Hastings Diversified Utilities Fund : Hastings Performance Fee

Hastings Funds Management Limited ABN 27 058 693 388

AFSL No. 238309

Level 27, 35 Collins Street Melbourne VIC 3000 Australia T [phone]

F [phone]

www.hfm.com.au

Melbourne, London, San Antonio, Sydney

ASX Announcement

Hastings Diversified Utilities Fund (HDF) Total pages: 2

6 January 2012

Hastings Performance Fee

Hastings Funds Management Limited (Hastings), as Responsible Entity for Hastings Diversified Utilities Fund (HDF), today confirmed that following the outperformance of HDF relative to its benchmark index, a performance fee is payable to Hastings by HDF for the six month period ended 31 December 2011.
During the financial year ended 31 December 2011, HDF achieved above average returns against key market indicators, based on comparable investments. HDF's market capitalisation has risen from $876 million to $1,087 million, which together with distributions paid to securityholders in the same period, results in an increase in securityholder value of $266 million.
A review of HDF's performance by Mercer (Australia) Pty Ltd shows that the total return securityholders who participated in all rights and reinvestment opportunities would have achieved, has been 12.46 percent per annum since inception and 34.25 percent since a performance fee last became payable as at 30 June 2011. This compares favourably to the Benchmark Index that forms the basis of HDF's performance fee calculation, as well as the ASX/S&P 300 Utilities Accumulation Index, as shown in Table 1 below.

Table 1 Comparative Total Return Performance
	Since Inception (p.a.)	Since 1-Jul-11
HDF	12.46%	34.25%
ASX/S&P 200 Industrials Accumulation Index	4.06%	(4.01)%
ASX/S&P 300 Utilities Accumulation Index	7.63%	7.45%
Notes: Performance measurement assumes investor reinvested all distributions received and fully participated in the 2009 rights issue. Accumulation indices based on investor applying the same initial capital and rights issue capital to the indices at the equivalent point in time. Returns are based on December 2011 distribution having been declared but not paid, while the closing security price is ex-distribution.

As a result of HDF's strong performance, for the six month period ended 31 December 2011 Hastings is entitled to a performance fee of $54,107,593, excluding GST and after taking into account any prior period underperformance and any resultant carried forward losses. Hastings has elected to receive $30,724,044 of the amount payable now and defer its decision regarding the payment of the balance of the performance fee.
On 14 December 2011, APA Group announced an unsolicited takeover bid for HDF. In view of this, Hastings believes it is appropriate to defer its decision regarding the payment of $23,383,549, being the portion of the performance fee which Hastings calculates as having accrued since 14 December 2011. When it considers the payment of this portion of the performance fee further, Hastings intends to take into account the

Unless otherwise stated, the information contained in this document is for informational purposes only. It does not constitute an offer of securities and should not be relied upon as financial advice. The information has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person or entity. Before making an investment decision you should consider, with or without the assistance of a financial adviser, whether any investments are appropriate in light of your particular investment needs, objectives and financial circumstances. Neither Hastings, nor any of its related parties including Westpac Banking Corporation ABN 33 007 457 141, guarantees the repayment of capital or performance of any of the entities referred to in this document and past performance is no guarantee of future performance. Hastings, as the Manager or Trustee of various funds, is entitled to receive management and performance fees.

sustained performance of HDF and whether control of HDF has changed (or is likely to change) or whether
HDF has undergone (or is likely to undergo) a change of responsible entity.
If a performance fee accrues in the performance fee calculation period ended 30 June 2012, Hastings intends to assess the performance fee that may be payable, taking into account the performance of the fund and any apparent increase in the performance fee which it considers to be attributable to takeover activity.
Hastings will receive the $30,724,044 component of the performance fee payable now, in cash.
An experienced independent valuer, Grant Thornton Corporate Finance Pty Ltd., has reviewed the Performance Fee and its opinion is that the performance fee has been calculated in accordance with the terms set out in the Product Disclosure Statement (PDS) and the constitutions of HDF.

For further enquiries, please contact:

Colin Atkin

Chief Executive Officer

Hastings Diversified Utilities Fund
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Website: www.hfm.com.au/hdf

Simon Ondaatje

Head of Investor Relations

Hastings Funds Management
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Website: www.hfm.com.au/hdf

Jane Frawley

Company Secretary

Hastings Funds Management Limited