Bki Investment : Net Tangible Asset Backing

To p 2 5 I n v e s t m e n t s

% of Total

Stock Portfolio

Office Level 2, 160 Pitt Street Mall

Sydney NSW 2000

Telephone [phone]

Fax [phone]

Web www.bkilimited.com.au

ABN 23 106 719 868

BKI Investment Company Limited NTA and Monthly Report December 2014

Objective

Our aim is to create wealth for BKI shareholders, through an increasing fully franked dividend and capital growth.

Investment Strategy

BKI is a research driven, active equities manager investing for the long term in profitable, high yielding, well managed companies. An investment in BKI gives shareholders access to a diversified equity portfolio across most sectors of the market. BKI is managed for the benefit of shareholders, not charging external portfolio management fees or performance fees.

Net Tangible Asset Backing

The consolidated unaudited pre tax net asset backing at 31 December 2014 was

$1.63 per share.

The company is a long-term equity investor and does not intend to dispose of its total portfolio. If estimated tax at 30% on unrealised portfolio gains were to be recognised, net asset backing post tax would be $1.52 per share.

Dividends

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. All historical dividends paid have been fully franked.

Cash and cash equivalents 5.3%

Total of Top 25 plus

cash and cash equivalents 84.7%

BKI's historical fully franked dividend yield as at 31 December 2014 was 4.4% (based on the rolling 12 Month Dividend** and share price of $1.585). BKI's historical grossed up yield as at 31 December 2014 was 6.3% (based on a tax rate of 30%). BKI's Dividend Reinvestment Plan has been maintained.

Management Expense Ratio (MER)

BKI's MER as at 30 June 2014 was 0.17%. BKI does not charge shareholders
external management or performance fees.

Board and Management

Directors:Robert Millner (Chairman), Alex Payne, David Hall and Ian Huntley. Management:Tom Millner (CEO), Will Culbert (Senior Investment Analyst) and

Jaime Pinto (Company Secretary).

Discount / Premium to NTA History

$1.80

$1.70

$1.60

$1.50

$1.40

$1.30

$1.20

$1.10

$1.00

$0.90

$0.80

$0.70

$0.60

40%

30%

20%

10%

0%

-10%

-20%

C o m p a n y O v e r v i e w

Mandate Australian Listed Equities Benchmark S&P/ASX 300 Acc Index Market Capitalisation $879m Investment Portfolio $859m Cash & Cash Equivalents $48m

Total Portfolio Including Cash $907m

Prem/Disc % Pre Tax NTA BKI Share Price

Benefits of Investing in BKI Investment Company Limited

Performance - Delivering sound long term returns to shareholders.

High Value / Low Cost - Opportunity to invest in an active, high conviction, closed end portfolio with a MER of only 0.17%. BKI does not charge external portfolio management fees or a performance fee.

Dividends - Predictable fully franked income stream.

Franking Credits - 30% tax rate already paid on dividend income, tax credits passed on directly to shareholders.

Diversification - Exposure to most sectors of the market through well managed,

dividend paying companies.

Simplicity - An investment in BKI.ASX provides administration simplicity.

Structure - BKI is a Company with a closed end investment structure.

Listed on the ASX - High levels of Transparency and Compliance, ASX Listing

Rules, Continuous Disclosure requirements.

Debt $0

MER* 0.17% Performance Fee N/A Rolling 12 Month Dividend** 6.95cps Historical Dividend Yield*** 4.4% Percentage Franked 100% Grossed up Yield*** 6.3% DRP Active Pre Tax NTA $1.63

Post Tax NTA $1.52

Share Price $1.585

BKI Portfolio Returns are measured after all operating expenses, provision and payment of income and capital gains tax.

BKI Performance

as at 31 December 2014

S&P/ASX 300 ACC INDEX (XKOAI)

BKI Total Shareholder Returns

BKI Share Price Outperformance V's XKOAI

BKI Portfolio Performance

BKI Portfolio Outperformance V's 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. Total Shareholder Returns inclu de reinvestment of dividends. Past performance is generally not indicative of future performance.

The material contained within the BKI Investment Company Limited Monthly Report (The Report) has been prepared by BKI Investm ent Company Limited. Figures referred to in The Report are unaudited. The Report 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 The Report 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 The Report 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.

*MER as at 30 June 2014; **Includes FY2014 Final Ordinary Dividend of 3.50cps and FY2014 Interim Ordinary Dividend of 3.45cps *** Based on share price as at 31

December 2014. Grossed up yield based on a tax rate of 30%.