Our dividend strategy this year has successfully focused on companies with strong balance sheets and cash flows, and reliable track records of paying dividends. With cash rates at the lowest level since the GFC and the futures market pricing in further cuts, low deposit rates are making high yielding equities even more attractive. We also believe investors who successfully identify true earnings growth stories will be duly rewarded. We have screened our stock coverage further to identify larger stocks (market cap >A$1bn) that we believe are well positioned in their various sectors for growth whilst simultaneously providing a high yield to investors and maintaining a strong balance sheet (limiting the potential for a discounted capital raising in the absence of material acquisitions).

Screening for growth + yield + solid balance sheet position

We have screened our stock coverage universe for stocks that exhibit growth and yield characteristics. For the purpose of this exercise, we have excluded the Resources sector from our
recommendations. What have we looked for? 1) stocks offering >7% EPS growth in FY13 and
FY14; 2) Yield >4% in FY13 and FY14; 3) net debt/EBITDA <2x; and 4) market capitalisation

Campbell Brothers - has a strong track record of delivering earnings growth both organically
and through acquisitions, in addition to rewarding shareholders with solid dividends. We believe
the recent share price weakness provides an attractive investment opportunity.

Coca-Cola Amatil - strong and well recognised brands, dominant market positions and growth
from emerging markets. Looking slightly expensive, however CCL is a solid portfolio holding
backed by a strong full franked yield. Buy on any dips.

Incitec Pivot – We expect strong earnings growth in FY13 with the first full year of the
Moranbah Project. The commissioning of the Moranbah plant from 1 July 2012 is a key catalyst
and over time will see IPL’s earnings mix skew to explosives (c70% from 50% currently). We
expect this to produce a PE re-rating over time.

Monadelphous - offers 25% EPS growth coupled with a 6.6% fully franked yield and with
A$180m of cash on the balance sheet, MND certainly fits the growth + yield bill. There is
also the possibility that MND will payout a special dividend in the future.

Sonic Healthcare - strong and well recognised brands, dominant market positions and growth
from emerging markets. Looking slightly expensive, however a portfolio holding. Buy any dips.
 Super Retail Group – has an exemplary track record of delivering superior earnings growth
(20% EPS CAGR over the past 5 years) which we believe will continue. Strong cash flow and
dividends will be a by-product of this growth.

Woolworths – has identified genuine opportunities for margin expansion in Australian
supermarkets which will likely see upgrades to forecasts. WOW is also underpinned by a very
solid dividend yield.

Important disclosures regarding companies that are the subject of this report and an explanation of recommendations and volatility can be found at the end of this document.