Bki Investment : Net Tangible Asset Backing (December 2016)

BKI Investment Company Limited

NTA AND MONTHLY REPORT-December 2016

Top 25 Investments

% of Total

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

1	Commonwealth Bank	9.5%
2	National Australia Bank	8.5%
3	Westpac Banking Corp	7.6%
4	ANZ Banking Group	4.9%
5	Telstra Corporation	4.8%
6	Wesfarmers Limited	4.5%
7	APA Group	3.2%
8	TPG Telecom	3.1%
9	AGL Energy Limited	2.8%
10	Transurban Group	2.7%
11	Woolworths Limited	2.6%
12	New Hope Corporation	2.5%
13	Sydney Airport	2.1%
14	Macquarie Group	2.1%
15	IAG Limited	1.9%
16	Invocare Limited	1.9%
17	ASX Limited	1.9%
18	BHP Billiton	1.9%
19	Ramsay HealthCare	1.9%
20	Sonic Healthcare	1.8%
21	Challenger Limited	1.7%
22	ARB Corporation	1.7%
23	Woodside Petroleum	1.7%
24	Suncorp Group	1.7%
25	Brambles Limited	1.3%
Cash and cash equivalents		2.7%
Total of Top 25 plus
cash and cash equivalents		83.0%

Business Overview

BKI is a research driven, Listed Investment Company, investing for the long term in profitable, high yielding, well managed companies. Listed on the Australian Stock Exchange (BKI.ASX) and managed by Contact Asset Management, an investment in BKI gives shareholders access to a diversified Australian equity portfolio.

Net Tangible Asset Backing

The consolidated unaudited pre-tax net asset backing at 31 December 2016 was $1.61 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.

Growing Fully Franked Dividends

BKI's Board & The Manager are shareholders in BKI. We invest for the long term and focus on creating wealth for all shareholders by keeping costs low and increasing fully franked dividends and capital growth.

As at 31 December 2016, BKI's fully franked dividend yield was 4.5% (based on the immediate past 12 Month rolling dividend** and share price of $1.625), while the grossed up yield was 6.4% (tax rate of 30%).

1.00

0.50

7.00

1.00

1.00

6.00

5.00

5.30

6.00

6.00

5.25

6.00

6.40

6.65

6.95

7.20

7.25

5.00 4.00 3.00

4.30

2.00

2.00

1.00

0.00

Ordinary Dividends Special Dividends

BKI Dividends paid to shareholders (cents per share).

We focus on dividend payments - not generating excessive management or performance fees.

Benefits of Investing in BKI Investment Company Limited

• High Value / Low Cost - Active, high conviction, closed end portfolio. No excessive portfolio management fees. No performance fees.

• Tax Effective - All dividends have been fully franked.

  Company Overview

  Mandate Australian Listed Equities

• Performance - Delivering sound returns plus dividend growth.

• Diversification- Exposure to well managed, dividend paying companies.

  Market Capitalisation

  Investment Portfolio

  $980m

  $948m

• Listed on the ASX

  ASX Listing Rules - Continuous Disclosure requirements, High levels of Transparency and Compliance.

  Size & strength - Market Capitalisation of $980m.

  Cash & Cash Equivalents $26m

  Total Portfolio Including Cash $974m

  Debt $0

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

  MER* 0.16%

  Liquidity - Shares trade on the ASX. 14,500 shareholders.

  Performance Fee

  N/A

  Settlement T+2.

• Experience - The Board and The Manager of BKI have over 180 years of collective industry experience (average of 26 years).

  Rolling 12 Month Dividend** 7.25cps

  Historical Dividend Yield*** 4.5%

• Alignment - The Directors and The Manager are shareholders in BKI. We focus on dividend payments - not generating excessive

Percentage Franked

100%

management fees.

Management Expense Ratio (MER)

BKI's MER as at 30 June 2016 was 0.16%.

Board of Directors

Directors : Robert Millner (Chairman), Alex Payne, David Hall and Ian Huntley. Jaime Pinto (Company Secretary).

Investment Manager

Contac t Ass et Man agement: Tom Millner (Director/Portfolio Manager), Will Culbert (Director/Portfolio Manager). Contact provides investment management services to BKI in accordance with the directions of the BKI Board and BKI Investment Committee.

Grossed up Yield*** 6.4%

DRP Active

Pre Tax NTA $1.61

Post Tax NTA $1.52

Share Price $1.625

Contact Us

Website www.bkilimited.com.au E-Mail [e-mail] Tom Millner 0408 754 180

Will Culbert 0410 627 378

Jaime Pinto 02 9210 7000

www.bkilimited.com.au

BKI Performance	1 Year	3 Yrs	5 Yrs	7 Yrs	10 Yrs	12 Yrs
as at 31 Decvember 2016		(pa)	(pa)	(pa)	(pa)	(pa)
S&P/ASX 300 ACC INDEX (XKOAI)	11.8%	6.6%	11.6%	6.7%	4.4%	7.4%
BKI Total Shareholder Returns (TSR)	0.9%	5.6%	12.1%	8.5%	5.6%	8.4%
BKI TSR Outperformance V's XKOAI	-10.9%	-1.0%	0.5%	1.8%	1.2%	1.0%
BKI Portfolio Performance	5.0%	4.1%	8.9%	6.3%	5.3%	6.9%
BKI Portfolio Outperformance V's XKOAI	-6.8%	-2.5%	-2.7%	-0.4%	0.9%	-0.5%
BKI Performance	1 Year	3 Yrs	5 Yrs	7 Yrs	10 Yrs	12 Yrs
Including Franking Credits		(pa)	(pa)	(pa)	(pa)	(pa)
S&P/ASX 300 ACC INDEX (XKOAI) - 80% Franked	13.4%	8.1%	13.4%	8.5%	6.1%	9.1%
BKI Total Shareholder Returns - 100% Franked	2.9%	7.6%	14.3%	10.7%	7.8%	10.6%

Source: BKI Investment Company Limited, Bloomberg. 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. TSR include reinvestment of dividends. TSR including franking credits are based on BKI's dividends being fully franked and the S&P/ASX300 Accumulation Index franked at 80%. 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 Investment Company Limited (ABN 23 106 719 868). 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 2016; **Includes FY2016 Final Dividend of 3.65cps and FY2016 Interim Dividend of 3.60cps *** Based on share price as at 31 December 2016. Grossed up yield based on a tax rate of 30%.