IOR Friendly Society Ltd ACN 087 648 940 v IOR Group Ltd

Section 11: Members' scheme of arrangement (Pursuant to Section 411 of the Corporations Act 2001 (Cth)) BETWEEN: IOR FRIENDLY SOCIETY LIMITED ABN 50 087 648 940 (IOR) AND ITS MEMBERS PREAMBLE A. IOR is a public company limited by shares and guarantee and registered in Victoria under the Corporations Act 2001 (Cth). B. IOR Group Limited is a public company limited by shares and registered in Victoria under the Corporations Act 2001 (Cth). Two fully paid ordinary shares of $1.00 each have been issued by IOR Group Limited each of which is held by a partner in Minter Ellison (legal advisers to IOR), on trust for Mr John Dixon, a former director of IOR. C. IOR Group Limited is not a Member. D. The Directors of IOR consider that the Scheme:

(a) is in the interests of IOR and the Members as a whole; (b) does not materially or adversely affect any creditors of IOR; and (c) the Share Allocation Rules, which are based on a recommendation from the Appointed Actuary and are supported by the Independent Actuary, provide a fair and reasonable basis for allocating Shares between Members. E. IOR and IOR Group Limited have entered into the Implementation Deed under which each of them has agreed to observe all the provisions of the Scheme which relate to it and to do everything within its power that is necessary to give full effect to the Scheme. 1. Definition and Interpretation 1.1 Definitions In the Scheme, unless the context otherwise requires: Appointed Actuary means Mr Bruce Watson, principal of Brett & Watson, who is the appointed actuary of IOR under the Life Insurance Act 1995 (Cth). APRA means the Australian Prudential Regulation Authority. ASIC means the Australian Securities and Investments Commission. Bank Account means all right, title and interest of IOR in and to the chose in action evidenced by bank account number 10695028 issued by the Commonwealth Bank of Australia at its Box Hill branch, BSB 063 109. Benefit Fund means a benefit fund, within the meaning of the Life Insurance Act 1995 (Cth), operated by IOR. Business Day means a day on which banks are open for general banking business in Melbourne. Buy-Back Agreement means an agreement to be entered between IOR (as purchaser) and IOR Group Limited (as vendor) on the second Business Day after the passage of the Buy-Back Resolution, pursuant to which IOR agrees to buy-back from IOR Group Limited the Single Share, free from encumbrance, for a purchase price of $1.00, on the basis that the transaction of sale and purchase is completed immediately after the agreement is entered. Buy-Back Resolution means a resolution agreed to, at the First General Meeting, approving the terms of the Buy-Back Agreement. Class means each of the following three groups of persons: (a) the person, being a Member, who is the trustee from time to time of the Verification Trust; (b) the person, being a Member, who is the trustee from time to time of the Overseas Members Trust; and (c) all Members other than those referred to in paragraphs (a) and (b). Confirmation of Details means a form to the effect set out in Annexure A to this Scheme sent to each Member and completed with personalised details of that Member. Constitution means the constitution of IOR in force as at 30 April 2007. Constitution Amendment Resolution means a special resolution to amend clause 23.9(2) of the Constitution by replacing the words 'A Member' with the words 'A Member (other than a Member who is a security holder)'. Court means the Federal Court of Australia. Cut-Off Date means 5.00pm Melbourne time on 11 April 2007. Deed Poll means a deed poll dated 30 April 2007 under which IOR Group Limited covenants to observe all the provisions of the Scheme which relate to it and to do everything within its power that is necessary to give full effect to the Scheme. Director means each person who is a member of the board of directors of IOR. Disputes Resolution Committee means: (a) before the Implementation Date, the disputes resolution committee established by IOR; and (b) after the Implementation Date, the disputes resolution committee established pursuant to the constitution of IOR Group Limited, to resolve any disputes about membership of IOR and entitlements to receive Shares. Effective Date means the date on which the Scheme becomes effective in accordance with section 411(10) of the Corporations Act 2001 (Cth). Eligible Employee means an employee of the IOR Group as at 21 June 2007 employed prior to 1 July 2006, excluding Tent secretaries. For the avoidance of doubt, non-executive Directors and independent contractors are not Eligible Employees. Explanatory Memorandum means the Explanatory Memorandum approved by the Court to be dispatched to Members in respect of the Scheme. Financial Assistance Resolution means a resolution agreed to, at the Second General Meeting, by all ordinary shareholders of IOR approving the giving by IOR of financial assistance, if any, constituted by the transfer of the Management Fund to IOR Group Limited, to: (a) the acquisition of Shares in IOR Group Limited by the Members; and (b) the acquisition of shares in IOR by IOR Group Limited. First General Meeting means a General Meeting of IOR held after the Scheme Meeting for the purpose of considering the First General Meeting Resolutions. First General Meeting Resolutions means the: (a) Issue of Single Share Resolution; (b) Issue of Shares (Implementation) Resolution; (c) Buy-Back Resolution; and (d) the Constitution Amendment Resolution. General Meeting Resolutions means the First General Meeting Resolutions and the Financial Assistance Resolution. Implementation Deed means a deed dated 30 April 2007 between IOR and IOR Group Limited, as set out in Annexure C. Implementation Date means 1 August 2007 or such other date as the Court, with the consent of IOR, may order. Implementation Shares means 55 million fully paid ordinary shares in the issued capital of IOR. Independent Actuary means Ernst & Young ABC Pty Limited. Issue of Single Share Resolution means a resolution of Members in general meeting to approve, in accordance with clause 8.1 of the Constitution, the issue of one fully paid ordinary share in the issued capital of IOR to IOR Group Limited, and the manner in which dividends on such share are to be calculated and determined. Issue of Shares (Implementation) Resolution means a resolution of Members in general meeting to approve, in accordance with clause 8.1 of the Constitution, the issue of the Implementation Shares to IOR Group Limited, and the manner in which dividends on such shares are to be calculated and determined, as contemplated in clause 4.1 of the Implementation Deed. ITAA36 means the Income Tax Assessment Act 1936 (Cth). Last Share Claim Date has the meaning given in the deed establishing the Verification Trust. Management Fund means the undertaking of IOR and the assets and liabilities of IOR (including, for the avoidance of doubt, all of the issued capital in IOR Community Care Pty Ltd) with the exception of: (a) the Benefit Funds and the assets and liabilities referable to the Benefit Funds (including any rights and obligations arising under any agreement for the provision of services in relation to the management and administration of the Benefit Funds); and (b) the Bank Account. Meetings means the Scheme Meetings and the General Meetings. Member means each person who is a member of IOR as at the Cut-Off Date and, for the avoidance of doubt, does not include IOR Group Limited. Overseas Member means a Member who as at the Cut-Off Date has a registered address outside Australia. Overseas Members Trust means the trust established in respect of Overseas Members, the terms of which are summarised in the Explanatory Memorandum. Register means IOR's register of Members. Regulatory Authority means ASIC, APRA and any government or governmental, semi-governmental or judicial entity or authority. Scheme means this scheme of arrangement, subject to any alterations or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act 2001 (Cth). Scheme Meetings means the separate meetings of each Class, ordered by the Court to be convened in relation to the Scheme pursuant to section 411(1) of the Corporations Act 2001 (Cth). Second Court Date means the day on which the Court makes an order pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) approving the Scheme. Second Court Hearing means the hearing before the Court at which application is made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) approving the Scheme. Second General Meeting means a general meeting of IOR held on the next Business Day following the First General Meeting for the purpose of considering the Financial Assistance Resolution. Shares means ordinary shares (within the meaning of the constitution of IOR Group Limited). Share Allocation Rules means the rules for the allocation of Shares to Members, as set out in Annexure B to this Scheme. Single Share means one fully paid ordinary share in the issued capital of IOR issued pursuant to the Issue of Single Share Resolution. Termination Date means 31 December 2007 or such later date as IOR determines. Unverified Member means a Member as at the Cut-Off Date who does not: (a) during the period of 12 months prior to the Cut-Off Date pay or procure the payment of a premium or other amount due under a Policy referable to a Benefit Fund; (b) send a duly completed Confirmation of Details to IOR on or before the Effective Date; (c) vote in person or by proxy at a Scheme Meeting or at the General Meetings; or (d) otherwise confirm their details on or before the Effective Date in a manner satisfactory to IOR. Verification Trust means the trust established in respect of Unverified Members, the terms of which are summarised in the Explanatory Memorandum. 1.2 Interpretation

In this Scheme, unless the context otherwise requires: (a) words and phrases have the same meaning (if any) given to them in the Corporations Act 2001 (Cth); (b) words importing singular include the plural and vice versa; and (c) a reference to any legislation or regulation is a reference to that legislation or regulation as varied, amended or replaced from time to time. 2. Conditions of Scheme

The Scheme is conditional on the satisfaction of each of the following conditions precedent prior to 5.00pm AEST on the Second Court Date: (a) (Member approval) a resolution in favour of the Scheme is passed by a majority in number of the Members in the relevant Class present and voting (either in person or by proxy) at each of the Scheme Meetings; (b) (Section 413 order) the Court making an order under section 413 of the Corporations Act 2001 (Cth) providing for the transfer of the Management Fund from IOR to IOR Group Limited; (c) (General Meeting Resolutions) the passage at the General Meetings of the General Meeting Resolutions; (d) (Cancellation of Share) the cancellation of the Single Share; (e) (Regulatory consents) the obtaining of all approvals and consents required by any Regulatory Authority to implement the transactions contemplated by the Scheme; (f) (No prohibitions) no Regulatory Authority taking any action or making any final order or decree which action, order or decree restrains or prohibits the implementation of the Scheme or any transaction contemplated by the Scheme; (g) (other conditions) such other conditions approved by the Court under section 411(6) of the Corporations Act 2001 (Cth) as are acceptable to IOR; and (h) (Court approval) the lodgement with ASIC of an office copy of the Court order approving the Scheme pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth). 2.2 Certificate

IOR must provide to the Court at the Second Court Hearing a certificate signed by the Company Secretary of IOR, or such other evidence as the Court requests, confirming whether or not all the conditions precedent in clauses (a)-(g) have been satisfied or waived. 2.3 Lapse

The Scheme will lapse and be of no further force or effect if the Second Court Date has not occurred on or before the Termination Date. 3. The Scheme 3.1 Lodgement of Court orders with ASIC Within 10 Business Days following approval of the Scheme by the Court in accordance with section 411(4)(b) of the Corporations Act 2001 (Cth), IOR will lodge with ASIC office copies of the Court orders under section 411(4)(b) of the Corporations Act 2001 (Cth) approving the Scheme. 3.2 Implementation Steps

On the Implementation Date the following will occur in the order provided: (a) IOR will issue the Implementation Shares to IOR Group Limited in accordance with clause 4.1 of the Implementation Deed; (b) the Members cease to be members of IOR; (c) the liability of each Member as a guarantor on the winding up of IOR is extinguished; (d) each Member is taken to have consented to be a member of IOR Group Limited; (e) IOR must transfer, and procure that IOR Group Limited will accept the transfer of, the Management Fund from IOR to IOR Group Limited and IOR must procure that the Bank Account has a credit balance of not less than $2 million; (f) IOR must procure that IOR Group Limited issues Shares to each Member (subject to clauses 3.4 and 3.5) in accordance with the Implementation Deed and the Share Allocation Rules; and (g) IOR must procure that IOR Group Limited will (subject to each Eligible Employee who is not a Member agreeing to become a member of IOR Group Limited) issue and allot to each Eligible Employee the number of Shares allocated to them in accordance with the Share Allocation Rules. 3.3 Extinguishment of Membership interests

Each Member agrees with IOR that the Membership interests of the Member, including the liability of that Member as a guarantor on the winding up of IOR, are extinguished on the Implementation Date. 3.4 Verification Trust

Each person who is an Unverified Member will not have the Shares allocated to them issued to them, but such Shares will instead be issued to the trustee of the Verification Trust, to be held in accordance with the terms of the Verification Trust, and may be claimed by that Member at any time before the Last Share Claim Date. 3.5 Overseas Members Trust

Each person who is an Overseas Member will not have the Shares allocated to them issued to them, but such Shares will instead be issued to the trustee of the Overseas Members Trust, to be held in accordance with the terms of the Overseas Members Trust, by which the trustee will be obliged to dispose of those Shares and remit the net proceeds to that Member in accordance with the terms of the Overseas Members Trust. 3.6 Correction of Allocation of Member

Each Member agrees that the indicative share allocation in the Chairman's letter sent to them is not binding on IOR and acknowledges that IOR has the right to correct that indicative share allocation in determining the final allocation of Shares in respect of that Member, subject only to decisions of the Disputes Resolution Committee. 4. Establishment of Share Capital 4.1 Share Capital of IOR Group Limited

IOR and all the Members agree that their intention as from the Implementation Date is that an amount determined by the Directors of IOR Group Limited, not exceeding the listing day company valuation amount (referred to in Note 3 to the table set out in section 121AS of ITAA36) and, pending the inclusion of IOR Group Limited in the official list of the Australian Securities Exchange, the pre-listing day company valuation amount (referred to in Note 2 to the table set out in section 121AS of the ITAA36) be established as share capital of IOR Group Limited as part of the demutualisation of IOR under the Scheme. 5. Membership

IOR may settle any disputes, or make any decisions concerning whether a person is or should have been, or should be treated as, a Member at the Cut-Off Date, or concerning the rights and entitlements of that person under the Scheme, in its absolute discretion. 5.2 Request for Determination

A person who is of the view that he or she are or should have been, or should be treated as, a Member at the Cut-Off Date, may request IOR to make a determination or procure that IOR Group Limited makes a determination. Such notification must be made by no later than the expiry of six months after the Implementation Date. IOR is under no obligation to consider any notification made after that date. 5.3 Disputes Resolution Committee

All Members agree to the exercise by the Disputes Resolution Committee of all powers and discretions conferred upon it under its terms of reference or the constitution of IOR Group Limited, including the power to issue and to forfeit Shares. 6. Effect on Members

This arrangement binds each Member in accordance with section 411(4) of the Corporations Act 2001 (Cth) and, in particular, on the Scheme coming into effect, each Member: (a) directs IOR as its attorney and agent to procure the issue of Shares to the Member in accordance with clause 3.2 and the Deed Poll; and (b) accepts the issue of Shares to the Member by IOR Group Limited procured by IOR in accordance with clause 3.2 and the Deed Poll. 7. General scheme provisions

If the Court proposes to approve the Scheme subject to any alterations or conditions under section 411(6) of the Corporations Act 2001 (Cth), IOR may by its Counsel consent on behalf of all persons concerned (including Members) to those alterations or conditions. 7.2 Maintain Register

For the purpose of applying the Share Allocation Rules, IOR will maintain the Register in a manner which clearly sets out whether a Member is (or by virtue of the application of the provisions of clause 5, should have been or should be treated as) a member of IOR at the Cut-Off Date, and the Register, in this form (but subject to the correction of any manifest error or to an alteration pursuant to a decision or determination made under clause 5), will be final and binding. 7.3 Notices

Where a notice, transfer, application, direction or other communication referred to in the Scheme is sent by post to IOR, it shall not be deemed to be received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at IOR's registered office. 7.4 Notices to joint members

Notices (including any notice and attendant documentation relating to the Scheme) may be served by IOR on joint members by giving the notice to the joint member whose name appears first in the Register. 7.5 Agreement of Members

Each Member agrees to accept and be bound by the terms of the Scheme. 7.6 Members' consent

Each Member consents to IOR doing all things which are necessary, desirable, incidental to or connected with the full and effective implementation and performance of the terms of the Scheme. 7.7 All actions

IOR will execute all documents and do all acts and things which are necessary, desirable, incidental to or connected with the full and effective implementation and performance of its obligations under the Scheme. 7.8 Attorney

Each Member, without the need for any further act, irrevocably appoints IOR, and each director and officer of IOR severally, as its attorney and agent for the purpose of executing any document, and doing any act or thing, necessary or desirable to give effect to the Scheme. 7.9 Governing law

The Scheme is governed by the law of the State of New South Wales. IN THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT 1 On 16 May 2007 the Court made orders pursuant to s 411 of the Corporations Act 2001 (Cth) (the Act) that the plaintiff convene a meeting of its members for the purpose of considering and, if thought fit, agreeing to a scheme of arrangement between the plaintiff and its members. The nature of the scheme and its intended effect was explained in the reasons given on 16 May 2007 for making those orders. The meeting of members and other associated meetings have now been conducted and the plaintiff has applied to the Court for approval of the scheme pursuant to s 411(4)(b) of the Act. 2 I am satisfied by the evidence adduced on behalf of the plaintiff that the steps for the convening of the meetings that I ordered have been followed. At the meeting, 96.74 % of the members who attended in person or by proxy and voted, voted in favour of the scheme. 3 The evidence indicates that there are substantial numbers of members with whom the plaintiff has lost contact (Lost Contact Members). Of some 11,800 members there were 915 Lost Contact Members. Of those, some 413 were members for whom the plaintiff had an address but from whom mail was returned. Some 502 of the Lost Contact Members had no address with the plaintiff at all. 4 Approximately half of the 915 became members between 1900 and 1947. Many of those members would no longer be living. There was actuarial evidence to the effect that the probability of such members still being alive in 2007 is 52% for males and 70% for females. The material before me satisfies me that, even if all of those members who were alive had attended and voted against the proposal, it would not have made any difference to the result. 5 In the course of the first hearing I raised some questions concerning the manner in which the share allocation rules were determined. Having regard to those queries, the plaintiff's actuary has explained in some more detail the rationale for the rules. That rationale is explained in the affidavit of Bruce Andrew Watson of 28 June 2007. Without going into the intricacies of the rationale, I am satisfied that the share allocation rules are equitable. 6 In the course of the earlier hearing I also raised a question concerning the possible application of the rules against perpetuities and remoteness of vesting. The relevant trust deeds contain a provision to the effect that the trust begins when the settlement is made and, unless terminated sooner, continues for the longest period which the law permits without exceeding any limits imposed by laws governing the duration of trusts and the vesting of beneficial interests under trusts. On the basis that the only jurisdictions that may be relevant are New South Wales and Victoria, there does not appear to be any risk that the terms of the trust would be void by reason of remoteness of vesting. Each of those jurisdictions has legislation providing in effect for a perpetuity period of 80 years. 7 I have seen evidence from the Australian Securities Investments Commission and from the Australian Prudential Regulation Authority indicating that approval has been given and that all of the conditions precedent of the scheme have been satisfied. In all of the circumstances, I am satisfied that the scheme should be approved. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate: Dated: 30 July 2007 Counsel for the Plaintiff: M B Oakes SC Solicitor for the Plaintiff: Minter Ellison Lawyers Date of Hearing: 2 July 2007 Date of Judgment: 2 July 2007