Managing Director's Speech to Shareholders

Investment Research Group - Annual General Meeting

Held Friday, 16 September 2011

Fellow Shareholders, fellow Directors, Ladies and Gentleman.

It has been a short time since we have had a General Meeting and most of the contents of the Annual Report to 31 March 2011 are known to you.

It is not a pretty picture but it will not come as any surprise. We have kept shareholders and the market fully informed over the last two years. We have worked very hard to resurrect the company and give shareholders a return on their investment.

I have been advised on many occasions that I should simply walk away from the business and allow the business to fail. However I have been determined to reward those shareholders who have had faith in IRG and me.

The Special Meeting of shareholders held on the 6th May 2011 authorised a placement of capital to GA Sego and this has moved the company into a positive situation. The financial contribution by GA Sego plus the support of their directors: Tan Sri Hamid Bugo, Tim Munro-Keene and their alternate Rewi Bugo, has been very good for IRG. We are looking forward to working with them further and developing IRG and moving IRG to the next stage.

Comments on subsequent trading

Most observers of the financial markets will realise the volatility that the western world is in and will realise the pressure most financial organisations are under.

The volatile nature of the markets has two effects. One being some people wish to trade hence there can be activity as people trade in and out as they react to various occurrences. IRG does not gain significant value from this as most traders use internet platforms due to the low cost of brokerage.

Our business is very much focussed on investors. These are people who have cash surpluses and who wish to maintain capital and gain a return on that capital.

With the volatility of markets and the uncertainty plus the risk adverse nature of these investors there is an increasing desire to stay with banks and other low risk investments. The good thing for the New Zealand market has been the number of new issues in the bond sector. There have been a number of very good offerings in this regard recently including Air NZ, Z Energy and Genesis Power Ltd.

These issues are generally attractive as they are either government related and/ or part of an oligopoly.

The bonds are generally trade-able and hence attractive to investors.

Our business results will show a continuation of trading trends for the last two six monthly trading period however we expect a significantly better six months to 31 March 2012.

What innovations is IRG undertaking?

During the past six months we have purchased Sharechat and we are working on integrating this into our web strategy. We are able to access new clients through this database and we are able to promote various subscriptions and offerings. It has allowed us to offer various subscriptions, bundle various advertising packages with NZ Investor magazine and the Yearbook.

I strongly recommend the site to you. You can receive the information on all news releases by just clicking on www.sharechat.co.nz and follow the prompts.

We are working on two investment banking projects which we anticipate will come to fruition in the next three to four months. Investment banking by its nature has a variable cash flow. These are not certain but if they occur will create a significant benefit to IRG.

Share consolidation

The board has resolved to consolidate shares on the basis of 1:20 i.e. each shareholder will receive one new share for each twenty shares it currently holds. We believe this will move the company's share price into a realistic level and move to more appropriate value. The effective date will be announced shortly.

Non marketable parcels

Most investors will have noted that there had been sales of very small parcels in IRG which has depressed the market price and hence the market cap. Shareholders may be aware that an institutional shareholder of IRG shares chose to distribute its shareholding in IRG to all of its unit holders. This gave IRG approximately four hundred new shareholders and many of those with values of less than $70. As these shareholders did not actively purchase IRG shares they have been selling them over time and have been depressing the market price and hence the market capitalisation of IRG.

The board has resolved to work with Rotary club of Birkenhead Charitable Trust on a basis whereby small shareholders can donate the shares to Rotary Club of Birkenhead Charitable Trust and to indicate who the final beneficiary should be.

The shareholders have a choice of three separate charities with one being related to the Christchurch earthquake, one to cancer and one to physical disability.

The concept here is that if you own $30 or $40 worth of shares, your transaction costs will be a similar amount should you chose to sell. If you donate these to a charity the charity will consolidate the entire small shareholdings and sell as one bundle and hence the cost will be low and the end charities will gain significantly.

The benefits for IRG will be a reduction in costs required to service shareholders.

It should also allow a reduction in the number of small sellers reducing the price.

It will allow the individual shareholders to gain benefit of donating to a charity. Information will be sent to shareholders shortly.

Note

The concept has been run past the Financial Markets Authority (FMA) and NZX and there is no objection from these parties. We have been at great pains to show this is not a scheme on the basis of one of the cons Mr Whimp has used recently.

Ladies and Gentleman, IRG has been through a tough time the past two and a half years. I appreciate the support I have received from shareholders, from my directors and my staff. We are working very hard now to capitalise on the opportunities available to us so that we can reward our shareholders appropriately.

We expect to be able to make further position announcements before Christmas.

How can you help?

• Please consider subscribe to any of our media products.
• Please look to use IRG when buying or selling any security such as stocks or bonds.
• Please recommend our products to your friends and associates.

I recommend to you the approval of the Annual Report as presented.