AFI – Letter to AFIC Noteholders

17 January 2017



The Manager
ASX Market Announcements
Australian Securities Exchange
Exchange Centre
Level 4
20 Bridge Street
Sydney NSW 2000

Electronic Lodgement

Australian Foundation Investment Company Limited
Letter to AFIC Noteholders

Dear Sir / Madam

Please find attached a letter and exit notice regarding the maturity of the AFIC
Unsecured Convertible Notes which has been sent to noteholders today.


Yours faithfully,


Matthew Rowe
Company Secretary

Australian Foundation Investment Company Limited
Redemption of the AFIC Notes



This letter outlines key information and dates regarding your noteholding. Please note the
information provided in this letter is not financial product advice and has been prepared
without taking into account your individual investment objectives, financial circumstance or
particular needs. If you’re unsure of the impact of the information provided below we would
suggest that you should seek independent financial and taxation advice from your financial or
other professional advisor before deciding what to do with your AFIC Notes.

Convert your AFIC Notes to AFIC Ordinary Shares by completing an Exit Notice

Under the terms of the AFIC Notes, you are entitled to submit the attached Exit Notice to
convert some or all of your holding of AFIC Notes into AFIC ordinary shares (AFIC Shares).

If you elect to convert any of your AFIC Notes you will receive 19.66 AFIC shares, equivalent
to $5.0864 per share, for every AFIC Note (subject to rounding and pursuant to Section 7 of
the Prospectus).

No amount is payable by you on conversion – rather the Face Value of $100 per AFIC Note
is applied in full towards the subscription for AFIC Shares.

You will also be entitled to receive all unpaid and accrued interest up to but excluding the
Maturity Date.

Please note that the minimum number of AFIC Notes that can be converted is the lesser of
5 AFIC Notes or the balance of the holder’s holding of AFIC Notes. In accordance with the
Prospectus once you have lodged an Exit Notice you must not deal, transfer, dispose or
encumber any AFIC Notes that were the subject of the Exit Notice.
17 January 2017

222406_01XJ3F
Dear Noteholder,
I am writing to you as a current holder of [x,xxx] Unsecured, Convertible Notes (AFIC Notes)
issued by Australian Foundation Investment Company Limited (AFIC or the Company). The
AFIC Notes are
due to mature on 28 February 2017 (Maturity Date) pursuant to section 7.1 of
the Terms of the Issue of the AFIC Notes set out in the Prospectus lodged with ASIC on 14
November 2011 (
Prospectus).
AFI
MR SAM SAMPLE
FLAT 123
123 SAMPLE STREET
THE SAMPLE HILL
SAMPLE ESTATE
SAMPLEVILLE VIC 3030
Samples/000001/000001
*L000001*
Australian FoundationAustralian Foundation
Investment Company LimitedInvestment Company Limited
ABN 56 004 147 120ABN 56 004 147 120
Level 21, 101 Collins StLevel 21, 101 Collins St
Melbourne VIC 3000Melbourne VIC 3000
T 03 9650 9911T 03 9650 9911
F 03 9650 9100F 03 9650 9100
investinvest
@
afi .com.auafi .com.au
afi .com.auafi .com.au

The share price of AFIC shares (ASX:AFI) at the 13 January 2017 was $5.91 per share.
The highest market price of AFIC shares during the prior 3 months was $5.94 on
10 January 2017 and the lowest market price during this period was $5.65 on 9 November 2016.

If you wish to convert your AFIC Notes to AFIC Shares, you must complete the Exit Notice
attached to this letter and return it by post to the Company’s Share Registry Computershare
Investor Services Pty Limited, GPO Box 52. Melbourne Victoria 3001 Australia or via e-mail
to aficnotes@computershare.com.au.

The deadline for receipt of the exit notice is 13 February 2017.

Redemption of your AFIC Notes (Default Option)

Should you take no action the Company will redeem your entire holding of AFIC Notes on the
Maturity Date. The Repayment Amount, as set out in the Prospectus, is $100 per Note (Face
Value) and will be paid in full along with all unpaid and accrued interest up to but excluding
the Maturity Date. The Company will pay the proceeds in accordance with the payment
instructions on file.

The AFIC Notes are currently quoted on the ASX under code AFIG. Trading in the AFIC
Notes on the ASX will cease from the close of trading on 22 February 2017. AFIC Shares to
be issued on the conversion of AFIC Notes (AFIC New Shares) will trade on a deferred
settlement basis until the issue date of 28 February 2017. Any trades will be subject to
normal market terms and conditions and the applicable brokerage charges.

Important Dates

Deadline to convert AFIC Notes to AFIC Shares (by completing
an Exit Notice)
13 February 2017
Ex date for final interest payment 17 February 2017
Record Date for final interest payment 20 February 2017
Last Trading Date in AFIC Notes 22 February 2017
AFIC New Shares quoted on a deferred settlement basis 23 February 2017
Maturity Date / Final Interest Payment Date / Conversion Date /
Issue Date of AFIC New Shares
28 February 2017

If you have any questions in relation to the above, please do not hesitate to contact
Computershare on 1300 662 270.

Yours faithfully



Terry Campbell
Chairman
222406_01XJ3F

SRN/HIN: SRN WITHHELD
Instructions to convert your Notes to Ordinary Shares (Exit Notice)
Exit Notice
I/We, hereby give notice to convert 6.25% unsecured convertible notes (AFIC Notes)
into ordinary fully paid shares of the issuer, pursuant to the AFIC Notes Trust Deed and the terms and conditions of the AFIC Notes.
I/We, apply for such number of fully paid ordinary shares in the capital of Australian Foundation Investment Company Limited (AFIC) as is equal to
the number of ordinary shares that the note holder is entitled to upon conversion, as calculated in accordance with the terms and conditions of the
AFIC Notes.
Important Notice: Minimum number of AFIC Notes that can be converted is the lesser of 5 AFIC Notes or the balance of the holder’s holding of AFIC Notes.
A
Contact Details
Please provide your contact details in case we need to speak to you about this form
Name of contact person Contact person’s daytime telephone number
B
Sign Here - This section must be signed for your instructions to be executed.
C
All correspondence to:
Computershare Investor Services Pty Limited
GPO Box 52 Melbourne
Victoria 3001 Australia
Enquiries (within Australia) 1300 662 270
(within New Zealand) 0800 333 501
(outside Australia) 61 3 9415 4373
Facsimile 61 3 9473 2500
www.investorcentre.com
222406_01XJ2B
AFI
Where a choice is required,
mark the box with an ‘X’
X
Use a black pen.
Print in CAPITAL letters.
ABC 1 23
Individual or Securityholder 1
DirectorDirector/Company SecretarySole Director and Sole Company Secretary
Securityholder 2Securityholder 3
Day Month
Year
/ /
I/We authorise you to act in accordance with my/our instructions set out above. I/We acknowledge that these instructions supersede and have priority over all previous instructions in
respect to my/our securities. In accordance with AFIC Notes Prospectus a holder must not deal, transfer, dispose of or encumber any AFIC Notes the subject of an Exit Notice once
that Exit Notice has been given.
Note: When signed under Power of Attorney, the attorney states that they have not
received a notice of revocation. Computershare Investor Services Pty Limited needs
to sight a certified copy of the Power of Attorney
.
Holder Identification Number (HIN) or
Securityholder Reference Number (SRN)
ABN 56 004 147 120
AFI
MR SAM SAMPLE
FLAT 123
123 SAMPLE STREET
THE SAMPLE HILL
SAMPLE ESTATE
SAMPLEVILLE VIC 3030
Samples/000001/000002/i12
*M00000112Q02*

Convertible Notes Terms and Conditions
This is a summary of the material terms of the AFIC Notes and should be read in conjunction with the Terms of Issue in section 7 of the
prospectus lodged with ASIC on 14 November 2011.
Issuer Australian Foundation Investment Company Limited
(ABN 56 004 147 120)
Trustee Australian Executor Trustees Limited
(ABN 84 007 869 794)
Issue Price $100 per Note
Issue Date 19 December 2011
Maturity Date 28 February 2017 (unless earlier converted or redeemed) upon which date AFIC will pay face value for each
unconverted AFIC Note.
Term From the Issue Date until 28 February 2017, unless earlier converted into Ordinary Shares or redeemed.
Interest Rate The AFIC Notes will bear interest at a rate of 6.25 per cent per annum on the face value of the AFIC Note
accruing from the Issue Date and payable in arrears on each Interest Payment Date unless earlier converted into
Ordinary Shares.
Interest on AFIC Notes converted into Ordinary Shares will be paid up until the date the AFIC Notes are
converted.
Interest Payment Dates First payment on 28 February 2012 (for the period from the Issue Date to 27 February 2012) and then on 31
August and 28 February each year until and including the Maturity Date.
Conversion The AFIC Notes may be converted by holders into Ordinary Shares on 28 February and 31 August of each
year from the Issue Date of the AFIC Notes to 28 February 2017 (both dates inclusive) and at the occurrence of
specified events.
Ranking Each Ordinary Share issued on conversion will rank in all respects pari passu and form one class with the
Ordinary Shares then on issue and be entitled for all dividends declared after the date of conversion (being either
31 August or 28 February).
Participation in If there is an offer by AFIC to shareholders to subscribe for securities of AFIC (except for a dividend reinvestment
plan, like arrangement or a share purchase plan) prior to the Maturity Date, the offer will be extended to each note
holder (so far as it is lawful to do so).
Voting Note holders may not vote at meetings of members of AFIC unless provided for by the ASX Listing Rules or the
Corporations Act.
Computershare Investor Services Pty Limited
GPO Box 52
Melbourne Victoria 3001
Australia
Private Bag 92119
Auckland 1142
New Zealand
Please return the completed form to one of
the addresses opposite:
222406_01XJ2B
AFI
Exit Notices must be received by the Company at least 15 days prior to the relevant Interest Payment Date
New Issues