Presentation to Investors Perth

May 2013

Benefits of investing in BKI.ASX

2

Dividends Predictable and growing fully franked

income stream.

18.5% lift in dividend payments

over the last 5 years

5 Special Dividends since listing

Franking Credits 30% tax rate already paid on

dividend income, tax credits passed

on directly to shareholders.

All Dividends Fully Franked

Grossed up Yield of 6.7%

Performance Delivering sound, long term returns

to shareholders.

9 year Total Shareholder Returns of

10.4% pa (as at 30 April 2013)

Low Cost One of the lowest cost, professionally

and actively managed equity

products in the market.

MER of 0.18%

No Performance Fees

Diversification Exposure to most sectors of the

market through well managed,

dividend paying companies.

BKI currently holds 53 companies

within the portfolio

Benefits of investing in BKI.ASX

3

Administration

Simplicity

Diversified market exposure

Easy monitoring of one shareholding

Two dividend statements per annum

All through BKI.ASX

Structure

BKI is a closed end LIC (Company),

unlike an open ended fund manager

(Managed Trust).

Not beholden to fund inflows or fund

outflows.

Not a forced seller in bear markets

Not a forced buyer in bull markets

Low turnover; no portfolio “churn”

Transparency High levels of transparency and

compliance by being a publically

listed company.

ASX Listing Rules

Continuous Disclosure

Board of Directors

AGM

Monthly NTA’s, Top 20 Investments

Annual Reports

Net Operating Result FY2004 – FY2012

$ M

illio

ns

4

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011 2012

Net Operating Result

Dividends Paid 2H2004 – 1H2013

Ce

nts

per

Sh

are

2 2.1 2.2 2.5 2.5 2.6 2.7

3 3 3 3 2.5 2.75 3 3

3.2 3.2 3.25

1

0.5

0.5

1 0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Ordinary Dividends Special Dividends

5

Dividends + Franking Credits $

Au

stra

lian

Do

llars

Source: BKI Investment Company Limited; IRESS. An investor who spent the equivalent of $10,000 to purchase BKI shares upon listing in December 2003 would now be

receiving fully franked dividends of $709pa. The franking credits enhance the income by a further $304 (total income of $1,013). The same investment in a term deposit

(based on the cash rate) would be earning $303pa with no franking credits. Dividends have not been reinvested. Ignores capital appreciation of BKI shares.

Dividends and Franking Credits received from a $10,000 Investment from BKI’s

inception V’s Bank Quarterly Interest.

Highlights the opportunity of a fully franked dividend in a falling interest rate

environment.

0

200

400

600

800

1,000

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

BKI Dividend BKI Franking Interest

6

Historical Grossed Up Yield Assumes a tax rate of 30%

7

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

BKI Grossed Up Dividend Yield 90 Day Bank Bill

Source: BKI Investment Company Limited; IRESS. Grossed up yield based on a tax rate of 30%; Includes FY2012 Final Ordinary Dividend of 3.20cps,

FY2013 Interim Ordinary Dividend of 3.25cps and FY2013 Interim Special Dividend of 0.50cps. Based on share price as at 30 April 2013 of $1.49.

Source: BKI Investment Company Limited, IRESS. Portfolio Returns are measured by change in pre tax NTA and are after all

operating expenses, provision and payment of both income and capital gains tax and the reinvestment of dividends. Total Shareholder

Returns include reinvestment of dividends. Past performance is generally not indicative of future performance.

BKI Performance as at 30 April 2013

BKI Portfolio

Returns are

measured

after

all operating

expenses,

provision and

payment of

income and

capital gains

tax.

8

BKI Performance 1 Year 3 Yrs 5 Yrs 7 Yrs 9 Yrsas at 30 April 2013

(pa) (pa) (pa) (pa)

S&P/ASX 300 ACC INDEX (XKOAI) 22.7% 7.0% 2.9% 4.2% 9.4%

BKI Total Shareholder Returns 28.6% 12.0% 8.1% 6.1% 10.4%

BKI Share Price Outperformance V's XKOAI 5.9% 5.0% 5.2% 1.9% 1.0%

BKI Portfolio Performance 23.2% 8.8% 6.1% 6.1% 10.0%

BKI Portfolio Outperformance V's XKOAI 0.5% 1.8% 3.2% 1.9% 0.6%

Source: BKI Investment Company Limited, IRESS. Total Shareholder

Returns include reinvestment of dividends. Past performance is generally

not indicative of future performance.

9

28.6%

12.0%

8.1% 6.1%

10.4%

22.7%

7.0%

2.9% 4.2%

9.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1 Year 3 Years (pa) 5 Years (pa) 7 Years (pa) 9 Years (pa)

BKI Total Shareholder Returns S&P/ASX 300 ACC INDEX (XKOAI)

Portfolio Performance as at 30 April 2013

BKI Portfolio Performance is measured after

all operating expenses, provision and

payment of income and capital gains tax.

23.2%

8.8%

6.1% 6.1%

10.0%

22.7%

7.0%

2.9% 4.2%

9.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1 Year 3 Years (pa) 5 Years (pa) 7 Years (pa) 9 Years (pa)

BKI Portfolio Performance S&P/ASX 300 ACC INDEX (XKOAI)

Source: BKI Investment Company Limited, IRESS. Portfolio Performance

is measured by change in pre tax NTA and is after all operating expenses,

provision and payment of both income and capital gains tax and the

reinvestment of dividends. Past performance is generally not indicative of

future performance.

Total Shareholder Returns as at 30 April 2013

Total Shareholder Returns exclude the

benefit of franking credits being passed on

from BKI to Shareholders.

BKI is a research driven, active equities manager investing for the long term in profitable,

high yielding, well managed companies. Stock selection is bottom up, focusing on the

merits of individual companies rather than market and economic trends.

BKI is focused on investing in stocks using the 5 basic fundamentals below as part of the

stock selection process:

1. Income - Dividend Yields, Franking Credits, Pay Out Ratios

2. Principal Activity - Sustainable Business Model, Competitive Advantage

3. Debt Levels - Gearing Ratios, Net Interest Coverage

4. Management and Board - Share Ownership, Board Meeting Attendance, History of

Creating Shareholder Wealth

5. Earnings and Valuations - Earnings Profiles, PE Multiples, EV/EBITDA Multiples

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Investment Process

BKI Investment Company Limited Index

1 NAB National Australia Bank 10.2% 5.7%

2 CBA Commonwealth Bank 9.7% 8.5%

3 WBC Westpac Banking Corp. 8.1% 7.5%

4 NHC New Hope Corporation 7.4% 0.0%

5 BHP BHP Billiton Limited 6.2% 7.5%

6 TLS Telstra Corporation 5.1% 4.4%

7 WES Wesfarmers Limited 4.6% 3.1%

8 ANZ ANZ Banking Corporation 4.0% 6.3%

9 WOW Woolworths Limited 3.8% 3.2%

10 ALQ ALS Limited 2.6% 0.2%

11 AGK AGL Energy Limited 2.5% 0.6%

12 TPM TPG Telecom Limited 2.2% 0.2%

13 WPL Woodside Corporation 2.0% 2.2%

14 CCL Coca-Cola Amatil 1.8% 0.8%

15 MTS Metcash Corporation 1.7% 0.3%

16 IVC Invocare Limited 1.6% 0.1%

17 ARP ARB Corporation 1.5% 0.1%

18 APA APA Group 1.4% 0.4%

19 QBE QBE Insurance Group 1.4% 1.2%

20 ASX ASX Limited 1.1% 0.5%

Cash & Cash Equivalents 5.0% 0.0%

Total 83.9% 52.8%

Top 20 Shareholdings As at 30 April 2013

Diversification BKI’s portfolio comprises of

dividend paying, well managed

companies. Exposure to most

sectors of the market.

High Conviction Benchmark Unaware – BKI’s

long term strategy of investing

in dividend paying stocks

means the portfolio is not

aligned with an index.

11

Portfolio Valuation as at 30 April 2013

$ M

illio

ns

12

0

100

200

300

400

500

600

700

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Apr-13

Investment Portfolio Cash

Management Expense Ratio

BKI Internally Managed

0.69% 0.71%

0.56%

0.46% 0.46%

0.31%

0.19% 0.18% 0.18% 0.18%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

2004 2005 2006 2007 2008 2009 2010 2011 2012 1H 13

13

ASX Code BKI.ASX

Listing Date December 2003

Mandate Aust Listed Equities

Investment Sectors Diversified

Benchmark S&P/ASX 300

Acc Index

Total Assets $721m

Debt Nil

Management Expense Ratio 0.18%

Performance Fee Nil

Historical Dividend Yield 4.7%

Percentage Franked 100%

Grossed Up Yield 6.7%

Dividend Distribution Frequency Half Yearly

Dividend Payout Policy 90%-95%

Dividend Reinvestment Plan Active

Share Purchase Plan Inactive

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Research Coverage Morningstar

Morgan Stanley

Bell Potter

Evans and Partners

Baillieu Holst

Approved Product List Dixon Advisory

Baillieu Holst

Morgan Stanley

Powerwrap Super

Model Portfolio Dixon Advisory

Baillieu Holst

Morgan Stanley

AIOFP

Investment Menu MLC Wrap Super

MasterKey Custom Super

Contact Tom Millner

0408 754180 or 02 9238 0522

BKI Fact Sheet www.bkilimited.com.au

Disclaimer

This material has been prepared by BKI Investment Company Limited.

The information within this document is not intended to provide advice to investors or take into account an individual’s financial

circumstances or investment objectives. This is general investment advice only and does not constitute advice to any person. The

opinions within this document are not intended to represent recommendations to investors, they are the view of BKI Investment

Company Limited as of this date and are accordingly subject to change.

Information related to any company or security is for information purposes only and should not be interpreted as a solicitation of

offer to buy or sell any security. The information on which this presentation is based has been obtained from sources we believe

to be reliable, but we do not guarantee its accuracy or completeness.

Investors should consult their financial adviser in relation to any material within this document.

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