Mayne Investments Limited Home Page

Mayne Investments Limited - Responsible entity for Northern Investment Trust Fund

Mayne Investments Limited - ABN 34 000 339 211

CURRENT INVESTOR RATE: 5.00% p.a

Most Recent Correspondence To Investors

Dear Investor

It has now been six months since Mayne Investments and most other mortgage funds in Australia, had to suspend redemptions following an unprecedented increase in withdrawal requests, following the governments bank guarantee. Since that time, the Board and management of Mayne have taken every available measure to preserve the integrity of your investment whilst returning as much capital as is prudently possible to those who wanted it.

In addition to making regular quarterly distributions (with the next due 31 May 2009) we have made two Partial Redemption Offers, totalling $50 million. Those who participated in the offers have been able to redeem up to 55% of their investment.

However, in both offers more than 70% of accounts did not to participate; investors preferring instead to leave their money in the Fund and receive the higher return than is available with say a bank deposit. We believe that those who needed access to their capital have, to a large extent, had the opportunity to do so and it is perhaps now the time to look towards the future.

The Board of Mayne is still conscious of the need for investors to have regular access to some of their capital whilst at the same time mindful of the majority of investors who want to see the Fund continue to prosper and be of a size that will enable us to continue to provide a competitive return and regular income. As has been the case for 40 years, the Fund continues to perform well, enabling us to pay a sound return, underpinned by first mortgage security.

Accordingly, with the view to preserving the Fund as much as possible for the time when we are able to lift the freeze and resume normal operations, the Board has determined that rather than continue to put up lump sums, future redemption offers will be restricted to a percentage of each investor’s balance of funds. As with previous offers, investors are under no obligation to participate in the offer. It is intended that we will make these offers on a regular basis.

Details of the offer are attached.

Hardship Relief

The Board recognised at a very early stage that freezing the Fund would cause considerable hardship for some investors. We applied for and received relief under the Corporations Act from ASIC to meet genuine hardship requests, based on their strict guidelines and to be applied on a fair and transparent basis.

To this end, a Hardship Committee was formed comprising a number of directors and senior staff. This committee has considered and approved a large number of requests where it could be established that an investor was experiencing genuine hardship and provided they could show, as ASIC states, they “did not otherwise have the financial capacity to meet the expense”.

This committee will continue to diligently apply these guidelines based on procedural fairness and in the best interest of the Fund and all investors.

Banking Licence and Government Guarantee

You will be aware that whilst the governments guarantee on bank deposits brought comfort to bank account holders it also caused considerable concern for investments not covered by the guarantee. The Board of Mayne has sought to obtain relief under this guarantee by exploring the option of becoming an authorised deposit taking institution under the auspices of APRA. After considerable enquiry it would appear that APRA does not have the appetite to issue any new banking licences, indicating instead that there are too many hurdles for mortgage funds to overcome, including the restructuring of a fund to satisfy their capital adequacy requirements.

Accordingly, the Board has taken the view that it is no longer appropriate to continue to pursue a banking licence in an attempt to obtain relief under the guarantee.

The mortgage funds industry has called on the government to phase out the guarantee on bank deposits, believing that this will greatly assist the recovery of the industry.

The Future

Like most funds in the mortgage industry we are unable to say just when we will be able to lift the restriction on redemptions. A lot will depend on the speed at which the economy recovers from the global economic crisis and from what is now officially termed by the RBA as a ‘recession’. It would appear that it will be some time yet before funds can again open their doors without having to confront another flood of redemptions. However, we believe that the climate of fear that swept around the world in the last few months of 2008 has dissipated and that investors who no longer fear a loss of capital are now looking to a better return than that being offered by the banking industry at a time of record low interest rates.

We have issued a new Product Disclosure Statement that highlights the fact that the Fund is now operating on a non-liquid basis. This enables us to accept deposits from new and existing investors. It is felt that accepting new deposits and resuming lending will also hasten the unfreezing of the Fund.

The Board and management of Mayne Investments continue to work hard to overcome this difficult period. The road to recovery is a long one, but with your support, Mayne intends to remain a significant investment alternative to the banks for those seeking security and a good, regular return.

Greg Andersen

General Manager

24 April 2009

Dear Investor

Since your Directors took the unprecedented step of deferring redemption requests, we have been working tirelessly to provide investors access to their funds in as timely and prudent a manner as possible. It was recognised that the sudden freeze on funds caused considerable inconvenience to a great many investors and accordingly, we have endeavoured to return funds to those needing to redeem part of their investment in as short a time span as possible.

The second Redemption Offer of $30 million closed 16 February 2009 and those who participated in the offer received 39% of their request. The amount redeemed in the first two offers totalled $50 million or approximately 17% of the total funds under management at the time the Fund was frozen. For those who participated in both offers, it was possible to redeem up to 55% of their investment. We believe this to be a significant amount and anecdotally better than any other mortgage Fund in Australia.

We continue to explore all options for obtaining relief under the government’s guarantee, although we again stress that this is a long and complicated process. It is hoped that we will be able to make a more definitive statement concerning this in the near future.

Despite the difficult conditions currently prevailing, the Fund continues to perform very well. Accordingly, the Board has determined that the distribution rate for the three months ending 28 February 2009 will be 6.73%. The distribution rate effective 1 March 2009 will be 5%.

We also recognise that there are a great many investors who value their investment with Mayne and who have no desire to see the size of the Fund continue to decline. The Fund has delivered reliable and consistent returns over forty years and in this time of considerably lower interest rates, many investors continue to look to Mayne to provide them with a regular income stream and capital stability.

Accordingly, whilst the Board is committed to making further redemption offers, the scope and nature of future offers will be carefully considered. In this regard, I will write to you again shortly.

The problems besetting Mayne Investments are being experienced by every mortgage fund in Australia. Your Directors firmly believe that there is a place for funds such as Mayne in the finance and investment industry, not only to give the banks continued competition but to provide investors with a more generous rate of return than that offered by the market.

A number of existing investors are again investing in the Fund and we are in the process of issuing a new Product Disclosure Statement to encourage new deposits. The Board believes that once we begin to again accept new deposits we will be a lot closer to resuming normal activities.

Greg Andersen

General Manager

28 February 2009

21 January 2009

Dear Investor

Partial Withdrawal offer of $30 million

The Board of Mayne Investments Limited has resolved to make an additional $30 million available to investors under a structured withdrawal offer. This follows on from the first redemption offer of $20 million and has been determined as a prudent amount of money to make available based on an assessment of the current status of the Fund. There is no obligation on Mayne to make this offer and the offer must be made to all investors.

The first offer was well and truly oversubscribed to the extent that the Fund could only redeem funds at the rate of 25.7 cents in the dollar. This was a disappointing result and anecdotal evidence suggests that a great many applicants inflated their redemption request in the belief that it would be scaled back. This has the effect of masking the underlying demand and makes it difficult for us to manage an orderly programme of partial redemption offers.

On a more pleasing note, it was encouraging to see that 75% of accounts chose not to participate in the offer. It is also encouraging to see that some investors are once again adding to their investment.

We would remind all investors that the Fund continues to perform well and it is only the ongoing demand for redemptions that stops us from returning to normal operations. This will be achieved much sooner if investors do not participate in the offer or only redeem funds sufficient to meet their pressing needs.

Investors are advised that a quarterly distribution will also be made at the end of February, with the current distribution rate at 7%, reducing to 6% effective 1 February 2009. In the absence of any further rate changes, the average for the quarter is expected to be 6.73%.

Since deferring withdrawals the Board and management at Mayne have kept the operation of the Fund under constant review to not only work towards resuming normal operations but also to assess what steps Mayne can take to assist investors. During this time we have also been working towards increasing cash levels.

The directors will continue to review the operations of the Fund and will determine whether to recommence the processing and payment of withdrawals or continue with periodic withdrawal offers. If the Board continues with the periodic withdrawal process then investors will be notified accordingly.

We are working hard to return to normal redemption procedures as quickly as possible although we cannot set a date at this stage. It will be done when we are satisfied that the needs of all investors are protected. For further details of the offer see over the page.

Greg Andersen

General Manager

HOW THE OFFER OPERATES

In making this withdrawal offer the Corporations Act 2001 (Cwth) requires among other things, the offer:

· be made to all investors;

· remains open for at least 21 days;

· specifies the amount of money that will be available, in this case up to $30 million; and

· explains the method for dealing with withdrawal requests where the total requested withdrawals exceed the amount made available.

How do you participate?

You do not have to participate in this offer. Investors who do wish to take part must complete the attached withdrawal form and submit it to Mayne so that we receive it by no later than 5 pm (Eastern Daylight Saving time) on Monday 16 February 2009.

If the total of all withdrawal requests received exceed the $30 million offered then as required by the Corporations Act, requests will be satisfied proportionately in the manner explained below.

Amount an investor requested to withdraw___

Amount of money available X Total of all amounts investors request to withdraw

For example:

There is $30 million available to meet withdrawal requests.

Mr Jones lodges a withdrawal request for $20,000.

The total amount of valid withdrawal requests received from those investors participating in the offer is $40 million.

Mr Jones would therefore receive $15,000.

This is an example only. What an investor (who participates in the offer) receives will depend on the amount of their withdrawal request and the total amount of all withdrawal requests.

What if you have previously lodged a withdrawal request?

All previously lodged withdrawal requests will not be considered a withdrawal request under this offer. In order to be included in this offer you must complete and return the Unit Redemption Form attached to this letter so that Mayne receives it by no later than 5 pm, Monday 16 February 2009.

How much do I ask for?

This is ultimately a decision for each investor. However, the Board strongly urges investors to limit their requests to their immediate requirements.

How will I be paid?

You can nominate to receive your money by cheque or by detailing your bank account details on the attached ‘Periodic Redemption Offer’ form. It is expected that upon expiry of the notice period, requests will be processed and into your account within three working days of the offer closing.

Does this affect the current 90 day deferral of withdrawals?

The decision enables the Board to undertake a structured withdrawal offer to all investors. However, it does not automatically mean existing withdrawal requests lapse.

It is important to understand that the move to Periodic Redemption Offers replaces the previous 90 day deferral of redemptions.

10 December 2008

Dear Investor

Withdrawal offer of $20 million

The Board of Mayne Investments Limited on 21 October 2008 took the unprecedented step of temporarily deferring withdrawal requests for an initial period of 90 days after receiving an overwhelming number of withdrawal requests. The directors of Mayne were and remain very aware this has caused financial difficulties for some investors.

The Board has a responsibility to always act in the best interests of its investors. Making a decision to suspend redemptions is an example of doing just that. As an investor in the Fund your money is pooled together with a large number of other investors and invested in Australian based mortgages, fixed interest investments and cash. These mortgages have been providing a steady rate of return and are conservatively managed through strict lending criteria. Mortgages however are not easily turned into cash but the Northern Investment Trust Fund (Fund) maintains a portion of assets that can be quickly turned into cash to pay expected redemptions.

Where the level of demand for cash redemptions exceeds the level of cash available, particularly in extraordinary circumstances such as those following the Federal Government’s decision to guarantee bank deposits, redemptions may need to be suspended. Selling assets quickly, simply to meet redemption requests would not provide time to deliver the optimal return to investors.

Since deferring withdrawals the Board and management at Mayne have kept the operation of the Fund under constant review to not only work towards resuming normal operations but also to assess what steps Mayne can take to assist investors. During this time we have also been working towards increasing cash levels.

With this in mind, the Board has resolved to make up to $20 million available to investors under a structured withdrawal offer. This amount has been determined by the Board as a prudent amount of money to make available based on an assessment of the current status of the Fund at this time.

There is no obligation on Mayne to make this offer and whilst the offer must be made available to all investors, the Board hope that only those with pressing financial needs will participate in the offer and then only up to what is actually required.

How the offer operates

In making this withdrawal offer the Corporations Act 2001 (Cwth) requires among other things, the offer:

·               be made to all investors;

·               remains open for at least 21 days;

·               specifies the amount of money that will be available, in this case up to $20 million; and

·               explains the method for dealing with withdrawal requests where the total requested withdrawals exceed the amount made available.

How do you participate?

Investors who wish to take part in this offer must complete the mailed withdrawal form and submit it to Mayne so that we receive it by no later than 5 pm (NSW time) on Wednesday 7 January 2009.

If the total of all withdrawal requests received exceed the $20 million offered then as required by the Corporations Act, requests will be satisfied proportionately in the manner explained below.

Amount an investor requested to withdraw

Amount of Money available

X

Total of all amounts investors request to withdraw

For example:

There is $20 million available to meet withdrawal requests.

Mr Jones lodges a withdrawal request for $20,000

The total amount of valid withdrawal requests received from those investors participating in the offer is $40 million.

Mr Jones would therefore receive $10,000.

This is an example only. What an investor (who participates in the offer) receives will depend on the amount of their withdrawal request and the total amount of all withdrawal requests.

What if you have previously lodged a withdrawal request?

All previously lodged withdrawal requests will not be considered a withdrawal request under this offer. In order to be included in this offer you must complete and return the Withdrawal Application attached to this letter so that Mayne receives it by no later than 5 pm (NSW time) on Wednesday 7 January 2009.

How much do I ask for?

The Board would encourage investors to limit their requests to their immediate requirements.

How will I be paid?

You can nominate to receive your money by cheque or by detailing your bank account details on the attached ‘Periodic Redemption Offer’ form. It is expected that upon expiry of the notice period, requests will be processed and into your account within three working days of the offer closing.

Does this affect the current 90 day deferral of withdrawals?

The decision enables the Board to undertake a structured withdrawal offer to all investors. However, it does not automatically mean existing withdrawal requests lapse.

It is important to understand that the move to Periodic Redemption Offers replaces the previous 90 day deferral of redemptions.

The directors will continue to review the operations of the Fund and will determine whether to recommence the processing and payment of withdrawals or continue with periodic withdrawal offers. If the Board continues with the periodic withdrawal process then investors will be notified accordingly.

We are working hard to return to normal redemption procedures as quickly as possible although we cannot set a date at this stage. It will be done when we are satisfied that the needs of all investors are protected.

Greg Andersen

General Manager

Initial Letter To Investors

22 OCTOBER 2008

Dear Investor,

Following the announcement by the Federal Government last Sunday 12 October 2008 to guarantee all funds in Banks, Building Societies & Credit Unions, Mayne Investments Limited, as well as a number of similar funds, has received a steadily increasing number of redemption requests.

Extensive publicity has yesterday been given to Australia’s largest mortgage trust, Challenger Howard Mortgage Trust, and their decision to suspend redemption requests. As a result of this sudden and unexpected publicity Mayne Investments and other local funds have received accelerated redemption activity. Accordingly, the directors of Mayne Investments & East Coast Mortgage Trust have both taken the decision to suspend redemption requests for an initial period of up to 90 days.

Even though the Fund retains good liquidity, the continued increase in redemptions could not prudently be sustained indefinitely.

It is disappointing that the current situation has been caused by the government’s decision not to include managed funds such as Mayne Investments in the support package.

This difficult decision has not been taken lightly in the certain knowledge that it will no doubt cause distress to some investors. However, the Board could not let the situation continue to deteriorate. Once this decision was made, the Board could not, under the Corporations Act, give preferential treatment to some investors.

The Board is firmly of the view that Mayne Investments remains in a very strong financial position. Quarterly distributions are expected to be unaffected. Directors do not currently anticipate there will be any loss of capital.

Investors should note that Mayne has operated successfully through good and bad times for over forty years without loss of capital to any investor. Mayne Investments has:

* No exposure to the sub prime residential market;
* No exposure to the share market or foreign exchange markets;
* No borrowings;
* Considerable cash reserves; and a
* Well performed and profitable loan book.

We expect the 90 day period will allow the Board of Directors sufficient time to conduct a thorough and orderly review of the situation and make representation to the government for the guarantee to be extended to mortgage trusts.

In the interim, the Board has resolved to withdraw the current product disclosure statement until the market volatility has subsided. Those investors who have their distributions automatically reinvested can contact our office and arrange for the distribution to be paid rather than reinvested.

Those investors who have invested in the Fund within the last 14 days may be entitled to apply to have their investment redeemed under the “cooling off” provisions and affected investors who wish to use this process should contact our Lismore office.

We would urge investors to contact their federal member of parliament and express their concerns about how the government has chosen to favour the banks, building societies and credit unions to the disadvantage of the investment and funds management industry.

We thank our investors for their continued support at a time when factors beyond our control had led us to this disappointing situation.

Greg Andersen
General Manager

PRIVACY STATEMENT