17 July 2008Kate KidsonPrincipal AdviserASX LimitedRialto South...

17 July 2008

Kate Kidson

Principal Adviser
ASX Limited
Rialto South Tower
L45, 525 Collins Street
Melbourne VIC 3000

Via email: [email protected]


Dear Kate,

Luminus Systems Limited (the “Company”)

I refer to your letter dated 15 July 2008.

Your letter sought a response to 11 questions or queries.
The following statements address the substance of those questions or queries by reference to the numbering in
your letter.


Q1. At the time that the Companies Update was released to the market, was the Company aware of the key
terms of the margin lending arrangements of any, or all, of the Directors, including the respective trigger
points, the right of the lender to sell unilaterally and any other material details (the “Information”)?

A. Yes. At the time that the Companies Update was released to the market, the Company was aware of the
margin lending arrangements, including the respective trigger points, the right to the lender to sell
unilaterally and any other material details (the “Information”)


Q2. If, at the time that the Companies Update was released, the Company was aware of the Information in
respect of any, or all, of the Directors’ margin lending arrangements, did the Company consider that the
Information was material to the Company?

A. The company did not consider that the Information was material to the Company.



Q3 If, at the time that the Companies Update was released, the Company was aware of the Information in
respect of any, or all, of the Directors’ margin lending arrangements, and the Company did not consider
that the Information was material; please advise the basis on which the Company did not consider the
Information to be material to the Company.

A. The relevant shares formed part of a much larger portfolio of shares and other assets, which were the
subject of financing arrangements between interests associated with Ian Pattison and Sal Catalano (the
relevant directors) and PSL.

The larger portfolio was in turn the subject of arrangements with PSL’s financiers. In particular, the
relevant shares were the subjects of a term loan from ANZ to PSL. The terms and conditions of the term
loan did not include a trigger event relating to the value of the shares in the Company. Moreover, given the
nature of the arrangements between PSL and ANZ the directors believed that the loans would not be called
and as such the circumstances under which the loan would be called were sufficiently remote to not
warrant disclosure to the market.

In any event, the market understood that the Company was effectively controlled by the principals of
PSL in circumstances where their shareholding would form part of a portfolio the subject of a financing arrangement.

The top 20 shareholders in the Company control in excess of 90.00% of the capital of the Company. The directors are of the opinion that all of these shareholders were aware
or should have been aware of these arrangements.

In their filings of Forms 604 (Notice of Change of interests of substantial holder) and Appendix 3Y
Forms substantial interests the relevant directors noted that their interests were associated with PSL.



Q4. If, at the time that the Companies Update was released, the Company was aware of the Information
in respect of any, or all, of the Directors’ margin lending arrangements and the Company considered
that the Information was material, please advise why the Information was not released to the market
at that time.

A Not applicable



Q5. If the answer to question 1 is “no”, please advise whether, subsequent to the release of the
Companies Update, the Company became aware of the Information in relation to the margin lending
arrangements of any, or all, of the Directors.

A Not applicable



Q6. If, subsequent to the release of the Companies Update, the Company did become aware of the
Information in respect of any, or all, of the Directors margin lending arrangements, please advise
when it became aware of the Information.

A Not applicable



Q7. In the light of the guidance contained in the Companies’ Update, please advise what steps were
taken by the Company in order to ascertain whether the Information in relation to the margin lending
arrangements of the Directors, whether considered individually or collectively, was material to the
Company.

A The directors of the Company formed the view that the margin lending arrangements with PSL would
not be called and thus the arrangements were not material to the Company.



Q8. If, subsequent to the release of the Companies’ Update, the Company became aware of the
Information in relation to the margin lending arrangements of any, or all, of the Directors please
advise whether the Company considered that the Information was material to the Company?

A Refer to the answer to question 2.



Q9. If, subsequent to the release of the Companies’ Update, the Company became aware of the
Information in relation to the margin lending arrangements of any, or all, of the Directors and the
Company did not consider that the Information was material, please advise the basis on which the
Company did not consider the Information to be material to the Company.

A Refer to the answer to question 3.



Q10. If, subsequent to the release of the Companies’ Update, the Company became aware of the
Information in relation to the margin lending arrangements of any, or all, of the Directors and the
Company considered that the Information was material, please advise why the Information was not
released to the market at that time.

A Not relevant because not material, but subsequent to 4 July, legal advice was sought.



Q11. Please confirm that the Company is in compliance with the listing rules and, in particular, listing rule
3.1.

A Confirmed.

Kind Regards,
Ian Pattison
Director





QUERY FROM ASX

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15 July 2008
Ian Pattison
Company Secretary
Luminus Systems Limited
Level 4, 349 Collins Street
Melbourne VIC
By email only



Dear Ian

Luminus Systems Limited (the "Company")


We refer to the following.

• The Company’s request for a trading halt on 4 July 2008.

• The Company’s response titled “Appointment of Receiver and Manager to Primebroker Securities
Limited (“PSL”)” to an ASX Limited (“ASX”) letter dated 7 July 2008 that was given to ASX on 8 July
2008 and which states, among other things:
“The names of related party security holders who are parties to the Margin Finance Facilities with PSL
and the number of securities held are:
Interests associated with Ian Pattison 105,758
Interests associated with Sal Catalano 88,837,450
Interests associated with both Ian Pattison and Sal Catalano 1,838,409,835”


• The initial substantial shareholder notice that was lodged with ASX by Australia and New Zealand
Banking Group Limited (“ANZ”) on 8 July 2008 and cross-released under the Company’s ASX Code on
the same day (the “ANZ Announcement”). The ANZ Announcement discloses ANZ’s shareholding of
2,521,768,436 ordinary shares (68.47%) in the Company as at 4 July 2008.


ANZ advised it had acquired a relevant interest in the shares as a result of the appointment of receivers and managers in respect of certain property of PSL under a fixed and floating charge given by PSL in favour of ANZ
dated 12 February 2008 and that PSL holds further Company shares through ANZ Nominees Limited.

It was indicated that at that time it was not known whether PSL’s interest in the latter shares is subject to
the charge.

ASX Limited
ABN 98 008 624 691
Level 45
Rialto South Tower
525 Collins Street
Melbourne VIC 3000
GPO Box 1784Q
Melbourne
VIC 3001
Telephone 61 (03) 9617 7842
Facsimile 61 (03) 9614 0303
Internet http://www.asx.com.au


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• ASX’s Companies Update no. 02/08 dated 29 February 2008 that refers to the disclosure of material
information relating to the financing arrangements of entities and existence of terms of any finance
arrangements that may be in place in relation to directors’ shareholdings e.g. margin loans.

As you are aware listing rule 3.1 requires an entity, once it becomes aware of any information concerning it that a
reasonable person would expect to have a material effect on the price or value of the entity’s securities, to
immediately tell ASX that information.

The exceptions to this requirement are set out in listing rule 3.1A.

I would also like to draw your attention to the definition of “aware” in Chapter 19 of the listing rules. This
definition states that:

“an entity becomes aware of information if a director or executive director (in the case of a trust, director
or executive officer of the responsible entity or management company) has, or ought reasonably to
have, come into possession of the information in the course of the performance of their duties as a
director or executive officer of that entity.

”Furthermore, paragraph 18 of Guidance Note 8 states:

“Once a director or executive officer becomes aware of information, he or she must immediately
consider whether that information should be given to ASX. An entity cannot delay giving information to
ASX pending formal sign-off or adoption by the board, for example.”

Listing rule 3.1A sets out an exception from the requirement to make immediate disclosure, provided that each of
the following are satisfied.

“3.1A.1 A reasonable person would not expect the information to be disclosed.

3.1A.2 The information is confidential and ASX has not formed the view that the information has
ceased to be confidential.

3.1A.3 One or more of the following applies.

• It would be a breach of a law to disclose the information.

• The information concerns an incomplete proposal or negotiation.

• The information comprises matters of supposition or is insufficiently definite to
warrant disclosure.

• The information is generated for the internal management purposes of the entity.

• The information is a trade secret.”

ASX’s Companies Update no. 02/08 states the following:
“Where a director has entered into margin loan or similar funding arrangements for a material number of
securities, ASX advises that listing rule 3.1 (PDF 204 KB), in appropriate circumstances, may operate to
require the entity to disclose the key terms of the arrangements, including the number of securities
involved, the trigger points, the right of the lender to sell unilaterally and any other material details.
Whether a margin loan arrangement is material under listing rule 3.1 is a matter which the company
must decide having regard to the nature of its operations and the particular circumstances of the
company.”


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Having regard to the above definition, listing rule 3.1 and Companies Update 02/08 (“Companies Update”), we
ask that you answer the following questions.

1. At the time that the Companies Update was released to the market, was the Company aware of the key
terms of the margin lending arrangements of any, or all, of the Directors, including the respective trigger
points, the right of the lender to sell unilaterally and any other material details (the “Information”)?

2. If, at the time that the Companies Update was released, the Company was aware of the Information in
respect of any, or all, of the Directors’ margin lending arrangements, did the Company consider that the
Information was material to the Company?

3. If, at the time that the Companies Update was released, the Company was aware of the Information in
respect of any, or all, of the Directors’ margin lending arrangements, and the Company did not consider
that the Information was material, please advise the basis on which the Company did not consider the
Information to be material to the Company.

4. If, at the time that the Companies Update was released, the Company was aware of the Information in
respect of any, or all, of the Directors’ margin lending arrangements and the Company considered that
the Information was material, please advise why the Information was not released to the market at that
time.

5. If the answer to question 1 is “no”, please advise whether, subsequent to the release of the Companies
Update, the Company became aware of the Information in relation to the margin lending arrangements
of any, or all, of the Directors.

6. If, subsequent to the release of the Companies Update, the Company did become aware of the
Information in respect of any, or all, of the Directors margin lending arrangements, please advise when
it became aware of the Information.

7. In the light of the guidance contained in the Companies’ Update, please advise what steps were taken
by the Company in order to ascertain whether the Information in relation to the margin lending
arrangements of the Directors, whether considered individually or collectively, was material to the
Company.

8. If, subsequent to the release of the Companies’ Update, the Company became aware of the Information
in relation to the margin lending arrangements of any, or all, of the Directors please advise whether the
Company considered that the Information was material to the Company?

9. If, subsequent to the release of the Companies’ Update, the Company became aware of the Information
in relation to the margin lending arrangements of any, or all, of the Directors and the Company did not
consider that the Information was material, please advise the basis on which the Company did not
consider the Information to be material to the Company.

10. If, subsequent to the release of the Companies’ Update, the Company became aware of the Information
in relation to the margin lending arrangements of any, or all, of the Directors and the Company
considered that the Information was material, please advise why the Information was not released to the
market at that time.

11. Please confirm that the Company is in compliance with the listing rules and, in particular, listing rule 3.1.
Your response should be sent to me by return e-mail or by facsimile on facsimile number (03) 9614 0303. It
should not be sent to the Company Announcements Office.
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Unless the information is required immediately under listing rule 3.1, a response is requested as soon as
possible and, in any event, not later than 4.00pm EST on Thursday, 17 July 2008.
Please note that ASX reserves the right, under listing rule 18.7A, to release this letter and the Company’s
response to the market. Accordingly, it would be appreciated if you would prepare your response in a form
suitable for release to the market and separately address each of the questions asked.

If you have any queries in relation to the above please let me know.


Yours sincerely,
Sent by electronic means without signature
Kate Kidson
Principal Adviser, Issuers (Melbourne)