Mortgage trusts are one of the oldest examples of unit trusts. Investors’ funds are pooled and subsequently deployed in loans secured by mortgages over real property. The terms under which funds are invested, pooled and lent to third parties must be in accordance with the Constitution and any representations made in the Product Disclosure Statement (PDS).

Mortgage trusts have existed in Australia since at least the early 1970’s and are now commonly regulated as managed investment schemes required to be registered with ASIC and subject to the requirements of Chapter 5C of the Corporations Act.

The attraction of a unit trust is that it allows investors to do collectively what they otherwise generally cannot do individually, either because of a lack of time, lack of expertise, lack of sufficient capital, or a combination of these factors.

The East Coast Mortgage Trust is an unlisted unit trust registered as a managed investment scheme under the Corporations Act.

The Trust operates as a pooled mortgage trust where your funds are combined with others and invested in a diversified portfolio of commercial loans and other Authorised Investments.
The Trust is currently operating as a non-liquid managed investment scheme. This means Units can only be redeemed under a Withdrawal Offer. For more details on withdrawals from the Trust refer to page 13 of the Product Disclosure Document.

The current objective of the Board is (subject to market conditions) to move the Trust back to a liquid scheme status and enable it to process and pay valid redemption requests within an appropriate period.

Investors should note this is currently an objective of the Board and not a forecast that this will in fact occur. It is possible the Trust will continue to operate as a non liquid managed investment scheme for some significant period into the future.

The Trust is managed by Lismore Management Corporation, the responsible entity, which is charged with the responsibility under the Constitution and Corporations Act to pool, invest and manage Unit Holder funds.

The East Coast Mortgage Trust’s origins date back to early 1961 when a group of local Northern New South Wales professionals saw the need for an investment facility that could provide a place for locals to invest funds under external management, and provide others with the opportunity to borrow money under the supervision of management.

The East Coast Mortgage Trust in its current form was established by a Trust Deed dated 20 June 1989 and amended from time to time.

East Coast Mortgage Trust investors pool their monies with other like minded investors in loans secured primarily by mortgages over real property.

You benefit through the opportunity to participate in a diversity of investments otherwise outside your individual capacity whilst earning a return and enjoying the security of a pooled, mortgage backed investment.

As a Unit Holder in the Trust you:

• will enjoy professional management of your funds, free from the responsibility and inconvenience associated with the administration of the investment, a task which is performed by us;
• invest without incurring any entry fees;
• can choose from different returns to suit your particular circumstances and investment goals; and
• know that your money is earning a return daily and paid monthly (subject to availability).

In return for an investment in the Trust, you will be issued Units in the Trust and receive distributions. The number of Units you receive depends on the amount invested. Units are generally issued at $1.00 per Unit so that if $1000.00 is invested you will generally receive 1000 Units.

Trust income will be paid as a ‘Distribution’ calculated on the basis of the number of Units you held during the preceding month. Distribution amounts generally accrue from the next business day after the Trust receives investment moneys along with a valid Application Form.

The current rate of return is available on request or via our website at www.ecmt.com.au.

The East Coast Mortgage Trust also notifies you of any rate change in advance. We provide monthly statements to East Coast Advantage Investors and six monthly statements to East Coast Premium Choice Investors so you can see exactly what your investment is earning.

Investors in East Coast Mortgage Trust are offered the choice of two investment options:

• East Coast Premium Choice offering a premium rate of return for investors who elect not to participate in Periodic Offers; and
• East Coast Advantage providing regular access to funds through participating in Withdrawal Offers when they are made.

Yes. We recognise that investors may prefer to divide their investment between East Coast Premium Choice and East Coast Advantage investment options. You can split your total investment between these two options by speaking to one of our staff and specifying how you want your funds to be applied to each investment option.

In such cases the effective Distribution rate paid will depend on the investment balance in each option.

The Withdrawal Fee is a percentage deducted from the current variable distribution rate. It applies where investors choose to invest under East Coast Advantage. The Withdrawal Fee is currently set at 1.00% p.a. but may vary from time to time. We will publish advice of a change in the Withdrawal Fee at least 30 days prior to any change.

For Example:

* Rates expressed are indicative at the time of publication of the Product Disclosure Document, are not a forecast and may vary. Current rates are available at any of our offices.

The current economic climate has placed unprecedented demands on the operations of the Trust and we believe the fairest way to address these costs is on a user pay basis via an ongoing ‘Withdrawal Fee’ deducted from East Coast Advantage Unit Holders’ Distribution entitlements.

The Withdrawal Fee will not be paid to Lismore Management Corporation but rather will form part of the income of the Trust which may be distributed to Unit Holders.

The purpose of the introduction of the East Coast Advantage investment option and the Withdrawal Fee is to allow those Unit Holders who are seeking to withdraw their investment in the Trust the opportunity to do so.

This approach also rewards longer term investors with the potential for higher returns by selecting the East Coast Premium Choice investment option. The majority of our investors have invested with the Trust for many years, receiving regular distributions and have rarely sought to withdraw their investment. It is these investors who we consider would benefit from this approach.

Provided sufficient investors participate in East Coast Premium Choice, this will significantly reduce the redemption pressures placed on the Trust.

On 7 October 2009, a meeting of the Trust’s Unit Holders was held. At the meeting, Unit Holders were asked to approve the implementation of the East Coast Premium Choice and East Coast Advantage investment options.

The outcome saw 96% of votes cast by Unit Holders in favour of the implementation of the East Coast Premium Choice and East Coast Advantage investment options. Following the meeting, all existing Unit Holders are deemed by operation of the amendments to the Trust’s
constitution, to be East Coast Premium Choice investors.

You can switch between the East Coast Premium Choice and East Coast Advantage investment options by completing the Investment Choice Authority. If you switch from East Coast Advantage to East Coast Premium Choice we will amend your investment and
cease charging the Withdrawal Fee the first Business Day after a valid Investment Choice Authority is received at our offices.

Any previously lodged but incomplete redemption requests will be rendered invalid.

If you switch from East Coast Premium Choice to East Coast Advantage the switch will be effective on the day 6 months after your Investment Choice Authority is accepted. From that day you will be charged the Withdrawal Fee and be eligible to participate in any Withdrawal Offer.

No. Interest rates on loans to borrowers are generally variable and the Distributions paid to you by the Trust vary accordingly. Whilst some loans made by the Trust may have a fixed interest rate, it is our present policy to have the majority of loans on variable rates so that rates can be adjusted to reflect market conditions.

Distributions are paid monthly subject to available funds.

You may elect to have your Distribution paid by electronic funds transfer (EFT) to your nominated account or reinvested with your existing investment by completing the appropriate section of the Application Form or advising us in writing. Unless you indicate otherwise on the Application Form, we will reinvest all your Distributions.

Units issued on the reinvestment of Distributions will earn income from the next day after the Distributions are allocated. Please mail us an original written request, if you wish to change your Distribution instructions.

No, Distributions are not guaranteed. The level of Distributions in any particular period is determined by the earnings of the Trust in that period from mortgages, cash, income-producing properties and other Authorised Investments less fees and expenses incurred.

As with any investment there are risks. For the particular risks of this investment please refer to page 22 of the Product Disclosure Statement or the appropriate section of our website.

No.

The Trust is currently operating as a non-liquid managed investment scheme. This means, redemptions from the Trust can only be made under a Withdrawal Offer and only for those units held in the East Coast Advantage Investment option.

We recommend investors seek independent financial advice based on their particular needs before making a decision to invest.

Trust funds are primarily invested in first mortgages secured over real property and other Authorsed Investments such as income-producing property. These investments are by their nature relatively long term and we encourage investors to consider East Coast Mortgage Trust as a medium to long term investment.

Lismore Management Corporation intends for so long as the Trust remains a non liquid managed investment scheme, to make periodic Withdrawal Offers, subject to the availability of sufficient liquid assets. While there is no obligation for us to make a Withdrawal Offer our objective is to make offers to East Coast Advantage investors regularly subject to the availability of sufficient liquid assets.

Before making a Withdrawal Offer, we will determine the amount of liquid funds available for redemptions and the terms under which the offer will be made based on the available liquidity in the Trust and other conditions that prevail at the time.

Lismore Management Corporation must notify all eligible East Coast Advantage Unit Holders of the following information in relation to any Withdrawal Offer;

1. the period in which the offer will remain open;
2. the amount of funds that will be used to satisfy Withdrawal requests; and
3. what will happen if the Withdrawal request is over-subscribed.

In order to participate in a Withdrawal Offer you must be an eligible East Coast Advantage Unit Holder and lodge an original withdrawal request with Lismore Management Corporation before the Withdrawal Offer closes. Fax copies will not be accepted.

The total pooled amount of the Withdrawal Offers and their frequency will be dependent on the available cash and the operational requirements of the Trust. We consider our primary focus should be in maintaining an appropriate level of Distributions from the Trust to Unit Holders.

When a Withdrawal Offer is made, all East Coast Advantage Unit Holders will be advised of the terms of the Withdrawal Offer. Those Unit holders can then choose to elect to redeem all or part of their investment. The conditions under which a redemption offer is made will be explained in the offer. Generally if a Withdrawal Offer is oversubscribed investors who lodged a redemption request will receive an amount calculated in accordance with the formula set out below:

We cannot guarantee either the timing of Withdrawal Offers or the amount you will receive under any offer that is made.

Application Forms are enclosed in the Supplementary Product Disclosure Statement (SPDS). New investors can invest by completing the Application Form – New Investors Only.

Existing investors may add to their investment at any time by completing the Application Form – Existing Investors Only.

Application Forms should only ever be completed by persons who have received and had an opportunity to read the PDS and SPDS. Please contact us 02 6622 2092 between 9am and 5pm, Monday to Friday or download a copy from this website if you require a full copy of the PDS and SPDS with application forms attached.

The minimum investment amount permitted in relation to an investment in the Trust is $1000.00. Your completed Application Form needs to be posted or delivered to our offices in Lismore or Ballina together with satisfactory proof of identification and arrangements for payment of the Application Money (either cheque or EFT or direct debit). Cash will not be accepted.

Detailed instructions on how to complete the Application Form and what constitutes satisfactory proof of identification are contained in the SPDS. We reserve the right to accept or reject in full or part of any Application Form.

Currently no. Whilst the Trust is operated as a non-liquid managed investment scheme, applicants will not be entitled to any cooling-off rights.

The use of tax file numbers is strictly regulated by privacy and taxation laws. You do not have to give us your tax file number or exemption details but if you do not supply this information, taxation laws require us to deduct from your Distribution entitlement tax at the highest marginal rate (plus the Medicare Levy).

We will provide you with regular information about your investment via various channels, including:

• confirmation of the acceptance of an initial investment in the form of a statement;
• a regular statement which includes appropriate taxation information;
• the East Coast Online Access facility;
• In the case of the Trust’s annual report & quarterly performance against industry benchmarks via our website at www.ecmt.com.au;
• on request at any time.

You may also notify us in writing if you do not wish to receive the above information or if you would prefer to access the information electronically via our website at www.ecmt.com.au. Please contact our staff for further details.

Investors can check the status of their investment through our website www.ecmt.com.au once they have applied and been set up as a user of East Coast Online Access.
East Coast Online Access offers investors the ability to access account information such as balances and statements when you need them, generally 24 hours a day, 7 days a week.

Applications for East Coast Online Access are available on the website or by calling at one of our offices in Lismore or Ballina. Once the original application is received your application will be processed generally within 24 hours.

Perpetual Trustee Company Ltd is the Custodian of the Trust. As Custodian, it holds all cash and securities of the Trust. Funds are advanced to borrowers only after certification that documents are in order by a firm of solicitors appointed by us. Funds are released by Perpetual Trustee Company Ltd at our direction on receipt of this certification.

Although the Custodian undertakes this role as custodian of the Trust, it is important to understand that the Custodian is not a trustee appointed to protect investors.

Generally, the income you receive as a result of your investment in the Trust will form part of your taxable income in the relevant financial year. Advice regarding your taxation position should be obtained from your accountant or financial adviser.

Further information on taxation is contained in page 25 of the PDS.

Units in the Trust are not listed on any stock exchange and we do not propose to list the Units. At the time of the issue of the PDS the Units have not been rated by any credit rating agency however they may be in the future.

Trust funds are primarily invested in first mortgages secured over real property and other Authorised Investments such as income-producing property. These investments are by their nature relatively long term and we encourage investors to consider East Coast Mortgage Trust as a medium to long term investment.

Investors in East Coast Mortgage Trust may elect not to participate in periodic (Withdrawal) Offers and in doing so take advantage of the premium rate of return that the Trust offers. This is the East Coast Premium Choice investment option.

When you invest in East Coast Premium Choice you will be offered our premium rate of return. You must select the East Coast Premium Choice investment option, when completing the required section of the Application Form. East Coast Premium Choice investors agree:

• Not to receive or participate in Withdrawal Offers when they are made;
• To only change their instructions to switch from East Coast Premium Choice to East Coast Advantage after first giving a minimum of 6 months notice; and
• Not to request a transfer of funds from East Coast Premium Choice to East Coast Advantage without first giving a minimum of 6 months notice.

East Coast Advantage investors can switch to East Coast Premium Choice immediately by contacting us at our offices in Lismore or Ballina.
You are under no obligation to lodge a redemption request. You can allow your investment to continue as long as you like, taking advantage of the premium rate of return offered by East Coast Mortgage Trust.

Should you change your mind and elect to commence participating in Withdrawal Offers you must complete an Investment Choice Authority Form.
You will be eligible to take part in Withdrawal Offers (when they are made) following expiration of the 6 months notice period which will commence from the date your authority form is accepted. The Withdrawal Fee will also apply from the expiration of the 6 month notice period.

We cannot guarantee either the timing of Periodic Redemption Offers or the amount you will receive under any offer that is made.

Investors who choose to invest all or part of their funds in East Coast Advantage are able to participate in Periodic Redemption Offers whenever they are made. In choosing to take advantage of greater levels of access these investors agree to be charged a Withdrawal Fee.

East Coast Advantage investors can switch or transfer funds to East Coast Premium Choice at any time. In all other ways investing as an East Coast Advantage investors is the same as under East Coast Premium Choice.

If you wish to participate in Withdrawal Offers made from time to time, you should select the East Coast Advantage investment option when completing the Application Form.

Whilst the Trust is non-liquid, from time to time and subject to the availability of sufficient liquid funds, Lismore Management Corporation may make Withdrawal Offers under which eligible East Coast Advantage holders will be able to request that their Units be redeemed subject to the terms and conditions applying to the Withdrawal Offer.

East Coast Advantage unit holders are subject to a Withdrawal Fee. At any time, an East Coast Advantage Unit Holder may switch to the East Coast Premium Choice investment.

The Withdrawal Fee is a percentage deducted from the current variable distribution rate. It applies where investors choose to invest under East Coast Advantage. The Withdrawal Fee is currently set at 1.00% p.a. but may vary from time to time. We will publish advice of a change in the Withdrawal Fee at least 30 days prior to any change.

For Example:

* Rates expressed are indicative at the time of publication of the Product Disclosure Document, are not a forecast and may vary. Current rates are available at any of our offices.

The current economic climate has placed unprecedented demands on the operations of the Trust and we believe the fairest way to address these costs is on a user pay basis via an ongoing ‘Withdrawal Fee’ deducted from East Coast Advantage Unit Holders’ Distribution entitlements.

The Withdrawal Fee will not be paid to Lismore Management Corporation but rather will form part of the income of the Trust which may be distributed to Unit Holders.

The purpose of the introduction of the East Coast Advantage investment option and the Withdrawal Fee is to allow those Unit Holders who are seeking to withdraw their investment in the Trust the opportunity to do so.

This approach also rewards longer term investors with the potential for higher returns by selecting the East Coast Premium Choice investment option. The majority of our investors have invested with the Trust for many years, receiving regular distributions and have rarely sought to withdraw their investment. It is these investors who we consider would benefit from this approach.

Provided sufficient investors participate in East Coast Premium Choice, this will significantly reduce the redemption pressures placed on the Trust.

The Trust is currently operating as a non-liquid managed investment scheme. This means, redemptions from the Trust can only be made under a Withdrawal Offer and only for those units held in the East Coast Advantage Investment option.

We recommend investors seek independent financial advice based on their particular needs before making a decision to invest.

Trust funds are primarily invested in first mortgages secured over real property and other Authorsed Investments such as income-producing property. These investments are by their nature relatively long term and we encourage investors to consider East Coast Mortgage Trust as a medium to long term investment.

Lismore Management Corporation intends for so long as the Trust remains a non liquid managed investment scheme, to make periodic Withdrawal Offers, subject to the availability of sufficient liquid assets. While there is no obligation for us to make a Withdrawal Offer our objective is to make offers to East Coast Advantage investors regularly subject to the availability of sufficient liquid assets.

Before making a Withdrawal Offer, we will determine the amount of liquid funds available for redemptions and the terms under which the offer will be made based on the available liquidity in the Trust and other conditions that prevail at the time.

Lismore Management Corporation must notify all eligible East Coast Advantage Unit Holders of the following information in relation to any Withdrawal Offer;

1. the period in which the offer will remain open;
2. the amount of funds that will be used to satisfy Withdrawal requests; and
3. what will happen if the Withdrawal request is over-subscribed.

In order to participate in a Withdrawal Offer you must be an eligible East Coast Advantage Unit Holder and lodge an original withdrawal request with Lismore Management Corporation before the Withdrawal Offer closes. Fax copies will not be accepted.

The total pooled amount of the Withdrawal Offers and their frequency will be dependent on the available cash and the operational requirements of the Trust. We consider our primary focus should be in maintaining an appropriate level of Distributions from the Trust to Unit Holders.

When a Withdrawal Offer is made, all East Coast Advantage Unit Holders will be advised of the terms of the Withdrawal Offer. Those Unit holders can then choose to elect to redeem all or part of their investment. The conditions under which a redemption offer is made will be explained in the offer. Generally if a Withdrawal Offer is oversubscribed investors who lodged a redemption request will receive an amount calculated in accordance with the formula set out below:

We cannot guarantee either the timing of Withdrawal Offers or the amount you will receive under any offer that is made.