SGH LIMITED - M&A Activity 2010

This Scheme Booklet is important and requires your immediate attention. You should read this document in its entirety. If you are in any doubt as to how to deal with this document, please consult your financial, legal or other professional adviser.

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Media Group
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Scheme Booklet PART A

For the scheme of arrangement between Seven Network Limited ( ACN 052 816 789) and the holders of Seven Shares in relation to the proposed merger of Seven Network Limited and WesTrac Holdings Pty Limited to form Seven Group Holdings.

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THE INDEPENDENT SEVEN DIRECTORS UNANIMOUSLY RECOMMEND THAT SEVEN SHAREHOLDERS VOTE IN FAVOUR OF THE SHARE SCHEME, IN THE ABSENCE OF A SUPERIOR PROPOSAL.

The Independent Expert has concluded that the Share Scheme is fair and reasonable and therefore in the best interests of Unrelated Seven Shareholders.

If you have any questions about the Share Scheme, please call the Seven Network Limited Information Line 1300 656 831 (from within Australia, for the cost of a local call) or +61 2 8986 9358 (from outside Australia). Alternatively, you can go to Seven Group Holding’s website at www.sevengroup.com.au

FINANCIAL ADVISERS

LEGAL ADVISER

Important notices

Purpose of this Scheme Booklet Important document

This Scheme Booklet has been sent to you in two parts: Part A (this document) and Part B (the document that accompanies this document). They are both important documents and you should read both Part A and Part B in their entirety. If you are in any doubt as to the course you should follow, you should seek independent professional advice.

Date

This Scheme Booklet is dated 16 March 2010.

Explanatory statement

This Scheme Booklet (except for Annexure 1 to Part A of this Scheme Booklet) is the explanatory statement that has been prepared pursuant to section 412(1) of the Corporations Act to explain the effect of the Share Scheme. It provides information which is material to the making of a decision by Seven Shareholders about whether or not to vote in favour of the Share Scheme.

ASX listing

A conditional application has been made for the admission of SGH to the official list of the ASX and for quotation of all SGH Shares on the ASX. This application is conditional on, among other things, the Share Scheme being approved.

Role of ASIC, the ASX and the Court

A copy of this Scheme Booklet has been examined by ASIC pursuant to section 411(2)(b) of the Corporations Act and registered by ASIC under section 412(6) of the Corporations Act. ASIC has been requested to provide a statement in accordance with section 411(17)(b) of the Corporations Act that ASIC has no objection to the Share Scheme. If ASIC provides that statement, it will be produced to the Court at the Second Court Hearing. Neither ASIC nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

A copy of this Scheme Booklet has been lodged with the ASX. Neither the ASX nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

The Court is not responsible for the contents of this Scheme Booklet and, in ordering that the Share Scheme Meetings be convened, the Court does not in any way indicate that the Court has approved or will approve, or otherwise endorse the Share Scheme.

Scheme Booklet not a prospectus

This Scheme Booklet is not a prospectus lodged under Chapter 6D of the Corporations Act. Section 708(17) of the Corporations Act provides that Part 6D.2 of the Corporations Act (relating to disclosure to investors about securities) does not apply in relation to an offer of securities if it is made under a compromise or arrangement under Part 5.1 of the Corporations Act, approved at a meeting held as a result of an order made by the Court under section 411(1) or (1A) of the Corporations Act. The Share Scheme will be such an arrangement if it is approved at the Share Scheme Meetings.

Foreign Seven Shareholders

This Scheme Booklet has been prepared having regard to Australian disclosure requirements and Australian accounting standards. These disclosure requirements and accounting standards may be different from those in other countries.

It is important that Seven Shareholders who are not Australian resident taxpayers or who are liable for tax outside Australia seek specific tax advice in relation to the Australian and overseas tax consequences of the Share Scheme.

Restrictions in certain foreign countries may make it impractical or unlawful for SGH Shares to be offered or issued under the Share Scheme to Seven Shareholders in those countries, or for Seven Shareholders located in those countries to receive SGH Shares under the Share Scheme.

Any Seven Shareholder whose address in the Share Register is outside of Australia and its external territories, New Zealand, Hong Kong, the UK, the US or Canada will be an Ineligible Foreign Holder for the purpose of the Share Scheme, unless ACE determines that it is lawful and not unduly onerous or impractical to issue that person with New SGH Shares.

This Scheme Booklet, the Share Scheme and the Recommended Proposal do not, either individually or in combination, constitute:

an offer to sell to Seven Shareholders any securities in SGH; or
a solicitation of an offer to purchase from Seven Shareholders any securities in Seven,

in any jurisdiction where such an offer or solicitation would be illegal. Seven Shareholders who are Ineligible Foreign Holders will not be issued with SGH Shares but will instead receive a cash payment. Seven Shareholders

in New Zealand, Hong Kong, the UK, the US or Canada should refer to the important information in section 4.5 of Part B of this Scheme Booklet.

Investment decisions

The information in this Scheme Booklet does not constitute financial product advice. This Scheme Booklet does not take into account your individual investment objectives, financial situation, taxation position or particular needs. The information in this Scheme Booklet should not be relied on as the sole basis for any decision in relation to your Seven Shares. You should seek independent professional advice before making any investment decision in relation to your Seven Shares or how to vote on the Share Scheme.

Forward looking statements

This Scheme Booklet contains forward looking statements which are not based solely on historical facts but are based on current expectations about future events and results. These forward looking statements are subject to inherent risks and uncertainties. Such risks and uncertainties include factors and risks specific to the industries in which Seven and WesTrac Group operate as well as general economic conditions, prevailing exchange rates and interest rates, conditions in the financial markets, government policies and regulations, competitive pressures and changes in technology. Actual events or results may differ materially from the expectations expressed or implied in such forward looking statements. None of Seven, WesTrac Group, SGH, their respective related bodies corporate or their respective directors, officers, employees and advisers makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. Accordingly, you are cautioned about placing undue reliance on forward looking statements contained in this Scheme Booklet.

Unless otherwise indicated, all references to estimates, targets and forecasts and derivations of the same in this booklet are references to estimates, targets and forecasts by Seven or WesTrac Group management (as applicable). Management estimates, targets and forecasts are based on views held only at the date of this Scheme Booklet, and actual events and results may be materially different from them.

Since SGH is presently a company with no operations, and it will not acquire WesTrac Group and Seven until around the time of implementation of the Share Scheme, all statements in this Scheme Booklet about SGH are necessarily forward looking statements.

Pro forma historical and pro forma forecast

financial information

The pro forma historical financial information and pro forma forecast financial information included in this Scheme Booklet (as set out in sections 1.2, 2.6 and 3.11 of Part B of this Scheme Booklet) has been prepared in accordance with the recognition and measurement principles of Australian Accounting Standards as at 31 December 2009 although it is presented in an abbreviated form insofar as it does not include all the disclosures, statements or comparative information as required by the Australian Accounting Standards applicable to annual financial reports prepared in accordance with the Corporations Act. The pro forma historical financial information and pro forma forecast financial information should be read in conjunction with the rest of this Scheme Booklet, the consolidated financial statements and related notes of Seven and SGH and other information that Seven and SGH have filed with ASIC and that Seven has announced to the ASX.

Entitlement to vote

Seven Shareholders who are registered on the Share Register at 7.00pm on 18 April 2010 are entitled to vote at the relevant Share Scheme Meeting. Further details on how to vote at the Share Scheme Meetings are set out in section 9 of Part A of this Scheme Booklet and in the relevant notice of meeting in Annexure 1 to Part A of this Scheme Booklet.

Privacy and personal information

Seven and SGH may collect personal information about you in connection with the Share Scheme. The personal information may include the names, contact details and details of shareholdings of Seven Shareholders, together with the names and contact details of individuals appointed by Seven Shareholders to act as proxies, attorneys or corporate representatives to vote at the Share Scheme Meetings.

Such information will be collected for the purpose of the Share Scheme Meetings and implementing the Share Scheme and the Recommended Proposal. The information may be disclosed to Seven, SGH and their respective

officers, related bodies corporate, advisers and service providers to the extent necessary in connection with the Share Scheme Meetings and implementing the Share Scheme and the Recommended Proposal.

You may have certain rights to access personal information which is collected about you. You should contact the Seven Registry in the first instance should you wish to exercise these rights – the Seven Registry’s contact details are set out on the inside back cover of each part of this Scheme Booklet.

Seven Shareholders who appoint a named person as their proxy, attorney or corporate representative to vote at a Share Scheme Meeting should inform that person of the matters outlined above.

Responsibility for information in this Scheme Booklet

Seven is responsible for the contents of this Scheme Booklet other than, to the maximum extent permitted by law, the SGH Information, the WesTrac Information, the Independent Expert’s Report, the Investigating Accountant’s Report and the Tax Letters.

ACE is responsible for the WesTrac Information and SGH Information (except to the extent that any misleading or deceptive statement results from information supplied by Seven), but does not assume any responsibility for the accuracy or completeness of any other part of this Scheme Booklet.

The Independent Expert has prepared the Independent Expert’s Report and is responsible for that report. None of Seven, SGH, ACE, their respective related bodies corporate or the directors, officers, employees or advisers of any of these entities assumes any responsibility for the accuracy or completeness of the information in the Independent Expert’s Report except, in the case of Seven or ACE, in relation to information given by that entity to the Independent Expert.

The Investigating Accountant has prepared the Investigating Accountant’s Report and is responsible for that report. None of Seven, SGH, ACE, their respective related bodies corporate or the directors, officers, employees or advisers (other than the Investigating Accountant) of any of these entities assumes any responsibility for the accuracy or completeness of the information in the Investigating Accountant’s Report except, in the case of Seven or ACE, in relation to information given by that entity to the Investigating Accountant.

Ernst & Young has prepared the Tax Letters and is responsible for the Tax Letters. None of Seven, SGH, ACE, their respective related bodies corporate or the directors, officers, employees or advisers (other than Ernst & Young) of any of these entities assumes any responsibility for the accuracy or completeness of the information in the Tax Letters except, in the case of Seven or ACE, in relation to information given by that entity to Ernst & Young.

Effect of rounding

A number of figures, amounts, percentages, estimates, calculations of value and fractions in this Scheme Book ( Figures ), are subject to the effect of rounding. Accordingly the actual calculation of these Figures may differ from the Figures set out in this Scheme Booklet.

Definitions

Capitalised terms used in Part A of this Scheme Booklet and the Proxy Form are defined in the Glossary in section 10 of Part A of this Scheme Booklet.

Each of the reports and other documents contained in this Scheme Booklet (including in each of the Annexures) have their own defined terms which are sometimes different from those set out in the Glossary.

Photographs and diagrams

Photographs and diagrams used in this Scheme Booklet do not depict assets owned or used by WesTrac Group or Seven unless otherwise specified. Diagrams used in this Scheme Booklet are illustrative only and may not be drawn to scale.

References to time and currency

All references in this Scheme Booklet to:

time are references to the time in Sydney, New South Wales unless expressly indicated otherwise; and
• currency (including “$” and “A$”) are references to Australian dollars.

Questions

If you have any questions in relation to the Share Scheme or this Scheme Booklet, please call the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday. Alternatively, you can go to SGH’s website at www.sevengroup.com.au.

Overview of this Scheme Booklet and what you should do	2
Key dates	4
Letter from the Deputy Chairman of Seven Network Limited	5
Letter from the Chairman of Australian Capital Equity Pty Limited	7
What the Recommended Proposal is creating	8
1. Summary of reasons why you should vote in favour of the Share Scheme	11
2. Summary of reasons why you may consider voting against the Share Scheme	13
3. Why you should vote in favour of the Share Scheme	15
4. Why you may consider voting against the Share Scheme	25
5. Other relevant considerations	29
6. The Share Scheme: questions and answers	33
7. Overview of WesTrac Group	39
8. Overview of SGH	41
9. How to vote	43
10. Glossary	47
Annexure 1 Notices of Share Scheme Meetings	53
Corporate directory	57

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Overview of this Scheme Booklet and what you should do

WHAT IS THIS SCHEME BOOKLET FOR?

This Scheme Booklet provides you with relevant information that you will need in order to decide whether or not to vote in favour of the Share Scheme. The Share Scheme is a scheme of arrangement that forms part of the Recommended Proposal to create SGH by merging Seven with WesTrac Group, which is associated with Mr Kerry Stokes AC. SGH will be a significant Australian diversified operating and investment group with market leading businesses and investments with strong revenues and earnings.

Part B (accompanying this Part A) which is common to both the Share Scheme and the TELYS3 Scheme and which has been provided to both Seven Shareholders (in respect of the Share Scheme) and TELYS3 Holders (in respect of the TELYS3 Scheme).

Part B of this Scheme Booklet includes a copy of the Independent Expert’s Report in section 6. The Independent Expert’s Report is an important document which you should read in full. It contains important qualifications and assumptions relevant to the opinions expressed.

RECOMMENDED PROPOSAL

Under the Share Scheme, SGH Group will acquire all of the Seven Shares. The Share Scheme requires the approval of Seven Shareholders.

The Recommended Proposal also includes the TELYS3 Scheme pursuant to which SGH will acquire all of the TELYS3 in exchange for TELYS4, a new security to be issued by SGH. Holders of TELYS3 will receive a separate booklet containing information in relation to the TELYS3 Scheme.

This Scheme Booklet is comprised of two separate parts:

this Part A which is specific to the Share Scheme and has been provided only to Seven Shareholders; and

RELATED PARTY INTERESTS

Under the Recommended Proposal, certain Seven Directors being Kerry Stokes, Peter Gammell and Ryan Stokes have a different interest from other Seven Shareholders. They, or entities of which they are directors, have an existing interest in WesTrac Group which has entered into transactions with Seven to implement the Recommended Proposal. In view of this personal interest of Messrs Stokes, Gammell and Stokes, they were excluded from the Seven Board of Directors’ considerations in relation to the Recommended Proposal. Seven also put in place protocols to deal with any perceived or actual conflicts of interest arising as a result. These protocols are described in detail in section 4.2 of Part B of this Scheme Booklet and summarised in section 5.3 of this Part A.

The Independent Expert has concluded that the Share Scheme is fair and reasonable and therefore in the best interests of Unrelated Seven Shareholders. You should read the Independent Expert’s Report in full.

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2 Seven Network Limited Scheme Booklet – Part A

Particularly having regard to the potential for conflicts of interest, Seven Shareholders should carefully read this Scheme Booklet, including the Independent Expert’s Report.

WHAT SHOULD YOU DO?

STEP 1 – CAREFULLY READ THIS SCHEME BOOKLET

You should read both Part A and Part B of this Scheme Booklet in their entirety before making a decision on whether or not to vote in favour of the Share Scheme.

STEP 2 – VOTE ON THE SHARE SCHEME

Vote on the Share Scheme by doing one of the following:

complete and return the White Proxy Form accompanying this Scheme Booklet if you are a Related Share Holder, or the Pink Proxy Form accompanying this Scheme Booklet if you are an Unrelated Share Holder, for the Share Scheme Meetings in accordance with the instructions set out on that form. Your Proxy Form must be received by the Seven Registry or by Seven by no later than Sunday, 18 April 2010[1] ; or
attend the relevant Share Scheme Meeting and vote in person, at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000 on Tuesday,

20 April 2010. The Unrelated Seven Shareholder Class Meeting will commence at 10.00am (Sydney time).

You may also vote by attorney or corporate representative.

Refer to section 9 of Part A of this Scheme Booklet for further information regarding how to vote at the relevant Share Scheme Meeting.

Seven Shareholders who are registered in the Share Register at 7.00pm on Sunday, 18 April 2010 may attend and vote at the Share Scheme Meetings.

FOR FURTHER INFORMATION

If you are in any doubt as to what you should do, you should consult your financial, legal or other professional adviser before deciding whether or not to vote in favour of the Share Scheme.

If you have any questions, please contact the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday. Alternatively, you can go to SGH’s website at www.sevengroup.com.au.

Note:

1 The deadline for submitting Proxy Forms for the Share Scheme Meetings is 7.00pm on Sunday, 18 April 2010. However, as a practical matter, Proxy Forms returned by post will need to be received by the Seven Registry by no later than Friday, 16 April 2010.

The Independent Seven Directors unanimously recommend that you vote in favour of the Share Scheme, in the absence of a superior proposal.

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Key dates

Event	Date
Record date for Seven interim dividend of 17 cents per Seven Share	1 April 2010
Interim dividend of 17 cents per Seven Share paid	16 April 2010
Deadline for receipt of Proxy Forms for the Share Scheme Meetings1	10.00am on Sunday, 18 April 2010
Record date for determining entitlement to vote at the Share	7.00pm on Sunday, 18 April 2010
Scheme Meetings2
Share Scheme Meetings (Unrelated Seven Shareholder Class Meeting)	10.00am on Tuesday, 20 April 2010
to be held at The Grand Ballroom, The Westin Sydney, No.1 Martin Place
Sydney, NSW 2000
Court hearing to approve the Share Scheme (and the TELYS3 Scheme)	Friday, 23 April 2010
Effective Date of the Share Scheme	Thursday, 29 April 2010
Suspension of trading in Seven Shares	Thursday, 29 April 2010
Commencement of trading in SGH Shares on a deferred settlement	Friday, 30 April 2010
basis on the ASX
Share Scheme Record Date for determining entitlements	7.00pm on Thursday, 6 May 2010
to Share Scheme Consideration
Implementation Date	Thursday, 13 May 2010
Dispatch of holding statements for New SGH Shares	Thursday, 13 May 2010
Last day of trading in SGH Shares on a deferred settlement basis	Thursday, 13 May 2010
Commencement of trading in SGH Shares on a normal settlement basis	Friday, 14 May 2010

These dates and times are indicative only. The actual times and dates will depend on many factors outside the control of Seven, including the Court approval process and the satisfaction or, where applicable, waiver of the conditions in the Implementation Deed and the Share Scheme.

Any changes will be notified on the SGH website at www.sevengroup.com.au and announced to the ASX.

Notes:

1 As a practical matter, Proxy Forms returned by post will need to be received by the Seven Registry by no later than Friday, 16 April 2010.

2 The date for determining entitlement to vote at the Share Scheme Meetings will be Sunday, 18 April 2010 at 7.00pm (Sydney time). As a practical matter, for a person to be entitled to vote at a Share Scheme Meeting, they must be registered as the holder of Seven Shares by no later than 7.00pm (Sydney time) on Friday, 16 April 2010.

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4 Seven Network Limited Scheme Booklet – Part A

Letter from the Deputy Chairman of Seven Network Limited

12 March 2010

Dear Seven Shareholder,

It is with pleasure that we set out the details of what is an exciting and transformational transaction for Seven Network Limited ( Seven ).

Seven today is a company principally holding investments, with its main assets being an interest of approximately 47% in the Seven Media Group joint venture, strategic investments in three leading Australian media companies, a small but growing wireless broadband network, a portfolio of listed securities and a large cash holding.

The prospects for capital growth from Seven’s investment in Seven Media Group are positive, although it does not provide Seven with operating earnings given the level of ownership of the investment. The other media investments position Seven to participate in any future consolidation in Australia’s media sector and generate dividends and franking credits for Seven. However, Seven does not control these investments and there is market uncertainty as to the deployment of Seven’s cash reserves. Your directors believe that these factors have contributed to Seven’s shares trading at a substantial discount to the underlying value of its assets.

As a result, the Seven Directors have considered strategies to add greater certainty and visibility to the growth outlook for Seven. In this process the Seven Directors have analysed in detail the potential transaction opportunities for Seven in the media and telecommunications segment and have concluded that value-enhancing opportunities currently within this segment are limited. The Seven Directors have also considered opportunities outside of the media segment, recognising the potential diversification benefits that such a strategy could provide.

PROPOSAL TO CREATE SEVEN GROUP HOLDINGS LIMITED

On 22 February 2010, Seven announced that agreement had been reached with Australian Capital Equity Pty Limited ( ACE ) on a proposal to combine the assets and investments of Seven with WesTrac Holdings Pty Limited (owner of the WesTrac Group ), a market leading equipment management business owned by ACE ( Recommended Proposal ).

The new entity, Seven Group Holdings Limited ( SGH ), will be a significant Australian diversified operating and investment group. SGH will have market leading businesses and investments with strong revenues and earnings, an attractive growth outlook and will allow Seven to deploy part of its cash reserves in a business with attractive growth prospects. As shareholders in SGH, Seven Shareholders will maintain exposure to Seven’s media assets, while gaining exposure to the operating business of WesTrac Group which is leveraged to the mining and construction industries in some of the world’s fastest growing economies and is expected to generate significant growth.

The Recommended Proposal will be implemented by way of separate schemes of arrangement for Seven Shareholders ( Share Scheme ) and holders of TELYS3 ( TELYS3 Scheme ). The Share Scheme will be approved by Seven Shareholders not associated with ACE ( Unrelated Seven Shareholders ) and separately approved by Related Holders. However, the Share Scheme is not conditional on the TELYS3 Scheme proceeding. Under the Recommended Proposal:

Seven and WesTrac Group will be combined to form SGH;
Seven Shareholders will receive one SGH Share for each Seven Share that they hold;
Ultimately, ACE will receive 115 million SGH Shares (less the number of SGH Shares already on issue) for WesTrac Group;
Seven Shares will cease trading on the ASX and SGH shares will commence trading on the ASX; and
TELYS3 will be exchanged on a one for one basis into TELYS4, a new security which will be issued on similar terms to TELYS3 by SGH.

INDEPENDENT SEVEN DIRECTORS’ RECOMMENDATION

In view of the personal interest of Kerry Stokes, Peter Gammell and Ryan Stokes in matters relating to the Recommended Proposal, an Independent Board Committee ( IBC ) was established in November 2009 comprising the Independent Seven Directors, to consider and oversee negotiations with ACE and SGH.

The Independent Seven Directors unanimously recommend that you support the Recommended Proposal by voting in favour of the Share Scheme. Each Seven Director who holds or controls Seven Shares intends to vote those shares, or procure that those shares are voted, in favour of the Share Scheme.

The financial benefits of the Recommended Proposal include:

expected earnings per share accretion of 22% in FY2011;
an increase in fully franked dividends in FY2011 to 36 cents, with the potential for increased dividends (and a greater ability to frank dividends in future years); and
SGH’s conservative balance sheet, providing it with an ability to capitalise on future growth opportunities.

The assumptions underlying the SGH financial forecasts and the sensitivities of the forecasts are set out in 3.11 of Part B of this Scheme Booklet.

The Independent Seven Directors believe that as a result of the Recommended Proposal the market will be able to more fully recognise the value of Seven’s assets and investments within the new SGH.

The Independent Seven Directors’ recommendation to vote in favour of the Share Scheme is based on a number of important considerations:

the key benefits that will be delivered to Seven Shareholders if the Share Scheme is implemented when compared against its potential disadvantages and risks (see sections 1 to 4 of Part A of this Scheme Booklet for details of the potential benefits and disadvantages and section 5 of Part B for details of the potential risks);
the implied value of Seven Shares of $8.70 based on the agreed equity value for WesTrac Group of $1.0 billion. The value of $8.70 represents an 18% premium to the closing price of Seven Shares on 19 February 2010 (the last trading day before announcement of the Recommended Proposal) and a 33% premium to the volume weighted average trading price of Seven Shares over the 90trading days up to and including 19 February 2010;
the lack of alternative transactions that would provide comparable value for Seven Shareholders; and
the Independent Expert’s conclusion that the Share Scheme is fair and reasonable and therefore in the best interests of Unrelated Seven Shareholders (see section 6 of Part B of this Scheme Booklet).

INDEPENDENT BOARD COMMITTEE

To manage conflicts of interest that could arise between Seven and ACE, the Seven Directors adopted protocols to govern the conduct of considering and negotiating the Recommended Proposal. The IBC comprising the Independent Seven Directors was formed to evaluate and negotiate the Recommended Proposal with ACE. The IBC engaged Grant Samuel and J.P. Morgan as strategic and financial advisers, Freehills as legal adviser, KPMG as investigating accountant and Ernst & Young as tax adviser.

INDEPENDENT EXPERT

The IBC commissioned Deloitte ( Independent Expert ) to prepare an Independent Expert’s Report for Seven Shareholders and TELYS3 Holders. The Independent Expert concluded that the Share Scheme is fair and reasonable and therefore in the best interests of Unrelated Seven Shareholders and that the TELYS3 Scheme is fair and reasonable and therefore in the best interests of TELYS3 Holders.

The Independent Expert has valued SGH Shares in the range of $7.09 to $8.57 on a minority basis with a midpoint of $7.83. Further, the Independent Expert estimated the fair market value of a Seven Share to be in the range of $7.63 to $9.51 on a control basis with a midpoint of $8.57. Although the low end of the Independent Expert’s value range for a SGH Share on a minority basis is below the low end of its value range for a Seven Share on a control basis, the Independent Expert has concluded that as the value range of the SGH Shares overlaps with that of Seven Shares, the Share Scheme is fair.

The Independent Expert has noted that the valuation range for a Seven Share on a control basis and an SGH Share on a minority basis represents a relatively wide range but that this is appropriate considering the nature of Seven’s assets and, in particular, the high level of financial leverage associated with Seven’s investment in SMG and the early stage of development of the WesTrac China business.

Further details are set out in section 6 of Part B of this Scheme Booklet, which you should read in full.

CONCLUSION

Further information in relation to the Share Scheme is contained in this Part A and in Part B of this Scheme Booklet, including the reasons for the Independent Seven Directors’ recommendation and the Independent Expert’s Report. You should also have regard to the potential disadvantages and risks associated with the Share Scheme as summarised in sections 2 and 4 of Part A of this Scheme Booklet and set out in detail in section 5 of Part B of this Scheme Booklet. Please read both parts of this Scheme Booklet before making your decision and voting at the relevant Share Scheme Meeting.

I encourage you to vote. If you wish the Recommended Proposal to proceed, it is important you vote in favour of the Share Scheme.

If you have any questions in relation to the Recommended Proposal, the Share Scheme or this Scheme Booklet, please contact the Seven Network Limited Information Line on 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia) between 9.00am and 5.00pm (Sydney time), Monday to Friday, or go to SGH’s website at www.sevengroup.com.au.

Yours sincerely,

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Peter Ritchie AO Deputy Chairman Seven Network Limited

6 Seven Network Limited Scheme Booklet – Part A

Letter from the Chairman of Australian Capital Equity Pty Limited

12 March 2010

Dear Seven Shareholder,

On behalf of Australian Capital Equity Pty Limited ( ACE ), we are pleased to provide you with information regarding the Recommended Proposal to merge Seven Network Limited ( Seven ) and the owner of the WesTrac Group, to create Seven Group Holdings Limited ( SGH ). I am writing to you as Chairman of ACE and not in my capacity as a director of Seven.

An investment in SGH will provide Seven Shareholders with ongoing exposure to all of Seven’s existing investments, including Seven Media Group, West Australian Newspapers Holdings Limited and Consolidated Media Holdings Limited. In addition, shareholders in SGH will gain exposure to WesTrac Group, an authorised Caterpillar equipment dealer in its Western Australia and New South Wales/ACT Service Territories, where it has market leading positions. WesTrac Group is also an authorised dealer in its North Eastern China Service Territory. WesTrac Group has exposure to both the high growth resources sector in Australia and the fast growing Chinese economy. National Hire Group Limited (which is 66% owned by WesTrac Group), has a 46% investment in Coates Hire which is the #1 equipment hire business in Australia.

Over the last 20 years ACE has built the WesTrac Group and we are extremely proud of what management have achieved – and through the Recommended Proposal we are pleased to be providing Seven Shareholders the opportunity to enjoy the benefits of its marketleading businesses.

ACE believes the combination of Seven and WesTrac Group represents a positive and transformational change for Seven Shareholders in terms of providing greater exposure to wholly-owned operating businesses with significant earnings, and transforms Seven from a company principally holding investments to part of an operating and investment group with diversity, scale and strong growth prospects. ACE believes that as a result of the Recommended Proposal, Seven will have addressed a number of the market’s concerns with Seven’s current structure and that the transaction will be value accretive for all stakeholders.

Further, ACE believes the financial benefits of the Recommended Proposal are compelling for Seven Shareholders given the expected 22% earnings per share accretion in FY2011, increase in dividend coverage, and the proposed increase in dividends per share in the year ending 30 June 2011. The combined company will also have a conservative capital structure that will allow it to take advantage of opportunities to drive further shareholder value as they become available.

SGH will be ACE’s primary investment for the foreseeable future. For this reason we have asked long-time ACE executive Peter Gammell to serve as Chief Executive Officer of SGH and we have every confidence he will serve all shareholders with distinction.

Our key objective for SGH will be to continue management’s strong track record of long term shareholder value creation and riskmanagement. Further as a result of this transaction we are confident the market will be able to more fully recognise the value of the company’s underlying assets. We look forward to working with management to ensure the numerous growth opportunities available to the combined group are fully considered and executed for the benefit of all shareholders.

On behalf of ACE, I encourage you to vote in favour of the Share Scheme and we look forward to welcoming you as a fellow shareholder in SGH.

Yours sincerely,

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Kerry Stokes AC Executive Chairman Australian Capital Equity Pty Limited

What the Recommended Proposal is creating

OVERVIEW OF SGH

The Recommended Proposal will create a significant Australian diversified operating and investment group with enhanced revenue and earnings, exciting growth prospects and a strong balance sheet that can be used to fund future expansion.

STRENGTHS OF SGH

A significant Australian diversified operating and investment group with market leading businesses and investments with strong revenues and earnings.
Substantially transforms Seven from a company principally holding investments to an operating and investment group, while retaining full upside to existing strategic investments.
A unique opportunity for Seven Shareholders to gain exposure to WesTrac Group, including the Western Australia and New South Wales resources sectors, and the growing Chinese economy.
Compelling financial benefits, including expected earnings per share accretion, increased dividends in FY2011, greater scope for future dividend per share growth and a conservative balance sheet.
Ongoing opportunities for shareholder value creation.
SGH will be ACE’s primary investment.

WHAT YOU WILL RECEIVE

If the Share Scheme proceeds, you will receive one New SGH Share for every Seven Share that you own on the Share Scheme Record Date.

See section 5.1 of Part A of this Scheme Booklet for further details.

Your SGH Shares will entitle you to returns from Seven’s existing businesses and investments and the returns from WesTrac Group’s future operations.

In return for selling WesTrac Group to SGH, ACE will ultimately receive 115,000,000 SGH Shares (less the number of SGH Shares already on issue). This will mean that Mr Kerry Stokes and his associates (referred to as Related Holders in this Scheme Booklet) will increase their ownership of SGH to approximately 67.9% which is greater than their current ownership of 48.7% of Seven.

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8 Seven Network Limited Scheme Booklet – Part A

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----- Start of picture text -----

SEVEN GROUP
HOLDINGS LIMITED
Cash and other
investments
~47%
100%
22%
Media Group
66%
Australia 100% 23%
100%
46% [1]
100% 11%
China
50% [2]
100%
WESTRAC GROUP SEVEN
----- End of picture text -----

Notes:

Yellow dotted box indicates businesses which are part of WesTrac Group. Red dotted box indicates businesses which are part of Seven. 1 National Hire’s interest in Coates Hire is 46%. 2 SMG’s interest in Yahoo!7 is 50%.

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The following charts illustrate the current relative ownership of Seven (as between Unrelated Seven Shareholders and Related Holders) and the relative ownership of SGH after the Share Scheme is implemented. For further details, see section 5.4 of Part A of this Scheme Booklet.

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----- Start of picture text -----

SEVEN SHAREHOLDERS SGH SHAREHOLDERS
Unrelated
Seven
Shareholders
Related Holders 32.1%
consideration for
Related Unrelated WesTrac Group
Holders Seven 37.5%
48.7% Shareholders Related Holders
51.3% consideration
for shareholding
in Seven
Related 30.4%
Holders [1]
67.9%
Seven Shares: 190.4 million SGH Shares: 305.4 million
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Note:

1 Related Holders’ interest in SGH comprises of consideration received for the sale of WesTrac Group to SGH and for its shareholding in Seven under the Share Scheme.

10 Seven Network Limited Scheme Booklet – Part A

1 SUMMARY OF REASONS WHY YOU SHOULD VOTE IN FAVOUR OF THE SHARE SCHEME

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Section 1 11

1 CREATION OF A SIGNIFICANT AUSTRALIAN DIVERSIFIED OPERATING AND INVESTMENT GROUP WITH MARKET LEADING BUSINESSES AND INVESTMENTS WITH STRONG REVENUES AND EARNINGS

Seven will be transformed from a company principally holding investments to a leading Australian diversified operating and investment group with forecast FY2011 revenue of $2.8 billion, EBITDA of $312 million and NPAT of $187 million[*] . SGH will provide investors exposure to the following market leading businesses:

The assumptions underlying the SGH forecasts and the sensitivities of the forecasts are set out in section 3.11 of Part B of this Scheme Booklet. Forward looking statements are based on current expectations about future events and results. They are subject to inherent risks and uncertainties. Actual events or results may differ materially from the expectations expressed or implied in such forward looking statements.

SGH OWNERSHIP	INDUSTRY	FY2009 REVENUE (A$m)1	STRATEGIC POSITION
~47%	Metro free-to-air television	1,484	#1 prime time free-to-air television network2
~47%	Magazines		One of the two largest magazine publishers in Australia
~24%3	Online media		Leading online platform with global and local content across online, mobile and IPTV
100% 100%	Equipment management Equipment management	555 1,876	#1 equipment solutions company in WA and NSW/ACT One of the leading global equipment solutions companies in China
31%4	Equipment hire	978	#1 Australian equipment hire company
23%	Newspaper/Radio	419	#1 newspaper in WA
22%	Pay TV	n.a	Highly strategic investments in FOXTEL and FOXSports
100%	Broadband	34	First to launch 4G service

Notes to the table:

1 Total full year company revenue as at 30 June 2009, without reference to SGH’s interests.
2 Prime time free-to-air television audience shares for the year ended 31 December 2009.
3 SGH’s economic interest in Yahoo!7. Seven’s interest in SMG is approximately 47%, which in turn has a 50% interest in Yahoo!7.
4 SGH’s economic interest in Coates Hire. WesTrac Group’s interest in National Hire is 66%, which in turn has a 46% interest in Coates Hire.

2 WESTRAC GROUP IS A MARKET LEADING BUSINESS WITH SIGNIFICANT GROWTH PROSPECTS

WesTrac Group is an authorised Caterpillar dealer in its Western Australia and New South Wales/ACT Service Territories with the leading market share in those states. WesTrac Group is also an authorised Caterpillar dealer in its North Eastern China Service Territory. WesTrac Group is a top five Caterpillar dealership globally.

3 COMPELLING FINANCIAL BENEFITS, INCLUDING SIGNIFICANT EARNINGS PER SHARE ACCRETION AND POTENTIAL FOR INCREASED DIVIDENDS OVER TIME

The creation of SGH is expected to result in 22% earnings per share accretion for Seven Shareholders in FY2011. The SGH Directors expect to increase dividends in FY2011 to 36 cents per SGH Share and are committed to growing dividends in the future.

4 MAINTAIN ONGOING OPPORTUNITIES FOR SHAREHOLDER VALUE CREATION

SGH will maintain an active portfolio strategy and is well positioned to capitalise on future growth opportunities given its conservative balance sheet.

5 SGH WILL BECOME THE PRIMARY INVESTMENT OF ACE

SGH will become the primary investment of ACE.

6 INDEPENDENT EXPERT’S CONCLUSION

The Independent Expert has concluded that the Share Scheme is fair and reasonable and therefore in the best interests of Unrelated Seven Shareholders. The Independent Expert’s Report is an important document which you should read in full. It contains important assumptions and qualifications to the opinions expressed.

Further details of the reasons why you should vote in favour of the Share Scheme are set out in section 3 of Part A of this Scheme Booklet.

12 Seven Network Limited Scheme Booklet – Part A

2 SUMMARY OF REASONS WHY YOU MAY CONSIDER VOTING AGAINST THE SHARE SCHEME

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Section 2 13

1 CHANGE IN THE NATURE OF INVESTMENT

The nature of Seven Shareholders’ investment will change, with exposure to different businesses, investments, risks and earnings profiles. These include risks relating to Caterpillar’s ability to terminate dealership agreements on short notice, foreign exchange risk and the risk associated with investment in new sectors and countries, and WesTrac’s general dependance on Caterpillar for the timely supply of equipment and continued product development.

2 DILUTION OF VOTING POWER DUE TO THE ISSUE OF SGH SHARES TO ACE

Shareholders not associated with Mr Kerry Stokes (Unrelated Seven Shareholders) will hold 32.1% of SGH, compared to their current holding of 51.3% of Seven.

3 PRICE UNCERTAINTY

The price at which SGH Shares trade on the ASX after the Share Scheme is implemented may be influenced by a range of factors and SGH Shares may trade below the current price

of Seven Shares.

4 LEVERAGE AND INTEREST COSTS

SGH will have gross borrowings of approximately $500 million and a cash balance of $507 million, whereas Seven currently has minimal borrowings and a significant cash balance ($1,042 million).

5 RELATED PARTY INTERESTS

Some Seven Shareholders may not favour Seven entering into

a transaction under which certain Seven Directors have

a different interest from other Seven Shareholders, despite the Independent Expert and the Independent Seven Directors believing it is in the best interests of Unrelated Seven Shareholders.

Further details of the reasons why you may consider voting against the Share Scheme are set out in section 4 of Part A of this Scheme Booklet.

14 Seven Network Limited Scheme Booklet – Part A

3 WHY YOU SHOULD VOTE IN FAVOUR OF THE SHARE SCHEME

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Section 3 15

THE INDEPENDENT SEVEN DIRECTORS BELIEVE THE SHARE SCHEME OFFERS A NUMBER OF BENEFITS FOR SEVEN SHAREHOLDERS AND UNANIMOUSLY RECOMMEND THAT SEVEN SHAREHOLDERS VOTE IN FAVOUR OF THE SHARE SCHEME, IN THE ABSENCE OF A SUPERIOR PROPOSAL.

In making their recommendation, the Independent Seven Directors have, in particular, considered the advantages and benefits of the Share Scheme set out in this section 3, together with:

the disadvantages and potential risks of the Share Scheme, set out in section 4 of Part A of this Scheme Booklet;
the other relevant considerations set out in section 5 of Part A of this Scheme Booklet;
the risks as set out in section 5 of Part B of this Scheme Booklet; and
the report by the Independent Expert, set out in section 6 of Part B of this Scheme Booklet.

You should read each of these sections of this Scheme Booklet in full before deciding how to vote on the Share Scheme.

All Seven Shares held by the Related Holders will vote in a separate class and, consequently, the outcome of the Share Scheme will effectively be determined by Seven Shareholders not associated with Mr Kerry Stokes.

CREATION OF A SIGNIFICANT AUSTRALIAN DIVERSIFIED OPERATING AND INVESTMENT GROUP

The combination of Seven with WesTrac Group will create a significant Australian diversified operating and investment group.
SGH will provide investors with exposure to leading Australian businesses. SMG (owner of Channel Seven, Pacific Magazines and an interest in Yahoo!7), CMH (which has an interest in FOXTEL and FOXSports), WAN, WesTrac Group and Coates Hire are all leaders in their respective markets.
The creation of SGH will provide the ability to deploy some of Seven’s excess cash into a business with attractive growth prospects.
The SGH Board will comprise the existing Seven Directors plus Mr Jim Walker, the CEO of the WesTrac Group. Two additional independent directors will be invited to join the SGH Board and are expected to be nominated for election at SGH’s first annual general meeting in late 2010.
The Independent Seven Directors believe various factors contribute to the discount currently applied by the market to Seven Shares, including uncertainty as to deployment of Seven’s cash reserves. The Independent Seven Directors believe the repositioning of Seven, the deployment of part of its cash reserves in a growing, operating-business should assist to narrow that discount. As noted in section 4 of Part A of this Scheme Booklet under the heading “Price Uncertainty”, there is uncertainty as to the price at which SGH Shares will trade on the ASX.
The Independent Expert has noted that a holding company discount is likely to apply to SGH and that providing an estimate of the likely company discount is inherantly uncertain.

Relative Profit Before Tax Contribution of Seven and WesTrac Group

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WesTrac
Group [1]
51%
Seven
49%
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Profit before tax: $205 million

1 Excludes National Hire.

Note:

Profit before tax analysis is prior to $5 million in merger company costs and prior to treasury synergies from the repayment of the WesTrac Group Facility of $600 million.

SGH is forecast to achieve pro forma revenue of $2.8 billion, EBITDA of $312 million and NPAT of $187 million for the year ending 30 June 2011. The assumptions underlying the SGH forecasts and the sensitivities of the forecasts are set out in section 3.11 of Part B of this Scheme Booklet.

16 Seven Network Limited Scheme Booklet – Part A

WESTRAC GROUP IS A MARKET LEADING BUSINESS WITH SIGNIFICANT GROWTH PROSPECTS

WESTRAC GROUP IS AN AUTHORISED CATERPILLAR DEALER IN ITS WESTERN AUSTRALIA AND NEW SOUTH WALES/ACT SERVICE TERRITORIES AND IN ITS NORTH EASTERN CHINA SERVICE TERRITORY.

Caterpillar is the leading global construction and mining equipment provider.
WesTrac Group is one of Caterpillar’s top five (by sales value) dealers globally (out of 182 dealers).
WesTrac Group’s relationship with Caterpillar spans approximately 20 years.

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FY2009 AUSTRALIA FY2009 CHINA
REVENUE BY REVENUE BY
MARKET Heilongjiang MARKET
Other13% Mining62% MongoliaInner HebeiTianjinJilinLiaoning Other18% Mining32%
Construction AustraliaWestern AustraliaWestern Beijing
25% New South Shanxi
Wales / / ACT
Construction
50%
WA Key Statistics NSW/ACT Key Statistics [4] China Territories Key Statistics
YEAR OF COMMENCEMENT [1] : 1990 YEAR OF COMMENCEMENT [1] : 2004 YEAR OF COMMENCEMENT [1] : 2001
NO. OF BRANCHES: 10 NO. OF BRANCHES: 15 NO. OF BRANCHES: 38
NO. OF EMPLOYEES [2] : 1,621 NO. OF EMPLOYEES [2] : 1,026 NO. OF EMPLOYEES [2] : 1,392
TOTAL NO. MACHINES AND TOTAL NO. MACHINES AND TOTAL NO. MACHINES AND
ENGINES CURRENTLY INSTALLED [3] : 15,844 ENGINES CURRENTLY INSTALLED [3] : 15,631 ENGINES CURRENTLY INSTALLED [3] : 9,743
FY2009 NO. OF MACHINES SOLD: 597 FY2009 NO. OF MACHINES SOLD: 529 FY2009 NO. OF MACHINES SOLD: 1,709
KEY COMMODITY: Iron Ore KEY COMMODITY: Coal KEY COMMODITY: Coal
AREA: 2.5m km [2] AREA: 0.8m km [2] AREA: 2.3m km [2]
POPULATION: 2.2m POPULATION: 7.4m POPULATION: 263.4m
GDP: A$155bn GDP: A$380bn GDP: A$993bn
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Source: WesTrac Group management, Australian Bureau of Statistics, China Statistical Yearbook 2008 (National Bureau of Statistics of China). Past performance is not a reliable indicator of future performance.

Notes:

Key operating statistics are as at 31 January 2010.

AUD/USD = $0.85.

1 From the time ACE acquired or assumed control of the dealership.

2 As at 31 January 2010.

3 As at 16 February 2010.

4 Key statistics relate to all of New South Wales and the Australian Capital Territory. WesTrac Group’s New South Wales Service Territory excludes that portion of the state that is west of 144° longitude, which means that areas such as Broken Hill are outside its service territory.

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----- Start of picture text -----

The WesTrac branch in Newman services the iron ore industry in the Pilbara
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Section 3 17

WESTRAC AUSTRALIA IS THE CLEAR MARKET LEADER IN ITS WESTERN AUSTRALIA, AND NEW SOUTH WALES/ ACT SERVICE TERRITORIES IN HEAVY EQUIPMENT.

Number 1 with 54% (by sales value) market share in Western Australia.
Number 1 with 51% (by sales value) market share in New South Wales and the Australian Capital Territory.

#1 Western Australia market share by sales (FY2009) #1 New South Wales market share by sales (FY2009)

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----- Start of picture text -----

Other 24%
Other 31%
WesTrac
WesTrac Group
Competitor #2 Group 51%
1% 54%
Competitor #2
3%
Competitor #1
21% Competitor #1
15%
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Source: WesTrac Group management.

WESTRAC GROUP PROVIDES EXPOSURE TO THE HIGH GROWTH RESOURCES SECTOR IN AUSTRALIA.

Western Australia has extensive mineral deposits and is the third largest producer of iron ore globally.
In New South Wales, WesTrac Group’s operations are leveraged to the state’s large and growing coal mining sector.

Australian iron ore production (m tonnes)[1]

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----- Start of picture text -----

New South Wales coal production (m tonnes) [2]
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800 200
700
600 150
500
400 100
300
200 50
100
0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CAGR 2004 – 2009: 4%
CAGR 2010 – 2015: 9% CAGR 2010 – 2015: 5%
CAGR 2004 – 2009: 10%
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Source: WesTrac Group management, Australian Mineral Economics data.

Notes:

Data for calendar years presented in charts above. Past performance is not a reliable indicator of future performance. 1 WA accounts for the majority of Australia’s iron ore production.

2 Saleable historical and forecast production of metallurgical and thermal coal.

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----- Start of picture text -----

Aerial view of WesTrac’s headquarters in WesTrac provides product support for the WesTrac delivers a wide range of products
Guildford, Perth equipment its sells and services to the mining sector
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18 Seven Network Limited Scheme Booklet – Part A

WESTRAC CHINA IS A RAPIDLY GROWING DEALERSHIP, CAPITALISING ON THE SIGNIFICANT GROWTH IN CHINA.

WesTrac China operates in six provinces and the municipalities of Beijing and Tianjin in North Eastern China (the North Eastern China Service Territory).
WesTrac China has established 38 branches since 1999 and plans to open an additional 20 branches by the end of 2010.
The North Eastern China Service Territory contains mineral rich areas, rapidly developing population centres including Beijing and has established transport infrastructure.
China, now the world’s third largest economy, has achieved an annual average GDP growth of 11% over the past five years, which compares to an average of 2% for the G7 nations.

Metals and mining industry growth in China (US$ billion)

Urban population growth in China (million)

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----- Start of picture text -----

1,200
$1,200 1,100
1,000
$1,000 900
800
$800
700
600
$600
500
400
$400
300
200
$200
100
0
$0
2008 2009 2010 2011 2012 2013 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
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Source: CGM China Industry forecast model; United Nations – Department of Economic and Social Affairs, ‘The 2007 Revision Population Database’, 11 May 2009.

Note:

Data for calendar years presented in charts above. Past performance is not a reliable indicator of future performance.

WESTRAC GROUP’S BUSINESS MODEL PROVIDES RECURRING REVENUE FROM PRODUCT SUPPORT.

WesTrac Group provides complete equipment solutions and services for its customers over the life cycle of the equipment. The initial sale is the beginning of an ongoing customer relationship. As the machine population grows so too does the product support revenue opportunity.
Product support (servicing and parts) is considered a recurring, more stable and higher margin revenue stream for WesTrac Group, as customers require ongoing maintenance, in all prevailing market conditions, to keep their machines operating in the field.

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----- Start of picture text -----

WesTrac Group provides parts and it’s servicing for its customers
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Section 3 19

WESTRAC GROUP HAS A STRONG TRACK RECORD OF GROWTH AND FINANCIAL PERFORMANCE.

WesTrac Group has achieved a sales compound annual growth rate of 21% between FY2001 and FY2009 as illustrated in the chart below.

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----- Start of picture text -----

[Sales ($ million)]
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009
FY2001 – FY2009 sales CAGR: 21%
----- End of picture text -----

Source: WesTrac Group management, Bloomberg.

Note:

2001-2009 based on audited financial reports for WesTrac Pty Ltd and WesTrac China Ltd only, excluding WesTrac Fleet and WERC. China dealership introduced in 2001. NSW/ACT dealership introduced in 2004. WesTrac China Ltd translated at relevant average fiscal year AUD/HKD exchange rate. Past performance is not a reliable indicator of future performance.

The growth prospects for WesTrac Group are strong given the expected level of mining activity in Australia and the continued development of mines and more sophisticated mining techniques.
WesTrac Group’s sales and EBITDA are forecast to grow by 21% and 24% respectively between FY2010 and FY2011. This follows the difficult trading conditions during FY2009 and the early part of FY2010 caused by the global financial crisis.

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----- Start of picture text -----

WesTrac Kalgoorlie in Western Australia services WesTrac provides equipment and service to the construction industry
one of Australia’s major mining regions
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20 Seven Network Limited Scheme Booklet – Part A

WesTrac Group revenue ($ million)

WesTrac Group EBITDA ($ million)

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----- Start of picture text -----

$3,000
$2,737
$2,500 $2,432
$2,304 $2,271
$2,000
$1,855
$1,500
$1,000
$500
$0
FY2007 FY2008 FY2009 FY2010 FY2011
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----- Start of picture text -----

$400
$350
$300
$250 $221 $231
$216
$200 $186
$172
$150
$100
$50
$0
FY2007 FY2008 FY2009 FY2010 FY2011
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Source: Pro forma financial information as set out in section 2.6(c) of Part B of the Scheme Booklet. Past performance is not a reliable indicator of future performance. The forward looking statements are based on current expectations about future events and results. They are subject to inherent risks and uncertainties. Actual events or results may differ materially from the expectations expressed as implied in such forward looking statements.

EXPERIENCED MANAGEMENT TEAM WITH A COMBINED 78 YEARS WORKING EXPERIENCE WITH WESTRAC GROUP AND CATERPILLAR.

WesTrac Group’s management team led by Chief Executive Officer, Jim Walker, has been responsible for WesTrac Group’s successful financial performance.

Key management	# of years with WesTrac Group	# of years in industry
Jim Walker–Group CEO	20	40
Sybrandt van Dyk–COO, WA	8	8
Darren Tasker–COO, NSW/ACT	12	20
Donald James–CFO	9	9
Martin Bryant–Managing Director for China	9	30
Chris Forde–COO, Corporate Support Services	20	37
Total	78	144

This management team will continue with SGH after the Recommended Proposal is implemented, enabling it to continue to capitalise on future growth opportunities. This management team has also invested in SGH as shareholders.

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WesTrac Group has a strong focus on customer service.

Section 3 21

EXPOSURE TO NATIONAL HIRE AND COATES HIRE.

WesTrac Group owns 66% of National Hire, which in turn has a 46% interest in Coates Hire, the leading Australian general equipment hire company.
WesTrac Group supplies a range of equipment to Coates Hire, and National Hire is its preferred supplier of lighting towers. The investment in National Hire and Coates Hire provides WesTrac Group with significant strategic benefits.
As part of the Recommended Proposal, National Hire was valued at $246 million. As ACE was unable to provide Seven with due diligence in respect of National Hire, ACE has underwritten the value of SGH’s investment in National Hire at $246 million (being $2.50 per National Hire share) as at the time of the release of the National Hire accounts for the year ending 30 June 2011. See section 9.14(E) of Part B of this Scheme Booklet for more information about the National Hire Market Value Deed.

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46%
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----- Start of picture text -----

100%
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Australia’s largest general equipment hire company with over 120 years of experience
Supplies a wide range of equipment to the engineering and building construction & maintenance, mining & resources, manufacturing, government, and events markets
Manufacture, assembly and sales of mobile lighting, power generation and dewatering equipment, and the distribution and support of Perkins engines, FG Wilson power generation sets and Godwin pump wet ends

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----- Start of picture text -----

WesTrac Group owns 66% of National Hire which in turn owns 46% of Coates Hire
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22 Seven Network Limited Scheme Booklet – Part A

COMPELLING FINANCIAL BENEFITS, INCLUDING SIGNIFICANT EARNINGS PER SHARE ACCRETION AND POTENTIAL FOR INCREASED DIVIDENDS OVER TIME

Earnings per share accretion of 22% in FY2011, in the first full financial year following the transaction.
The Recommended Proposal will allow for a FY2011 dividend of 36 cents per share (fully franked) and the potential for SGH Directors to further increase dividends over time. Forecast FY2011 dividend coverage ratio is expected to improve from Seven’s current 1.2x to pro forma 1.4x for SGH. The Recommended Proposal will also enhance the ability to frank dividends.

PRO FORMA FINANCIAL INFORMATION

A$ million		SGH pro	%
(except per share data)	Seven	forma	change
Forecast FY2011 NPAT	111	187	+68%
Forecast FY2011 EPS1	0.41	0.50	+22%
Forecast FY2011 DPS	0.34	0.36	+6%
Forecast FY2011	1.2x	1.4x	+16%
dividend coverage

Source: Pro forma financial forecasts as set out in sections 1.2 and 3.11 of Part B of this Scheme Booklet, together with assumptions underlying these forecasts and the sensitivities to the forecasts. The forward looking statements are subject to inherent risks and uncertainties. Actual events or results may differ materially from the expectations expressed as implied in such statements.

Note:

1 Basic earnings per share after dividend payment to TELYS holders.

MAINTAIN ONGOING OPPORTUNITIES FOR SHAREHOLDER VALUE CREATION

The balance sheet of SGH will have no gearing on a net debt basis.
SGH will maintain a strong cash/liquidity position to take advantage of future growth opportunities.
SGH will maintain an active portfolio strategy, including ongoing investment, recapitalisation and restructuring of investments.
(1) SGH will continue to own and invest in a range of media, telecommunications and industrial businesses.
(2) WesTrac Group includes a strategic and controlling interest in National Hire, which has a 46% interest in Coates Hire – Australia’s leading general equipment hire business.

SGH WILL BECOME THE PRIMARY INVESTMENT OF ACE

ACE and the Related Holders will own approximately 67.9% of all SGH Shares if the Share Scheme is approved and implemented.
The creation of SGH consolidates substantially all of ACE’s investments into a single corporate structure.
Seven Shareholders will benefit from the ongoing service of existing WesTrac Group and Seven management teams.
There is significant knowledge and understanding of WesTrac Group’s business among the Seven Directors.
Mr Peter Gammell, who has been an executive of ACE for over 20 years, is to become Chief Executive Officer of SGH and will drive company strategy and growth.
ACE the Related Holders have committed to Caterpillar that they will collectively hold more than 60% of all SGH Shares.
The CEO of SGH and some members of the WesTrac Group and ACE management teams are shareholders of SGH. The interests of SGH Directors in SGH securities before and after implementation of the Share Scheme are disclosed in section 9.4 of Part B of this Scheme Booklet.

INDEPENDENT EXPERT’S CONCLUSION

THE INDEPENDENT EXPERT HAS CONCLUDED THAT THE SHARE SCHEME IS FAIR AND REASONABLE AND THEREFORE IN THE BEST INTERESTS OF UNRELATED SEVEN SHAREHOLDERS. THE INDEPENDENT EXPERT HAS VALUED SGH SHARES IN THE RANGE OF $7.09 TO $8.57 ON A MINORITY BASIS.

The Independent Expert, Deloitte, has concluded that the Share Scheme is fair and reasonable and therefore in the best interests of Unrelated Seven Shareholders.
The Independent Expert has valued SGH Shares in the range of $7.09 to $8.57 on a minority basis with a midpoint of $7.83. Further, the Independent Expert estimated the fair market value of a Seven Share to be in the range of $7.63 to $9.51 on a control basis with a midpoint of $8.57. As the value range of the SGH Shares overlaps with that of Seven Shares, the Independent Expert concluded that the Share Scheme is fair.
The low end of the Independent Expert’s value range for a SGH Share of $7.09 on a minority basis is below the low end of the Independent Expert’s value range for a Seven Share of $7.63 on a control basis. The mid-point of its valuation of an SGH Share of $7.83 is 8.6% below the mid-point of its valuation of a Seven Share. However, the Independent Expert has noted that there is a 50% overlap between its value range for an SGH Share and the value range for a Seven Share which the Independent Expert considers is sufficient to conclude that the Share Scheme is fair.

Section 3 23

The Independent Expert’s valuation range for a Seven Share on a control basis and an SGH Share on a minority basis represents a relatively wide range of approximately 25% and 21% from low to high, respectively. The Independent Expert concluded that the width of these ranges was appropriate considering the nature of Seven’s assets and, in particular, the high level of financial leverage associated with Seven’s investment in SMG and the early stage of development of the WesTrac China business.
The proposed terms of the Recommended Proposal include an agreed equity value of $1.0 billion for WesTrac Group. This equity value was negotiated by the IBC with its advisers with ACE and its advisers on an arm’s length basis. The agreed equity value is within the range of equity values for WesTrac Group estimated by the Independent Expert of $833 – $1,034 million on a minority basis.
The Independent Expert’s Report is an important document which you should read in full. It contains important qualifications and assumptions relevant to the opinions expressed.

24 Seven Network Limited Scheme Booklet – Part A

4 WHY YOU MAY CONSIDER VOTING AGAINST THE SHARE SCHEME

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Section 4 25

The Share Scheme has a number of potential disadvantages and risks that Seven Shareholders should consider in deciding whether or not to vote in favour of the Share Scheme.

While the Independent Seven Directors are of the opinion that these disadvantages and risks are outweighed by the advantages of the Share Scheme (as set out in section 3 of Part A of this Scheme Booklet), Seven Shareholders should consider their individual circumstances and make their own determination on whether to vote in favour of the Share Scheme.

CHANGE IN THE NATURE OF INVESTMENT

THE SGH SHARES REPRESENT A CHANGE IN THE NATURE OF SEVEN SHAREHOLDERS’ INVESTMENT AND EXPOSURE TO DIFFERENT BUSINESSES, INVESTMENTS, RISKS AND EARNINGS PROFILES.

These risks should be considered by Seven Shareholders in assessing whether or not to vote in favour of the Share Scheme.

SEVEN SHAREHOLDERS WILL BE EXPOSED TO THE RISKS OF WESTRAC GROUP’S EXISTING BUSINESSES, INCLUDING RISKS ASSOCIATED WITH A NEW INDUSTRY AND OPERATIONS IN A NEW COUNTRY, AND BUSINESS-SPECIFIC RISKS.

Seven Shareholders will be exposed to:
(1) a combination of two diverse businesses and the risks associated with both in combination rather than a predominantly media investment focused business and the risks associated with that business;
(2) the risk associated with operations in China, a country to which Seven currently does not have a material exposure;
(3) the risks of WesTrac Group’s existing businesses, including:
the risk of reduced activity in the resources and construction markets in Australia and China;
the risk of increased competition from other equipment distributors, suppliers and hire companies;
- foreign exchange risk;
the risk arising from Caterpillar’s ability to terminate WesTrac Group’s dealership agreements at short notice;
the risk arising from WesTrac’s dependence on Caterpillar for the timely supply of equipment and continued product development; and
- recruitment and retention of key personnel.

(See section 5.2 of Part B of this Scheme Booklet.)

SEVEN SHAREHOLDERS WILL BE EXPOSED TO THE RISKS RELATING TO SGH.

Seven Shareholders will be exposed to the risks relating to the newly formed SGH, including:
(1) uncertainty with respect to future dividends. The SGH Directors are committed to a dividend policy of maintaining and growing dividends over time and believe that the financial benefits of the Recommended Proposal include the potential for increased dividends (and a greater ability to frank dividends in future years). However, future dividends are subject to earnings performance and the extent to which dividends can be franked; and
(2) increased borrowings, including the ability to refinance this debt.
(See section 5.3 of Part B of this Scheme Booklet.)

SEVEN SHAREHOLDERS WILL ALSO REMAIN EXPOSED TO THE RISKS RELATING TO SEVEN

Seven Shareholders will remain exposed to the risks relating to Seven to which they are currently exposed to by holding Seven Shares (see section 5.1 of Part B of this Scheme Booklet).

DILUTION OF VOTING POWER DUE TO THE RECEIPT OF SGH SHARES BY ACE

THE VOTING POWER OF SEVEN SHAREHOLDERS WILL BE DILUTED AS A RESULT OF THE SGH SHARES RECEIVED BY ACE FOR THE ACQUISITION OF WESTRAC GROUP BY SGH.

Ultimately, ACE will receive 115,000,000 SGH Shares (less the number of SGH Shares already on issue) in exchange for the transfer of WesTrac Group to SGH. In addition, under the Share Scheme, Related Holders will receive SGH Shares in exchange for the Seven Shares that they currently hold.
Seven Shareholders not associated with Mr Kerry Stokes (that is, Unrelated Seven Shareholders) will own 32.1% of the SGH Shares in aggregate immediately after the Share Scheme is implemented, compared to their current aggregate level in Seven of 51.3%. This means that the Related Holders can effectively pass a special resolution of SGH. The Related Holders have agreed to vote their SGH Shares in the same manner. See section 9.14(b)(3) of Part B of this Scheme Booklet for further details.
The number of shares owned by Unrelated Seven Shareholders remains unchanged (refer table in section 5.4) but there will be more SGH Shares on issue after the Share Scheme is implemented than there currently are Seven Shares.

See section 5.4 of Part A of this Scheme Booklet for further details.

26 Seven Network Limited Scheme Booklet – Part A

PRICE UNCERTAINTY

THE PRICE AT WHICH SGH SHARES TRADE ON THE ASX AFTER THE SHARE SCHEME IS IMPLEMENTED MAY BE INFLUENCED BY A RANGE OF FACTORS AND SGH SHARES MAY TRADE BELOW THE CURRENT PRICE OF SEVEN SHARES.

The levels of liquidity and volatility at which SGH Shares may trade after the Share Scheme is implemented could differ from those at which Seven Shares currently trade.
There is no guarantee that SGH Shares will trade in or above the Independent Expert’s minority basis range of $7.09 to $8.57 per SGH Share or that they will trade at or above the recent trading prices of Seven Shares.
Although safeguards have been put in place to manage the conflicts of interest involved, including the commissioning of the Independent Expert’s Report, Seven establishing the Independent Board Committee, and the fact that the Recommended Proposal will not proceed unless Unrelated Shareholders holding at least 75% of the shares voted vote in favour of the Share Scheme, some Seven Shareholders may prefer that Seven not enter into a transaction under which related parties of Seven have a different interest from other Seven Shareholders.
The Independent Expert has concluded that SGH will be subject to a holding company discount to the underlying value of its assets. The Independent Expert has applied the midpoint of this discount range of 12.5% in determining value of an SGH share on a minority basis. This holding company discount is reduced from the discount suggested to be applicable to Seven by certain brokers of between 20% and 35%. Shareholders should be aware that providing an estimate of the likely holding company discount that may factor into SGH’s share trading after the implementation of the Share Scheme is inherently uncertain and is likely to change over time as a consequence of future developments with SGH and the general market. Further information on the holding company discount is set out in the Independent Expert’s Report of section 6 of Part B of the Scheme Booklet.

LEVERAGE AND INTEREST COSTS

SGH will have drawn debt facilities and borrowings of approximately $500 million and $507 million in cash compared to Seven which currently has minimal debt and $1,042 million in cash.
SGH’s borrowings will expose Seven Shareholders to changes in interest rates, refinancing risk and the risk of default on loans.

RELATED PARTY INTERESTS

Certain Seven Directors have a different interest from other Seven Shareholders. The interests of those directors are described in section 9.4 of Part B of this Scheme Booklet. In summary, entities of which Kerry Stokes, Peter Gammell and Ryan Stokes are directors have an existing interest in the WesTrac Group which has entered into transactions with Seven to implement the Recommended Proposal, and will therefore obtain benefits from the transaction in a capacity other than as Seven Shareholder if the Recommended Proposal proceeds.

Section 4 27

THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK

28 Seven Network Limited Scheme Booklet – Part A

5 OTHER RELEVANT CONSIDERATIONS

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Section 5 29

5.1 WHAT SEVEN SHAREHOLDERS WILL RECEIVE UNDER THE SHARE SCHEME

If the Share Scheme is implemented, each Seven Shareholder on the Share Scheme Record Date will receive the Share Scheme Consideration, which is one New SGH Share for each Seven Share held by that person on the Share Scheme Record Date.

The Share Scheme Record Date is expected to be 7.00pm on 6 May 2010. The Share Scheme Consideration will be issued on the Implementation Date for the Share Scheme, which is currently expected to be 13 May 2010.

Ineligible Foreign Holders will not receive New SGH Shares under the Share Scheme. Instead, the New SGH Shares that would otherwise be issued to Ineligible Foreign Holders will be issued to the Nominee. The Nominee will sell those securities on behalf of the Ineligible Foreign Holders, who will receive acash payment from the proceeds of that sale. See section 4.5 of Part B of this Scheme Booklet for further details.

The IBC’s due diligence and negotiations were supported by professional advisers including Grant Samuel and J.P. Morgan (financial and strategic advisers), Freehills (legal adviser), KPMG Transaction Services (investigating accountant and financial and commercial due diligence) and Ernst & Young (tax adviser).

The IBC negotiated an enterprise value of $2.0 billion, comprising $1.0 billion of net debt and an equity value of $1.0 billion for 100% of the outstanding shares of WesTrac Holdings. The agreed enterprise value of WesTrac Holdings was determined by the IBC with its advisers in negotiation with ACE and its advisers on an arm’s length basis. The agreed equity value is within the value range estimated by the Independent Expert of $833 million to $1,034 million on a monirity basis.

5.4 EFFECT OF SHARE SCHEME ON CONTROL

The Share Scheme will result in ACE and the Related Holders increasing their measure of control over SGH, relative to their current position in respect of Seven.

If the Share Scheme proceeds:

5.2 SEVEN FY2010 INTERIM DIVIDEND

Irrespective of whether the Share Scheme is implemented, Seven Shareholders will receive Seven’s interim dividend of 17 cents per Seven Share announced by Seven on 22 February 2010. This dividend will be paid on 16 April 2010 to persons who are Seven Shareholders on 1 April 2010.

5.3 ROLE OF THE IBC IN DEVELOPMENT OF THE RECOMMENDED PROPOSAL

Seven’s Board of Directors established the IBC and put in place communication protocols to manage conflicts of interest arising in respect of the Recommended Proposal. The IBC extensively negotiated the Recommended Proposal on behalf of Seven and oversaw detailed due diligence in respect of WesTrac Group (including direct discussions with senior Caterpillar executives).

all of the Seven Shares will be transferred to WesTrac Group and Seven will become an indirect wholly-owned subsidiary of SGH; and
Seven Shareholders (other than Ineligible Foreign Holders) will exchange their Seven Shares for New SGH Shares on a one-for-one basis.

However, before the Share Scheme is implemented, SGH will have SGH Shares on issue (details of which are set out in section 9.4 of Part B of this Scheme Booklet). Under the Purchase Agreement, ultimately ACE will receive 115 million SGH Shares (less the number of SGH Shares already on issue), in exchange for the transfer of WesTrac Group to SGH. As a result, ACE and the Related Holders will hold 67.9% of all SGH Shares immediately after the Share Scheme is implemented.

The following table sets out holdings of Unrelated Seven Shareholders and Related Holders in each of Seven and SGH, immediately before and after implementation of the Share Scheme, illustrating its effect on control:

	Seven shareholding	Seven shareholding	SGH shareholding	SGH shareholding
Seven Shareholder	before Share Scheme		after Share Scheme
	Number of		Number of
	ordinary shares	%	ordinary shares	%
Related Holders	92,814,349	48.7	207,304,349	67.9
Other Seven Shareholders collectively
(Unrelated Seven Shareholders)	97,595,932	51.3	98,105,932	32.1
Total	190,410,281	100.0	305,410,281	100.0

30 Seven Network Limited Scheme Booklet – Part A

5.5 IMPLICATIONS IF THE SHARE SCHEME DOES NOT PROCEED

If the Share Scheme is not approved and implemented:

Seven Shareholders will continue to hold Seven Shares and Seven will continue to exist as an independent, standalone entity listed on the ASX;
Seven will continue to focus on its current businesses and investments, and will continue to implement its strategy as previously announced with the objective of building a leading diversified media and investment company;
Seven will continue to operate under the existing corporate structure with its directors and management in place;
Seven Shareholders will continue to be exposed to the risks in respect of Seven, its businesses and its investments, set out in section 5.1 of Part B of this Scheme Booklet;
the TELYS3 Scheme will not proceed, even if it is approved by TELYS3 Holders and no TELYS4 will be issued; and
the benefits of the Share Scheme will not be realised.

Seven will incur costs of approximately $10.8 million (inclusive of GST) in connection with the Recommended Proposal in a scenario where it does not proceed. In certain circumstances (see the summary of the Cost Recovery Agreement in section 9.14(H) of Part B of this Scheme Booklet), Seven may be entitled to recover these costs from ACE if the Recommended Proposal is not implemented. There is no cost recovery in circumstances where the Seven Shareholders do not approve the Scheme. If the Share Scheme does not proceed, any transaction costs that are not recoverable from ACE will be written off in Seven’s results for the year ending 30 June 2010.

5.6 PRICE OF SEVEN SHARES

The closing price of Seven Shares on 19 February 2010 (the trading day immediately prior to announcement of the Recommended Proposal) was $7.36 per Seven Share and the 90 trading day VWAP up to and including that date was $6.53 per Seven Share.

The closing price of Seven Shares on 10 March 2010 was $7.99 per Seven Share. This is a premium of 9% and 22% to the closing price and 90 trading day VWAP prior to the Recommended Proposal, respectively.

The price of Seven Shares may fall if the Recommended Proposal is not implemented and there is no alternative superior proposal. The Independent Seven Directors consider it highly unlikely that a superior proposal will emerge.

5.7 BOARD COMPOSITION AND DIVERSE FOCUS

If the Share Scheme is implemented, the SGH Directors will preside over two distinct and diverse businesses. Managing businesses of the nature of those operated by the WesTrac Group will be new to SGH Directors other than Kerry Stokes, Peter Gammell, Ryan Stokes and Jim Walker, as managing the businesses and investments of Seven will be new for Jim Walker. While the SGH Board will have a dual operational focus new to some directors, the SGH Board will benefit from the current dual key focuses of Messrs Stokes, Gammell and Stokes in two separate groups’ Boards becoming a single focus on the SGH Board. The Seven Directors are confident that the SGH Board will benefit from their collective diverse skill sets and experience across both business groups and in considering the appointment of independent directors to the SGH board, the SGH board intends to supplement and consolidate upon this diversity. There will be increased costs associated with the management of SGH going forward, estimated at approximately $5 million.

5.8 THE SHARE SCHEME IS CONDITIONAL

The Share Scheme is subject to various conditions. A summary of these conditions and their status as at the date of this Scheme Booklet are set out in section 4.3 of Part B of this Scheme Booklet. These conditions include that the transactions contemplated by the Purchase Agreement have taken place, which is expected to occur by not later than two Business Days after the Second Court Hearing.

As at the date of this Scheme Booklet, the Seven Directors are not aware of any matter that they expect will result in a breach of any of those conditions or result in any of them not being satisfied.

5.9 FREE FLOAT AND INDEX INCLUSION

If the Share Scheme is implemented, Related Holders will increase their ownership in SGH to approximately 67.9% which is greater than the Related Holders’ current ownership of 48.7% of Seven. ACE and the SGH Board intend to maintain the post Share Scheme level of free float of SGH shares with the objective of ensuring SGH is included in the relevant S&P indices. In relation to their shareholding in SGH, ACE and the Related Holders intend to act in a manner that maintains the free float of SGH Shares at a level consistent with S&P index inclusion.

See section 5.3(a)(5) of Part B of this Scheme Booklet for risks associated with S&P index inclusion.

Section 5 31

5.10 TAXATION IMPLICATIONS

A general guide to the Australian tax consequences of the Share Scheme for certain Seven Shareholders is set out in the Tax Letters in section 8 of Part B of this Scheme Booklet. These guides are expressed in general terms and are not intended to provide taxation advice in respect of the particular circumstances of any Seven Shareholder. Seven Shareholders should seek their own taxation advice.

5.11 ALL OR NOTHING PROPOSAL

If the Share Scheme is approved and implemented, it will bind all Seven Shareholders including those who do not vote at the Share Scheme Meetings and those who vote against the Share Scheme. This means that, if the Share Scheme proceeds, all Seven Shareholders at the Share Scheme Record Date (currently expected to be 6 May 2010) will have their Seven Shares transferred to WesTrac Holdings in return for the Share Scheme Consideration.

5.12 CATERPILLAR CONSENT

Caterpillar has provided its consent to the transactions, pursuant to the provisions of its various Caterpillar dealer agreements. ACE and the Related Holders have committed to Caterpillar that they will collectively hold more than 60% of the voting shares in SGH. Refer to section 9.14 of Part B of this Scheme Booklet for further details. ACE and the Related Holders intend to act consistently with the commitment provided to Caterpillar and to maintain their aggregate interest in the voting shares of SGH above 60%.

5.13 SCRIP-FOR-SCRIP CGT ROLLOVER

MOST SEVEN SHAREHOLDERS WHO WOULD OTHERWISE MAKE A CAPITAL GAIN IN RESPECT OF THE DISPOSAL OF THEIR SEVEN SHARES UNDER THE SHARE SCHEME SHOULD BE ELIGIBLE TO RECEIVE SCRIP-FOR-SCRIP CGT ROLLOVER RELIEF.

Seven has applied for a class ruling from the ATO confirming that Seven Shareholders who would otherwise make a capital gain in respect of the disposal of their Seven Shares under the Share Scheme should be eligible for scripfor-scrip rollover relief.
Scrip-for-scrip rollover relief enables certain Australian resident Seven Shareholders to defer any CGT liability until the time they dispose of the SGH Shares that they receive under the Share Scheme.

32 Seven Network Limited Scheme Booklet – Part A

6 THE SHARE SCHEME: QUESTIONS AND ANSWERS

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Section 6 33

This section answers some frequently asked questions about the Share Scheme. It is not intended to address all relevant issues for Seven Shareholders and should be read together with the remainder of this Scheme Booklet.

Question	Answer	Further information
The Share Scheme
What is the Share Scheme?	The Share Scheme is a scheme of arrangement under the	Section 4 of Part B of
	Corporations Act being proposed by Seven for the approval	this Scheme Booklet
	of Seven Shareholders.	provides information on
	A scheme of arrangement is a statutory procedure that is commonly used to enable one company to acquire, or merge with, another company.	the implementation of the Recommended Proposal, including the Share Scheme.
	The Share Scheme forms part of the Recommended Proposal.	A copy of the Share Scheme is contained in section 11 to
		Part B of this Scheme Booklet.
Why is the Share Scheme	The Share Scheme forms part of the Recommended Proposal
being proposed?	under which WesTrac Group and Seven will be merged to
	create SGH.
	The Share Scheme provides for the proposed acquisition of all
	Seven Shares by WesTrac Holdings in exchange for SGH Shares,
	as part of this transaction.
What is the effect of the	If the Share Scheme becomes Effective:
Share Scheme?	all Seven Shares as at the Share Scheme Record Date will be •
	transferred to WesTrac Holdings, a wholly-owned subsidiary
	of SGH;
	if the TELYS3 Scheme also becomes Effective, Seven will •
	become a wholly-owned subsidiary of WesTrac Holdings
	and will be delisted from the ASX; and
	all Seven Shareholders at the Share Scheme Record Date •
	(whether or not they voted for or against the Share Scheme)
	will receive the Share Scheme Consideration.
Assessment of the Share Scheme
What is the Independent	The Independent Seven Directors unanimously recommend	Section 3 of Part A of this
Seven Directors’	that you vote in favour of the Share Scheme, in the absence	Scheme Booklet sets out the
recommendation	of a superior proposal.	reasons for the Independent
in respect of the		Seven Directors’ unanimous
Share Scheme?		recommendation.
What is the opinion of	The Independent Expert has concluded that the Share Scheme	A copy of the Independent
the Independent Expert?	is fair and reasonable and therefore in the best interests of	Expert’s Report is contained
	Unrelated Seven Shareholders.	in section 6 of Part B of this
		Scheme Booklet.
Are there any potential	The Independent Seven Directors unanimously believe that	You should also review section 5
disadvantages associated	the potential advantages of the Share Scheme outweigh the	of Part A of this Scheme
with the Share Scheme?	potential disadvantages of the Share Scheme.	Booklet which sets out other
	However, Seven Shareholders should be aware of the potential	considerations relevant to your assessment of the Share Scheme
	disadvantages and risks related to the Share Scheme. These are	and section 5 of Part B of this
	described in section 4 of Part A of this Scheme Booklet.	Scheme Booklet which sets out
		in detail the risks associated with
		the Share Scheme.

34 Seven Network Limited Scheme Booklet – Part A

Question	Answer	Further information
Why have only	Only the Independent Seven Directors have provided a	Section 5.3 of Part A of this
some of the Seven	recommendation in relation to the Share Scheme. These	Scheme Booklet contains
Directors provided a	directors comprised the IBC, which evaluated and negotiated	further details about the
recommendation?	the Recommended Proposal (including the Share Scheme)	IBC and the Independent
	on behalf of Seven.	Seven Directors.
	The remaining Seven Directors are either associated with ACE
	(or are Related Holders) or are executives of Seven and have not
	provided a recommendation on that basis.
Share Scheme Consideration
What is the Share	If the Share Scheme becomes Effective and you hold Seven	Further information about the
Scheme Consideration?	Shares at the Share Scheme Record Date, you will receive the	Share Scheme Consideration
	Share Scheme Consideration. The Share Scheme Consideration	is contained in section 5.1 of
	comprises one New SGH Share for each Seven Share held at the	Part A of this Scheme Booklet.
	Share Scheme Record Date.
	The Share Scheme Consideration will only be paid in respect of
	Seven Shares held at the Share Scheme Record Date.
When will I receive	If the Share Scheme becomes Effective and is implemented, the
my Share Scheme	Share Scheme Consideration to which you are entitled will be
Consideration?	issued to you on the Implementation Date and your holding
	statements for New SGH Shares will be sent to you on that date.
What happens if	If you are an Ineligible Foreign Holder, the New SGH	Detailed information relevant
I am an Ineligible	Shares that would otherwise be issued to you as Share	to foreign Seven Shareholders
Foreign Holder?	Scheme Consideration will instead be sold on your behalf	is contained in section 4.5 of
	by the Nominee. You will be paid the proceeds of sale	Part B of this Scheme Booklet.
	(net of costs) promptly following the last sale of New SGH
	Shares by the Nominee.
When can I start trading	Trading on the ASX in SGH Shares issued under the Share
my New SGH Shares?	Scheme is expected to commence on a deferred settlement
	basis on 30 April 2010 and is expected to commence on a
	normal settlement basis on 14 May 2010.
	The exact amount of New SGH Shares to be issued to you
	will not be confirmed to you until you receive your holding
	statement following the Implementation Date. If you trade in
	your New SGH Shares during the deferred settlement period
	or prior to receipt of your holding statement, you do so at your
	own risk.
Will I have to pay any	No, there is no brokerage, stamp duty or other costs payable by
brokerage or stamp duty	you in connection with the disposal of your Seven Shares and
on the disposal of my	your receipt of the Share Scheme Consideration, except if you
Seven Shares under the	are an Ineligible Foreign Holder.
Share Scheme?
	Ineligible Foreign Holders whose Share Scheme Consideration is
	sold by the Nominee will incur brokerage in connection with that
	sale (such brokerage representing your pro rata share of the total
	brokerage incurred by the Nominee in connection with the sale
	of all New SGH Shares attributable to Ineligible Foreign Holders).

Section 6 35

Question	Answer	Further information
Share Scheme Meetings,	voting and approval
Why are there separate	Seven Shareholders are required to vote on the Share Scheme	The Notices of Meeting for
meetings for:	at separate meetings because of the relationship between the	each of the Share Scheme
Unrelated Seven •	Related Holders and SGH.	Meetings are contained in
Shareholders; and Related Holders, •	Accordingly: Unrelated Seven Shareholders (being all Seven Shareholders •	Annexure 1 to Part A of this Scheme Booklet.
to vote on the Share	who are not Related Holders) will vote on the Share Scheme
Scheme?	at the Unrelated Seven Shareholder Class Meeting; and
	Related Holders will vote on the Share Scheme at the •
	Related Holder Class Meeting.
	The Share Scheme must be approved by the required majorities
	ateachof the Share Scheme Meetings in order for the Share
	Scheme to be taken to be approved by Seven Shareholders.
Who is entitled to vote on	Each person who is recorded on the Share Register as the holder
the Share Scheme at the	of Seven Shares as at 7.00pm (Sydney time) on 18 April 2010 is
Share Scheme Meetings?	entitled to attend and vote at the Share Scheme Meetings.
	Only:
	Unrelated Seven Shareholders will be entitled to vote •
	at the Unrelated Seven Shareholder Class Meeting; and
	Related Holders will be entitled to vote at the Related Holder •
	Class Meeting.
When and where will	The Share Scheme Meetings will be at The Grand Ballroom,	The Notices of Meeting for
the Share Scheme	The Westin Sydney, No.1 Martin Place, Sydney, NSW 2000 on	each of the Share Scheme
Meetings be held?	20 April 2010.	Meetings are contained in
		Annexure 1 to Part A of this
	The Unrelated Seven Shareholder Class Meeting will commence	Scheme Booklet.
	at 10.00am (Sydney time). The Related Holder Class Meeting will
	commence at 11.00am (Sydney time).
If I wish to vote at a	You can vote at a Share Scheme Meeting:	See section 9 of Part A of
Share Scheme Meeting,	by sending in the White Proxy Form accompanying this •	this Scheme Booklet for
how do I vote?	Scheme Booklet if you are a Related Share Holder, or the Pink	further information regarding
	Proxy Form accompanying this Scheme Booklet if you are an	how to vote.
	Unrelated Share Holder, in accordance with the instructions
	set out on that form;
	in person; •
	by attorney; or •
	for bodies corporate, through a corporate representative. •
Is voting compulsory?	Voting is not compulsory. However, the Independent Seven	Detailed information on how
Should I vote?	Directors unanimously recommend that you vote in favour	to vote is set out in section 9 of
	of the Share Scheme, in the absence of a superior proposal,	Part A of this Scheme Booklet.
	and urge you to exercise your right to vote at the relevant
	Share Scheme Meeting.
	Your vote is important.
How will Seven Directors	Each Seven Director intends to vote, or procure the vote of,
be voting?	all Seven Director Shares in favour of the Share Scheme,
	in the absence of a superior proposal.

36 Seven Network Limited Scheme Booklet – Part A

Question	Answer	Further information
Will I be bound by the	Yes, if the Share Scheme is approved and becomes Effective,
Share Scheme if I do not	then all Seven Shares held by you at the Share Scheme Record
vote or if I vote against the	Date will be transferred to WesTrac Holdings and you will receive
Share Scheme?	the Share Scheme Consideration even if you did not vote, or
	voted against the Share Scheme.
What is the approval	The Share Scheme Resolution must be approved by:
threshold for the Share	a majority in number of Seven Shareholders who vote •
Scheme?	on the Share Scheme Resolution; and
	at least 75% of the total number of votes cast by Seven •
	Shareholders on the Share Scheme Resolution,
	ateachof the Share Scheme Meetings.
	The Court has a discretion to waive the first of these two
	requirements if it considers it appropriate to do so.
	For the Share Scheme to become Effective, it must also be
	approved by the Court.
Are there any conditions	There are a number of conditions which must be satisfied or	Further details of the conditions
to the Share Scheme?	waived before the Share Scheme is implemented. Some of these	to the Share Scheme are set out
	conditions are conditions precedent that must be satisfied or	in section 4.3 of Part B of this
	waived at or before the Second Court Hearing, while others	Scheme Booklet.
	are conditions subsequent that must be satisfied or waived
	after the Second Court Hearing but before the Share Scheme
	becomes Effective.
	As at the date of this Scheme Booklet, neither Seven nor SGH is
	aware of any circumstances which would cause the outstanding
	conditions not to be satisfied.
Is the Share Scheme	No. If the Share Scheme is approved by Seven Shareholders and
conditional on the TELYS3	the Court, and all conditions are satisfied, it will be implemented
Scheme being approved	even if the TELYS3 Scheme is not implemented.
and implemented?	However, the TELYS3 Scheme will not proceed unless the Share
	Scheme is implemented.
When will the result	The results of the Share Scheme Meetings will be available
of the Share Scheme	shortly after the conclusion of each meeting on 20 April 2010.
Meetings be known?	The result of the Related Holder Class Meeting will be available
	at the commencement of the Unrelated Seven Shareholder
	Class Meeting and the result of that latter meeting will be
	available shortly after its conclusion.
	The result of the Share Scheme Meetings will be announced to
	the ASX once available.
	Even if the Share Scheme Resolution is passed by both Share
	Scheme Meetings, the Share Scheme will be subject to the
	approval of the Court and the satisfaction or waiver of any
	remaining conditions.

Section 6 37

Question	Answer	Further information
What happens if the Share	If the Share Scheme is not approved by the requisite majorities	Further details of what will
Scheme is not approved	of Seven Shareholders at either or both Share Scheme Meetings,	or may happen to Seven and
or otherwise does not	if the Share Scheme is not approved by the Court, or if any	Seven Shareholders if the Share
proceed?	condition of the Share Scheme is not satisfied or waived,	Scheme does not proceed
	then the Share Scheme will not become Effective and will not	are provided in section 5.5 of
	proceed. Seven Shareholders will not receive the Share Scheme	Part A of this Scheme Booklet.
	Consideration but will retain their Seven Shares and Seven will
	continue to operate as a standalone entity.
Other Questions
If the Share Scheme is	Yes. Seven Shareholders will be entitled to the FY2010 interim
approved, will I receive	dividend of 17 cents per Seven Share irrespective of the
my FY2010 interim	outcome of the Share Scheme.
dividend in respect
of my Seven Shares?
What happens if an	If an alternative proposal emerges, this will be announced to
alternative proposal	the ASX and the Independent Seven Directors (who comprise
emerges?	the IBC) will carefully consider the proposal and advise you of
	their recommendation.
What are the tax	The Tax Letters contain a discussion of the main Australian	The Tax Letters are contained
implications of the	taxation implications of the Share Scheme.	in section 8 of Part B of this
Share Scheme?		Scheme Booklet.
	Your decision on whether or not to vote in favour of the Share
	Scheme should be made only after your consultation with a
	financial, legal or other professional adviser based on your own
	investment objectives, financial situation, taxation position and
	particular needs.
Can I sell my Seven	You can sell your Seven Shares on market at any time before
Shares now?	the close of trading on the ASX on the Effective Date at the
	prevailing market price.
	The Effective Date is currently expected to be 29 April 2010.
Further Information
How can I get further	For further information, you can call the Seven Network
information if I have	Limited Information Line on 1300 656 831 (for the cost of
any questions?	a local call from within Australia) or +61 2 8986 9358 (from
	outside Australia) between 9.00am and 5.00pm (Sydney time),
	Monday to Friday. Alternatively, you can go to SGH’s website at
	www.sevengroup.com.au.
	If you are in doubt about anything in this Scheme Booklet,
	please contact your financial, legal or other professional adviser.

38 Seven Network Limited Scheme Booklet – Part A

7 OVERVIEW OF WESTRAC GROUP

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Section 7 39

WesTrac Holdings, which is the head company of the WesTrac Group, is an investment holding company wholly-owned by ACE. WesTrac Group is headquartered in Perth and directly and indirectly employs over 4,000 people nationally.

WesTrac Holdings’ current three core investments are:

WesTrac Australia – WesTrac Australia is an authorised Caterpillar dealer in its Western Australia and New South Wales/ACT Service Territories. WesTrac Australia is one of only four authorised Caterpillar dealers in Australia and is the leading equipment management company providing an end-to-end product and serving primarily the mining and construction markets.
WesTrac China – WesTrac China is one of only four authorised Caterpillar dealers in China. WesTrac China is an authorised Caterpillar dealer in its North Eastern China Service Territory (which comprises six provinces and the municipalities of Beijing and Tianjin), covering some of China’s fastest growing and most mineral rich territories in North Eastern China.
National Hire – WesTrac Group holds a 66% interest in National Hire, a company listed on the ASX with a current market capitalisation of approximately A$297 million on 10 March 2010. National Hire owns 100% of Allight, which manufactures, assembles and sells Allight mobile lighting towers, power generation and dewatering equipment. It also distributes Perkins engines, FG Wilson power generation sets, Godwin wet ends and parts, and has 46% investment in Coates Hire. Coates Hire is the largest equipment hire business in Australia with over 200 branches and satellite locations and serves the mining, construction and event management sectors.

The diagram below provides a high level overview of WesTrac Holdings’ current business structure:

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----- Start of picture text -----

ACE
100%
WesTrac Holdings
100%
WesTrac Australia
100% 66%
WesTrac China National Hire
46% (National Hire’s share)
Coates Hire
----- End of picture text -----

Refer to section 2 of Part B of this Scheme Booklet for further details about the WesTrac Group.

WesTrac Australia and WesTrac China are together one of Caterpillar’s top five dealers globally by sales. Caterpillar is the world’s largest construction equipment manufacturer and a leading heavy construction and mining equipment provider. Caterpillar is listed on the New York Stock Exchange, is a member of the Dow Jones Industrial Index and has a market capitalisation of approximately US$37 billion as at 10 March 2010.

The Caterpillar brand is a globally recognised brand. Caterpillar is the only manufacturer of earthmoving or construction equipment included in BusinessWeek’s Top 100 Global Brands in 2009.

40 Seven Network Limited Scheme Booklet – Part A

8 OVERVIEW OF SGH

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Section 8 41

The combination of Seven and WesTrac Group will create a significant Australian diversified operating and investment group with market leading businesses and investments with strong revenues and earnings. The holding company of the combined group will be named Seven Group Holdings Limited (SGH).

SGH will comprise a wholly-owned industrial operating business alongside key strategic investments in media and industrial equipment hire. It will be an operating company with an attractive growth outlook that retains exposure to Seven’s existing strategic investments.

SMG – owner of Australia’s number one rated free-to-air television network (Channel Seven) and a leading magazine publisher (Pacific Magazines), with an investment in a leading online media platform (Yahoo!7).
WesTrac Group – leading market positions in both sales and units sold in both Western Australia and New South Wales/ Australian Capital Territory in heavy equipment, and a rapidly growing Caterpillar dealership in North Eastern China.
National Hire’s investment in Coates Hire – the leading equipment hire business in Australia.
WAN – the leading newspaper in Western Australia.
CMH – a leading pay TV provider, with investments in FOXTEL and FOXSports.

SGH is forecast to achieve FY2011 revenue of $2.8 billion, EBITDA of $312 million and NPAT of $187 million. The assumptions underlying these forecasts and the sensitivities of the forecasts are set out in section 3.11 of Part B of this Scheme Booklet.

SHG has pro forma net assets of $2,756 million as at 31 December 2009, which compares to Seven’s pro forma net assets of $2,226 million as at 31 Decmber 2009. The difference between the pro forma net assets of SGH and Seven as at 31 December 2009 is $530 million. This difference is accounted for by the net asset contribution of the WesTrac Group and National Hire of $569 million and net pro forma adjustments and consolidation entries of negative $39 million.

Each SGH business unit will report directly to the Chief Executive Officer and will be supported by SGH’s corporate head office. A summary structure of SGH is illustrated in page 9 of Part A of this Scheme booklet.

Refer to section 3 of Part B of this Scheme Booklet for further details about SGH.

42 Seven Network Limited Scheme Booklet – Part A

9 HOW TO VOTE

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Section 9 43

9.1 THE SHARE SCHEME MEETINGS

The Share Scheme is subject to the approval of Seven Shareholders at the Share Scheme Meetings.

The Share Scheme Meetings have been convened for 20 April 2010 at 10.00am. The Unrelated Seven Shareholder Class Meeting will commence at 10.00am (Sydney time). The Related Holder Class Meeting will be held, at 11.00am (Sydney time).

At the Share Scheme Meetings, the Unrelated Seven Shareholders and the Related Holders will be separately asked to consider and, if thought fit, pass the following Share Scheme Resolution:

“That, for the purpose of section 411 of the Corporations Act 2001 (Cth) and for all other purposes, the scheme of arrangement to be made between the Company and the holders of fully paid ordinary shares in the Company (as contained in and more particularly described in the Scheme Booklet of which this notice of meeting forms part) is approved, with or without modification as approved by the Supreme Court of New South Wales.”

In order for the Share Scheme Resolution to be passed, unless the Court orders otherwise, it must be approved by a majority (that is, greater than 50%) in number of Seven Shareholders voting on the Share Scheme Resolution (in person or by proxy, attorney or, in the case of corporate Seven Shareholders, by a corporate representative). In addition, those Seven Shareholders who vote in favour must cast at least 75% of the total number of votes cast by Seven Shareholders on the Share Scheme Resolution (in person or by proxy, attorney or, in the case of corporate Seven Shareholders, by a corporate representative).

The voting majorities necessary for approval of the Share Scheme Resolution must be satisfied at each of the Related Holder Class Meeting and the Unrelated Seven Shareholder Class Meeting.

Voting at each Share Scheme Meeting will be by poll.

9.2 ENTITLEMENT TO VOTE

All Seven Shareholders as at 7.00pm (Sydney time) on 18 April 2010 will be entitled to vote at their respective Share Scheme Meeting.

9.3 HOW TO VOTE

You may vote in person at the relevant Share Scheme Meeting. If you are unable to attend the meeting in person, you may vote by using the White Proxy Form accompanying this Scheme Booklet if you are a Related Share Holder, or the Pink Proxy Form accompanying this Scheme Booklet if you are an Unrelated Share Holder, in respect of the Share Scheme Meetings accompanying this Scheme Booklet.

A corporate shareholder or corporate proxy may vote by corporate representative appointed pursuant to section 250D of the Corporations Act.

Further details are set out below:

A) VOTING IN PERSON

To vote in person at a Share Scheme Meeting, you must attend:

in the case of Unrelated Seven Shareholders, the Unrelated Seven Shareholder Class Meeting commencing at 10.00am (Sydney time) on 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000; or
in the case of Related Holders, the Related Holder Class Meeting commencing at 11.00am (Sydney time) on 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000.

All persons attending a Share Scheme Meeting must register their attendance by disclosing their name at the point of entry to the meeting.

B) VOTING BY PROXY

If you cannot attend the relevant Share Scheme Meeting, you may vote by proxy by completing and sending in the White Proxy Form accompanying this Scheme Booklet if you are a Related Share Holder, or the Pink Proxy Form accompanying this Scheme Booklet if you are an Unrelated Share Holder, in respect of the Share Scheme Meetings accompanying this Scheme Booklet.

44 Seven Network Limited Scheme Booklet – Part A

A proxy need not be a Seven Shareholder. If you are entitled to vote at both a Share Scheme Meeting and the TELYS3 Scheme Meeting, you may appoint the same or different proxies for each of those meetings.

If you are entitled to vote at both a Share Scheme Meeting and the TELYS3 Scheme Meeting, and you wish to appoint a proxy for each of those meetings, you must complete the White Proxy Form accompanying this Scheme Booklet if you are a Related Share Holder, or the Pink Proxy Form accompanying this Scheme Booklet if you are an Unrelated Share Holder, in respect of the Share Scheme Meetings and the Yellow Proxy Form in respect of the TELYS3 Scheme Meeting.

If you are entitled to cast two or more votes at the relevant Share Scheme Meeting, you may appoint two proxies. You may specify the proportion or number of votes which each proxy is appointed to exercise. If proportions or numbers are not specified, each proxy may exercise half of the votes you are entitled to cast. Fractions of votes will be disregarded. Appointing a proxy will not preclude you from attending the relevant meeting in person and voting at the meeting instead of your proxy.

To be effective, validly completed Proxy Forms in respect of the Share Scheme Meetings (accompanied by any power of attorney or other authority under which that Proxy Form is signed or a certified copy of that power of attorney or authority, in each case unless previously provided to the Seven Registry) must be:

posted to the Seven Registry in the reply paid envelope provided or, if you are outside of Australia or do not otherwise use the reply paid envelope, to Registries Limited, GPO Box 3993, Sydney NSW 2001, Australia;
successfully transmitted by facsimile to the Seven Registry on +61 2 9290 9655 (from within Australia) or +61 2 9290 9655 (from outside Australia); or
posted, delivered or successfully transmitted by facsimile to the registered office of Seven,

so that it is received by no later than 10.00am (Sydney time) on 18 April 2010 (or if the meeting is adjourned, at least 48 hours before the resumption of the meeting in relation to the resumed part of the meeting).

Your proxy should retain a copy of the Proxy Form (together with any power of attorney or other authority under which that form is signed or a certified copy of that power of attorney or authority) to assist with admission to the Share Scheme Meetings.

You can obtain additional Proxy Forms from the Seven Registry (see the inside back cover of either part of this Scheme Booklet for the Seven Registry’s contact details) or by calling the Seven Network Limited Information Line 1300 656 831 (for the cost of a local call from within Australia) or +61 2 8986 9358 (from outside Australia).

If you complete and return the Proxy Form for a Share Scheme Meeting, you may still attend that meeting, revoke the proxy and vote in person.

C) VOTING BY ATTORNEY

Alternatively, if you cannot attend the relevant Share Scheme Meeting, you may vote by a duly authorised attorney. An attorney need not be a Seven Shareholder. If you are entitled to vote at both a Share Scheme Meeting and the TELYS3 Scheme Meeting, you may appoint the same or different attorneys for each of those meetings.

The power of attorney, or a certified copy of the power of attorney, should be lodged with the Seven Registry before the Share Scheme Meetings or brought to the relevant meeting.

D) CORPORATE REPRESENTATIVE

If a representative of a corporate shareholder or corporate proxy is to attend a Share Scheme Meeting pursuant to section 250D of the Corporations Act, a certificate of appointment of the representative (or such other document as the Chairman of the relevant Share Scheme Meeting considers sufficient together with any power of attorney or other authority under which the certificate or other document is signed or a certified copy of that power of attorney or authority) should be lodged with the Seven Registry prior to the Share Scheme Meetings or brought to the relevant meeting.

A form of certificate can be obtained from the Seven Registry.

Section 9 45

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46 Seven Network Limited Scheme Booklet – Part A

10 GLOSSARY

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Section 10 47

Term	Meaning
ACE	Australian Capital Equity Pty Limited (ACN 009 412 328).
AIFRS	the International Financial Reporting Standards as adopted in Australia.
Ashblue Holdings	Ashblue Holdings Pty Limited (ACN 068 180 898).
ASIC	the Australian Securities and Investments Commission.
associate	has the meaning given to it in section 12 of the Corporations Act.
ASX	ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange financial market that
	it operates, as the context requires.
ATO	Australian Taxation Office.
Business Day	a weekday on which trading banks are open for business in Sydney, Australia or, where
	appropriate, a “Business Day” as defined in the Listing Rules.
CAGR	compound annual growth rate.
Caterpillar	Caterpillar, Inc.
CGT	capital gains tax.
CMH	Consolidated Media Holdings Limited (ACN 009 071 167).
Coates Group	Coates Group Holdings Pty Limited (ACN 126 069 341).
Coates Hire	the equipment rental business conducted by Coates Group.
Corporations Act	the_Corporations Act 2001_(Cth).
Cost Recovery Agreement	the agreement titled ‘Cost Recovery Agreement’ dated 2 February 2010 between ACE and Seven.
Court	the Federal Court of Australia.
Deloitte	Deloitte Corporate Finance Pty Limited (ABN 19 003 833 127).
EBITDA	earnings before interest, tax, depreciation and amortisation.
Effective	when used in relation to a Scheme, the coming into effect, under section 411(10) of
	the Corporations Act, of the order of the Court made under section 411(4)(b) in relation
	to that Scheme.
Effective Date	the date on which the Share Scheme or the TELYS3 Scheme becomes Effective, as appropriate.
Ernst & Young	Ernst & Young Australia (ABN 75 288 172 749).
FY	financial year.
Grant Samuel	Grant Samuel Corporate Finance Pty Limited (ABN 84 076 176 657).
IBC	the Independent Board Committee, being a committee of the Board of Directors of Seven,
	comprising only the Independent Seven Directors.
Implementation Date	the fifth Business Day after the Share Scheme Record Date or such other day as the parties agree.
Implementation Deed	the Scheme Implementation Deed between Seven, SGH and ACE dated 21 February 2010
	(as amended) which is summarised in section 4.3 of Part B this Scheme Booklet.
Independent Expert	Deloitte.
Independent	the report prepared by the Independent Expert in connection with the Share Scheme
Expert’s Report	and the TELYS3 Scheme, which is set out in section 6 of Part B of this Scheme Booklet.
Independent Seven Director	each of Mr Peter Ritchie AO, Ms Elizabeth Dulcie Boling and Professor Murray Wells.
Ineligible Foreign Holder	a Seven Shareholder whose address shown in the Share Register at the Share Scheme Record Date
	is a place outside Australia and its external territories, New Zealand, Hong Kong, the UK, the US or
	Canada unless ACE determines that it is lawful and not unduly onerous or impracticable to issue
	that Seven Shareholder with New SGH Shares after the Share Scheme becomes Effective.
Investigating Accountant	KPMG.
Investigating	the report, prepared by the Investigating Accountant, set out in section 7 of Part B
Accountant’s Report	of the Scheme Booklet.
J.P. Morgan	J.P. Morgan Australia Limited (ACN 002 888 011).
KPMG	KPMG Transaction Services (Australia) Pty Limited (ACN 003 891 718).

48 Seven Network Limited Scheme Booklet – Part A

Term	Meaning
Listing Rules	The listing rules of the ASX.
National Hire	National Hire Group Limited (ACN 076 688 938).
National Hire Market	the deed titled ‘National Hire Market Value Deed’ between ACE and SGH in relation to National
Value Deed	Hire dated 21 February 2010.
National SGH Group	the aggregation of SGH, WesTrac Holdings and each of their respective subsidiaries from time
	to time (excluding Iron Ore Holdings Limited, Landfill Gas and Power Holdings Pty Limited,
	Wroxby and Seven and its subsidiaries).
New SGH Shares	the SGH Shares that are issued under the Share Scheme as Share Scheme Consideration.
New South Wales/ACT	that portion of the state of New South Wales, east of 144olongitude, and the
Service Territory	Australian Capital Territory.
Nominee	the person appointed by SGH to sell the New SGH Shares that are attributable to Ineligible
	Foreign Holders under the terms of the Share Scheme.
North Aston	North Aston Pty Limited (ACN 009 387 606).
North Eastern China	in the People’s Republic of China, the provinces of Jilin, Hebei, Liaoning, Inner Mongolia,
Service Territory	Heilongjiang and Shanxi and the municipalities of Beijing and Tianjin.
NPAT	net profit after tax.
Proxy Form	the:
	White or Pink proxy form for the Share Scheme Meetings sent to Seven Shareholders; or •
	Yellow proxy form for the TELYS3 Scheme Meeting sent to TELYS3 Holders, •
	as appropriate.
Purchase Agreement	the Share Purchase Agreement between ACE and SGH relating to the purchase by SGH of all
	of the issued shares in WesTrac Holdings dated 21 February 2010.
Recommended Proposal	the proposed creation of SGH, through:
	SGH acquiring WesTrac Group in exchange for 115,000,000 SGH Shares (less the number •
	of SGH Shares already on issue);
	SGH Group acquiring all Seven Shares pursuant to the Share Scheme in exchange for •
	SGH Shares; and
	the listing of SGH, •
	together with SGH Group acquiring the TELYS3 pursuant to the TELYS3 Scheme or the offer
	of TELYS4 on an individual basis if the TELYS3 Scheme is not implemented.
related body corporate	has the meaning given to it in the Corporations Act.
Related Holder	companies associated with Mr Kerry Stokes AC including Wroxby, Ashblue Holdings
	and North Aston.
Related Holder	the class meeting of Seven Shareholders ordered by the Court to be convened under section 411(1)
Class Meeting	for Related Holders, notice of which is set out in Annexure 1 to Part A of this Scheme Booklet.
S&P	Standard & Poor’s
Scheme	each of the Share Scheme and the TELYS3 Scheme, as appropriate.
Scheme Booklet	this document dated 16 March 2010, including both Part A and Part B, the Annexures to it and the
	Proxy Form.
Second Court Hearing	the hearing before the Court to approve the Share Scheme following the Share Scheme Meetings
	and (if the TELYS3 Scheme is approved by TELYS3 Holders) to approve the TELYS3 Scheme
	following the TELYS3 Scheme Meeting.
Seven	Seven Network Limited (ACN 052 816 789).
Seven Director	a director of Seven.

Section 10 49

Term	Meaning
Seven Director Share	any Seven Share:
	held by, or on behalf of, a Seven Director; or •
	listed as an indirect interest in an Appendix 3X or 3Y lodged with ASX for Seven in respect •
	of any Seven Director.
Seven Registry	Registries Limited (ACN 003 209 836).
Seven Shareholders	each person who is registered as the holder of Seven Shares.
Seven Shares	fully paid ordinary shares of Seven.
SGH	Seven Group Holdings Limited (ACN 142 003 469).
SGH Board	the board of directors of SGH.
SGH Director	a director of SGH.
SGH Group	SGH and its subsidiaries.
SGH Information	information regarding:
	the Notional SGH Group; and •
	the merged SGH Group following implementation of the Share Scheme, •
	prepared by ACE or a member of the Notional SGH Group for inclusion in this Scheme Booklet
	(which, for the avoidance of doubt, does not include the Independent Expert’s Report, the
	Investigating Accountant’s Report or the Tax Letters).
SGH Shares	fully paid ordinary shares of SGH.
Share Register	the register of members of Seven maintained in accordance with the Corporations Act.
Share Scheme	the scheme of arrangement under Part 5.1 of the Corporations Act between Seven and the
	persons who are Seven Shareholders on the Share Scheme Record Date, in respect of the Seven
	Shares, a copy of which is set out in section 11 to Part B of this Scheme Booklet.
Share Scheme	the consideration comprising one New SGH Share to be provided by SGH to each person who
Consideration	is a Seven Shareholder on the Share Scheme Record Date, for the transfer of each Seven Share
	to WesTrac Holdings under the Share Scheme.
Share Scheme Meetings	the meetings of Seven Shareholders ordered by the Court to be convened under section 411(1)
	of the Corporations Act for the purpose of considering and, if thought fit, approving the Share
	Scheme, being:
	the Unrelated Seven Shareholder Class Meeting; and •
	the Related Holder Class Meeting. •
Share Scheme Record Date	5.00pm on the fifth Business Day after the Effective Date for the Share Scheme.
Share Scheme Resolution	the resolution set out in the notices of meeting for each of the Share Scheme Meetings
	in Annexure 1 to Part A of this Scheme Booklet.
SMG	Seven Media Group Pty Limited (ACN 116 850 607).
subsidiary	has the meaning given to it in the Corporations Act.
Tax Letters	the letters from Ernst & Young set out in section 8 of Part B of this Scheme Booklet.
TELYS3	Transferrable Extendable Listed Yield Shares, being non-cumulative redeemable and convertible
	preference shares issued by Seven.
TELYS3 Holders	each person who is registered as the holder of TELYS3.
TELYS3 Register	the register of holders of TELYS3 maintained in accordance with the Corporations Act.
TELYS3 Scheme	the scheme of arrangement under Part 5.1 of the Corporations Act between Seven and persons
	who are TELYS3 Holders on the TELYS3 Scheme Record Date, in respect of the TELYS3, a copy of
	which is set out in section 12 of Part B of this Scheme Booklet.
TELYS3 Scheme Meeting	the meeting of TELYS3 Holders ordered by the Court to be convened under section 411(1) of the
	Corporations Act for the purpose of considering and, if thought fit, approving the TELYS3 Scheme.
TELYS3 Scheme Record Date	5.00pm on the fifth Business Day after the Effective Date for the TELYS3 Scheme.

50 Seven Network Limited Scheme Booklet – Part A

Term	Meaning
TELYS4	Transferrable Extendable Listed Yield Shares, being non-cumulative redeemable and convertible
	preference shares issued by SGH.
UK	the United Kingdom.
Unrelated Seven	the class meeting of Seven Shareholders ordered by the Court to be convened under section
Shareholder Class Meeting	411(1) for Unrelated Seven Shareholders, notice of which is set out in Annexure 1 to Part A
	of this Scheme Booklet.
Unrelated Seven	Seven Shareholders other than Related Holders.
Shareholders
US	the United States of America.
VWAP	volume weighted average price.
WAN	West Australian Newspapers Holdings Limited (ACN 053 480 845).
Western Australia	the State of Western Australia.
Service Territory
WesTrac Australia	the equipment business conducted by WesTrac Group in its Western Australia and
	New South Wales/ACT Service Territories.
WesTrac China	the equipment business conducted by WesTrac Group in the North Eastern China Service Territory.
WesTrac Group	WesTrac Holdings and its subsidiaries, excluding National Hire.
WesTrac Holdings	WesTrac Holdings Pty Limited (ACN 009 336 109).
WesTrac Information	information regarding the WesTrac Group prepared by ACE for inclusion in this Scheme Booklet
	(which, for the avoidance of doubt, does not include the Independent Expert’s Report, the
	Investigating Accountant’s Report or the Tax Letters).
WesTrac NSW/ACT	the equipment business conducted by WesTrac Group in its New South Wales/ACT
	Service Territory.
WesTrac WA	the equipment business conducted by WesTrac Group in its Western Australia Service Territory.
Wroxby	Wroxby Pty Limited (ACN 061 621 921).

Section 10 51

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52 Seven Network Limited Scheme Booklet – Part A

ANNEXURE 1 NOTICES OF SHARE SCHEME MEETINGS

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Annexure 1 53

UNRELATED SEVEN SHAREHOLDER CLASS MEETING: NOTICE OF MEETING

SEVEN NETWORK LIMITED (THE COMPANY) ACN 052 816 789

NOTICE OF COURT ORDERED SCHEME MEETING FOR A CLASS OF HOLDERS OF ORDINARY SHARES IN SEVEN NETWORK LIMITED

Notice is hereby given that by an order of the Supreme Court of New South Wales ( Court ) made on 16 March 2010, pursuant to section 411(1) of the Corporations Act 2001 (Cth) ( Corporations Act ), a meeting of a class of holders of fully paid ordinary shares in the Company ( Seven Shareholders ) other than Wroxby Pty Limited, Ashblue Holdings Pty Limited and their respective related bodies corporate ( Related Holders ) will be held at 10.00am (Sydney time) on 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000.

AGENDA

BUSINESS

The purpose of the Unrelated Seven Shareholder Class Meeting is to consider and, if thought fit, to agree to a scheme of arrangement (with or without modification) to bemade between the Company and the Seven Shareholders ( Share Scheme ).

A copy of the Share Scheme and a copy of the Explanatory Statement required by section 412 of the Corporations Act in relation to the Share Scheme accompany and form part of the Scheme Booklet, which this notice of meeting also forms a part.

The Court has directed that Mr Peter Ritchie AO is to act as Chairman of the Unrelated Seven Shareholder Class Meeting or failing him, Professor Murray Wells, and has directed the Chairman to report the result of the meeting to the Court.

Unless otherwise provided, words and expressions defined in the Share Scheme have the same meanings when used in this notice of meeting.

IMPORTANT NOTES

Shareholder approval: For the proposed Share Scheme to be binding in accordance with section 411 of the Corporations Act, the resolution must be approved by:

1 a majority in number of Seven Shareholders present and voting (either in person or by proxy or by attorney or representative); and
2 at least 75% of the total number of votes cast on the resolution,

at each of this meeting and the Related Holder Class Meeting (which will be held shortly before this meeting).

Court approval: The proposed Share Scheme (with or without modification) is subject to subsequent approval by the Court. If:

the resolution put to this meeting is approved by the requisite majority at both this meeting and the Related Holder Class Meeting; and
the other conditions precedent (other than the condition precedent relating to Court approval of the Share Scheme) are satisfied or waived,

the Company intends to apply to the Court for orders to give effect to the Share Scheme. In order for the Share Scheme to be effective, it must be approved by the Court and an office copy of the order must be lodged with the Australian Securities and Investments Commission.

Advertisement: Where this notice of meeting is advertised unaccompanied by the Scheme Booklet, a copy of the Scheme Booklet may be obtained by anyone entitled to attend the meeting by contacting the Company Secretary.

DATED THIS 16 MARCH 2010 BY ORDER OF THE BOARD

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SPECIAL BUSINESS

Resolution 1 – Approval of scheme of arrangement

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

Warren W Coatsworth Company Secretary

“That, for the purpose of section 411 of the Corporations Act 2001 (Cth) and for all other purposes, the scheme of arrangement to be made between the Company and the holders of fully paid ordinary shares in the Company (as contained in and more particularly described in the Scheme Booklet of which this notice of meeting forms part) is approved, with or without modification as approved by the Supreme Court of New South Wales.”

54 Seven Network Limited Scheme Booklet – Part A

NOTES:

1 A person entitled to attend and vote is entitled to appoint a proxy and, if entitled to cast two or more votes, may appoint not more than two proxies. Where more than one proxy is appointed, the appointor may specify the proportion or number of the appointor’s votes that each proxy is appointed to exercise. If the appointor appoints two proxies and the appointment does not specify this proportion or number, each proxy may exercise half of the appointor’s votes. A proxy need not be a shareholder in the Company.
2 Pursuant to the orders of the Court dated 16 March 2010, the date and time for determining the identity of those Seven Shareholders entitled to attend and vote at the meeting is 7.00pm on 18 April 2010. Related Holders are not entitled to vote at this meeting.
3 To be effective, validly completed proxy forms (accompanied by any power of attorney or other authority under which that form is signed or a certified copy of that power of attorney or authority, in each case unless previously provided to the Company’s share registry) must be:
posted to the Company’s share registry in the reply paid envelope provided or, if you are outside of Australia or do not otherwise use the reply paid envelope, to Registries Limited, GPO Box 3993, Sydney NSW 2001, Australia;
successfully transmitted by facsimile to the Company’s share registry on +61 2 9290 9655 (from within Australia) or +61 2 9290 9655 (from outside Australia); or
posted, delivered or successfully transmitted by facsimile to the registered office of the Company,

Further details about how to vote at the Unrelated Seven Shareholder Class Meeting are set out in section 9 of Part A of the Scheme Booklet and, in the case of Seven Shareholders voting by proxy, on the proxy form.

RELATED HOLDER CLASS MEETING: NOTICE OF MEETING

SEVEN NETWORK LIMITED (THE COMPANY) ACN 052 816 789

NOTICE OF COURT ORDERED SCHEME MEETING FOR A CLASS OF HOLDERS OF ORDINARY SHARES IN SEVEN NETWORK LIMITED

Notice is hereby given that by an order of the Supreme Court of New South Wales ( Court ) made on 16 March 2010, pursuant to section 411(1) of the Corporations Act 2001 (Cth) ( Corporations Act ), a meeting of a class of holders of fully paid ordinary shares in Seven Network Limited ( Seven Shareholders ) comprising those of Wroxby Pty Limited, Ashblue Holdings Pty Limited and their respective related bodies corporate who hold such shares ( Related Holders ) will be held at 11.00am (Sydney time) on 20 April 2010 at The Grand Ballroom, The Westin Sydney, No.1 Martin Place, Sydney NSW 2000.

AGENDA

BUSINESS

The purpose of the Related Holder Class Meeting is to consider and, if thought fit, to agree to a scheme of arrangement (with or without modification) to be made between the Company and the Seven Shareholders ( Share Scheme ).

The Court has directed that Mr Peter Ritchie AO is to act as Chairman of the Related Holder Class Meeting or failing him, Professor Murray Wells, and has directed the Chairman to report the result of the meeting to the Court.

Unless otherwise provided, words and expressions defined in the Share Scheme have the same meanings when used in this notice of meeting.

SPECIAL BUSINESS

Resolution 1 – Approval of scheme of arrangement

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

Annexure 1 55

IMPORTANT NOTES

Shareholder approval: For the proposed Share Scheme to be binding in accordance with section 411 of the Corporations Act, the resolution must be approved by:

1 a majority in number of Seven Shareholders present and voting (either in person or by proxy or by attorney or representative); and
2 at least 75% of the total number of votes cast on the resolution,

at each of this meeting and the Unrelated Seven Shareholder Class Meeting (which will be held shortly after this meeting).

Court approval: The proposed Share Scheme (with or without modification) is subject to subsequent approval by the Court. If:

the resolution put to this meeting is approved by the requisite majority at both this meeting and the Unrelated Seven Shareholder Class Meeting; and
the other conditions precedent (other than the condition precedent relating to Court approval of the Share Scheme) are satisfied or waived,

DATED THIS 16 MARCH 2010

BY ORDER OF THE BOARD

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Warren W Coatsworth Company Secretary

NOTES:

1 A person entitled to attend and vote is entitled to appoint a proxy and, if entitled to cast two or more votes, may appoint not more than two proxies. Where more than one proxy is appointed, the appointor may specify the proportion or number of the appointor’s votes that each proxy is appointed to exercise. If the appointor appoints two proxies and the appointment does not specify this proportion or number, each proxy may exercise half of the appointor’s votes. A proxy need not be a shareholder in the Company.
2 Pursuant to the orders of the Court dated 16 March 2010, the date and time for determining the identity of those Seven Shareholders entitled to attend and vote at the meeting is 7.00pm on 18 April 2010. Unrelated Seven Shareholders are not entitled to vote at this meeting.
3 To be effective, validly completed proxy forms (accompanied by any power of attorney or other authority under which that form is signed or a certified copy of that power of attorney or authority, in each case unless previously provided to the Company’s share registry) must be:
posted to the Company’s share registry in the reply paid envelope provided or, if you are outside of Australia or do not otherwise use the reply paid envelope, to Registries Limited, GPO Box 3993, Sydney NSW 2001, Australia;
successfully transmitted by facsimile to the Company’s share registry on +61 2 9290 9655 (from within Australia) or +61 2 9290 9655 (from outside Australia); or
posted, delivered or successfully transmitted by facsimile to the registered office of the Company,
so that it is received by no later than 10.00am (Sydney time) on 18 April 2010 (or if the meeting is adjourned, at least 48 hours before the resumption of the meeting in relation to the resumed part of the meeting).

Further details about how to vote at the Related Holder Class Meeting are set out in section 9 of Part A of the Scheme Booklet and, in the case of Seven Shareholders voting by proxy, on the proxy form.

56 Seven Network Limited Scheme Booklet – Part A

Corporate directory

COMPANY

Seven Network Limited ACN 052 816 789

REGISTERED OFFICE

Level 2 38-42 Pirrama Road Pyrmont NSW 2009

COMPANY SECRETARY

Mr Warren W Coatsworth

SEVEN REGISTRY

Registries Limited Level 7, 207 Kent Street Sydney NSW 2000

LEGAL ADVISER

Freehills Level 38 MLC Centre Martin Place Sydney NSW 2000

INVESTIGATING ACCOUNTANT

KPMG Transaction Services (Australia) Pty Limited 10 Shelley Street Sydney NSW 2000

INDEPENDENT EXPERT

Deloitte Corporate Finance Pty Limited Grosvenor Place 225 George Street Sydney NSW 2000

FINANCIAL ADVISERS TO SEVEN

Grant Samuel Corporate Finance Pty Limited Level 19 Governor Macquarie Tower 1 Farrer Place Sydney NSW 2000

TAX ADVISER

Ernst & Young Australia Level 33, Ernst & Young Centre, World Square 680 George Street Sydney NSW 2000

J.P. Morgan Australia Limited Level 32 Grosvenor Place 225 George Street Sydney NSW 2000

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AI assistant

SGH LIMITED — M&A Activity 2010

65777_rns_2010-04-29_7b26bc6b-d0e7-448d-a2c2-1926d2ed87cb.pdf

Scheme Booklet PART A

Important notices

Purpose of this Scheme Booklet Important document

Date

Explanatory statement

ASX listing

Role of ASIC, the ASX and the Court

Scheme Booklet not a prospectus

Foreign Seven Shareholders

Investment decisions

Forward looking statements

Pro forma historical and pro forma forecast

financial information

Entitlement to vote

Privacy and personal information

Responsibility for information in this Scheme Booklet

Effect of rounding

Definitions

Photographs and diagrams

References to time and currency

Questions

Table of contents

Overview of this Scheme Booklet and what you should do

WHAT IS THIS SCHEME BOOKLET FOR?

RECOMMENDED PROPOSAL

RELATED PARTY INTERESTS

WHAT SHOULD YOU DO?

STEP 1 – CAREFULLY READ THIS SCHEME BOOKLET

STEP 2 – VOTE ON THE SHARE SCHEME

FOR FURTHER INFORMATION

Key dates

Notes:

Letter from the Deputy Chairman of Seven Network Limited

12 March 2010

PROPOSAL TO CREATE SEVEN GROUP HOLDINGS LIMITED

INDEPENDENT SEVEN DIRECTORS’ RECOMMENDATION

INDEPENDENT BOARD COMMITTEE

INDEPENDENT EXPERT

CONCLUSION

Letter from the Chairman of Australian Capital Equity Pty Limited

12 March 2010

What the Recommended Proposal is creating

OVERVIEW OF SGH

STRENGTHS OF SGH

WHAT YOU WILL RECEIVE

1 SUMMARY OF REASONS WHY YOU SHOULD VOTE IN FAVOUR OF THE SHARE SCHEME

1 CREATION OF A SIGNIFICANT AUSTRALIAN DIVERSIFIED OPERATING AND INVESTMENT GROUP WITH MARKET LEADING BUSINESSES AND INVESTMENTS WITH STRONG REVENUES AND EARNINGS

Notes to the table:

2 WESTRAC GROUP IS A MARKET LEADING BUSINESS WITH SIGNIFICANT GROWTH PROSPECTS

3 COMPELLING FINANCIAL BENEFITS, INCLUDING SIGNIFICANT EARNINGS PER SHARE ACCRETION AND POTENTIAL FOR INCREASED DIVIDENDS OVER TIME

4 MAINTAIN ONGOING OPPORTUNITIES FOR SHAREHOLDER VALUE CREATION

5 SGH WILL BECOME THE PRIMARY INVESTMENT OF ACE

6 INDEPENDENT EXPERT’S CONCLUSION

2 SUMMARY OF REASONS WHY YOU MAY CONSIDER VOTING AGAINST THE SHARE SCHEME

1 CHANGE IN THE NATURE OF INVESTMENT

2 DILUTION OF VOTING POWER DUE TO THE ISSUE OF SGH SHARES TO ACE

3 PRICE UNCERTAINTY

4 LEVERAGE AND INTEREST COSTS

5 RELATED PARTY INTERESTS

3 WHY YOU SHOULD VOTE IN FAVOUR OF THE SHARE SCHEME

THE INDEPENDENT SEVEN DIRECTORS BELIEVE THE SHARE SCHEME OFFERS A NUMBER OF BENEFITS FOR SEVEN SHAREHOLDERS AND UNANIMOUSLY RECOMMEND THAT SEVEN SHAREHOLDERS VOTE IN FAVOUR OF THE SHARE SCHEME, IN THE ABSENCE OF A SUPERIOR PROPOSAL.

CREATION OF A SIGNIFICANT AUSTRALIAN DIVERSIFIED OPERATING AND INVESTMENT GROUP

Relative Profit Before Tax Contribution of Seven and WesTrac Group

WESTRAC GROUP IS A MARKET LEADING BUSINESS WITH SIGNIFICANT GROWTH PROSPECTS

#1 Western Australia market share by sales (FY2009) #1 New South Wales market share by sales (FY2009)

Australian iron ore production (m tonnes)[1]

Urban population growth in China (million)

WESTRAC GROUP’S BUSINESS MODEL PROVIDES RECURRING REVENUE FROM PRODUCT SUPPORT.

WesTrac Group revenue ($ million)

WesTrac Group EBITDA ($ million)

EXPERIENCED MANAGEMENT TEAM WITH A COMBINED 78 YEARS WORKING EXPERIENCE WITH WESTRAC GROUP AND CATERPILLAR.

PRO FORMA FINANCIAL INFORMATION

MAINTAIN ONGOING OPPORTUNITIES FOR SHAREHOLDER VALUE CREATION

INDEPENDENT EXPERT’S CONCLUSION

THE INDEPENDENT EXPERT HAS CONCLUDED THAT THE SHARE SCHEME IS FAIR AND REASONABLE AND THEREFORE IN THE BEST INTERESTS OF UNRELATED SEVEN SHAREHOLDERS. THE INDEPENDENT EXPERT HAS VALUED SGH SHARES IN THE RANGE OF $7.09 TO $8.57 ON A MINORITY BASIS.

4 WHY YOU MAY CONSIDER VOTING AGAINST THE SHARE SCHEME

CHANGE IN THE NATURE OF INVESTMENT

SGH LIMITED M&A Activity 2010