CHALLENGER LIMITED — Director's Dealing 2011

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Sydney

19 December 2011

Ms Stephanie So Adviser, Listings ASX Compliance Pty Ltd Exchange Centre Level 6, 20 Bridge Street Sydney, NSW 2000

Level 15, 255 Pitt Street Sydney NSW 2000 Australia GPO Box 3698 Sydney NSW 2001 www.challenger.com.au

Telephone 02 9994 7000 Facsimile 02 9994 7777

Dear Ms So

Appendix 3Y - Change of Director’s Interest

At the Challenger Limited AGM on 22 November 2011, shareholders resolved to approve a variation of Mr Stevens’ employment contract, whereby Mr Stevens has agreed to forego his contractual entitlement to accelerated vesting upon termination in good leaver circumstances in respect of the 2010 Hurdled Performance Rights and any hurdled performance rights which may be granted in the future. Instead, Mr Stevens will now hold those rights after a ‘good leaver’ termination in accordance with and subject to the hurdles recorded in the terms of offer (i.e. continued vesting arrangements).

Pursuant to this, as foreshadowed in the AGM Notice of Meeting, Mr Stevens has now been issued 750,000 2011 Hurdled Performance Rights with continued vesting arrangements. These 2011 Hurdled Performance Rights are granted as part of Mr Stevens’ FY2011 remuneration and will vest in three tranches in September 2013, 2014 and 2015, if the specified performance hurdles are met.

The attached Appendix 3Y sets out the details of this grant.

Yours sincerely,

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Suzie Koeppenkastrop Company Secretary Challenger Limited

Melbourne Level 33, 101 Collins Street PO Box 297, Flinders Lane, Melbourne VIC 3000 Telephone 02 9994 7000 Facsimile 02 9994 7777 Brisbane Level 7, 320 Adelaide Street GPO Box 3234, Brisbane QLD 4001 Telephone 07 3136 5400 Facsimile 07 3136 5407 Perth Level 2, 168 St Georges Terrace PO Box Z5065, St Georges Terrace, Perth WA 6831 Telephone 08 9261 7412 Facsimile 08 9241 0571 Adelaide Level 3, 97 Pirie Street Adelaide SA 5000 Telephone 08 7129 4402 Facsimile 08 8232 4446

Challenger Limited ABN 85 106 842 371 Challenger Group Services Pty Limited ABN 91 085 657 307 Challenger Life Company Limited ABN 44 072 486 938 AFSL 234670 Challenger Commercial Lending Limited ABN 65 000 033 143 Challenger Managed Investments Limited ABN 94 002 835 592 AFSL 234668 Challenger Listed Investments Limited ABN 94 055 293 644 AFSL 236 887 CIF Investment Trust 1 ARSN 114 139 703 CIF Investment Trust 2 ARSN 114 139 632 Challenger Wine Trust ARSN 092 960 060 Challenger Diversified Property Trust 1 ARSN 121 484 606 Challenger Diversified Property Trust 2 ARSN 121 484 713 Challenger Management Services Limited ABN 29 092 382 842 AFSL 234 678 Challenger Retirement Services Pty Limited ABN 80 115 534 453 AFSL295642 RSE Licence No. L0001304 Challenger Mortgage Management Pty Ltd ABN 72 087 271 109 Challenger Securitisation Management Pty Ltd ABN 56 100 346 898 AFSL 244593 Challenger Investment Services Limited ABN 44 119 605 373 AFSL 320505

Appendix 3Y Change of Director’s Interest Notice

Rule 3.19A.2

Appendix 3Y

Change of Director’s Interest Notice

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 30/09/01 Amended 01/01/11

Name of entity Challenger Limited

ABN 85 106842371

We (the entity) give ASX the following information under listing rule 3.19A.2 and as agent for the director for the purposes of section 205G of the Corporations Act.

Part 1 - Change of director’s relevant interests in securities

In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust

Note: In the case of a company, interests which come within paragraph (i) of the definition of “notifiable interest of a director” should be disclosed in this part.

• See chapter 19 for defined terms.

01/01/2011 Appendix 3Y Page 1

Appendix 3Y Change of Director’s Interest Notice

Nature of change

Example: on-market trade, off-market trade, exercise of options, issue of securities under dividend reinvestment plan, participation in buy-back

Part 2 – Change of director’s interests in contracts

Note: In the case of a company, interests which come within paragraph (ii) of the definition of “notifiable interest of a director” should be disclosed in this part.

• See chapter 19 for defined terms.

Appendix 3Y Page 2

01/01/2011

Appendix 3Y Change of Director’s Interest Notice

Part 3 –[+] Closed period

• See chapter 19 for defined terms.

01/01/2011 Appendix 3Y Page 3