12 January 2017

Australian Governance Masters Index Fund Limited ASX: AQF

NTA & Investment Update – 31 December 2016

At 31 December 2016, Australian Governance Masters Index Fund Limited (Company) was invested in 75 companies. The total investment value of the portfolio was $51,224,171. The unaudited, estimated pre-tax net tangible asset (NTA) value of the Company was $1.93 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 gains were to be recognised, the NTA value after tax would be $1.81 per Share.

At 31 December 2016, the 75 shareholdings of the Company, at market value, were:

COMPANY MARKET VALUE ($) WEIGHT (%) OF 5,680,192 11.09% BANKING CORPORATION 4,363,608 8.52% AUST AND NZ BANKING GROUP 3,560,570 6.95% LTD 3,258,780 6.36% BHP BILLITON LTD 3,217,579 6.28% CORPORATION LTD 2,494,573 4.87% LTD 1,899,292 3.71% CSL LTD 1,833,788 3.58% WOOLWORTHS LTD 1,242,066 2.42% LTD 1,186,052 2.32% LTD 1,016,563 1.98% 988,404 1.93% LTD 903,204 1.76% GROUP 840,450 1.64% BRAMBLES LTD 783,296 1.53% LTD 695,942 1.36% LIMITED 692,723 1.35% QBE INSURANCE GROUP LTD 678,256 1.32% LTD 618,435 1.21% AMP LTD 596,408 1.16% AGL ENERGY LTD 594,994 1.16% LTD 585,464 1.14% INSURANCE AUSTRALIA GROUP LTD 582,683 1.14% SYDNEY AIRPORT 535,997 1.05% LTD 459,732 0.90% 435,654 0.85%

COMPANY MARKET VALUE ($) WEIGHT (%) AURIZON HOLDINGS 414,590 0.81% 389,726 0.76% ASX LTD 385,236 0.75% APA GROUP 382,076 0.75% LTD 371,272 0.72% PROPERTY GROUP 369,552 0.72% GPT GROUP 361,194 0.71% LTD 353,763 0.69% LTD 352,291 0.69% LEND LEASE GROUP 317,868 0.62% CALTEX AUSTRALIA LTD 317,850 0.62% GROUP 315,743 0.62% PRIVATE LTD 310,719 0.61% COCHLEAR LTD 280,885 0.55% LTD 265,200 0.52% LTD 253,835 0.50% LTD 246,296 0.48% LTD 241,340 0.47% TATTS GROUP LTD 235,648 0.46% BENDIGO AND ADELAIDE BANK 234,754 0.46% COCA-COLA AMATIL LTD 213,876 0.42% BLUESCOPE STEEL LTD 209,858 0.41% SEEK LTD 204,838 0.40% BANK OF LTD 178,465 0.35% THE LTD 161,506 0.32% LTD 159,062 0.31% LTD 158,695 0.31% ORORA LTD 144,351 0.28% OZ MINERALS LTD 139,164 0.27% CLYDESDALE BANK PLC 127,103 0.25% MAGELLAN FINANCIAL GROUP LTD 126,813 0.25% JB HI-FI LTD 125,395 0.24% LTD 124,724 0.24% REA GROUP LTD 110,350 0.22% DOWNER EDI LTD 108,536 0.21% .COM LTD 102,956 0.20% ADELAIDE BRIGHTON LTD 98,967 0.19% HENDERSON GROUP 98,742 0.19% CSR LTD 97,750 0.19% DULUXGROUP LTD 97,488 0.19% VOCUS COMMUNICATIONS LTD 95,612 0.19% PERPETUAL LTD 94,351 0.18%

COMPANY MARKET VALUE ($) WEIGHT (%) NORTHERN STAR RESOURCES LTD 89,074 0.17% TPG TELECOM LTD 87,289 0.17% TRAVEL GROUP LTD 72,397 0.14% GRAINCORP LTD 71,566 0.14% NAVITAS LTD 62,414 0.12% LTD 53,437 0.10% MEDICAL LTD 33,243 0.06% SUBTOTAL $49,592,563 96.81% CASH $1,631,608 3.19% TOTAL $51,224,171 100.00%

* Source: Walsh & Company Asset Management Pty Limited. Note some figures may not reconcile due to rounding. The historical performance of the Manager is not a guarantee of the future performance of the Portfolio or the Company.

The Company invests only in, what it considers to be, the best governed Australian companies within the S&P/ASX 100 Index, as ranked by the Company’s corporate governance analysis and third party research. The Company pursues an index style of investing with an active corporate governance bias and expects to hold securities of approximately 75 to 85 Australian entities within the S&P/ASX 100 at any time.

The Company believes that boards and management that show relatively high levels of corporate governance tend to outperform companies with relatively lower levels of corporate governance over the long term. The Company also seeks to promote adherence to corporate governance best practice recommendations in its investments by voting in shareholder meetings.

The Company aims to achieve long-term capital appreciation, while reducing risk, preserving the capital of the Company and investing in a diversified portfolio of investments.