position Rate per hour ($)

Partner $650

Executive Director $595

Director $575

Senior Manager $515

Manager $435

Assistant Manager $370

Senior Analyst $325

Analyst $290

Accountant $260

Junior Accountant $170

Senior Secretary $205

Computer Operator $145

Clerk $175

Typist $110

Office Assistant $110

DBS/DBS/3089794/975018/AUM/1211844873.1 26

Schedule 3: Deed Poll (see clause 6.7 of the Scheme)

1

Deed Poll

By Each Scheme Creditor

In favour of Each Released Party

Deed Poll dated 2016

By Each Scheme Creditor

In favour of Each Released Party

2

BACKGROUND

A. GSMAL and GSF are wholly-owned subsidiaries of GSL. GSMAL carried on business as the responsible entity of a number of agricultural and forestry managed investment schemes. GSF carried on the business of providing loans to Scheme Members. GSS held an Australian Financial Services Licence and used authorised representatives to provide advice on managed investment schemes issued by any of the Great Southern Companies.

B. Rhodes, Butlin, Young, Mews and Patrikeos were, at various times, directors of GSMAL and other Great Southern Companies.

C. On 16 May 2009, GSMAL and certain of its Related Bodies Corporate entered into voluntary administration under Part 5.3A of the Act. On 19 November 2009, creditors resolved to appoint the Liquidators as joint and several liquidators of GSMAL and certain of its Related Bodies Corporate pursuant to section 439C of the Act.

D. Proceedings have been commenced by or against or involving Scheme Members (and others) in respect of, or arising out of, a number of agricultural and forestry managed investment schemes managed by GSMAL. In addition, the Liquidators commenced the Liquidators' Claims against the defendants referred to therein, including the Directors.

E. The Liquidators notified the Insurers of claims and circumstances which might give rise to claims under the Insurance Policies. The Liquidators sought indemnity under the relevant Insurance Policies for claims related to allegedly misleading statements made in various PDSs in respect of Scheme Creditors' investments in a number of agricultural managed investment schemes managed by GSMAL.

F. Certain of the Scheme Creditors assert that they have an entitlement to a charge on insurance monies pursuant to section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) under the Insurance Policies.

G. The Insurers have raised various coverage issues and defences with respect to the claims under the Insurance Policies and have not accepted the validity of the charge referred to in recital F. The issues in relation to the existence and validity of the charge were determined in Chubb

Insurance Company of Australia Limited v Moore [2013] NSWCA 212.

H. On 23 July 2014, the Settlement Parties (including GSMAL, GSF, the Defendants and the Lead Plaintiffs) executed the Deed of Settlement to resolve the entirety of their disputes (save for certain claims, including the Liquidators' Claims), on the terms and conditions set out in the Deed of Settlement.

I. The Liquidators filed an application in the Supreme Court of Victoria for approval of the scheme of arrangement contemplated by clause 3.1 of the Deed of Settlement. The Supreme Court of Victoria approved the Scheme on 4 February 2016.

J. Pursuant to clause 3.1.6 of the Deed of Settlement and clause 6.7 of the Scheme, the Scheme Administrators are empowered to, and do hereby, execute on behalf of all Scheme Creditors this Deed Poll to release and extinguish any and all PDS Claims against the Released Parties.

OPERATIVE PROVISIONS

1. Definitions

3

In this Deed Poll (unless the context otherwise requires):

(a) Deed of Settlement means the Deed of Settlement dated May 2014 but which was, in fact, executed on 23 July 2014 between, among others, GSMAL, GSF and certain named Scheme Creditors;

(b) Insurers means each of Chubb Insurance Company of Australia Limited ACN 003 710 647, Liberty Mutual Insurance Company t/as Liberty Insurance Underwriters ARBN 086 083 605, Allianz Australia Insurance Limited ACN 000 122 850, AIG Australia Limited ACN 004 727 753, DUAL Australia Pty Limited ACN 107 553 257, AXIS Speciality Europe Public Limited Company t/as Axis Speciality Australia ARBN 131 203 122, QBE Insurance (Australia) Limited ACN 003 191 035, Wesfarmers General Insurance Limited ACN 000 036 279;

(c) Insurance Policies means the professional indemnity and directors & officers' liability policies issued by the Insurers in favour of companies in the Great Southern Group, including GSMAL;

(d) PDS means a Product Disclosure Statement issued by GSMAL and, in the case of the Great Southern 2008 Future Forestry Investment Scheme, includes the Product Disclosure Statement issued by GSMAL and Rural Funds Management Limited (formerly Great Southern Funds Management Limited);

(e) PDS Claim means any claim, demand, action, suit or proceeding for damages, debt, restitution, equitable compensation, account, injunctive relief, specific performance, declaratory relief or any other remedy, whether by original claim, cross-claim, claim for contribution or otherwise whether presently known or unknown and whether arising at common law, in equity, under statute or otherwise and whether involving a third party or party to the Deed of Settlement and all liabilities, losses, damages, costs (including legal costs on a full indemnity basis), interest, fees, and penalties of whatever description (whether actual, contingent or prospective) arising out of, or in connection with, the contents of or the facts giving rise to, the PDSs, the Loan Agreements and/or the allegations made in or the facts giving rise to each of the Proceedings;

(f) Proceedings has the same meaning as in the Deed of Settlement;

(g) Released Parties means:

a. GSMAL;

b. Related Entities of GSMAL (including GSF, GSS and current and former directors of GSMAL and GSMAL's Related Bodies Corporate);

c. Related Persons of Related Entities of GSMAL;

d. Directors and their Related Persons;

e. Non-Executive Directors and their Related Persons; and

f. each of the Insurers.

4

(h) Scheme means the scheme of arrangement between GSMAL and its Scheme Creditors under part 5.1 of the Corporations Act 2001 (Cth) which was approved by the Supreme Court of Victoria on 4 February 2016;

(i) Scheme Administrators means Darren Gordon Weaver, Martin Bruce Jones and James Henry Stewart in their capacity as scheme administrators of the Scheme;

(j) Scheme Creditors' Pool means the sum of $3,550,000 to be contributed by the Insurers of GSMAL to be distributed by the Scheme Administrators to the Scheme Creditors;

(k) Settlement Parties means the parties to the Deed of Settlement;

(l) Terms defined in this Deed Poll have the meanings given to them in this Deed Poll; and

(m) Terms that are not defined in this Deed Poll have the same meaning as given to them in the Scheme, unless the contrary intention appears or the context requires otherwise.

2. Releases

Upon receipt of the Scheme Creditors' Pool by GSMAL and upon receipt of the M+K Trust Account Payment by Macpherson & Kelly Lawyers Pty Ltd trading as M+K Lawyers, each Scheme Creditor conclusively, absolutely, unconditionally, irrevocably and forever releases and discharges the Released Parties of and from any and all PDS Claims.

3. Governing law and jurisdiction

This deed poll shall be governed by and construed in accordance with the laws of Victoria. The parties submit to the non-exclusive jurisdiction of the courts of Victoria and the Commonwealth of Australia.

5

Executed as a deed poll

Executed for and on behalf of each and every

Scheme Creditor by Martin Bruce Jones, as one

of the Scheme Administrators of Great Southern

Managers Australia Limited (in liquidation), in

the presence of:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signature of witness

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signature

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Full name of witness

Executed for and on behalf of each and every

Scheme Creditor by James Henry Stewart, as

one of the Scheme Administrators of Great

Southern Managers Australia Limited (in

liquidation), in the presence of:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signature

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Full name of witness

DBS/DBS/3089794/975018/AUM/1211844873.1 27

Schedule 4: Scheme Administrator's Deed Poll (see clauses 8.5 and 8.8 of the Scheme)

DATED 2015

[NAME OF PROPOSED SCHEME ADMINISTRATOR]

- and -

GREAT SOUTHERN MANAGERS AUSTRALIA LIMITED

(IN LIQUIDATION) (ACN 083 825 405)

and its Scheme Creditors

SCHEME ADMINISTRATOR'S

DEED POLL relating to a proposed

Scheme of Arrangement

2

THIS DEED POLL is made on 2015

BY:

[Name of proposed scheme administrator] of [Address]

IN FAVOUR OF:

Great Southern Managers Australia Limited (in Liquidation) ACN 083 825 405 of care of Ferrier

Hodgson, Level 28, 108 St Georges Terrace, Perth WA 6000 (GSMAL) and its Scheme Creditors

BACKGROUND

A The parties to the proposed Scheme are GSMAL and its Scheme Creditors.

B [Name of proposed scheme administrator] is proposed to be appointed as a Scheme

Administrator to administer the Scheme.

C [Name of proposed scheme administrator] has agreed, subject to the Scheme being approved

by the requisite majorities of Scheme Creditors and the Court, and subject to the Scheme

proceeding to be implemented, to exercise the powers and discretions conferred, and the

duties, obligations and responsibilities imposed, on a Scheme Administrator by the

Corporations Act 2001 (Cth), Corporations Regulations 2001 (Cth) and the Scheme, all in

accordance with the terms of the Scheme.

D The appointment of [Name of proposed scheme administrator] as Scheme Administrator is

subject to the execution and delivery of this Deed Poll prior to the Commencement Date.

Accordingly, [Name of proposed scheme administrator] has agreed to enter into this Deed

Poll.

OPERATIVE PROVISIONS

1. DEFINITIONS

1.1 Definitions

In this Deed Poll:

PDS Claim means any claim, demand, action, suit or proceeding for damages, debt,





party to the Deed of Settlement and all liabilities, losses, damages, costs (including legal

costs on a full indemnity basis), interest, fees, and penalties of whatever description (whether

actual, contingent or prospective) arising out of, in connection with the contents of or the

facts giving rise to, the PDSs, the Loan Agreements and/or the allegations made in or the

3

facts giving rise to each of the Proceedings.

Commencement Date means the date on which a sealed copy of the order of the Court

approving the Scheme under section 411(4)(b) of the Corporations Act 2001 (Cth) is lodged

with ASIC.

Court means the Supreme Court of Victoria.

Deed of Settlement means the deed of settlement, dated "May 2014", but in fact entered into

on 23 July 2014, between GSMAL and others, recording that the parties to the document had

agreed to resolve the entirety of their disputes, other than the Liquidators' Claims, on the

terms and conditions set out in the document.

Investments means any investment by a Scheme Member in any managed investment

scheme in or post 1998 of which GSMAL is or was the responsible entity.

Scheme means the scheme of arrangement under and pursuant to Part 5.1 of the Corporations

Act 2001 (Cth) to be proposed by the Liquidators pursuant to clause 3.1 of the Deed of

Settlement.

Scheme Administrator means each of the scheme administrators proposed to be appointed to

administer the Scheme.

Scheme Creditors means persons who made Investments, and who have a PDS Claim which

relates to or arises out of any product disclosure statement issued by GSMAL (and, in the

case of the Great Southern 2008 Forestry Investment Scheme, the product disclosure

statement issued by GSMAL and Rural Funds Management Limited (formerly Great

Southern Funds Management Limited), including, but not limited to, the issue of any such

product disclosure statements or in any statements in or omissions from such product

disclosure statements.

Terms that are not defined in this Deed Poll and that are defined in the Deed of Settlement

have the same meaning as given to them in the Deed of Settlement, unless the contrary

intention appears or the context requires otherwise.

2. CONSENT TO ACT

(a) [Name of proposed scheme administrator] hereby consents to act as a Scheme

Administrator on and from the Commencement Date.

(b) If the Scheme is approved by the requisite majorities of Scheme Creditors and the

Court and the Scheme proceeds to be implemented, [Name of proposed scheme

administrator] undertakes to exercise the powers and discretions conferred, and the

duties, obligations and responsibilities imposed, on a Scheme Administrator by the

Corporations Act 2001 (Cth), Corporations Regulations 2001 (Cth) and the Scheme,

all in accordance with the terms of the Scheme.

3. COVENANT BY SCHEME ADMINISTRATOR

[Name of proposed scheme administrator] covenants for the benefit of GSMAL and its

Scheme Creditors that he will, to the extent necessary to administer the Scheme, be bound by

the terms of the Scheme as if [Name of proposed scheme administrator] is a party to the

Scheme.

4

4. SCHEME ADMINISTRATOR'S ACKNOWLEDGMENT

[Name of proposed scheme administrator] acknowledges and agrees that the benefit of this

Deed Poll can be enforced directly by GSMAL and the Scheme Creditors (or any one of

them) against him.

5. CONTINUING OBLIGATION

This Deed Poll is irrevocable and remains in full force and effect until [Name of proposed

scheme administrator] has duly performed his obligations under this Deed Poll, or [Name of

proposed scheme administrator]'s appointment as a Scheme Administrator is terminated

earlier in accordance with the terms of the Scheme.

6. GENERAL

6.1 Governing law and jurisdiction

(a) This Deed Poll is governed by the laws of Western Australia.

(b) [Name of proposed scheme administrator] irrevocably submits to the exclusive

jurisdiction of the courts of the State of Western Australia, and any courts that may

hear appeals from any of those courts, for any proceedings in respect of this Deed

Poll and the Scheme.

6.2 Waiver

(a) A waiver of any right arising from a breach of this Deed Poll or of any right, power,

authority, discretion or remedy arising upon default under this Deed Poll must be in

writing and signed by the persons granting the waiver;

(b) A failure or delay in exercise, or partial exercise of:

(i) a right arising from a breach of this Deed Poll; or

(ii) a right, power, authority, discretion or remedy created or arising upon default

under this Deed Poll;

does not result in a waiver of that right, power, authority, discretion or remedy.

(c) [Name of proposed scheme administrator] is not entitled to rely on a delay in the

exercise or non-exercise of a right, power, authority, discretion or remedy arising

from a breach of this Deed Poll or on a default under this Deed Poll as constituting a

waiver of that right, power, authority, discretion or remedy.

6.3 Remedies cumulative

The rights and remedies of GSMAL, the Scheme Creditors and [Name of proposed scheme

administrator] under this Deed Poll are in addition to other rights and remedies given by law

independently of this Deed Poll.

5

6.4 Further action

[Name of proposed scheme administrator] will promptly do all things and execute and deliver

all further documents necessary or expedient to give effect to this Deed Poll and the

transactions contemplated by it.

EXECUTED AS A DEED POLL:

Executed by [Name of proposed scheme

administrator] in the presence of:

Name of witness Signature of [Name of proposed scheme

administrator]


DBS/DBS/3089794/975018/AUM/1209780315.1

Schedule 4: Scheme Creditors Register

_________________________________________________________________________

The Scheme Creditors Register can be viewed by visiting the Ferrier Hodgson Website, accessing the

electronic version of this Explanatory Statement and clicking on the following link: [Hyperlink]


DBS/DBS/3089794/975018/AUM/1209780315.1

Schedule 5: Scheme Administrator's Deeds Poll

_________________________________________________________________________

The Scheme Administrator's Deeds Poll can be viewed by visiting the Ferrier Hodgson Website,

accessing the electronic version of this Explanatory Statement and clicking on the following link:

[Hyperlink]

http://www.ferrierhodgson.com/au/~/media/Ferrier/Files/Documents/Corp%20Recovery%20Matters/Great%20Southern%20Managers%20Australia%20Ltd%20Scheme%20of%20Arrangement/Scheme%20Deed%20Poll.pdf

DBS/DBS/3089794/975018/AUM/1209780315.1

Schedule 6: Report as to Affairs

_________________________________________________________________________

GSMAL's Report as to Affairs (excluding a list of Scheme Creditors) is attached. The full Report as

to Affairs can be viewed by visiting the Ferrier Hodgson Website, accessing the electronic version of

this Explanatory Statement and clicking on the following link: [Hyperlink]

http://www.ferrierhodgson.com/au/~/media/Ferrier/Files/Documents/Corp%20Recovery%20Matters/Great%20Southern%20Managers%20Australia%20Ltd%20Scheme%20of%20Arrangement/RATA.pdfhttp:/www.ferrierhodgson.com/au/~/media/Ferrier/Files/Documents/Corp%20Recovery%20Matters/Great%20Southern%20Managers%20Australia%20Ltd%20Scheme%20of%20Arrangement/RATA.pdf