ARC FUNDS LIMITED — AGM Information 2021

Jan 28, 2021

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29 January 2021

Annual General Meeting

Chairman’s Address

FY20 Results

The Company recorded an after-tax loss of $1,132,127 for the full year to June 30, 2020. The result was primarily driven by the reduced valuation of our investment in Namoi Cotton which I cover further below.

Our stated Net Tangible Assets (“NTA”) on June 30, 2020 was 31 cents per share compared to 40 cents a share on June 30, 2019. This is disappointing but not unexpected given the poor share-price performance of our main investment in Namoi Cotton.

Namoi Cotton Investment

We presently hold the 9.6 % stake in Namoi Cotton of which a significant portion is subject to a share vote today to distribute these shares back to our shareholders.

We estimate that the business of Namoi Cotton is past the worst of the drought, and having expensed the restructuring costs, Namoi will emerge as a far more profitable and less risky company in the next cotton crop cycle, which we expect to be in 2022. We continue to believe at 31 cents the shares are significantly undervalued.

Return of Capital, Distribution of Namoi Shares to ARC shareholders

We acknowledge that over the past 5 years, we have been unsuccessful in securing a business to acquire, or assets to manage to create a recurring source of income.

Therefore, today we vote to enable the distributing a significant portion of the existing holding in Namoi Cotton shares directly to the shareholders of ARC. The board believes the distribution of 9 Namoi Shares for every 10 ARC shares held, is in the best interests of the Company and its shareholders to preserve value.

The actions required to bring effect to this distribution are covered in Resolution 3 and Resolution 4 of today’s meeting. The process and implications of these resolutions have been described in detail for shareholders in the Notice of Meeting and Explanatory Memorandum.

The board recommends shareholders vote in favour of Resolutions 3 and 4.

Australian Rural Capital Limited ABN 52 001 746 710

c/- Broadley Rees Hogan, Level 24, 111 Eagle Street, BRISBANE QLD 4000 GPO Box 635 BRISBANE QLD 4001 phone: (07) 3223 9170

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The Future of ARC

Following today’s meeting, and the passing of resolutions 3 and 4 by shareholders, ARC will hold cash of circa $30,000 and approximately 1,045,000 Namoi Shares. The Company will be seeking further investments and has commenced a process to consider proposals and assets to acquire, to date we have received three (3) expressions of interest.

The board will be updating shareholders on this progress when appropriate.

Thanks

I again, wish to give thanks for all the efforts, work, wise counsel and input from my fellow director’s Darren and Wayne in the past year and I recommend Wayne Massey for re-election at this meeting. I also wish to thank our company secretaries for their contributions and our various advisers with whom we have worked with over the past year for your help to make today’s meeting happen.

Finally, the Board wishes to thank all our shareholders for your interest and support.

ENDS.

By order of the Board of Directors.

For Further Details contact: James Jackson, Executive Chairman Mobile: 0402435762 Email: james.jackson@ruralcapital.com.au

Australian Rural Capital Limited ABN 52 001 746 710

c/- Broadley Rees Hogan, Level 24, 111 Eagle Street, BRISBANE QLD 4000 GPO Box 635 BRISBANE QLD 4001 phone: (07) 3223 9170