Diversified United Investment : 30 June 2016 Appendix 4E, Preliminary Final Report & Accounts

DIVERSIFIEDUNITEDINVESTMENTLIMITED‌‌‌‌‌‌‌‌‌‌

ABN 33 006 713 177

APPENDIX 4E STATEMENT‌ FOR THE YEAR ENDED 30 JUNE 2016

CONTENTS‌

• Results for announcement to the market‌‌

• Letter to Australian Securities Exchange‌

• Financial Statements

• Independent Audit Report

Appendix 4E: Results for Announcement to the Market Diversified United Investment Limited 30.6.2016

RESULTS FOR ANNOUNCEMENT TO THE MARKET

The reporting period is the year ended 30 June 2016 with the prior corresponding period being the year ended 30 June 2015.

This report is based on audited financial statements. A copy of the audit report can be found on page 30.

Results for announcement to the market

• Revenue from ordinary activities was $36.4 million, down 8.4% from the prior year.

• Profit after tax and before net realised and unrealised losses/gains on the investment portfolio was $30.5 million, down 9.6% from the prior year. Net realised investment gains and losses are recorded in the Asset Realisation Reserve.

• This year special dividends of $246,000 after tax were received. Last year special dividends of $3,831,000 were received.

• Earnings per share excluding the special dividends received fell 3.3% to 14.6 cents per share, or 13.5% to 14.7 cents including the special dividends received. The weighted average number of ordinary shares for the year was 206,950,582 as against 198,422,380 in the prior year, an increase of 4.3%.

• The final dividend is 7.5 cents per share (7.5 cents for the prior year) fully franked, making total dividends for the year 14.0 cents fully franked, unchanged on the prior year. The final dividend is payable on 23 September 2016. The record date for determining entitlement to the final dividend is 2 September 2016.

• The final dividend will not include any Listed Investment Company capital gain dividend.

• The Company operates a Dividend Reinvestment Plan ("DRP") under which shareholders may elect to have all or part of their dividend payment reinvested in new ordinary shares. Pricing of the new DRP shares will be at the volume weighted average selling price of shares traded on the Australian Securities Exchange on the Dividend ex date of 1 September 2016 and the following four business days, without any discount. The last day for receipt of an election notice for participation in the plan is 5 September 2016.

• The net tangible asset backing per share based on the market valuation of investments was

$3.53 at 30 June 2016, compared to $3.68 at the end of the prior year, a fall of 4.1%. These calculations are after tax on net realised gains, before any future tax benefit of net realised losses, before estimated tax on net unrealised gains/losses, and before provision for the final dividend.

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DIVERSIFIEDUNITEDINVESTMENTLIMITED

ABN 33 006 713 177

LEVEL20 TEL[phone]

101 COLLINSSTREETFAX(613) 9654 3499

MELBOURNEVIC3000

Australia

16 August 2016

The General Manager

Australian Securities Exchange Ltd 10thFloor

20 Bond Street

Sydney NSW 2000

Dear Sir,

Financial Results and Dividend Announcement for the Financial Year Ended 30 June 2016

The Directors make the following report concerning the company's performance and final dividend:-

Profit and Realised Capital Gains

Profit after income tax for the year ended 30 June 2016 was $30,506,000 (last year: $33,740,000) a fall of 9.6%, or a rise of 1.2% if special dividends received of $246,000 after tax (last year: $3,831,000) are excluded. Last year profit included realised foreign currency exchange gains of $1,119,000 after tax (this year: nil).

The profit for the year excludes net realised gains and losses on the investment portfolio which are transferred directly to the Asset Realisation Reserve. The net realised losses on the investment portfolio after tax for the year were $3,970,000 (last year: gains of $7,735,000).

Operating expenses (excluding interest) were 0.12% of the average market value of the portfolio (last year: 0.13%).

Earnings Per Share

Earnings per share excluding the special dividends received fell 3.3% to 14.6 cents per share, or 13.5% to 14.7 cents including the special dividends received.

The weighted average number of ordinary shares for the year was 206,950,582 against 198,422,380 last year, taking into account the shares issued on the dividend re-investment plan and having adjusted for the bonus element in the November 2014 rights issue, an increase of 4.3%.

Dividends

The Directors have declared a final dividend of 7.5 cents per share fully franked to shareholders registered on 2 September 2016, to be paid on 23 September 2016. The comparable 2015 final dividend was 7.5 cents per share fully franked. Together with the interim dividend of 6.5 cents per share, total dividends for the year are 14.0 cents per share fully franked, unchanged from last year.

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LIC Capital Gains

The final dividend will not include any Listed Investment Company capital gain dividend.

Dividend Reinvestment Plan

The Company operates a Dividend Reinvestment Plan ("DRP") under which shareholders may elect to have all or part of their dividend payment reinvested in new ordinary shares. Pricing of the new DRP shares will be at the volume weighted average selling price of shares traded on the Australian Securities Exchange on the Dividend ex date of 1 September 2016 and the four business days immediately following that date, without any discount. The last day for the receipt of an election notice for participation in the plan is 5 September 2016.

Asset Backing

The net tangible asset backing per share based on the market valuation of investments was $3.53 at 30 June 2016 and $3.74 at 31 July 2016. These calculations are after tax on net realised gains, before any future tax benefit of net realised losses, before estimated tax on net unrealised gains and losses, and before provision for the final dividend.

The Company is a long term investor and does not intend disposing of its total portfolio. If estimated tax on net unrealised gains were to be deducted, the above figures would be $3.14 at 30 June 2016 and $3.29 at 31 July 2016.

Asset Allocation

At 30 June 90% of the portfolio was invested in Australian equities, and 10% in international equities through Exchange Traded Index Funds.

Performance

The Company's net asset backing accumulation performance (assuming all dividends paid by the Company were reinvested in its shares, and after all expenses and tax) for the year to 30 June 2016 was steady while the S&P/ASX 200 accumulation index rose 0.6% over the same period. The Company's accumulation performance is after all expenses, tax, and the impact of the Company's gearing. Such items are not included in the S&P/ASX index.

In the Australian market, on an accumulation basis, the ASX top 20 index fell 7% for the year. The Energy sector fell 22%, Financials fell 9%, Healthcare rose 22%, and the Property Trust and Utilities sectors both rose 25%. The Company's relative performance for the year was assisted by its positions in Healthcare and Industrials, but held back by its significant holdings in the top 20 sector, the underweight positions in Utilities and Property Trusts, and overweight position in Energy. In Australian dollar terms the international portfolio performed broadly in line with the Australian index for the year.

Annual General Meeting

The Annual General Meeting of the Company will be held on Tuesday 18 October 2016 at 9.00 am at the offices of KPMG, 147 Collins Street, Melbourne.