ARC FUNDS LIMITED — Capital/Financing Update 2017

Mar 20, 2017

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ASX ANNOUNCEMENT

21 March 2017

Company Announcements Office

Dear Sir/Madam

- Re: Pro-Rata Non Renounceable Entitlement Offer ("Offer")

Please find attached, a letter being sent to all ARC Option Holders today in relation to the above Offer.

Yours faithfully

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Chris Lobb

Company Secretary

Australian Rural Capital Limited ABN 52 001 746 710

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

21 March 2017

Dear Option holder

Pro‐Rata Non‐Renounceable Entitlement Offer

On 21 March 2017, Australian Rural Capital Limited ( ASX:ARC ) ( ARC or Company ) announced it will be conducting a pro‐rata non‐renounceable entitlement offer to shareholders of 3,218,660 new shares on the basis of 1 new Share for every 2.85 Shares held in ARC as at 7.00pm (Sydney time) on Friday 24 March 2017 ( Record Date ) at 50 cents per new share( New Shares ) to raise approximately $1,600,000 (before costs) ( Entitlement Offer ). Only Shareholders who, as at the Record Date, are registered holders of Shares in ARC and have a registered address in Australia or New Zealand will be eligible to participate ( Eligible Shareholders ). The Entitlement Offer is unconditional and is fully underwritten by Baron Partners Limited ( Underwriter ). Under the terms of the Entitlement Offer, Eligible Shareholders may also apply for additional ARC shares in excess of their Entitlement at the same price as under the Entitlement Offer ( Top‐Up Facility ). Additional New Shares will only be available under the Top‐Up Facility where there is a shortfall between applications for New Shares received from Eligible Shareholders and the number of New Shares proposed to be issued under the Entitlement Offer. ARC is offering the New Shares for issue without disclosure to investors under section 708AA of the Corporations Act 2001 (Cth) as modified by ASIC Class Order 08/35. ARC lodged an Offer Document for the Entitlement Offer with the ASX on 21 March 2017, a copy of which will be sent to each Eligible Shareholder on or about 28 March 2017. Option holders not entitled to participate Your options do not entitle you to participate in the Entitlement Offer. The purpose of this letter is to give you notice prior to the Record Date that you may exercise your options should you wish to participate in the Entitlement Offer. If you choose to participate in the Entitlement Offer by exercising some or all of your options prior to the Record Date, you will be sent the Offer Document together with the personalised Entitlement and Acceptance Form containing important information about the Entitlement Offer. Before deciding whether to exercise all or any of your options, you should consider the terms of the Entitlement Offer carefully and consult with your professional adviser if necessary.

Under the terms of the Entitlement Offer, Eligible Shareholders may also apply for additional ARC shares in excess of their Entitlement at the same price as under the Entitlement Offer ( Top‐Up Facility ). Additional New Shares will only be available under the Top‐Up Facility where there is a shortfall between applications for New Shares received from Eligible Shareholders and the number of New Shares proposed to be issued under the Entitlement Offer. ARC is offering the New Shares for issue without disclosure to investors under section 708AA of the Corporations Act 2001 (Cth) as modified by ASIC Class Order 08/35. ARC lodged an Offer Document for the Entitlement Offer with the ASX on 21 March 2017, a copy of which will be sent to each Eligible Shareholder on or about 28 March 2017.

Exercise of Options

To exercise your options and participate in the Entitlement Offer (in respect of your options) you will need to deliver to the Company’s Share Registry, Boardroom Pty Limited, the following before the Record Date:

1. completed application form to exercise options specifying the number of options to be exercised ( Option Exercise Notice ); and

2. payment for the exercise price for those options by way of a cheque made payable to “ Australian Rural Capital Limited ”.

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Each Share allotted as a result of the exercise of an option will rank equally with all other issued Shares of the Company. The Option Exercise Notice and payment for the exercise of the options must be received by the Company no later than the Record Date.

If you do not wish to participate in the Entitlement Offer (in respect of your options), you do not need to take any action.

Overseas Shareholders

The Entitlement Offer is not available in any jurisdiction where, or to any person to whom, it would be unlawful to issue the New Shares. It is the responsibility of any applicant under the Entitlement Offer to ensure compliance with any laws of a country relevant to their application. An option holder who is resident outside of Australia or New Zealand may not be able to participate in the Entitlement Offer upon exercise of their options, depending on the securities laws of their country of residence and their individual circumstances.

Key Dates

Key dates of the Entitlement Offer are set out in the table below:

Key Dates
Key dates of the Entitlement Offer are set out in the table below:
EVENT	DATE
Announcement of the Offer	21 March 2017
Notice sent to Option holders regarding participation	21 March 2017
“Ex” Date where the Company’s existing shares will commence trading withoutthe entitlement to participate in the Offer	23 March 2017
Record Date to determine Entitlements under the Offer	7.00pm (Sydney time)24 March 2017
Dispatch Date to all Shareholders	28 March 2017
Opening Date for the Entitlement Offer	28 March 2017
Last day to extend Entitlement Offer Closing Date	10 April 2017
Closing Date for the Entitlement Offer	13 April 2017
New Shares for which valid applications have been received and accepted by theCompany will be issued	21 April 2017
Normal trading of New Shares on ASX expected to commence	24 April 2017

For further information relating to the Entitlement Offer and/or the exercise of the options you hold, please contact your accountant or financial adviser.

If you require administrative assistance with exercising your options or the Entitlement Offer please contact the Company’s share registry Boardroom Pty Ltd on 1300 737 760 (in Australia) or +61 2 9290 9600 (outside Australia) if you have any queries.

Yours faithfully

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Chris Lobb Company Secretary

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