Presentation to Shareholders March 2012

Disclaimer

2

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.

1. BKI Background - Group Profile, Investment Strategy,

History, Directors and Management

2. 1H 2012 Results - Highlights, Dividends, MER,

Performance

3. Macro Snapshot - Investor Confidence, Valuations, Yields

4. Taking Advantage - Investment Opportunity, Diversification,

Value, Income, Portfolio Movements

3

Agenda

BKI Background

4

5

Group Profile and Investment Strategy

BKI’s investment portfolio has been built on a philosophy of long term

investment with a focus on Australian equities. BKI primarily seeks to

invest in well-managed businesses with a profitable history and with

the expectation of sound dividend and distribution growth.

An investment in BKI gives shareholders access to a diversified

portfolio across most sectors of the market.

BKI aims to generate an increasing income stream in the form of fully

franked dividends, to the extent of available imputation tax credits,

through long-term investment in a portfolio of assets that are also able

to deliver long term capital growth to shareholders.

6

History

1980’s Brickworks Limited (BKW) Establishes Share Portfolio

2003 Acquires BKW’s Share Portfolio – BKI lists on the ASX

2004 Merges with Pacific Strategic Investments (Mkt Cap ~$26m)

2007 Renounceable Rights Issue raises $57.0m

Placement raises $49.3m

2008 Becomes internally managed

Takes over Huntley Investment Company (Mkt Cap ~$93m)

2009 BKW divests shares – WHSP becomes substantial shareholder

Share Purchase Plan raises $24.1m

2011 Awarded Listed Investment Company of the Year

7

In 2009 WHSP increased their shareholding in BKI to become the largest

shareholder (currently holding 13.7% of BKI shares). Listed in 1903, WHSP is the

second oldest listed company on the ASX and holds investments worth in excess of

$4.6bln.

As an investment group WHSP has a window on the business world through the

operating companies it controls and the investment companies where it has board

representation. WHSP’s long term, patient investment philosophy is dispersed

across many sectors including, Building Products, Property, Coal,

Telecommunications, Financial Services, Pharmaceuticals, Retail and Agriculture.

Washington H. Soul Pattinson

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Directors and Management

Name Position Special Responsibilities

Mr Robert Millner Non-Executive Director and

Chairman

Investment Committee

Remuneration Committee

Mr David Hall Independent Non-Executive

Director

Chairman Audit Committee

Remuneration Committee

Mr Alex Payne Non-Executive Director Chairman Remuneration Committee

Investment Committee

Audit Committee

Mr Ian Huntley Independent Non-Executive

Director

Investment Committee

Remuneration Committee

Audit Committee

Mr Tom Millner Chief Executive Officer Investment Committee

Mr Jaime Pinto Company Secretary

BKI awarded “2011 Listed Investment Company of the Year”.

The award is a great endorsement of an LIC whose major

focus is to invest in quality companies, enabling it to

generate a growing dividend stream and capital growth.

Exciting future for the LIC sector.

Fund Manager of the Year Awards

1H 2012 Results

10

11

BKI Result Highlights

1H 2012 1H 2011 Growth

Ordinary Dividend Income $14.34m $12.46m 12.4%

Net Operating Result $14.16m $12.81m 10.5%

Net Operating Profit $16.42m $15.60m 5.2%

Earnings Per Share 3.33cps 3.03cps 9.3%

Dividend Per Share 3.20cps 3.00cps 6.7%

12

Dividends Paid

2

4.3 5 5.3

6 6 5.25

6

3.2

1 1

1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

cps cps cps cps cps cps cps cps cps

2004 2005 2006 2007 2008 2009 2010 2011 2012

Ordinary Dividends Special Dividends

13

Management Expense Ratio

0.69% 0.71%

0.56%

0.46% 0.46%

0.31%

0.19% 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 1H 2012

14

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 not indicative of future performance.

BKI Performance as at 29 February 2012

BKI Portfolio

Returns are

measured after

all operating

expenses,

provision and

payment of

income and

capital gains

tax.

BKI Performance 6 Mths 1 Year 3 Years 5 Years 7 Yearsas at 29 February 2012

(pa) (pa) (pa)

S&P/ASX 300 ACC INDEX (XKOAI) 2.6% -6.8% 13.8% -1.7% 4.9%

BKI Total Shareholder Returns 8.7% 2.1% 17.6% 1.8% 5.7%

BKI Share Price Outperformance V's XKOAI 6.1% 8.9% 3.8% 3.5% 0.8%

BKI Portfolio Performance 5.4% 0.1% 14.5% 1.6% 5.9%

BKI Portfolio Outperformance V's XKOAI 2.8% 6.9% 0.7% 3.3% 1.0%

Macro Snapshot

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Inappropriate cash rates

Global funding pressures affecting variable mortgage rates

Uncertainty on the future cost of living and household affordability

House price decline

Commodity price decline

Negativity surrounding weak global economies

Unstable federal government

Rising unemployment

Slow GDP growth

Low credit growth

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Low Investor Confidence

Domestic

Changed risk appetite to investing in Australian shares

Record consumer savings

Hybrid issues putting pressure on ordinary shares

International

High Australian Dollar

Unfavorable federal government policies;

Carbon Tax

Mining Resources Rent Tax

…Leading to a reduced exposure to Australian shares

17

Investors’ Defensive Reaction

18

Historical PE Multiples (X)

- Global Markets

Valuation – PE Ratios

Australian Historical

PE Ratios (X)

5

10

15

20

25

2001 2003 2005 2007 2009 2011 2013

Australia US Euro UK

6

9

12

15

18

2001 2003 2005 2007 2009 2011 2013

Australia Average

Source: Credit Suisse

19

Income – Dividend Yields

Historical Dividend Yields (%)

- Global Markets

Source: Credit Suisse

Australian Historical

Dividend Yield (%)

0%

1%

2%

3%

4%

5%

6%

7%

2001 2003 2005 2007 2009 2011 2013

Australia US Euro UK

2%

3%

4%

5%

6%

7%

2001 2003 2005 2007 2009 2011 2013

Australia Average

Taking Advantage

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Balance sheets of quality companies are robust and dividend

distributions have continued to improve.

Cautious of companies exposed to: Retail, Media and Manufacturing

Focused on our Stock Selection Criteria:

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Investment Opportunity

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

2. Principal Activity Sustainable Business Model, Competitive Advantage.

3. Debt Levels Gearing Ratios, Net Interest Coverage.

4. Management & Board Ownership, Board Meeting Attendance,

History of creating shareholder wealth.

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

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1H 2012 Portfolio Movements

Major Investments

FY 2012

Dividend

Yield

Industry

Group

(Sub-Sector)

FY 2012

Gearing

(%)

FY 2012

Interest

Cover (X)

Board and

Management

Ownership

FY 2012

PE Multiple

(X)

FY 2012

EPS Growth

(%)

1. Westpac Bank 8.1% Banks n/a n/a ~$36.1m 10.0 -3.3

2. National Aust Bank 7.4% Banks n/a n/a ~$71.5m 9.6 -2.1

3. Fleetwood Corp 5.3% Auto -5.0 n/a ~$129.3m 15.0 1.0

4. Wesfarmers Limited 5.3% Food 19.0 10.4 ~$64.2m 15.3 11.0

5. Telstra Corporation 8.7% Teleco 86.0 9.4 ~$5.4m 11.4 5.0

6. Commonwealth Bank 6.8% Banks n/a n/a ~$31.8m 11.3 1.0

7. QUBE Logistics 2.4% Transport 8.0 6.0 ~$107.0m 16.5 -44.4

Source: IRESS, BKI, Credit Suisse, CCZ, Company Data

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1H 2012 Portfolio Movements

Divestments

FY 2012

Dividend

Yield

Industry

Group

(Sub-Sector)

FY 2012

Gearing

(%)

FY 2012

Interest

Cover (X)

Board and

Management

Ownership

FY 2012

PE Multiple

(X)

FY 2012

EPS Growth

(%)

1. BlueScope Steel 0% Materials 15.4 1.6 ~$2.6m -8.0 23.1

2. Echo Entertainment 1.8%

Consumer

Discretionary 44.1 4.9 ~$1.8m 21.3 -28.5

3. Suncorp Prefs (SBKPB) 5.7% Insurance n/a n/a n/a n/a n/a

4. Westpac Prefs (WBCPA) 5.0% Banks n/a n/a n/a n/a n/a

5. Orica Prefs (ORIPB) 0% Materials n/a n/a n/a n/a n/a

Source: IRESS, BKI, Credit Suisse, Company Data

1 New Hope Corporation 14.3% 11 ANZ Banking Group 2.5%

2 BHP Billiton Limited 8.4% 12 Woodside Petroleum 2.5%

3 Commonwealth Bank 7.9% 13 Metcash Limited 1.9%

4 National Australia Bank 7.7% 14 Coca Cola Amatil 1.7%

5 Westpac Banking Corp 5.2% 15 Westpac Pref Shares 1.6%

6 Telstra Corporation 4.1% 16 QBE Insurance Group 1.5%

7 Campbell Brothers 3.9% 17 Invocare Limited 1.3%

8 Wesfarmers Limited 3.8% 18 ARB Corporation 1.3%

9 Woolworths Limited 3.1% 19 TPG Telecom Limited 1.2%

10 AGL Energy Limited 2.7% 20 ASX Limited 1.1%

Cash & cash equivalents 5.9%

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Diversification Top 20 Investments - As at 29 February 2012

Diversification S&P/ASX300 Acc Indices

25 Source: BKI Investment Company, IRESS

12 Month Total Shareholder Returns as at 29 February 2012.

Larger portfolio holdings V’s Index returns; diversification delivering performance.

-20%

-10%

0%

10%

20%

30%

40%

Telco Services

Consumer Staples

Industrials Financials S&P/ASX 300 Acc Index

Energy Materials

CPB

BHP

WPL

NHC

WOW

WES NAB CBA

WBC

TLS

BKI

26

Value

After adjusting BKI’s closing share price as at 29 February 2012 for the

Ordinary Interim Dividend of 3.2cps, BKI is currently trading at a 12% discount

to the Pre Tax NTA.

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

$1.20

$1.30

$1.40

$1.50

$1.60

$1.70

Prem/Disc % Pre Tax NTA BKI Share Price

Rates offered by banks and other financial institutions will negatively impact the

level of income received by some investors. BKI believe that the lower levels of

income received from cash and other fixed interest products could be a catalyst

for retail investors to search for income within the equities market.

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Income

BKI has a strong

dividend payout

ability with

abundant franking

credits.

BKI’s historical

grossed up

dividend yield was

8.7% as at 29

February 2012.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

BKI Grossed Up Dividend Yield 90 Day Bank Bill

Office Level 2, 160 Pitt Street

Sydney NSW 2000

Telephone +61 2 9210 7000

Fax +61 2 9210 7099

Web www.bkilimited.com.au

ABN 23 106 719 868

Low Cost

Low Risk

High Yield…

…all through BKI.ASX

www.bkilimited.com.au