June 2006 Quarter

At a Glance Dear Shareholders Performance for 27 months Welcome to our June 2006 quarter NZ50 stocks actually fell during the quarter, (since IPO) to 30 June 2006 shareholders’ newsletter. The Board and so the impact of Telecom and TV was Manager of Kingfish are pleased to report a significant. Outside the leaders, the market Net Asset Value $1.7825 +84.1% thriving quarter with Net Asset Value per share was a little more, and somewhat surprisingly, Diluted Net increasing to an all time high of $1.7825. buoyant with some significant share price gains Asset Value $1.4024 +44.8% The three months saw a number of significant (eg +30%). Corporate Share Price $1.23 +23% events: activity continued with a market stand by Warrant Price $0.33 +33% the Foodstuffs Group aiming for 10% of The 1) Waste Management was amalgamated Warehouse Group, while major shareholder Performance for the quarter with Transpacific Industries and Kingfish Origin Energy abandoned its proposed to 30 June 2006 received a special dividend and other merger with after failing to Net Asset Value +12.2% consideration totaling $15.7 million; attain sufficient shareholder support. Waste Diluted Net Asset Value +7.9% 2) We participated in the Initial Public Management was successful in its move to Share Price +9.8% Offerings of and Delegat’s, utilising amalgamate with Australian waste company, Warrant Price +37.5% debt facilities to enable these purchases Transpacific Industries, and was de-listed late ahead of the Waste Management proceeds in June. There were a few new listings to the June Quarter Biggest Movers being received; NZSX including Rakon and Delegat’s in which 3) Our March 2006 Annual Report was we participated. Rakon +71% published; +30% 4) A 2.5 cents per share fully imputed PORTFOLIO REVIEW Ryman Healthcare +30% dividend was paid on 16 June; 13 of the 14 stocks in the portfolio showed +18% 5) Buybacks continued with 2.65 million share price gains during the quarter, with the Delegat’s +39% shares having now been purchased by exception of Freightways which declined a Comvita +21% Kingfish between November 2005 and 30 modest 2%. 70% of the increase in the NAV June 2006 at an average price of $1.06, per share came from gains in the following Recent Portfolio changes and 3.3 million warrants at an average stocks: Rakon 76%, Metlifecare 30%, Ryman price of $0.19. 30% Mainfreight 18% and Delegat’s 39%. Rakon addition The gains in the retirement village stocks, Delegats addition The Kingfish Annual Shareholders Meeting Ryman Healthcare and Metlifecare added 8% Michael Hill increased was held on 5 July 2006 at the Bruce Mason to the NAV per share, with Pumpkin Patch and Waste Management exited Centre, Takapuna. Thank you to all those Mainfreight adding a combined 3%. The new who attended and for your questions which portfolio additions of Rakon and Delegat’s Portfolio Holdings at made the meeting more interesting. It was contributed an aggregate 1.5%. The strong 30 June 2006 heartening to see so many of you supporting profit growth in both retirement stocks is fueling Kingfish Holdings the company and to be able to talk to many their share price gains. Metlifecare upgraded Limited: Weightings of you personally. At the meeting we its FY06 earning forecast by approximately • Ryman Healthcare 20.1% announced a 2.5 cents per share fully imputed 15% earlier in the year and Ryman achieved • Mainfreight 15.7% special dividend payable on 4 August 2006. 49% growth in FY06 profit and confidently • Pumpkin Patch 11.9% The three resolutions put to shareholders predicted an average of at least 15% profit • Metlifecare 11.3% at the ASM were passed: the re-election of growth over each of the next five years. • Freightways 10.5% myself as a director, the adoption of a new • Michael Hill 8.9% constitution (to automatically reflect changes PORTFOLIO CHANGES to the NZX listing rules) and authority for During the quarter we were pleased to (Holdings owns the core portfolio of the Board to agree the remuneration of participate in Initial Public Offerings of two companies that are expected to be PricewaterhouseCoopers. quality businesses, Rakon and Delegat’s. Rakon owned for many years) is a world-leading designer and manufacturer We look forward to the remainder of 2006 with of high-quality crystal components used in Kingfish Nursery Limited: 14% confidence and thank you for your continued telecommunications and GPS applications. Its growth prospects are very attractive as GPS • Delegat’s support. applications (in-car navigation and hand-held • Rakon navigation etc) become more widespread. • Cadmus Technology Delegat’s is NZ’s largest independent • Comvita winemaker with a strong foothold in NZ’s • Kidicorp Rob Challinor renowned Sauvignon Blanc varietal. Its Oyster • NZ Exchange Chairman - Kingfish Limited Bay brand is established in many overseas • Software of Excellence 10 July 2006 markets where significant sales growth should occur with increasing grape supply in coming Net Cash: 7.6% FISHER FUNDS QUARTERLY REVIEW years. The Waste Management amalgamation June 2006 was an eventful quarter for the / takeover was completed late in the quarter. (Nursery owns shares in companies NZ market overall. The NZ50 fell 3% mainly Fisher Funds reluctantly made the decision to that have not yet met all investment because of declines in the share prices of accept the offer of $8.642 per share. The Waste criteria to become a core holding) Telecom and Sky TV. In fact only seven of the Management Board and senior management Update

ASM KEY DISCUSSION POINTS RELATIVE PERFORMANCE TO 30 JUNE 2005 AtPERFORMANCE what level (30of NAVJUNE discount2006) Oneto Month Three Months Twelve Months Since Inception POINTS OF INTEREST (IPO)One Three Twelve Since shareDecember price would 2004 Kingfish Quarter consider KINGFISH SPECIAL DIVIDEND MonthThe Months Board announced Months at Inception the Annual aKingfish share NAV buy back? 1.8% 12.2% 46.3% 84.1% Shareholders Meeting that Kingfish is to 90 Day Bank Bill Index +7% p.a. 1.2%Kingfish3.6% NAV (Start Date14.5% 31 March 04) 32.9%4.67% -5.50% 18.48% 25.84% The shares of a Listed Investment pay a special fully imputed dividend of 2.5 CompanyDifference (LIC) such as Kingfish may0.6%90 Day 8.6%Bank Bill Index31.8% +7%pa 51.2%1.14%cents 3.47% per share. 13.82%The dividend 17.12% is payable on alternateNZSX Small Captrading Index (NZSCI)between a premium or0.6%Difference2.8% 7.2% 31.6%3.53%4 August -8.97% 2006 on all 4.66% eligible shares 8.72% held on the record date of 21 July 2006. The Board discountNZSX Mid Cap to Index NAV. (NZSEMC) The Kingfish capital3.1% 7.7% 17.9% 42.0% management policy as disclosed in the has elected and is able to pay this special NZSX 50 Gross Index (NZ50G) -0.8% -3.1% 10.5% 38.3% dividend because Kingfish has received prospectus states that “if in the opinion Netgreater Asset than Value expected Performance dividend income over of the Board the value of the shares and Since Inceptionthe past couple Vs Relevantof months. The Indices most specific warrantsKingfish do not appropriately Net Asset Value, reflect Share the and Warrant Price Performance portion of this additional dividend income underlying asset value the board will from Kingfish NZ50G was fromNZSCI the special dividendNZSEMC declared by time$1.80 to time consider buying shares and Waste Management as part of its recent warrants$1.70 in Kingfish. Any decision by the amalgamation with Transpacific Industries Board to acquireKFL shares+ KFLWA Pr orice warrants will $1.60 KFL NAV 40 Group. The special dividend is in line with the consider otherKF investmentL Price alternatives Kingfish dividend policy of distributing income $1.50 and whether the acquisition is in the best after deducting operating and management $1.40 interest of the shareholders”. The Kingfish 35 costs, including tax and financing costs. The Board$1.30 will most likely consider a buyback special dividend will be eligible to participate programme$1.20 when it believes the discount in the Dividend Reinvestment Plan. to$1.1 be0 extreme, or greater than the 30 THE KINGFISH WEBSITE discount$1.00 ranges prevalent in similar investment vehicles. If a decision is $0.90 www.kingfishlimited.co.nz made in relation to a buy back then 25 $0.80 The Kingfish website profiles the company KingfishMar -04 is requiredJun-04 toSep-04 adviseDe c-the04 marketMar -05 Jun-05 Sep-05 Dec-05 Mar -06 Jun-06 and includes our latest news and information, in advance. The Board expects that an including shareholder reports and market upward trend in the underlying NAV over 20 announcements. time$0.38 should usually be enough to minimize Warrant Price any$0.33 discount to NAV. A copy of the Fisher Funds Management

$0.28 15 Monthly newsletter “From the Undergrowth” is available on the Kingfish website www. $0.23 The level and criteria for the kingfishlimited.co.nz under the shareholder Manager’s$0.18 eligibility for the 10 reports section. Performance$0.13 fee If you would like to receive an emailed copy of the monthly Fisher Funds newsletter Fisher$0.08 Funds is entitled to a performance please register your email address at Mar -04 Jun-04 Sep-04 Dec-04 Mar -05 Jun-055 Sep-05 Dec-05 Mar -06 Jun-06 fee for generating returns in excess of a enquire@kingfishlimited.co.nz benchmark rate. The benchmark rate for the year ended 31 March 2005 was 13.4% strongly endorsed the amalgamation proposal two thirds0 of Michael Hill’s earnings are from The actual return achieved by Fisher Funds to the extent that, we believe, the medium AustraliaApr-04 and Pumpkin Jun-04 Patch Aug-04generates Oct-0485% WHAT’S Dec-04 Feb-05 COMING Apr-05 UP: Jun-05 wasterm outlook36.4%, for Fisher the company Funds was was jeopardized therefore of its profits from outside NZ. Our first-hand entitledwere the amalgamationto receive 15% not toof occur. this “excess” assessment of these companies offshore • Special Dividend Paid - return. The fee became payable once the prospects shows them to be very promising. 4 August 2006 NAVSubsequent per share to the IPOexceeded allocation, $1.33. Fisher Funds This Over time their growth will generate occurredhas added toat the various holdings dates of both in Rakon the andfirst substantialWHAT’S gains COMING which will UP: benefit Kingfish • Half Year End - 30 September 2006 quarterDelegat’s. of 2005. The base NAV for the andInterim its shareholders. Report – Oct 05 current year becomes $1.32 (being the • Interim Report for 2007 year highestFISHER NAVFUNDS per OUTLOOKshare previously achieved The Kingfish Update Report will be If you- November would like 2006 to receive an Fisher Funds remains comfortable with emailed copy of the monthly Fisher at the end of any previous financial year). produced for the December and June • December Quarter Shareholders the outlook for the portfolio. Many of the A performance fee will not become quarters. The Annual Report and FundsUpdate newsletter - January please 2007 register payablecompanies again within until Kingfish the Manager have significant achieves CarmelInterim Fisher Report will be produced in your email address at anoffshore increase operations in NAV which in willany both year protect that Managingthe interim Director periods. [email protected]• Financial Year End - 31 March 2007 exceedstheir earnings the frombenchmark the continued return slow and down the Fisher Funds Management Ltd in the economy and may enhance 10 July 2006 NAV exceeds $1.32. The Board believes A copy of the Fisher Funds monthly The Kingfish Update Report will be profits from a falling NZ dollar. For example, that this structure is appropriate and newsletter “From the Undergrowth” produced for the December and June Delegat’s exports over 80% of its production; compares favourably with other fund is available on the Kingfish website quarters. The Annual and Interim Reports managers in Australasia and that it (www.kingfishlimited.co.nz) under will be produced for the March and correctly incentivises the Manager to the Shareholder Reports section. September periods. achieve a competitive return for Kingfish shareholders.

Kingfish Limited Phone +64 9 489 7094 Fax +64 9 489 7139 P O Box 33 549 Takapuna , New Zealand email: [email protected] www.kingfishlimited.co.nz The Information and any opinions herein are based on sources believed reliable, but the writer makes no representations as to its accuracy or completeness. All opinions reflect the writer’s judgement on the date of this report and are subject to change without notice.