INVESTMENT MANDATE

The IBC investment mandate requires:

• At least 50% of the portfolio after delta adjustment for any option derivative positions must be invested in listed securities at all times;
• The portfolio will not be geared by external borrowings;
• Financial derivatives may be used as an alternative to direct purchases or sales and hedging of risk but not used to produce financial exposures that would result in short selling or leveraging of the portfolio. Financial exposure is measured as the aggregate of physical exposure and derivative exposure through delta adjustment;
• Maximum weight to an individual stock in the top 20 is 15% and ex top 20 is 10%;
• Authorized investments include all listed securities and initial public offerings of securities to be listed on the ASX and rights issues and placements in respect of a listed class of security, cash, bank deposits, bank issued money market instruments, fixed and floating rate securities issued by a bank licensed to operate as a bank in Australia.

Kaplan Funds Management manages the above IBC mandate to achieve the following investment goals:

• A positive investment return averaging greater than the 1 year swap rate plus 6% over time with an emphasis on income generation
• A portfolio volatility or risk lower than the ASX 300 Index.

The investment management agreement with KFM provides for the payment of an investment management fee of 0.6% per annum of the value of the portfolio.