6th August 2003

Dear Shareholder,

Attached to this letter you will find a Notice of Meeting and related Meeting Documentation that will assist you in deciding how to exercise your vote on the proposed special resolution relating to a selective buyback of shares in Lemarne.

On 22 May 2003 Lemarne Corporation Limited (“Lemarne”) announced that it had reached agreement with HGL Group Pty Ltd (“HGL Group”) to buy-back 3,306,369 Lemarne shares held by HGL Group for $1.80 per Lemarne share (“Buy-Back”). Further, on 23 July 2003 Lemarne announced that the independent expert engaged to advise whether the proposed Buy-Back was fair and reasonable to Lemarne shareholders (other than HGL Group and its associates) had delivered its report to the directors. It concluded that the advantages and disadvantages of the Buy-Back proceeding outweighed the advantages and disadvantages of the Buy-Back not proceeding.

HGL Group currently holds approximately 20% of Lemarne’s issued capital. Its parent company, HGL Limited made a takeover bid for all or part of the shares in Lemarne on 6 November 2002 and after 7 extensions, had only acquired an additional 42,963 shares. HGL recently terminated its bid and agreed to the Buy-Back on the terms set out in the Buy-Back deed (which was provided to ASX on 22 May 2003 and can be viewed on www.asx.com.au) and is summarised in the Meeting Documentation.

The Buy-Back is conditional on the provision of a private ruling by the Australian Tax Office. Directors are confident this private tax ruling will be received by 31 August 2003 and that this condition will be satisfied.

The Buy-Back is also conditional on the approval of Lemarne shareholders (other than HGL Group and its associates who are prevented from voting on the special resolution). The Buy-Back directly affects the remaining shareholders of Lemarne as the offer is being funded by Lemarne and will result in a reduction in the cash on hand and the share capital of Lemarne.

The Meeting Documentation has been prepared to assist shareholders assess the Buy-Back in terms of its advantages and disadvantages for Lemarne, and its potential impact on your own financial circumstances.

Your directors are unanimous in their view that the Buy-Back is in the best interests of Lemarne and intend to vote their shareholdings, and those of persons associated with them, in favour of the special resolution.

Your directors urge you to vote on the special resolution in relation to the Buy-Back as it affects your shareholding and your vote is important. You can vote in the following ways:

• vote in favour of the special resolution to approve the Buy-Back, which if approved by 75% of the votes cast by Lemarne shareholders entitled to vote on the special resolution, will result in the Buy-Back of HGL Group’s shares and the cancellation of those Buy-Back shares from the Lemarne register; or
  
  
• vote against the proposed Buy-Back, which if defeated will see no change to the share structure of Lemarne and a retention of the cash at bank currently reserved to fund the Buy- Back; or
  
  
• nominate a proxy, including me or any other director of Lemarne, to vote on your behalf (a proxy form is included in the Meeting Documentation).
  

If you have any queries in relation to the proposed Buy-Back, please contact the company secretary and finance director Mr Stephen Mason on (03) 9820 2400, facsimile (03) 9820 2038 or slmason@removeme.lemarne.com.au.


We appreciate your ongoing support and look forward to seeing you at the Meeting on 8 September 2003.


Yours sincerely,

Brian Noxon

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