Clime Capital Limited

Company Announcements
Australia Stock Exchange
by e-lodgement

20 August 2012

CLIME CAPITAL LIMITED

ANNOUNCES $1.5 MILLION PROFIT

 Profit before tax $ 1.9 million for the year ended 30 June 2012.

 Gross portfolio increased by 1.6% after fees and expenses for the 12 months ended 30
June 2012 against negative market return of -7.0%.

 There were two Bonus share issues to ordinary sharesholders both declared on a 1 for
20 basis. Converting preference shareholders are now entitled to receive 1.21550625
ordinary shares for every converting preference share upon conversion date.

 Total cash dividends paid during the year of $3.28 million an increase of 6% compared
to June 2011.

 Total Shareholders return based on share price and dividends of over 11.8% p.a.

For further information please contact:

John Abernethy
Chairman
(02) 9252 8522

Clime Capital Limited

Level 5, 352 Kent Street Sydney NSW 2000 Australia | PO Box Q1286 Queen Victoria Building NSW 1230
ABN 99 106 282 777 P 02 9252 8522 F 02 8917 2155 W www.clime.com.au T @climeinvest
 Clime Capital Limited

Appendix 4E
Preliminary Final Report
Lodged with the ASX under Listing Rule 4.3A

Year Ended 30 June 2012

(Previous corresponding period – 30 June 2011)

Results for Announcement to the Market

Revenue from ordinary activities down 48% $3,383,970

Profit after tax attributable to members down 72% $1,494,086

Franked
Amount per amount per
security security
Dividends per share – Fully Paid Ordinary Shares
Interim Dividend – FY12 (paid 28 October 2011) 1 cent 1 cent
Interim Dividend – FY12 (paid 19 January 2012) 1 cent 1 cent
Interim Dividend – FY12 (paid 30 April 2012) 1 cent 1 cent
Final dividend – FY12 (paid 30 July 2012) 1 cent 1 cent
Dividends per share – Converting Preference Shares
July to Sep 11 – Quarterly Dividend (paid 27 October 2011) 4.75 cents 4.75 cents
Oct to Dec 11 – Quarterly Dividend (paid 18 January 2012) 4.75 cents 4.75 cents
Jan to March 12 – Quarterly Dividend (paid 27 April 2012) 4.75 cents 4.75 cents
Apr to Jun 12 – Quarterly Dividend (paid 27 July 2012) 4.75 cents 4.75 cents

Explanation of revenue from ordinary activities

Revenues for the period decreased to $3,383,970 (FY11: $6,525,799). This decrease was
primarily caused by a decrease in investment revenue and increase in unrealised losses on
financial assets.

Explanation of profit from ordinary activities after tax attributable to members

Profit after tax attributable to members decreased to a profit of $1,494,086 (FY11:
$5,317,540).

Clime Capital Limited

Level 5, 352 Kent Street Sydney NSW 2000 Australia | PO Box Q1286 Queen Victoria Building NSW 1230
ABN 99 106 282 777 P 02 9252 8522 F 02 8917 2155 W www.clime.com.au T @climeinvest
 Clime Capital Limited

COMMENTARY ON RESULTS
FINANCIAL YEAR ENDED 30 JUNE 2012

Performance

The Board reports that the invested portfolio outperformed the ASX All Ordinaries Accumulation
Index for the financial year 2011/12. The portfolio return of 1.58% over the year is after deducting
all fees, expenses and tax.

1 year 2 years* 3 years* 4 years*

Clime Capital Limited 1.58% 5.07% 11.52% 9.04%

ASX All Ordinaries Acc.

-7.04% 2.11% 5.86% -1.97%
Index

Outperformance 8.62% 2.96% 5.66% 11.01%

* annualised performance

Outlook

The return was generated by a disciplined investment approach. The features of this approach
are:
a. Acquiring positions in companies when the market price on offer is at a discount to our
assessment of value;
b. Lightening or selling positions when the market price is well above our assessment of
value;
c. Maintaining a realistic requirement for required return for our preferred equity
investments;
d. Seeking out yield in the market from hybrid investments; and
e. Reverting to cash when value is not readily available in the market.

During the year the portfolio held no more than twenty five investments at any point in time. The
average cash balance of the portfolio throughout the year was 17%. We have noted in earlier
reports that the portfolio has over 3 to 4 years been able to generate returns far superior to
market returns without being fully invested at any point.
 Clime Capital Limited

Supplementary Appendix 4E information

Additional dividend/distribution information

Details of dividends/distributions declared or paid during or subsequent to the year ended 30

June 2012 are as follows:

Record Date Payment Date Type Amount Total Franked Foreign

per Dividend amount sourced
security per dividend
security amount
per
security
Fully Paid Ordinary Shares
13 Oct 2011 28 Oct 2011 Interim 1 cent $448,550 1 cent -
04 Jan 2012 19 Jan 2012 Interim 1 cent $449,801 1 cent -
10 April 2012 30 April 2012 Interim 1 cent $473,581 1 cent -
09 July 2012 30 July 2012 Final 1 cent $474,885 1 cent -
Converting Preference Shares
13 Oct 2011 27 Oct 2011 Quarterly 4.75 cents $364,068 4.75 cents -
04 Jan 2012 18 Jan 2012 Quarterly 4.75 cents $364,067 4.75 cents -
10 April 2012 27 April 2012 Quarterly 4.75 cents $364,067 4.75 cents -
09 July 2012 27 July 2012 Quarterly 4.75 cents $364,067 4.75 cents -

Dividend/distribution reinvestment plan

The company operates a dividend reinvestment plan.

Net tangible assets per security (Cum-Dividend)

2012 2011
$ $

Fully diluted net tangible asset backing per ordinary share – pre-tax $1.12 $1.27
Fully diluted net tangible asset backing per ordinary share – post-tax $1.09 $1.23

During 2011/12 two 1 for 20 bonus shares were issued with record dates of 7 July 2011 and
2 March 2012.

Controlled Entities

The company did not gain or lose control over any entities during the 12 months ended 30
June 2012.
 Clime Capital Limited

Associates and Joint Venture entities

The company does not have any interests in associates or joint venture entities.

Foreign Accounting standards

Not applicable

Audit

The accounts have been audited, and a copy of the audit report has been included in the
Annual Report, lodged with the ASIC and ASX today.
 CLIME CAPITAL LIMITED
ABN 99 106 282 777

ANNUAL REPORT FOR THE YEAR ENDED

30 JUNE 2012
 CLIME CAPITAL LIMITED

ABN 99 106 282 777

Contents Page No

Chairman’s Letter 2

Corporate Directory 6

Director’s Report 7

Auditor’s Independence Declaration 16

Corporate Governance Statement 17

Statement of Comprehensive Income 21

Statement of Financial Position 22

Statement of Changes in Equity 23

Statement of Cash Flows 24

Notes to the Financial Statements 25

Director’s Declaration 44

Independent Audit Report 45

ASX Additional Information 47

Dear Fellow Shareholder,

In the last two Annual Reports I have outlined the investment methodology that our manager,
Clime Asset Management Pty Limited (“Clime”), undertakes to identify candidates for the
investment portfolio of your company (“CAM”).

The process is fairly simple.

First, Clime filters hundreds of companies and reviews their recent history (up to 5 years) of
profitability (i.e. return on equity). Clearly, high and growing returns are desirable but this must
be considered in the context of the maturity and size of the individual business as well as the
industry dynamics in which they operate.

Amongst other key issues Clime considers such things as:

. The description of the business - is it easily understood?

. How changing economic or market developments will affect the company;
. The quality of the management;
. The strength of the balance sheet; and
. The company’s potential to maintain or improve the return on equity.

The aim of the Clime is to build a portfolio of between 20 and 25 listed securities. The portfolio
includes the companies identified above and other securities (debt notes and hybrids) which
offer a high recurrent yield from strong balance sheets or business cash flows.

When the preferred companies and securities are identified, Clime will then undertake the
process of determining value. In the 2010 Annual Report, I outlined Clime’s approach in some
detail and I refer you to that report once again. The portfolio is built with companies and
securities that are acquired at prices that Clime considers to be below their value.

There are two other key decisions or processes that Clime undertakes and these are crucial to
understand. These decisions are based on a macroeconomic overlay of economic conditions
and world markets.

First, Clime makes a conscious decision to allocate its portfolio between cash (passive) and
invested (active). The level of the cash holding indicates the confidence level that Clime has in
the market environment. Clearly, the events of the last five years are proof that an Australian
equity investor must be acutely aware of international developments. The strategic decision by
Clime to lift cash holdings in early 2008 ensured that capital was partly insulated from the
savage market decline.

Second, Clime actively undertakes portfolio rotation. Whilst the aim is to maintain at least 20
invested positions, the actual portfolio is actively managed. This means that attractive
companies or securities will enter the portfolio if there is room. Otherwise a position will need
to be liquidated to facilitate a rotation of positions.

2 of 49
Performance

1 year 2 years* 3 years* 4 years*

Clime Capital Limited
1.58% 5.07% 11.52% 9.04%
ASX All Ordinaries Acc.
Index -7.04% 2.11% 5.86% -1.97%
Outperformance
8.62% 2.96% 5.66% 11.01%
* annualised performance

It is pleasing to report that the Manager achieved a positive portfolio return in 2011/12 after all
costs and expenses, against a market return that was decidedly negative. The performance of
the company's portfolio has been excellent over longer periods as well.

Once again in 2011/12 shareholders can observe that the portfolio was fairly stable with low
portfolio turnover and high conviction to the investments in the portfolio. From an investment
perspective, I believe that it is low portfolio turnover and high performance that stands CAM
above many other peer group Listed Investment Companies. Whilst the manager will and
indeed did (in 2008) rotate the portfolio aggressively in extraordinary economic circumstances,
this will be an uncommon occurrence.

CAM is not a trading entity but it is actively managed as outlined above. The stocks or
securities that enter or are resident in portfolio are filtered through various valuation and
outlook reviews. Over the last 3 years the manager has focused on yield as a major part of the
expected total return. The manager identified the likelihood of a low growth economic cycle
early after the GFC and positioned the portfolio appropriately. The portfolio has benefitted from
its significant holdings in high yielding hybrids (AAZPB and MXUPA) and a significant stake in
a small high rental stream, Ethane Pipeline (EPX). In the last 12 months the high conviction
investments in Telstra (TLS), the major banks and Woolworths (WOW) have contributed to the
positive returns with each also offering high fully franked dividends. Also noteworthy is that the
portfolio retained its significant position in McMillan Shakespeare (MMS) which once again
delivered an excellent return to the portfolio.

Capital Management, Dividends and Bonus issues

The Board intends to maintain its policy of declaring ordinary and preference share dividends
each quarter. The current portfolio has a high level of income generation from its shares and
yielding investments. The portfolio also generates franking which are beneficial to
shareholders.

3 of 49
During 2011/12 year CAM declared two 1 for 20 bonus share issues and maintained the
ordinary dividend levels on the increased shares. The Directors believe that bonus shares
have improved the liquidity of CAM shares and resulted in a re-rating of CAM shares in the
market.

The Board is of the view that buybacks of CAM stock would result in reduced liquidity and a
de-rating of CAM shares. Further, the manager is contracted to invest in investments to
generate attractive returns for shareholders over both the medium and longer term. Clearly the
investing of capital in late 2008 and early 2009 was a highly beneficial activity. Had the
manager been focused on buying back CAM shares then the significant returns to
shareholders in the following three years would not have eventuated.

In support of the above statements it is pleasing to report that CAM has produced total
shareholder returns, share price plus dividends, well in excess of market returns.
The following chart shows this starkly.

Investment Manager Update

The manager of CAM is Clime Asset Management Pty Limited (Clime) which a fully owned
subsidiary of Clime Investment Management Limited (CIW). The manager at that date of this
report is managing approximately $310 million in Australian listed security portfolios.

4 of 49
I am pleased to note that Clime continues to strengthen its investment management processes
and in recent years has introduced highly experienced people to its internal investment
committee. Of note is that Mr. Paul Zwi now chairs this committee. Paul has over twenty years
experience in equity markets with senior positions in funds management and financial planning
organizations.

I am also pleased to inform shareholders that Clime has appointed Mr. George Whitehouse as
portfolio manager for CAM. George joined Clime three years ago and he recently been
responsible for the highly informative quarterly reports that are sent to shareholders and
lodged with the ASX.

Thank you

I would like to thank the staff of Clime for their funds management and administrative services.
CAM aims to achieve attractive investment returns and is committed to keeping its
shareholders continuously informed of portfolio and market developments. I believe this has
been achieved to a high level in recent years.

Finally, I would like to thank the owners of CAM. The provision of patient capital in a small
listed investment company does test the resolve of shareholders. However, the recent
performance of the shares has been good and suggests that the company's performance is
being belatedly noticed.

John Abernethy
Chairman

Sydney, 17 August 2012

5 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
CORPORATE DIRECTORY

Directors John Abernethy (Chairman)

Geoffrey Wilson
Julian Gosse
Anthony Hockey - Resigned on 5 July 2011
Brett Spork

Company Secretary Richard Proctor

Registered Office Level 5

352 Kent Street
Sydney NSW 2000

Contact Details P: (02) 9252 8522

F: (02) 8917 2155
E: www.clime.com.au

Share Registry Boardroom Pty Limited

Level 7, 207 Kent Street
Sydney NSW 2001

P: 1300 737 760

F: 1300 653 459
W: www.boardroomlimited.com.au

Auditor Grant Thornton

Level 19, 2 Market Street
Sydney NSW 2000

Stock Exchange Listings Clime Capital Limited securities are listed on the Australian Stock Exchange
under the following exchange codes:

Fully Paid Ordinary Shares CAM

Converting Preference Shares CAMPA

Page 6 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Your directors present their report on Clime Capital Limited ("the Company") for the financial year ended 30 June 2012.

Directors

The following persons were directors of the Company during the whole of the financial year and up to the date of this report
unless otherwise stated:

Mr. John Abernethy

Mr. Geoffrey Wilson
Mr. Julian Gosse
Mr. Anthony Hockey - Resigned on 5 July 2011
Mr. Brett Spork

Information on Directors

Mr. John Abernethy (Age 53) Non-Executive Chairman

Experience and expertise
Mr. John Abernethy was appointed director on 31 July 2009. Mr. Abernethy has over 25 years’ funds management experience
in Australia having been General Manager Investments of the NRMA. John holds a Bachelor of Commerce (Economics)/LLB
from the University of New South Wales.

Other current directorships

Mr. Abernethy is a non-executive director of WAM Research Limited, Australian Leaders Fund Limited, WAM Active Limited
and Jasco Holdings Limited.

Mr. Abernethy is also an executive director of Clime Investment Management Limited.

Former directorships in last 3 years

None.

Special responsibilities
None.

Interests in shares and options

329,824 ordinary shares in Clime Capital Limited.
111,641 converting preference shares in Clime Capital Limited.

Mr. Geoffrey Wilson (Age 54) Non-Executive Director

Experience and expertise
Mr. Geoffrey Wilson has had 31 years’ experience in the Australian and international securities industry. He holds a Bachelor
of Science Degree and a Graduate Management Qualification. He is also a Fellow of the Institute of Company Directors and a
Senior Fellow of the Financial Services Institute of Australasia.

Mr. Geoffrey Wilson was appointed as a non-executive director in November 2003.

Other current directorships

Mr. Wilson is the Chairman of WAM Capital Limited, WAM Research Limited, WAM Active Limited, the Australian Stockbrokers’
Foundation Limited and Ascham Foundation. He is a Director of Australian Leaders Fund Limited, Cadence Capital Limited,
Vietnam Fund Limited, Incubator Capital Limited, the Sporting Chance Cancer Foundation, Australian Fund Managers
Foundation and Odyssey House McGrath Foundation.

Former directorships in last 3 years

None.

Special responsibilities
None.

Interests in shares
439,934 ordinary shares in Clime Capital Limited.

Page 7 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Information on directors (continued)

Mr. Julian Gosse (Age 62) Independent, Non-Executive Director

Experience and expertise
Mr. Julian Gosse was appointed non-executive director in November 2003. He has extensive experience in banking and
broking both in Australia and overseas, having worked in London for Rowe and Pitman, in the United States for Janney
Montgomery and Scott and in Canada for Wood Gundy. Mr. Gosse has also been involved in the establishment, operation and
ownership of several small businesses.

Other current directorships

Mr. Gosse is a non-executive director of ITL Limited and Iron Road Limited. He is also a director of Australian Leaders Fund
Limited, WAM Research Limited and Iron Road Limited.

Former directorships in last 3 years

None.

Special responsibilities
Chairman of Audit Committee
Chairman of Remuneration Committee
Chairman of Nomination Committee

Interest in shares
None.

Mr. Anthony Hockey (Age 47) Independent, Non-Executive Director

Experience and expertise
Mr. Anthony Hockey is the managing director of Hocfin Consulting Pty Limited and has over 14 years’ experience in strategy
and business performance improvement, primarily in the wealth management industry. Prior to establishing Hocfin Consulting
Pty Limited, he held the position of Head of Strategy and Corporate Advice with ING Australia where he was responsible for
assessing merger & acquisition opportunities and providing operations integration advice. Prior to that he was a management
consultant with PricewaterhouseCoopers where he led business performance improvement initiatives for clients operating
across a wide range of industries.

Mr. Hockey holds a Master of Management (MGSM), a Master of Commerce (University of NSW) and a Bachelor of Economics
(University of Sydney) and a Diploma, Company Directors Course (AICD).

Mr. Hockey was appointed non-executive director in September 2003 and resigned on 5 July 2011.

Other current directorships

None.

Former directorships in last 3 years

None.

Special responsibilities
Member of Audit Committee
Member of Remuneration Committee
Member of Nomination Committee

Interests in shares
None.

Page 8 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Information on directors (continued)

Mr. Brett Spork (Age 50) Independent, Non-Executive Director

Experience and expertise
Mr. Brett Spork was appointed independent Director of the Company in May 2011. Mr. Spork has extensive experience in the
Funds Management, Banking and Financial Services sectors. Mr. Spork's previous roles include CEO of Investorfirst , CEO of
E*Trade Australia and Executive Director with Macquarie Bank.

Mr. Spork holds a Degree in Business from Queensland University of Technology.

Other current directorships

Total Fund Services Limited and Shell-Cove Capital Management Limited

Former directorships in last 3 years

InvestorFirst Limited

Special responsibilities
Member of Audit Committee
Member of Remuneration Committee
Member of Nomination Committee

Interests in shares
None.

Company Secretary
Mr. Richard Proctor was appointed to the position of Company Secretary effective 1 January 2011. Mr. Proctor is the Chief
Operating Officer of Clime Investment Management Limited (the parent entity of the Investment Manager).

Mr. Proctor holds a Bachelor of Business Studies (Hons) from the University of Brighton, United Kingdom and is a qualified
Chartered Accountant. Mr. Proctor has over 25 years experience in operations and finance and has held senior roles with
Readers Digest, Time Warner, Heinz Food and Rothmans Tobacco in Australia and Europe.

Meetings of directors
The numbers of meetings of the Company's board of directors, and of each board committee held during the year ended 30
June 2012, and the numbers of meetings attended by each director were:

Director Board Meetings Audit Committee Meetings Remuneration Committee Meetings

A B A B A B
Mr. John Abernethy 4 4 - - - -
Mr. Geoffrey Wilson 4 3 - - - -
Mr. Julian Gosse 4 4 2 2 1 1
Mr. Brett Spork 4 4 2 2 1 1
A - Number of meetings eligible to attend
B - Number of meetings attended

Rotation and election of directors

In accordance with the Company's Constitution, Mr. John Abernethy and Mr. Geoffrey Wilson retire by rotation and, being
eligible, offer themselves for re-election.

Principal activities
The principal activity of the Company during the financial year was investing in securities listed on the Australian Stock
Exchange.

There was no significant change in these activities during the current financial year.

Operating result
The net profit after providing for tax amounted to $1,494,086 (2011: $5,317,540).

Page 9 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Dividends paid or recommended

Dividends paid or recommended during the financial year are as follows:

2012 2011
$ $

Total dividends paid

Final ordinary dividend paid during the year in respect of the prior
financial year (2011: $401,212) 447,295 401,212
Converting preference share dividend paid during the year in respect
of the prior financial year (2011: $364,068) 364,068 364,068
Interim ordinary dividend paid in respect of the September 2011
quarter (2011: $402,379) 448,550 402,379
Converting preference share dividend paid in respect of the
September 2011 quarter (2011: $364,066) 364,068 364,066
Interim ordinary dividend paid in respect of the December 2011
quarter (2011: $403,524) 449,801 403,524
Converting preference share dividend paid in respect of the
December 2011 quarter (2011: $364,067) 364,067 364,067
Interim ordinary dividend paid in respect of the March 2012 quarter
(2011: $424,849) 473,581 424,849
Converting preference share dividend paid in respect of the March
2012 quarter (2011: $364,067) 364,067 364,067
Total dividends paid 3,275,497 3,088,232

Total dividends declared not paid

Final ordinary dividend in respect of the current financial year (2011:
$447,295) 474,885 447,295
Converting preference share dividend paid in respect of the June
2012 quarter (2011: $364,068) 364,067 364,068
Total dividends declared not paid 838,952 811,363

Total dividends paid or recommended 4,114,449 3,899,595

Prior to the end of the financial year, the directors declared a fully franked dividend of 1 cent per share payable on 30 July 2012
on ordinary shares as at record date 9 July 2012 and a fully franked dividend of 4.75 cents payable 27 July 2012 on converting
preference shares as at record date 9 July 2012.

Review of operations

Investment income from ordinary activities

Investment income for the period decreased to $3,383,970 (2011: $6,525,799). This decrease was primarily caused by a
significant decrease in realised gains and increase in unrealised losses.

Net profit attributable to members of the Company

Profit from ordinary activities after tax attributable to members decreased to a profit of $1,494,086 (2011: $5,317,540).

Page 10 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Significant changes in state of affairs

No significant changes in the Company's state of affairs occurred during the year.

After balance date events

No matters or circumstances have arisen since the end of the financial year which significantly affected, or may significantly
affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial
years.

Future developments
Information on likely developments in the Company's operations and the expected results have not been included in this report
because the directors believe it would likely result in unreasonable prejudice to the Company.

Other developments
On 17 February 2012 the Board announced a bonus issue for ordinary shareholders, on a 1 for 20 basis. Converting
preference shareholders received 1.21550625 ordinary shares for every converting preference share upon conversion date.
The record date for this issue was 02 March 2012.

On 23 December 2008 it was disclosed that a Statement of Claim had been issued to Credit Corp Group Limited by the
Company, as the representative party for a group which had entered into litigation funding agreements with IMF (Australia)
Limited.

An amount of $173,067 has been awarded and received towards settlement of this claim prior to year end.

Environmental issues
The Company’s operations are not regulated by any significant law of the Commonwealth or of a State or Territory relating to
the environment.

Insurance of officers
During the financial year, the Company paid a premium for an insurance policy insuring all directors and officers against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in
their capacity as director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the
Company. In accordance with common commercial practice, the insurance policy prohibits disclosure of the nature of the
liability insured against and the amount of the premium.

Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory duties where the auditor’s
expertise and experience with the Company is important.

Details of the amounts paid or payable to the auditor Grant Thornton Audit Pty Limited (2011: BDO Audit (NSW-VIC) Pty
Limited) for audit services provided during the year are set out in note 3 of the attached Financial Report.

Unissued shares under option

There are no unissued ordinary shares of Clime Capital Limited under option at the date of this report.

Page 11 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Remuneration report - audited

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act
2001.

The remuneration report is set out in the following sections:

A Directors and key management personnel details

B Principles used to determine the nature and amount of remuneration
C Details of remuneration
D Service agreements
E Additional information

The information provided in section A-E includes remuneration disclosures that are required under section 300A of the
Corporations Act 2001.

A Directors and key management personnel details

The following persons acted as directors of the company during or since the end of the financial year.
John Abernethy Non-Executive Chairman
Geoffrey Wilson Non-Executive Director
Julian Gosse Independent, Non-Executive Director
Anthony Hockey - Resigned on 5 July 2011 Independent, Non-Executive Director
Brett Spork Independent, Non-Executive Director
Richard Proctor Company Secretary

B Principles used to determine the nature and amount of remuneration

The Remuneration Committee is responsible for making recommendations to the board on remuneration policies and packages
applicable to the board members and executives of the Company. The board’s remuneration policy is to ensure the
remuneration package properly reflects the person’s duties, responsibilities and the level of performance, and that
remuneration is competitive in attracting, retaining and motivating people of the highest quality.

Other key management personnel

The only other key management personnel employed during the financial year by the Company was Mr. Richard Proctor,
employed in his capacity as Company Secretary.

Non-executive directors
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the
directors. Remuneration of non-executive directors is determined by the full board within the maximum amount approved by the
shareholders from time to time. The payments to non-executive directors do not include retirement benefits other than statutory
superannuation. Consultation with non-executive directors outside their duties as directors is treated as external consultation
and is subject to additional fees by consent of the Board. The Company has a policy that non-executive directors are not
entitled to retirement benefits and may not participate in any bonus scheme (where applicable).

Directors' fees
The current base remuneration was last reviewed with effect in November 2010. The non-executive directors' fees are inclusive
of committee fees.

Non-executive directors’ fees are determined within a non-executive directors’ base remuneration pool, which is periodically
recommended for approval by shareholders. The non-executive directors’ base remuneration pool currently stands at
$150,000 per annum.

Page 12 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Remuneration report - audited (continued)

C Details of remuneration
The company's Chairman (Mr. John B Abernethy) and Secretary (Mr. Richard Proctor) are employed by Clime Investment
Management Ltd and do not receive any form of direct remuneration from the Company. Instead Clime Investment
Management Limited receives fees from Clime Capital Ltd designed to cover the cost of provision of these services and Clime
Investment Management Ltd. settles this amount directly with the Chairman and Secretary. The company has no other staff and
therefore has no key management personnel.

Amounts of remuneration
Details of the remuneration of the directors of Clime Capital Limited for services rendered to the Company are set out below.
With the exception of the Company’s directors, there are no key management personnel (as defined in AASB 124 Related
Party Disclosures) employed by the Company.

Mr. Richard Proctor is the only other key management personnel whose remuneration must be disclosed under the
Corporations Act 2001 .

Key management personnel and other key management personnel of Clime Capital Limited

2012 Short-term Post-

employee employment
benefits benefits
Cash salary Superannuation Total
$ $ $
John Abernethy 30,000 - 30,000
Geoffrey Wilson 11,468 1,032 12,500
Julian Gosse 27,523 2,477 30,000
Brett Spork 30,000 - 30,000
Richard Proctor 24,000 - 24,000
Total key management personnel 122,991 3,509 126,500

2011 Short-term Post-

employee employment
benefits benefits
Cash salary Superannuation Total
$ $ $
John Abernethy 30,000 - 30,000
Geoffrey Wilson 9,174 826 10,000
Julian Gosse 27,523 2,477 30,000
Anthony Hockey 27,445 2,477 29,922
Brett Spork 2,500 - 2,500
Richard Proctor 12,000 - 12,000
Jennifer El-Sibai 12,000 - 12,000
Total key management personnel 120,642 5,780 126,422

Page 13 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Remuneration report - audited (continued)

D Service agreements
Remuneration and other terms of employment for other key management personnel is formalised in service agreements with
Clime Investment Management Ltd with annual adjustments (once agreed by the Remuneration Committee) notified in writing.
Provisions relating to the term of agreement, periods of notice required for termination and relevant termination payments are
set out below.

Mr. Richard Proctor Company Secretary

• Term of agreement – No fixed term
• Notice period for termination by employee – 1 month
• Notice period for termination by company – 1 month
• Payment of a termination benefit on early termination by the company – in lieu of 1 month’s notice and other than for gross
misconduct – equal to a maximum of 8.33% of the annual remuneration package current at the time of termination

E Additional information

Performance of Clime Capital Limited

The tables below set out the summary information regarding the company's earnings and movements in shareholder wealth for
the five years to 30 June 2012:

Performance result - historical analysis

30 June 2012 30 June 2011 30 June 2010 30 June 2009 30 June 2008
$ $ $ $ $
Investment gains/(losses) 3,383,970 6,525,799 15,695,635 2,374,465 (17,618,537)
Net profit/(loss) before tax 1,899,990 5,300,683 13,186,731 1,176,956 (18,657,962)
Net profit/(loss) after tax 1,494,086 5,317,540 11,441,944 1,179,098 (14,928,802)

Movements in shareholder wealth - historical analysis

30 June 2012 30 June 2011 30 June 2010 30 June 2009 30 June 2008
Share price at 1 July $1.06 $1.02 $0.76 $0.90 $1.40
Share price at 30 June $0.94 $1.06 $1.02 $0.76 $0.90
2
NTA - pre-tax $1.12 $1.27 1.34 $1.12 $1.11
2
NTA - post-tax $1.09 $1.23 1.30 $1.12 $1.11
Interim dividends - ord. shares 1 3.0cps 3.0cps 3.0cps - -
Final dividend - ord. shares 1 1.0cps 1.0cps 1.0cps 1.0cps -
Special dividend - ord. shares 1 - - - - -
Preference share dividends 19.00cps 19.00cps 18.25cps 4.5cps 9.0cps
Bonus share issue - ord. shares 1 for 203 1 for 20 1 for 20 - -
Basic EPS 0.07cps 6.88cps 21.87cps 1.64cps (41.60cps)
Diluted EPS 0.07cps 6.88cps 21.87cps 1.64cps (41.60cps)
1
Fully franked dividends
2
Does not take into account the dilutive effect of the bonus shares.
3
1 for 20 bonus shares issued with record dates 7 July 2011 and 2 March 2012

END OF AUDITED REMUNERATION REPORT

`

Page 14 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' REPORT

Proceedings on behalf of company

As at the date of this report, no person has applied for leave of Court to bring proceedings on behalf of the Company or to
intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 16.

Signed in accordance with a resolution of the directors.

John Abernethy
Director
Clime Capital Limited

Sydney, 17 August 2012

Page 15 of 49
 Grant Thornton Audit Pty Ltd
ABN 91 130 913 594

Level 19, 2 Market Street

Sydney NSW 2000
GPO Box 2551
Sydney NSW 2001

T +61 2 9286 5555

F +61 2 9286 5599
E [email protected]
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Clime Capital Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Clime Capital Limited for the year ended 30 June 2012, I declare
that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act

2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the

audit.

GRANT THORNTON AUDIT PTY LTD

Chartered Accountants

Iain Kemp
Partner - Audit & Assurance

Sydney, 17 August 2012

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together
with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

16 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
CORPORATE GOVERNANCE STATEMENT

A description of the Company's corporate governance practices are set out below. All these practices, unless otherwise stated,
were in place the entire year and comply with the ASX Principles of Good Corporate Governance and Best Practice
Recommendations.

Board of directors and its committees

Role of the board

The Company has a board and one executive officer (the Company Secretary). Subject at all times to any written guidelines
issued by the board of directors of Clime Capital Limited, the day-to-day management and investment of funds is primarily
carried out by Clime Asset Management Pty Ltd (the Investment Manager) in accordance with a management agreement.

The role of the board is to set strategic direction and to be responsible for the overall corporate governance of the Company
which includes:

• to oversee and monitor the performance of the Manager’s compliance with the management agreement and to ensure that
the Manager is monitoring the performance of other external service providers;
• ensuring adequate internal controls exist and are appropriately monitored for compliance;
• ensuring significant business risks are identified and appropriately managed;
• approving the interim and final financial statements and related reports and other communications to the ASX and
shareholders; and
• setting appropriate business standards and a code for ethical behaviour.

The board aims to ensure that all directors and the Investment Manager act with the utmost integrity and objectivity, and
endeavours to enhance the reputation of the Company. The board should act in a manner designed to create and build
sustainable value for shareholders.

Board processes

The board has established a number of board committees including a Nomination Committee, a Remuneration Committee and
an Audit Committee. These committees have written mandates and operating procedures which are reviewed on a regular
basis. The board has also established a range of policies which govern its operation.

The board will hold two scheduled meetings each year plus any other strategic meetings as and when necessitated by the
Company’s operations. The agenda for meetings is prepared through the input of the Chairman and the Company Secretary.
Standing items include matters of Compliance and Reporting, Financials, Shareholder Communications and Investment
Strategy and Outcomes. Submissions are circulated in advance.

Composition of the board

The names of the directors of the Company in office at the date of this Statement are set out in the Directors’ Report.

The board is comprised of four non-executive directors (five until 5 July 2011). Two (three until 5 July 2011) of the Company’s
non-executive directors, Mr. J Gosse, Mr. B Spork and Mr. A Hockey (resigned 5 July 2011), are also independent.

Whilst the board acknowledges the benefits of a majority of independent directors, it believes that it can adequately achieve the
Company’s objectives with the current board’s level of expertise and without unnecessarily burdening shareholders with the
additional costs associated of adding further independent directors to the board. The board also notes that the principal
management function, being the management of the Company’s investments, resides with the Investment Manager, Clime
Asset Management Pty Ltd.

An independent director is considered to be a director:

(a) who is not a member of management;

(b) who has not within the last three years been employed in an executive capacity by the Company or been a professional
adviser or consultant to the Company;
(c) is not a significant supplier to the Company;
(d) has no material contractual relationship with the Company other than as a director; and
(e) is free from any interest or business or other relationship which could materially interfere with the director's ability to act
in the best interests of the Company.

All directors must retire from office no later than the third annual general meeting (AGM) following their last election. Any
directors appointed by the board must be duly appointed at the next AGM.

Page 17 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
CORPORATE GOVERNANCE STATEMENT

Nomination Committee

The Nomination Committee oversees the selection and appointment process for directors. The Committee annually reviews the
composition of the board and makes recommendations on the appropriate skill mix, personal qualities, expertise, gender and
diversity required. Where a vacancy exists the Committee develops selection criteria and generates a list of potential
candidates for review, determination of an order of preference and ultimate selection by the board or shareholders.

The Nomination Committee comprised the following members during the year:

• J Gosse (Chairman)
• B Spork

The terms and conditions of the appointment and retirement of non-executive directors are set out in a letter of appointment.
The performance of all directors is reviewed periodically by the Chairman. Directors whose performance is unsatisfactory are
asked to retire.

Remuneration Committee

The committee reviews and makes recommendations to the board on remuneration of the directors themselves. The
Remuneration Committee meets periodically to review the terms of remuneration packages for executive and non-executive
directors.

Full details on directors' remuneration are provided in the Directors' Report.

The Remuneration Committee comprised the following members during the year:

• J Gosse (Chairman)
• B Spork

Audit Committee

The Audit Committee has a documented Charter approved by the board. All members must be non-executive directors. The
Chairman must not also be the Chairman of the board. The Committee is responsible for considering the effectiveness of the
systems of internal control and financial reporting. Due to the size and structure of the board, and having regard to the number
of non-executive directors, it is not currently practicable for the Audit Committee to consist of more than two members. The
Audit Committee met twice during the year.

The Audit Committee comprised the following members during the year:

• J Gosse (Chairman)
• B Spork

The responsibilities of the Audit Committee are to:

1. Oversee the existence and maintenance of internal controls and procedures to ensure compliance with all applicable
regulatory obligations;
2. Oversee the financial reporting process;
3. Review the annual and half-year financial reports and recommend them for approval by the board;
4. Nominate external auditors; and
5. Review the existing external audit arrangements.

The Audit Committee also requires the Company’s administrator, FundBPO Pty Ltd, to report annually on the operation of
internal controls.

The external audit firm partner responsible for the Company’s audit attends Audit Committee meetings by invitation and
presents to the Audit Committee twice per year. The Audit Committee formally reports to the Board after each of its meetings.

Page 18 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
CORPORATE GOVERNANCE STATEMENT

External auditor

The Company and Audit Committee policy is to appoint external auditors who clearly demonstrate quality and independence.
Grant Thornton Audit Pty Limited was appointed as the external auditor in June 2012 (2011: BDO Audit (NSW-VIC) Pty
Limited). It is Grant Thornton's policy to rotate audit engagement partners on listed companies in accordance with the
Corporations Act 2001.

The external auditor is requested to attend the AGM and to be available to answer shareholder questions about the conduct of
the audit and the preparation and content of the audit report.

Risk management policy

The board acknowledges that it is responsible for the overall system of internal control but recognises that no cost effective
internal control system will preclude all errors and irregularities. The board has delegated responsibility for reviewing the risk
profile and reporting on the operation of the internal control system to the Audit Committee.

Risks are identified and assessed by the Company’s board as well as by the Company’s auditors. Controls (which may include
policies, procedures, reviews, audits and/or obtaining appropriate insurance) are implemented to deal with risks based on an
assessment of:

• The nature and extent of the risk facing the Company;

• The extent and categories of risks which the board considers acceptable to bear;
• The likelihood of the risk materialising;
• The Company’s ability to minimize the risk of incident and its resultant impact on the business should a particular risk
materialise; and
• The costs of operating particular controls relative to the benefit obtained by managing the relevant risk.

The Investment Manager, Clime Asset Management Pty Ltd, will report any instances of control or policy failure or breach to
enable the board to consider whether relevant controls require reassessment, strengthening or improvement and whether the
level of monitoring by the Audit Committee and the board is adequate.

In accordance with the ASX Corporate Governance Principles and Recommendations, the Investment Manager is required to
state to the board in writing that:

• The Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial position
and operational results and are in accordance with relevant Accounting Standards;
• The statement above is founded on a sound system of risk management and internal compliance and control which
implements the policies adopted by the board; and
• The Company’s risk management and internal compliance and control system is operating efficiently and effectively in all
material respects.

Director and executive dealing in Company shares

Directors and executives are not required to hold a minimum number of shares in order to hold their positions. All director and
executive shareholdings are disclosed in the Related Parties note within the Annual Report.

Subject to not being in possession of undisclosed price-sensitive information (and with adequate time being provided for the
information to be reflected in the Company’s share price), directors and executives may deal in shares of the Company. On the
basis that Clime Capital Limited is a listed investment company obligated to disclose its net tangible asset position on a monthly
basis, the board believes that the Company’s shareholders are generally fully informed.

Independent professional advice and access to Company information.

Each director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior
consultation with the Chairman, may seek independent professional advice at the entity’s expense. A copy of advice received
by the director is made available to all other members of the board.

Page 19 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
CORPORATE GOVERNANCE STATEMENT

Executive management

The Company's operations are primarily conducted through Clime Asset Management Pty Limited (Investment Manager) and
FundBPO Pty Limited (Administration Manager).

These entities, together with the Company’s Company Secretary, incorporate the specialist wholesale investment and
administration personnel who undertaken the Company’s executive operations.

The Company’s executive management arrangements have been structured to provide investors with an extremely cost
efficient investment vehicle and access to a significant depth of professional resources.

Ethical standards and code of conduct

The board has developed a Code of Conduct (the Code) which applies to all directors and executives. The Code is reviewed
and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices
necessary to maintain confidence in the Company’s integrity.

In summary, the Code requires that at all times all company personnel act with the utmost integrity, objectivity and in
compliance with the letter and spirit of both the law and Company policies.

A copy of the Code is available on the Company's website.

Shareholder communications.

The board informs shareholders of all major developments affecting the Company’s state of affairs.

The Company Secretary is primarily responsible for coordinating the disclosure of information to shareholders and regulators
under the direction of the board.

Relevant information is communicated to the Company’s shareholders through the following measures:

• An Annual Report will be mailed at the close of the financial year to those shareholders who have elected to receive a hard
copy. Alternatively, for those shareholders who so choose, a link to a copy of the Annual Report on the Company’s website
will be emailed in lieu of a hard copy;

• Net asset backing per share is released to the ASX by the 14th day following each month-end;

• Any information of a material nature affecting the Company is disclosed to the market through release to the ASX as soon
as the Company becomes aware of such information, in accordance with the ASX Continuous Disclosure requirement.

The board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability
and understanding of the Company’s strategy and goals.

The following charters and policies are available on request or can be found in the Corporate Governance section of the
Company’s website at www.clime.com.au:

• Board of Directors Charter

• Code of Conduct
• Securities Dealing Policy
• Continuous Disclosure Policy
• Communications Policy
• Audit Committee Charter
• Remuneration Committee Charter
• Nomination Committee Charter
• Risk Management Policy

Page 20 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012

Note 2012 2011

$ $

Investment income
Investment revenue 2 3,872,570 4,754,673
Net realised gain on disposal of financial assets at fair value
through profit or loss 2,296,883 4,009,146
Net unrealised loss on financial assets at fair value through profit
or loss (2,962,715) (2,238,625)
Other income 177,232 605

Total investment income 3,383,970 6,525,799

Expenses
Management fees (650,949) (665,395)
Performance fees (386,059) -
Administrative expenses (320,472) (433,299)
Directors' fees and company secretarial fees (126,500) (126,422)

Total expenses (1,483,980) (1,225,116)

Profit for the year before income tax expense 1,899,990 5,300,683

Income tax (expense)/benefit 4(a) (405,904) 16,857

Profit for the year 1,494,086 5,317,540

Other comprehensive income for the year - -

Total comprehensive income for the year 1,494,086 5,317,540

Basic earnings per share 6 0.07cps 6.88cps

Diluted earnings per share 6 0.07cps 6.88cps

The above Statement of Comprehensive Income should be read in conjunction with

the Notes to the Financial Statements which follow.

Page 21 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012

Note 2012 2011

$ $

Assets
Cash and cash equivalents 13(a) 9,847,819 11,674,763
Trade and other receivables 7 1,023,382 521,515
Financial assets at fair value through profit or loss 8 53,907,134 52,660,472
Current tax asset - 990
Prepayments 9 23,571 24,978

Total assets 64,801,906 64,882,718

Liabilities
Trade and other payables 10 933,999 114,770
Dividends payable 5(b) 838,952 811,363
Current tax liability 4(b) 866,728 -
Deferred tax liability 4(c) 1,266,116 1,727,931

Total liabilities 3,905,795 2,654,064

Net assets 60,896,111 62,228,654

Equity
Issued capital 11 54,231,158 53,754,701
Profit reserve 5,500,000 -
Retained earnings 12 1,164,953 8,473,953

Total equity 60,896,111 62,228,654

The above Statement of Financial Position should be read in conjunction with

the Notes to the Financial Statements which follow.

Page 22 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012

Retained
Note Issued Capital Earnings Profit Reserve Total Equity
$ $ $ $

Balance at 1 July 2010 53,296,741 6,290,728 - 59,587,469

Profit for the year - 5,317,540 - 5,317,540

Other comprehensive
income/(loss) for the year - - - -
Total comprehensive income for
the year - 5,317,540 - 5,317,540

Transactions with owners in their

capacity as owners

Issue of Ordinary shares 11(a) 457,960 - - 457,960

Dividends provided for or paid -
Ordinary shares 5 - (1,678,047) - (1,678,047)
Dividends provided for or paid -
Converting Preference Shares 5 - (1,456,268) - (1,456,268)
457,960 (3,134,315) - (2,676,355)

Balance at 30 June 2011 53,754,701 8,473,953 - 62,228,654

Profit for the year - 1,494,086 - 1,494,086

Other comprehensive
income/(loss) for the year - - - -
Total comprehensive income for
the year - 1,494,086 - 1,494,086

Transactions with owners in their

capacity as owners

Issue of Ordinary shares 11(a) 476,457 - 476,457

Dividends provided for or paid -
Ordinary shares 5 - (1,846,817) - (1,846,817)
Dividends provided for or paid -
Converting Preference Shares 5 - (1,456,269) - (1,456,269)

Transfer to profit reserve - (5,500,000) 5,500,000 -

476,457 (8,803,086) 5,500,000 (2,826,629)

Balance at 30 June 2012 54,231,158 1,164,953 5,500,000 60,896,111

The above Statement of Changes in Equity should be read in conjunction with

the Notes to the Financial Statements which follow.

Page 23 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2012

Note 2012 2011

$ $

Cash flows from operating activities

Proceeds from sale of investments 16,885,745 25,355,481
Payments for purchase of investments (18,826,434) (24,799,349)
(1,940,689) 556,132
Dividends and trust distributions received 2,368,253 3,193,586
Interest received 1,482,413 1,594,506
Payments for administrative and other expenses (463,282) (534,061)
Investment manager's fees paid (651,830) (663,985)
Performance fees paid - (1,409,631)
Other income received 177,232 605

Net cash inflow from operating activities 13(b) 972,097 2,737,152

Cash flows from financing activities

Dividends paid (2,799,041) (2,630,274)

Net cash outflow from financing activities (2,799,041) (2,630,274)

Net (decrease)/increase in cash held (1,826,944) 106,878

Cash and cash equivalents at beginning of the financial year 11,674,763 11,567,885

Cash and cash equivalents at end of the financial year 13(a) 9,847,819 11,674,763

The above Statement of Cash Flows should be read in conjunction with

the Notes to the Financial Statements which follow.

Page 24 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

These financial statements are general purpose financial statements prepared in accordance with applicable
Accounting Standards, including Australian Accounting Interpretations, the Corporations Act 2001 and other
authoritative pronouncements of the Australian Accounting Standards Board.

Clime Capital Limited is a publicly listed company, incorporated and domiciled in Australia.

The financial statements of the Company comply with International Financial Reporting Standards (IFRS) as adopted
in Australia in their entirety. The financial statements and notes also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board. The Statements are prepared from
records of the company on an accrual basis and are based on historical costs, modified, where applicable, by the
measurement of fair value of selected non-current assets, financial assets and financial liabilities The Directors
revalue the trading portfolio on a daily basis.

The following is a summary of the material accounting policies adopted by the company in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.

(b) Investments

i) Classification
The Company's investments are categorised as at fair value through profit or loss. They comprise:
- derivative financial instruments (options)
- investments in publicly listed and unlisted companies and fixed interest securities

It is considered that the information needs of shareholders in a company of this type are better met by stating
investments at fair value rather than historical cost and by presenting the Statement of Financial Position on a liquidity
basis.

ii) Valuation
All investments are classified as "held-for-trading" investments and are recognised at fair value.

iii) Recognition/derecognition
The Company recognises financial assets and financial liabilities on the date it becomes party to the contractual
agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this date.

Investments are derecognised when the right to receive cash flows from the investments have expired or the Company
has transferred substantially all risks and rewards of ownership.

iv) Measurement
Financial assets and liabilities held at fair value through profit or loss are measured initially at fair value excluding any
transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed
immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at
fair value with changes in their fair value recognised in profit or loss.

The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices at the
reporting date without any deduction for estimated future selling costs. Financial assets are priced at current bid prices,
while financial liabilities are priced at current asking prices.

Page 25 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Investments (continued)

v) Investment income
Dividend income is recognised in profit or loss on the day on which the relevant investment is first quoted on an “ex-
dividend” basis.

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value
through profit or loss' category are included in profit or loss in the period in which they arise.

vi) Impairment of financial assets

Financial assets, other than those at fair value through profit and loss, are assessed for indicators of impairment at
each reporting date. Financial assets are impaired where there is objective evidence that as a result of one or more
events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment
have been impacted.

(c) Derivatives

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The resulting gain or loss is recognised immediately in profit or
loss unless the instrument is designated as a hedging instrument, in which case the recognition of the gain or loss will
depend on the nature of the hedge relationship.

Where derivatives have been designated as a hedging instrument, their fair value will be disclosed in Note 16.

(d) Income Tax

The charge for current income tax expense is based on the taxable income for the year. It is calculated using the tax
rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability
is settled. Current and deferred taxes are recognised in profit or loss except where they relate to items that may be
recognised directly in equity, in which case they are adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available
against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the Company will derive sufficient
future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed
by law.

(e) Bills of Exchange

Bills receivable are held at face value less unearned discount. Revenue and costs are recognised on an effective yield
basis.

Page 26 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(f) Cash and cash equivalents

For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value, and bank overdrafts.

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

(g) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as being
part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the statement
of financial position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as an asset or liability in the statement of
financial position.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows.

(h) Earnings per share

i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.

Potential ordinary shares are anti-dilutive when their conversion to ordinary shares would increase earnings per share
or decrease the loss per share from continuing operations. The calculation of diluted earnings per share does not
assume conversion, exercise or other issue of potential ordinary shares that would have an anti-dilutive effect on
earnings per share.

(i) Operating segments

The company has adopted AASB 8 Operating Segments and AASB 2008-3 Amendments to Australian Accounting
Standards arising from AASB 8 with effect from 1 July 2009. AASB 8 requires a ‘management approach’ under which
segment information is presented on the same basis as that used for internal reporting purpose.

The information being reported is based on what the key decision makers use internally for evaluating segment
performances and deciding how to allocate resources to operating segments. The company is organised into one
main segment which operates solely in the business of investment management within Australia.

(j) Dividends

Provisions for dividends payable are recognised in the reporting period in which they are declared, for the entire
undistributed amount, regardless of the extent to which they will be paid in cash.

Page 27 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(k) Issued capital

Ordinary and preference shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(l) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012
reporting periods. The directors' assessment of the impact of these new standards (to the extent relevant to the Fund)
and interpretations is set out below:

(i) AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from
AASB 9 and AASB 2010 Amendment to Australia Accounting Standards arising from AASB 9 (December 2010)
(effective from 1 January 2013*)

AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and
financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption.

AASB 9 permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity
investments that are not traded.

The Company has not yet decided when to adopt AASB 9. Management does not expect this will have a significant
impact on the Company's financial statements as the Company does not hold any available-for-sale investments.

* In December 2011, the IASB delayed the application date of IFRS 9 to 1 January 2015. The AASB is expected to
make an equivalent amendment to AASB 9 in due course.

(ii) AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising
from AASB 13 (effective 1 January 2013)

AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value
disclosures. The Company has yet to determine which, if any, of its current measurement techniques will have to
change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any
of the amounts recognised in the financial statements. However, application of the new standard will impact the type of
information disclosed in the notes to the financial statements. The Company does not intend to adopt the new
standard before its operative date, which means that it would be first applied in the annual reporting period ending 30

There are no other standards that are not yet effective and that are expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future transactions.

Page 28 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

2012 2011
$ $

2. INVESTMENT REVENUE

Dividends received 2,415,335 3,124,454

Trust distributions 40,969 14,707
Interest 1,416,266 1,615,512

TOTAL 3,872,570 4,754,673

3. AUDITORS' REMUNERATION

Remuneration of the auditors of the Company in relation to:

Audit and review of the financial reports

Deloitte Touche Tohmatsu - 16,490
BDO Audit (NSW-VIC) Pty Limited - 18,500
Grant Thornton Audit Pty Limited 19,229 -
Taxation 1,500 3,150

TOTAL 20,729 38,140

4. TAXATION

(a) Income tax expense

The prima facie tax on profit before income tax is reconciled
to income tax expense as follows:
Prima facie tax payable on profit before income tax at 30% 569,997 1,590,205

Adjusted for tax effect of amounts which are not deductible

(taxable) in calculating taxable income:
Imputation gross up on dividends received 249,442 356,138
Franking credits on dividends received (831,472) (1,187,127)
Permanent differences (35,092) 15,781
Under/(over) provision of prior year tax 456,173 (65,528)
409,048 709,469
Recoupment of tax losses not previously brought to account (3,144) (726,326)

Income tax expense/(benefit) 405,904 (16,857)

The applicable weighted average effective tax rates are

as follows: (21.36%) (0.32%)

(b) Current tax liabilities

Income Tax 866,728 -

Page 29 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

2012 2011
$ $
4. TAXATION (continued)

(c) Deferred tax liabilities

Deferred income tax comprises the estimated tax payable at the current
income tax rate of 30% on the following items:

Tax on unrealised losses on investment portfolio 1,190,490 1,623,132

Other temporary differences 75,626 112,608

1,266,116 1,735,740

(d) Deferred tax assets

Deferred tax assets comprises the estimated tax deductible
at the current income tax rate of 30% on the following items:

Temporary differences - 4,950

Tax loss for the current year - 2,859

- 7,809

Net deferred tax liability 1,266,116 1,727,931

(e) Income tax expense/(benefit) recognised in the profit or loss

Current income tax expense 869,872 726,326

Recoupment of tax losses not previously brought to account (3,144) (726,326)
Under provision of prior year tax 456,173 (65,528)
Deferred tax relating to the origination and reversal of temporary
differences (916,996) 51,530
Tax losses recognised during the year - (2,859)

405,904 (16,857)

Page 30 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

2012 2011
$ $

5. DIVIDENDS

(a) Paid in the current year

Dividends paid in the current year

A fully franked final dividend on ordinary shares in respect of the 2011
financial year of 1 cent per share was paid on 28 July 2011 (2011: A fully
franked final dividend on ordinary shares in respect of the 2010 year of 1 cent
per share was paid on 27 July 2010) 447,295 401,212

A fully franked dividend on converting preference shares in respect of the

2011 financial year of 4.75 cents per share was paid on 27 July 2011 (2011: A
fully franked dividend on converting preference shares in respect of the 2010
year of 4.75 cents per share was paid on 26 July 2010) 364,068 364,068

A fully franked dividend on ordinary shares for the quarter ended 30

September 2011 of 1 cent per share was paid on 28 October 2011 (2011: A
fully franked dividend on ordinary shares for the quarter ended 30 September
2010 of 1 cent per share was paid on 18 October 2010) 448,550 402,379

A fully franked dividend on converting preference shares for the quarter ended
30 September 2011 of 4.75 cents per share was paid on 27 October 2011
(2011: A fully franked dividend on converting preference shares for the quarter
ended 30 September 2010 of 4.75 cents per share was paid on 15 October
2010) 364,068 364,066

A fully franked dividend on ordinary shares for the quarter ended 31

December 2011 of 1 cent per share was paid on 19 January 2012 (2011: A
fully franked dividend on ordinary shares for the quarter ended 31 December
2010 of 1 cent per share was paid on 25 January 2011) 449,801 403,524

A fully franked dividend on converting preference shares for the quarter ended
31 December 2011 of 4.75 cents per share was paid on 18 January 2012
(2011: A fully franked dividend on converting preference shares for the quarter
ended 31 December 2010 of 4.75 cents per share was paid on 24 January
2011) 364,067 364,067

A fully franked dividend on ordinary shares for the quarter ended 31 March
2012 of 1 cent per share was paid on 30 April 2012 (2011: A fully franked
dividend on ordinary shares for the quarter ended 31 March 2011 of 1 cent
per share was paid on 28 April 2011) 473,581 424,849

A fully franked dividend on converting preference shares for the quarter ended
31 March 2012 of 4.75 cents per share was paid on 27 April 2012 (2011: A
fully franked dividend on converting preference shares for the quarter ended
31 March 2011 of 4.75 cents per share was paid on 27 April 2011)
364,067 364,067

3,275,497 3,088,232

Page 31 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

2012 2011
$ $

5. DIVIDENDS (CONTINUED)

(b) Provided for in the current year

A fully franked dividend in respect of the 2012 year of 1 cent per share was
payable on ordinary shares as at 30 June 2012 (2011: A fully franked dividend
in respect of the 2011 year of 1 cent per share was payable on ordinary
shares as at 30 June 2011) 474,885 447,295

A fully franked dividend in respect of the 2012 year of 4.75 cents per share
was payable on converting preference shares as at 30 June 2012 (2011: A
fully franked dividend in respect of the 2011 year of 4.75 cents per share was
payable on converting preference shares as at 30 June 2011) 364,067 364,068

838,952 811,363

(c) Dividend franking account

Franking account balance 1,272,880 1,862,582

Impact on franking account balance of dividends not recognised, payable
on 27 and 30 July 2012 (2011: 26 and 27 July 2011) (359,551) (347,727)

913,329 1,514,855

6. EARNINGS PER SHARE

Basic earnings per share 0.07cps 6.88cps

Diluted earnings per share 0.07cps 6.88cps

Reconciliation of earnings used in calculating basic and

diluted earnings per share:
Total comprehensive income for the year 1,494,086 5,317,540
Less: dividends provided or paid - converting preference shares (1,456,268) (1,456,268)
Earnings used in calculating basic earnings per share
(adjusted for preference dividends paid during the year) 37,818 3,861,272

Earnings used in calculating diluted earnings per share

(adjusted for preference dividends paid during the year) 37,818 3,861,272

Weighted average number of ordinary shares used in the

calculation of basic earnings per share 56,596,155 56,107,475

Weighted average number of shares used in the

calculation of diluted earnings per share 56,596,155 56,107,475

Reconciliation of weighted average number of shares:

Weighted average number of ordinary shares used in the
calculation of basic earnings per share 47,279,821 46,791,140
Add:
Weighted average number of converting preference shares at 1.21550625 per
share used in the calculation of earnings per share 9,316,334 9,316,334
Weighted average number of shares used in the calculation
of earnings per share 56,596,155 56,107,475

Page 32 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

2012 2011
$ $

7. TRADE AND OTHER RECEIVABLES

Income receivable 524,159 502,255

Unsettled trades 472,485 -
Other debtors 26,738 19,260

1,023,382 521,515

Terms and conditions

Income receivable represents dividends and interest accrued and receivable at reporting date. Unsettled trades are
non-interest bearing and are secured by the Australian Securities Exchange - National Guarantee Fund. They are
settled within 3 days of the sale being executed. Other debtors consists of GST receivables that can be recovered from
the Australian Tax Office. No interest is applicable to any of these amounts.

The credit risk exposure in relation to receivables is the carrying amount.

8. INVESTMENTS

Financial assets at fair value through profit or loss

(1) Listed equities 43,365,543 41,972,749
Unlisted trust 300,000 300,000

(2) Interest bearing securities

Listed convertible notes 9,312,387 10,387,723
Floating rate notes 929,204 -

Total financial assets at fair value through profit or loss 53,907,134 52,660,472

9. OTHER ASSETS

Prepayments 23,571 24,978

23,571 24,978

10. TRADE AND OTHER PAYABLES

Accrued expenses 44,292 54,532

Amount payable to related parties 440,133 54,955
Unsettled trades 449,574 5,283

933,999 114,770

Terms and conditions

Unsettled trades are non-interest bearing and are secured by the Australian Securities Exchange - National Guarantee
Fund. They are settled within 3 days of the purchase being executed.

Page 33 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

2012 2011
$ $

11. ISSUED CAPITAL (CONTINUED)

Issued and paid-up capital

(a) 47,488,465 (2011: 42,598,946) ordinary fully paid shares 35,989,927 35,513,470
(b) 7,664,573 (2011: 7,664,573) converting preference fully paid shares 18,241,231 18,241,231

Balance at the end of the year 54,231,158 53,754,701

2012 2011
Number of Number of
shares shares
(a) Movements in ordinary share capital
Balance at beginning of the year 42,598,946 38,210,176 35,513,470 35,055,510

Issue of ordinary shares pursuant to a 1 for

20 bonus issue on 7 July 2011 (2011: Issue
of ordinary shares pursuant to a 1 for 20
bonus issue on 2 July 2010) 2,130,554 1,911,000 - -

Issue of ordinary shares pursuant to a 1 for

20 bonus issue on 7 March 2012 (2011:
Issue of ordinary shares pursuant to a 1 for
20 bonus issue on 9 March 2011) 2,255,727 2,023,596 - -

Dividend reinvestment plan 503,238 454,174 476,457 457,960

Balance at the end of the year 47,488,465 42,598,946 35,989,927 35,513,470

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share
capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued
shares do not have a par value.

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at
shareholders meetings. In the event of winding up the Company, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds on liquidation.

2012 2011 2012 2011

Number of Number of
shares shares $ $
(b) Movements in converting preference
share capital
Balance at beginning of the year 7,664,573 7,664,573 18,241,231 18,241,231

Balance at the end of the year 7,664,573 7,664,573 18,241,231 18,241,231

Holders of convertible preference shares carry a right to be paid a quarterly dividend equal to 7.5% of the issue price
annually, subject to the availability of profits and the Directors, at their discretion, determining to pay that dividend. The
dividends payable are non-cumulative.

The convertible preference shares automatically convert into ordinary shares in ten years from allotment date, or
sooner at the option of the holder. The convertible preference shares are non-redeemable. In the event of winding up
the Company, convertible preference shareholders will rank ahead of Clime ordinary shareholders to the extent of the
paid-up capital on the preference shares plus accrued but unpaid dividends.

Page 34 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

11. ISSUED CAPITAL (CONTINUED)

(b) Movements in converting preference share capital

Holders of convertible preference shares are entitled to vote at shareholders' meetings in certain circumstances as
outlined in the Prospectus dated 16 March 2007.

(c) Capital risk management

The Company's capital structure currently consist of equity and retained earnings and there is no long term debt or
short term debt. The operating cash flows of the Company are used to finance short term capital. The capital risk
management is continuously reviewed as the Company has surplus cash available for investment.

12. RESERVES AND RETAINED PROFITS

2012 2011
$ $

(a) Retained earnings

Balance at the beginning of the year 8,473,953 6,290,728

Net profit attributable to members of the company 1,494,086 5,317,540

Transfer to profit reserve (5,500,000) -
Dividends provided for or paid (3,303,086) (3,134,315)

Balance at end of financial year 1,164,953 8,473,953

(b) Profit reserve

Balance at the beginning of the year - -
Transfer from retained earnings 5,500,000 -

Balance at end of financial year 5,500,000 -

Profit reserve is made up of amounts allocated from retained earnings that are preserved for future dividend payments.

13. CASH FLOW INFORMATION

(a) Reconciliation of cash

For the purposes of the statement of financial position and statement of cash
flows, cash and cash equivalents comprise:
Cash at bank 531,401 9,674,763
Short term bank deposits with maturity less than three months 9,316,418 2,000,000

Total cash and cash equivalents 9,847,819 11,674,763

Page 35 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

13. CASH FLOW INFORMATION (CONTINUED)

2012 2011
$ $

(b) Reconciliation of net profit attributable to members of the

Company to net cash provided by operating activities

Profit attributable to members of the Company 1,494,086 5,317,540

Changes in assets and liabilities:

(Increase)/decrease in trade and other receivables (29,383) 38,539
Increase in investments at fair value through profit or loss (1,274,857) (1,214,389)
Decrease in prepayments 1,407 4,113
Decrease in current tax asset 990 -
Increase/(decrease) in trade and other payables 374,940 (1,391,795)
Decrease in deferred tax liability (461,814) (16,856)
Increase in current tax liability 866,728 -

Net cash provided by operating activities 972,097 2,737,152

14. RELATED PARTY TRANSACTIONS

All transactions with related entities were made on normal commercial terms and conditions no more favourable than
transactions with other parties unless otherwise stated.

(a) Management and Performance Fees

Management and performance fees paid to companies related to the Directors and Company Secretary were as
follows:

2012 2011
$ $

Clime Asset Management Pty Ltd - note (c)(i) 874,271 499,046

Clime Investment Management Ltd - note (c)(ii) 54,000 54,000
Boutique Asset Management Pty Ltd - note (c)(iii) 162,737 166,349

1,091,008 719,395

As at 30 June 2012, $440,133 (2011: $54,955) of the year's management and performance fees remain unpaid and
within payables.

(b) Dividends
All dividends paid and payable by the Company to Directors and Director related entities are on the same basis as to
other shareholders.

Page 36 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

14. RELATED PARTY TRANSACTIONS (CONTINUED)

(c) Nature of Relationships

(i) Clime Asset Management Pty Ltd

Mr John Abernethy is the Director and Chief Investment Officer of the Investment Manager, Clime Asset Management
Pty Ltd (a wholly-owned subsidiary of ASX listed company Clime Investment Management Limited). Clime Asset
Management Pty Ltd receives management and performance fees as remuneration for managing the Company's
investment portfolio.

(ii) Clime Investment Management Ltd

Mr John Abernethy is a Director in Clime Investment Management Ltd. Clime Investment Management Ltd receives
management fees as remuneration for the employment of the Chairman, John Abernethy and Company Secretary,
Richard Proctor as detailed in note 15. Clime Investment Management Ltd owns 12.02% of the share capital of Clime
Capital Limited.

(iii) Boutique Asset Management Pty Ltd

Boutique Asset Management Pty Ltd, a company in which Mr Geoffrey Wilson is a director, has an assignment from
the Investment Manager to receive 25% of all management fees payable by the Company under the Management
Agreement.

15. KEY MANAGEMENT PERSONNEL DISCLOSURE

The company's Chairman (Mr. John B Abernethy) and Secretary (Mr. Richard Proctor) are employed by Clime
Investment Management Ltd and do not receive any form of direct remuneration from the Company. Instead Clime
Investment Management Limited receives fees from Clime Capital Ltd designed to cover the cost of provision of these
services. Clime Asset Management Pty Ltd as the Manager receives a management and performance fee from the
company as detailed below. The company has no other staff and therefore has no key management personnel other
than the Directors.

There have been no other transactions with Key Management Personnel or their related entities other than those
disclosed in Note 14.

The names and position held of the Company's key management personnel (including Directors) in office at any time
during the financial year are:

John Abernethy - Non-Executive Chairman

Geoffrey Wilson - Non-Executive Director
Julian Gosse - Non-Executive Director
Anthony Hockey - Non-Executive Director (resigned 5 July 2011)
Brett Spork - Non-Executive Director
Richard Proctor - Company Secretary

(a) Remuneration of Directors and Other Key Management Personnel

In accordance with Section 300A of the Corporations Act 2001, all detailed information regarding the remuneration of
Directors and other key management personnel has been included in the Remuneration Report in the Directors' Report
of the Annual Report.

Page 37 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

15. KEY MANAGEMENT PERSONNEL DISCLOSURE (CONTINUED)

(a) Remuneration of Directors and Other Key Management Personnel (continued)

A summary of the remuneration of Directors and other key management personnel for the current and previous
financial year is set out below:

2012 2011
$ $

Cash salary, fees and commissions 122,991 120,642

Short-term employee benefits 122,991 120,642

Superannuation 3,509 5,780

Post-employment benefits 3,509 5,780

Total employment benefits 126,500 126,422

(b) Shareholdings

2012
Balance at Shares acquired Balance at
1 July 2011 / (disposed) 30 June 2012

Ordinary Shares
John Abernethy (Chairman) 290,756 37,126 327,882
Geoffrey Wilson 399,031 40,903 439,934
Richard Proctor 324,503 (244,379) 80,124

1,014,290 (166,350) 847,940

Converting Preference Shares

John Abernethy (Chairman) 111,641 - 111,641

111,641 - 111,641

2011
Balance at Shares acquired Balance at
1 July 2010 / (disposed) 30 June 2011

Ordinary Shares
John Abernethy (Chairman) 258,289 32,467 290,756
Anthony Hockey 35,024 (35,024) -
Geoffrey Wilson 361,931 37,100 399,031
Richard Proctor 256,481 68,022 324,503

911,725 102,565 1,014,290

Converting Preference Shares

John Abernethy (Chairman) 111,641 - 111,641
Richard Proctor 7,500 (7,500) -

119,141 (7,500) 111,641

There were no shares or options granted during the reporting period as compensation.

Page 38 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

16. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives, Policies and Procedures

The Company's accounting policies are included in Note 1, while the terms and conditions of each class of financial
asset, financial liability and equity instrument, both recognised and unrecognised at reporting date, are included under
the appropriate note for that instrument.

Risks arising from holding financial instruments are inherent in the Company's activities, and are managed through a
process of ongoing identification, measurement and monitoring. The Company is exposed to credit risk, liquidity risk
and market risk. The Company is responsible for identifying and controlling the risks that arise from these financial
instruments.

The risks are measured using a method that reflects the expected impact on the results and equity of the Company
from reasonably possible changes in the relevant risk variables. Information about these risk exposures at the
reporting date, measured on this basis, is disclosed below. Information about the total fair value of financial
instruments exposed to risk, as well as compliance with established investment mandate limits, is also monitored by
the Company. These mandate limits reflect the investment strategy and market environment of the Company, as well
as the level of risk that the Company is willing to accept, with additional emphasis on selected industries.

This information is prepared and reported to relevant parties within the Company on a regular basis as deemed
appropriate.

Concentrations of risk arise when a number of financial instruments or contracts are entered into with the same
counterparty, or where a number of counterparties are engaged in similar business activities, or activities in the same
geographic region, or have similar economic features that would cause their ability to meet contractual obligations to
be similarly affected by changes in economic, political or other conditions.

In order to avoid excessive concentrations of risk, the Company monitors its exposure to ensure concentrations of risk
remain within acceptable levels and either reduces exposure or uses derivative instruments to manage the excessive
risk concentrations when they arise.

(b) Credit risk

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit
risk on financial assets, excluding investments, of the Company which have been recognised on the Statement of
Financial Position, is the carrying amount. The Company is not materially exposed to any individual credit risk.

Credit is not considered to be a major risk to the Company as any cash and fixed interest securities held by the
Company or in its portfolios are invested with financial institutions that have a Standard and Poor’s long term rating
between BBB and AA-. Also the majority of maturities are within three months.

None of the assets exposed to a credit risk are overdue or considered to be impaired.

(c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities. This risk is controlled through the Company’s investment in financial instruments, which under market
conditions are readily convertible to cash. In addition, the Company maintains sufficient cash and cash equivalents to
meet normal operating requirements.

Maturity analysis for financial liabilities

Financial liabilities of the Company comprise trade and other payables which have no contractual maturities but are
typically settled within 30 days.

Page 39 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

16. FINANCIAL INSTRUMENTS (CONTINUED)

(d) Market risk

Market risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices.

By its nature, as a listed investment company that invests in tradeable securities, the Company will always be subject
to market risk as it invests its capital in securities which are not risk free. The market prices of these securities can and
do fluctuate in accordance with multiple factors.

The Company seeks to reduce market risk by attempting to invest in equity securities where there is a significant
'margin of safety' between the underlying companies' value and share price. The Company does not have set
parameters as to a minimum or maximum margin of safety, nor does it have set parameters regarding a minimum or
maximum amount of the portfolio that can be invested in a single company or sector.

(i) Interest rate risk

The Company's interest bearing financial assets expose it to risks associated with the effects of fluctuations in the
prevailing levels of market interest rates on its financial position and cash flows, the risk is measured using
sensitivity analysis below.

The table below summarises the Company's exposure to interest rates risk. It includes the Company's assets and
liabilities at fair values, categorised by the earlier of contractual repricing or maturity date.

Weighted
Average
Effective
Interest Floating Non Interest Fixed Interest
2012 Rate Interest Rate Bearing Rate Total
% $ $ $ $

Financial Assets
Cash and cash equivalents 4.49% 531,401 - 9,316,418 9,847,819
Trade and other receivables - 996,644 - 996,644
Financial assets held at fair
value through profit and loss 10,241,591 43,665,543 - 53,907,134
Total Financial Assets 10,772,992 44,662,187 9,316,418 64,751,597

Financial Liabilities
Trade and other payables - 889,707 - 889,707
Dividends payable - 838,952 - 838,952
Total Financial Liabilities - 1,728,659 - 1,728,659

Page 40 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

16. FINANCIAL INSTRUMENTS (CONTINUED)

(d) Market risk (continued)

(i) Interest rate risk (continued)

Weighted
Average
Effective
Interest Floating Non Interest Fixed Interest
2011 Rate Interest Rate Bearing Rate Total
% $ $ $

Financial Assets
Cash and cash equivalents 5.03% 9,674,763 - 2,000,000 11,674,763
Trade and other receivables - 502,255 - 502,255
Financial assets held at fair value
through profit and loss 10,387,723 42,272,749 - 52,660,472
Total Financial Assets 20,062,486 42,775,004 2,000,000 64,837,490

Financial Liabilities
Trade and other payables - 60,238 - 60,238
Dividends payable - 811,363 - 811,363
Total Financial Liabilities - 871,601 - 871,601

(ii) Equity Price Risk

Equity Price Risk is the risk that fair value of equities decreases as a result of changes in market prices, whether
those changes are caused by factors specific to the individual stock or factors affecting the broader market. Equity
price risk exposure arises from the Company's investment portfolio.

(iii) Summarised sensitivity analysis

The following table summarises the sensitivity of the Company’s operating profit and equity to interest rate risk and
price risk. The reasonably possible movements in the risk variables have been determined based on
management’s best estimate, having regard to a number of factors, including historical levels of changes in
interest rates, historical correlation of the Company’s investments with the relevant benchmark and market
volatility. However, actual movements in the risk variables may be greater or less than anticipated due to a number
of factors, including unusually large market shocks resulting from changes in the performance of the securities in
which the Company invests. As a result, historic variations in risk variables are not a definitive indicator of future
variations in the risk variables.

Price risk Interest rate risk

Impact on profit and loss/equity
-10% +10% -100 bps +100 bps

30 June 2012 (5,390,713) 5,390,713 (103,871) 103,871

30 June 2011 (5,266,047) 5,266,047 (217,237) 217,237

No effect on other comprehensive income would result from price or interest rate risk in 2012 or 2011.

Page 41 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

16. FINANCIAL INSTRUMENTS (CONTINUED)

(e) Fair values of financial assets and financial liabilities

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.

The table below presents the Company's assets measured and recognised at fair value at 30 June 2012 by level of the
following fair value measurement hierarchy:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices)
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

At 30 June 2012
Financial assets at fair value through profit
or loss
Listed equities 43,365,543 - - 43,365,543
Unlisted unit trust - - 300,000 300,000
Listed convertible notes 9,312,387 - - 9,312,387
Floating rate notes 929,204 - - 929,204
Total financial assets at fair value
through profit or loss 53,607,134 - 300,000 53,907,134

At 30 June 2011
Financial assets at fair value through profit
or loss
Listed equities 41,972,749 - - 41,972,749
Unlisted unit trust - - 300,000 300,000
Listed convertible notes 10,387,723 - - 10,387,723
Total financial assets at fair value
through profit or loss 52,360,472 - 300,000 52,660,472

The fair value of financial instruments traded in active markets (publicly traded derivatives and trading securities) is
based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets
held by the Company is the current bid price. These instruments are included in level 1.

The fair value of financial instruments that are not traded in an active market (over-the-counter derivatives and unlisted
unit trusts) is determined using valuation techniques. The Company uses a variety of methods and makes assumptions
that are based on market conditions existing at the end of each reporting period.

The carrying amounts of trade receivables and payables are assumed to approximate their fair values due to their
short-term nature.

Page 42 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012

17. SEGMENT INFORMATION

The Company is organised into one main segment which operates solely in the business of investment management
within Australia.

The Company operates in Australia and holds all assets within Australia.

The Company has identified its operating segments based on the internal reports that are reviewed and used by the
Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of
resources.

The directors are of the opinion that the current financial position and performance of the Company is equivalent to the
operating segments identified above and as such no further disclosure has been provided.

18. CONTINGENT LIABILITIES

As at 30 June 2012, the Company has no contingent liabilities or commitments (2011: Nil).

19. EVENTS SUBSEQUENT TO BALANCE DATE

No dividends have been recommended by the Directors subsequent to the end of the financial year.

No matters or circumstances have arisen since the end of the financial year which significantly affected, or may
significantly affect, the operations of the Company, the results of those operations or the state of affairs of the
company in future financial years.

19. COMPANY DETAILS

The registered office and principal place of business of the Company is:

Level 5
352 Kent Street
Sydney NSW 2000

Page 43 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777
DIRECTORS' DECLARATION
FOR THE YEAR ENDED 30 JUNE 2012

The directors declare that:

(a) In the directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations
Act 2001 , including compliance with Accounting Standards, and giving a true and fair view of the financial position and
performance of the Company;

(b) In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable;

(c) In the directors' opinion, the attached financial statements are in compliance with International Financial Reporting
Standards, as stated on Note 1(a) of the financial statements;

(d) The directors have been given the declarations required by S.295A of the Corporations Act 2001; and

(e) The remuneration disclosures contained in the Remuneration Report comply with S300A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors made pursuant to S.295(5) of the Corporations Act 2001 .

On behalf of the directors

John Abernethy
Director

Sydney, 17 August 2012

Page 44 of 49
 Grant Thornton Audit Pty Ltd
ABN 91 130 913 594

Level 19, 2 Market Street

Sydney NSW 2000
GPO Box 2551
Sydney NSW 2001

T +61 2 9286 5555

F +61 2 9286 5599
E [email protected]
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Clime Capital Limited

Report on the financial report

We have audited the accompanying financial report of Clime Capital Limited (the “Company”),
which comprises the statement of financial position as at 30 June 2012, the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year
then ended, notes comprising a summary of significant accounting policies and other explanatory
information and the directors’ declaration of the company.

Directors responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view of the financial report in accordance with Australian Accounting
Standards and the Corporations Act 2001. This responsibility includes such internal controls as
the Directors determine are necessary to enable the preparation of the financial report to be free
from material misstatement, whether due to fraud or error. The Directors also state, in the notes
to the financial report, in accordance with Accounting Standard AASB 101 Presentation of
Financial Statements, that compliance with the Australian equivalents to International Financial
Reporting Standards ensures that the financial report, comprising the financial statements and
notes, complies with International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards which require us to
comply with relevant ethical requirements relating to audit engagements and plan and perform
the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether
due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the Directors, as well as evaluating the overall presentation of the financial report.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together
with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.

Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.

Auditor’s opinion
In our opinion:

a the financial report of Clime Capital Limited is in accordance with the Corporations Act
2001, including:

i giving a true and fair view of the Company’s financial position as at 30 June 2012
and of its performance for the year ended on that date; and

ii complying with Australian Accounting Standards and the Corporations

Regulations 2001; and

b the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the remuneration report included in pages 12 to 14 of the directors’ report for
the year ended 30 June 2012. The Directors of the Company are responsible for the preparation
and presentation of the remuneration report in accordance with section 300A of the
Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report,
based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Clime Capital Limited for the year ended 30 June
2012, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD

Chartered Accountants

Iain Kemp
Partner - Audit & Assurance

Sydney, 17 August 2012

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 CLIME CAPITAL LIMITED
ABN 99 106 282 777

ASX ADDITIONAL INFORMATION

The shareholder information set out below was applicable as at 17 August 2012.

A. Distribution of Equity Securities

Analysis of numbers of equity security holders by size of holding:

Fully Paid Ordinary Shares No. of Holders

1 - 1,000 105
1,001 - 5,000 278
5,001 - 10,000 218
10,001 - 100,000 608
100,001 and over 72
1,281

Converting Preference Shares No. of Holders

1 - 1,000 40
1,001 - 5,000 262
5,001 - 10,000 169
10,001 - 100,000 122
100,001 and over 8
601

B. Equity Security Holders

The names of the twenty largest holders of quoted equity securities are listed below:

Ordinary Shares

Percentage of
Name No. of Shares issued shares

CLIME INVESTMENT MANAGEMENT LTD 5,689,668 11.950

MR VICTOR JOHN PLUMMER 3,150,000 6.616
PERPETUAL TRUSTEES CONSOLIDATED LIMITED <CLIME ASSET MANAGEMENT A/C> 2,140,987 4.497
J P MORGAN NOMINEES AUSTRALIA LIMITED 1,410,578 2.963
DI IULIO HOMES PTY LIMITED <DI IULIO SUPER FUND A/C> 1,162,518 2.442
GLEN RANELAGH PTY LTD 858,834 1.804
MR JOHN STEPHEN MICHAEL HEATHERS & MRS MARGARET JEAN HEATHERS <HEATHERS FAMILY S/F A/C> 725,681 1.524
JOHN E GILL OPERATIONS PTY LTD 616,118 1.294
HUDSON PHARMACEUTICALS PTY LTD <SEAGULLS S/FUND A/C> 480,059 1.008
HIGHLAND ENDEAVOURS PTY LIMITED <HOWELL FAMILY A/C> 464,926 0.976
DYNASTY PEAK PTY LTD <THE AVOCA SUPER FUND A/C> 439,934 0.924
MR NIGEL SELBY TULLOCH & MRS BONNEY SAU YING TULLOCH <THE TULLOCH SUPER FUND A/C> 334,900 0.703
MR RORY DUNLEVY <DUNLEVY SUPER FUND A/C> 333,514 0.700
THE SPORTS CAFE (AUSTRALIA) PTY LTD 303,878 0.638
MR VICTOR JOHN PLUMMER 285,324 0.599
MR DON HOLDEN & MRS SUE HOLDEN 282,136 0.593
BARRY GEORGE FORBES & CARLA FORBES <FORBES SUPER FUND A/C> 277,058 0.582
MR DEREK JOHN CANTLE <DJ & AI CANTLE FAMILY A/C> 252,524 0.530
MR PAUL WILHELM MCCAULEY & MRS LISA-GAYE MCCAULEY <ASAP SUPER FUND A/C> 246,170 0.517
IQTEL AUSTRALIA PTY LTD <THE MENZIES FAMILY A/C> 243,102 0.511
19,697,909 41.371

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 CLIME CAPITAL LIMITED
ABN 99 106 282 777

ASX ADDITIONAL INFORMATION

Converting Preference Shares

Percentage of
Name No. of Shares issued shares

CLIME INVESTMENT MANAGEMENT LTD 916,765 11.961

DI IULIO HOMES PTY LIMITED <DI IULIO SUPER FUND A/C> 487,546 6.361
MR RICHARD TOOHER 340,000 4.436
SANOLU PTY LIMITED 211,308 2.757
GREAT D PTY LTD <GREAT D SUPER FUND A/C> 200,000 2.609
STORFUND PTY LTD <KENNARDS SELF STOR S/F A/C> 135,417 1.767
MRS MARITA TOOHER 120,000 1.566
MR GORDON COAD & MISS SHIRLEY PRATT <COAD AND PRATT SUPER ACCOUNT> 106,000 1.383
MR ANTHONY JOHN GILL <THE STAG A/C> 100,000 1.305
MR JOHN STEPHEN MICHAEL HEATHERS & MRS MARGARET JEAN HEATHERS <HEATHERS FAMILY S/F A/C> 100,000 1.305
PERPETUAL TRUSTEES CONSOLIDATED LIMITED <CLIME ASSET MANAGEMENT A/C> 96,668 1.261
J P MORGAN NOMINEES AUSTRALIA LIMITED 84,233 1.099
ABERNETHY SUPERANNUATION PTY LTD <ABERNETHY SUPER FUND A/C> 80,300 1.048
DOUBLE PTY LIMITED 80,000 1.044
NAVIGATOR AUSTRALIA LTD <MLC INVESTMENT SETT A/C> 69,800 0.911
MR ANTHONY DENIS O'NEILL & MRS ANNE MARIE O'NEILL <EVENPEAK SUPER FUND A/C> 62,500 0.815
MRS MARGARET JOY MOSS 56,049 0.731
MR FELIX GUY LENOX HOLMER <THE SUNDANCER SUPER A/C> 55,000 0.718
BARBRIGHT AUSTRALIA PTY LTD <INTERQUARTZ SUPER FUND A/C> 54,167 0.707
MR DICK ROBERT LISTER & MRS JAN LOUISE LISTER <LUMEN S/F A/C> 52,000 0.678
3,407,753 44.462

Unquoted equity securities

There are no unquoted equity securities on issue as at the date of this report.

C. Substantial Holders

Substantial holders in the company are set out below (based on voting interest in fully paid ordinary shares only):

No. of shares Percentage of

Name held issued shares

Clime Investment Management Limited 5,689,668 11.95%

D. Voting Rights

The voting rights attaching to each class of equity securities are set out below:

(a) Fully Paid Ordinary Shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each

(b) Converting Preference Share

One vote for each share held, but limited to matters affecting the rights of such shares.

48 of 49
 CLIME CAPITAL LIMITED
ABN 99 106 282 777

ASX ADDITIONAL INFORMATION

E. Investments held at the balance date.

No. of shares Fair Value at 30
held June 2012

ADG Global Supply Limited 2,800,000 173,600

Australand Convertible Notes 31/12/2049 28,509 2,534,450
Australia & New Zealand Banking Group Limited 146,839 3,233,393
BHP Billiton Limited 136,500 4,291,560
Blackmores LTD 9,250 241,425
Brickworks Limited 275,500 2,755,000
Commonwealth Bank of Australia 48,200 2,559,420
Ethane Pipeline Income Fund 1,662,847 3,774,663
Forge Group 147,630 645,143
IMF Australia 10.25% Convertible Note 529,045 909,957
Iress Market Technology 257,492 1,683,998
Macq Perp Notes 1,560,000 929,204
Maxim Income Fund 300,000 300,000
McMillan Shakespeare Limited 416,400 4,917,684
Mineral Resources Ltd 104,500 935,275
Mortgage Choice Limited 434,365 558,159
Mothercare Australia Ltd 17,451,751 1,273,978
Mothercare Australia Ltd Convertible Note 3,351,855 603,334
Multiplex Convertible Note 31/12/2049 46,053 3,359,566
OrotonGroup Ltd 264,061 1,927,645
Reece Australia Limited 45,500 821,275
Seven Grp Hld ConvNt 24,550 1,905,080
Telstra Corporation Limited 1,275,000 4,692,000
The Reject Shop 195,805 1,789,657
Thorn Group Limited 824,698 1,204,059
Westpac Banking Corporation 123,900 2,618,007
Woolworths Limited 122,000 3,269,600
53,907,134

F. During the year ended 30 June 2012, the Company recorded 524 transactions in securities (including options).
$43,692 (excluding GST) in brokerage was paid or accrued for the year.

G. Investment Manager
The Company has entered into an Investment Management Agreement with the Investment
Manager, Clime Asset Management Limited.
Base fee
The Investment Manager is entitled to a monthly base fee calculated as 0.08334% (excluding GST) of the
market value of all assets less total indebtedness of the Company. The Investment Manager has excluded
deferred tax assets from the calculation of the base fee thereby reducing the base fee amount.
Performance fee
The Investment Manager is entitled to a performance fee calculated as 20% (excluding GST) of the amount
by which the absolute dollar value of the investment performance (after deducting the base fee) exceeds
the All Ordinaries accumulation Index for the annual period, provided that the performance is positive.

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