1

Title
This notice is the Takeovers Code (Eastern Hi Fi Group Limited) Exemption Notice 2009.

2

Application
This notice applies to acts or omissions occurring on or after 1 February 2009.

3

Expiry

This notice expires on the close of 31 July 2009.

4

Interpretation

(1)

In this notice, unless the context otherwise requires,-

Act means the Takeovers Act 1993

Code means the Takeovers Code under the Act

EHF means Eastern Hi Fi Group Limited

meeting means the meeting of the shareholders of EHF that is to be held on or about 25 February 2009 to consider, amongst other things, whether to approve, for the purposes of rule 7(d) of the Code, the allotments of voting securities to James Ian Urquhart pursuant to the rights issue and the supplementary placement

notice of meeting means the notice of meeting to be sent to the shareholders of EHF in respect of the meeting

rights issue means the rights issue to be conducted by EHF under a prospectus to be registered following the meeting

supplementary placement means the allotment to James Ian Urquhart of the number of voting securities that, in addition to the number of voting securities allotted to him under the rights issue, would be required to fully convert the loan of $1 million provided by him to the company pursuant to a loan agreement dated 12 December 2008

voting security means a voting security in EHF.

(2)

In this notice, a reference to a person increasing voting control is a reference to the person becoming the holder or controller of an increased percentage of the voting rights in EHF.

(3)

Any term or expression that is defined in the Act or the Code and used, but not defined, in this notice has the same meaning as in the Act or the Code.

5

Exemption from rule 7(d) of Code in respect of rights issue

James Ian Urquhart is exempted from rule 7(d) of the Code in respect of any increase in his voting control as a result of the allotment of voting securities to him under the rights issue and the supplementary placement to the extent that rule 7(d) requires the notice of meeting to comply with rule 16(b) of the Code.

6

Exemption from rule 16(b) of Code in respect of notice of meeting

EHF is exempted from rule 16(b) of the Code in respect of the notice of meeting.

7

Condition of exemptions in clauses 5 and 6 relating to notice of meeting

The exemptions in clauses 5 and 6 are subject to the condition that the notice of meeting contains, or is accompanied by, the following particulars:

1. the maximum number of voting securities that could be allotted to James Ian Urquhart under the rights issue and the supplementary placement:
2. the maximum number of voting securities that could be allotted to James Ian Urquhart under the rights issue and the supplementary placement, expressed as a percentage of the total voting securities on issue after those allotments:
3. the maximum percentage of the total voting securities that could be held or controlled by James Ian Urquhart after the allotment of voting securities under the rights issue and the supplementary placement:
4. the maximum percentage of the total voting securities that could be held or controlled by James Ian Urquhart and his associates after the allotment of voting securities under the rights issue and the supplementary placement.

The matters referred to in subclause (1)(a) to (d) must be calculated on the basis that there are no changes to the total number of voting securities on issue between the date of the notice of meeting and the expiry of this notice other than as a result of the rights issue and the supplementary placement.

8

Further conditions of exemptions in clauses 5 and 6 relating to notice of meeting

The exemptions in clauses 5 and 6 are subject to the further conditions that-

1. the notice of meeting contains, or is accompanied by,-
   1. full particulars of the rights issue and the supplementary placement; and
   2. a summary of the terms and conditions of the exemptions granted under this notice; and
2. the notice of meeting displays, in a prominent position, a disclaimer stating that by exempting James Ian Urquhart from rule 7(d) of the Code, and EHF from rule 16(b) of the Code, the Takeovers Panel is-
   1. neither endorsing nor supporting the accuracy or reliability of the contents of the notice of meeting; and
   2. not implying it has a view on the merits of the proposed allotment of voting securities to James Ian Urquhart under the rights issue or the supplementary placement; and
3. the form of the notice of meeting is approved by the Takeovers Panel.

9

Application of exemption in clause 5

The exemption in clause 5 does not apply-

1. if there is an increase in the voting control of James Ian Urquhart, except as a result of an allotment of voting securities under the rights issue or the supplementary placement, before completion of the rights issue or the supplementary placement (whichever is the later):
2. to an increase in the voting control of James Ian Urquhart as a result of an allotment of voting securities under the rights issue or the supplementary placement if, immediately after the completion of the allotment, the total percentage of voting securities held or controlled by James Ian Urquhart is greater than the maximum percentage of voting securities that could be held or controlled by James Ian Urquhart as disclosed in the notice of meeting in accordance with clause 7(1)(c).