EMERGING LEADERS INVESTMENT LTD 
By Emerging Leaders Investment Limited
ABN: 29 107 197 795
Company Announcements Office
Australian Stock Exchange Limited
20 Bridge Street
SYDNEY NSW 2000
19 July 2013
Emerging Leaders lnvestment Limited proposed Reorganisation
The Board of Emerging Leaders lnvestment Limited (ELI) has been aware for some time of the concerns that ELI's share price has consistently traded below the leve! of ELI's net tangible assets per share (NTA). The discount has persisted despite the consistent outperformance of ELI's investment portfolio relative to the portfolio's benchmark (ELI has had a 4.63%pa excess return aver the benchmark return since inception in March 2005).
As previously announced:
• In March 2013, ELI received a requisition from Solhurst Pty Limited ATF Solhurst Pty Limited Superannuation Fund (Solhurst) to convene a meeting of ELI shareholders. Solhurst informed the Board that it intended to take control of the ELI Board and wind up ELI. ELI obtained legai advice and determined that the requisition was invalid.
• In May 2013, ELI received a further notice from Solhurst stating that Solhurst intends to move resolutions under section 2030 ofthe Corporations Act at a generai meeting to be calied under section 249F of the Corporations Act.
• ELI aIso received nomination notices from Solhurst and RBC lnvestor Services Australia Nominees Pty Limited (holding ELI shares as custodian far entities in the Wilson Asset Management Group) nominating Reubert Hayes, Matthew Stubbs and Peter Kennedy as directors of ELI.
As previously announced, the lndependent Directors of ELI (being John Evans and John Skippen) 1 were informed by Ausbil Dexia Limited (Ausbil) that, in the event of a winding up of ELI as a result of Solhurst having gained contrai of the Board, Ausbil would commence legai action against ELI far damages. Such action, if successful, would likely result in a substantial damages daim against ELI,
1 Paul Xiradis is aIso a member of the Board of ELI but is not an lndependent Director because heisa shareholder in, and CEO of, Ausbil. Mr Xiradis is also a shareholder in ELI. Mr Xiradis did not participate in the Board decision to propose the Reorganisation.
primarily due to the value of the Funds Management Agreement between ELI and Ausbil (which has a term of 25 years from 18 January 2005) (FMA).
In response to the steps taken by two of ELI's major shareholders as referred to above, the Board has investigated alternatives to reduce the discount toNTA without triggering a claim for damages against ELI under the FMA.
Following that investigation by the Board, the lndependent Directors have determined that the best available alternative is to propose to ELI shareholders a Reorganisation of ELI which will, if implemented, result in the discount toNTA being eliminated, through eligible ELI shareholders receiving units in an unlisted unit trust: Ausbillnvestment Trusts- Australian Emerging Leaders Fund (AELF) and non-eligible ELI shareholders receiving cash.
AELF has an identical investment strategy to ELI's and is managed by the same investment manager, Ausbil. lmportantly, AELF does not incur the costs associated with a listed vehicle, and due to its
size, operates under a lower fixed cast structure than ELI (a management fee levied at 0.85% of
AELF's net asset value).
A key aspect of the Reorganisation is that the lndependent Directors have secured Ausbil's agreement (subject to implementation of the Reorganisation) to the early termination of the FMA fora termination fee of $464,000, which the lndependent Directors have established (by obtaining an independent valuation) is a discount to the value of the FMA.
lmplementation AgreementTo effect the Reorganisation, ELI has entered into an implementation agreement with Ausbil (lmplementation Agreement). Under the lmplementation Agreement, the parties' obligations to implement the Reorganisation are conditional on a number of customary conditions precedent, including ELI shareholder approvai, regulatory approvals andATO clearance. The lmplementation Agreement aIso contains customary termination provisions for both ELI and Ausbil including termination for: materia! breach by the other party that is not rectified; change of director recommendations; ELI shareholder resolutions not being passed; and non-satisfaction of conditions precedent. In addition, Ausbil may terminate if there is a change in the ELI Board.
Key Steps in Reorganisation
The lmplementation Agreement also provides that, subject to approvai by ELI shareholders andali other required regulatory approvals, the Reorganisation will be implemented by a Liquidator approved by shareholders who will undertake the following steps:
• Ali ELI shareholders will receive value in cash or AELF units equivalent to the NTA after wind up costs (Net NTA) of their holding of ELI shares.
• To achieve this, ELI will transfer its portfolio of investments in-specie to AELF (less an amount of cash sufficient to pay ELI's creditors and wind-up costs and to pay the Cash Distribution to Non-Eiigible Shareholders).
• ELI will apply for and be issued units in the AELF.
• ELI will then make an in-specie distribution of the AELF units to ali ELI shareholders who hold a minimum of 10,000 shares and who are resident in Australia or New Zealand {Eiigible
• Ali ELI shareholders who are not Eligible Shareholders {Non-Eiigible Shareholders) will receive the Net NTA of their holding of ELI shares in cash {Cash Distribution).
• ELI will be voluntarily wound up and delisted.
Following the distribution of AELF units by ELI to Eligible Shareholders, investors will be able to withdraw their units in AELF {subject to the normal terms far redemptions from AELF) at a value determined by referenceto the net asset value of AELF, far settlement on a T+3 basis.
As at close of trading on the ASX on 16 July 2013, ELI had a closing share price of $0.84 versus an estimated NTA of $0.92. Based on those values, it follows that the implementation of the Reorganisation would result in a gain far ELI shareholders (before wind-up costs) of $0.08 per share. lt is estimated that wind-up costs will be approximately $0.025 per share. The net gain implied by the values as at close of trading on 16 July 2013 is therefore estimated to be $0.055 cents per share.
In addition, the Board expects to declare a franked final dividend far the 12 months ending 30 June
2013, payable in September. ELI will further seek to utilise any remaining franking credits via a special distribution, to the extent possible, prior to the winding up of ELI and the distribution of AELF units and cash in the Reorganisation.
In support of the Reorganisation,Solhurst has agreed to withdraw its notice under section 2030 of the Corporations Act.
Wind-up costs
As noted abave, ELI estimates that the wind-up costs of ELI will be approximately $0.025 per share. The estimated wind-up costs will include: $464,000 far termination ofthe FMA; $36,000 far Ausbil
providing assistance to ELI in the period after the AELF units have been issued to ELI and up until ELI
is wound-up; and estimated legai fees and Liquidator fees.
Having assessed the alternatives available to ELI in response to the actions taken by two of ELI's major shareholders referred to abave, the lndependent Directors of ELI consider the Reorganisation to be in the best interests of ELI shareholders and unanimously recommend that ELI shareholders vote in favour of the Reorganisation.
The recommendation set aut abave is subject to no superior proposal emerging.
2 ELI shareholders who hold their shares for the benefit of persons resident outside Australia and New Zealand or for the benefit of US persons may be deemed to be Non-Eiigible Shareholders. The ELI Board reserves the right to treat any Non-Eiigible Shareholder as an Eligible Shareholder, at the Board's discretion.
Next Steps
The proposed Reorganisation will require regulatory and shareholder approvals.
ELI anticipates sending the Explanatory Memorandum, Notice of Meeting and other supporting documentation, providing details of the Reorganisation and the proposed resolutions, to
shareholders in September 20133
Shareholders will aIso receive a product disclosure statement in
relation to the units in AELF to be distributed if the Reorganisation is approved. The shareholders meeting is expected to be held in November 2013.
lf approved, the distribution of AELF units and cash is expected occur in December 2013.
Yours sincerely, John Skippen
Director
3 Ali dates are indicative and subject to change.
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