Benefits of investing in PAI

• Access to a manager with a proven investment philosophy and method for selecting undervalued stocks and a team of experienced investment professionals

• Exposure to an actively managed, diversified equity portfolio that seeks to minimise losses during market downturns using risk management techniques

• Actively managed currency exposures providing substantial diversification from the Australian dollar

• Easy to trade on ASX - no set minimum investment required

• Being taxed at source, PAI can distribute available profits to shareholders in the form of dividends, usually fully-franked

• Having established a dividend profit reserve, PAI's Board can smooth its dividends from year to year

About the Fund

An ASX-listed investment company, PAI offers investors an easy and convenient means of accessing an actively managed, diversified portfolio of Asian (ex-Japan) companies across industry sectors, providing exposure to undervalued businesses that are benefiting from Asia's dynamic growth and transformation.

Investment objective

To provide capital growth over the long-term through investing primarily in undervalued listed securities of companies in the Asian region (ex-Japan) across sectors. In doing so, PAI aims to achieve net returns over a five year plus investment horizon that are in excess of the benchmark (MSCI All Country Asia ex Japan Net Index (A$)) returns.

Investment philosophy

Platinum is an active manager focused on delivering long-term absolute returns (i.e. returns in absolute terms, rather than relative to any benchmark).

Platinum's investment philosophy is centred on the belief that there are times when events of a transitory nature may have a disproportionate effect on a company's share price, be they positive or negative, causing it to deviate from its inherent trend line. Such events, in Platinum's' view, present potential investment opportunities if one is able to differentiate between the companies that have a sound business case but are facing temporary set-backs from those which have lesser potential or face fundamental problems.

Platinum's style of investment management is focused on seeking out the neglected and overlooked parts of the market. Its core expertise is in identifying companies that have sound businesses and promising growth prospects but are temporarily out-of-favour with the market.

Investment approach

To identify companies whose businesses and growth prospects are temporarily inappropriately valued by the market, Platinum builds each portfolio through a process of individual stock selection (the "Bottom‐Up Approach) rather than from any pre-determined asset allocation by macro-economic modelling (the so-called "top-down model) or by reference to any index weightings (the so-called "benchmarking model).

Platinum applies both qualitative and quantitative analyses when selecting stocks. Considerations in connection with each company typically include, but are not limited to:

• whether the company's business is competitive and sustainable;

• the quality of the company's management;

• the company's ownership structure;

• whether the company is financially sound;

• the company's price to earnings ratio, price to book ratio, and free cash flow; and

• whether the company is likely to generate free cash flow that will grow.

• Such analyses are underpinned by observations and studies of broader socio-political and macroeconomic themes and trends.

How we invest your money

Platinum's investment process generally involves the following key elements:

Idea generation

• Generation of themes and ideas in Platinum's investment process is eclectic in nature. Input from observations of the changing social and political landscape and the application of numeric skills are both regarded as an important part of the investment process.

• Platinum places great store on the cross-pollination of ideas and the view that increasingly more weight should be applied to the global context of a company's operations than purely regional considerations.

• Platinum's investment team is structured into six sector/regional teams (see Section 4.5 of the Prospectus for detail) each with a team leader who is also a portfolio manager for one or more of the funds managed by Platinum, which are further supported by a team of quantitative analysts and dealers. The location, organisation structure, range of team meetings and internal infrastructure is all designed to foster a collaborative open approach and to facilitate the free flow of information between analysts with different geographic and industry responsibilities. For example, while a specialist team of five analysts are primarily responsible for researching companies in the Asian Region ex Japan, the financials/services sector team may also cover financials stocks in the region. Analysts from the two teams would closely collaborate in their research efforts on such stocks.

Screens

• Platinum uses various devices to make sense of the universe of stocks available. These include screening which allows for the selection of companies based on specific criteria (or "screens) across a large databank of companies. This process allows Platinum to undertake cross-comparative studies of companies in its investable universe, thereby drawing up short-lists for more intense study. In setting these screens, Platinum may build on a hypothesis regarding social, political, or economic change. For example, a screen may seek to identify industry groups that are currently out of favour with investors.

Intensive research

• Once a company has been identified as a potential investment opportunity, it is then investigated by investment analysts in greater detail and depth, utilising a variety of resources, including material from the company itself and its competitors, reports from stockbroking analysts and industry material. Analysts may also visit the companies being studied as well as their competitors and suppliers.

• Once an analyst has studied an industry or a company, he or she will prepare a detailed report which is then subjected to the scrutiny of team members who meet to vigorously discuss and debate the merits of the case. The purpose of these meetings is to expose areas of concern and potential flaws in each investment proposal rather than to achieve

• a consensus. The final decision lies not with a committee, but solely between the analyst who is the promoter of the idea and the relevant portfolio manager.

• The research report and/or investment review will include such matters as, for example, certain achievements expected from the company being proposed. These may vary considerably depending on the nature of the company involved, but, among other things, tend to include sales and earnings targets. Failure by the company to meet these targets would raise concern and, notwithstanding any price action, could result in the shares being sold. It is Platinum's experience that when targets are met or exceeded, the share price tends to overshoot expectations. Flexibility in selling may allow for the market's tendency to overreact.

Portfolio construction

As a consequence of Platinum's investment approach and process, the Portfolio will be built from the bottom up from a series of individual stock selections rather than from a pre-determined asset allocation. Investment weightings in the Portfolio may vary considerably from benchmarks such as indices issued by MSCI.

The Manager views the process of portfolio building as a layering process. At any time, there will be newly introduced ideas, others that have made an initial contribution and others that are starting to tire. Care is taken to understand the inter-relationship of stocks within a portfolio.

When undervalued securities cannot be found, the Manager may leave funds in cash. Therefore, after periods when the markets have performed strongly the Portfolio may hold significant cash positions. Likewise, when the Manager's research reveals companies whose prospects are seen as overvalued, the Manager may short sell as a way of managing the Portfolio's risk.