Explanatory Memorandum and Notice of Extraordinary General Meeting Opus Capital Limited ACN 095 039 366 Date Tuesday 23 September 2014 Time 10:00 am Location Level 18 Trustee House 444 Queen Street BRISBANE QLD 4000 This meeting has been convened to allow members to consider and vote on two resolutions to approve a transaction involving Opus Capital Limited (OCL) acquiring the business of Madsen Finance Pty Ltd (an entity associated with the current managing director of OCL, Mr. Matthew Madsen) in exchange for a significant new issue of ordinary shares in OCL and other cash consideration. BDO Corporate Finance (Qld) Ltd has prepared an Independent Expert's Report on the proposed acquisition, and has concluded that in their opinion, the proposed transaction is not fair, but reasonable to the non- associated Shareholders. Refer to section B-12 for further information. In this document you will find: 1. a director’s letter outlining the proposal; 2. an explanatory statement containing an explanation of, and information about, the proposal; 3. a Notice of Extraordinary General Meeting; 4. an Independent Expert Report; and 5. a Proxy Form. Page 1 of 35 Section A – Non-executive director’s letter Letter from the non-executive director Dear Shareholder, Enclosed with this letter are documents setting out details of the proposal for Opus Capital Limited (OCL) to acquire Madsen Finance Pty Ltd ACN 104 184 367 (MF) from Madsen Nominees Pty Ltd as trustee for the MB & PM Madsen Family Trust (Vendor), an entity controlled by the current managing director of OCL, Mr. Matthew Madsen (Transaction). A meeting of OCL’s shareholders is being called for Tuesday, 23 September 2014 to seek approval for the Transaction. The Company is required by the Corporations Act to provide certain details of the Transaction and to obtain various shareholder approvals in order to implement the Transaction. The relevant approvals are identified in full in the Notice of Meeting and the Explanatory Memorandum. You are urged to consider carefully all of this material, determine how you wish to vote, and cast your vote accordingly. Completion of the Transaction Completion of the Transaction is conditional upon, amongst other things, the passing of the two Resolutions set out in the attached Notice of Meeting. The terms of the Transaction are summarised in the Explanatory Memorandum. Conclusion of the Independent Expert Shareholders are referred to the Independent Expert’s Report prepared by BDO Corporate Finance (QLD) Ltd (Independent Expert). The Independent Expert was engaged by the Non-Associated Directors of OCL to provide an independent opinion as to whether or not the Transaction as a whole, including the issue of the Consideration Shares and payment of Deferred Consideration, is ‘fair and reasonable’ to OCL's Shareholders who are not excluded from voting on the Resolutions (Non- Associated Shareholders). The Independent Expert has concluded that the Transaction and the issue of the Consideration Shares and other Deferred Consideration, which are the subject of the Resolutions in the enclosed Notice of Meeting, is not fair but reasonable to OCL’s Non-Associated Shareholders. The Independent Expert’s Report is contained in Annexure A of this document. Please read that carefully, as it outlines various important matters relating to the Transaction. Proposal The proposal is for OCL to acquire the sole share of MF, in exchange for 691,751,161 ordinary shares in OCL, and a first amount of Deferred Consideration of $450,000, payable on or before 30 days after Completion. There is also an amount payable by OCL at Completion for the balance sheet items of MF. MF will then become a full subsidiary of OCL, and all future revenues associated with MF will be to the benefit of the OCL Group. The proposed Transaction has an earn-out - if profits before income tax are over $500,000 in each of the following three years ($950,000 in the financial year ended 30 June 2015, to take into account the Deferred Consideration already paid by OCL) – this number having been picked as it is higher than, but within reach of, MF’s prior years’ EBITDA figures – then the Vendor will become entitled to 50% of that additional earning as a Further Deferred Consideration. If the targets are not met, on a cumulative basis, OCL pays no more for MF. The balance of the 50% ‘outperformance’ for these subsequent three years, and revenues from year four onwards, will be retained in the OCL Group, except for fees associated with an historic transaction, (which may or may not occur) will be paid back out to the Vendor in full for the prior work done. Mr. Madsen will continue to be managing director of MF (in addition to his managing director role at OCL), through an existing consulting agreement with an associated entity. The proposed Transaction was extensively negotiated on behalf of the Non-Associated Shareholders, and is detailed in section B-4. Benefits of the proposal Your Non-Associated Directors, Mr. Rowan Ward and Mr. Leylan Neep believe the proposal is in the best interests of OCL and its Shareholders. We agreed on the following reasons for reaching this conclusion: Advantages: The Transaction will: align Mr. Madsen’s interests to Shareholder interests; provide considerable incentive to Mr. Madsen to outperform historical performance; assist with retention of the key man of the Group; generate additional revenues and cash flow to assist with the growth and development of OCL’s businesses; result in more diversified revenue streams which should improve the risk profile of the Group and enhance revenues and profitability; and capture where appropriate debt procurement fees (which currently exit the Group), to benefit all Shareholders. Disadvantages: the Transaction is opined as being not fair but reasonable to Shareholders by the Independent Expert. There is a premium (for control) being ascribed to the Transaction by the Independent Expert; there is a loss of control for the majority Shareholder given its reduction in shareholding from 73.57% to 47.87%; as earnings of MF are dependent on business relationships, there is a material ‘key man’ risk; and exposure of Shareholders to the funds management business of OCL will be diluted. Please read Section B-6 for a comprehensive discussion of the advantages and disadvantages, as well as general Risks, of the Transaction. Recommendation of the Directors Mr. Matthew Madsen, Mr. Mark Hallett, Mr. Rowan Ward and Mr Leylan Neep are the usual directors of OCL. Mr. Leylan Neep was acting as an alternate director for Mr. Madsen and Mr. Hallett at the date the Transaction was entered into, and acted as a director in place of Mr. Hallett. He has since been appointed to the board as an executive director on 31 July 2014. Mr. Madsen and Mr. Hallett make no recommendation with respect to the Resolutions due respectively to their material personal interest or potential future interest in them. Further details of their interests in the Transaction and the Resolutions are set out in the Explanatory Memorandum. The Non-Associated Directors, Mr. Ward and Mr. Neep, unanimously recommend that Shareholders vote in favour of the Resolutions set out in the enclosed Notice of Meeting, having regard to the advantages set out above. Page 3 of 35 Resignation as Independent director Prior to the date of this notice, I have given notice to OCL of my intention to resign as independent director. My decision is based on personal reasons, and I will be serving out my three months’ notice period. Regardless of my resignation and as put forward in the Explanatory Memorandum, I believe this Transaction is in OCL’s best interests. OCL is in the progress of identifying a suitable candidate to replace me as an independent director. Mr. Leylan Neep, who has acted as an alternative director for Mr. Mark Hallett in relation to the Transaction, was appointed to the board of OCL as a director from 31 July 2014. What you should do Shareholders are encouraged to carefully read the enclosed Explanatory Memorandum and Independent Expert’s Report in their entirety, and to attend the Extraordinary General Meeting and vote on the Resolutions. Capitalised terms can be found in the Glossary at the back. A Proxy Form is enclosed at Appendix B so that any Shareholder who is unable to attend the Extraordinary General Meeting can still vote. Should you wish to discuss this Notice of Meeting please contact Mr. Lachlan Davidson on (07) 3002 5300. If you are unable to attend the Extraordinary General Meeting, you are strongly urged to complete the Proxy Form and return it (see Proxy Form for details) as soon as possible and in any event so it is received by OCL by no later than 48 hours prior to the date and time of the meeting (or by close of business on Friday, 19 September 2014 if the proxy is being returned by post). Once again, on behalf of the Board I would like to thank you for your continued support. Yours sincerely Rowan Ward Non-executive director Opus Capital Limited Dated: 22 August 2014 Page 4 of 35 Important notice This Explanatory Memorandum contains an explanation of, and information about, the proposal to be considered at the Extraordinary General Meeting of OCL on Tuesday, 23 September 2014. It is given to OCL’s eligible Non-Associated Shareholders to help them determine how to vote on the two important resolutions set out in the accompanying Notice of Meeting. Shareholders should read this Explanatory Memorandum in full because individual sections do not give a comprehensive review of the Transaction contemplated in this Explanatory Memorandum. This Explanatory Memorandum forms part of the accompanying Notice of Meeting and should be read together with the Notice of Meeting.