WAM RESEARCH LIMITED — AGM Information 2012

Nov 27, 2012

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WAM RESEARCH LIMITED ABN 15 100 504 541 CHAIRMAN’S ADDRESS ANNUAL GENERAL MEETING

Delivered by Geoffrey Wilson at the Annual General Meeting of shareholders held at Lyceum Theatre, Wesley Centre, Sydney on Wednesday 28 November 2012.

Introduction

Good Aft e rnoon an d welcome to the nin t h Annual General M eeting of W AM Res e arch Ltd (WAM R e search). M y name i s Geoff Wi l son, I am the Chair m an of the Board of D irectors and I will b e chairin g the meeting today. Before I r e port on what we ha v e achiev e d with your mon e y in 2011/2012 and discuss t h e outlook , I would li k e to intro d uce my f e llow board members – M atthew Ki d man, Jo h n Abernet h y and Julian Gosse and our C ompany Secretar y Kate Tho r ley.

Also joini n g us to a d dress qu e stions regarding the Financial Statemen t s is our a u partner fr o m Moore Stephens , Scott Whiddett.

Financial Results

The year to June 2 0 12 was a n other diffi c ult period for Austr a lian and global equi t ies. The Europea n debt crisi s cast a p a ll over int e rnational markets a n d dampe n ed consumer and investor s entiment. T he S&P/ A SX All O r dinaries A ccumulati o n Index f e ll for the t h ird time in the pa s t five year s . WAM Research c o ntinued its defensive stance a nd during the year retained a n averag e of 36.6 p e r cent of i ts portfoli o in cash, d eposited i n term de p osits with the major Australia n banks.

The com p any's inv e stment portfolio ach i eved a re t urn of 4.5 per cent f o r the yea r to 2012 June whi c h was sig n ificantly b etter than the performance of t he broad e r market. T he S&P/AS X All Ordin a ries Accu m ulation I n dex fell 7.0 per cent, this equ a tes to an outperfor m ance of 1 1.5 per c e nt.

Operatin g profit bef o re tax in the year to June 201 2 was $780,434. Op e rating pr o fit after tax was $1,956,069, including an incom e tax benefit from franking cre d it offsets o f $1,175,6 3 5. Total c o mprehen s ive inco m e was $3, 0 89,725.

WAM Re s earch del i vered per f ormance in a numb e r of metri c s during t h e 2012 fi n ancial year. The company achieved a 2.6 per c ent incre a se in after-tax net ta n gible assets, adjusted f or dividen d s, and WAM Rese a rch's share price, a d justed for dividends , rose 10. 4 per cent representi n g a continued narro w ing of th e discount to net tan g ible assets.

1 Level 11, 13 9 Macquarie S treet, Sydne y NSW 2000 | GPO Box 46 5 8 Sydney N S W 2001 | AB N 15 100 50 4 541 Phone 02 92 4 7 6755 | Fa x 02 9247 68 5 5 | info@wa m funds.com. a u | www.wa m funds.com.a u

Overall the updated investment strategy implemented in July 2010 has resulted in greater flexibility and is providing benefits to shareholders.

Performance as at 30 June 2012	1 Year %	Since July 2010 %pa*	3 Years %pa*	5 Years %pa*
WAM Research Investment Portfolio S&P/ASX All Ordinaries Accumulation Index Outperformance	+4.5% -7.0% +11.5%	+10.8% +2.1% +8.7%	+10.7% +5.9% +4.8%	-2.5% -4.1% +1.6%

• investment process revised July 2010

Dividend Growth

During the financial year WAM Research increased the fully franked full year dividend by 8.3% to 6.5 cents per share. This consisted of a fully franked interim dividend of 3.25 cents per share and a fully franked final dividend of 3.25 cents per share. The final dividend included 0.4 cents of LIC capital gain which will enable some shareholders to claim a further tax deduction.

This represents an annualised fully franked dividend yield of 7.6 per cent based on the 27 November closing price of $0.855.

The Board is committed to paying an increasing stream of fully franked dividends to shareholders provided the Company has sufficient franking credits and it is within prudent business practices. It must also comply with Government legislation and the ATO’s interpretation of a company’s ability to pay franked dividends. Dividends are paid on a sixmonthly basis. Dividend payments will also be made with consideration to cash flow and cash holdings.

Outlook

In the first months of the 2013 financial year, investment markets continue to focus on the dire economic situation in Europe, the uncertain direction of fiscal settings in the United States and questions over China's ability to generate growth at comparable rates to the recent past.

The Australian stockmarket has begun the financial year well and the WAM Research portfolio has risen 11.4 per cent in the first 4 months.

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Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 15 100 504 541 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wamfunds.com.au | www.wamfunds.com.au

At WAM Research our strategy is to invest in undervalued growth companies and in doing so we take a medium to long term view. We buy when we see a catalyst that is going to change the market's valuation of a stock, such as a structural change in an industry, new management or an earnings surprise. We undertake intensive research, which in the past year included over 1,000 company meetings. We believe it is vital we know and understand our investee companies and their management as this gives us a thorough understanding for how they make money and their various profit drivers. This gives us a competitive insight into what motivates people and what drives their behaviour.

Since November 2011, the Reserve Bank has lowered its cash rate from 4.75 per cent to 3.25 per cent. Lower borrowing costs for businesses and consumers provide a stimulus for economic activity. The cuts are positive for sharemarket valuations because lower interest rates mean higher price to earnings ratios. Lower rates on savings products also force bank depositors to look to equities for better returns.

Six months ago average term deposits paid around 6 per cent interest. Now they pay a little over 4 per cent.

If a revival in economic activity makes investors less risk-averse, money will flow into the sharemarket. At the same time, the reduction in deposit rates will encourage a shift into equities over time. We believe this will be positive for WAM Research in the year ahead.

WAM Research’s is well positioned with 39.2% held in cash and term deposit with the major Australian banks and the remaining 60.8% in listed equities. This provides us with considerable flexibility to invest as opportunities arise.

In the year ahead, we envisage Research Driven opportunities to continue to present themselves as valuations are at low levels. The challenge will be the correct forecasting of earnings growth.

Appreciation

I would like to thank the team at Wilson Asset Management for their considerable efforts and my fellow Board members for their valued contributions.

Finally, on behalf of the Board I extend my thanks to our loyal shareholders for their continuing support and also welcome those of you who are new WAM Research shareholders this year. The Board and the Wilson Asset Management team looks forward to meeting you and continuing to deliver strong performance and fully franked dividends over time.

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Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 15 100 504 541 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wamfunds.com.au | www.wamfunds.com.au