ECP EMERGING GROWTH LIMITED — Interim / Quarterly Report 2017

Jul 12, 2017

SHAREHOLDERS’ QUARTERLY REPORT

JUNE 2017

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OVERVIEW

Barrack St Investments Limited posted a Net Tangible Asset Value (NTA) of 105.06 cents per share at 30 June 2017. This reflected an increase of 2.8% from the last quarter end.

OBJECTIVE Long-term capital growth and income

STRATEGY

High-conviction portfolio of quality Australian listed small to mid-cap companies constructed using a research driven, bottom-up investment philosophy

DIVIDEND INFORMATION

(Cents per share, fully franked) AUD 0.01 at 13 April 2017 AUD 0.015 at 23 September 2016 AUD 0.01 at 07 April 2016

COUNTRIES WHERE LISTED Australian Securities Exchange: August 2014

STOCK EXCHANGE CODE ASX: BST

**UNDERLYING PORTFOLIO PERFORMANCE **	**UNDERLYING PORTFOLIO PERFORMANCE **	**UNDERLYING PORTFOLIO PERFORMANCE **	**UNDERLYING PORTFOLIO PERFORMANCE **	**UNDERLYING PORTFOLIO PERFORMANCE **	**UNDERLYING PORTFOLIO PERFORMANCE **
	Since Inception p.a.	3 months	1 year	3 years p.a.	5 years p.a.
Portfolio^	10.4%	4.7%	2.6%	N/A	N/A
ASX All Ordinaries Index	0.8%	-2.4%	8.5%	2.3%	6.9%
^Source: ECP Asset Management Gross performance before impact of fees, taxes and charges. Past performance no predictor of future returns.

INVESTMENT ACTIVITY

During the quarter we added both ARB Corporation (ARB) and Cochlear (COH) to the portfolio and we removed Sirtex (SRX). ARB was added back to the portfolio in May after being sold earlier in the year. It is a high quality business with good growth options and a sustainable competitive advantage in the products and markets that it operates in. COH is one of the larger companies within the index and is also a high quality growth business with a strong sustainable competitive advantage around its implant products. We included the stock into the portfolio in April after a detailed research process. Shortly after its inclusion, the FDA in the US approved the release of the latest implant product upgrade (Nucleus 7), which added to the stocks already positive momentum. During the quarter we exited the SRX investment following the dismissal of the Group CEO, after he sold shares before a material downgrade, and which was followed by the departure of its Chief Medical Officer. Given the circumstances surrounding the CEO’s dismissal, it was deemed that SRX was no longer investment grade, therefore not suitable for inclusion in the portfolio.

RATINGS

• Independent Investment Research – Recommended[1]

DIRECTORS

Murray d’Almeida Chairman

David Crombie AM Independent

Dr Emmanuel (Manny) Pohl Non-Independent

COMPANY SECRETARY

Brian Jones

MARKET COMMENTARY AND OUTLOOK

Global markets produced a range of results over the quarter with both political and economic events continuing to influence outcomes. The US market remained strong with the S&P 500 up 2.6% and the NASDAQ up 3.9% - both close to record highs on the back of a growing US economy.

In Europe, the economy continues to show signs of improvement, with unemployment steadily declining from previous highs. While the European recovery looks healthier than it has been historically, there has been a range of political events causing volatility in the share markets:

• During May, the French elections produced a surprising result with Macron’s party taking a comfortable victory.

• Conversely, in the UK, the Conservatives lost their majority generating more uncertainty for that country and consequently the UK market was down 0.1% for the quarter.

• Germany was relatively stable with the DAX up only 0.1%.

COMPANY DETAILS

Barrack St Investments Limited ACN 167 689 821 Suite 305, Level 3 Barrack House 16-20 Barrack Street Sydney NSW 2000 AUSTRALIA

Tel: +61 2 8651 8600 Fax: +61 2 8651 6899 Email: info@barrackst.com

Markets in Australia were generally down for the June quarter. The fall in banks and the decline in the price for most commodities drove overall performance down and this was best seen in the ASX 20 index which was down 5.1% and ASX 200 was down 2.5%. The All Ords posted a decline of 2.4% this quarter, while the Small Ords posted a negligible decline of 0.8%.

In Australia, the RBA announced that they would hold the cash rate at 1.5% which resulted in the AUD depreciating against most currencies. The AUD appreciated by 0.7% against the USD (76.87 US Cents) and declined against the EUR and GBP at 5.9% (67.3 EU Cents) and 3.0% (59.0 UK Pence) respectively.

PORTFOLIO CHARACTERISTICS (as at 30 June 2017)

barrackst.com

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NTA (before tax on unrealized gains) – total	$19,245,516.35
NTA (before tax on unrealized gains) – per share	105.06 cents
Concentration of the Top 20 Holdings	89.1%
Stocks in the underlying portfolio	22

JUNE 2017

FUND MANAGER

ECP ASSET MANAGEMENT ABN 68 158 827 582

Suite 305, Level 3 343 George Street Sydney NSW 2000 AUSTRALIA

Tel: +61 2 8651 8600 Fax: +61 2 8651 6899 Email: info@ecpam.com

ecpam.com

INVESTMENT PHILOSOPHY

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• Investments should outperform the risk-free rate

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• The price one pays determines the ultimate long-term return

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• High quality growth companies outperform over the longer term

SECTOR BREAKDOWN		TOP 7 STOCK HOLDINGS
Consumer Discretionary	22.9%	Magellan Financial Group Ltd	7.0%
Financials	18.8%	Domino’s Pizza Enterprises	6.6%
Information Technology	16.8%	TPG Telecom Limited	6.6%
Industrials	15.6%	Carsales.com Ltd	6.3%
Cash	8.2%	Reliance Worldwide	5.8%
Health Care	7.2%	Trade Me Group	5.2%
Telecommunications Services	6.6%	BT Investment Management	5.1%
Consumer Staples	3.9%

ACTIVE	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	SECTOR WEIGHTSto theALL ORDINARIES	PORTFOLIO CHANGES during the Quarter	PORTFOLIO CHANGES during the Quarter
30%													ADDITIONS
20%													ARB Corporation	ARB
10%													Cochlear Limited	COH
-20% -10% 0%	Cons…	I.T.	Industrials	Telcos'	Health Care	Utilities	Cons…	Energy	Real Estate	Financials	Materials		REMOVALS Sirtex Medical	SRX

ACTIVELY PROMOTING THE COMPANY

Barrack St Investments (BST) is committed to growing the Company and promoting itself to investors, financial advisers and stockbrokers and investor associations.

INVESTMENT PROCESS

INITIAL SCREENING PROCESS

• ROE • IPOs

• Revenue Growth • Broker Ideas

• Interest cover • Internal Ideas

FUNDAMENTAL ANALYSIS

• Understanding the Business Model

• Sustainable Competitive Advantage

• Organic Growth Opportunities

• Assessing Management

The Company continues its active engagement program in the June quarter through broker roadshows presentations in various capital cities, including at the Australian Shareholders Association Annual Conference in May. In the coming quarter Dr Emmanuel Pohl, Director of BST, will be presenting at the Australian Investor Association National Conference at the Gold Coast. In additional to this, representatives of the Company will be meeting with Shareholders, brokers and other investment professionals in Brisbane, Sydney, Melbourne, Adelaide and Perth.

Please contact the Company for further information about these and other events through info@barrackst.com or call +61 2 8651 8600 if you would like us to present at your investor function or to visit your office.

VISIT THE WEBSITE

The Company has a website which has additional information about Barrack St Investments and links to all Announcements and Reports. The address is www.barrackst.com

• Assessing the Operating Environment

Subscribe to our latest updates through www.barrackst.com

PORTFOLIO WEIGHTING

STRUCTURE AND TERMS

• 5 Year Risk Adjusted Total Return

• Market Risk Analysis

HIGH CONVICTION PORTFOLIO OF COMPANIES This process is the basis for all our Australian equities investment decisions.

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Dividend Reinvestment Plan	Dividend Reinvestment Plan is an optional way of reinvesting dividends to acquire additional shares, free of brokerage, commission, stamp duty and other	Dividend Reinvestment Plan is an optional way of reinvesting dividends to acquire additional shares, free of brokerage, commission, stamp duty and other	Dividend Reinvestment Plan is an optional way of reinvesting dividends to acquire additional shares, free of brokerage, commission, stamp duty and other
	costs.
Legal Domicile	Australian Securities Exchange (ASX) Listed Investment Company (LIC)
Fees	Management Fee of 1.0% p.a. Performance Fee 20% of the annual outperformance over 8.0%.
MER	Estimated at 1.2%
Reporting and	Monthly Net Tangible Asset Values on www.asx.com.au and quarterly reports,
Correspondence	half-yearly and annual reports onwww.barrackst.com.
Auditor	Leslie Pines
Registry	Boardroom Pty Limited -	1300 737 760	ORenquiries@boardroomlimited.com.au
Share price and NTA	www.asx.com.au andwww.barrackst.com

1 This opinion is provided by Independent Investment Research and must be read together with whole report including the disclaimer and relevant legal notices which can be found at www.independentresearch.com.au