Pacific First Mortgage Fund(Formerly City Pacific First Mortgage Fund)

ARSN 088 139 477

PFMF Investor CommitteeMeeting #2 Report

Formalities

Meeting was formally opened by the Chairman and everyone was advised of their obligations as participating members of the Investor Committee. The Chairman also confirmed that the purpose of the Meeting is to allow members to engage in open discussion with a view to representing the interests of all Unitholders

Non-BT Meeting

A meeting of non-BT Members of the Committee had occurred prior to the IC Meeting and the following matters were noted:

1. Unitholders are now faced with a different investment profile as their investment is no longer “at call” and a portion of the Fund is exposed to property and development like returns

2. As far as practicable, Unitholders should be given an INDIVIDUAL CHOICE as to their future participation in the Fund. In order to make this choice, Unitholders need to be fully appraised of the future strategy of the Fund; and,

3. Unitholders desire timely communication regarding the activities and progress of the Investment Manager through all communications lines including the Call Centre, website and mail outs.

Compliance

The Deputy Chairman of the RE, Rodger Bacon, discussed the following matters:

1. The hand-over of the books and records has been completed however some materials are still be sought from the liquidator of CPL;

2. The new third party service providers (Trust Company Fiduciary Service Limited as Custodian and Computershare as Registrar) are performing well;

3. Fund Financial Statements for the Half Year ended 31 December 2009 will be lodged with ASIC by end March 2010. No significant audit issues have been raised to date.

4. A summary of the Financial Statements at 31 December 2009 and of this Investor Committee meeting will be included in a Quarterly Newsletter to Unitholders which will be distributed by the end of March.

5. The consolidation of the Fund’s Constitution has now been completed and will be published in due course.

6. Material updates posted to the website will also be summarised in a quarterly newsletter for distribution to all Unitholders.

Fund Report:

Fund Assets

1. Andrew Griffin provided a detailed update on the current position of the Funds’ Assets ;

2. All Assets are being managed in accordance with an orderly liquidation strategy (no fire sale and currently no development of assets);

3. The timing of cash recoveries from asset sales/refinancing have been reviewed, enabling consideration of payments to Unitholders; and,

4. The performance of the portfolio and the development planning is otherwise satisfactory at this time.

Legal Review

1. Andrew Griffin discussed the outcome of the legal review conducted by the Funds solicitors and advised the Committee that several potential matters had been identified . The Fund is now considering the commencement of legal action in respect of these matters to recover the losses caused by the negligence of the relevant parties.

2. Andrew Griffin also advised there can be no certainty regarding the outcome of any court case, nor the potential to recover an amount commensurate with the losses suffered by the Fund, however the Fund’s legal advice is that some recovery ought to be likely.

Pacific First Mortgage FundBalmain Trilogy Investment Management Pty Limited ABN 55 136 832 945PFMF Investor Committee - Meeting #2 Report 2

PFMF Investor Committee - Meeting #2 ReportREPORT TO UNITHOLDERS INVESTOR COMMITTEE MEETING HELD ON 5TH MARCH 2010

CBA Facility

1. As at the date of the meeting the CBA Facility stood at $80M. It is anticipated that further scheduled repayments will be met which will reduce the facility to the required level of $30m by the end of June 2010, as per the Facility Agreement

2. CBA are required to consent to any redemption plans desired by the Unitholders.

Strategy

A Draft Strategy Paper which is currently being considered by the BT Board and the Funds solicitors was discussed by Andrew Griffin and highlighted a prospective strategy that focused on providing unitholders with an INDIVIDUAL CHOICE as to their ongoing participation in the Fund. Key points of the strategy is as follows:

1. An orderly disposal of assets (no fire sale) is to continue by BT with expenditure on certain assets to improve their value but not extending to any development of assets;

2. Seek to provide all unitholders with a mandatory payment plan (i.e. received by every unitholder in their proportion);

3. Seek to provide all unitholders with an elective payment plan (i.e. each Unitholder can individually choose to redeem or not at their absolute discretion);

4. Seek to provide all unitholders with an entitlement to their respective share of any recoveries from successful prospective legal actions irrespective of whether or not they have received either mandatory or elective payments;

5. Procuring an institutional investor to acquire units direct from investors (potentially at a discount) for those investors wishing to accelerate their complete exit from the Fund.

6. A revised fee structure involving the reduction of the base fee and the introduction of a performance fee to better align the interests of the Investment Manager and Unitholders.

Communication

BT confirmed that a review of all its Unitholder communication protocols is to be undertaken to ensure that there is a free flow of information on a timely basis.

Pacific First Mortgage FundBalmain Trilogy Investment Management Pty Limited ABN 55 136 832 945PFMF Investor Committee - Meeting #2 Report 3

Meeting Date:

Friday 5th March 2010

Location:

Balmain Corporation Boardroom - Sydney NSW

Members Present:

Ken Atchison (Chairman of the Committee)Rodger Bacon - Deputy Chairman, TrilogyMichael Holm - Chairman, BalmainAndrew Griffin - Chief Executive Officer, BalmainPhilip Ryan - Managing Director, TrilogyGraham Kells - UnitholderJulian Brown - UnitholderBill Lawson - UnitholderJohn Zygis - UnitholderTom Powers - UnitholderVadim Shev - UnitholderJohn Rudajs - UnitholderDeborah Bryzak - UnitholderPeter Fardoulys - UnitholderBrad Taylor - Unitholder

In Attendance:

Trevor Gibson - Executive Director, TrilogyErin Dingle - Marketing & Communications Manager, TrilogyJudith Howard - Company Secretary, Balmain (Minute Taker)Marcus Fazzolari - Manager Structured Finance, Balmain

Next Meeting:

The next Meeting of the Investor Committee will be held in Brisbane on 16th April, 2010.

Media Requests:

All representatives of the Media are required to contact the Chairman, Mr Ken Atchison for all press related matters (03) 9642 3835.

All statements and releases regarding the Investor Committee are made jointly by its members and are issued by its chairman Mr Ken Atchison.

www.pfmf.com.auwww.balmaintrilogy.com.au

Balmain Trilogy Investment Management Pty Limited ABN 55 136 832 945

Investment Manager of the Pacific First Mortgage FundLevel 14, 60 Castlereagh Street, Sydney NSW 2000GPO Box 3570, Sydney NSW 2001Tel: 02 9232 8888 Fax: 02 9232 8588

BTI 4190