IRONBARK BALANCED INCOME LIMITED — Proxy Solicitation & Information Statement 2015

Mar 25, 2015

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ABN 89 008 108 227

26 March 2015

The Manager Company Announcements Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street, Sydney NSW 2000

Dear Sir or Madam,

Notice of General Meeting and Explanatory Memorandum – Off-Market Buyback

In accordance with the Listing Rules, I attach a copy of the Shareholder Booklet containing the Notice of Meeting and Explanatory Memorandum for the general meeting to consider the resolution to authorise the proposed off-market buy-back.

Yours faithfully,

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Jill Brewster Company Secretary

Ironbark Capital Limited Level 22, 44 Market Street, Sydney NSW 2000 Telephone (02) 8917 0399 Fax (02) 8917 0377 www.ironbarkcapital.com

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Chairman's letter

Dear Shareholder

Shareholder Booklet – General Meeting and Buy-Back

As committed to shareholders of Ironbark Capital Limited ( IBC ), the Board proposes that IBC conduct a buy-back of its ordinary shares through an off-market tender process ( Buy-Back ), subject to authorisation by IBC's shareholders.

The proposal to conduct the Buy-Back is a company sponsored means to enable shareholders to exit, if they wish, from all or part of their investment in IBC at a price equal to the net tangible asset backing per share ( NTA ), less transaction costs and expenses and excluding the deferred tax asset of IBC.

Enclosed with this letter is a shareholder booklet containing a notice of meeting and explanatory memorandum for the general meeting to be held on 30 April 2015 ( Booklet ). At the general meeting, shareholders will consider the resolution to authorise the conduct of the Buy-Back.

If the Buy-Back is approved, shareholders can elect to not participate in the buy-back or sell some or all of their shares at a price equal to the NTA less transaction costs and expenses and excluding the deferred tax asset of IBC. However, in the unlikely event that net tangible assets of IBC would fall below $35 million as a result of IBC's acceptance of Tenders under the Buy-Back, Tenders will be scaled back on a pro rata basis. The scale back will be adopted so as to maintain a minimum amount of net tangible assets for IBC to ensure its continued viability as an ASX listed company. This scale back has been included so that the Buy-Back is consistent with the regulatory policy to facilitate buy-backs through an off-market tender process.

The Board believes that IBC’s investment strategy with its focus on income generation and low volatility has its place as part of a broader diversified portfolio. The directors of IBC intend to remain shareholders of IBC if the conduct of the Buy-Back is approved by shareholders and retain a significant proportion of each of their shares in IBC. Kaplan Partners Pty Ltd ( Kaplan ), IBC's largest shareholder, has advised IBC that it does not intend to participate in the Buy-Back (if approved) and that it intends to retain its entire shareholding as it supports IBC.

The Board also believes that the effect of the Buy-Back, if authorised, will be to decrease the discount at which shares in IBC have traditionally traded to NTA. The proposal for the Board to convene a meeting of IBC's shareholders to approve the conduct of the Buy-Back was approved by IBC's shareholders at the 2011 IBC annual general meeting ( Proposal ). The Board believes that the existence of the Proposal has assisted with closing the gap between IBC's NTA and share price. It is the Board's intention to offer shareholders the opportunity to have their shares bought back every 3 years for this purpose. Kaplan has also advised IBC that it is supportive of this strategy.

Your directors make no recommendation regarding whether you should participate in the Buy-Back as this is an individual shareholder decision. Detailed information regarding some matters you may take into account when deciding to vote in favour or against the Buy-Back is set out in section 2 of the Booklet.

Shareholders are not required to decide at this stage whether to participate in the Buy-Back. A formal invitation will be made to shareholders in a separate document if the resolution to authorise the Buy-Back is approved.

I encourage you to consider the matters set out in the Booklet carefully before deciding how to vote on the resolution to authorise the Buy-Back.

Yours sincerely

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Michael Cole Chairman

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Ironbark Capital Limited (ACN 008 108 227)

Shareholder Booklet – Notice of Meeting and Explanatory Memorandum

General Meeting for authorisation of buy-back of ordinary shares

A notice of meeting is included with this Booklet. A proxy form for the meeting accompanies this Booklet.

Your vote is important in determining whether the buy-back proceeds. This is an important document and requires your urgent attention.

If you are in any doubt as to how to deal with this Booklet, please consult your legal, financial, taxation or other professional adviser immediately.

If you have recently sold all of your Shares, please disregard all enclosed documents.

IMPORTANT NOTICES

General

You should read this Booklet in its entirety before making a decision on how to vote on the Resolution to be considered at the General Meeting. The notice convening the General Meeting is contained in this Booklet. A proxy form for the meeting is enclosed.

Defined terms

Capitalised terms in this Booklet are defined either in the Glossary in Section 6 of this Booklet or where the relevant term is first used.

References to dollars , cents or $ are references to the lawful currency of Australia. Any discrepancies between the totals and the sum of all the individual components in the tables contained in this Booklet are due to rounding.

Purpose of this Booklet

The purpose of this Booklet is to:

• provide information regarding the business to be conducted at the General Meeting;

• explain the terms and effect of the BuyBack; and

• provide such information as is prescribed by the Corporations Act.

ASIC and ASX

A copy of this Booklet has been lodged with ASX and ASIC. None of ASX, ASIC or any of their officers takes any responsibility for the contents of this Booklet.

Investment decisions

This Booklet does not take into account the investment objectives, financial situation, tax position and requirements of any particular person. This Booklet should not be relied on as the sole basis for any investment decision in relation to Shares. Independent financial and taxation advice should be sought before making any decision to invest in IBC or in relation to the Buy-Back. It is important that you read the entire Booklet before

making any voting or investment decision. In particular, it is important that Members consider the possible disadvantages of the Buy-Back and the risk factors identified in Section 2.

Members should carefully consider these factors in light of their particular investment objectives, financial situation, tax position and requirements. If Members are in any doubt on these matters, they should consult their legal, financial, taxation or other professional adviser before deciding how to vote on the Buy-Back. Past performance is no indication of future performance.

Forward looking statements

This Booklet may contain certain prospective financial information based on current expectations about future events. Any prospective financial information is, however, subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described in such prospective financial information. Factors which may affect future financial performance include, among other things, those identified in Section 2. The assumptions on which prospective financial information is based may prove to be incorrect or may be affected by matters not currently known to, or considered material by, IBC.

Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement and deviations are both normal and to be expected. None of IBC, the officers of IBC or any person named in this Booklet makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement. You are cautioned not to place undue reliance on any such statements.

Any forward looking statements in this Booklet reflect views held only as at the date of this Booklet.

Electronic document

This Booklet may be viewed online at www.ironbarkcapital.com. A paper copy of this Booklet will be provided free of charge to any person who requests a copy by contacting IBC.

IMPORTANT DATES AND TIMES FOR THE GENERAL MEETING TO APPROVE THE RESOLUTION TO AUTHORISE THE BUY-BACK

Date of this Booklet	26 March 2015
Last time and date by which the proxy form for the General	10:00 am (Sydney time) on
Meeting can be lodged	28 April 2015
Time and date for determining eligibility to vote at the	7:00 pm (Sydney time) on
General Meeting	28 April 2015
General Meeting*	10:00 am (Sydney time) on
	30 April 2015

• The General Meeting will be held at History House, 133 Macquarie Street, Sydney NSW

You should consult your legal, financial, taxation or other professional adviser concerning the impact your decision may have on your own circumstances.

IMPORTANT DATES AND TIMES FOR THE BUY-BACK IF THE RESOLUTION IS APPROVED

If the Resolution is approved at the General Meeting, the following dates and times will be important for the Buy-Back.

Ex Date	8 May 2015
Record Date	12 May 2015
Despatch to all Shareholders of the Buy-Back Booklet	15 May 2015
Opening Date	15 May 2015
Last date for withdrawal of Tenders	19 June 2015
Closing Date	5:00 pm (Sydney time)
	19 June 2015
Determination and announcement of Buy-Back Price	17 July 2015
Buy-Back Date	27 July 2015
Settlement / dispatch of payment	30 July 2015

The above dates are subject to change and are indicative only. While IBC does not anticipate any changes to these dates, it reserves the right to change them without prior notice to Shareholders. Subject to the Corporations Act and the Listing Rules, any change to these dates and times will be publically announced on ASX as soon as it is reasonably practicable to do so.

IBC also reserves the right to terminate the Buy-Back at any time prior to the date on which IBC enters into Buy-Back Contracts with Shareholders by making an announcement to the ASX to that effect.

TABLE OF CONTENTS

CLAUSE

PAGE

Important dates and times
Table of Contents
Notice of General Meeting
EXPLANATORY MEMORANDUM ............................................................................................. 1
1. Rationale and terms of the Buy-Back ......................................................................... 1
2. Buy-Back – Relevant considerations........................................................................... 8
3. Kaplan Funds Management and IBC ......................................................................... 17
5. Additional information regarding Buy-Back ............................................................... 20
6. Glossary .............................................................................................................. 22

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Notice of General Meeting

Ironbark Capital Limited (ACN 008 108 227)

Notice of Meeting for a General Meeting of Members

To be held at 10.00 am (Sydney time) on 30 April 2015 at History House, 133 Macquarie Street, Sydney NSW

IMPORTANT INFORMATION

This is an important document that should be read in its entirety.

This Notice of Meeting includes an Explanatory Memorandum. The Explanatory Memorandum has been prepared to assist Members in determining whether or not to vote in favour of or against the Resolution set out in this Notice of Meeting.

The Explanatory Memorandum should be read in conjunction with this Notice of Meeting.

You are encouraged to attend the meeting, but if you cannot, you are requested to complete and return the enclosed proxy form without delay:

By post to the Registry, Boardroom Pty Limited:

GPO Box 3993, Sydney NSW 2001

By hand delivery to the Registry at:

Level 7, 207 Kent Street, Sydney NSW 2000

By fax to the Registry on:

9290 9655 from within Australia, or +61 2 9290 9655 from outside Australia

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The business of the General Meeting is to consider the following proposed resolution.

1. Approval of Buy-Back

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

That to the extent required under Section 257C of the Corporations Act 2001 (Cth) , the terms of, and entry into, the buy-back agreement as described in the Explanatory Memorandum accompanying this Notice of Meeting, is approved.

Without limitation, Section 257C of the Corporations Act is relevant to this Resolution. There are no voting restrictions for this Resolution.

Explanatory Memorandum

Members are referred to the Explanatory Memorandum accompanying and forming part of this Notice of Meeting.

Entitlement to vote

The Directors have decided that for the purpose of determining entitlements to attend and vote at the General Meeting, Shares will be taken to be held by the persons who are the registered holders at 7:00 pm (Sydney time) on 28 April 2015. Accordingly, Share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the General Meeting.

How to vote

Members entitled to vote at the General Meeting may vote:

• by attending the meeting and voting in person; or

• by appointing an attorney to attend the meeting and vote on their behalf or, in the case of corporate members or proxies, a corporate representative to attend the meeting and vote on its behalf; or

• by appointing a proxy to attend and vote on their behalf, using the proxy form accompanying this Notice of Meeting. A proxy may be an individual or a body corporate.

Voting in person (or by attorney)

Members or their proxies, attorneys or representatives (including representatives of corporate proxies) wishing to vote in person should attend the General Meeting and bring a form of personal identification (such as their driver's licence).

To vote by attorney at this meeting, the original or a certified copy of the power of attorney or other authority (if any) under which the instrument is signed must be received by the Registry before 10:00 am (Sydney time) on 28 April 2015 in any of the following ways:

By post to the Registry, Boardroom Pty Limited:

GPO Box 3993, Sydney NSW 2001

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By hand delivery to the Registry at:

Level 7, 207 Kent Street, Sydney NSW 2000

By fax to the Registry on:

9290 9655 from within Australia, or +61 2 9290 9655 from outside Australia

To vote in person, you or your proxy, attorney, representative or corporate proxy representative must attend the General Meeting to be held at History House, 133 Macquarie Street, Sydney NSW on 30 April 2015 commencing at 10:00 am (Sydney time).

A vote cast in accordance with the appointment of a proxy or power of attorney is valid even if before the vote was cast the appointor:

• died;

• became mentally incapacitated;

• revoked the proxy or power; or

• transferred the Shares in respect of which the vote was cast,

unless IBC received written notification of the death, mental incapacity, revocation or transfer before the meeting or adjourned meeting.

Voting by proxy

Members wishing to vote by proxy at this meeting must:

• complete and sign or validly authenticate the proxy form, which is enclosed with this Booklet; and

• deliver the signed and completed proxy form by 10:00 am (Sydney time) on 28 April 2015 in accordance with the instructions below.

A person appointed as a proxy may be an individual or a body corporate.

Submitting proxy votes

Members wishing to submit proxy votes for the General Meeting must return the enclosed proxy form to IBC in any of the following ways:

By post to the Registry, Boardroom Pty Limited:

GPO Box 3993, Sydney NSW 2001

By hand delivery to the Registry at:

Level 7, 207 Kent Street, Sydney NSW 2000

By fax to the Registry on:

9290 9655 from within Australia, or +61 2 9290 9655 from outside Australia

Note: proxies may not be returned by email nor is internet voting available.

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Notes for proxies

1. A Member entitled to attend and vote at the meeting is entitled to appoint not more than two proxies to attend and vote at the meeting on that Member's behalf.

3. A proxy need not be a Member.

4. A proxy may be an individual or a body corporate. A proxy that is a body corporate may appoint a representative to exercise the powers that the body corporate may exercise as the Member's proxy.

5. If a Member appoints two proxies, neither may vote on a show of hands. If the member appoints two proxies and the appointment does not specify the proportion or number of the Member's votes each proxy may exercise, each proxy may exercise half the Member's votes on a poll.

6. A proxy may vote or abstain as he or she chooses except where the appointment of the proxy directs the way the proxy is to vote on a particular resolution.

7. If a proxy appointment is signed or validly authenticated by the Member but does not name the proxy or proxies in whose favour it is given, the Chairman may either act as proxy or complete the proxy appointment by inserting the name or names of one or more Directors or the company secretary of IBC.

If:

• a Member nominates the Chairman of the meeting as the Member's proxy; or

• the Chairman is to act as proxy if a proxy appointment is signed by a Member but does not name the proxies in whose favour it is given or otherwise under a default appointment according to the terms of the proxy form,

then the person acting as Chairman in respect of an item of business at the meeting must act as proxy under the appointment in respect of that item of business.

Notes for corporate representatives

1. To vote in person at the General Meeting, a Member or proxy which is a body corporate may appoint an individual to act as its representative.

2. To vote by corporate representative at the meeting, a corporate Member or proxy should obtain an Appointment of Corporate Representative Form from the Registry, complete and sign the form in accordance with the instructions on it. The appointment should be lodged at the registration desk on the day of the meeting.

3. The appointment of a representative may set out restrictions on the representative's powers.

4. The original form of appointment of a representative, a certified copy of the appointment, or a certificate of the body corporate evidencing the appointment of a representative is prima facie evidence of a representative having been appointed.

5. The Chairman of the meeting may permit a person claiming to be a representative to exercise the body's powers even if he or she has not produced a certificate or other satisfactory evidence of his or her appointment.

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By order of the Board

Jill Brewster Company Secretary Ironbark Capital Limited

26 March 2015

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EXPLANATORY MEMORANDUM

1. RATIONALE AND TERMS OF THE BUY-BACK

1.1 Rationale for the Buy-Back

Under a buy-back, a company buys back its own shares from its shareholders. Any shares bought back are cancelled, with the result that the number of shares on issue is reduced by the number of shares bought back.

At the time of the 2011 annual general meeting ( 2011 AGM ), Shares had been trading at a large discount to IBC's net tangible assets for a sustained period as indicated in the chart below. The Directors at that meeting offered to convene a general meeting for Shareholders to authorise a buy-back by off-market tender process in which Shareholders may, but are not obliged to participate (the Buy-Back ) between 30 June 2014 and 30 April 2015 in order to give Shareholders who wish to sell some or all of the Shares the opportunity to do so at a price equal to IBC's net tangible asset ( NTA ) backing per Share less transaction costs associated with the proposed Buy-Back ( Proposal ).

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The Directors nominated the approximately three year period between the 2011 AGM and the proposed time for implementation of the Buy-Back so that Shareholders would have an appropriate period over which to evaluate the performance of IBC. This proposal was approved by Shareholders at the 2011 AGM and a new rule 4.12 was inserted in IBC's constitution to give effect to this proposal. An extract of rule 4.12 is set out in Annexure 1 for reference.

The Directors consider that the proposed Buy-Back is a very effective way to provide liquidity to Shareholders at the NTA of their Shares for those Shareholders who wish to dispose of some or all of their Shares. This would be subject to scale back on a pro-rata basis in the unlikely event that the level of participation in the Buy-Back by Shareholders would mean that the NTA of IBC would fall below $35 million as a result of IBC's acceptances of tenders under the Buy-Back ( Buy-Back Limit ). The Buy-Back Limit has been adopted so as to maintain a minimum amount of NTA for IBC to ensure its continued viability as an ASX listed company.

The Buy-Back is a company-sponsored means to enable Shareholders to exit all or part of their investment at a price close to NTA if they wish to (subject to the Buy-Back Limit). A

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selective return of capital, an alternative means available under the Corporations Act to facilitate such an exit, would require Shareholder approval by way of special resolution from Members not participating in the reduction. This alternative was not considered appropriate as all Shareholders eligible to participate in the reduction would be excluded from voting on the resolution to approve the conduct of the buy-back.

The Directors believe that the effect of the Buy-Back, if authorised, will be to decrease the discount at which Shares in IBC have traditionally traded to NTA. The Board believes that the existence of the Proposal has assisted with closing the gap between IBC's NTA and Share price. It is the Board's intention to offer Shareholders the opportunity to have their Shares bought back every 3 years for this purpose.

Other mechanisms to return capital were also considered, but an off-market Buy-Back was considered the most appropriate because it accommodates each Shareholder's preferences in respect of how many Shares it wishes to be bought back by IBC (if any). Also, the Buy-Back Price will primarily be funded through the sale of investments, which requires a period of time for the sale process to occur, and this cannot be accommodated as well by other mechanisms such as on-market buy-backs.

Your Directors make no recommendation regarding whether you should participate in the Buy-Back as this is an individual shareholder decision.

The Directors believe that the existence of the Proposal has assisted with closing the gap between IBC's NTA and share price. It is the Board's intention to offer shareholders the opportunity to have their shares bought back every 3 years for this purpose. For reference in this regard, the chart on the previous page shows a comparison of IBC’s Share price as against NTA over the previous twelve years highlighting the closure in the gap since 2011.

1.2 Terms of the Buy-Back

(a) Buy-Back

The Buy-Back will be structured as if it were an equal access buy-back. If the BuyBack is approved by Shareholders, Shareholders will receive a Buy-Back Booklet following the General Meeting setting out in detail the terms of the Buy-Back and other information known to IBC relevant to the decision of a Shareholder as to whether to participate in the Buy-Back. Shareholders will then have a period of 1 month to elect to participate in the Buy-Back.

At the end of the Tender Period, IBC will accept all valid offers from Shareholders (other than Excluded Foreign Shareholders), subject to the Buy-Back Limit. In the unlikely event that net tangible assets of IBC would fall below $35 million as a result of IBC's acceptance of Tenders under the Buy-Back, Tenders will be scaled back on a pro rata basis.

(b) Participation is voluntary

Participation in the Buy-Back is voluntary. Shareholders who do not wish to participate in the Buy-Back can still vote on whether IBC should offer the Buy-Back but need not take any further action in relation to the Buy-Back.

(c) Entitlement to participate

If the Resolution is passed at the General Meeting, the Buy-Back will be available for Tender by Shareholders (other than Excluded Foreign Shareholders) on the register of members of IBC on 12 May 2015 being the date 7 Business Days after

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the date the Resolution is passed. Shares acquired on the ASX on or after the BuyBack Ex-Entitlement Date (8 May 2015) will not be registered in your name by the Record Date and so will not carry an entitlement to participate in the Buy-Back.

Excluded Foreign Shareholders are Shareholders who reside in a jurisdiction outside Australia and IBC considers it would be unreasonable to make the BuyBack available to the Shareholder having regard to the number of Shareholders in that jurisdiction, the number and value of Shares held by Shareholders in that jurisdiction; and the cost of complying with legal requirements, and the requirements of any relevant regulatory authority in making the invitation, in that jurisdiction. On this basis, IBC presently considers it would be unreasonable to make the Buy-Back available to shareholders who reside in a jurisdiction outside Australia and those Shareholders will be deemed Excluded Foreign Shareholders.

(d) Buy-Back Price

If the Buy-Back is approved by Shareholders, the Buy-Back Price will be an amount equal to the NTA per Share after deduction of transaction costs associated with the Buy-Back and excluding the deferred tax asset of IBC. An explanation of the BuyBack Price and an example calculation of the Buy-Back Price is set out below.

NTA

How is NTA determined?

A company’s NTA is the net assets of the company, i.e. assets less liabilities. Consistent with its obligations as a listed investment company, IBC reports its monthly NTA per share to the ASX.

The calculation of the Buy-Back Price is based on the net tangible assets of IBC, after deduction of transaction costs associated with the Buy-Back and excluding the deferred tax asset of IBC, which is then divided by the number of Shares.

IBC's main assets, as with all listed investment companies, consist of its investment portfolio, which for IBC represents approximately 50 securities quoted on the ASX.

At the end of the Tender Period, IBC will estimate the Buy-Back Price based on the number of Tenders IBC receives and IBC's net tangible assets based on its most recent management accounts. IBC will then sell investments as necessary over a period of 20 Business Days after the close of the Tender Period and draw on cash reserves to fund its expected payment obligations under the Buy-Back. After that process has been completed, IBC will then determine and announce the Buy-Back Price on the date that is 20 Business Days after the close of the Tender Period, based on the NTA and realisation costs and excluding deferred tax assets and determined once the sale process has completed.

Why isn't the Buy-Back Price a fixed price or measured against the price of Shares on ASX?

The purpose of the Buy-Back is to provide Shareholders with an opportunity to exit all or part of their investment at a price close to NTA (subject to any scale back). Shares in in IBC have continued to trade on the ASX at a discount to NTA, although the gap has closed in recent months due to the performance of IBC and the commitment to the Buy-Back.

The Buy-Back Price has not been set as a fixed price because any fixed price set could, depending on the performance of IBC's trading portfolio, be more or less than IBC's NTA after the Tender Period closes. For example:

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• if the buy-back price were a fixed price per Share and that price is lower than NTA per Share after the Tender Period closes, then Shareholders who elected to participate in the Buy-Back would be disadvantaged by participating in the Buy-Back; and

• if the buy-back price were a fixed price per Share and that price was higher than NTA per Share after the Tender Period closes, then existing Shareholders would be disadvantaged by IBC having to pay more than NTA per Share to fund its payment obligations under the Buy-Back.

When will the Buy-Back Price be determined and announced?

The actual Buy-Back Price will not be determined and announced until 20 Business Days after the Buy-Back Tender Period closes.

The reason that the Buy-Back Price will be announced 20 Business Days after the Tender Period closes is because IBC will fund its obligation to pay Shareholders participating in the Buy-Back the Buy-Back Price by selling investments in its trading portfolio, and NTA will be calculated after that process has occurred so that the Buy-Back Price accurately reflects NTA, less transaction costs and excluding the deferred tax asset of IBC.

Shareholders that intend to participate in the Buy-Back (if it is approved) are cautioned that the calculation of the Buy-Back Price exposes them to fluctuations in the market for investments held by IBC between their Tender into the Buy-Back and determination of the Buy-Back Price.

Transaction costs

Transaction costs (inclusive of estimated investment realisation costs) are presently estimated to be in the order of 0.11 cents per Share.

The actual transaction costs incurred will depend on the amount of Tenders received by IBC to participate in the Buy-Back. Please see section 2.7 for further detail in respect of the costs comprising the estimated transaction costs.

Deferred tax asset

Deferred tax assets represent the amounts of income taxes recoverable in future periods in respect of carried forward unused tax losses including unrealised tax losses on current investments and temporary differences.

As deferred tax assets are recoverable in future periods, the realisation of deferred tax assets is uncertain and dependent on the future profitability of IBC and therefore their value is of benefit to those Shareholders who are not participating in the Buy-Back.

Special dividend

The Buy-Back Price paid to Shareholders to buy back their Shares may contain two components for Australian tax purposes: a capital component and a deemed dividend component. The deemed dividend component (if any) may be eligible to be treated as a franked dividend for tax purposes. If the Buy-Back Price is greater than both the Average Capital Per Share and the Tax Value per Share, part of the deemed dividend component of the Buy-Back Price may be an unfrankable dividend.

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In the event that the NTA is greater than both 55.25 cents per Share, (being the Average Capital Per Share) and the Tax Value, the Directors of IBC may declare a special fully franked dividend to all Shareholders on the date of calculation of the NTA. If declared, this may have the effect of reducing any unfranked dividend component of the Buy-Back Price. Any special dividend would be franked in accordance with the imputation rules. The record date for any special dividend would be set at a date prior to IBC's acceptance of any Tender from Shareholders so that it is available to all Shareholders, including Shareholders who elect to participate in the Buy-Back. If the Directors declare such a dividend, all Shareholders, including any who choose to participate in the Buy-Back, will be entitled to receive the special dividend. See section 2.14 for further details.

(e) Example of how the Buy-Back Price is determined

Example Buy-Back Price calculation as at 31 December 2014
	Cents per Share
Net Tangible Assets	55.73
Less: Transaction costs	(0.11)
Less: Deferred tax asset	(0.38)
Estimated Buy-Back Price	55.24
Share Price on the ASX as at 31 December 2014	54.00

Additional considerations in relation to example calculation

Using the above example, the price at which the Buy-Back would have been offered based on the financial position of IBC as at 31 December 2014 represents a 2.3% premium to the last traded price of 54 cents per Share on 31 December 2014. By comparison, the last price at which Shares traded on the ASX on 25 March 2015 (the date prior to the date of this Booklet) was 54.5 cents per share.

In the above example, there would be no dividend component as the Buy-Back price of 55.24 cents per share is less than the Average Capital Per Share of 55.25 cents per share.

IBC reports its NTA per Share to the ASX monthly. This figure is not an audited figure. As at 28 February 2015, the Buy-Back Price would have been 55.55 cents per Share, comprising the 55.25 cents per Share Average Capital Per Share component and 0.3 cents per share deemed dividend component, representing a 2.9% premium to the last traded price of 54 cents per share on 28 February 2015 (this is calculated after deducting the 1 cent per Share dividend which had an exdate of 18 March 2015).

(f) Buy-Back Limit and scale back

Tenders will be scaled back on a pro rata basis so that not all Shares tendered by Shareholders will be bought back if the NTA of IBC would fall below $35 million as a result of IBC's acceptance of Tenders under the Buy-Back as at the date the BuyBack Price is announced.

IBC considers that it is unlikely that the Buy-Back Limit would be reached because based on IBC's statement of financial position as at 31 December 2014, this would require that Shareholders Tender 63.875% of IBC's Shares into the buy-back. Shareholders are cautioned that the number of Shares that comprise the amount of Tenders required to reach the Buy-Back Limit is based on the Buy-Back Price, not a

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fixed percentage of IBC's Shares. As such, the proportion of Shares which will comprise the Buy-Back Limit will fluctuate and will only be able to be determined at the date the Buy-Back Price is determined.

In the unlikely event that participation in the Buy-Back is sufficiently high, as described above, as to result in the Tenders received being required to be scaled back, the scale back will be applied as follows:

• (i) Shareholders who have submitted Tenders in respect of all of their Shares and who would have a Shareholding of 2,000 Shares or less as a result of the scale back will have all of their Shares bought back; and

• (ii) The remaining Shares tendered by Shareholders to be bought back will be scaled back on a pro rata basis to ensure that the Buy-Back does not result in NTA of IBC falling below $35 million.

(g) Funding of the Buy-Back

As at 28 February 2015, IBC held investments in 50 securities quoted on the ASX. Each of these securities are available for sale to the extent required to fund payments under the Buy-Back. IBC also held cash of $1.42 million representing approximately 1.4% of the value of the portfolio on that date. This cash is also available to meet payment obligations under the Buy-Back.

IBC will fund the payment obligations under the Buy-Back by liquidating some of its investments and drawing on existing cash resources.

(h) Timing

If the Resolution is approved by Shareholders, the Buy-Back Booklet will be mailed to eligible Shareholders within 3 Business Days of the Record Date, expected to be 15 May 2015.

If the Resolution is approved by Shareholders, the Buy-Back will be open for Tenders for a period of 1 month and so is expected to close on 19 June 2015.

Payment of the Buy-Back Price for Shares, the subject of the Buy-Back, will be made within 28 Business Days after close of the Buy-Back Tender Period. This is expected to provide IBC a reasonable opportunity to allow IBC to realise sufficient investments to meet the Buy-Back payment obligations. All Shares bought back will be cancelled following payment of the Buy-Back Price.

See the section titled "Important Dates and Times for the Buy-Back if the Resolution is Approved" for additional detail.

The dates specified are subject to change and are indicative only. While IBC does not anticipate any changes to these dates, it reserves the right to change them without prior notice to Shareholders. Subject to the Corporations Act and the Listing Rules, any change to these dates and times will be publically announced on ASX as soon as it is reasonably practicable to do so.

IBC also reserves the right to terminate the Buy-Back at any time prior to the date on which IBC enters into Buy-Back Contracts with Shareholders by making an announcement to the ASX to that effect.

(i) How does the Buy-Back compare to selling Shares on the ASX?

See above for the method to calculate the Buy-Back Price and an example of the calculation. While this illustrates the method of calculation of the Buy-Back Price, it

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should not be taken as a representation of the Buy-Back Price that will in fact be determined.

The last price at which Shares traded on ASX on 25 March 2015 (being the last trading day prior to commencement of printing of this Booklet) was 54.5 cents.

You may be able to sell your Shares for a higher price than the Buy-Back Price on the ASX. However, you may have to pay brokerage if you sell your Shares on the ASX. You should not have to pay brokerage if you sell your Shares in the Buy-Back directly through the tender process.

The market price of Shares on the ASX may move higher than the Buy-Back Price during the Tender Period. It may also vary significantly in the future. The BuyBack may have the effect of reducing selling pressure on the Share price. As a result, while liquidity may be reduced, the price at which Shares trade on the ASX may be higher than that prior to implementation of the Buy-Back. By implementing the Buy-Back process, IBC is not making any recommendation or giving any advice on the value of its Shares, or whether (or how) you should sell your Shares.

Before you decide what to do with your Shares, we strongly recommend you seek your own professional advice (including taxation advice).

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2. BUY-BACK – RELEVANT CONSIDERATIONS

2.1 Introduction

The purpose of this Section 2 is to identify significant issues for Members to consider in relation to the Buy-Back.

Before deciding how to vote at the General Meeting, Members should carefully consider the factors discussed below, as well as the other information contained in this Booklet.

2.2 Why you may vote in favour of the Resolution

Reasons why Members may decide to vote in favour of the Resolution include the following:

• All Shareholders (except for Excluded Foreign Persons) have an equal opportunity to participate in the Buy-Back.

• Shareholders have the opportunity to sell their Shares at a price equal to NTA after transaction expenses and excluding the deferred tax asset (based on actual realisation of IBC investments). This price could be higher or lower than the Share price on ASX at the time of calculating the Buy-Back Price.

• Shareholders have a choice of whether to retain their Shares or participate in the Buy-Back for their full shareholding or part thereof (subject to the Buy-Back Limit).

• The off-market buy-back process will enable Shareholders to sell a large volume of Shares other than through the ASX.

• Eligible Shareholders will not have to pay brokerage or appoint a stockbroker to sell their Shares in the off-market Buy-Back.

2.3

Why you may vote against the Resolution

Members may decline to approve the Resolution for a number of reasons. These may include the following:

• There will be a reduction in the number of Shares on issue which may decrease liquidity on the ASX. See Section 2.12 for details.

• The Buy-Back will increase operating costs such as audit and custodian fees (other than management fees) as a proportion of total assets of IBC. See Section 2.6 for details.

• In the unlikely event that the Buy-Back Limit is reached, that is if IBC's NTA would fall below $35 million as a result of the Buy-Back, Tenders by Shareholders will be scaled back on a pro rata basis and if this occurs a Shareholder will not be able to sell all the Shares tendered to IBC, unless the Shareholder would be left with 2,000 Shares after IBC's acceptance of the Tender.

• By participating in the Buy-Back, Shareholders will not have the opportunity to benefit from the management of the portfolio to be undertaken by KFM.

• In view of the possible adverse consequences of the Buy-Back for Shareholders not wishing to participate in the Buy-Back, it may be in the interests of such Shareholders to vote against the Resolution.

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2.4 Key implications if the Buy-Back does not proceed

If Members do not pass the Resolution:

• The Buy-Back will not proceed and there will be no change in the capital structure of IBC.

• IBC will continue to be managed by KFM in accordance with the terms of the Management Agreement (see section 3.2 for further details).

• Shareholders wishing to exit their investment in IBC must do so on the ASX or offmarket which may depress the price of Shares traded on the ASX.

• IBC will continue as an ASX listed company.

2.5 Impact on IBC's financial position

The impact of the Buy- Back on the financial position of IBC is illustrated in the pro-forma balance sheet below which sets out the audited Statement of Financial Position as at 31 December 2014 and with the scenarios of 25%, 50%, and 63.875%* participation by Shareholders in the buy-back.

*Based on IBC's statement of financial position as at 31 December 2014, the Buy-Back Limit would be reached if Shareholders Tender 63.875% of IBC's Shares into the buyback. Shareholders are cautioned that the number of Shares that comprise the amount of Tenders required to reach the Buy-Back Limit is based on the Buy-Back Price, not a fixed percentage of IBC's Shares. As such, the proportion of Shares which will comprise the Buy-Back Limit will fluctuate and will only be able to be determined at the date the BuyBack Price is determined.

The precise impact of the Buy-Back cannot be determined until the Buy-Back Price and the total size of the Buy-Back are determined.

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Statement of Financial Position as at 31 December 2014

	Before Buyback $'000	25% take up $'000	50% take up $'000	63.875% take up $'000
CURRENT ASSETS
Cash and cash equivalents	579	579	579	579
Trade and other receivables	150	150	150	150
Trading portfolio	94,401	70,757	47,113	33,990
Other assets	35	35	35	35
TOTAL CURRENT ASSETS	95,165	71,521	47,877	34,754
NON‐CURRENT ASSETS
Deferred tax assets	646	646	646	646
TOTAL NON‐CURRENT ASSETS	646	646	646	646
TOTAL ASSETS	95,811	72,167	48,523	35,400
LIABILITIES
CURRENT LIABILITIES
Trade and otherpayables	108	108	108	108
Current tax liabilities	285	285	285	285
TOTAL CURRENT LIABILITIES	393	393	393	393
NON‐CURRENT LIABILITIES
Deferred tax liabilities	7	7	7	7
TOTAL NON‐CURRENT LIABILITIES	7	7	7	7
TOTAL LIABILITIES	400	400	400	400
NET TANGIBLE ASSETS	95,411	71,767	48,123	35,000
EQUITY
Issued capital	94,595	70,951	47,307	34,184
Profit reserve	748	748	748	748
2015 Profit reserve	681	681	681	681
Accumulated losses	(613)	(613)	(613)	(613)
TOTAL EQUITY	95,411	71,767	48,123	35,000
NTA per share $0.5573 $0.559 $0.562 $0.566 NTA per share after deferred tax & transaction costs $0.5524 $0.553 $0.553 $0.554

Notes:

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1. The column headed "Before Buy-Back" represents the audited statement of financial position of IBC as at 31 December 2014.

2. The column headed "25% take-up" is taken from the audited statement of financial position of IBC as at 31 December 2014 and represents IBC's acceptance of Tenders in respect of 42,803,867 Shares representing 25% of the issued Shares and assuming the Buy-Back Price of 55.24 cents which is NTA as at 31 December 2014 net of transaction costs of the buy-back of 0.11 cents and excluding the deferred tax asset of $646,000.

3. 3 The column headed "50% take-up" is taken from the audited statement of financial position of IBC as at 31 December 2014 and represents IBC's acceptance of Tenders in respect of 85,607,733 Shares representing 50% of the issued Shares and assuming the Buy-Back Price of 55.24 cents which is NTA as at 31 December 2014 net of transaction costs of the buy-back of 0.11 cents and excluding the deferred tax asset of $646,000.

4. The column headed "63.875% take-up" is taken from the audited statement of financial position of IBC as at 31 December 2014 and represents IBC's acceptance of Tenders in respect of 109,363,879 Shares representing 63.875%% of the issued Shares and assuming the Buy-Back Price of 55.24 cents which is NTA as at 31 December 2014 net of transaction costs of the buy-back of 0.11 cents and excluding the deferred tax asset of $646,000.

5. 5 Assumed that Buy-Back was funded by sale of investments and there is no change in the cash levels in the above balance sheets. If part of the portfolio was liquidated, IBC would realise gains and losses and this would change the retained earnings. For simplicity, in the above scenarios, it was assumed that no gains or losses were realised on the sale of investments.

6. The full deferred tax asset of $646,000 is maintained as IBC can utilise this after the Buy-Back subject to future profitability.

2.6 Impact on Operating Costs

Under the Management Agreement, KFM is entitled to a management fee equal to 0.65% per annum of the value of the portfolio, calculated on the last Business Day of each month. Effective 1 July 2015, this will be changed whereby KFM will be paid an annual management fee of 0.40% of the value of the portfolio for the period of the mandate. Commencing 1 July 2014, a performance fee of 15% of the performance (adjusted for the value of franking credits received or accrued during the financial year (after the deduction of the management fee and any applicable GST)) of the portfolio above the 1 year swap rate plus 6% (the benchmark) will be determined by IBC at the end of each financial year for the period of the mandate. This performance fee will be payable by IBC to KFM within 30 business days of the end of the immediately preceding financial year. See Section 3.2 for details. The amount of management fees paid to KFM will therefore reduce in proportion to the reduction of assets of IBC following the Buy-Back.

Other on-going costs associated with the operation of IBC including accounting and audit fees, advisors' fees, costs of preparation of the annual report, holding annual general meetings, other compliance costs and legal costs are largely fixed costs and will not reduce proportionately with the reduction in assets of IBC. As a result, the management expense ratio for IBC may increase.

If there is a significant take-up of the Buy-Back by eligible Shareholders, the Directors will reassess the operating costs (including Board expenses) associated with continued operation of the business of IBC and may take steps available to them to limit any increase in the management expense ratio of IBC.

2.7

Transaction costs

Transaction costs (inclusive of estimated investment realisation costs) are presently estimated to be in the order of 0.11 cents per Share.

Estimated transaction costs comprise the following:

• (a) Registry services and associated costs in the order of approximately $45,000 to $55,000;

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• (b) Tax and legal advice in the order of approximately $35,000 to $50,000;

• (c) Accounting and administration costs in the order of approximately $8,000 to $12,000; and

• (d) Transaction costs for realisation of the portfolio assuming approximately 50% of the portfolio is liquidated in the order of approximately $85,000 to $100,000.

The actual transaction costs incurred will depend on the level of Tenders received by IBC to participate in the Buy-Back.

2.8 Funding of the Buy-Back

As at 28 February 2015, IBC held investments in 50 securities quoted on the ASX. Each of these securities are available for sale to the extent required to fund payments under the Buy-Back. IBC also held cash of $1.42 million representing approximately 1.4% of the value of the portfolio on that date. This cash is also available to meet payment obligations under the Buy-Back.

As investment manager, KFM will arrange to fund the payment obligations under the BuyBack by liquidating IBC investments and drawing on existing cash resources. Under the Management Agreement, KFM must take any action required to ensure that IBC has sufficient cash available to meet its payment obligations under the Buy-Back.

In preparing the pro forma statements of financial position included in Section 2.5, it has been assumed that the Buy-Back was funded by the sale of investments and that no gains or losses were realised on the sale of those investments. This may not reflect the source of funding for the Buy-Back. See note 5 to the pro forma statements of financial position in Section 2.5 for details.

2.9

No impact on solvency

IBC considers that it will remain solvent and will continue to be able to pay its debts as and when they fall due following the Buy-Back, irrespective of the level of IBC's acceptance of Tenders into the Buy-Back.

The Directors do not consider that the Buy-Back will materially prejudice IBC’s ability to pay its creditors.

2.10 Impact on IBC's capital structure

IBC presently has 171,215,466 Shares on issue held by 2,365 Shareholders (based on the register of Members of IBC on 6 March 2015). IBC has no other securities on issue.

Under the Corporations Act, each Share that is bought back will be cancelled. As a result, the number of Shares on issue, and therefore the capital of IBC, will be reduced by the number of Shares that Shareholders offer into the Buy-Back.

If the Buy-Back Limit is reached, the maximum impact on the capital structure is as outlined below.

If NTA of IBC would fall below $35 million as a result of IBC's acceptance of Tenders under the Buy-Back, Tenders will be scaled back on a pro rata basis. The exact number of Shares bought-back in this circumstance will depend on the Buy-Back Price. However, for illustration, based on the financial position of IBC as at 31 December 2014, assuming transaction costs of 0.11 cents per Share (inclusive of estimated investment realisation costs) and excluding the deferred tax asset of 0.38 cents per Share, the Buy-Back Price would be 55.24 cents per Share. The maximum number of shares bought back would have been 109,363,879 so that IBC would have had 61,851,587 Shares remaining on

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issue. The financial impact is outlined in the last column of the table in section 2.5 with the heading “63.875% take up”.

2.11 Impact on control of IBC

The impact of the Buy-Back on the control of IBC is dependent on the level of participation in the Buy-Back and the identity of the parties electing to participate in the Buy-Back.

Based on the most recent substantial holder notices lodged with IBC:

• (a) Kaplan Partners Pty Ltd and its Associates ( Kaplan ) held voting power of 24.38%;

• (b) WAM Research Limited and its Associates ( Wilson Asset Management Group has voting power of 7.37%; and

• (c) Abtourk (Syd No 415) Pty Limited ( Abtourk ), has voting power of 5.08%.

Kaplan has advised IBC that its current intention is that it does not intend to participate in the Buy-Back and will continue to support IBC. Additionally, KFM, IBC's investment manager, is a wholly owned subsidiary of Kaplan Partners Pty Ltd. As described in section 3.2, KFM's management fees are a calculated as a percentage of the portfolio value of IBC so to the extent IBC's portfolio value decreases as a result of the Buy-Back, KFM's fees will decrease (see section 3.2 for further details).

Abtourk (Syd No 415) Pty Limited is owned and controlled (directly or indirectly) by Mr Michael Cole, the Chairman of the IBC board. Please see section 2.16 for details in relation to Mr Cole’s intentions to participate in the Buy-Back.

The table below illustrates the possible voting power of the above named substantial holders if each does not participate in the Buy-Back and its voting power in IBC does not change other than as a direct result of the Buy-Back.

Substantial holder	Voting power (Based on the Shareholder's most recent substantial holder notice)	Voting power if 25% of IBC's Shares are bought back and the Shareholder does not participate in the Buy-Back	Voting power if 50% of IBC's Shares are bought back and the Shareholder does not participate in the Buy-Back	Voting power if 63.875%* of IBC's Shares are bought back and the Shareholder does not participate in the Buy-Back
Kaplan	24.38%	32.51%	48.76%	67.49%
Wilson Asset Management Group	7.37%	9.83%	14.74%	20.40%
Abtourk	5.08%	6.77%	10.16%	14.06%

*Based on IBC's statement of financial position as at 31 December 2014, the Buy-Back Limit would be reached if Shareholders Tender 63.875% of IBC's Shares into the buy-back. Shareholders are cautioned that the number of Shares that comprise the amount of Tenders that would reach the BuyBack Limit is based on the Buy-Back Price, not a fixed percentage of IBC's Shares. As such, the proportion of Shares which will comprise the Buy-Back Limit will fluctuate and will only be able to be determined at the date the Buy-Back Price is determined.

The table illustrates that if 50% of IBC's Shares are bought back, Kaplan will almost be able to pass an ordinary resolution at a general meeting of Shareholders on a poll by itself. Similarly, if 63.875% of IBC's Shares are bought back, Kaplan will almost be able to pass a special resolution at a general meeting of Shareholders on a poll by itself.

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2.12 Impact on liquidity and trading

Generally, liquidity in trading of Shares is affected by the number of Shares available for trading. As the Buy-Back (if authorised by Shareholders) will reduce the number of Shares on issue, the Buy-Back may result in a reduction in liquidity of IBC Shares on the ASX. The extent of that reduction will depend on the number of Shares bought back by IBC.

However, as the Buy-Back provides an exit mechanism for Shareholders independent of the ASX, the Buy-Back may have the effect of reducing selling pressure on the IBC Share price. As a result, while liquidity may be reduced, the price at which Shares trade on the ASX may be higher than that prior to implementation of the Buy-Back.

Moreover, if the Buy-Back price is higher than the price at which Shares trade on the ASX, there may be an increase in the market price for Shares.

The last price at which Shares traded on the ASX on 25 March 2015 (the date prior to the date of this Booklet) was 54.5 cents per share.

The price at which the Buy-Back would have been offered based on the financial position of IBC as at 31 December 2014, assuming transaction costs of 0.11 cents per Share (inclusive of estimated investment realisation costs) and excluding the deferred tax asset of 0.38 cents per Share was 55.25 cents per Share, a 2.3% premium to the last traded price. See Section 3.4 for further information regarding trading in Shares on the ASX.

2.13 Impact on IBC tax position

Other than as outlined in section 2.15 below, the Buy-Back should not give rise to any income tax or CGT consequences for IBC.

However, a disposal of IBC’s investments to fund the Buy-Back may trigger a tax liability (subject to any available tax and capital losses) for IBC in respect of any gain realised on the disposal.

2.14 Australian tax consequences for Shareholders

For Australian taxation purposes, the Buy-Back would constitute an “off-market” share buy-back. The Buy-Back Price paid to Shareholders to buy back their Shares may contain two components for Australian tax purposes: a capital component and a deemed dividend component. The deemed dividend component (if any) may be eligible to be treated as a franked dividend for tax purposes.

If the Buy-Back Price is greater than both the Average Capital Per Share and the Tax Value per Share, part of the deemed dividend component of the Buy-Back Price may be an unfrankable dividend. A special dividend may be declared, which may have the effect of reducing the unfranked component (if any).

If the Buy-Back proceeds, a booklet containing further details in relation to the Buy-Back (Buy-Back Booklet), including an invitation to participate and the terms of the relevant Buy-Back, would be sent to Shareholders.

Each Shareholder should obtain specific tax advice on the treatment of the Buy ‐ Back taking into account their particular circumstances.

2.15

Impact on franking credits

As at 31 December 2014, IBC had a franking credit balance of $0.138 million.

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The Buy-Back Price may include a deemed dividend component if the Buy-Back Price exceeds 55.25 cents per Share, being the Average Capital Per Share. Furthermore, if the Buy-Back Price is greater than the Tax Value, part of the deemed dividend component may be unfrankable.

If the Directors declare a special dividend, any such special dividend will be franked in accordance with the imputation rules. The record date for any special dividend would be set at a date prior to IBC's acceptance of any Tender from Shareholders so that it is available to all Shareholders, including Shareholders who elect to participate in the BuyBack.

The amount of franking credits that will be utilised under the Buy-Back cannot be determined until the Buy-Back Price, the Tax Value and the total size of the Buy-Back are determined.

2.16 Intentions of the Directors

As at 6 March 2015, the Directors held the following numbers of Shares:

Directors	Number of Shares
M Cole	10,237,651
I Hunter	2,770,532
R Finley	1,865,526
Total	14,873,709

The Chairman, Mr Cole has indicated that he has not made a final decision with respect to his Shareholding but if the Resolution is approved, he intends to retain a significant Shareholding post Buy-Back. Mr Hunter has indicated that if the Resolution is approved, he will retain at least 50% of his Shareholding. Mr Finley has indicated that if the Resolution is approved, he will retain at least 25% of his Shareholding.

2.17 How would a scale back work?

Tenders will be scaled back on a pro rata basis so that not all Shares tendered by Shareholders will be bought back if the NTA of IBC would fall below $35 million as a result of IBC's acceptance of Tenders under the Buy-Back as at the date the Buy-Back Price is announced.

In the unlikely event that participation in the Buy-Back is sufficiently high as to result in the Tenders received being required to be scaled back, the scale back will be applied as follows:

• (a) Shareholders who have submitted Tenders in respect of all of their Shares and who would have a Shareholding of 2,000 Shares or less as a result of the scale back will have all of their Shares bought back; and

• (b) The remaining Shares tendered by Shareholders to be bought back will be scaled back on a pro rata basis to ensure that the Buy-Back does not result in NTA of IBC falling below $35 million.

2.18

How will a Shareholder know if a scale back will be applied?

On 17 July 2015 IBC will announce the Buy-Back Price and whether any scale back will be applied.

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IBC will send all Eligible Shareholders who have tendered their Shares in to the Buy-Back a statement notifying them of the number of their Shares that have been bought back and the price paid for them on 30 July 2015.

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3. KAPLAN FUNDS MANAGEMENT AND IBC

3.1 Kaplan Funds Management

About Kaplan Funds Management

KFM is a wholesale fund manager founded in 1998 with approximately $1.3 billion currently under management in both equities and interest rate benchmarked portfolios. Wholesale products include investment trusts for the professional investor market and charities, a pooled superannuation trust and discrete equities and income mandates for corporate clients. Kaplan manages the portfolio of IBC.

Investment Philosophy

KFM has been managing funds with an absolute return philosophy since 1998. The manager’s philosophy is derived from an income oriented investment style combined with active, risk averse and disciplined portfolio management. KFM’s management style has appealed to investors such as charities, foundations, defined pension funds, self-managed super and high net worth individuals seeking consistent returns with low volatility.

Investment Team

Sam Kaplan

Sam Kaplan, the Managing Director of KFM has over 35 years' experience in the funds management industry and investment markets and a proven track record over a number of market cycles.

He successfully managed funds in his position as investment manager for the NRMA Group for over 15 years and has managed smaller funds for high net worth individuals and proprietary funds for Jamison Equity Limited and Patrick Corporation Limited.

Sam was integral in the establishment of the listed Qube Logistics previously known as KFM Diversified Infrastructure & Logistics Fund. KFM was the investment manager of the fund until corporatisation in August 2011. Sam is the Deputy Chairman of Qube Holdings Limited.

He has achieved above-average returns for investors over a number of market cycles through patient investing and by focusing on value opportunities and a disciplined approach to risk.

Douglas Hew

Doug Hew is an investment manager at KFM and has over 25 years' experience in the funds management industry.

Previously, he was a director of Hopkins Partners Funds Management Limited and a senior fund manager at Potter Warburg Asset Management Limited and Hambros Australia Limited.

Performance and Funds Under Management

KFM currently manages $1.3 billion for both wholesale and high net worth investors (as at 28 February 2015). Since the inception of the management of IBC the performance has returned 8.73% per annum over 12.2 years with relatively low volatility of 6.7% compared to the ASX 300 Index volatility of 13.2% over the same period.

Past performance is no indication of future performance.

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3.2 Management Agreement

KFM assumed responsibility for the management of the portfolio of IBC with effect from close of business on 31 December 2002. Under the Management Agreement, KFM has powers of a natural person to deal with the portfolio and to do all things necessary for the purpose of managing the portfolio.

When managing IBC's portfolio, KFM must comply with the investment instructions and investment objectives given by IBC from time to time.

In return for managing IBC's portfolio, KFM is entitled to a management fee equal to 0.65% per annum of the portfolio value of IBC calculated on the last business day of each month. Effective 1 July 2015, this will change, whereby KFM will be paid an annual management fee of 0.40% of the value of the portfolio for the period of the mandate. Commencing 1 July 2014 a performance fee of 15% of the performance (adjusted for the value of franking credits received or accrued during the financial year (after the deduction of the management fee and any applicable GST)) of the portfolio above the 1 year swap rate plus 6% (the benchmark) will be determined by IBC at the end of each financial year for the period of the mandate. This performance fee will be payable by IBC to KFM within 30 business days of the end of the immediately preceding financial year.

The Management Agreement may be terminated by either KFM or IBC on 12 months’ written notice of termination. IBC may also terminate the Management Agreement by written notice to KFM if:

• (a) a material change in the sound operation of KFM’s business, or

• (b) poor performance of KFM, assessed on a two year rolling period from 3 March 2004.

3.3 Summary of full and half-year results and outlook

In the 2014 financial year, IBC generated an underlying profit from operations, before tax of $9.516 million, which increased by 27.4% from the previous year’s $7.467 million. In the half year to 31 December 2014 IBC generated an underlying profit from operations, before tax of $128,000.

The operating profit reflects the revenue from dividends and interest income, realised and unrealised gains less operating costs which include management fees paid to KFM for management of the investment portfolio.

The net profit after tax for the 2014 year was $7.675 million for the year, compared to a prior year profit of $6.186 million. Included in the operating profit after tax was recognition of net gains on investments before tax $5.933 million (compared to net gains of $3.807 million in the prior year).

As at 31 December 2014, IBC has a deferred tax asset (DTA) of $646,000.

A complete copy of the audited financial statements for IBC for the financial year ended 2014 and the audited report for the half year ended 31 December 2014 is available from IBC’s website at www.ironbarkcapital.com.

3.4

Trading in Shares

In the 12 months to 6 March 2015, Shares have traded at a high of 58.22 cents per Share (on 25 August 2014) and a low of 52 cents per Share (on 15 December 2014). The volume weighted average price at which Shares have traded in this period was 55.06 cents per Share.

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In the 3 months to 6 March 2015, Shares have traded at a high of 57 cents per Share (on 11 December 2014) and a low of 52 cents per Share (on 15 December 2014). The volume weighted average price at which Shares have traded in this period was 54.71 cents per Share.

3.5 IBC is a disclosing entity

As a company listed on the ASX and a "disclosing entity" under the Corporations Act, IBC is subject to regular reporting and disclosure obligations which require it to announce price sensitive information as soon as it becomes aware of that information. IBC's most recent announcements are available from its website.

Further announcements concerning IBC will continue to be made available on the website after the date of this Booklet.

The ASX maintains files containing publicly available information about entities listed on their exchange. IBC's files are available for inspection from the ASX during normal business hours and are available on the ASX website.

IBC is required to lodge various documents with ASIC. Copies of documents lodged with ASIC by IBC may be obtained, or inspected at, ASIC offices.

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5. ADDITIONAL INFORMATION REGARDING BUY-BACK

5.1 Introduction

This Section includes additional information that IBC considers is material to the decision on how to vote on the Resolution.

5.2 Regulatory requirements

This Section summarises the Corporations Act requirements relevant to the Resolution (approval of Buy-Back).

Under Section 257C of the Corporations Act, IBC may not undertake a buy-back of shares representing more than 10% of the smallest number of votes attaching to Shares on issue in the preceding 12 months unless the terms of the buy-back agreement are approved by Shareholders in General Meeting. This cap on share buy-backs is known as the 10/12 limit.

Whether the Buy-Back will result in the 10/12 being exceeded will depend upon the level of acceptance for the Buy-Back received by IBC following passage of the Resolution. The Resolution is directed at providing the authorisation to implement the Buy-Back on the assumption that the 10/12 limit will be exceeded.

5.3 No Voting Restrictions

There are no voting restrictions for the Resolution.

5.4 ASX waivers

As at the date of this Booklet, no waiver from the Listing Rules has been granted by the ASX to IBC in relation to the Buy-Back.

5.5 ASIC Relief

The proposed Buy-Back does not technically comply with the requirements under the Corporations Act for an equal access buy-back because the Corporations Act contemplates IBC making an offer to buy-back shares to Shareholders, whereas the Buy-Back contemplates IBC making an invitation to Shareholders to offer to IBC to Buy-Back their Shares. Also, as Excluded Foreign Persons will not be entitled to participate in the BuyBack, the Buy-Back is technically a selective buy-back, whereas IBC wishes to treat it as an equal access buy-back.

Accordingly, absent of relief from ASIC, it will not be a buy-back in the form contemplated by the Corporations Act and in addition would be treated as a selective buy-back for the purposes of the Corporations Act. and, rather than requiring approval by ordinary resolution of Shareholders, it would require approval by a special resolution on which no votes may be cast by Shareholders whose Shares are proposed to be bought back.

IBC has applied for and received an exemption under Section 257D(4) of the Corporations Act. This exemption permits IBC to conduct the Buy-Back in substantially the same manner as an equal access buy-back in accordance with Division 2 of Part 2J of the Corporations Act, provided that:

• (a) the Buy-Back is on substantially on the terms contemplated in the Buy-Back Invitation;

• (b) the Buy-Back complies with the conditions in subsection 257B(2) of the Act, subject to subsection 257B(3) of the Act, except that:

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• (i) IBC does not comply with paragraph 257B(2)(b) of the Act but rather invites all Eligible Shareholders to offer for sale any number of their Shares to IBC in accordance with the terms and conditions of the Buy-Back Invitation; and

• (ii) IBC does not comply with paragraph 257B(2)(c) of the Act but rather, all Eligible Shareholders have a reasonable opportunity to offer for sale any number of their Shares as set out in paragraph (b)(i) above; and

• (iii) IBC does not comply with paragraph 257B(2)(d) of the Act but rather, the buy-back agreements are not entered into until after the Tender Period has closed; and

• (iv) IBC does not comply with paragraph 257B(2)(e) of the Act but rather the Buy-Back Invitation is to be made to all Eligible Shareholders subject to the scale back mechanism described in the Buy-Back Invitation; and

• (c) IBC must ensure that:

• (i) the Buy-Back Invitation includes a Buy-Back Limit; and

• (ii) the Buy-Back Invitation includes a term that if, at the close of the Buy-Back Offer Period, IBC has received tenders that in aggregate are more than the Buy-Back Limit:

  • (A) IBC will buy back Shares up to the Buy-Back Limit;

  • (B) the number of Shares in each Eligible Shareholder’s tender that will be bought back will be reduced in accordance with the scale back mechanism described in the Buy-Back Invitation; and

• (iii) no buy-back agreement is entered into until after the Tender Period has closed; and

• (iv) IBC does not make the Buy-Back Invitation unless the terms of the BuyBack Invitation are approved by a resolution passed in accordance with subsection 257C(1) of the Act at a general meeting of Shareholders on or about 30 April 2015.

5.6 Independent advice

Members should consult their legal, financial, taxation or other professional adviser if they have any queries regarding:

• the Buy-Back;

• the taxation implication for them if the Buy-Back is implemented; or

• any other aspects of this Booklet.

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6. GLOSSARY

The following terms used in this Booklet (including the Notice of Meeting included in this Booklet) have the meanings given to them below, unless the context otherwise requires.

2011 AGM	has the meaning given in section 1.1
ASIC	Australian Securities & Investment Commission
Associate	has the meaning given in section 9 of the Corporations Act.
ASX	ASX Limited (ACN 008 624 691) or, as the context requires, the financial market conducted byit
Average Capital Per Share	the number that is the amount of IBC’s issued ordinary Share capital divided by the number of shares on issue
Board or IBC Board	the board of Directors of IBC or any duly constituted committee of the board
Booklet	this Notice of Meeting and Explanatory Memorandum
Business Day	a day other than a Saturday, Sunday or public holiday on which banks are open for normal banking business in New South Wales
Buy-Back	the buy-back of Shares by way of a tender process as set out in this Explanatory Memorandum
Buy-Back Booklet	the booklet in respect of the Buy-Back to be sent to Shareholders if the Resolution is passed
Buy-Back Date	the date and time the IBC Board determines number of Shares to be bought back (and accepts Tenders in accordance with the terms and conditions of this Buy-Back)
Buy-Back Contract	the contract formed on the Buy-Back Date between a Shareholder participating in the Buy-Back and IBC at the time that IBC accepts a Tender (if and to the extent that IBC accepts the Tender)
Buy-Back Documents	the Buy-Back Booklet, the Tender Form and the Withdrawal/Amendment Form
Buy-Back Limit	The maximum number of Shares that IBC decides to buy back being the number of shares that, when purchased at the Buy-Back Price would not result in the NTA of IBC falling below $35 million.
Buy-Back Price	the price at which IBC will buy back Shares from tenders it accepts in the Buy-Back, rounded to the nearest cent if the Resolution is approved by Shareholders
CHESS Holder	a holder of Shares on the CHESS sub-register of IBC
CGT	capitalgains tax
Corporations Act	the_Corporations Act 2001_(Cth), as modified by any relief or exemption to it granted by ASIC to IBC
Director	means a director of IBC from time to time
Excluded Foreign Person	any person holding Shares:

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	(a) to whom IBC would be prohibited from paying money pursuant to the: i. Banking (Foreign Exchange) Regulations 1959(Cth); ii. Regulations made under the_Charter_ of the United Nations Act 1945(Cth) imposing financial sanctions including the Charter of the United Nations (Dealing with Assets) Regulations 2008 (Cth); or iii. Any other law, act, rule, or regulation which prohibits the Company from making payments to foreign persons; or (b) who resides in a jurisdiction where it would be illegal under the laws of Australia to make the Buy-Back Invitation to the Shareholder; or (c) whose participation in the Buy-Back Invitation is not permitted under the laws of Australia or the jurisdiction in which they are resident; or (d) who resides in a jurisdiction outside Australia and it would be unreasonable to make the Buy-Back Invitation to the Shareholder having regard to each of the following: i. the number of Shareholders in the jurisdiction; ii. the number and value of Shares held by Shareholders in that jurisdiction; and iii. the cost of complying with legal requirements, and the requirements of any relevant regulatory authority application to making the Invitation in that jurisdiction. For the avoidance of doubt, an Excluded Foreign Person includes: (a) any person who is located or resident in the United States; (b) any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from the United States; or (i) any person who has a registered address in Canada.
Explanatory Memorandum	this explanatory memorandum dated 26 March 2015 in relation to the Resolution
General Meeting	the meeting of members to be convened in respect of the Resolution on 30 April 2015. The notice convening the General Meeting is included in this Booklet

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IBC	Ironbark Capital Limited ACN 008 108 227
KFM	Kaplan Funds Management Pty Ltd ACN 079 218 643, AFSL 240815
Listing Rules	the listingrules of the ASX
Management Agreement	the management agreement between IBC and KFM effective from 1 February2005
Member	a registered holder of Shares
NTA	net tangible assets
Notice of Meeting	the notice for the General Meeting dated 26 March 2015, included in this Booklet
Registry	Boardroom PtyLimited(ACN 003 209 836)
Resolution	the resolution set out in the Notice of Meeting to approve the Buy-Back
Shares	ordinaryshares in the capital of IBC
Shareholder	a registered holder of Shares
S&P Index	S&P/ASX 300 index
Tax Value	the volume weighted average price (VWAP) of the Company’s shares on the ASX over the last five trading days before the announcement of the Buy- Back adjusted for the percentage change in the S&P/ASX 300 Index from the commencement of trading on the first announcement date to the close of tradingon the daythe Buy-Back closes
Tender	a Shareholder's offer to sell Shares to IBC on the terms and conditions set out in the Buy-Back Documents as amended in accordance with the procedures set out in the Buy-Back Documents
Tender Form	the form of offer by a Shareholder to sell Shares to IBC under the Buy-Back, which will be enclosed with the Buy-Back Booklet, or represented by instructions from a CHESS Holder's controlling participant (and includes a Tender Form amended in accordance with any procedures set out in the Buy- Back Documents)
Tender Period	the period within which, if the Resolution is approved, Shareholders may lodge, withdraw or amend a tender in accordance with the procedures set out in the Buy-Back booklet to be sent to Shareholders if the Resolution is approved, expected to be 15 May2015 to 19 June 2015
Withdrawal/Amendment Form	the form entitled “Withdrawal/Amendment Form", a copy of which will be included at the back of the Buy-Back Booklet, that is required to withdraw or amend a previously submitted Tender
voting power	has the meaning given in the Corporations Act

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Annexure 1

RULE 4.12 OF IBC'S CONSTITUTION

4.12 Realisation Transaction

• (a) For the purposes of this rule 4.12:

Realisation Price means the net tangible asset backing per share of the Company after deduction of transaction costs associated with the Realisation Transaction, and if determined by the directors, costs to wind up the Company following completion of the Realisation Transaction. This determination will be made on a date that is within 20 Business Days after the close of the offer under a Realisation Transaction.

Realisation Transaction means a selective buyback of shares of the Company undertaken through an off-market tender process in which members may, but are not obliged to, participate for cash of an amount per share equal to the Realisation Price, undertaken in accordance with Chapter 2J Division 2 of the Corporations Act.

• (b) Subject to rule 4.12(c), the directors must:

• (i) take all reasonable steps to assess the ability of the Company to effect the Realisation Transaction, the impact of effecting the Realisation Transaction on the Company, members who participate in the Realisation Transaction and members who do not participate in the Realisation Transaction (if any) and any alternative the directors consider may provide an equivalent or more attractive benefit to members;

• (ii) to the extent necessary to enable the directors to satisfy their obligations under this rule 4.12(b), engage such advisers as a reasonable person would engage to obtain advice in relation to the Realisation Transaction;

• (iii) convene a meeting of members to be held after 30 June 2014 and before 30 April 2015 to authorise implementation of the Realisation Transaction or, if the Company is unable for any reason to effect the Realisation Transaction on the terms proposed in this rule 4.12, to authorise implementation of a transaction, on terms as similar as is reasonably possible to those proposed in this clause 4.12;

• (iv) take all steps within their power that are necessary to ensure that the Realisation Transaction, or other transaction proposed at the meeting referred to in rule 4.12(b)(iii), if approved by members in accordance with the Corporations Act, can be implemented as soon as possible after approval of the Realisation Transaction or other transaction. This includes, without limitation, preparing an explanatory memorandum satisfying the requirements of the Corporations Act in respect of the Realisation Transaction and lodging all necessary documents with ASIC;

• (v) take all steps within their power to ensure that the meeting referred to in rule 4.12(b)(iii) is held on the date for which it has been convened without adjournment; and

• (vi) comply with all applicable laws in respect of the Realisation Transaction.

• (c) Nothing in this rule 4.12 requires a director to:

• (i) give a recommendation to members that they vote in favour of the resolution authorising or approving a Realisation Transaction; or

• (ii) take any action which is inconsistent with applicable law (including, without limitation, their fiduciary obligations).

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• (d) The directors must not take any action which is designed to, or otherwise expected to have the effect of, limiting the ability of the Company to implement or substantially reduce the benefit to members of implementing a Realisation Transaction including, without limitation, entering into any contract which results in a significant payment to a third party on implementation of a Realisation Transaction.

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All Correspondence to:

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 By Mail Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Australia Level 7, 207 Kent Street, Sydney NSW 2000 Australia  By Fax: +61 2 9290 9655  Online: www.boardroomlimited.com.au  By Phone: (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600

YOUR VOTE IS IMPORTANT

For your vote to be effective it must be recorded before 10.00am on 28 April 2015.

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 APPOINTMENT OF PROXY

Indicate who you want to appoint as your Proxy.

If you wish to appoint the Chair of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chair 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 Chair 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.

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 contacting the company’s securities registry or you may copy this form.

To appoint a second proxy 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 on a poll. Fractions of votes will be disregarded. (b) return both forms together in the same envelope.

STEP 3 SIGN THE 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 should 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 should be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 LODGEMENT

Proxy forms (and any Power of Attorney under which it is signed) must be received no later than 48 hours before the commencement of the meeting, therefore by 10.00am on Tuesday, 28 April 2015. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy forms may be lodged using the enclosed Reply Paid Envelope or:

STEP 2 VOTING DIRECTIONS TO YOUR PROXY

To direct your proxy how to vote, mark the boxes opposite the item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of securities are to be voted on any item by inserting the percentage or number that 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 for all your securities your vote on that item will be invalid.

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” prior to admission. An Appointment of Corporate Representative form can be obtained from the company’s securities registry.

 By Fax + 61 2 9290 9655  By Mail Boardroom Pty Limited GPO Box 3993, Sydney NSW 2001 Australia Level 7, 207 Kent Street,  In Person Sydney NSW 2000 Australia

Attending the Meeting

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

Ironbark Capital Limited

ABN 89 008 108 227

Your Address

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 in the space to the left. Securityholders sponsored by a broker should advise their broker of any changes. Please note, you cannot change ownership of your securities using this form.

PROXY FORM

STEP 1 APPOINT A PROXY

I/We being a member/s of Ironbark Capital Limited ( IBC ) and entitled to attend and vote hereby appoint:

the Chair of the Meeting (mark box)

OR if you are NOT appointing the Chair of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered shareholder) you are appointing as your proxy below

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chair of the Meeting as my/our proxy at the General Meeting of IBC to be held at History House, 133 Macquarie Street, Sydney on Thursday 30 April 2015 at 10am and at any adjournment of that meeting, to act on my/our behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

The Chair of the Meeting intends to vote undirected proxies in favour of each of the items of business.

STEP 2 VOTING DIRECTIONS * 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 vote will not be counted in calculating the required majority if a poll is called.

For Against Abstain*

Resolution 1 Approval of Buy-Back

STEP 3 SIGNATURE OF SHAREHOLDER

This form must be signed to enable your directions to be implemented.

Individual or Securityholder 1 Securityholder 2 Securityholder 3 Sole Director and Sole Company Secretary Director Director / Company Secretary Contact Name…………………………………………….... Contact Daytime Telephone………………………................................ Date / / 2015