6 March 2013 The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement

Australian Foundation Investment Company Limited Information Meetings – Presentation

Dear Sir / Madam Please find attached the presentation to be given at the Information Meetings being held in March and April 2013. Yours faithfully

Simon Pordage Company Secretary

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Disclaimer

Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good faith. However, no warranty (express or implied) is made as to the accuracy, completeness or reliability of any statements, estimates or opinions or other information contained in these materials (any of which may change without notice) and to the maximum extent permitted by law, the Disclosers disclaim all liability and responsibility (including, without limitation, any liability arising from fault or negligence on the part of any or all of the Disclosers) for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from these materials.

This information has been prepared and provided by AICS. To the extent that it includes any financial product advice, the advice is of a general nature only and does not take into account any individual’s objectives, financial situation or particular needs. Before making an investment decision an individual should assess whether it meets their own needs and consult a financial advisor.

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Agenda

1. Half-year results2. Market and sector snapshot3. Portfolio highlights4. Looking ahead5. Dividend Substitution Share Plan

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1. Half-year results

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Summary of half-year results to 31 December 2012

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Earnings and dividends per shareDividends maintained through the GFC

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Portfolio & share price performance to 31 January 2013Portfolio has outperformed over the short and long term.

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Share price moved to a premium of 4%

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2. Market and sector snapshot

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S&P/ASX 200 Price IndexDemand for yield has been rising in the last year.

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Where the Convertible Note funds were invested in the six months following the issue

Financials/market related: AMP, ASX, IRESS

Healthcare: CSL, Ramsay Healthcare, Ansell, Sonic Healthcare

Infrastructure: Hastings Diversified Utilities Fund, Sydney Airport, Transurban, Australian Infrastructure Fund

Energy: Oil Search, Woodside Petroleum

Banks: ANZ, Commonwealth Bank

Telecommunications: Telstra

Capital raisings: AGL, Brambles, QBE and Tox Free Solutions

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Key Trends - Households have been building deposits ($b)

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Key Trends

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Sectors returns over 12 months to 31 December 2012

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3. Portfolio highlights

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Major purchases 1 July to 31 December 2012

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$60.5m $13.5m $13.2m

$8.9m $8.6m $8.1m

$5.8m $5.8m $5.4m

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Major sales 1 July to 31 December 2012

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Hastings DiversifiedUtilities Fund

$83.6mMetcash

$12.4m

Peet

$6.1mSeven West Media

$5.2m

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Top 25 at 31 January 2013 – Banks

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Top 25 at 31 January 2013 – Resources

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Top 25 at 31 January 2013 – Energy

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Top 25 at 31 January 2013 – Mining Services

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Top 25 at 31 January 2013 – Industrial

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Top 25 at 31 January 2013 – Non Bank Financial Services

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Top 25 at 31 January 2013 – Retail

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Top 25 at 31 January 2013 – Infrastructure

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Recent reporting season feedback from companies

“Cost pressures”

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“Subdued conditions”

“Cautious earnings outlook”

“Revenue growth challenge”“High Australian dollar”

“Industrial relations climate”

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4. Looking ahead

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Key factors

• Central bank policies

• Global growth low, government debt high

• Earnings outlook subdued

• Market consolidation likely

AFIC portfolio well-positioned and in good shape

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Annual consensus EPS growth

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All ordinaries price index – long term performance

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Longer term issues for investors to consider

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5. Dividend Substitution Share Plan

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AFIC’s Dividend Substitution Share Plan (DSSP)

Important Notice

AFIC does not give taxation advice, and the following slides should not be construed as such.

The taxation laws are different in each country (including New Zealand) and shareholders need to be aware of the differences with regards to the operation of the DSSP.

Shareholders should in all cases seek their own advice as to whether or not participation in the DSSP is suitable for them.

A copy of the DSSP booklet and the relevant ATO Class Ruling in respect of the Plan are available on the Company’s website (www.afi.com.au) or by request from the AFIC office.

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Dividend Substitution Share Plan (DSSP)What is it?

• Instead of a dividend, shareholders can elect to receive substitute shares.

• The price under the DSSP will be the same as for the DRP.

• No income tax is payable on DSSP shares at the time of receipt (for Australian resident taxpayers) – instead, tax is paid only when the shares are sold.

• DSSP shares do not receive the franking credit or any LIC gains.

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Dividend Substitution Share Plan (DSSP)Who might it be suitable for?

Those shareholders who:

• Wish to increase their shareholding rather than take cash.

• Are Australian tax payers who wish to defer any tax payable until the AFIC shares are sold.

• Are on a high marginal tax rate on their dividend.

Shareholders who pay tax at a lower rate (e.g. super funds) are expected to prefer the DRP.

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