1. October 2013 TAE Presentation

2. 2 Market Shift Higher

3. Checking in on valuations 3  Yield 5.3% grossed up versus cash rate of 2.5%  PE 14.6x which is in line with 15 year average.  But still cheap relative to bonds  Focus on earnings not valuations PE of the marketBond Yield versus Earnings Yield

4. Key areas of growth – global manufacturing 4  Global manufacturing has been improving – synchronised growth.  US remains strong boosted by improved competitiveness for manufacturing and monetisation of gas.

5. Key areas of growth – Australian housing 5  Sydney clearance rate 83% on large volume  Merrill Lynch property conference key insight  Affordability being addressed by medium density strategies  State Governments reducing red and green tape – more stock  Prices up 2-5% nationally and 5-7% in Sydney  Pick up is emerging – Lend Lease sales +20%

6. Key areas of growth – Market Flows 6  Flows picking up as noted below  Fund managers will benefit from combined market and flow data

7. Areas not growing 7  Retail not yet showing evidence of improvement  Mining services still soft  Currency has pulled back which offsets some of the earnings benefit we were expecting from the currency.

8. Broad Portfolio Positioning 8  Offshore plays (AMC, BXB, FOX, QBE).  Rotation out of bonds into equities (HGG, MQG, QBE).  Underweight defensive companies (WOW, TLS, Utilities).  Domestic housing related stocks (LLC, SGP, DLX).  Sustainable growth stocks (TME, SEK, CWN, SHL, AZJ, AIO).  Data has been more supportive for resources (RIO, BHP).

9. 9 Lend Lease  East coast recovery play.  Residential clearly in recovery mode off a low base.  Barangaroo construction on schedule.  Mr Abbott wants to be Mr Infrastructure. Backlog in the Australian infrastructure space.  Strong visibility on next three years earnings and still cheap on 10.9x.

10. 10 Henderson Group  Earnings recovery play as flows into equities accelerate.  Sentiment towards equities and earnings have improved.  Low cash rates driving a search for yield.  Earnings accelerating and market forecasts are too low yet still on 15x.

11. 11 Aurizon  Efficiency improvement play.  Strong coal tonnages and volumes.  Long term earnings growth through cost savings and efficiency gains.  Earnings to double – trading at a 20% discount to our valuation

12. 12 Brambles  Earnings to improve as global economy recovers and A$ falls.  Exposure to global growth in consumer staples, in particular improved US outlook.  Recall Demerger creates value. Trades at 17x but this reduces quickly as earnings recover.

13. 13 FOX  Stock re-rated on the demerger and loses the Murdoch discount and newspaper discount.  It has stalled of late as those that bought into the demerger exit.  Still value on 13x 2016 despite 20% pa growth.  Visibility of growth very strong.

14. 14 Performance – High Conviction Portfolio Annualised as at 30 September 2013 Please note: Past performance is not an indication of future performance. No allowance has been made for taxation and fees are not taken into account.

15. 15 Performance – Income Portfolio Annualised as at 30 September 2013 Please note: Past performance is not an indication of future performance. No allowance has been made for taxation and fees are not taken into account.

16. 16 Disclaimer DISCLAIMER IMPORTANT NOTE: While every care has been taken in the preparation of this material, DNR AFSL Pty Ltd (ABN 39 118 946 400, an Australian Financial Services Licensee, License Number 301658), makes no representation or warranty as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. This material has been prepared for the purpose of providing general information without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this material, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. Dalton Nicol Reid expressly disclaims any responsibility or liability to anyone who acts or relies upon anything contained in, or omitted from, this material. Past performance is not indicative of future performance.