Diversified United Investment : 30 June 2017 Appendix 4E, Preliminary Final Report & Accounts

DIVERSIFIEDUNITEDINVESTMENTLIMITED‌‌‌‌‌‌‌‌‌‌

ABN 33 006 713 177

APPENDIX 4E STATEMENT‌ FOR THE YEAR ENDED 30 JUNE 2017

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 30.6.2017

RESULTS FOR ANNOUNCEMENT TO THE MARKET

The reporting period is the year ended 30 June 2017 with the prior corresponding period being the year ended 30 June 2016.

This report is based on audited financial statements. A copy of the audit report can be found on page 31.

Results for announcement to the market

• Revenue from ordinary activities was $39.4 million, up 8.3% from the prior year.

• Profit after tax and before net realised and unrealised losses/gains on the investment portfolio was $32.8 million, up 7.5% from the prior year. Net realised investment gains and losses are recorded in the Asset Realisation Reserve.

• This year special dividends of $1,820,000 after tax were received. Last year special dividends of $246,000 were received.

• Excluding special dividends received revenue rose 4.0%* and profit after tax rose 2.4%*.

• Earnings per share based on profit after tax rose 7.5% to 15.8 cents. Excluding the special dividends received, earnings per share rose 2% to 14.9 cents*. The weighted average number of ordinary shares for the year was 208,179,034 as against 206,950,582 in the prior year, an increase of 0.6%.

• The final dividend is 8.0 cents per share (7.5 cents for the prior year) fully franked, making total dividends for the year 14.5 cents fully franked, compared to 14.0 cents fully franked in the prior year. The final dividend is payable on 22 September 2017. The record date for determining entitlement to the final dividend is 31 August 2017.

• 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 30 August 2017 and the following four business days, without any discount. The last day for receipt of an election notice for participation in the plan is 1 September 2017.

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

$4.00 at 30 June 2017, compared to $3.53 at the end of the prior year, a rise of 13.3%. 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.

* Additional non IFRS information.

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DIVERSIFIEDUNITEDINVESTMENTLIMITED

ABN 33 006 713 177

LEVEL20 TEL[phone]

101 COLLINSSTREETFAX(613) 9654 3499

MELBOURNEVIC3000

Australia

17 August 2017

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 2017

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 2017 was $32,800,000 (last year: $30,506,000) a rise of 7.5%, or a rise of 2.4%* if special dividends received of $1,820,000 after tax (last year: $246,000) are excluded.

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 gains on the investment portfolio after tax for the year were $10,918,000 (last year: losses of $3,970,000).

Operating expenses (excluding interest) were 0.12% of the average market value of the portfolio (last year: 0.13%). Including the management fees of the International Exchange Traded Funds and Small Cap Managed Funds in which the Company is invested, the expense ratio was 0.15% (last year: 0.14%).

Earnings Per Share

Earnings per share rose 7.5% to 15.8 cents per share, or 2% to 14.9* cents excluding the special dividends received.

The weighted average number of ordinary shares for the year was 208,179,034 against 206,950,582 last year, an increase of 0.6%.

Dividends

The Directors have declared a final dividend of 8.0 cents per share fully franked to shareholders registered on 31 August 2017, to be paid on 22 September 2017. The comparable 2016 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 14.5 cents per share fully franked, compared to 14.0 cents per share fully franked last year.

* Additional non IFRS information.

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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 30 August 2017 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 1 September 2017.

Asset Backing

The net tangible asset backing per share based on the market valuation of investments was $4.00 at 30 June 2017 and $3.98 at 31 July 2017. 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 $3.47 at 30 June 2017 and $3.46 at 31 July 2017.

Asset Allocation

At 30 June 88.5% of the portfolio was invested in Australian equities, and 11.5% 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 2017 rose 17.6% while the S&P/ASX 200 accumulation index rose 14.1% 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.

Including the benefit of franking credits for shareholders who can fully utilise them, the Company's accumulation return for the year to 30 June 2017 was a rise of 19.5% compared to a rise of 15.9% in the S&P/ASX 200 Franking Credit Adjusted Total Return Index.

The Company's relative performance for the year was assisted by stock selection in the Resource, Financials and Healthcare sectors, and by its underweight positions in the Telecommunications and Real Estate sectors which fell 22% and 6% respectively. In Australian dollar terms the international portfolio also contributed modestly to outperformance.

Annual General Meeting

The Annual General Meeting of the Company will be held on Monday 16 October 2017 at 11.00 am at the offices of Evans & Partners, Mayfair Building, 171 Collins Street, Melbourne.