Quarter Update Newsletter 1 July 2015 - 30 September 2015

The quarter to 30 September was incredibly tough in the Australian share market, with the broad ASX 200 Index falling almost 10% in New Zealand dollar terms. The big four At a Glance banking stocks, which together comprise a third of the index, sold off on early indications as at 30 September 2015 of weaker house prices. Mining stocks, which make up the next largest part of the index, were down on continued falls in commodity prices. Energy stocks similarly followed the oil NAV $0.66 price lower. So with rising risks in all major sectors, it was very much a perfect storm for SHARE PRICE $0.64 the Australian share market. In fairness, global markets were also weak with the S&P Index DISCOUNT 2.6% of US stocks down almost 7% in United States dollars, and the major European Index down almost 9% in Euros. 1 In this particularly challenging period, the Barramundi’s adjusted NAV* was down 3.6%. Portfolio Holdings 30 SEPTEMBER 2015 SEPTEMBER 30 UPDATE limited barramundi Both the share portfolio and the foreign currency hedge contributed to a better result Summary relative to the market. Our decision to remain out of commodity stocks, and our smaller as at 30 September 2015 banking positions compared to the market, contributed to protecting our investors’ capital. In addition, some key portfolio holdings distinguished themselves by defying the broader Company % Holding conditions. (+23%), Veda (+23%), Domino’s Pizza (+14%) and CSG (+11%) 3.1% all rose over the period. Our positioning in stronger companies with more stable earnings ANZ 3.9% streams continued to benefit portfolio performance. The portfolio did not escape the harsh 2.2% full-year results season unscathed, with disappointments from a few key holdings like Austbrokers 2.9% SEEK (-13%), Ansell (-21%) and Sonic Healthcare (-13%). We believe these sell-offs in key Brambles 4.0% portfolio stocks are temporary. Burson Group 3.7% 3.5% Coca-Cola Amatil 3.5% Performance as at 30 September 2015 Since Inception Credit Corp 1.6% 3 Years October 2006 3 Months (accumulated) (accumulated) CSG 3.5% Barramundi Adjusted NAV* -3.6% +9.9% +14.5% CSL 3.2% Relative Performance Domino’s Pizza 3.7% S&P/ASX Small Ords Industrial Gross Index -3.1% +18.3% +2.3% 3.7% (in NZ dollar terms) Ingenia Communities 3.2% Total Shareholder Return* -2.3% +29.3% +19.8% Medibank 4.6% Adjusted Net Asset Value (NAV) MYOB 3.1% Adjusted NAV is calculated using NAVs (audited at the end of each financial year) and adds back dividends paid to shareholders. The directors believe adjusted NAV to be useful as it reflects the underlying performance of the investment portfolio adjusted for Nanosonics 2.0% dividends. Nick Scali 2.0% Total Shareholder Return (TSR) 5.7% TSR is calculated using the share price performance plus dividends paid to shareholders. The directors believe TSR to be useful as it mirrors the return of an investor who reinvests their dividends. No metric has been included for investors who take their ResMed 4.1% dividend in cash as the return on those cash dividends will differ per shareholder. Retail Food Group 2.1% SEEK 2.9% Total Shareholder Return Sonic Healthcare 3.3% Technology One 4.0% Dividends Total Shareholder Return* Share Price Toxfree Solutions 2.7% $1.30 $0.025 $1.20 Veda 5.3% $1.10 $0.020 3.9% $1.00 $0.90 $0.015 Equity Total 91.4% $0.80 $0.70 $0.010 Australian dollar cash 6.6% $0.60 New Zealand dollar cash 1.0% $0.50 $0.005 $0.40 Dividends per share Total Cash 7.6% $0.30 $0 Centrebet Receivable 0.5% Share Price/Total Shareholder Return Shareholder Price/Total Share Oct 06 Oct 07 Oct 08 Oct 09 Oct 10 Oct 11 Oct 12 Oct 13 Oct 14 Apr 07 Apr 08 Apr 09 Apr 10 Apr 11 Apr 12 Apr 13 Apr 14 Apr 15 Sep 15 Forward foreign exchange 0.5% contracts TOTAL 100.0% *Adjusted NAV and Total Shareholder Return assume all dividends are reinvested, but exclude imputation credits. NB: NAV and Adjusted NAV are net of fees and tax, and include the dilution effect of warrants exercised. Notable Share Price Movements in the Quarter in Australian dollars (from Bloomberg)

+35 % +23 % +23 % - 22 % -24 %

Key news on portfolio stocks employment advert market in , and we believed this market was depressed because of temporary economic When reporting their full year results in August, Veda advised stress. Secondly, we found that key competitor LinkedIn made investors that near-term profits would be negatively impacted significant profits from selling employers access to a database by higher expenses. The company intended to spend more as of skilled candidates, and we saw potential for SEEK to grow it prepared to address a longer-term growth opportunity. In profits by doing the same. And finally, through its subsidiary the longer term, a change in regulation would enable Veda Zhaopin, SEEK had a strong position in a burgeoning Chinese to sell more comprehensive credit data to its clients than it 2 market. While all three of these reasons remain valid, at its full

had in the past. In fact, this growth opportunity was a key 2015 SEPTEMBER 30 UPDATE limited barramundi year result SEEK surprised investors negatively with the level of reason we had originally chosen to own Veda. As such, we investment required to realise these opportunities. It seems the supported management’s decision and bought more shares business is in for a period of weaker short-term earnings as it as it sold off. In mid-September Equifax, a global leader in the prepares for longer-term growth. While we are disappointed sector, expressed an interest in acquiring Veda at a significant with the earnings momentum, we are happy to support premium to the share price at the time. Equifax has since portfolio stocks during periods where they fall out of favour increased its offer slightly and is undertaking a due-diligence because they are making astute long-term investments. on Veda. Medibank was sold to share market investors by the Australian Federal Government in November 2014. At the time, we took the view that significant profitability and efficiency gains were likely as Medibank evolved from a state-run institution to a private business. Medibank did not disappoint. At its maiden full year result the company Carmel Fisher Manuel Greenland showed significant improvements in profitability from both Managing Director Senior Portfolio Manager better control of claims inflation, and from improving cost Fisher Funds Management Ltd Fisher Funds Management Ltd efficiency. In addition to beating profit expectations, Medibank 30 October 2015 30 October 2015 management’s guidance for future profit growth exceeded investors’ expectations and the share rallied strongly. When Ansell delivered its 2015 result the market reacted Company News negatively to its guidance for flat to weaker earnings in 2016. This is due mainly to adverse currency movements, and to Dividend Paid 25 September 2015 an increase in the amount of tax Ansell expects to pay. We A dividend of 1.42 cents per share was paid to Barramundi view these factors as being largely beyond the company’s shareholders on 25 September 2015, under the quarterly control. More importantly, in our opinion, Ansell indicated distribution policy. Interest in Barramundi’s dividend its underlying earnings were expected to show growth of reinvestment plan (DRP) remains high with 39% of 8% to 16%, a creditable outcome in a low global growth shareholders participating in the plan. Shares issued to DRP environment. We continue to like the strong positions and participants are at a 3% discount to market price. If you favourable industry structures Ansell enjoys in its key market would like to participate in the DRP, please contact our share segments, and support management’s strategy of brand registrar, on 09 488 8777. development and product innovation to widen the company’s moat. We have bought further shares in Ansell since the result The Barramundi quarter update newsletter is produced for the and the company has announced a share buyback which March and September quarters only. The annual and interim signals a belief that its shares are undervalued. reports cover the June and December periods. If you would like There were three key features we particularly liked about to receive future newsletters electronically please email us at SEEK when we first bought it. Firstly, it dominated the online [email protected]

DISCLAIMER: The information in this newsletter has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Barramundi Limited and its officers and directors make no representation as to its accuracy or completeness. The newsletter is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from an authorised financial adviser should be taken before making an investment. To the extent that the newsletter contains data relating to the historical performance of Barramundi Limited or its portfolio companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.

Barramundi Limited. Private Bag 93502, Takapuna, Auckland 0740, New Zealand Phone +64 9 489 7074 Fax +64 9 489 7139 Email: [email protected] www.barramundi.co.nz