Half Yearly Report and Accounts as at 31 December 2022

Australian Foundation Investment Company Limited
Page 1 of 7

Appendix 4D Statement
for the Half Year Ending
31 December 2022

Contents
• Results for Announcement to the Market
• Media Release
• Appendix 4D Accounts
• Independent Auditor’s Review Report
This half year report is presented under listing rule 4.2A and should
be read in conjunction with the Company’s 2022 Annual Report.
This announcement was authorised for release by the Board of
Australian Foundation Investment Company Limited.
Australian Foundation Investment Company Limited
ABN 56 004 147 120
1

Australian Foundation Investment Company Limited
Results for Announcement to the Market
The reporting period is the half year ended 31 December 2022 with the prior corresponding
period being the half year ended 31 December 2021.
The results have been reviewed by the Company’s auditors.
> Profit after tax was $163.7 million (up 12.2%
on the previous corresponding period’s $146.0
million)
.
>
Profit after tax attributable to members was
$163.5 million (up 12.0% on the previous
corresponding period’s $146.0 million).
> Revenue from operating activities was $178.1
mi
llion, up $16.3 million or 10.1% fr
om the
previous corresponding period. This excludes
capital gains on investments.
>
The interim dividend is 11 cents per share,
fully franked, an increase from 10 cents last
year. The dividend will be paid on 24 February
2023 to ordinary shareholders on the register
on 3 February 2023 and the shares are
expected to commence trading on an ex-
dividend basis on 2 February 2023. There is
no conduit foreign income component of t
he
di
viden
d.
>
A Dividend Reinvestment Plan (DRP) and
Dividend Substitution Share Plan (DSSP) are
available, the price for which will be set at a
2.5% discount to the Volume Weighted
Average Price of the Company’s shares traded
on the ASX and Cboe automated trading
systems over the five trading days from when
the shares trade ex-dividend. The last date for
the receipt of an election notice for
pa
rticipation in the DRP & DSSP is 5.00 pm
(Melbourne time) on 6 February 2023
.
> The final dividend for the 2022 financial year
was 14 cents per share (fully franked), and it
was paid to shareholders on 30 August 2022.
> Net tangible assets per share before any
prov
ision for deferred tax on the unrealised
gains on the long-term investment portfolio as
at 31 December 2022 were $6.90, down from
$7.76 at 31 December 2021 (both befor
e
allowing for any announced dividends).
2

Australian Foundation Investment Company Limited
Interim dividend lifted 10% to 11 cents per share
Half Year Report to 31 December 2022
AFIC’s investment focus is on a diversified portfolio of Australian equities, seeking to
provide attractive income and capital growth to shareholders over the medium to long
term. This is achieved at a low cost, with lower volatility than the market, and with low
portfolio turnover which produces tax-effective outcomes for shareholders. AFIC’s
management expense ratio is 0.13% (annualised) with no additional fees.
Half Year Profit was $163.7 million following on from the recovery in dividend income. In the
corresponding period last year, Half Year Profit was $146.0 million.

Investment income for the six months to 31 December 2022 was $174.0 million, up from $159.4 million in
the corresponding period last year. There was an increase in dividends across several holdings, with the
biggest increases coming from Woodside Energy Group, Transurban, Mainfreight, Santos, National
Australia Bank and Commonwealth Bank of Australia. JB Hi-Fi and Mirvac Group, along with an increased
holding in BHP, also provided an uplift in dividend income.

The interim dividend for the half year is 11 cents per share fully franked, an increase of 1 cent per share
from the previous corresponding period of 10 cents per share fully franked.

Short term portfolio performance was impacted by adjustments in the market resulting from rising interest
rates which produced a fall in the share price of many quality companies in the portfolio which had been
trading at very robust valuations. These companies are core holdings for the portfolio and have contributed
strongly to long term portfolio performance. Geopolitical events also produced strong returns in the more
cyclical stocks such as energy and utilities, where AFIC is generally underweight given its long term
investment focus. Portfolio return for the half year was 7.1%, including franking. The return for the
S&P/ASX 200 Accumulation Index was 10.8% including franking. Over 10 years, the corresponding figures
are positive 9.4% per annum for AFIC and positive 10.2% per annum for the Index. AFIC’s performance
returns are after costs.
Portfolio return (including the full benefit of franking) to 31 December 2022.
Per a
nnum returns other than for six months. AFIC’s performance figures are after costs.
Past performance is not indicative of future performance.
3

Australian Foundation Investment Company Limited
Market Commentary and Portfolio
Performance
The S&P/ASX 200 Accumulation Index including
the benefit of franking, rose 10.8% in the six
months to 31 December 2022, led by strength in
the Materials, Energy and Banking sectors, with the
strength in the Materials sector supported by the
announcement that China would reopen from
COVID-19 lockdowns. Supply chain challenges,
resulting in sharply higher coal prices and the
ongoing
invasion of the Ukraine by Russia, drove
the strength in the Energy sector. Over the period,
banks delivered solid operating results with
productivity gains offsetting emerging cost inflation.
AFIC’s portfolio had a return of 7.1% including
franking for the six months to 31 December 2022,
with the largest drag on relative performance being
the decline in the valuation of many high-quality
companies from their previous very high levels.
This included positions in ARB, James Hardie
Industries, Mainfreight and Transurban, which have
delivered very strong returns over the past five
years. We remain convinced about the prospects
for these companies despite the recent decline in
share prices. All of these companies have a long
track record of excellent financial discipline
delivering strong shareholder returns. The
underweight position in resources, which includes
energy and lithium stocks also negatively impacted
relative performance.
Companies in the portfolio that contributed
strongly to returns through the six-month period
were Commonwealth Bank, BHP, Westpac
Banking Corporation, CSL and Wesfarmers.
AFIC is an investor with a long term focus. Ten-
year portfolio return figures to 31 December 2022
are 9.4% versus 10.2% for the S&P/ASX 200
Accumulation Index over the same period. These
figures include the full benefit of franking, with
AFIC’s return after costs. This performance has
been achieved with lower portfolio volatility than
the market and more consistent dividend income.

Portfolio Adjustments
A feature of our focus on quality businesses is
identifying those companies displaying attributes of
pricing power over the long term. Companies
owning unique assets with a market leadership
position are best able to pass through rising costs.
Core portfolio holdings are represented by high-
quality companies we consider relatively well
positioned to pass through cost increases.

We increased our holdings in BHP, Santos, Mirvac
Group, Goodman Group, Seek, EQT Holdings and
Woolworths at attractive prices. We consider long
term prospects for all these companies remain
strong. BHP will be a beneficiary of increased
demand for iron ore as the China economy
reopens while Santos predominantly produces
LNG, a key transition fuel as the world’s energy
needs move to more renewable sources.
We recently initiated a position in Breville Group,
which is a kitchen appliance company operating
premium brands in the cooking, beverage and food
preparation categories. The business was founded
in 1932, maintains a heavy focus on product
innovation and has very strong global distribution
which should provide for further profit growth.
Breville Group has a long history of excellent
financial discipline delivering strong returns for
shareholders.
We exited Orica and Reliance Worldwide
considering long term prospects for these
companies will be increasingly challenged as
competitive intensity increases.
Outlook
The outlook for economic activity remains uncertain
with subdued consumer and business sentiment
and persistent cost inflation leading to higher
operating costs for most companies. Expectations
are that interest rates will increase in the near term
with the quantum and timing of rate increases
remaining unclear.
Our strategy of owning a diversified portfolio of
quality companies well positioned to deliver
earnings growth over the medium to long term
remains appropriate. While market volatility may
emerge, short term periods of uncertainty often
present good buying opportunities for investors like
AFIC which is focussed on a company’s long term
prospects to deliver earnings and dividend
growth.
Please direct any enquiries to:

Mark Freeman Geoff Driver
Managing Director General Manager
(03) 9225 2101(03) 9225 2102
23 January 2023
4

Australian Foundation Investment Company Limited
Major Transactions in the Investment Portfolio
Acquisitions
Cost
($’000)
BHP 92,406
Santos 19,094
Mirvac Group 15,619
Breville Group 14,938
Goodman Group 13,111
Disposals
Proceeds
($’000)
Orica* 39,045
Carsales.com 28,228
Ramsay Health Care 25,053
NEXTDC 20,905
Amcor 20,509
*Complete disposal from the portfolio.
New Companies Added to the Portfolio
Breville Group
5

Australian Foundation Investment Company Limited
Top 25 Investments at 31 December 2022
Includes investments held in both the investment and trading portfolios.
Value at Closing Prices at 30 December 2022
Total Value
$ Million
% of the
Portfolio
1
Commonwealth Bank of Australia 810.5 9.6%
2
BHP 747.1 8.9%
3
CSL 682.4 8.1%
4
Macquarie Group 373.9 4.4%
5
Transurban Group 373.7 4.4%
6
Westpac Banking Corporation 363.0 4.3%
7
Wesfarmers 338.4 4.0%
8
National Australia Bank* 334.9 4.0%
9
Woolworths Group 246.8 2.9%
10
Rio Tinto 216.8 2.6%
11
Woodside Energy Group* 206.0 2.4%
12
Mainfrei
ght 205.7 2.4%
13
ANZ Group Holdings 200.8 2.4%
14
Telstra Group 194.2 2.3%
15
Amcor184.3
2.2%
16
Goodman Group 167.6 2.0%
17
Coles Group 150.9 1.8%
18
ResMed 147.1 1.7%
19
James Hardie Industries 143.2 1.7%
20
Carsales.com* 138.1 1.6%
21
Reece 106.6 1.3%
22
Sonic Healthcare 99.5 1.2%
23
Santos* 99.4 1.2%
24
ASX 97.4 1.2%
25
Computershare 95.1 1.1%
Total 6,723.6
As percentage of total portfolio value (excludes cash) 79.9%
* Indicates that options were outstanding against part of the holding.
6

Australian Foundation Investment Company Limited
Portfolio Performance to 31 December 2022
Performance Measures to 31 December 2022 6 Months 1 Year
3 Years
% pa
5 Years
% pa
10 Years
% pa
Portfolio Return – Net Asset Backing Return
Including Dividends Reinvested 6.2% -8.0%5.0% 6.4% 7.6%
S&P/ASX 200 Accumulation Index 9.8% -1.1%5.5% 7.1% 8.7%
Portfolio Return – Net Asset Backing Gross
Return Including Dividends Reinvested* 7.1% -6.6%6.6% 8.2% 9.4%
S&P/ASX 200 Gross Accumulation Index* 10.8% 0.5% 6.9% 8.6% 10.2%
* Incorporates the benefit of franking credits for those who can fully utilise them.
Note: AFIC net asset per share growth plus dividend series is calculated after management expenses,
income tax and capital gains tax on realised sales of investments. It should also be noted that
Index returns for the market do not include the impact of management expenses and tax on their
performance.
7

A
USTRALIAN
FOUNDATION
INVESTMENT
C
OMPANY
LIMITED
ABN 56 004 147 120








HALF-YEAR REPORT
31 DECEMBER 2022




8

COMPANY PARTICULARS
Australian Foundation Investment Company Limited (“AFIC”)
ABN 56 004 147 120
AFIC is a Listed Investment Company. As such it is an investor in equities and similar securities on the
stock market primarily in Australia.
Directors:
John Paterson, Chairman
Rebecca P. Dee-Bradbury
Craig M. Drummond
Julie A. Fahey
Graeme R. Liebelt
David A. Peever
Catherine M. Walter AM
R. Mark Freeman, Managing Director
Company Secretaries:
Matthew J. Rowe
Andrew J.B. Porter
Auditor:
PricewaterhouseCoopers, Chartered Accountants
Country of
incorporation:
Australia
Registered office: Level 21
101 Collins Street
Melbourne, Victoria 3000
Contact Details: Mail Address:
Telephone :
Facsimile:
Email:
Internet address:
Level 21, 101 Collins St., Melbourne, Victoria 3000
(03) 9650 9911
(03) 9650 9100
invest@afi.com.au
afi.com.au
For enquiries regarding net asset backing (as advised each month to the
Australian Securities Exchange):

Telephone: 1800 780 784 (toll free)
Share Registrar: Computershare Investor Services Limited
Mail Address:


AFIC Shareholder
enquiry lines :

Facsimile:
Internet:
GPO Box 2975, Melbourne, Victoria 3001
Yarra Falls, 452 Johnston Street, Abbotsford, Victoria
3067
1300 662 270 (Aus)
0800 333 501 (NZ)
+613 9415 4373 (from overseas)
(03) 9473 2500
www.investorcentre.com/contact

For all enquiries relating to shareholdings, dividends and related matters, please
contact the share registrar.
Securities Exchange
Codes:

AFI Ordinary shares (ASX and NZX)

  
9

DIRECTORS' REPORT

The Directors present their report in relation to the half-year to 31 December 2022 on the
consolidated entity (“the Group”) consisting of Australian Foundation Investment Company Limited
(“the Company” and “AFIC”) and its subsidiary, Australian Investment Company Services Limited
(“AICS”).

Directors
The following persons were Directors of the Company during the half-year and up to the date of
this report:

J. Paterson (appointed June 2005)
R.P. Dee-Bradbury (appointed May 2019)
C.M. Drummond (appointed July 2021)
G.R. Liebelt (appointed June 2012)
J.A. Fahey (appointed April 2021)
D.A. Peever (appointed November 2013)
C.M. Walter AM (appointed August 2002)
P.J. Williams (appointed February 2010, retired October 2022)
R.M. Freeman (appointed January 2018)

Review of the Group's operations and results
Overview
AFIC’s investment focus is on a diversified portfolio of Australian equities. There has been no
change in the nature of the Company’s activities during the period. Its primary objectives are to
pay dividends which, over time, will grow at a faster rate than inflation, and to generate attractive
total returns in terms of growth in net asset backing plus dividends.

Profit Performance and Dividend
Profit for the half-year was $163.7 million, up 12.2% from the previous corresponding period.
The net profit per share for the six months to 31 December 2022 was 13.25 cents per share with
an interim dividend declared of 11 cents per share fully-franked, an increase of 1 cent on the
previous corresponding period.
The portfolio return for the 6 months (measured by change in net asset backing per share plus
dividends reinvested) was 6.2% compared to the return of the S&P/ASX 200 Accumulation Index
for the same period which was 9.8%. AFIC’s portfolio return is calculated after management fees,
income tax and capital gains tax on realised sales of investments and does not reflect the value of
franking credits or LIC credits attached to the dividends. Index returns for the market do not
include the impact of management expenses and tax on their performance.
During the half-year 5.7 million shares were issued under the DRP and the DSSP resulting in an
additional $36.9 million of capital (after costs).


10

Auditors’ independence declaration
A copy of the auditors’ independence declaration as required under section 307C of the
Corporations Act 2001 is set out on page 12.

Rounding of amounts to nearest thousand dollars
The Group is of a kind referred to in the ASIC Corporations’ (Rounding in Financial/Directors’
Reports) Instrument 2016/191, relating to the "rounding off" of amounts in the directors' report and
financial report. Unless specifically stated otherwise, amounts in the directors' report and financial
report have been rounded off to the nearest thousand dollars in accordance with that Instrument.



This report is made in accordance with a resolution of the Directors.



J. Paterson
Chairman
Melbourne
23 January 2023

11

PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the review of Australian Foundation Investment Company Limited for the half-year
ended 31 December 2022, I declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001
in
relation to the review; and
(b)
no contraventions of any applicable code of professional conduct in relation to the review
.
This de
claration is in respect of Australian Foundation Investment Company Limited and the entity it
controlled during the period.
Kate L Lo
gan Melbourne
Partner
PricewaterhouseCoopers
23 January 2023
12

CONSOLIDATED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31
DECEMBER 2022
Note Half-year
2022
Half-year
2021
$’000 $’000
Dividends and distributions 173,974 159,415
Revenue from deposits and bank bills 1,297 8
Other revenue 2,819 2,344
Total revenue
178,090 161,767
Net gains/(losses) on trading portfolio
2,890 (1,035)
Income from operating activities 3 180,980 160,732
Finance & related costs (612)(401)
Administr
ation expenses (8,249) (9,155)
Profit before income tax expense 172,119 151,176
Income tax expense(8,377) (5,198)
Profit for the half-year 163,742 145,978
Profit is attributable to :
Equity holders (members) of Australian Foundation
Investment Company Ltd
163,467 145,968
Minority Interest 275 10
163,742 145,978
Ce
nts Cents
Basic earnings per share 8 13.25 11.92
This Income Statement should be read in conjunction with the accompanying notes.
13

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
HALF-YEAR ENDED 31 DECEMBER 2022

Half-Year to 31 December 2022 Half-Year to 31 December 2021
Revenue Capital Total Revenue Capital Total
$’000 $’000 $’000 $’000 $’000 $’000
Profit for the half-
year 163,742 - 163,742 145,978 - 145,978

Other Comprehensive Income
Items that will not be recycled through the Income Statement
Gains for the period on equity securities in
the investment portfolio
- 346,925346,925 - 435,861435,861
Tax on above -
(106,905)(106,905) - (132,974)(132,974)
Total other comprehensive income
1
- 240,020240,020 - 302,887302,887

Total comprehensive income
2
163,742 240,020403,762 145,978 302,887448,865
1
Net capital income not accounted for through the Income Statement
2
This is the company’s Net Return for the half-year, which includes the Net Profit plus the net realised and
unrealised gains or losses on the Company’s investment portfolio.



Half-Year to 31 December 2022 Half-Year to 31 December 2021
Revenue Capital Total Revenue Capital Total
$’000 $’000 $’000 $’000 $’000 $’000
Total Comprehensive Income is
attributable to:

Equity holders of Australian Foundation
Investment Compan
y Ltd
163,467 240,020 403,487 145,968 302,887 448,855
Minorit
y Interest 275 - 275 10 - 10
163,742 240,020 403,762 145,978 302,887 448,865



This Statement of Comprehensive Income should be read in conjunction with the accompanying

notes.


14

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2022
31 Dec 30 June
2022 2022
Note $’000 $’000
Current assets
Cash 128,263 144,619
Receivables 10,721 36,598
T
rading portfolio 4 - 4,979
Total current assets 138,984 186,196

Non-current assets
Investment portfolio 8,419,930 8,082,513
Deferred tax assets 1,454 -
Total non-current assets 8,421,384 8,082,513

Total assets 8,560,368 8,268,709

Current liabilities
Payables 1,651 28,688
Trading portfolio 4 737 -
Borrowin
gs – bank debt 10,000 10,000
Tax payable 14,610 62,567
Provisions 4,074 6,114
Total current liabilities 31,072 107,369

Non-current liabilities
Provisions 99 896
Deferred tax liabilities - othe
r - 503
Deferred tax liabilities - investment portfolio 5 1,263,947 1,169,452
Total non-current liabilities 1,264,046 1,170,851

Total liabilities 1,295,118 1,278,220

Net Assets 7,265,250 6,990,489

Shareholders' equity
Share Capital 6 3,107,028 3,070,163
Revaluation Reserve 2,750,219 2,556,466
Realised Capital Gains Reserve 438,294 510,503
General Reserve 23,637 23,637
Retained Profits 944,711 828,634
Parent Entit
y Interest 7,263,889 6,989,403
Minority Interest 1,361 1,086
Total equity 7,265,250 6,990,489



This Balance Sheet should be read in conjunction with the accompanying notes.
15

C
ONSOLIDATED
S
TATEMENT OF
C
HANGES IN
E
QUITY FOR THE
H
ALF
-Y
EAR ENDED
31

D
ECEMBER
2022



Attributable to members of Aust
ralian Foundation Investment Company
Ltd

Half-Year to 31 December 2022

Note

Share
Capital
$’000

Revaluation
Reserve
$’000

Realised
Capital
Gains
$’000

General
Reserve
$’000

Retained
Profits
$’000

Total
Parent
Entity
$’000

Minority
Interest
$’000

Total
$’000
Total equity at the beginning of the half-y
ear
3,070,163
2,556,466 510,503 23,637
828,634 6,989,403
1,086 6,990,489
Dividends paid
7
- -
(
118,476
)
-
(
47,390
)

(
165,866
)

-
(
165,866
)

Shares issued - Dividend Reinvestment Plan
6
36,914
- - - -
36,914
-
36,914
Other Share Capital Ad
j
ustments
6
(
49
)

- - - -
(
49
)

-
(
49
)

Total transactions with shareholders

36,865
- (118,476)
- (47,390) (129,001)
- (129,001)
Profit for the half-
y
ear

-
- - - 163,467
163,467
275
163,742







Net gains for the period on equity securities in the investment portfolio

- 240,020
-
-
-
240,020
-
240,020
Other Comprehensive Income for the half-
y
ear
- 240,020 - - - 240,020 - 240,020
Transfer to Realised Capital Gains Reserve of net cumulative ga
ins (after tax) on
investments sold

-
(
46,267
)
46,267 - -
-
-
-







Total equity at the end of the half-year

3,107,028
2,
750,219 438,294 23,637 944,711 7,263,889
1,361 7,265,250




This Statement of Changes in Equity should be
read in conjunction with
the accompanying notes.

16

C
ONSOLIDATED
S
TATEMENT OF
C
HANGES IN
E
QUITY FOR THE
H
ALF
-Y
EAR ENDED
31

D
EC
.

2021

(
CONT
)



Attributable to members of Au
stralian Foundation Investment
Compan
y
Ltd


Half-Year to 31 December 2021

Note

Share
Capital
$’000

Revaluation
Reserve
$’000

Realised
Capital
Gains
$’000

General
Reserve
$’000

Retained
Profits
$’000

Total
Parent
Entity
$’000

Minority
Interest
$’000

Total
$’000
Total equity at the beginning of the half-y
ear
3,007,730
3,394,297 416,071 23,637 716,221 7,557,956
1,066 7,559,022
Dividends
p
aid
7
- -
(
35
,
430
)
-
(
129
,
909
)

(
165
,
339
)

-
(
165,339
)

Shares issued - Dividend Reinvestment Plan

36,511
- - - -
36,511
-
36,511
Other Share Capital Ad
j
ustments

(
82
)

- - - -
(
82
)

-
(
82
)

Total transactions with shareholders

36,429
- (35,430)
- (129,909) (128,910)
- (128,910)
Profit for the hal
f
-
y
ea
r


-
- - - 145,968
145,968
10
145,978






Other Comprehensive Income for the half-year




Net gains for the period on equity securities in the investment portfolio

- 302,887
-
-
-
302,887
-
302,887
Other Comprehensive Income for the half-
y
ear
- 302,887 - - - 302,887 - 302,887
Transfer to Realised Capital Gains Reserve of net cumulative gains (after tax) on investments sold

-
(
66,239
)
66,239 - -
-
-
-






Total equit
y
at the end of the half-
y
ea
r

3,044,159
3,630,945 446,880 23,637 732,280 7,877,901
1,076 7,878,977
This Statement of Changes in Equity should be
read in conjunction with the accompanying notes


17

CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR
ENDED 31 DECEMBER 2022
Half-year Half-year
2022 2021
$’000 $’000
INFLOWS/ INFLOWS/
(OUTFLOWS) (OUTFLOWS)
Cash flows from operatin
g activities
Sales from tradin
g portfolio 16,354 13,403
Purchases for trading portfolio (7,749) (1,200)
Interest received 1,297 8
Dividends and distributions received 198,482 171,034
208,384 183,245

Other receipts 2,817 2,353
Administration expenses (10,949) (10,534)
Finance costs paid
(612) (401)
Taxes paid (2,834) (7,187)
Net cash inflow/
(outflow) from operating activities 196,806 167,476

Cash flows from investing activities
Sales from investment portfolio 225,943 311,559
Purchases for investment portfolio
(244,045) (354,976)
Taxes paid on capital
gains (66,560) (13,944)
Net cash inflow/(outflow) from investing activities (84,662) (57,361)

Cash flows from financing activities
P
roceeds from borrowing - 10,000
Share issue costs
(49) (82)
Dividends paid (128,451) (128,136)
Net cash inflow/
(outflow) from financing activities (128,500) (118,218)

Net increase/(decrease) in cash held (16,356) (8,103)
Cash at the beginning of the half-yea
r 144,619 97,122
Cash at the end of the half-year 128,263 89,019











This Cash Flow Statement should be read in conjunction with the accompanying notes.

18

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED
31 DECEMBER 2022
1. Basis of preparation of half-year financial report
This general purpose half-year financial report has been prepared in accordance with Accounting
Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the notes of the type normally included in an
annual financial report. This report should be read in conjunction with the 2022 Annual Report
and public announcements made by the Group during the half-year, in accordance with the
continuous disclosure requirements of the Corporations Act 2001.
The accounting policies adopted are consistent with those of the previous financial year and
corresponding interim reporting period.
In the interests of transparency in its reporting, the Group uses the phrase “market value” in place
of the AASB terminology “fair value for actively traded securities.” The Company’s investments in
listed securities are valued at the closing price on the ASX on the last trading day before the
period end.

2. Financial reporting by segments
The Group consists of a Listed Investment Company and a subsidiary which provides
administration services to it and to other Listed Investment Companies in Australia. It has no
reportable business or geographic segments.
(a) Segment information provided to the Board
The internal reporting provided to the Board for the Group’s assets, liabilities and performance is
prepared on a consistent basis with the measurement and recognition principles of Australian
Accounting Standards, except that net assets are reviewed both before and after the effects of
capital gains tax on investments (as reported in the Group’s Net Tangible Asset announcements
to the ASX).
The relevant amounts as at 31 December 2022 and 31 December 2021 were as follows:
2022
$


2021
$
Net tangible asset backing per share
Before Tax 6.90 7.76
After Tax 5.88 6.43

(b) Other segment information
Segment Revenue
Revenues from external parties are derived from the receipt of dividend, distribution and interest
income, and income arising on the trading portfolio.
The Company is domiciled in Australia and the Group’s dividend and distribution income is
predominantly from entities which maintain a listing in Australia. The Group has a diversified
portfolio of investments, with only the Group’s investment in BHP comprising more than 10% of
the Group’s income (including trading portfolio) for the half-year ended 31 December 2022 –
21.1% (2021 : 22.7%).
19

3. Income from operating activities
Half-year
2022
$'000

Half-year
2021
$'000
Income from operating activities is comprised of the following:

Dividends & distributions
 securities held in investment portfolio
173,974 159,342
 securities held in trading portfolio
- 73
173,974 159,415
Interest income
 deposits and income from bank bills
1,297 8
1,297 8
Net gains/(losses) and write downs
 net
gains from trading portfolio sales
1,673 106
 unrealised gains/(losses) in trading portfolio
1,217 (1,141)
2,890 (1,035)

Administration fees received from other Listed Investment
Companies
2,602 2,285
Expenses recovered from other Listed Investment
Companies
180 8
Other expenses recovered 37 51

180,980 160,732



4. Tradin
g portfolio

As part of the activities of the trading portfolio, the Company enters into option contracts for the
purpose of enhancing returns, offsetting risk or providing opportunities to acquire or sell securities
at advantageous prices.
As at balance date there were call options outstanding which, if they were all exercised, would
require the Company to deliver securities to the value of $108.7 million (30 June 2022: $21.4
million).









20

5. Deferred tax liabilities – investment portfolio
In accordance with AASB 112 Income Taxes, deferred tax liabilities have been recognised for
Capital Gains Tax on the unrealised gain in the investment portfolio at current tax rates (30%)
totalling $1,263.9 million (30 June 2022 : $1,169.5 million). As the Directors do not intend to
dispose of the portfolio, this tax liability may not be crystallised at this amount.
6. Shareholders’ equity – share capital
Movements in Share Capital of the Company during the half-year were as follows:
Date Details Notes Number
of shares
’000
Issue
price
$
Paid-up
Capital
$’000
01/07/2022 Opening Balance
1,229,906 3,070,163
30/08/2022 Dividend Reinvestment Plan i 4,883 7.56 36,914
30/08/2022 Dividend Substitution Share Plan ii 836 7.56 n/a
Various Other Share Capital adjustments - (49)
31/12/2022 Balance 1,235,625 3,107,028

i The Company has a Dividend Reinvestment Plan under which some shareholders elected to
have all or part of their dividend payment reinvested in new ordinary shares. Pricing of the
new DRP shares was based on the average selling price of shares traded on the Australian
Securities Exchange & Cboe automated trading systems in the five days from the day the
shares begin trading on an ex-dividend basis.
ii The Company has a Dividend Substitution Share Plan under which some shareholders
elected to forego all or part of their dividend payment and receive shares instead. Pricing of
the new DSSP shares was done on the same basis as the DRP.
iii The Company introduced an on-market Buy-Back Programme in December 2000. This plan
remains active. No shares were bought back during the period.

7. Dividends
Half-year
2022
$’000
Half-year
2021
$’000

Dividends (fully franked) paid during the period 165,866 165,339
(excluding DSSP shares)
(14 cents per
share)

(14 cents per
share)
Dividends not recognised at period end
Since the end of the half-year the Directors have declared an
interim dividend of 11 cents per share, fully franked. The
aggregate amount of the proposed interim dividend expected to
be paid on 24 February 2023, but not recognised as a liability at
the end of the half-year is 135,919







21

8.Earnings per Share
Half-year
2022
Half-year
2021
Number Number
Weighted average number of ordinary shares used as the
denominator
1,233,729,034 1,224,280,994
$’000 $’000
Profit after tax for the half-year attributable to members of the
Company
1
63,467145,968
Cents Cents
Basic earnings per share 13.25 11.92
There are no dilutive instruments on issue and consequently diluted earnings per share are the
same as basic earnings per share.
9.
Ev
ents subsequent to
balance date
Sin
ce 31 December 2022 to the date of this report there has been no event specific to the Group
of which the Directors are aware which has had a material effect on the Group or its financial
position.
10
. Co
ntingencie
s
At
balance date Directors are not aware of any material contingent liabilities or contingent assets
other than those already disclosed elsewhere in the financial report.
22

DIRECTORS' DECLARATION
In
the Directors’ opinion:
(a
)
the financial statements and notes set out on pages 13 to 22 are in accordance with th
e
Cor
porations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(ii) giving a true and fair view of the Group’s financial position as at 31 December 2022
and of its performance, as represented by the results of the operations, changes
in
eq
uity and cash flows, for the half-year ended on that date; and
(b
)
there are reasonable grounds to believe that the Company will be able to pay its debt
s
a
s and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors.
J. P
aterson
Chairman
Melbou
rne
2
3 January 2023
23

PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
.
Independent auditor's review report to the members of Australian
Foundation Investment Company Limited
Report on the half-year financial report
Conclusion
We have reviewed the half-year financial report of Australian Foundation Investment Company Limited
(the Company) and the entity it controlled during the half-year (together the Group), which comprises the
consolidated balance sheet as at 31 December 2022, the consolidated statement of comprehensive
income, consolidated statement of changes in equity, consolidated cash flow statement and
consolidated income statement for the half-year ended on that date, significant accounting policies and
explanatory notes and the directors' declaration.
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the accompanying half-year financial report of Australian Foundation Investment Company
Limited does not comply with the Corporations Act 2001 including:
1.
giving a true and fair view of the Group's financial position as at 31 December 2022 a
nd of its
perfo
rmance for the half-year ended on that date
2.compl
ying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporatio
ns
Reg
ulations 2001
.
Basis for conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by
the Independent Auditor of the Entity (ASRE 2410). Our responsibilities are further described in the
Auditor’s responsibilities for the review of the half-year financial report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards)
(the Code) that are relevant to the audit of the annual financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
Responsibilities of the directors for the half-year financial report
The directors of the Company are responsible for the preparation of the half-year financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the half-year financial report that gives a true and fair view and is free from material misstatement
whether due to fraud or error.
24

Auditor's responsibilities for the review of the half-year financial report
Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE
2410 requires us to conclude whether we have become aware of any matter that makes us believe that
the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true
and fair view of the Group's financial position as at 31 December 2022 and of its performance for the
half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards
and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
PricewaterhouseCoopers
Kate L Lo
gan Melbourne
Partner 23 January 2023
25