ARC FUNDS LIMITED — Director's Dealing 2013

Jul 23, 2013

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Simon Daniels Adviser, Listings Compliance (Sydney) ASX Compliance Pty Limited 20 Bridge Street SYDNEY NSW 2000

24 July 2013

Dear Simon,

With reference to your letter of earlier today regarding the late lodgment of an Appendix 3Y on my behalf by Tidewater Investments Limited ( Tidewater or the Company ), I note that this is an extremely rare occurrence. As the Company Secretary, I am responsible for the prompt lodgment of all ASX announcements, including Appendix 3Y’s on behalf of Tidewater. The Company has strict rules regarding the requirement of Directors to lodge details of share transactions with myself on a timely basis. Given the modest turnover of Tidewater shares on ASX, the Company is easily able to cross-check buyers and sellers of individual parcels of shares.

In any event, the Company has explicit share dealing rules which were lodged with ASX on 16 December 2010 and which have not been amended. These rules require that various consents be obtained prior to dealing, which results in all of the Board of Directors being aware that an individual Director is purchasing or selling securities at a specific time. However, it should be noted that orders to transact in Tidewater’s securities may take a considerable period of time to execute due to the thinly traded nature of Tidewater’s ordinary shares.

In relation to the specific situation noted in your letter:

1. Please explain why the Appendix 3Y was lodged late

The electronic contract note sent by the transacting broker was intercepted by an anti-spam filter. In addition, the trade was settled directly with a third party financial institution which administers part of my shareholding in Tidewater. As a consequence, the transaction did not come to light until reconciliation of personal accounts and Director shareholding cross-checks in relation to Tidewater’s 2013 full year audit.

.

Tidewater Investments Limited ABN 52 001 746 710

phone: (02) 9380 9001

Suite 7.06, 2-14 Kings Cross Road, POTTS POINT NSW 2011 GPO Box 4870 SYDNEY NSW 2001

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1. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

See above description. I am of the strong opinion that the current procedures are more than adequate, and that the late lodgment of the Appendix 3Y in this instance was as a result of a specific software malfunction.

1. If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

The current procedures are considered more than adequate and do not require amendment to ensure compliance with listing rule 3.19B.

Please do not hesitate to contact me if you require further details.

Finally, I would ask you to note the correct street address of the Company, which was notified to ASX on 20 February 2012 rather than that at the top of your letter.

Yours sincerely,

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Andrew Brown

Managing Director & Company Secretary

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ASX Compliance Pty Limited ABN 26 087 780 489 20 Bridge Street Sydney NSW 2000 PO Box H224 Australia Square NSW 1215

Telephone 61 2 9227 0137 Facsimile 61 2 9241 7620 www.asx.com.au

24 July 2013

Andrew Brown Tidewater Investments Limited Suite 7.09, 14 Kings Cross Rd Potts Point NSW 2011

By email: andrew.brown@tidewater.com.au

Tidewater Investments Limited (the “Company”)

We refer to the following:

1. The Appendix 3Y lodged by the Company with ASX Limited (“ASX”) on 23 July 2013 for Andrew Brown (the “Appendix 3Y”).

2. Listing rule 3.19A.2 which requires an entity to tell ASX the following:

A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust). The entity must complete Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.

1. Listing rule 3.19B which states as follows:

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

1. The Companies Update dated 27 June 2008, reminding listed entities of their obligation to notify ASX within 5 business days of the notifiable interests in securities held by each director and outlining the action that ASX would take in relation to breaches of listings rules 3.19A and 3.19B.

The Appendix 3Y indicates that a change in Andrew Brown’s notifiable interest occurred on 26 June 2013. It appears an Appendix 3Y should have been lodged with ASX by 3 July 2013. Consequently, the Company may be in breach of listing rules 3.19A and/or 3.19B.

Please note that ASX is required to record details of breaches of the listing rules by listed companies for its reporting requirements.

ASX reminds the Company of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Company make necessary arrangements to ensure there is not a reoccurrence of a breach of the listing rules.

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Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: “Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities”, we ask that you answer each of the following questions:

1. Please explain why the Appendix 3Y was lodged late.

2. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

3. If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

Your response should be sent to me by e-mail at simon.daniels@asx.com.au or by facsimile on facsimile number (02) 9241 7620 . It should not be sent to the Company Announcements Office.

A response is requested as soon as possible and, in any event, not later than half an hour before the start of trading ( i.e. before 9.30 a.m. A.E.S.T. ) on Wednesday, 31 July 2013 .

Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a form suitable for release and should separately address each of the questions asked.

If you have any queries or concerns, please contact me immediately.

Yours sincerely

(sent electronically without signature)

Simon Daniels Adviser, Listings Compliance (Sydney)