CLIME INVESTMENT MANAGEMENT LTD — Proxy Solicitation & Information Statement 2011

Apr 18, 2011

Clime Investment Management

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19 APRIL 2011

Company Announcements Office

ASX Limited 4[th] Floor, 20 Bridge Street,

SYDNEY NSW 2000

Clime Investment Management Limited Notice of Meeting

Further to the announcement made on 28 March 2011, Clime Investment Management Limited ( Company or CIW ) confirms that a Notice of Meeting and Explanatory Memorandum have been dispatched to CIW shareholders today.

A copy of this Notice of Meeting and Explanatory Memorandum is annexed to this announcement.

The shareholder meeting will be held on 2 3 May 2011 at 10.30 am at Suite 1, Level 1, 7 Macquarie Place, Sydney NSW 2000 .

As stated in our previous announcement shareholders will be asked at this meeting to adopt a new constitution to bring the Company’s constitution in line with current law, technology and governance practices.

For further information, please contact:

Richard Proctor

Company Secretary

02 9252 8522

Clime Investment Management Limited Level 1, 7 Macquarie Place Sydney NSW 2000 Australia | PO Box R1297 Royal Exchange NSW 1225 | ABN 37 067 185 899 P 02 9252 8522 F 02 9252 8422 W www.clime.com.au T @climeinvest

Clime Investment Management Limited ABN 37 067 185 899

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FOR ALL ENQUIRIES CALL REGISTRIES:

(within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600

FACSIMILE: +61 2 9290 9655

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POSTAL ADDRESS: Registries Limited GPO Box 3993 Sydney NSW 2001 Australia

XXXXXX XXXXXX ROYAL EXCHANGE NSW 1225

YOUR VOTE IS IMPORTANT

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This is your address as it appears on the company’s share register. If this is incorrect, please mark the box with an “X” and make the correction on the form. Securityholders sponsored by a broker should advise your broker of any changes. Reference Number : XXXXXXXXXXX

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Please note it is important you keep this confidential

FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECEIVED BEFORE 10:30AM, SATURDAY, 21 MAY 2011

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 Appointment of proxy

Indicate here who you want to appoint as your proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chairman of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an "Appointment of Corporate Representative form" prior to admission. An Appointment of Corporate Representative form can be obtained from the company 's securities registry.

Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company’s securities registry or you may copy this form.

To appoint a second proxy using this Proxy Form, you must:

(a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and

(b) return both forms together in the same envelope.

STEP 3 Sign the Proxy Form

The form must be signed as follows:

Individual: This form is to be signed by the securityholder.

Joint Holding: where the holding is in more than one name, all the securityholders must sign. Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 Lodgement of Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below not later than 48 hours before the commencement of the meeting at 10:30am on Monday, 23 May 2011 . Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxies may be lodged:

BY MAIL Share Registry - Registries Limited, GPO Box 3993, Sydney NSW 2001 Australia BY FAX +61 2 9290 9655 IN PERSON Share Registry - Registries Limited, Level 7, 207 Kent Street, Sydney NSW 2000 Australia

STEP 2 Voting directions to your proxy

You can tell your proxy how to vote

To direct your proxy how to vote, place a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

Attending the Meeting

If you wish to attend the meeting please bring this form with you to assist registration.

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Clime Investment Management Limited

PROXY FORM Extraordinary General Meeting

XXXXXX XXXXXX ROYAL EXCHANGE NSW 1225

S00013621641

STEP 1 - Appointment of proxy

I/We being a member/s of Clime Investment Management Limited (the "Company") and entitled to attend and vote hereby appoint

the Chairman of the Meeting (mark with an 'X') OR

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If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy at the Extraordinary General Meeting of Clime Investment Management Limited to be held at Suite 1, Level 1, 7 Macquarie Place, SYDNEY NSW 2000 on Monday, 23 May 2011 at 10:30am and at any adjournment of that meeting, to act on my behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

STEP 2 - Voting directions to your proxy - please mark

Ordinary Business 1. Approval of Director - Mr Neil Schafer Special Business 2. To adopt a new Constitution

X to indicate your directions

For Against Abstain For Against Abstain

The Chair intends to vote 100% of all open proxies FOR the resolutions.

*If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

Step 3 - PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact Name......................................................................... Contact Daytime Phone....................................................................... Date / /
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Clime Investment Management

Clime Investment Management Limited ACN 067 185 899

Notice of Extraordinary General Meeting

Notice is hereby given that the extraordinary general meeting of Clime Investment Management Limited ( Company ) will be held at Suite 1, Level 1, 7 Macquarie Place, Sydney NSW 2000 on 23 May 2011 at 10:30am .

Business of the Meeting

Resolution 1 – Approval of Director – Mr Neil Schafer

To consider and, if thought fit, to pass the following resolution as an ordinary resolution :

“ That for the purposes Rule 3.4 of the Existing Constitution and for all other purposes the appointment of Mr Schafer as a Director if the Company be ratified.”

Resolution 2 -To adopt a new Constitution

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That for the purposes of Section 136(2) of the Corporations Act and for all other purposes, the Company’s Constitution be repealed and a new Constitution be adopted in the form of the document tabled at the meeting, and signed by the Chairperson for the purposes of identification and with effect from the date the resolution is passed. ”

Other Information

An Explanatory Memorandum accompanies and forms part of this notice of meeting. Certain terms used in this notice are defined in that Explanatory Memorandum.

All Shareholders should read the Explanatory Memorandum carefully and in its entirety. Shareholders who are in doubt regarding any part of the business of the meeting should consult their financial or legal adviser for assistance.

Voting by Proxy

Any Shareholder of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote instead of that Shareholder.

Clime Investment Management Limited Level 1, 7 Macquarie Place Sydney NSW 2000 Australia | PO Box R1297 Royal Exchange NSW 1225 | ABN 37 067 185 899 P 02 9252 8522 F 02 9252 8422 W www.clime.com.au T @climeinvest

Clime Investment Management

The proxy does not need to be a member of the Company. A Shareholder that is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half of the Shareholder’s votes.

Proxies must be:

• (a) lodged at the registered office of the Company; or

(b) received at the fax number specified below.

not later than 48 hours before the meeting ie by 10:30am (Sydney time) on 21 May 2011 .

The Company’s registered office:

Suite 1, Level 1 7 Macquarie Place Sydney NSW 2000

Delivery address for proxies c/o Registries Limited (in person): Level 7, 207 Kent Street, Sydney NSW 2000

Delivery address for proxies c/o Registries Limited (if by mail): GPO Box 3993 Sydney NSW 2001 Fax number: + 61 2 9290 9655

A form of proxy is provided with this notice.

By order of the Board

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Richard Proctor

Company Secretary

Clime Investment Management Limited ACN 067 185 899

Explanatory Memorandum Extraordinary General Meeting

This Explanatory Memorandum sets out further information regarding the proposed resolution to be considered by the shareholders of Clime Investment Management Limited ( Company ) at the extraordinary general meeting to be held at Suite 1, Level 1, 7 Macquarie Place, Sydney NSW 2000 on 23 May 2011 at 10:30am .

Resolution 1: Approval of Director – Mr Neil Schafer

Mr Neil Schafer having consented to act as a Director of the Company was appointed as a Director on 7 January 2011. Under this resolution, Mr Schafer is seeking shareholders’ ratification of his appointment as a Director of the Company in accordance with Rule 3.4 of the Company’s Existing Constitution.

Mr Schafer has extensive experience in Funds Management, Banking and Financial Services sectors and holds First Class Honour’s Degree in Applied Economics from the University of New England.

The Board unanimously recommends that Shareholders ratify the appointment of Mr Schafer as a Director of the Company.

Resolution 2: To adopt a new Constitution

Introduction

Resolution 2 seeks Shareholder approval, by special resolution, to repeal the Company’s Constitution and to adopt a new Constitution.

Without limitation, Section 136(2) of the Corporations Act is relevant to Resolution 1. The Company can only amend its constitution or adopt a new constitution if shareholders approve by passing a special resolution.

In accordance with the Listing Rules, copy of the new Constitution has been provided to the ASX prior to the date of this Notice of Extraordinary General Meeting.

Reasons for seeking approval for a new Constitution

The Company’s Existing Constitution was adopted on 20 October 2000 and has not been updated since that date although there have been a number of changes to the Corporations Act 2001 (Cth), technology and corporate governance practices generally.

As a listed entity, it is essential that the Company has a Constitution that meets the current requirements of the Corporations Act, the Listing Rules, Corporations Regulations and Corporate Governance practices. Although the proposed new Constitution is broadly consistent with the provisions of the existing Constitution many of the proposed changes are changes which address changes to the law, governance or otherwise provide general clarity.

CIW Explanatory Memo (WM00543836-002)

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In particular, the new Constitution removes outdated provisions in the Existing Constitution such as provisions that apply to a company that is registered as a pooled development fund. The Company ceased to be registered as a pooled development in 2002.

A summary of the key material provisions of the new Constitution are set out in the Annexure to this Notice.

A copy of the proposed new Constitution:

1. Can be located on the Company’s website – www.clime.com.au ,or

2. Can be obtained on request by emailing richard@clime.com.au

The Directors support the adoption of the new Constitution and unanimously recommend that Shareholders vote in favour of this resolution.

CIW Explanatory Memo (WM00543836-002)

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Glossary

ASX means ASX Limited.

Board means the board of Directors of the Company.

Company means Clime Investment Management Limited (ACN 067 185 899).

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Existing Constitution refers to the Company’s existing constitution adopted on 20 October 2000.

Extraordinary General Meeting means the proposed meeting of Shareholders to be held at Suite 1, Level 1, 1 Macquarie Place, Sydney NSW 2000 on 23 May 2011 at 10:30am to consider and, if thought fit, to pass the Resolution set out in the Notice of Extraordinary General Meeting.

Explanatory Memorandum means this explanatory memorandum distributed with the Notice of Extraordinary General Meeting.

Listing Rules means the listing rules of the ASX.

Notice of Extraordinary General Meeting means the notice dated 23 May 2011 which is enclosed in this booklet.

Ordinary Share means a fully paid ordinary share in the Company.

Proxy Forms means the proxy form for the Extraordinary General Meeting distributed with this Explanatory Memorandum.

Resolution means a resolution proposed to be approved by Shareholders in the Notice of Extraordinary General Meeting.

Shareholder means a holder of Ordinary Shares.

CIW Explanatory Memo (WM00543836-002)

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Annexure

Summary of the key material provisions of the new Constitution

Rule 2.1 – Power to issue new securities

Under the new Constitution, the power to issue new shares, options and other securities and to determine the terms on which those securities can be issued rests with the Directors. In issuing new shares the Directors must still ensure that the issue complies with the Corporations Act and the Listing Rules, which restrict the ability to issue shares in certain circumstances.

Rule 2.2 – Preference shares

Under the Corporations Act, the Company is not able to issue preference shares unless the rights attaching to those shares are set out in the constitution or have otherwise been approved by special resolution of the Company. The right to issue preference shares was provided for in the existing constitution. The new Constitution sets out more clearly the rights that would attach to preference shares if any such shares are issued in the future. This gives the Directors the flexibility to issue preference shares in the future should they resolve to do so, which gives the Company greater flexibility in the way that it may raise capital in the future.

Rule 2.3 – Variation of rights attaching to shares

This Rule sets out the procedure to be followed to change any of the rights attaching to an existing class of shares if the Company has more than one class of shares on issue. The procedure requires that the change be approved in writing by Shareholders who hold at least 75% of number of shares in that class or by a special resolution of the holders of the relevant class of shares. This procedure would not apply to the issue of preference shares under the preceding Rule.

Rule 2.7 – Altering the capital of the Company

This Rule provides that in addition to altering the capital of the Company in any manner permitted by the Corporations Act, the Company can alter its share capital by converting shares into larger or smaller numbers, undertaking an in specie distribution of shares, cancelling forfeited shares or converting shares from one class to another by way of an ordinary resolution of members of the Company.

Rule 3 – Calls, lien & forfeiture

This Rule sets out the procedure for making calls for amounts that are unpaid on shares. Where a call is made and is not paid within the timeframe provided under the Listing Rules (if applicable) after the due date for payment, the relevant share may be forfeit and may be sold or otherwise disposed of by the Company on the terms the Directors think fit. The holder of a Share that has been forfeited remains liable to the Company for outstanding amounts in relation to that Share, including interest. These provisions reflect general practice.

Rule 4 – Transfer of Shares

Subject to the provisions of the Constitution, the Corporations Act and the Listing Rules, Shares are freely transferable by a transfer document in the form approved by the ASX or otherwise approved by the Directors.

The new Constitution also provides that the Directors may refuse to register any transfer of Shares if the Listing Rules (where the Company is listed) permit the Company to do so, and must refuse to register any transfer of Shares if the Listing Rules require the Company to do so.

Rule 5.2 & Rule 9.1 – Notice of meetings

Each Shareholder is entitled to receive notice of general meetings of the Company. Notices required to be given to Shareholders (including notice of meeting) may be given by posting, faxing or sending an electronic notification to the address provided by the Shareholder for the giving of notices.

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Rule 5.3 & 5.5(c) – Meeting procedures

The new Constitution confirms the chairperson’s authority to ensure the orderly conduct of meetings.

Rule 5.4(a) – Quorum for general meetings

Under the new Constitution, the quorum for future general meetings of the Company will be at least 5 members present in person or by proxy or members representing 10% of the voting shares.

Rule 5.7(b) – Calling a poll at general meetings

A poll may be called on a resolution being considered at a general meeting immediately before or immediately after the declaration of the result of the show of hands on that resolution by:

• the chairperson;

• at least 5 members present in person and not excluded from voting on the resolution; or

• members present in person and representing not less than 5% of the total voting rights of all the members not excluded from voting on the resolution on a poll

Rule 5.7(e) – Casting vote of chairperson at general meetings

The new Constitution provided that in the event of a equality of votes at a general meeting, the chairperson will not have a casting vote.

Rule 5.7 & 5.9 - Voting at company meetings

The voting provisions of the new Constitution provide that resolutions put to a general meeting must be decided by a show of hands unless a poll is demanded. The new Constitution clearly sets out that in voting on a show of hands, each Shareholder (who is not excluded from voting) who is present has one vote only (even if that Shareholder has been appointed as the proxy for another shareholder) and on a poll has one vote for each fully paid Share the Shareholder holds or represents.

Rule 5.10 – Direct voting

The new Constitution includes provisions that will enable Shareholders to vote directly on resolutions considered at a general meeting or class meeting by mailing, faxing or using other electronic means as approved by the Directors.

The inclusion of a direct voting provision in the Constitution will mean that, if in the future, the Directors decide to establish a direct voting facility for future Company meetings, shareholders who are entitled to vote at the relevant general or class meeting will still be able to directly exercise their voting rights even where they do not attend the meeting personally or by a proxy. The Directors will determine the procedures and regulations that will govern the implementation and use of direct voting.

Direct voting will operate concurrently with, and not replace, the proxy system provided for in the new Constitution and the Corporations Act.

Rule 5.11 & 5.12 - Proxies and corporate representatives

A Shareholder who is entitled to attend and vote at a general meeting may appoint a proxy to attend and vote in the place of that Shareholder. The new Constitution sets out the requirements for the valid appointment of a proxy (which may include by electronic means if the Directors so determine) and requires that proxy appointments be provided directly by the appointing Shareholder to the Company.

A Shareholder that is a corporate entity may appoint an individual as a corporate representative to exercise the powers of that Shareholder. The new Constitution sets out the requirements for the valid appointment of a corporate representative.

Rule 5.14 – Disregarding votes cast by excluded persons

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Under the Listing Rules and the Corporations Act, certain Shareholders (usually Shareholders who are related to Directors in some way) may be excluded from voting on resolutions in which they have a special interest. The new Constitution confirms that if votes are cast by a Shareholder who is excluded from voting, those votes will not be counted.

Rule 6.3, 6.10 & 6.11 - Director appointments and procedures

The Director appointment provisions of the new Constitution provide that a person can only be nominated for the office of Director if they are:

• a shareholder or are nominated by a shareholder, and have given the amount of notice required under the Listing Rules or at least 2 months notice;

• nominated by a majority of the existing Directors they do not have to comply with the nomination provisions; or

• standing for re-election, either through director rotation or having been appointed to fill a casual vacancy during the year.

The new Constitution confirms that technical disruptions experienced by Directors attending a meeting by telephone or other communication systems do not invalidate that meeting for lack of quorum and that Directors’ circulating resolutions may be received by electronic communications. – Please carefully review these resolutions and let us know if you are happy with them.

Rule 6.4 – Qualifications of Directors

The new Constitution sets out the circumstances which disqualify a person from acting as a Director, which include where the person has been disqualified from managing a corporation under the Corporations Act. The new Constitution does not require that a person must hold Shares in order to be a Director.

Rule 6.5 – Remuneration of Directors

The Directors are entitled to be remunerated for their services as Directors. The amount of the total remuneration paid to all non-executive Directors must not exceed the annual aggregate maximum determined by the Company in general meeting.

The new Constitution provides that the aggregate maximum remuneration of the non-executive Directors may not be increased without the prior approval of the Shareholders in General Meeting.

Under the new Constitution, Directors of the Company are also entitled to be paid all travelling and other expenses properly incurred by them in attending and returning from Directors’ meetings or committee or general meetings of the Company and otherwise in connection with the business or affairs of the Company or its subsidiaries.

Directors who perform extra services for the Company or hold other offices in the Company may be paid such other remuneration for those services as the Directors think fit.

The new Constitution also provides that the (remaining) Directors may determine to make a payment upon the death or retirement of a Director if permitted under the Corporations Act.

Rule 6.7 - Periodic retirement of Directors

Listing Rules no longer require that a 1/3[rd] of the Directors retire at each Annual General Meeting. The new Constitution accordingly provides that each Director must not hold office as a Director after the third annual general meeting held after the Director was last appointed or elected or 3 years after the date on which the Director was last appointed or elected, whichever is the longer in accordance with Rule 14.4 of the Listing Rules. Directors who cannot continue in office because of this Rule are required to resign and may stand for re-election.

Rule 8.1 - 8.7 - Dividends & capitalising amounts

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The Rules in the new Constitution that deal with the payment of dividends have been designed to a accommodate a recent change to the law governing when a company may pay a dividend. The new Constitution provides that the Directors can determine, declare and fix the amount and time for payment of a dividend as and when permitted by the Corporations Act. The Directors also have the power to determine:

• that dividends are to be paid from a particular source; or

• that a dividend be wholly or partly paid by a distribution of assets (including shares of another company); or

• to establish a dividend reinvestment plan; or

• to set aside reserves and to capitalise amounts as they think fit.

The method of payment of a dividend may include any or all of the payment of cash, the issue of shares or other securities, the grant of options and the transfer of assets. The in specie provision (Rule 8.4 (a)) in the new Constitution is not a new provision but mirrors the in specie provision in the Company’s Existing Constitution.

Additionally, the capitalisation of profits provision in Rule 8.7 also mirrors the capitalisation of profits provision in the Company’s Existing Constitution.

As announced on 28 March 2011 , following the adoption of the new Constitution which will bring the Company’s Constitution in line with the current law, the Company intends to declare a dividend by way of an in specie distribution of its Mothercare Australia Limited (ASX:MLC) shares.

Rule 10.1 – Winding up

If the Company is wound up, the new Constitution provides that the liquidator may, if approved by a special resolution of Shareholders, divide the Company’s assets among the Shareholders in the manner determined by the liquidator. A Shareholder cannot be forced to accept any assets of the Company in respect of which a liability remains.

Rule 11 – Directors’ indemnity & insurance

To the extent permitted by law, the Company must indemnify each Director and other officer of the Company against any liability incurred by the person in their capacity as Director or other officer unless that liability arises out of conduct involving lack of good faith.

To the extent permitted by law, the Company may maintain insurance for liability incurred by its Directors and officers in their capacities as Directors and officers.

Rule 12.1 – Transferring, voting and dividend rights of restricted securities

The new Constitution provides that where the Company has shares that are classified by the ASX as being restricted securities, the Company cannot register any transfer of those Shares. If there is a breach of the Listing Rules or restriction agreement in respect of restricted shares, the holder will not be entitled to dividends or voting rights in relation to those shares.

Rule 13 - Small Holdings

The new Constitution provides the Company with a mechanism to divest a holder of unmarketable parcels of shares by selling those shares on-market or otherwise disposing of the Shares in the manner determined by the Directors. Currently an unmarketable parcel of shares is a holding that has a value of less than $500. The procedure gives holders of these small parcels an ability to elect to retain their small holding of Shares.

Shareholders who do not choose to retain their Shares will be paid the proceeds of the sale after the sale procedure has completed.

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Other

References: the new Constitution refers to the Corporations Act rather than Corporations Law as in the existing Constitution. Additionally, it refers to the ASX Settlement Rules rather then the former SCH Business Rules. It also removes references to a “pooled development fund” as the Company is no longer registered as such.

CIW Explanatory Memo (WM00543836-002)