2023 Annual Reports and AGM Documentation

31 August 2023



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
Statutory Annual Report, Annual Shareholder Review and
Annual General Meeting Documentation


Dear Sir / Madam

Please find attached the 2023 Statutory Annual Report, Annual Shareholder
Review and Annual General Meeting Documentation being sent to
shareholders.


Yours faithfully


Matthew Rowe
Company Secretary


Authorised by the Company Secretary

Income,
Capital Growth,
Low Cost
Annual Report
2023

3 DIRECTORS’
REPORT
3 5 Year Summary
4 About the Company
6 Review of Operations
and Activities
12 Top 25 Investments
13 Company Position
14 Board Members
17 Senior Executives
18 Remuneration Report
30 Non-audit Services
31 Auditor’s Independence
Declaration

32 FINANCIAL
STATEMENTS
33 Consolidated Income Statement
34 Consolidated Statement of
Comprehensive Income
35 Consolidated Balance Sheet
36 Consolidated Statement
of Changes in Equity
38 Consolidated Cash Flow
Statement
39 NOTES TO
THE FINANCIAL
STATEMENTS
39 A. Understanding AFIC’s
Financial Performance
43 B. Costs, Tax and Risk
46 C. Unrecognised Items
47 D. Balance Sheet
Reconciliations
49 E. Income Statement
Reconciliations
50 F. Further Information
56 DIRECTORS’
DECLARATION
57 INDEPENDENT
AUDIT REPORT
62 OTHER
INFORMATION
62 Information About Shareholders
62 Major Shareholders
63 Sub-underwriting
63 Substantial Shareholders
63 Transactions in Securities
64 Major Transactions in the
Investment Portfolio
66 Holdings of Securities
68 Holdings of International
Securities
70 Issues of Securities
72 Company Particulars
73 Shareholder Information
Australian Foundation Investment Company Limited ABN 56 004 147 120
Contents
AUSTRALIAN FOUNDATION
INVESTMENT COMPANY
IS A LISTED INVESTMENT
COMPANY INVESTING
IN AUSTRALIAN AND
NEW ZEALAND EQUITIES.

Year in Summary
* Assumes a shareholder can take full advantage of the franking credits.
#
Includes a non-cash dividend of $74.9 million from the BHP Petroleum/Woodside merger in 2022.
Profit for
the Year
$310.2m
$360.6m in 2022
#
Fully Franked
Dividend
14
¢
Final
25
¢
Total
24 cents total
in 2022
Total
Shareholder
Return
-1. 4 %
Share price plus
dividend, including
franking*
Management
Expense Ratio
0 .14 %
0.16% in 2022
Total Portfolio
$8.9b
Including cash
at 30 June.
$8.2 billion in 2022
2023
Total Portfolio
Return
13.9%
Including franking*
S&P/ASX 200
Accumulation Index
including franking*
16.6%
1
Australian Foundation Investment Company Limited Annual Report 2023

2
Australian Foundation Investment Company Limited Annual Report 2023

DIRECTORS’ REPORT
5 Year Summary
Notes
(a) Participation in the Rio Tinto and BHP off-market share buy-backs, special dividends and the receipt of a dividend because of the Coles
demerger from Wesfarmers.
(b) All dividends were fully franked. The LIC attributable gain attached to the dividend was 2023: 10.0 cents; 2022: 14.29 cents, 2021: 4.29 cents,
2020: 7.14 cents, 2019: 7.14 cents.
(c) 8 cents fully franked special dividend paid with the interim dividend.
(d) Excludes cash.
(e) Net asset backing per share based on year-end data before the provision for the final dividend. The figures do not include a provision for capital
gains tax that would apply if all securities held as non-current investments had been sold at balance date as Directors do not intend to dispose
of the portfolio.
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Investments at Market Value
($ Million)
(d)
Net Asset Backing Per Share
($)
(e)
Number of Shareholders
(30 June)
20192020
20192020
20192020
20192020
20192020
2021
2021
2021
2022
2022
2021
2021
2022
2022
2022
2023
272.2
134.2
(a)
240.4
235.1
360.6
310.2
2023
34.0
19.9
19.3
29.4
25.1
2023
6.49
5.96
7.45
6.63
7.19
2023
138,671
153,588
159,500
164,979
163,964
2023
7,566
7,122
8,978
8,087
8,753
Dividends Per Share
(Cents)
(b)
20202021202220192023
24
2424
32
(c)
24
8
(c)
25
3
Australian Foundation Investment Company Limited Annual Report 2023

4
Australian Foundation Investment Company Limited Annual Report 2023
About the Company
Australian Foundation Investment Company (AFIC) is a listed investment company
investing in Australian and New Zealand equities.
Investment Objectives
The Company aims to provide shareholders with attractive
investment returns through access to a growing stream
of fully franked dividends and growth in capital invested.
The Company’s primary investment goals are:
• to pay dividends which, over time, grow faster
than the rate of inflation; and
• to provide attractive total returns over the medium
to long term.
How AFIC Invests – What We Look For in Companies
A portfolio that
is managed to
achieve long term
capital and dividend
growth
Quality FirstGrowth
Including dividends
Value

Approach to Investing
Investment Philosophy
Our investment philosophy is built on
taking a medium to long term view on
companies in a diversified portfolio with
an emphasis on identifying and investing
in quality companies that are likely to
sustainably grow their earnings and
dividends over this timeframe.
Quality in this context is an outcome of
our assessment of the following factors:
1. We prefer companies that have a
leadership position or are developing
one within the industry in which they
operate. This will often mean we are
investing in a unique set of assets with
competitive advantages that produces
attractive returns on invested capital.
2. As a long term, tax aware investor we
seek to be in companies that have a
long term sustainable business model,
with low risk of disruption. This helps
to ensure portfolio turnover remains
low. The analysis may consider
technological disruption, environmental
issues, including the impact of climate
change, and social risks as all of these
factors can have a material impact
on the assessment of a company’s
long term sustainability.
3. We consider how a company’s
business can be potentially impacted
by influences outside the control
of management such as change in
government regulation and/or policy.
4. We are attracted to companies with
outstanding management teams
and boards with strong governance
processes, whose interests are
closely aligned with shareholders,
and act in the best interest of all
their stakeholders, including their
employees, customers, suppliers
and wider communities. We consider
matters including safety, diversity,
social impacts, environmental impact,
and modern slavery where material
or appropriate in the context of that
company. We regularly review and
meet with companies to ensure
ongoing alignment with our investment
frameworks. Our process may
include an assessment of the board
in terms of their past performance,
history of capital allocation, level of
accountability, mix of skills, relevant
experience and succession planning.
We also consider a company’s degree
of transparency and disclosure.
Voting on resolutions is one of the
key functions that a shareholder has
in ensuring better long term returns
and management of investment risk.
We take input from proxy advisers
but conduct our own evaluation of
the merits of any resolution. We vote
on all company resolutions as part
of our regular engagement with the
companies in the portfolio and our
voting record is on the company’s
website. We actively engage with
companies when we are concerned
about resolutions that are not aligned
with shareholders’ interests. We seek
to stay engaged with the companies
and satisfy ourselves that any issues
are taken seriously and worked
through constructively. Ideally we
seek to remain invested to influence a
satisfactory outcome for stakeholders.
5. We prefer companies with more
stable income flows. We are wary
of companies that have large,
inconsistent profit streams.
6. We like our companies to be financially
strong and the assessment of the
balance sheet and the degree to which
the company is self-funding is critical
in our analysis. Cash generation is
also an important consideration.
Analysis of the above factors helps to
inform us of the structure of the industry
and a company’s sustainable competitive
position as well as the quality of the
people running the business, strength
of the balance sheet and consistency
of earnings. Within this analysis some
key financial metrics are considered.
These include return on capital employed,
return on equity, the level of gearing
in the balance sheet, margins and free
cash flow generation.
Alongside the assessment of quality
is an analysis of the ability of companies
to grow earnings over time, which
ultimately should drive dividend growth.
Recognising value is also an important
aspect of sound long term investing.
Short term measures such as the price
earnings ratio, price to book or price to
sales may be of some value but aren’t
necessarily strong predictors of future
performance. Our assessment of value
tries to capture the opportunity a business
has to prosper and thrive over the
medium to long term.
Reporting of social and environmental
issues will be influenced by the
development of standards by the
International Sustainability Standards
Board (ISSB). Their potential introduction
in Australia should enable investors over
time to better make informed decisions
on these issues based on company
disclosures arising from these standards.
Assessment of commitments and plans
by companies to reach net zero by 2050
may also be considered having regard to
several factors. These include the industry
in which they operate, progress against
their plans, their broader contribution to
social good in addressing the challenge
of reducing global carbon emissions,
and the impact on their value if they fail
to achieve their stated goals. In applying
external data for benchmarking*, the
current carbon intensity of AFIC’s portfolio
is considerably less than the S&P/ASX
200 Index.
In building the investment portfolio with
the principles outlined, we believe we can
offer investors a well-diversified portfolio
of quality companies structured to deliver
total returns ahead of the Australian
equity market over the long term with
less volatility and with more consistent
dividends.
From time to time, some borrowings
may be used where potential investment
returns justify the use of debt.
AFIC is managed for the benefit of its
shareholders with fees based on the
recovery of costs rather than as a fixed
percentage of the portfolio. There are
no additional fees. As a result, the benefit
of scale over time results in a very low
expense ratio for investors. For the
12 months to 30 June 2023 this was
0.14 per cent, or 14 cents for each
$100 invested.
* Data provided by ISS ESG.
Portfolio at 30 June 2023.
5
Australian Foundation Investment Company Limited Annual Report 2023

Profit and Dividend
The full year profit was $310.2 million,
down from $360.6 million in the previous
corresponding period. Last year’s profit
included a dividend of $74.9 million
(which was non-cash but carries franking
credits with it) resulting from the BHP
Petroleum/Woodside merger. Excluding
this figure, the full year profit was up
8.6 per cent from $285.7 million in the
corresponding period last year. The
increase in the underlying profit from
last year was driven by higher dividends
received from investee companies
and adjustments made to the portfolio
throughout the year.
Earnings per share for the financial year
were 25.1 cents per share. The final
dividend was maintained at 14 cents per
share fully franked, bringing total fully
franked dividends applicable for the year
to 25 cents per share following the 1 cent
per share increase in the interim dividend
declared in January 2023.
Seven cents of the final dividend were
sourced from taxable capital gains, on
which the Company has paid or will
pay tax. The amount of the pre-tax
attributable gain on this portion of the
dividend, known as an ‘LIC capital gain’,
is equal to 10.0 cents per share. The
enables some shareholders to claim
a tax deduction in their tax return.
Market and Portfolio
Performance
The Australian equity market enjoyed
a strong year despite significant the
increase in interest rates over the period
in response to inflationary pressures and
a somewhat more subdued outlook for
economic growth. In some quarters there
are concerns about a looming recession,
but this has yet to eventuate, and the
employment market remains strong.
However, this environment produced
quite a marked divergence in performance
across sectors.
Including the benefit of franking credits,
the S&P/ASX 200 Accumulation Index
rose 16.6 per cent over the financial year.
Best performing sectors were Information
Technology, up 38.1 per cent and
Materials, up 22.6 per cent.
The Information Technology sector has
shown similar strength to the NASDAQ
Composite Index over recent months
amid growing interest in the future
applications of artificial intelligence.
The strength in the Materials sector
was primarily driven by the re-opening
of the Chinese economy following a
period of lockdown during the COVID-19
pandemic. Sectors that underperformed
the broader market included Healthcare
which increased 5.7 per cent, Consumer
Staples up 6.2 per cent and Real Estate
up 6.8 per cent.
The portfolio returned 13.9 per cent
when franking is included. Together with
the strong rally in Materials the relative
underperformance in the strong market
came from a number of high-quality
companies in the portfolio which trailed
the return of the overall market. These
included Transurban Group, Mainfreight
and ASX. However, despite these short
term movements we still consider
the prospects for these companies
remain strong.
6
Australian Foundation Investment Company Limited Annual Report 2023
Review of Operations and Activities

Following a strong financial year ending
June 2022, our overweight position in
Amcor also had a meaningful negative
impact on relative performance.
Customer demand for its products
declined from the panic buying during
the COVID-19 related supply chain
challenges leading to a subsequent
period of customer destocking.
Materials exposure in the portfolio is
primarily through our holdings in BHP
and Rio Tinto. While our long term
underweight position in Materials
(particularly in lithium and gold)
detracted from relative performance,
we remain comfortable with the
positioning of the portfolio regarding
this more cyclical part of the market.
We maintain our research efforts in
the lithium sector, however high spot
commodity prices in these markets
make us cautious about investing at
present for the medium to long term.
Companies in the portfolio that
performed relatively well against the
Index through the 12-month period
included strong returns from Reece,
AUB Group, James Hardie Industries,
Carsales.com and Xero.
5.7%
38.1%
14.8%
16.8%
12.4%
13.3%
6.8%
22.6%
20.3%
6.2%
12.3%
17.3%
Real Estate
Energy
Materials
Utilities
ASX 200
Consumer
Discretionary
Information
Technology
Healthcare
Communication
Services
Banks
Consumer
Staples
Industrials
Figure 2: Sector Performance for the 12 Months to 30 June 2023
(Returns Do Not Include Franking)
7,600
7,400
7,200
7,000
6,800
6,600
6,400
Jul 22
Aug 22Sep 22
Nov 22
Dec 22
Feb 23
Mar 23
May 23
Jun 22
Oct 22Jan 23
Apr 23
Jun 23
Figure 1: Performance of the S&P/ASX 200 Price Index – 12 Months to 30 June 2023
Source: FactSet
7
Australian Foundation Investment Company Limited Annual Report 2023

8
Australian Foundation Investment Company Limited Annual Report 2023
Review of Operations and Activities
continued

Positioning the Portfolio
While we endeavour to have low turnover
to reduce the impact of tax paid on
returns, recycling capital from companies
trading at extreme valuations to capture
the appropriate buying opportunity
remains fundamental to our approach.
In this context, the portfolio benefited
from trimming several holdings at
appropriate times through the year.
This included holdings in NEXTDC,
Brambles, IRESS, Carsales.com
(following participation in recent equity
placements which took the holding to
above our desired portfolio position),
Commonwealth Bank of Australia,
Westpac Banking Corporation, ANZ
Group Holdings, Mainfreight, Transurban,
Ramsay Healthcare and Amcor. We exited
the position in Temple & Webster Group
which allowed us to redeploy this capital
in other opportunities.

We also exited our holdings in Orica,
InvoCare, Reliance Worldwide and
Ryman Healthcare. We are observing
structural industry challenges for many
of these companies or an environment
where competitive intensity has materially
increased. We consider the growth
prospects for the majority of these
companies to be increasingly
challenged as a result.
As a counterbalance to this activity
most purchases during the year were
focused on increasing weightings to
existing holdings. This included BHP,
National Australia Bank, Domino’s Pizza
Enterprises, IDP Education, Santos,
CSL, Mirvac, Computershare and
Goodman Group.
In managing the portfolio, we endeavour
to hold a diversified portfolio of quality
companies with an appropriate mix of
income and growth attributes to achieve
our long term investment objectives.
As value across the market during the
financial year became more difficult to
observe, we materially increased activity
to enhance income through the writing
of call options over selected holdings.
Pleasingly, this activity provided
a meaningful contribution to an
improvement in income for the year.
One new stock was added through the
year. We 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.
9
Australian Foundation Investment Company Limited Annual Report 2023
AFIC portfolio weightS&P/ASX 200 Index weight
18.4%15.5%14.0%12.6%9.0%7.4%0.0%6.3%3.4%5.4%1.9%2.7%3.4%
25%
20%
15%
10%
5%
0%
Banks
Materials
Healthcare
Industrials
Other
Financials
Consumer
Discretionary
Consumer
Staples
Communication
Services
Information
Technology
Energy
Real Estate
Cash
Utilities
Figure 4: AFIC Investment by Sector versus the S&P/ASX 200 Index
as at 30 June 2023 – Excludes International Holdings
Net asset per share growth plus dividends,
including franking
S&P/ASX 200 Accumulation Index,
including franking
1 year return
13.9%
16.6%
3 year return
11.9%
12.6%
8.6%
8.6%
5 year return10 year return
9.3%
10.1%
Figure 3: Portfolio Performance – Per Annum Returns to 30 June 2023
Figures assume an investor can take full advantage of the franking credits. Past performance is not
indicative of future performance.
Note AFIC’s performance returns are after costs. AFIC on occasions incurs realised capital gains tax
on the sale of shares. Not all the of the franking generated from these realised capital gains is paid
out as dividends and is therefore not included in these performance figures.

International Portfolio
We have continued to trial the
management of an international portfolio
over the period. This portfolio consists of
what we have assessed to be high-quality
companies with a strong competitive
advantage, good growth potential and
across a broad range of industries. This
portfolio was first initiated in May 2021
as a potential precursor to establishing
a separate low-cost international Listed
Investment Company in the future.
At 30 June 2023 approximately
$115.4 million was invested in
41 companies in this portfolio
(which represents approximately
1.3 per cent of the total AFIC portfolio).
The performance of the portfolio since
its inception is ahead of its benchmark
index which is very pleasing given the
volatile market conditions that have
been in evidence over this period.
Share Price Return
The share price was trading at a discount
of 2 per cent to the net asset backing
(before tax on unrealised gains) at the end
of June 2023, whereas at 30 June 2022
the premium was very high at 13 per cent
(Figure 5). As a result, the share price
return, including reinvestment of dividends
and franking credits, over the 12 months
to 30 June 2023 did not align with the
performance of the portfolio.
There appears to have been less demand
for equity funds across the industry as
interest rates have risen over the year and
AFIC was not immune from this trend.

The longer-term share price returns
are outlined in Figure 6. The figures
for the Index and share price assume
a shareholder can take full advantage
of the franking credits attached to
the dividends paid.
Outlook
Medium-term conditions remain
unpredictable with a broad range of
potential outcomes. Economic growth
and the employment rate remain sound
despite inflationary pressures, the recent
rapid rises in interest rates and growth
in China slowing.
In this context equity markets have
surprisingly been strong despite broad-
based expectations of a significant
slowing in many global economies
including Australia.
While aware of the prevailing environment
our research effort remains focused on
the fundamentals of the companies in
our investment universe. We consider
the portfolio remains invested in quality
companies forecast to deliver an
appropriate mix of income and growth
returns positioning us well to deliver
our long term investment objectives.
Valuation of the market as measured
by the price to sales ratio (Figure 7) and
price to book ratio (Figure 8) are relatively
high, particularly against the expected
background of more difficult operating
conditions for companies as higher
interest rates start to negatively impact
economic activity. In this context we can
afford to take a patient approach and use
any short term volatility to our advantage
as long term investors.
10
Australian Foundation Investment Company Limited Annual Report 2023
Review of Operations and Activities
continued
Jun 1
3
Jun 1
5
Jun 1
4
Jun 1
6
Jun 1
7
Jun 1
8
Jun 19Jun 20Jun 21Jun 22
Jun 23
15%
-5%
0%
5%
10%
20%
Figure 5: Share Price Premium/Discount to Net Asset Backing
Share price growth plus dividends,
including franking
S&P/ASX 200 Accumulation Index,
including franking
1 year return
-1.4%
16.6%
3 year return
10.1%
12.6%
8.4%
8.6%
5 year return10 year return
8.4%
10.1%
Figure 6: Share Price Return − Per Annum Returns to 30 June 2023

3.0
2.5
2.0
1.5
1.0
Times
Average 1.9
20032008201320182023
Figure 8: Valuation of the Market – Price to Book of the S&P/ASX 200 Index
Source: FactSet
Source: FactSet
1.2
1.6
2.0
2.4
Average 1.9
20032008201320182023
Times
Figure 7: Valuation of the Market – Price to Sales of the S&P/ASX 200 Index
Australian Foundation Investment Company Limited Annual Report 2023
11

Includes investments held in both the investment and trading portfolios.
Value at Closing Prices at 30 June 2023
Total Value
$ Million
% of the
Portfolio
1BHP 793.39.1
2Commonwealth Bank of Australia783.08.9
3CSL 674.37.7
4Macquarie Group*397.74.5
5Transurban Group*386.34.4
6Wesfarmers 363.74.2
7National Australia Bank*341.33.9
8Westpac Banking Corporation322.83.7
9Woolworths Group*292.23.3
10James Hardie Industries*215.12.5
11Rio Tinto 213.62.4
12Telstra Group 209.32.4
13Woodside Energy Group*200.12.3
14Goodman Group193.82.2
15ANZ Group Holdings 192.02.2
16Mainfreight 186.82.1
17Coles Group*179.02.0
18Carsales.com*161.21.8
19Amcor154.81.8
20ResMed144.01.6
21Reece 134.91.5
22Sonic Healthcare 118.11.3
23Xero 105.91.2
24Santos*104.51.2
25ARB Corporation 104.11.2
Total6,971.8
As percentage of total portfolio value (excludes cash)79.6%
* Indicates that options were outstanding against part of the holding.
Top 25 Investments
As at 30 June 2023
12
Australian Foundation Investment Company Limited Annual Report 2023

Capital Changes
The following changes occurred to the
Company’s share capital during the year:
• Under the Company’s Dividend
Substitution Share Plan, 835,703
new shares were issued at nil cost in
August 2022 and 697,074 new shares
were issued at nil cost in February 2023.
• Under the Company’s Dividend
Reinvestment Plan, 4,882,849 new
shares were issued at a price of
$7.56 in August 2022 and 4,026,683
new shares were issued at a price of
$7.29 in February 2023.
The Company’s buy-back facility remains
open although no shares were bought
back during the year.
The Company’s contributed equity, net
of share issue costs, rose $66.1 million
to $3.1 billion. At the close of the year
the Company had 1,240 million shares
on issue.
Dividends
Directors have declared a fully franked
final dividend of 14 cents per share,
the same as last year.
The dividends paid during the year ended
30 June 2023 were as follows:
$’000
Final dividend for the year
ended 30 June 2022 of
14 cents fully franked at
30 per cent paid 30 August
2022165,866
Interim dividend for the
year ended 30 June 2023
of 11 cents per share fully
franked at 30 per cent,
paid 24 February 2023130,836
296,702
Dividend Substitution
Share Plan (DSSP)
The Company has in place a Dividend
Substitution Share Plan.
This enables shareholders to elect to
receive shares in the Company instead
of dividends, forgoing any franking credit
and LIC gains that would otherwise be
attached to the dividend but deferring
any tax due on the receipt of such shares
(for Australian taxpayers) until such time
as the shareholding is sold. Shareholders
will need to seek their own taxation
advice in determining if this plan is
suitable for them.
Further details are available on the
Company’s website or by request from
the Company’s Share Registrar.
Financial Condition
The Company’s primary source of
funds consists of its shareholders’ funds.
The Company also had agreements with
Commonwealth Bank of Australia and
National Australia Bank for loan facilities
totalling $130 million (see Note D2). As at
30 June 2023, the facilities were drawn
down by $10 million. The Board takes
a prudent and conservative approach
to the use of borrowed funds. Currently,
when used, they are maintained within
a limit of 10 per cent of total assets.
Listed Investment Company
Capital Gains
Listed Investment Companies (LIC)
which make capital gains on the sale of
investments held for more than one year
are able to attach to their dividends an
LIC capital gains amount which some
shareholders are able to use to claim
a tax deduction. This is called an
‘LIC capital gain attributable part’.
The purpose of this is to put shareholders
in LICs on a similar footing with holders
of managed investment trusts with
respect to capital gains tax on the
sale of underlying investments.
Tax legislation sets out the definition of
a ‘Listed Investment Company’ which
AFIC satisfies. Furthermore, from time
to time the Company sells securities out
of the investment portfolio held for more
than one year which may result in capital
gains being made and tax being paid.
The Company is therefore on occasion
in a position to be able to make available
to shareholders an LIC capital gain
attributable part with our dividends.
In respect of this year’s final dividend of
14.0 cents per share for the year ended
30 June 2023, it carries with it a 10 cents
per share LIC capital gain attributable part
(2022: 14.29 cents). The amount which
shareholders may be able to claim as a
tax deduction depends on their individual
situation. Further details are provided in
the dividend statements.
Likely Developments
The Company intends to continue
investing on behalf of its shareholders
as it has been doing since 1928. The
results of these investment activities will
depend upon the performance of the
companies and securities in which we
invest. Their performance in turn depends
on many economic factors (macro, which
include economic growth rates, inflation,
interest rates, exchange rates and taxation
levels and micro which includes industry
economics and competitive behaviour)
and their approach to, and management
of, material Environmental, Social and
Governance (ESG) risks.
We do not believe it is possible or
appropriate to make a prediction on the
future course of markets or the performance
of our investments. Accordingly, we do
not provide a forecast of the likely results
of our activities. However, the Company’s
focus is on results over the medium to
long term and its twin objectives are
to grow dividends at a rate faster than
inflation and to provide shareholders
with attractive capital growth.
Significant Changes in
the State of Affairs
Directors are not aware of any other
significant changes in the operations
of the Company, or the environment
in which it operates, that will adversely
affect the results in subsequent years.
Events Since Balance Date
The Directors are not aware of any
matter or circumstance not otherwise
disclosed in the financial statements or
the Directors’ Report which has arisen
since the end of the financial year that
has affected or may affect the operations,
or the results of those operations, or
the state of affairs of the Company
in subsequent financial years.
Environmental Regulations
The Company’s operations are such that
they are not directly materially affected
by environmental regulations.
Rounding of Amounts
The Company is of the kind referred to
in the ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument
2016/191, relating to the ‘rounding off’ of
amounts in the financial report. Amounts
in the financial report have been rounded
off in accordance with that instrument, to
the nearest thousand dollars, or in certain
cases, to the nearest dollar.
Corporate Governance Statement
The Company’s Corporate Governance
Statement for the financial year ended
30 June 2023 will be found on the
Company’s website at afi.com.au/
corporate-governance.
As an overseas listed issuer on the
New Zealand Stock Exchange (NZX),
the Company is generally deemed
to comply with the NZX Listing Rules
provided that the Company remains
listed on the ASX, complies with the
ASX Listing Rules and provides the
NZX with all the information and
notices that it provides to the ASX.
13
Australian Foundation Investment Company Limited Annual Report 2023
Company Position

Board Members
Chairman of the Investment Committee. Member of the Remuneration,
Nomination and Audit Committees. Non-Executive Director of the
Company’s subsidiary, Australian Investment Company Services
Limited (AICS).
Mr Paterson is a company Director who was appointed to the Board
in June 2005 and Chairman in 2018. He was a former Alternate Director
of the Company for Mr Campbell from April 1987 to June 2005. He was
formerly the Chairman of Djerriwarrh Investments Limited.
He was formerly a Director of Goldman Sachs JBWere and is a former
member of the Board of Guardians of Australia’s Future Fund.
Member of the Investment and Nomination Committees.
Ms Dee-Bradbury was appointed to the Board in May 2019. Ms Dee-Bradbury
was previously Chief Executive Officer/President of Developed Markets
(Asia Pacific and ANZ) for Mondelez from 2010 to 2014. Before joining
Mondelez Ms Dee-Bradbury was Group CEO of the global Barbeques
Galore group, and has held other senior executive roles in organisations
including Maxxium, Burger King Corporation and Lion Nathan/Pepsi Cola
Bottlers. Ms Dee-Bradbury is a Non-Executive Director of BlueScope Steel
Limited (appointed April 2014), a Director of Energy Australia Holdings
following her appointment in April 2017 and a member of Chief Executive
Women and of the Women Corporate Directors Foundation. Ms Dee-Bradbury
was formerly a Non-Executive Director of Grain Corp Limited (from 2014
to 2020) and Tower Limited (NZ) until her resignation in 2016 and a former
member of the Federal Government’s Asian Century Strategic Advisory Board.
Member of the Investment Committee. Managing Director of AICS.
Mr Freeman became Chief Executive Officer and Managing Director
in January 2018 having been Chief Investment Officer since joining the
Company in February 2007. Prior to this he was a Partner with Goldman
Sachs JBWere where he spent 12 years advising the investment companies
on their investment and dealing activities. He has a deep knowledge
and experience of investment markets and the Company’s approaches,
policies and processes. He is also Managing Director of Djerriwarrh
Investments Limited, Mirrabooka Investments Limited and AMCIL Limited.
Member of the Investment and Nomination Committees. Non-Executive
Chairman of the Company’s subsidiary, AICS
Mr Drummond was appointed to the Board in July 2021. He is the President
of the Geelong Football Club Limited, Chairman of Transurban Ltd and a
Governor of The Ian Potter Foundation.
Mr Drummond was a member of the Financial Regulator Assessment
Authority from 10 September 2021 to 30 June 2023. He served as Chief
Executive Officer of Medibank from July 2016 to May 2021. Prior to joining
Medibank, he was Group Executive Finance and Strategy of National
Australia Bank (NAB), and Chief Executive Officer and Country Head of
Bank of America Merrill Lynch (Australia). Earlier in his career, Mr Drummond
held roles at Goldman Sachs JBWere including Chief Operating Officer,
Chief Executive Officer and Executive Chairman.
John Paterson
Chairman and
Independent
Non-Executive
Director
BCom (Hons) (Melb),
CPA, F Fin
Rebecca
Dee-Bradbury
Independent
Non-Executive
Director
BBus, GAICD
Mark Freeman
Managing Director
BE, MBA, Grad Dip
App Fin (Sec Inst),
AMP (INSEAD)
Craig Drummond
Independent
Non-Executive
Director
BCom (Melb),
SF FIN, FCA
14
Australian Foundation Investment Company Limited Annual Report 2023

Chairman of the Remuneration Committee.
Mr Liebelt was appointed to the Board in June 2012. He is Chairman of
Amcor Limited. He is a Fellow of the Australian Academy of Technological
Sciences and Engineering and a Fellow of the Australian Institute of Company
Directors. He was formerly a Director of Carey Baptist Grammar School,
Chairman and Director of DuluxGroup Limited, Chairman and Director of
the Global Foundation, Deputy Chairman of Melbourne Business School,
Managing Director and CEO of Orica Limited and Director of Australia
and New Zealand Banking Group Limited.
Chairman of the Audit Committee.
Ms Fahey was appointed to the Board in April 2021. She has over 30 years
of experience in technology, including in major organisations such as
Western Mining, Exxon, Roy Morgan, General Motors and SAP, covering
consulting, software vendor and Chief Information Officer roles. In addition
to her industry experience, she spent 10 years at KPMG as a partner
with the firm, during which time she held roles as National Lead Partner
Telecommunications, Media and Technology, and National Managing
Partner – Markets. She was also a member of the KPMG National
Executive Committee.
Ms Fahey is a Non-Executive Director of Seek Limited, IRESS Limited and
Datacom and a member of the Australian Red Cross LifeBlood board.
She was formerly a Non-Executive Director of Vocus, Partnerslife and
Cenitex and formerly a member of the Latrobe University Council.
Chairman of the Nomination Committee. Member of the Investment,
Remuneration and Audit Committees.
Mrs Walter is an Australian lawyer and company Director. She was
appointed to the Board in August 2002. She is Chair of Melbourne
Genomics Health Alliance and Helen Macpherson Smith Trust. Mrs Walter
is also a Director of Export Finance Australia. She was formerly Chair
of Federation Square Pty Ltd, Australian Synchrotron Company Ltd and
the Financial Adviser Standards & Ethics Authority (FASEA). She was also
Deputy Chair of Victorian Funds Management Corporation and a former
Director of the RBA’s Payments System Board, ASX, National Australia
Bank Ltd, Orica Ltd and Melbourne Business School.
Member of the Audit and Investment Committees.
Mr Peever was appointed to the Board in November 2013. He was Managing
Director of Rio Tinto Australia from 2009 to 2014. He is Chairman of
Brisbane Airport Group Pty Ltd. He chaired the Minister of Defence’s First
Principles Review of Defence and following the acceptance of the review
by Government was Chair of the Oversight Board which helped guide
implementation (with Defence) of the Review’s recommendations. David was
a Non-Executive Chairman of Naval Group Australia, a former member of
the Foreign Investment Review Board, a former Chair of Cricket Australia
and a former Director of the Stars Foundation, a not for profit body which
promotes education of Indigenous girls and also a former Vice Chairman
of the Minerals Council of Australia and was a Director of the Business
Council of Australia.
Graeme R Liebelt
Independent
Non-Executive
Director
BEc (Hons),
FAICD FTSE
Julie Fahey
Independent
Non-Executive
Director
BAS
Catherine
M Walter AM
Independent
Non-Executive
Director
LLB (Hons), LLM,
MBA (Melb), FAICD
David A Peever
Independent
Non-Executive
Director
BEc, MSc
(Mineral Economics)
15
Australian Foundation Investment Company Limited Annual Report 2023

Meetings of Directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year ended 30 June 2023
and the numbers of meetings attended by each Director were:
BoardInvestmentAuditRemunerationNomination
Eligible
to AttendAttended
Eligible
to AttendAttended
Eligible
to AttendAttended
Eligible
to AttendAttended
Eligible
to AttendAttended
J Paterson12121818442255
M Freeman12121817-3
#
-2
#
--
RP Dee Bradbury12121818-4
#
--55
CM Drummond121217
+
16-4
#
-2
#
4**4
JA Fahey1212-13
#
43-1
#
--
GR Liebelt 1212-17
#
-3
#
22--
DA Peever 1212181744---1
#
CM Walter12121818442255
PJ Williams
^
335511-1
#
22
# Attended meetings as non-members
+ C Drummond was appointed as a member of the Investment Committee on 25 July 2022.
** C Drummond was granted a leave of absence for one Nomination Committee meeting.
^ P Williams retired from the Board on 4 October 2022.
Insurance of Directors and Officers
During the financial year, the Company paid insurance premiums to insure the Directors and Officers named in this report to the extent
allowable by law. The terms of the insurance contract preclude disclosure of further details.
Board Members
continued
16
Australian Foundation Investment Company Limited Annual Report 2023

Senior Executives
Mr Driver joined the Company in January 2003. Previously, he was with
National Australia Bank Ltd for 18 years in various roles covering business
strategy, marketing, distribution, investor relations and business operations.
Mr Driver was formerly Chairman of Trust for Nature (Victoria).
Mr Rowe joined the Company in July 2016. He is a Chartered Secretary
with over 18 years of experience in corporate governance with a particular
focus in listed investment companies. He was previously a corporate
governance advisor at a professional services firm which included acting
as Company Secretary for three ASX listed companies. Prior to that he
was the Company Secretarial Manager for a funds management company
based in the United Kingdom.
Geoffrey N Driver
General Manager
Business Development
and Investor Relations
BEc, Grad Dip Finance,
MAICD
Matthew J Rowe
Company Secretary
BA (Hons), MSc Corp
Gov, FGIA, FCG
Mr Porter joined the Company in January 2005. He is a Chartered
Accountant and has had over 25 years experience in accounting and
financial management both in the United Kingdom with Andersen Consulting
and Credit Suisse First Boston, and in Australia where he was Regional
Chief Operating Officer for the Corporate and Investment Banking Division
of CSFB. He is a Director of the Auditing and Assurance Standards Board
(AUASB) and a Director of the Anglican Foundation. Mr Porter is a former
Chair of The Group of 100 (G100), the peak body for CFOs.
Andrew JB Porter
Chief Financial Officer/
Company Secretary
MA (Hons) (St And),
FCA, MAICD
17
Australian Foundation Investment Company Limited Annual Report 2023

Contents
The Directors present AFIC’s 2023 Remuneration Report which outlines key aspects of our remuneration policy and remuneration awarded
this year.
Changes to the Remuneration Structure for the Year Ended 30 June 2023
As outlined in the 2022 Annual Report, the Board has instituted changes to the remuneration plan for Executives with effect from
1 July 2022.
This has involves the merging of the Long Term Incentive Plan with the Annual Incentive Plan to create a new Incentive Plan.
58 per cent of the available incentive under the Incentive Plan is long term in nature, as it measures investment performance and the
growth in dividends and earnings per share over more than one year.
The remaining 42 per cent is 20 per cent based on personal metrics for each Executive and 22 per cent based on investment performance
and other financial metrics over a single year (although the Management Expense Ratio (MER) measure is reviewed in the context of
longer term trends).
Outcomes may differ from these percentages as, for instance, longer term measures may vest whilst shorter term measures may not,
and vice versa.
Awards under the Incentive Plan will be paid in cash. Executives are required to use 25 per cent of the pre-tax amount of any incentive
that vests to purchase shares in AFIC and/or the other LICs (see below). Executives are expected over time to build and to maintain an
appropriate holding not only in AFIC shares but also in shares in the other LICs to which the Executives provide service.
The performance metrics for the new Plan are the same as for the old Annual Incentive Plan, with the addition of a Reward/Risk component
which is measured over five years and compared to the Mercer Reward/Risk Survey of Australian fund managers.
The old Long Term Incentive Plan was entirely based on AFIC’s performance, and AFIC bore the entire expense. The merging of the
two plans means that all LICs bear an appropriate proportion of the cost.
Note on AFIC’s Proportion of the Costs Detailed in the Remuneration Report
The Remuneration Report is required to show the salary and incentives that the Group Executives receive. It does not accurately reflect
the actual cost to AFIC shareholders of this remuneration.
This is because the other companies that the Executives provide services to (Djerriwarrh Investments Ltd, Mirrabooka Investments Ltd
and AMCIL Ltd, collectively ‘the LICs’) pay for a proportion of these costs.
The total remuneration shown in Table 4 is $4.25 million.
Of this, 38 per cent (or $1.61 million) is or will be paid for by the other LICs, through the service agreements with AFIC’s subsidiary,
Australian Investment Company Services Ltd (AICS). Note that this includes the vesting during the 2022/23 year of the last tranche
of the old Long Term Incentive plan, which was entirely borne by AFIC.
Therefore, 62 per cent, or $2.64 million, will be borne by AFIC and its shareholders.
The report is structured as follows:
1 Remuneration Policy, Link to Performance and Outcomes
2 Structure of Remuneration
3 Executive Remuneration Expense
4 Contract Terms
5 Non-Executive Director Remuneration
Remuneration Report
18
Australian Foundation Investment Company Limited Annual Report 2023

Appendix
A. Remuneration Governance
B. Annual Incentives: Details of Outcomes and Conditions
C. Directors and Executives: Equity Holdings and Other Transactions
D. Potential Clawback of Incentives
E. Detailed Performance Measures by Investment Company
1. Remuneration Policy, Link to Performance and Outcomes
1.1 What is Our Remuneration Policy?
AFIC is an investor in securities which are listed mainly in Australia and New Zealand. Our primary investment goals are to pay dividends
which, over time, grow faster than the rate of inflation and to provide attractive total returns over the medium to long term. To achieve this,
we need to attract and retain professional, competent and highly motivated executives and staff through offering attractive remuneration
arrangements which:
• reflect market conditions;
• recognise the skills, experience, roles and responsibilities of the individuals;
• align with shareholder interests; and
• align with the risk management strategies.
Generally, we seek to set total remuneration at the upper or second quartile of the sectors in which we operate.
Remuneration for the Group’s executives has two main elements:
• fixed annual remuneration (FAR); and
• performance-related pay (Incentive Plan).
FAR is determined with reference to levels necessary to recruit and retain staff with the relevant skills and experience in the industry in
which the Group operates. We utilise external input, seeking to ensure that the FAR meets these conditions. This includes industry data
provided by the Financial Institutions Remuneration Group Inc. (FIRG) and McLagan for the financial services industry. The costs of the
FAR (and the personal element of the Annual Incentive) are allocated to the LICs based on an internal estimate of work performed which
is subject to Board approval.
Through performance-related pay, the remuneration is adjusted to reflect the risks that the Company and its shareholders face and how
the Company has responded to those risks. In particular:
• the key performance indicators chosen to determine performance-related pay are those that the Company considers most relevant
to its objectives of improving shareholder wealth over the medium to long term, whilst also considering the relative levels of risk;
• the focus is on performance over the medium to long term, with a smaller proportion of the Incentive Plan being dependent on a single
year’s performance; and
• executives agree to invest 25 per cent of the pre-tax annual cash incentive in AFIC shares and/or shares of the other investment
companies (AMCIL Limited, Djerriwarrh Investments Limited and Mirrabooka Investments Limited) and to hold these shares for
a minimum of four years.
19
Australian Foundation Investment Company Limited Annual Report 2023

1.2 What is Our Target Remuneration Mix?
The target remuneration mix for executives is as follows:
Managing Director’s
Target Remuneration Mix
Other Executives’ Target
Remuneration Mix
Fixed annual remuneration 50%
Annual incentive 50%
Fixed annual remuneration 67%
Annual incentive 33%
1.3 How is the Remuneration Paid in 2023 Linked to Performance?
1.3.1 Fixed Remuneration
Most Executives received increases in their fixed annual remuneration this year. AFIC continues to operate in a highly competitive market,
and salary levels are reviewed at least annually with the aim of remunerating its executives to the extent required to attract and retain
executives who are extremely competent and highly motivated.
1.3.2 Performance-related Pay
This section shows how incentive measurements are split between AFIC and the other investment companies.
%Result
AFIC Investment performance32Table 2
AFIC Other metrics 8Table 1
Percentage of incentive determined by AFIC performance40
Other LIC Investment Performance28Table 12
Other LIC Other metrics12Table 12
Percentage of incentive determined by Other LICs performance40
Total percentage of incentive determined by AFIC/Other LIC performance80
Personal metrics20N/A
100
See Table 5 for more details on the measures used in determining the Annual Incentives.
• The outcome for the previous long term incentive (LTI) award that was tested for vesting during the year are shown in Table 3.
Refer to Sections 2.2 and 2.3 for explanations of the measures used.
The Resources sector, an industry sector in which AFIC has traditionally been underweight, strongly outperformed the broader index
in the year ended 30 June 2023, up 23.0 per cent against the broader index up 14.8 per cent. This followed strong out-performance
in the previous year as well. Industrials, by contrast, where AFIC has traditionally invested for consistency of returns, was up only
11.8 per cent for the year ended 30 June 2023.
Remuneration Report
continued
20
Australian Foundation Investment Company Limited Annual Report 2023

This has resulted in AFIC underperforming its shorter term investment measures whilst the medium and longer term ones are either
in line or slightly below. However, AFIC strongly outperformed on the Risk/Reward measure, delivering the Board’s preferred outcome
of less-volatile returns.
Furthermore, many returns quoted by managed funds exclude either tax or expenses, or both. The use of ‘grossed-up returns’
(see Table 2 and Table 10) mitigates the tax disparity to some extent, as it adds back franking credits to the nominal dividend that the
index pays, and also that AFIC pays. The extent to which franking credits are retained by the Company, particularly from capital gains,
will be a drag on the stated performance.
For the other LICs, AMCIL also underperformed its shorter term investment measures (one and three years) but was either marginally
below (Grossed up NTA) or above (Investment Return) for the longer term – the difference being caused by the tax that AMCIL has had
to pay on realised gains and a number of share issues at a discount to NTA.
Mirrabooka strongly outperformed on all of its investment targets, and stretch levels were achieved, leading to a vesting higher than
target for the elements of the incentive that were based on these measures.
Largely due to the reallocation of costs, both AMCIL and Mirrabooka’s MER returned to historical norms.
Djerriwarrh’s investment returns by contrast to AFIC and AMCIL were stronger in the short term (one and three years, following a
realignment of strategy three years ago) and outperformed against its modified target (the Index returns are modified in periods of strong
growth to reflect the option strategy that Djerriwarrh uses to maintain its dividend yield at a level higher than that of the S&P/ASX 200
as a whole).
The MER for AFIC has fallen in the year despite a reduction in the size of the average portfolio value over the year. This is largely as a
consequence of the non-vesting of incentives and particularly the write-back of the accrued costs of the old Long Term Incentive Plan.
This latter is a ‘one-off’ benefit, and next year’s (and future years’) MER will not benefit from this. As a shareholder in AICS, Djerriwarrh also
benefited from this effect and its MER was down on the previous year.
Earnings growth (using a normalised earnings per share which strips out (as in previous years) merger and de-merger dividends et al.)
has been strong over one and three years but modest over five years following strong underlying Company earnings in 2018. The Board
also increased the dividend this year after maintaining a constant dividend through the COVID-19 pandemic and related crises, when
many companies and fund managers cut their distributions.
Detailed information about the performance of each investment company is provided in Section E of the Appendix (Table 12).
Table 1: Non-investment Return Performance Measures
Performance measure
Benchmark
Result
AFIC
Result
Comparison to
Benchmark
Growth in net operating result Est. CPI over five years – 3.3%1.3%Unfavourable
Management expense ratio n/a0.14%Favourable
Outcome: Achieved Partially achieved Not achieved
Table 2: Investment Return Performance Measures
Measure
Benchmark
Result
AFIC
Result
Comparison to
Benchmark
Investment return – 1 year14.8%12.8%Unfavourable
Investment return – 3 years11.1%11.0%In line
Investment return – 5 years7.2%7.5%Favourable
Investment return – 10 years8.6%8.1%Unfavourable
Grossed-up return – 1 year16.6%13.9%Unfavourable
Grossed-up return – 3 years12.6%11.9%Unfavourable
Grossed-up return – 5 years8.6%8.6%In line
Grossed-up return – 10 years10.1%9.3%Unfavourable
Risk/Reward – 5 years0.400.47Favourable
Outcome: Achieved Partially achieved Not achieved
21
Australian Foundation Investment Company Limited Annual Report 2023

Table 3: Vesting and Forfeiture of Long Term Incentives During the Year
Award Date
Assessment
DatesMeasure Tested
Benchmark
Result
AFIC
Result
%
Vested
%
Forfeited
ELTIP – Performance rights*
1 July 201830 June 2022Total gross shareholder return 8.6%12.5%50%0%
Total portfolio return (TPR)5.7%5.5%47.5%2.5%
* Of the rights awarded on 1 July 2018, 2.5 per cent were forfeited as the relevant targets were not achieved (although AFIC exceeded the target for TPR
it was below the 75th percentile which would have led to full vesting) and 97.5 per cent vested.
1.3.3 Remuneration Outcomes
Table 4 discloses the actual remuneration outcomes received by the Company’s executives during the year and the LTI that may have
vested in future years. These amounts are different to the statutory remuneration expense disclosed in Table 6. The Directors consider
the information about remuneration outcomes in Table 4 relevant for users because the statutory remuneration expense includes
accounting charges for long term incentives that may or may not be received in future years.
Table 4: Actual Executive Remuneration Outcomes
Total FAR
$
Incentive
‘Long
Term’
Portion
$
Incentive
‘Short
Term’
Portion
(Incl.
Personal)
$
Prior
Years’ LTI
Received*
$
Total
Remune-
ration
^

$
Total
Borne by
AFIC
$
Total
Borne
by Other
LICs
$
Incentive
Forfeited
$
LTI
Forfeited
$
Possible
Future LTI
(to Vest
Over Next
4 Years)
#

$
Mark Freeman – Managing Director
2023913,400312,054286,223239,7281,751,4051,067,214684,191(315,123)(9,798)-
2022884,340221,439246,907117,0341,469,720793,649676,071(239,126)(18,193)904,609
Andrew Porter – Chief Financial Officer
2023731,000124,869111,975140,5811,108,425696,726411,699(128,656)(6,164)-
2022707,47277,50484,436134,9561,004,368542,359462,009(85,675)(20,978)533,821
Geoff Driver – General Manager –
Business Development and Investor Relations
2023601,000102,66491,760115,839911,263572,893338,370(106,076)(5,078)-
2022582,62463,82670,352111,203828,005447,123380,882(69,740)(17,286)439,685
Matthew Rowe – Company Secretary
2023325,00063,03342,26753,153483,453300,413183,040(57,200)(2,330)-
2022309,00033,85136,77148,535428,157231,205196,952(37,528)(7,544)219,551
^ There is an ‘overlap’ caused by the vesting of the 2018–22 LTIP occurring in the year ended 30 June 2023 (even though it was in respect of the four
years ended 30 June 2022) and the amalgamation of the old ELTIP and Annual Incentive Plans which occurred for the year ending 30 June 2023.
The value of Incentive forfeited is the difference between the target amount and the amount awarded. See Table 9.
Note that some targets that measure performance over more than one year in the current year (e.g. EPS/Dividend growth) were measured over one year
in the previous corresponding period. This means that amounts vesting under this element are shown as long term in the current year and short term
in the previous year.
The differences between the amounts disclosed in Table 4 and the amounts in Table 6 are as follows:
* Prior year’s LTI received in Table 4 shows the value of performance shares that vested during the year, measured at the closing price on the day
that they were received. In contrast, Table 6 shows the accounting expense recognised in relation to the LTI plans during the year.
# The future LTI in Table 4 reflected the potential future remuneration that might have been received by the executives over the next four years
if the performance conditions are satisfied.
Information about non-executive director remuneration is provided in Section 5 Non-Executive Director Remuneration.
Remuneration Report
continued
22
Australian Foundation Investment Company Limited Annual Report 2023

2. Structure of Remuneration
2.1 Fixed Annual Remuneration (FAR)
The FAR component of an executive’s remuneration comprises base salary, superannuation guarantee contributions and fringe benefits.
Executives can elect to receive a portion of their FAR in the form of additional superannuation contributions or fringe benefits. This will
not affect the gross amount payable by the Group.
2.2 Incentive Plan
Table 5 below outlines the key terms and conditions of the Incentive Plan.
Table 5: Annual Incentives – Key Terms and Conditions
Managing DirectorOther Executives
Targeted % of FAR 100 per cent50 per cent
ObjectivesAlign remuneration with the creation of shareholder wealth.
Measures reflect the management of the Group and the other investment companies, as well
as the key investment returns that reflect the creation of shareholder wealth.
Performance measuresCompany performance (20 per cent): Investment performance (60 per cent): Personal objectives
(20 per cent)
See Table 10 for more details
Relative weightings of investment
companies for investment and
company related performance
AFIC: 40 per cent
Djerriwarrh Investments Limited: 16 per cent
AMCIL Limited: 12 per cent
Mirrabooka Investments Limited: 12 per cent
Personal objectives: 20 per cent (allocated on same basis as FAR)
Delivery of awardIncentive is paid in cash, but 25 per cent of the pre-tax amount received is used by recipients
to acquire shares in AFIC and/or the other investment companies which they agree to hold for
minimum of four years.
Performance measured in 2023See Tables 1 and 2 for AFIC. Mirrabooka outperformed, Djerriwarrh outperformed on shorter term
measures and AMCIL outperformed on longer term measures.
Outcomes for 2023
(see Table 9 for details)
66 per centAverage 65 per cent
The performance measures of the Incentive Plan are reviewed by the Remuneration Committee. The Committee may, from time to time,
revise the performance conditions and weightings in order to better meet the objectives of the annual incentive policies. They may also
change or suspend any part of the incentive payment arrangements. If relevant targets are not achieved but performance is close to
the target, some of the incentive may be paid. This would be noted as ‘partially achieved’ or ‘in line’ in Table 2. Where stretch levels
of performance are achieved above target, then higher amounts may be paid at the discretion of the Board. To date, total annual
incentives paid to each executive have never exceeded target.
For more detailed information about the annual incentive performance conditions and outcomes for 2023 please refer to Section B
Annual Incentives: Details of Outcomes and Conditions in the Appendix.
2.3 Executive Long Term Incentive Plans (ELTIP)
For details of the previous Executive Long Term Incentive Plan (ELTIP) that vested during the year (with effect from 30 June 2022),
please see the 2022 Annual Report, available on the Company’s website (afi.com.au). The ELTIP has now been discontinued.
23
Australian Foundation Investment Company Limited Annual Report 2023

3. Executive Remuneration Expense
This section discloses the remuneration expense recognised under accounting standards for each executive (Table 6). These amounts
are different to the remuneration outcomes disclosed in Table 4 as noted in that table.
Table 6: Remuneration Expense
Short Term
Post-
employment
Long Term
Share-based
Payments
Base Salary
$
Super-
annuation
$
Total Fixed
Remuneration
$
Incentives
$
LTI Cash-
settled*
$
Total
Remuneration
$
%
Fixed/
Performance
Related
Mark Freeman – Managing Director
2023885,90027,500913,400598,277-1,511,67760%/40%
2022856,84027,500884,340468,346271,0661,623,75254%/46%
Andrew Porter – Chief Financial Officer
2023703,50027,500731,000236,844-967,84476%/24%
2022679,97227,500707,472161,940115,976985,38872%/28%
Geoff Driver – General Manager –
Business Development and Investor Relations
2023573,50027,500601,000194,424-795,42476%/24%
2022555,12427,500582,624134,17895,517812,31972%/28%
Matthew Rowe – Company Secretary
2023297,50027,500325,000105,300-430,30076%/24%
2022281,50027,500309,00070,62248,716428,33872%/28%
* Includes amounts credited for non-vesting.
4. Contract Terms
Each Executive is employed under an open-ended contract, the terms of which can be varied by mutual agreement. There are no
contractual provisions for cessation of employment other than statutory requirements. Either the Company or the Executive can give
notice in accordance with statutory requirements. There are no specific payments to be made as a consequence of termination beyond
those required by statute. Should there be any payments, these will be at the Board’s discretion.
Material breaches of the terms of employment will normally result in the termination of an Executive’s employment.
5. Non-Executive Director Remuneration
Shareholders approve the maximum aggregate amount of remuneration per year available to be allocated between Non-Executive
Directors (NEDs). In proposing the amount for consideration by shareholders, the Remuneration Committee takes into account the time
demands made on Directors together with such factors as the general level of fees paid to Australian corporate directors.
For NEDs, who are charged with the responsibility of oversight of the Company’s activities, a fixed annual fee is paid with no element
of performance related pay.
The amount approved at the AGM in October 2019 was $1,250,000 per annum, which is the maximum amount that may be paid
in total to all NEDs. Retirement allowances for Directors were frozen at 30 June 2004.
On appointment, the Company enters into a deed of access and indemnity with each NED. Other than those in place at 30 June 2004
there are no termination payments due at the cessation of office, and any Director may retire or resign from the Board, or be removed
by a resolution of shareholders.
The amounts paid to each NED, and the figures for the corresponding period, are set out in Table 7.
Remuneration Report
continued
24
Australian Foundation Investment Company Limited Annual Report 2023

Table 7: Non-Executive Director Remuneration
Primary (Fee/
Base Salary)
$
Post-
employment
(Superannuation)
$
Total
Remuneration
$
J Paterson – Chairman
2023201,1064,894206,000
2022195,4554,545200,000
RP Dee-Bradbury – Non-Executive Director
2023100,5532,447103,000
202295,4554,545100,000
CM Drummond – Non-Executive Director
202393,2139,787103,000
202290,9099,091100,000
JA Fahey – Non-Executive Director
202393,2139,787103,000
202290,9099,091100,000
GR Liebelt – Non-Executive Director
2023103,000-103,000
202297,7272,273100,000
DA Peever – Non-Executive Director
202393,2139,787103,000
202290,9099,091100,000
CM Walter AM – Non-Executive Director
202393,2139,787103,000
202290,9099,091100,000
PJ Williams – Non-Executive Director (retired 4 October 2022)
202324,3172,55326,870
202290,9099,091100,000
Total Remuneration of Non-Executive Directors
2023801,82849,042850,870
2022843,18256,818900,000
Amounts Payable on Retirement
The amounts payable to the current NEDs who were in office at 30 June 2004, which will be paid when they retire, are set out in Table 8.
These amounts were expensed in prior years as the retirement allowances accrued.
Table 8: Non-Executive Director Retirement Allowance
Amount Payable on Retirement
$
CM Walter AM 42,385
Total42,385
25
Australian Foundation Investment Company Limited Annual Report 2023

Appendix
A. Remuneration Governance
Responsibilities of the Board and the Remuneration Committee
It is the Board’s responsibility to review and approve the recommendations of the Remuneration Committee.
For more information, the Charter of the Board is available on the Company’s website.
The Remuneration Committee’s primary responsibilities include:
• reviewing the level of fees for NEDs and the Chairman;
• reviewing the Managing Director’s remuneration arrangements;
• evaluating the Managing Director’s performance;
• reviewing the remuneration arrangements for other senior executives;
• monitoring legislative developments with regards to executive remuneration; and
• monitoring the Group’s compliance with requirements in this area.
For more information, the Charter of the Remuneration Committee is available on the Company’s website.
The Remuneration Committee is composed of three NEDs (GR Liebelt (Chairman), J Paterson and CM Walter AM) and meets at least
twice per year.
Policy on Hedging
The Company provides no lending or leveraging arrangements to its executives, who are prohibited by Company policy from entering
into hedging arrangements that mitigate the possibility that ‘at risk’ incentive payments may not vest.
Use of Remuneration Consultants
The Managing Director makes recommendations to the Remuneration Committee with regards to the remuneration levels and structure
of the KMP.
Ernst & Young review the calculations used in determining the vesting of awards and certifies them as being correct and in accordance
with the terms and conditions of the ELTIP.
Ernst & Young were not paid during the year ended 30 June 2023 for remuneration advice (2022: $7,365) and during the year
the Group paid $199,485 to EY for other professional advice received which included acting as the internal auditor for AICS and
general taxation and accountancy advice, including advice on the format and layout of the Remuneration Report (2022: $162,063)
(all including GST).
Ernst & Young were remunerated on an invoiced basis, based on work performed.
The Company also participates in the annual McLagan and FIRG surveys of fund managers to understand current remuneration levels
and practices.
B. Annual Incentives: Details of Outcomes and Conditions
Table 9 below shows the annual incentives paid to individual executives as a result of AFIC’s and the other investment companies’
performance on financial metrics and the individual’s achievement of their own personal objectives. Table 10 sets out the detailed terms
and conditions of the annual incentives. For a high-level summary see Section 2.2 and Table 5.
Table 9: Annual Incentive Outcomes
Executive
% of
Target Paid
$
Paid
% of Target
Forfeited
$
Forfeited
Mark Freeman66%598,27734%315,123
Andrew Porter65%236,84435%128,656
Geoff Driver65%194,42435%106,076
Matthew Rowe65%105,30035%57,200
Remuneration Report
continued
26
Australian Foundation Investment Company Limited Annual Report 2023

Table 10: Executive Annual Incentive Performance Conditions
Performance Areas
and Relative WeightingPerformance MeasuresPurpose of Measure
Company Performance (20 per cent)
The relevant weightings of the investment
companies are:
• AFIC: 50 per cent
• Djerriwarrh Investments Limited:
20 per cent
• AMCIL Limited: 15 per cent
• Mirrabooka Investments Limited:
15 per cent
• Operating result and dividend growth:
measured over five years against CPI.
• Management expense ratio (MER):
at Board discretion, generally measured
against prior years’ results.
• Dividend yield (DJW only).
• Net operating result reflects the ability
of the Company to meet its stated aim
of ‘paying out dividends which, over time,
grow faster than the rate of inflation’.
The dividends of both MIR and AMH
vary from year to year and are not a
key objective for those companies.
• MER reflects the costs of running
the Company.
• Maintaining a dividend yield above the
market’s is an important object for DJW.
Investment Performance (60 per cent)
The relevant weightings of the investment
companies are:
• AFIC: 50 per cent
• Djerriwarrh Investments Limited:
20 per cent
• AMCIL Limited: 15 per cent
• Mirrabooka Investments Limited:
15 per cent
• Relative investment return: measure
of the return on the portfolio invested
(including cash) over the previous one,
three, five, and 10 years, relative to
the S&P/ASX 200 Accumulation Index
(Combined S&P/ASX Mid Cap 50 and
Small Ordinaries for Mirrabooka and
modified S&P/ASX 200 Accumulation
Index for Djerriwarrh).
• Risk/Reward: measure of the return that
AFIC’s portfolio generates as a ratio of
the volatility risk that such a portfolio
incurs.
• Grossed-up return (GR): measure of
the movement in the net asset backing
of the Company (per share) plus the
dividends assumed to be reinvested
grossed up for franking credits over the
previous one, three, five, and 10 years.
This return is compared to the S&P/ASX
200 Accumulation Index grossed up for
franking credits (Combined S&P/ASX
Mid Cap 50 and Small Ordinaries for
Mirrabooka and modified S&P/ASX 200
Accumulation Index for Djerriwarrh).
The Board considers that the metrics used
reflect, over the medium to long term, the
stated objectives of the Company, namely
‘to provide attractive total returns and pay
dividends, which, over time, grow faster
than the rate of inflation’.
• Investment Return: reflects the returns
generated by the mix of the investments
that the Company has invested in. These
reflect the value added to shareholders
wealth by the investment decisions of
the Company.
• Risk/Reward: reflects the aim for AFIC’s
portfolio to be designed to face less
volatility risk than the market generally.
• Grossed-up return (GR): reflects
the movement in the value of the
underlying portfolio over the period
with the additional recognition of the
importance of franking credits.
Note: The Remuneration Committee has
discretion to determine, at the time of
the review, what it considers to be the
appropriate level of return to be used.
Personal Objectives (20 per cent)
These costs are allocated to AFIC
and to the LICs on the same proportion
as the FAR.
Includes:
• advice to the Board;
• succession planning;
• management of staff;
• risk management; and
• shareholder stewardship.
These measures all contribute to the
efficient running of the Group, and the
other investment companies, enhancing
investment outcomes.
Personal objectives are included in incentive
calculations to encourage outperformance
on non-financial metrics. These metrics
can be important determinants of business
success in the medium term. The Managing
Director reviews the performance of
each executive with the Remuneration
Committee, and the Remuneration
Committee alone determines how the
Managing Director is performing against
these objectives.
50 per cent is awarded based on the
individual’s capability and improvement
and 50 per cent on alignment with the
Company’s values and culture.
For details of Incentive Plans that vested or were awarded in the comparative year, please see the 2022 Annual Report, available on the
Company’s website.
27
Australian Foundation Investment Company Limited Annual Report 2023

C. Directors and Executives: Equity Holdings and Other Transactions
Table 11 sets out reconciliations of shares issued by the Group and held directly, indirectly or beneficially by Non-Executive Directors
and Executives of the Group, or by entities to which they were related.
Table 11: Shareholdings of Directors and Executives
Opening
Balance
Changes
During Year
Closing
Balance
J Paterson615,332-615,332
RM Freeman168,02415,556183,580
RP Dee-Bradbury14,66249715,159
CM Drummond13,27150,45063,721
JA Fahey1,242181,260
GR Liebelt527,708-527,708
DA Peever33,5761,13834,714
CM Walter377,89212,807390,699
PJ Williams49,756n/a-
GN Driver150,5278,598159,125
MJ Rowe8,9824,62513,607
AJB Porter185,36610,212195,578
Other Arrangements with Non-Executive Directors
Non-Executive Directors Craig Drummond, John Paterson and Catherine Walter have rented office space and, for John Paterson,
a parking space from the Group at commercial rates during the year. Sub-lease rental income (included in revenue) received or receivable,
including GST, by the Group during the year was:
Rental Income
Received/Receivable
$
C M Drummond12,147
J Paterson25,503
CM Walter12,256
D. Potential Clawback of Incentives
The Directors consider that the Incentive Plan allows for sufficient ‘clawback’ in the case of a material misstatement of the Group’s
financial statements or in any other case where the Board considers that such remuneration would be an ‘inappropriate benefit’.
The Directors, in their absolute discretion, may take such clawback actions as they deem necessary or appropriate to address
the events that give rise to an ‘inappropriate benefit’. Such actions may include:
1. cancelling or requiring the forfeiture of some or all of the Executive’s incentive payments;
2. adjusting the Executive’s future performance-based remuneration;
3. dismissing the Executive and/or initiating legal action; and/or
4. any other action the Directors consider appropriate.
The Directors are not required to show loss to the Company in order to determine that an ‘inappropriate benefit’ should be subject
to clawback.
E. Detailed Performance Measures by Investment Company
Table 12 shows the performance of AFIC and the other investment companies over the past five years, including details of investment
return and gross return (GR). These measures, which represent growth in shareholder wealth, are used in part to determine the vesting
of AFIC’s incentive plans to executives and the investment team.
Remuneration Report
continued
28
Australian Foundation Investment Company Limited Annual Report 2023

Table 12: Detailed Performance Measures for AFIC and the Other Investment Companies
Year Ending 30 June
10-year
Return
5-year
Return
3-year
Return 20232022202120202019
Comparative Returns
S&P/ASX 200 Accumulation Return8.56%7.16%11.12%14.78%-6.47%27.80%-7.7%11.6%
Modified S&P/ASX 200 Accumulation*8.24%7.16%10.03%12.59%-6.47%21.71%--
Gross S&P/ASX 200 Accumulation Return10.12%8.63%12.63%16.64%-5.12%29.12%-6.6%13.4%
Modified Gross S&P/
ASX 200 Accumulation Return*9.33%8.29%11.09%13.90%-5.12%22.64%--
Combined S&P/ASX Midcap 50 and Small
Ordinaries Accumulation Return (used for
Mirrabooka Investments Limited)9.70%5.55%9.36%13.21%-14.06%34.42%-2.6%2.8%
Gross Combined S&P/ASX Midcap 50
and Small Ordinaries Accumulation Return
(used for Mirrabooka Investments Limited)10.63%6.35%10.12%14.19%-13.52%35.22%-1.9%3.8%
Yield on S&P/ASX 200 grossed
up for franking creditsn/an/an/a5.6%5.1%2.9%5.8%5.2%
Australian Foundation Investment Company Limited
Mercer reward/riskn/a22nd/108n/an/an/an/an/an/a
Growth in earnings per sharen/a1.3%8.1%7.7%42.9%-18.0%-34.5%11.8%
Management expense ration/an/an/a0.14%0.16%0.14%0.13%0.13%
Gross return9.34%8.61%11.89%13.91%-6.78%31.92%-3.1%11.4%
Investment return8.07%7.52%10.95%12.81%-7.08%30.28%-4.1%9.8%
Djerriwarrh Investments Limited
Growth in net operating result per sharen/an/a8.0%5.8%30.9%-4.5%-26.0%3.7%
Management expense ration/an/an/a0.40%0.45%0.45%0.45%0.43%
Gross return7.78%5.98%11.43%14.20%-6.51%29.58%-11.5%9.1%
Investment return6.33%5.20%10.27%13.60%-6.21%25.83%-10.0%6.8%
Gross yield on NTA at end of June n/an/an/a6.8%6.5%4.7%5.6%8.6%
Mirrabooka Investments Limited
Management expense ration/an/an/a0.59%0.46%0.50%0.63%0.61%
Gross return12.38%9.80%12.09%17.91%-20.87%50.92%7.1%5.9%
Investment return12.05%9.79%12.72%18.08%-19.04%49.80%6.3%4.8%
AMCIL Limited
Management expense ration/an/an/a0.66%0.52%0.56%0.66%0.72%
Gross return9.46%8.09%8.61%13.46%-14.31%31.76%7.6%7.0%
Investment return9.38%8.46%9.78%12.42%-12.40%34.36%7.2%5.8%
* Used for Djerriwarrh Investments Limited.
29
Australian Foundation Investment Company Limited Annual Report 2023

Non-audit Services
Details of non-audit services performed by the auditors may be found in Note F2 of the Financial Report.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity
of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in the Corporations Act 2001
including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Company,
acting as advocate for the Company, or jointly sharing economic risk and rewards.
A copy of the Auditor’s Independence Declaration is set out on page 31.
This report is made in accordance with a resolution of the Directors.
John Paterson
Chairman
26 July 2023
30
Australian Foundation Investment Company Limited Annual Report 2023

Auditor’s Independence Declaration
31
Australian Foundation Investment Company Limited Annual Report 2023

32 FINANCIAL
STATEMENTS
33 Consolidated Income Statement
34 Consolidated Statement of
Comprehensive Income
35 Consolidated Balance Sheet
36 Consolidated Statement of
Changes in Equity
38 Consolidated Cash
Flow Statement

39 NOTES TO
THE FINANCIAL
STATEMENTS
39 A. Understanding AFIC’s
Financial Performance
39 A1. How AFIC Manages
its Capital
39 A2. Investments Held and How
They Are Measured
40 A3. Operating Income
41 A4. Dividends Paid
42 A5. Earnings Per Share
43 B. Costs, Tax and Risk
43 B1. Management Costs
43 B2. Tax
44 B3. Risk
46 C. Unrecognised Items
46 C1. Contingencies
47 D. Balance Sheet
Reconciliations
47 D1. Current Assets – Cash
47 D2. Credit Facilities
47 D3. Revaluation Reserve
48 D4. Realised Capital
Gains Reserve
48 D5. Retained Profits
48 D6. Share Capital
49 E. Income Statement
Reconciliations
49 E1. Reconciliation of Net Cash
Flows From Operating
Activities to Profit
49 E2. Tax Reconciliations
50 F. Further Information
50 F1. Related Parties
50 F2. Remuneration of Auditors
51 F3. Segment Reporting
51 F4. Summary of Other
Accounting Policies
53 F5. Performance Bond
53 F6. Share Incentive
Arrangements
54 F7. Principles of Consolidation
54 F8. Subsidiaries
55 F9. Lease Commitments
55 F10. Parent Entity
Financial Information
32
Australian Foundation Investment Company Limited Annual Report 2023
FINANCIAL STATEMENTS

Consolidated Income Statement
For the Year Ended 30 June 2023
Note
2023
$’000
2022
$’000
Dividends and distributionsA3334,740388,492
Interest income from depositsA33,71461
Other revenueA35,5534,871
Total revenue344,007393,424
Net gains/(losses) on trading portfolioA36,000629
Income from operating activities 350,007394,053
Finance costs(1,265)(845)
Administration expensesB1(17,987)(19,165)
Profit before income tax expense330,755374,043
Income tax expenseB2, E2(20,544)(13,486)
Profit for the year310,211360,557
Profit is attributable to:
Equity holders of Australian Foundation Investment Company Ltd309,763360,537
Minority interest44820
310,211360,557
CentsCents
Basic earnings per shareA525.0629.40
This Income Statement should be read in conjunction with the accompanying notes.
33
Australian Foundation Investment Company Limited Annual Report 2023

Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2023
Year to 30 June 2023Year to 30 June 2022
Revenue
1

$’000
Capital
1

$’000
Total
$’000
Revenue
1

$’000
Capital
1

$’000
Total
$’000
Profit for the year310,211-310,211360,557-360,557
Other comprehensive income
Items that will not be recycled through
the Income Statement
Gains/(losses) for the period -697,758697,758-(1,008,188)(1,008,188)
Tax on above-(210,319)(210,319)-300,219300,219
Total other comprehensive income-487,439487,439-(707,969)(707,969)
Total comprehensive income 310,211487,439797,650360,557(707,969)(347,412)
1. ‘Capital’ includes realised or unrealised gains or losses (and the tax on those) on securities in the investment portfolio. Income in the form of distributions
and dividends is recorded as ‘Revenue’. All other items, including expenses, are included in Profit for the year, which is categorised under ‘Revenue’.
Total comprehensive income is attributable to:
Year to 30 June 2023Year to 30 June 2022
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
$’000
Capital
$’000
Total
$’000
Equity holders of Australian
Foundation Investment Company 309,763487,439797,202360,537(707,969)(347,432)
Minority Interests448-44820-20
310,211487,439797,650360,557(707,969)(347,412)
This Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
34
Australian Foundation Investment Company Limited Annual Report 2023

Consolidated Balance Sheet
As at 30 June 2023
Note
2023
$’000
2022
$’000
Current assets
Cash D1165,385144,619
Receivables44,70936,598
Trading portfolio3,8374,979
Total current assets213,931186,196
Non-current assets
Investment portfolioA28,749,2268,082,513
Total non-current assets8,749,2268,082,513
Total assets8,963,1578,268,709
Current liabilities
Payables1,26828,688
Borrowings – bank debt10,00010,000
Tax payable32,15662,567
Provisions6,0576,114
Total current liabilities49,481107,369
Non-current liabilities
Provisions90896
Deferred tax liabilities – other830503
Deferred tax liabilities – investment portfolioB21,355,2001,169,452
Total non-current liabilities1,356,1201,170,851
Total liabilities1,405,6011,278,220
Net assets7,557,5566,990,489
Shareholders’ equity
Share capitalA1, D63,136,2823,070,163
Revaluation reserveA1, D32,926,1912,556,466
Realised capital gains reserveA1, D4509,741510,503
General reserveA123,63723,637
Retained profitsA1, D5960,171828,634
Parent entity interest7,556,0226,989,403
Minority interest1,5341,086
Total equity7,557,5566,990,489
This Balance Sheet should be read in conjunction with the accompanying notes.
35
Australian Foundation Investment Company Limited Annual Report 2023

Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Year Ended 30 June 2023Note
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 year3,070,1632,556,466510,50323,637828,6346,989,4031,0866,990,489
Dividends paid to shareholdersA4--(118,476)-(178,226)(296,702)-(296,702)
Dividend Reinvestment PlanD666,268----66,268-66,268
Other share capital adjustments(149)----(149)-(149)
Total transactions with shareholders66,119-(118,476)-(178,226)(230,583)-(230,583)
Profit for the year--
--309,763309,763448310,211
Other comprehensive income (net of tax)
Net gains for the period-487,439
---487,439-487,439
Other comprehensive income for the year-487,439---487,439-487,439
Transfer to realised capital gains of cumulative gains on investments sold-(117,714)117,714-----
Total equity at the end of the year3,136,2822,926,191509,74123,637960,1717,556,0221,5347,557,556
Year Ended 30 June 2022Note
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 year3,007,7303,394,297416,07123,637716,2217,557,9561,0667,559,022
Dividends paid to shareholdersA4--(35,430)-(248,124)(283,554)-(283,554)
Dividend Reinvestment PlanD662,584----62,584-62,584
Other share capital adjustments(151)----(151)-(151)
Total transactions with shareholders62,433-(35,430)-(248,124)(221,121)-(221,121)
Profit for the year----360,537360,53720360,557
Other comprehensive income (net of tax)
Net losses for the period-(707,969)
---(707,969)-(707,969)
Other comprehensive income for the year-(707,969)---(707,969)-(707,969)
Transfer to realised capital gains of cumulative gains on investments sold-(129,862)129,862-----
Total equity at the end of the year3,070,1632,556,466510,50323,637828,6346,989,4031,0866,990,489
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
36
Australian Foundation Investment Company Limited Annual Report 2023

Year Ended 30 June 2023Note
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 year3,070,1632,556,466510,50323,637828,6346,989,4031,0866,990,489
Dividends paid to shareholdersA4--(118,476)-(178,226)(296,702)-(296,702)
Dividend Reinvestment PlanD666,268----66,268-66,268
Other share capital adjustments(149)----(149)-(149)
Total transactions with shareholders66,119-(118,476)-(178,226)(230,583)-(230,583)
Profit for the year--
--309,763309,763448310,211
Other comprehensive income (net of tax)
Net gains for the period-487,439
---487,439-487,439
Other comprehensive income for the year-487,439---487,439-487,439
Transfer to realised capital gains of cumulative gains on investments sold-(117,714)117,714-----
Total equity at the end of the year3,136,2822,926,191509,74123,637960,1717,556,0221,5347,557,556
Year Ended 30 June 2022Note
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 year3,007,7303,394,297416,07123,637716,2217,557,9561,0667,559,022
Dividends paid to shareholdersA4--(35,430)-(248,124)(283,554)-(283,554)
Dividend Reinvestment PlanD662,584----62,584-62,584
Other share capital adjustments(151)----(151)-(151)
Total transactions with shareholders62,433-(35,430)-(248,124)(221,121)-(221,121)
Profit for the year----360,537360,53720360,557
Other comprehensive income (net of tax)
Net losses for the period-(707,969)
---(707,969)-(707,969)
Other comprehensive income for the year-(707,969)---(707,969)-(707,969)
Transfer to realised capital gains of cumulative gains on investments sold-(129,862)129,862-----
Total equity at the end of the year3,070,1632,556,466510,50323,637828,6346,989,4031,0866,990,489
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
37
Australian Foundation Investment Company Limited Annual Report 2023

Consolidated Cash Flow Statement
For the Year Ended 30 June 2023
Note
2023
$’000
Inflows/
(Outflows)
2022
$’000
Inflows/
(Outflow)
Cash flows from operating activities
Sales from trading portfolio 20,04220,888
Purchases for trading portfolio (5,178)(1,860)
Interest received3,71461
Dividends and distributions received320,485287,431
339,063306,520
Other revenue5,8774,962
Administration expenses(18,909)(18,383)
Finance costs paid(1,265)(845)
Taxes paid(7,083)(14,489)
Net cash inflow/(outflow) from operating activitiesE1317,683277,765
Cash flows from investing activities
Sales from investment portfolio491,219657,117
Purchases for investment portfolio (490,993)(662,366)
Taxes paid on sales from investment portfolio(66,560)(13,945)
Net cash inflow/(outflow) from investing activities(66,334)(19,194)
Cash flows from financing activities
Net bank borrowings-10,000
Share issue transaction costs(149)(151)
Dividends paid(230,434)(220,923)
Net cash inflow/(outflow) from financing activities(230,583)(211,074)
Net increase/(decrease) in cash held20,76647,497
Cash at the beginning of the year144,61997,122
Cash at the end of the yearD1165,385144,619
For the purpose of the Cash Flow Statement, ‘cash’ includes cash and deposits held at call.
This Cash Flow Statement should be read in conjunction with the accompanying notes.
38
Australian Foundation Investment Company Limited Annual Report 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A. Understanding AFIC’s Financial Performance
A1. How AFIC Manages its Capital
AFIC’s objective is to provide shareholders with attractive investment returns through access to a growing stream of fully franked
dividends and enhancement of capital invested.
AFIC recognises that its capital will fluctuate with market conditions. In order to manage those fluctuations, the Board may adjust
the amount of dividends paid, issue new shares, buy back the Company’s shares or sell assets.
AFIC’s capital consists of its shareholders’ equity plus any net borrowings. A summary of the balances in equity is provided below:
2023
$’000
2022
$’000
Share capital3,136,2823,070,163
Revaluation reserve2,926,1912,556,466
Realised capital gains reserve509,741510,503
General reserve23,63723,637
Retained profits960,171828,634
7,556,0226,989,403
Refer to Notes D3–D6 for a reconciliation of movement from period to period for each equity account (except the general reserve, which
is historical, relates to past profits which can be distributed and has had no movement).
A2. Investments Held and How They Are Measured
AFIC has two portfolios of securities: the investment portfolio and the trading portfolio.
The investment portfolio holds securities which the Company intends to retain on a long term basis, and includes a small sub-component
over which options may be written and an additional small sub-component of international (i.e. non-Australian/New Zealand listed stocks).
The trading portfolio consist of securities that are held for short term trading only, including call option contracts written over securities
that are held in the specific sub-component of the investment portfolio and on occasion put options and is relatively small in size.
The Board has therefore focused the information in this section on the investment portfolio. Details of all holdings (except for the specific
option holdings) as at the end of the reporting period can be found at the end of the Annual Report.
The balance and composition of the investment portfolio (all at market value) was:
2023
$’000
2022
$’000
Equity instruments (excluding below) 7,834,3137,492,259
Equity instruments (over which options may be written)799,527501,059
Equity instruments (listed on non-Australian/NZ Exchanges)115,38689,195
8,749,2268,082,513
How Investments Are Shown in the Financial Statements
The accounting standards set out the following hierarchy for fair value measurement:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices, which can be observed either directly (as prices) or indirectly (derived from prices).
Level 3: Inputs for the asset or liabilities that are not based on observable market data.
All financial instruments held by AFIC are classified as Level 1 (other than the options sold by the Company which are Level 2).
Their fair values are initially measured at the costs of acquisition and then remeasured based on quoted market prices at the end
of the reporting period.
39
Australian Foundation Investment Company Limited Annual Report 2023

Notes to the Consolidated Financial Statements
continued
Net Tangible Asset Backing Per Share
The Board regularly reviews the net asset backing per share both before and after provision for deferred tax on the unrealised gains
in AFIC’s long term investment portfolio. Deferred tax is calculated as set out in note B2. The relevant amounts as at 30 June 2023
and 30 June 2022 were as follows:
30 June 2023
$
30 June 2022
$
Net tangible asset backing per share
Before tax7.196.63
After tax6.095.68
Equity Investments
The shares in the investment portfolio are designated under the accounting standards as financial assets measured at fair value through
‘other comprehensive income’ (OCI), because they are equity instruments held for long term capital growth and dividend income, rather
than to make a profit from their sale. This means that changes in the value of these shares during the reporting period are included in OCI
in the Consolidated Statement of Comprehensive Income. The cumulative change in value of the shares over time is then recorded in the
revaluation reserve. On disposal, the amounts recorded in the revaluation reserve are transferred to the realisation reserve.
Securities Sold and How They Are Measured
Where securities are sold from the investment portfolio, any difference between the sale price and the cost is transferred from the
revaluation reserve to the realisation reserve and the amounts noted in the Consolidated Statement of Changes in Equity. This means the
Company is able to identify the realised gains out of which it can pay a ‘Listed Investment Company’ (LIC) gain as part of the dividend,
which conveys certain taxation benefits to many of AFIC’s shareholders.
During the period $538.7 million (2022: $729.0 million) of equity securities were sold. The cumulative gain on the sale of securities
was $117.7 million for the period after tax (2022: $129.9 million). This has been transferred from the revaluation reserve to the realisation
reserve (see Consolidated Statement of Changes in Equity). These sales were accounted for at the date of trade.
A3. Operating Income
The total income received from AFIC’s investments in 2023 is set out below.
Dividends and Distributions
2023
$’000
2022
$’000
Income from securities held in investment portfolio at 30 June328,188383,115
Income from investment securities sold during the year6,5525,166
Income from securities held in trading portfolio at 30 June-211
Income from trading securities sold during the year--
334,740388,492
Interest income
Revenue from deposits and cash management trusts3,71461
Other revenue
Administration fees5,5534,871
Dividend Income
Distributions from listed securities are recognised as income when those securities are quoted in the market on an ex-distribution basis.
Capital returns on ordinary shares are treated as an adjustment to the carrying value of the shares.
40
Australian Foundation Investment Company Limited Annual Report 2023

Trading Income
Net gains on the trading and options portfolio are set out below.
Net Gains
2023
$’000
2022
$’000
Net realised gains/(losses) from trading portfolio – shares48224
– options4,5421,008
Unrealised gains/(losses) from trading portfolio – shares1,010(641)
– options40038
6,000629
$145.3 million of shares are lodged with the ASX Clear Pty Ltd as collateral for sold option positions written by the Group
(2022: $131.6 million). These shares are lodged with ASX Clear under the terms of ASX Clear Pty Ltd which require participants in
the Exchange Traded Option market to lodge collateral, and are recorded as part of the Group’s Investment Portfolio. If all call options
were exercised, this would lead to the sale of $155.8 million worth of securities at an agreed price – the ‘exposure’ (2022: $21.4 million).
There were no put options in the portfolio at 30 June 2023 (2022: $nil).
A4. Dividends Paid
The dividends paid and payable for the year ended 30 June 2023 are shown below:
2023
$’000
2022
$’000
(a) Dividends Paid During the Year
Final dividend for the year ended 30 June 2022 of 14 cents fully franked at 30 per cent
paid 30 August 2022 (2022: 14 cents fully franked at 30 per cent paid on 31 August 2021).165,866165,339
Interim dividend for the year ended 30 June 2023 of 11 cents per share fully franked at 30 per
cent paid 24 February 2023 (2022: 10 cents fully franked at 30 per cent paid 25 February 2022)130,836118,215
296,702283,554
Dividends paid in cash230,434220,970
Dividends reinvested in shares66,26862,584
296,702283,554
Dividends forgone via DSSP11,4009,767
(b) Franking Credits
Opening balance of franking account at 1 July197,933158,009
Franking credits on dividends received109,312138,158
Tax paid during the year73,51227,561
Franking credits paid on ordinary dividends paid(127,158)(121,523)
Franking credits deducted on DSSP shares issued(4,887)(4,272)
Closing balance of franking account248,712197,933
Adjustments for tax payable in respect of the current year’s profits and the receipt
of dividends recognised as receivables41,36469,967
Adjusted closing balance290,076267,900
Impact on the franking account of dividends declared but not recognised as a liability
at the end of the financial year:(74,421)(73,794)
Net available215,655194,106
These franking account balances would allow AFIC to frank additional dividend payments
up to an amount of:503,195452,914
AFIC’s ability to continue to pay franked dividends is dependent upon the receipt of franked dividends from the trading and investment
portfolios and on AFIC paying tax.
41
Australian Foundation Investment Company Limited Annual Report 2023

2023
$’000
2022
$’000
(c) New Zealand Imputation Account
(Figures in A$ at year-end exchange rate: 2023: $NZ1.085:$A1; 2022: $NZ1.073:$A1)
Opening balance18,89813,261
Imputation credits on dividends received6,9705,848
Imputation credits on dividends paid(15,429)-
Closing balance10,43919,109
A NZ imputation credit on NZ 3.5 cents of the dividend was attached to the final dividend paid
on 30 August 2022. There is no NZ imputation credit attached to the proposed final dividend
for the year ended 30 June 2023.
(d) Dividends Declared After Balance Date
Since the end of the year Directors have declared a final dividend of 14 cents per share fully
franked at 30 per cent. The aggregate amount of the final dividend for the year to 30 June 2023 to
be paid on 1 September 2023, but not recognised as a liability at the end of the financial year is:173,649
(e) Listed Investment Company Capital Gain Account
Balance of the Listed Investment Company (LIC) capital gain account at 1 July:158,61943,793
Capital gains (including LIC gains received from dividends)52,670150,256
LIC gains paid as part of dividend(118,476)(35,430)
Balance at 30 June92,813158,619
This equates to an attributable gain of:132,590226,599
Distributed LIC capital gains may entitle certain shareholders to a deduction in their tax return, as set out in the dividend statement.
LIC capital gains available for distribution are dependent on the disposal of investment portfolio holdings that qualify for LIC capital
gains, or the receipt of LIC distributions from LIC securities held in the portfolios. $124.0 million attributable gain is attached to the final
dividend to be paid on 1 September 2023.
A5. Earnings Per Share
The table below shows the earnings per share based on the profit for the year:
Basic Earnings Per Share
2023
Number
2022
Number
Weighted average number of ordinary shares used as the denominator1,236,299,8221,226,476,015
$’000$’000
Profit for the year 309,763360,537
Cents Cents
Basic earnings per share25.0629.40
Excluding the Woodside/BHP Petroleum merger dividend for the year ended 30 June 2022, the basic earnings per share figure was
23.3 cents.
Notes to the Consolidated Financial Statements
continued
42
Australian Foundation Investment Company Limited Annual Report 2023

B. Costs, Tax and Risk
B1. Management Costs
The total management expenses for the period are as follows:
2023
$’000
2022
$’000
Rental expense relating to non-cancellable leases (648)(760)
Employee benefit expenses (11,093)(12,819)
Depreciation charge--
Other administration expenses(6,246)(5,586)
(17,987)(19,165)
Employee Benefit Expenses
A major component of employee benefit expenses is Directors’ and Executives’ remuneration. This has been summarised below:
Short Term
Benefits
$
Post-
employment
Benefits
$
Share-based
Payments
$
Total
$
2023
Non-Executive Directors 801,82849,042-850,870
Executives3,595,245110,000-3,705,245
Total4,397,073159,042-4,556,115
2022
Non-Executive Directors843,18256,818-900,000
Executives3,208,522110,000531,2753,849,797
Total4,051,704166,818531,2754,749,797
Detailed remuneration disclosures are provided in the Remuneration Report.
The Group (i.e. AFIC and its subsidiary, Australian Investment Company Services Ltd (AICS) – see Note F8) does not make loans
to Directors or Executives.
B2. Tax
AFIC’s tax position, and how it accounts for tax, is explained here. Detailed reconciliations of tax accounting to the financial statements
can be found in Note E2.
The income tax expense for the period is the tax payable on this financial year’s taxable income, adjusted for any changes in deferred
tax assets and liabilities attributable to temporary differences and for any unused tax losses. Deferred tax assets and liabilities (except
for those related to the unrealised gains or losses in the investment portfolio) are offset, as all current and deferred taxes relate to the
Australian Taxation Office and can legally be settled on a net basis.
A provision has been made for taxes on any unrealised gains or losses on securities valued at fair value through the Income Statement
– i.e. the trading portfolio, puttable instruments and convertible notes that are classified as debt.
A provision also has to be made for any taxes that could arise on sale of securities in the investment portfolio, even though there is
no intention to dispose of them. Where AFIC disposes of such securities, tax is calculated according to the particular parcels allocated
to the sale for tax purposes, offset against any capital losses carried forward.
43
Australian Foundation Investment Company Limited Annual Report 2023

Tax Expense
The income tax expense for the period is shown below:
(a) Reconciliation of Income Tax Expense to Prima Facie Tax Payable
2023
$’000
2022
$’000
Profit before income tax expense 330,755374,073
Tax at the Australian tax rate of 30 per cent (2022: 30 per cent)99,226112,222
Tax offset for franked dividends received(76,518)(96,709)
Sundry items whose tax treatment differs from accounting treatment(665)(403)
22,04315,110
Over provision in prior years(1,499)(1,624)
Total tax expense20,54413,486
Deferred Tax Liabilities – Investment Portfolio
The accounting standards require us to recognise a deferred tax liability for the potential capital gains tax on the unrealised gain in the
investment portfolio. This amount is shown in the Balance Sheet. However, the Board does not intend to sell the investment portfolio,
so this tax liability is unlikely to arise at this amount. Any sale of securities would also be affected by any changes in capital gains tax
legislation or tax rate applicable to such gains when they are sold.
2023
$’000
2022
$’000
Deferred tax liabilities on unrealised gains in the investment portfolio1,355,2001,169,452
Opening balance at 1 July1,169,4521,536,231
Tax on realised gains(24,571)(66,560)
Charged to OCI for ordinary securities on gains or losses for the period210,319(300,219)
1,355,2001,169,452
B3. Risk
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
As a Listed Investment Company that invests in tradeable securities, AFIC can never be free of market risk as it invests its capital
in securities which are not risk free – the market price of these securities will fluctuate.
A general fall in market prices of 5 per cent and 10 per cent, if spread equally over all assets in the investment portfolio, would
have led to a reduction in AFIC’s comprehensive income of $306.2 million and $612.4 million respectively, at a tax rate of 30 per cent
(2022: $282.9 million and $565.8 million).
AFIC seeks to reduce market risk at the investment portfolio level by ensuring that it is not, in the opinion of the Investment Committee,
overly exposed to one company or one particular sector of the market. The relative weightings of the individual securities and the
relevant market sectors are reviewed by the Investment Committee and risk can be managed by reducing exposure where necessary.
AFIC does not have a minimum or maximum amount of the portfolio that can be invested in a single company or sector.
Notes to the Consolidated Financial Statements
continued
44
Australian Foundation Investment Company Limited Annual Report 2023

AFIC’s total investment exposure by sector is as below:
2023
%
2022
%
Energy3.413.26
Materials15.4614.29
Industrials12.5812.68
Consumer Discretionary7.417.07
Consumer Staples 5.425.19
Banks 18.4218.36
Other Financials 9.009.14
Real Estate3.442.97
Telecommunications6.255.87
Healthcare14.0014.77
Information Technology2.734.61
Utilities0.030.03
Cash1.851.76
Securities representing over 5 per cent of the investment portfolio at 30 June were
BHP9.17.1
Commonwealth Bank8.98.8
CSL7.77.9
Transurban4.45.1
AFIC is also not directly exposed to material currency risk as most of its investments are quoted in Australian dollars. The international
portfolio is a minor (1.3 per cent) part of the total portfolio (2022: 1.1 per cent).
The writing of call options provides some protection against a fall in market prices as it generates income to partially compensate
for a fall in capital values. Options are only written against securities that are held in the trading or the specific sub-section of the
investment portfolio.
Interest Rate Risk
The Group is not currently materially exposed to interest rate risk as all its cash investments and borrowings are short term for a fixed
interest rate.
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. AFIC is exposed to credit risk from cash, receivables, securities in the trading portfolio and securities in the investment
portfolio respectively. None of these assets are overdue. The risk in relation to each of these items is set out below.
Cash
All cash investments not held in a transactional account (including with a custodian) are invested in short term deposits with Australia’s
‘big four’ commercial banks or in cash management trusts which invest predominantly in short term securities with an A1+ rating. In the
unlikely event of a bank default or default on the underlying securities in the cash trust, there is a risk of losing the cash deposits and
any accrued unpaid interest.
Receivables
Outstanding settlements are on the terms operating in the securities industry, which usually require settlement within two days of the
date of a transaction. Receivables are non-interest bearing and unsecured. In the event of a payment default, there is a risk of losing any
difference between the price of the securities sold and the price of the recovered securities from the discontinued sale. Receivables also
include dividends from securities that have passed the record date for the distribution but have not paid as at balance date.
Trading and Investment Portfolios
Converting and convertible notes or other interest-bearing securities that are not equity securities carry credit risk to the extent of
their carrying value. This risk will be realised in the event of a shortfall on winding-up of the issuing companies. As at 30 June 2023,
no such investments are held (2022: nil). AFIC engages a custodian, Northern Trust, to hold the shares that are in the sub-component
of the investment portfolio that contains international shares. AFIC receives a GS007 report on Internal Controls for Custody,
Investment Administration, Registry Monitoring and Related Information Technology Services from Northern Trust every six months.
45
Australian Foundation Investment Company Limited Annual Report 2023

Liquidity Risk
Liquidity risk is the risk that an entity will not be able to meet its financial liabilities.
AFIC monitors its cash flow requirements daily. The Investment Committee also monitors the level of contingent payments on a regular
basis by reference to known sales and purchases of securities, dividends and distributions to be paid or received; put options that may
require AFIC to purchase securities; and facilities that need to be repaid. AFIC ensures that it has either cash or access to short term
borrowing facilities sufficient to meet these contingent payments.
AFIC’s inward cash flows depend upon the dividends received. Should these drop by a material amount, AFIC would amend its outward
cash flows accordingly. AFIC’s major cash outflows are the purchase of securities and dividends paid to shareholders, and both of these
can be adjusted by the Board and management. Furthermore, the assets of AFIC are largely in the form of readily tradeable securities
which can be sold on-market if necessary.
The table below analyses AFIC’s financial liabilities into relevant maturity groupings. The amounts disclosed in the table are the contractual
undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.
30 June 2023
Less Than
6 Months
$’000
6–12 Months
$’000
Greater
Than 1 Year
$’000
Total
Contractual
Cash Flows
$’000
Carrying
Amount
$’000
Non-derivatives
Payables1,268--1,2681,268
Borrowings10,000--10,00010,000
11,268--11,26811,268
Derivatives
Options in trading portfolio*-----
-----
30 June 2022
Less Than
6 months
$’000
6 –12 Months
$’000
Greater
Than 1 Year
$’000
Total
Contractual
Cash Flows
$’000
Carrying
Amount
$’000
Non-derivatives
Payables28,688--28,68828,688
Borrowings10,000--10,00010,000
38,688--38,68838,688
Derivatives
Options in trading portfolio*-----
-----
* In the case of call options, there are no contractual cash flows as if the option is exercised the contract will be settled in the securities over which the
option is written. The contractual cash flows for put options written are the cash sums the Company will pay to acquire securities over which the options
have been written, and it is assumed for the purpose of the above disclosure that all options will be exercised (i.e. maximum cash outflow). There were
no put options outstanding at 30 June 2023 or 30 June 2022.
C. Unrecognised Items
C1. Contingencies
Directors are not aware of any material contingent liabilities or contingent assets other than those already disclosed elsewhere
in the financial report.
Notes to the Consolidated Financial Statements
continued
46
Australian Foundation Investment Company Limited Annual Report 2023

Further information that shareholder may find useful is included here. It is grouped into three sections:
D. Balance Sheet Reconciliations
E. Income Statement Reconciliations
F. Further Information
D. Balance Sheet Reconciliations
These notes provide further information about the basis of calculation of line items in the financial statements.
D1. Current Assets – Cash
2023
$’000
2022
$’000
Cash at bank 755747
Cash with custodian4,3595,660
Cash Management Trusts 160,271138,212
165,385144,619
Cash holdings yielded an average floating interest rate of 2.97 per cent (2022: 0.08 per cent). All cash investments are held in a
transactional account, with a custodian or in an overnight ‘at call’ account invested in cash management trusts which invest
predominantly in short term securities with an A1+ rating.
D2. Credit Facilities
2023
$’000
2022
$’000
Commonwealth Bank of Australia – cash advance facility 110,000110,000
Amount drawn down at 30 June00
Undrawn facilities at 30 June110,000110,000
National Australia Bank – cash advance facility 20,00020,000
Amount drawn down at 30 June10,00010,000
Undrawn facilities at 30 June10,00010,000
Total short term loan facilities130,000130,000
Total drawn down at 30 June10,00010,000
Total undrawn facilities at 30 June120,000120,000
The above borrowings, with the exception of the NAB facility, are unsecured. Repayment of facilities is done either through the use of
cash received from distributions or the sale of securities, or by rolling existing facilities into new ones. Facilities are usually drawn down
for no more than three months and hence are classified as current liabilities when drawn.
The debt facility with National Australia Bank is structured in the form of a securities lending arrangement. The terms of the agreement
require that securities be pledged as collateral for the drawn secured borrowings under that facility and that such securities currently
satisfy a minimum value of $11 million (110 per cent of the total drawn facility). These securities are held by the National Australia Bank
but included as part of the Company’s investment portfolio. As at 30 June 2023 the market value of the securities pledged as collateral
was $14.6 million (2022: $12.2 million).
D3. Revaluation Reserve
2023
$’000
2022
$’000
Opening balance at 1 July2,556,4663,394,297
Gains/(losses) on investment portfolio
– Equity Instruments697,758(1,008,188)
Provision for tax on above(210,319)300,219
Cumulative taxable realised (gains)/losses (net of tax)(117,714)(129,862)
2,926,1912,556,466
This reserve is used to record increments and decrements on the revaluation of the investment portfolio as described in accounting
policy Note A2.
47
Australian Foundation Investment Company Limited Annual Report 2023

D4. Realised Capital Gains Reserve
2023
$’000
2022
$’000
Opening balance at 1 July510,503416,071
Dividends paid(118,476)(35,430)
Cumulative taxable realised gains/(losses)(net of tax)117,714129,862
509,741510,503
This reserve records gains or losses after applicable taxation arising from disposal of securities in the investment portfolio as described
in Note A2.
D5. Retained Profits
2023
$’000
2022
$’000
Opening balance at 1 July828,634716,221
Dividends paid(178,226)(248,124)
Profit for the year309,763360,537
960,171828,634
This reserve relates to past profits.
D6. Share Capital
Movements in Share Capital
DateDetailsNotes
Number
of Shares
’000
Issue
Price
$
Paid-up
Capital
$’000
1/07/2021Balance1,220,8373,007,730
31/08/2021Dividend Reinvestment Plani4,5078.1036,511
31/08/2021Dividend Substitution Share Planii6878.10n/a
25/02/2022Dividend Reinvestment Plani3,3177.8626,073
25/02/2022Dividend Substitution Share Planii5587.86n/a
VariousCosts of issue--(151)
30/06/2022Balance1,229,9063,070,163
30/08/2022Dividend Reinvestment Plani4,8837.5636,914
30/08/2022Dividend Substitution Share Planii8367.56n/a
24/02/2023Dividend Reinvestment Plani4,0277.2929,354
24/02/2023Dividend Substitution Share Planii6977.29n/a
VariousCosts of issue--(149)
30/06/2023Balance1,240,3493,136,282
i. Shareholders elect to have all or part of their dividend payment reinvested in new ordinary shares under the Dividend Reinvestment Plan (DRP). The price
of the new DRP shares is based on the average selling price of shares traded on the Australian Securities Exchange and Cboe in the five days after the
shares begin trading on an ex-dividend basis.
ii. The Group has a Dividend Substitution Share Plan (DSSP) whereby shareholders may elect to forgo a dividend and receive shares instead. Pricing for
the DSSP shares is done as per the DRP shares.
iii. The Group has an on-market share buy-back program. During the financial year, no shares were bought back (2022: nil).
All shares have been fully paid, rank pari passu and have no par value.
Notes to the Consolidated Financial Statements
continued
48
Australian Foundation Investment Company Limited Annual Report 2023

E. Income Statement Reconciliations
E1. Reconciliation of Net Cash Flows From Operating Activities to Profit
2023
$’000
2022
$’000
Profit for the year310,211360,557
Net decrease/(increase) in trading portfolio1,142(234)
Dividends received as securities under DRP investments(16)(74,888)
Decrease/(increase) in current receivables(8,111)3,413
– Less increase/(decrease) in receivables for investment portfolio3,223(9,875)
Increase/(decrease) in deferred tax liabilities186,075(366,217)
– Less (increase)/decrease in deferred tax liability on investment portfolio(185,748)366,779
Increase/(decrease) in current payables(27,420)27,668
– Less increase/(decrease) in dividends payable2(46)
– Less (increase)/decrease in payables for investment portfolio27,610(27,610)
Increase/(decrease) in provision for tax payable(30,411)49,946
Capital gains tax charge taken through equity(24,571)(66,560)
Prior year taxes paid relating to capital gains66,56013,945
Increase/(decrease) in other provisions/non-cash items (863)887
Net cash flows from operating activities317,683277,765
E2. Tax Reconciliations
Tax Expense Composition
2023
$’000
2022
$’000
Charge for tax payable relating to the current year21,71614,548
Over provision in prior years(1,499)(1,624)
Increase/(decrease) in deferred tax liabilities327562
20,54413,486
Amounts Recognised Directly Through Other Comprehensive Income
Net movement in deferred tax liabilities relating to capital gains tax
on the movement in gains/losses in the investment portfolio210,319(300,219)
210,319(300,219)
Deferred Tax Assets and Liabilities
The deferred tax balances are attributable to:
2023
$’000
2022
$’000
(a) Tax on unrealised gains or losses in the trading portfolio(423)(161)
(b) Provisions and expenses charged to the accounting profit which are not yet tax deductible1,9292,111
(c) Interest and dividend income receivable which is not assessable for tax until receipt(2,336)(2,453)
(830)(503)
Movements:
Opening balance at 1 July(503)59
Credited/(charged) to Income statement(327)(562)
(830)(503)
Deferred tax assets and liabilities arise when provisions and expenses have been charged but are not yet tax deductible. These assets
are realised when the relevant items become tax deductible, as long as enough taxable income has been generated to claim the assets
against, and as long as there are no changes to the tax legislation that affect AFIC’s ability to claim the deduction.
49
Australian Foundation Investment Company Limited Annual Report 2023

F. Further Information
This section covers information that is not directly related to specific line items in the financial statements, including information about
related party transactions, share-based payments, assets pledged as security and other statutory information.
F1. Related Parties
All transactions with deemed related parties were made on normal commercial terms and conditions and approved by independent Directors.
(a) Arrangements with Non-Executive Directors
Non-Executive Directors J Paterson, C Drummond and C Walter have rented office space and, for J Paterson, a parking space from
the Group at commercial rates during the year. Sub-lease rental income (included in revenue) received or receivable by the Group,
excluding GST, during the year was $45,369 (2022: $51,824).
(b) AICS Transactions With Minority Interests
The below transactions were with Djerriwarrh Investments Ltd as a minority interest holder in the Company’s subsidiary.
2023
$’000
2022
$’000
Administration expenses charged for the year2,4422,262
(c) AICS Transactions with Other Listed Investment Companies
AICS had the following transactions with other Listed Investment Companies to which it provides services:
2023
$’000
2022
$’000
Administration expenses charged for the year to Mirrabooka Investments Ltd2,0581,702
Administration expenses charged for the year to AMCIL Ltd1,2161,021
F2. Remuneration of Auditors
For the year the auditor earned or will earn the following remuneration:
2023
$
2022
$
PricewaterhouseCoopers
Audit services
Audit or review of financial reports 176,496163,106
Audit related Services
AFSL compliance audit and review9,0988,707
Permitted non-audit services
Review of realised CGT balances63,70251,728
Preparation and lodgement of tax returns35,86434,370
Assistance with ATO Combined Assurance Review-41,800
Total remuneration285,160299,711
Notes to the Consolidated Financial Statements
continued
50
Australian Foundation Investment Company Limited Annual Report 2023

F3. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting used by the chief operating decision-maker.
The Board, through its committees, has been identified as the chief operating decision-maker, as it is responsible for allocating resources
and assessing performance of the operating segments.
Description of Segments
The Board makes the strategic resource allocations for AFIC. AFIC has therefore determined the operating segments based on the reports
reviewed by the Board, which are used to make strategic decisions.
The Board is responsible for AFIC’s entire portfolio of investments and considers the business to have a single operating segment (noting
that the investment portfolio contains sub-components for ease of administration). The Board’s asset allocation decisions are based
on a single, integrated investment strategy, and AFIC’s performance is evaluated on an overall basis.
Segment Information Provided to the Board
The internal reporting provided to the Board for AFIC’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 AFIC’s Net Tangible Asset announcements to the ASX).
Other Segment Information
Revenues from external parties are derived from the receipt of dividend, distribution and interest income, and income arising on the
trading portfolio and realised income from the options portfolio.
AFIC is domiciled in Australia and most of AFIC’s income is derived from Australian entities or entities that maintain a listing in Australia.
AFIC has a diversified portfolio of investments, with only one investment comprising more than 10 per cent of AFIC’s income – BHP
17.3 per cent (2022: one investment: BHP (35.6 per cent including the Woodside/BHP Petroleum merger dividend)).
F4. Summary of Other Accounting Policies
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, Interpretations issued
by the Australian Accounting Standards Board and the Corporations Act 2001. This financial report has been authorised for issue on
26 July 2023 in accordance with a resolution of the Board and is presented in the Australian currency. The Directors of the Company
have the power to amend and reissue the financial report.
AFIC has attempted to improve the transparency of its reporting by adopting ‘plain English’ where possible. Key ‘plain English’ phrases
and their equivalent AASB terminology are as follows:
PhraseAASB Terminology
Market value
Fair value for actively traded securities
Cash
Cash and cash equivalents
Share capital
Contributed equity
Options
Derivatives written over equity instruments that are valued at fair value through profit or loss
HybridsEquity instruments that have some of the characteristics of debt
AFIC complies with International Financial Reporting Standards (IFRS). AFIC is a ‘for profit’ entity.
AFIC has not applied any Australian Accounting Standards or AASB Interpretations that have been issued as at balance date but are
not yet operative for the year ended 30 June 2023 (‘the inoperative standards’). The impact of the inoperative standards has been
assessed and the impact has been identified as not being material. AFIC only intends to adopt other inoperative standards at the date
at which their adoption becomes mandatory.
Basis of Accounting
The financial statements are prepared using the valuation methods described in Note A2. All other items have been treated
in accordance with the historical cost convention.
Fair Value of Financial Assets and Liabilities
The fair value of cash and non-interest bearing monetary financial assets and liabilities of AFIC approximates their carrying value.
51
Australian Foundation Investment Company Limited Annual Report 2023

Convertible Notes
On the issue of convertible notes, the Group estimates the fair value of the liability component of the convertible notes, being the
obligation to make future payments of principal and interest to holders, using a market interest rate for a non-convertible note of similar
terms and conditions. The residual amount is included in equity as other equity securities with no recognition of any change in the value
of the option in subsequent periods. The liability component is then included in borrowings. Expenses incurred in connection with the
issue of the notes are deducted from the total face value and the expense is then incurred over the life of the notes.
The total liability is subsequently carried on an amortised cost basis with interest on the notes recognised as finance costs on an effective
yield basis until the liability is extinguished on conversion or maturity of the notes. The Group had no convertible notes on issue for the
years ended 30 June 2023 or 30 June 2022.
Employee Benefits
(i) Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including annual leave, expected to be settled within 12 months of balance date are recognised as
current provisions in respect of employees’ services up to balance date and are measured at the amounts expected to be paid when
the liabilities are settled.
(ii) Long Service Leave
In calculating the value of long service leave, consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at balance date on national government
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
(iii) Cash Incentives
Cash incentives are provided under the Executive Incentive Plan and are dependent upon the performance of the Group. A provision
is made for the cost of unsettled cash incentives at balance date. The Investment Team Annual Incentive plans are also settled on
a cash basis.
(iv) Share Incentives
Share incentives are provided under the Executive Incentive Plan and the Employee Share Acquisition Scheme.
For the Employee Share Acquisition Scheme and the Executive Incentive Plan, the incentives are based on the performance of the
individual, the Group and investment companies to which the Group provides administration services, for the financial year and, in the
case of performance of the Group and other investment companies, longer term performance of up to 10 years. For the Employee Share
Acquisition Scheme and a portion of the Executive Incentive Plan, the recipient agrees to purchase (or have purchased for them) shares
on-market, but receives a cash amount. A provision for the amount payable under both the Executive Incentive Plan and the Investment
Team Incentive Plan is recognised on the Balance Sheet.
The Executive Long Term Incentive Plan was discontinued during the year and the Executive Incentive Plan was modified to take this
into account. No further awards will be made under the Executive Long Term Incentive Plan – the 2019/20, 2020/21 and 2021/22 Plans
have all been cancelled.
62,569 shares vested during the year in respect of the 2018/19 plan (2022: 45,680). No further shares are eligible for vesting.
Directors’ Retirement Allowances
The Group recognises as ‘amounts payable’ Directors’ retirement allowances that have been crystallised. No further amounts will be
expensed as retirement allowances.
Notes to the Consolidated Financial Statements
continued
52
Australian Foundation Investment Company Limited Annual Report 2023

Administration Fees
The Group currently provides administrative services to other Listed Investment Companies. The associated fees are recognised on an
accruals basis as income throughout the year. Any amounts outstanding at balance date are recognised as receivable, subject to the
assessment of recoverability by the Directors.
Operating Leases
The Group currently has an operating lease in respect of its premises. Payments made under operating leases are charged to the Income
Statement on a straight-line basis over the period of the lease.
Rounding of Amounts
AFIC is a company of the kind referred to in the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191,
relating to the ‘rounding off’ of amounts in the financial report. Amounts in the Financial Report have been rounded off in accordance
with that Instrument, to the nearest thousand dollars, or in certain cases, to the nearest dollar.
F5. Performance Bond
The Group’s subsidiary, AICS, has under the terms of its Australian Financial Services License in place a performance bond to the sum
of $20,000 underwritten by the Commonwealth Bank of Australia in favour of the Australian Securities and Investments Commission
(ASIC), payable on demand to ASIC.
F6. Share Incentive Arrangements
Share Incentive Arrangements
The Group has a number of share incentive arrangements. These are accounted for in accordance with Note F4. Where shares are
issued to employees of AICS, AICS compensates AFIC for the fair value of the shares.
(a) Executive Incentive Plans
The executives’ remuneration arrangements incorporate an ‘at risk’ component as set out in the remuneration report. Part of this
‘at risk’ component is paid in shares in the Group.
(i) Executive Incentive Plan
Each financial year, the Remuneration Committee sets the target (cash) amount of remuneration that could be paid should all performance
targets and measures be achieved. If all are achieved, 100 per cent of the remuneration will be awarded. If stretch levels of
performance are achieved above target, then higher amounts may be paid. On the other hand there is no set minimum that
will be paid regardless of performance.
The performance measures are a combination of the performance of the Group, the investment companies to which the Group provides
administration services, and personal objectives.
All of the incentive remuneration awarded is paid in cash, with 25 per cent of the pre-tax amount being used by the executive
to purchase shares in AFIC and/or the other LICs. All remuneration under the plan, is paid in the financial year following the year
of assessment.
The executive agrees to the shares being subject to being held for four years (holding term), during which they cannot be sold.
Dividends are paid to executives on these shares prior to the expiry of the holding term. Should an executive leave the Group before
the holding term expires, the restriction will be lifted.
37,897 shares for both the former Executive Long Term Incentive and former Annual Incentive Plans (2022: 27,429 shares) were purchased
by Executives in the year (in relation to the prior year) with a fair value (being the acquisition price) of $276,813 (2022: $220,476).
(ii) Executive Long Term Incentive Plan (Discontinued)
An amount of $798,000 was written back as a result of the discontinuation of the 2019/20, 2020/21 and 2021/22 Plans.
1,632 rights under the 2018/19 plan were forfeited during the year (2.5 per cent).
53
Australian Foundation Investment Company Limited Annual Report 2023

(b) Employee Share Acquisition Scheme (ESAS)
Under the current Employee Share Acquisition Scheme, each employee who is not a participant in the executive or investment team
incentive plans is awarded $5,000 per annum. After PAYG is deducted, $2,500 is used to buy shares in the Company, which needs
to be held for three years. After three years, or the departure of the employee from employment with the Group, the shares come out
of the holding lock.
In addition, each employee is eligible for an additional award of up to $5,000. 50% of the amount awarded is used to buy shares in one
of the other LICs that AICS provides services to. The amount that is awarded is dependent on the metrics used for the vesting of
the Investment Team’s Short Term Incentive (excluding personal measures). During the year, 58 per cent of the possible maximum was
awarded, and 50 per cent of this was used to buy shares in Mirrabooka Investments Limited, as part of the Group’s policy of rotating
these purchases amongst the LICs other than AFIC to which AICS provides services.
(c) Expenses Arising From Share-based Payment Transactions
Total expenses arising from share based payment transactions recognised during the period as part of the employee benefit expense
(excluding any reversals) were as follows:
2023
$’000
2022
$’000
Share-based payment expense (ESAS only in 2023)55 599
(d) Liability
The total liability arising from share-based payment transactions is included in the current and non-current liabilities for ‘provisions’.
F7. Principles of Consolidation
AFIC’s consolidated financial statements consist of the financial statements of AFIC, the parent, and its subsidiary, Australian Investment
Company Services Ltd (AICS). 25 per cent of AICS is owned by Djerriwarrh Investments Ltd, another investment company for which
AICS performs operational and investment administration services, and for which it is paid monthly.
No subsidiaries were acquired or disposed of during the year. Intercompany transactions and balances between AFIC and AICS are
eliminated on consolidation.
The financial information for the parent entity, disclosed in Note F10 below, has been prepared on the same basis as the consolidated
financial statements. All notes are for the Consolidated Group unless specifically noted otherwise.
F8. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of Entity
Country of
IncorporationClass of Shares
Equity Holding
20232022
Australian Investment Company Services LtdAustraliaOrdinary75%75%
The investment in AICS is accounted for at cost in the individual financial statements of AFIC.
Notes to the Consolidated Financial Statements
continued
54
Australian Foundation Investment Company Limited Annual Report 2023

F9. Lease Commitments
The Group has entered into a non-cancellable operating lease for the use of its premises for six years with effect from 1 July 2022
(prior year comparatives represent the former lease). Current commitments relating to leases at balance date, for the current lease
(including GST), is:
2023
$’000
2022
$’000
Due within one year534508
Later than one year but less than five2,4162,302
Greater than five years-648
2,9503,458
F10. Parent Entity Financial Information
Summary Financial Information
The individual financial statements for the parent entity show the following aggregate amounts:
2023
$’000
2022
$’000
Balance Sheet
Current assets203,360177,347
Total assets8,952,6458,257,705
Current liabilities43,607101,688
Total liabilities1,401,0701,271,402
Shareholders’ equity
Issued capital3,136,4323,070,313
Reserves
Revaluation reserve2,926,1912,556,466
Realised capital gains reserve509,741510,503
General reserve23,63723,637
Retained earnings955,574825,384
4,415,1433,915,990
Total shareholders’ equity7,551,5756,986,303
Profit or loss for the year308,418360,477
Total comprehensive income 795,857(347,492)
55
Australian Foundation Investment Company Limited Annual Report 2023

DIRECTORS’ DECLARATION
In the Directors’ opinion:
(1) the financial statements and notes set out on pages 33 to 55 are in accordance with the Corporations Act 2001 including:
(a) complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(b) giving a true and fair view of the entity’s financial position as at 30 June 2023 and of its performance for the financial year ended
on that date; and
(2) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Note F4 to the financial statements confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Directors.
This declaration has been made after receiving the declarations required to be made to the Directors by the Managing Director and
the Chief Financial Officer regarding the financial statements in accordance with Section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2023. The declarations received were that, in the opinion of the Managing Director and the Chief Financial
Officer to the best of their knowledge, the financial records of the Company have been properly maintained, that the financial statements
comply with accounting standards and that they give a true and fair view.
John Paterson
Chairman
Melbourne
26 July 2023
56
Australian Foundation Investment Company Limited Annual Report 2023

INDEPENDENT AUDIT REPORT
57
Australian Foundation Investment Company Limited Annual Report 2023

INDEPENDENT AUDIT REPORT
continued
58
Australian Foundation Investment Company Limited Annual Report 2023

59
Australian Foundation Investment Company Limited Annual Report 2023

INDEPENDENT AUDIT REPORT
continued
60
Australian Foundation Investment Company Limited Annual Report 2023

61
Australian Foundation Investment Company Limited Annual Report 2023

OTHER INFORMATION
Information About Shareholders
At 20 July 2023 there were 163,674 holdings of ordinary shares. These holdings were distributed in the following categories:
Size of HoldingShareholdingsPercentage
1 to 1,00063,6672.02
1,001 to 5,00052,65310.73
5,001 to 10,00020,65612.05
10,001 to 100,00025,65950.83
100,000 and over1,03924.37
Total163,674100.00
Percentage held by the 20 largest holders7.67%
Average shareholding7,578
There were 5,528 shareholdings of less than a marketable parcel of $500 (71 shares).
Voting Rights of Ordinary Shares
The Constitution provides for votes to be cast:
(i) on a show of hands, 1 vote for each shareholder; and
(ii) on a poll, 1 vote for each fully paid ordinary share.
Major Shareholders
The 20 largest registered holdings of ordinary shares as at 20 July 2023 are listed below:
Ordinary Shares
RankNameUnits% Units
1HSBC Custody Nominees (Australia) Limited24,641,7851.99
2Citicorp Nominees Pty Limited12,264,6710.99
3Netwealth Investments Limited <Wrap Services A/C>9,176,4630.74
4Nulis Nominees (Australia) Limited <Navigator Mast Plan Sett A/C> 4,800,1710.39
5BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd <DRP A/C>4,334,1410.35
6Bougainville Copper Limited4,078,7170.33
7Navigator Australia Ltd <MLC Investment Sett A/C>3,926,4800.32
8IOOF Investment Services Limited <IPS Superfund A/C>3,887,7670.31
9Netwealth Investments Limited <Super Services A/C>3,885,7280.31
10Evanson Pty Ltd3,805,8380.31
11Custodial Services Limited <Beneficiaries Holding A/C>3,393,6670.27
12Bushways Pty Ltd2,570,5920.21
13Jamama Nominees Pty Limited2,369,8580.19
14Investment Custodial Services Limited <C A/C>2,220,2400.18
15IOOF Investment Services Limited <IOOF IDPS A/C>1,829,2300.15
16J P Morgan Nominees Australia Pty Limited1,678,9970.14
17Custodial Services Limited <A/C 4>1,647,2000.13
18Australian Executor Trustees Limited1,590,6450.13
19BNP Paribas Noms (NZ) Ltd <DRP>1,551,5630.13
20Twibill Pty Ltd1,443,2160.12
62
Australian Foundation Investment Company Limited Annual Report 2023

Sub-underwriting
During the year the Company did not participate as a sub-underwriter in any issues of securities.
Substantial Shareholders
The Company has not been notified of any substantial shareholders.
Transactions in Securities
During the year ended 30 June 2023, the Company recorded 686 transactions in securities (including options). $2,645,576 in brokerage
(including GST) was paid or accrued for the year.
63
Australian Foundation Investment Company Limited Annual Report 2023

Major Transactions in the Investment Portfolio
Acquisitions
Cost
($m)
BHP 148.1
National Australia Bank 50.4
IDP Education39.4
Domino’s Pizza Group 23.4
Santos19.1
64
Australian Foundation Investment Company Limited Annual Report 2023

Disposals
Proceeds
($m)
NEXTDC 69.9
Brambles 40.2
Orica* 39.0
IRESS38.3
InvoCare* 38.3
* Complete disposal from the portfolio.
New Companies Added to the Portfolio
Breville Group
65
Australian Foundation Investment Company Limited Annual Report 2023

Individual investments for the combined Investment and Trading portfolios as at 30 June 2023 are listed below. The list should not,
however, be used to evaluate portfolio performance or to determine the net asset backing per share at other dates. Net asset backing
is advised to the Australian Securities Exchange each month and is recorded on the toll free telephone service at 1800 780 784 and
posted to AFIC’s website afi.com.au.
Individual holdings in the portfolios may change during the course of the year. In addition, holdings which are part of the trading portfolio
may be subject to call options or sale commitments by which they may be sold at a price significantly different from the market price
prevailing at the time of the exercise or sale.
CodeOrdinary Shares, Trust Units or Stapled Securities
Number
Held
2022
’000
Number
Held
2023
’000
Market
Value
2023
$’000
AIAAuckland International Airport10,30010,30080,854
ALQALS7,6227,62285,063
AMCAmcor11,60010,415154,767
ANNAnsell1,3691,36936,590
ANZANZ Group Holdings8,4888,098191,997
ARBARB Corporation3,4733,640104,104
ASXASX1,4321,43290,216
AUBAUB Group2,3782,12162,357
BHPBHP13,92617,634793,338
BRGBreville Group070214,008
BXBBrambles9,2796,20089,342
CAR*Carsales.com8,0266,778161,240
CBACommonwealth Bank of Australia7,9007,809783,008
COHCochlear33433476,549
COL*Coles Group9,0239,722179,013
CPUComputershare4,0434,26599,716
CSLCSL2,3722,431674,311
CWYCleanaway Waste Management17,01418,18547,099
DJWDjerriwarrh Investments7,5057,50521,315
DMPDomino’s Pizza Enterprises6531,09350,756
DUIDiversified United Investments12,03012,03059,189
EQTEQT Holdings 1,3221,64742,702
FCLFINEOS Corporation9,2539,25320,541
FPHFisher & Paykel Healthcare Corporation3,9133,91388,188
GMGGoodman Group8,8359,655193,776
IAG*Insurance Australia Group9,5278,10045,613
Holdings of Securities
at 30 June 2023
66
Australian Foundation Investment Company Limited Annual Report 2023

CodeOrdinary Shares, Trust Units or Stapled Securities
Number
Held
2022
’000
Number
Held
2023
’000
Market
Value
2023
$’000
IELIDP Education7902,50555,366
IREIRESS8,2113,97540,741
JBHJB Hi-Fi1,1311,13149,493
JHX*James Hardie Industries5,2455,425215,057
MFTMainfreight (NZX Listed)3,2682,819186,802
MGRMirvac Group22,00029,35066,331
MIRMirrabooka Investments8,7288,72823,914
MQG*Macquarie Group2,2072,240397,749
NAB*National Australia Bank11,15512,950341,301
NANNanosonics5,9705,85327,745
NWLNetwealth Group3,4893,48948,288
NXTNEXTDC7,8641,74421,936
PXAPEXA Group2,9193,29944,897
REAREA Group64464492,155
REHReece7,2017,264134,893
RHCRamsay Health Care1,5831,22669,012
RIORio Tinto1,8621,862213,555
RMDResMed4,7504,390144,036
SEK*Seek3,3333,79582,391
SHLSonic Healthcare3,3203,320118,081
STO*Santos11,28613,921104,451
TCL*Transurban Group28,79127,115386,304
TLSTelstra Corporation48,68048,680209,325
WBCWestpac Banking Corporation15,54515,125322,768
WDS*Woodside Energy Group5,8165,816200,099
WESWesfarmers7,3727,372363,734
WOW*Woolworths Group7,1757,355292,171
WTCWisetech Global25042033,520
XROXero 833891105,907
Total8,637,677
* Indicates that options were outstanding against part of the holding.
67
Australian Foundation Investment Company Limited Annual Report 2023

CodeOrdinary Shares, Trust Units or Stapled Securities
Number Held
2022
Number Held
2023
Market Value
2023
A$
ACN-USAccenture5,506 5,506 2,552,471
AENA-ESAena 10,728 8,108 1,966,758
GOOGL-USAlphabet1,534 31,314 5,630,883
AMZN-USAmazon23,360 23,360 4,574,822
AAPL-USApple21,658 20,058 5,844,901
CP-USCanadian Pacific0 14,372 1,743,898
SCHW-USCharles Schwab27,651 30,501 2,597,160
CMG-USChipotle 1,325 1,115 3,582,941
CTAS-USCintas3,414 2,851 2,129,013
COST-USCostco 2,976 2,976 2,406,989
CCI-USCrown Castle10,886 10,886 1,863,357
EL-USEstee Lauder5,037 5,037 1,486,016
FERG-GBFerguson12,851 12,851 3,045,944
FTNT-USFortinet24,220 24,220 2,750,423
FCX-USFreeport0 17,870 1,073,808
HCA-USHCA Healthcare10,619 9,164 4,178,051
HD-USHome Depot6,284 6,034 2,815,887
ICE-USIntercontinental15,643 16,678 2,833,259
JPM-USJP Morgan12,029 14,176 3,097,314
OR-FRL’Oreal3,018 2,568 1,797,651
MC-FRLVMH Moet 2,155 2,191 3,099,082
Holdings of International Securities
at 30 June 2023
68
Australian Foundation Investment Company Limited Annual Report 2023

CodeOrdinary Shares, Trust Units or Stapled Securities
Number Held
2022
Number Held
2023
Market Value
2023
A$
MAR-USMarriott9,615 8,715 2,404,991
MA-USMastercard3,461 3,461 2,044,932
MCD-USMcDonalds8,702 7,442 3,336,249
META-USMeta 2,889 7,433 3,204,589
MSFT-USMicrosoft16,083 16,463 8,422,306
NESN-CHNestle18,826 20,806 3,759,228
NFLX-USNetflix3,792 3,322 2,198,300
NEE-USNextera20,749 20,749 2,312,891
NKE-USNike13,173 13,173 2,184,215
NOVOB-DKNovo Nordisk12,978 11,768 2,847,856
NVDA-USNVIDIA0 2,555 1,623,703
PEP-USPepsiCo10,474 9,294 2,586,056
ROG-CHRoche 5,035 5,545 2,546,597
SPGI-USS&P Global3,927 3,927 2,365,036
SU-FRSchneider10,228 10,851 2,960,478
SBUX-USStarbucks11,612 11,612 1,728,098
TMO-USThermo Fisher3,523 2,773 2,173,533
UNH-USUnited Health0 3,125 2,256,438
UMG-NLUniversal Music0 47,498 1,584,058
V-USVisa 4,977 4,977 1,775,595
Total115,385,777
69
Australian Foundation Investment Company Limited Annual Report 2023

Date of IssueTypePriceRemarks
24 February 2023DRP/DSSP$7.292.5 per cent discount
30 August 2022DRP/DSSP$7.565 per cent discount
25 February 2022DRP/DSSP$7.865 per cent discount
31 August 2021DRP/DSSP$8.103.5 per cent discount
23 February 2021DRP/DSSP$7.105 per cent discount
1 September 2020DRP/DSSP$6.30
24 February 2020DRP/DSSP$6.932.5 per cent discount
29 August 2019DRP/DSSP$6.21
25 February 2019DRP/DSSP$5.932.5 per cent discount
31 August 2018DRP/DSSP$6.18
23 February 2018DRP/DSSP$6.11
30 August 2017DRP/DSSP*$5.92
24 February 2017DRP/DSSP*$5.84
30 August 2016DRP/DSSP*$5.582.5 per cent discount
19 February 2016DRP/DSSP*$5.432.5 per cent discount
25 November 2015SPP$5.515.0 per cent discount
28 August 2015DRP/DSSP*$6.032.5 per cent discount
20 February 2015DRP/DSSP*$5.972.5 per cent discount
6 October 2014 SPP$5.882.5 per cent discount
29 August 2014 DRP/DSSP*$5.932.5 per cent discount
21 February 2014DRP/DSSP*$5.862.5 per cent discount
30 August 2013DRP/DSSP*$5.642.5 per cent discount
DSSP: Dividend Substitution Share Plan
22 February 2013DRP$5.37
31 August 2012DRP$4.36
24 February 2012DRP$4.26
19 December 2011Convertible Notes$100 Face ValueMature 28 February 2017. Interest rate 6.25 per
cent per annum. Conversion price: $5.0864
31 August 2011DRP$4.18
25 February 2011DRP$4.722.5 per cent discount
1 September 2010DRP$4.652.5 per cent discount
2 June 2010SPP$4.622.5 per cent discount
SPP = Share Purchase Plan
26 February 2010DRP$4.825 per cent discount
1 September 2009DRP$4.695 per cent discount
Issues of Securities
70
Australian Foundation Investment Company Limited Annual Report 2023

Date of IssueTypePriceRemarks
2 March 2009 DRP$3.725 per cent discount
25 August 2008 DRP$4.98
11 April 2008SAP$5.26
27 February 2008DRP$5.265 per cent discount
22 August 2007DRP$5.78
8 March 2007DRP $5.60
22 December 2006SAP$4.90
23 August 2006DRP $4.70
7 March 2006DRP $4.55
4 November 2005SAP $3.96
23 August 2005DRP $3.90
18 March 2005DRP $3.68
19 August 2004DRP $3.29
12 March 2004DRP $3.29
22 October 20031 for 8 rights issue $3.00
15 August 2003DRP $3.47
16 April 2003SAP $3.04
7 March 2003DRP $3.11
14 August 2002DRP $3.11
5 April 2002SAP$3.16
7 March 2002DRP$3.24
15 August 2001DRP$3.08
29 June 2001DRP $2.87
7 March 2001DRP $2.56
16 August 2000DRP$2.47
7 March 2000DRP $2.64
11 August 1999DRP $2.95
12 April 1999SAP$2.54 SAP = Share Acquisition Plan
15 March 1998DRP $2.79
4 September 1998DRP $2.43 DRP = Dividend Reinvestment Plan
Note for issues of securities in earlier years please consult the Company’s website, afi.com.au or via telephone (03) 9650 9911.
* Note that for the shares issued under the DSSP, the price shown is the indicative price used to determine the number of shares issued to participants.
Shares issued under the DSSP are issued at nil cost. Shareholders who sell shares issued under the DSSP should consult their tax adviser as to the
correct treatment of such sales for taxation purposes.
71
Australian Foundation Investment Company Limited Annual Report 2023

Australian Foundation Investment
Company Limited (AFIC)
ABN 56 004 147 120
Directors
John Paterson, Chairman
Mark Freeman, Managing Director
Rebecca P Dee-Bradbury
Craig M Drummond
Julie A Fahey
Graeme R Liebelt
David A Peever
Catherine M Walter AM
Company Secretaries
Matthew J Rowe
Andrew JB Porter
Auditor
PricewaterhouseCoopers
Chartered Accountants
Country of Incorporation
Australia
Registered Office and
Mailing Address
Level 21, 101 Collins Street
Melbourne Victoria 3000
Contact Details
Telephone (03) 9650 9911
Facsimile (03) 9650 9100
Email invest@afi.com.au
Website afi.com.au
For enquiries regarding net asset backing (as advised each
month to the Australian Securities Exchange):
Telephone 1800 780 784 (toll free)
Company Particulars
72
Australian Foundation Investment Company Limited Annual Report 2023

Australian Foundation Investment Company Limited Annual Report 2023
73
Share Registrar
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford Victoria 3067
New Zealand Address
Computershare Investor Services Limited
159 Hurstmere Road
Takapuna Auckland 0622
Shareholder

Enquiry Line 1300 662 270
+61 3 9415 4373 (from overseas)
Facsimile (03) 9473 2500
Website investorcentre.com/contact
For all enquiries relating to shareholdings, dividends and related
matters, please contact the share registrar as above.
Securities Exchange Codes
AFI Ordinary shares (ASX and NZX)
Annual General Meeting
Time 10.00am
Date Tuesday 3 October 2023
Venue Zinc at Federation Square
Location Corner of Flinders Street and
Swanston Street Melbourne
The AGM will be a hybrid meeting with a physical meeting
and access via an online platform. Further details are provided
in the Notice of Annual General Meeting.
Shareholder Information

MDM Design
Printed on environmentally friendly paper

Income,
Capital Growth,
Low Cost
Annual Review
2023

Australian Foundation Investment Company Limited ABN 56 004 147 120
AUSTRALIAN FOUNDATION
INVESTMENT COMPANY
IS A LISTED INVESTMENT
COMPANY INVESTING
IN AUSTRALIAN AND
NEW ZEALAND EQUITIES.
2 5 Year Summary
4 About the Company
8 Review of Operations
and Activities
18 Top 25 Investments
19 Income Statement
20 Balance Sheet
21 Summarised Statement
of Changes in Equity
22 Holdings of Securities
25 Holdings of International
Securities
27 Major Transactions in the
Investment Portfolio
28 Company Particulars
29 Shareholder Information
Contents

1Australian Foundation Investment Company Limited Annual Review 2023
* Assumes a shareholder can take full advantage of the franking credits.
#
Includes a non-cash dividend of $74.9 million from the BHP Petroleum/Woodside merger in 2022.
Profit for
the Year
$310.2m
$360.6m in 2022
#
Total Portfolio
Return
13.9%
Including franking*
S&P/ASX 200
Accumulation Index
including franking*
16.6%
Total
Shareholder
Return
-1.4%
Share price plus
dividend, including
franking*
Management
Expense Ratio
0 .14%
0.16% in 2022
Total Portfolio
$8.9b
Including cash
at 30 June.
$8.2 billion in 2022
2023
Fully Franked
Dividend
14
¢
Final
25
¢
Total
24 cents total
in 2022
Year in Summary

DIRECTORS’ REPORT
5 Year Summary
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Investments at Market Value
($ Million)
(d)
Net Asset Backing Per Share
($)
(e)
Number of Shareholders
(30 June)
20192020
20192020
20192020
20192020
20192020
2021
2021
2021
2022
2022
2021
2021
2022
2022
2022
2023
272.2
134.2
(a)
240.4
235.1
360.6
310.2
2023
34.0
19.9
19.3
29.4
25.1
2023
6.49
5.96
7.45
6.63
7.19
2023
138,671
153,588
159,500
164,979
163,964
2023
7,566
7,122
8,978
8,087
8,753
Dividends Per Share
(Cents)
(b)
20202021202220192023
24
2424
32
(c)
24
8
(c)
25
2Australian Foundation Investment Company Limited Annual Review 2023

Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Investments at Market Value
($ Million)
(d)
Net Asset Backing Per Share
($)
(e)
Number of Shareholders
(30 June)
20192020
20192020
20192020
20192020
20192020
2021
2021
2021
2022
2022
2021
2021
2022
2022
2022
2023
272.2
134.2
(a)
240.4
235.1
360.6
310.2
2023
34.0
19.9
19.3
29.4
25.1
2023
6.49
5.96
7.45
6.63
7.19
2023
138,671
153,588
159,500
164,979
163,964
2023
7,566
7,122
8,978
8,087
8,753
Dividends Per Share
(Cents)
(b)
20202021202220192023
24
2424
32
(c)
24
8
(c)
25
Notes
(a) Participation in the Rio Tinto and BHP off-
market share buy-backs, special dividends
and the receipt of a dividend because of the
Coles demerger from Wesfarmers.
(b) All dividends were fully franked. The LIC
attributable gain attached to the dividend
was 2023: 10.0 cents; 2022: 14.29 cents,
2021: 4.29 cents, 2020: 7.14 cents, 2019:
7.14 cents.
(c) 8 cents fully franked special dividend paid
with the interim dividend.
(d) Excludes cash.
(e) Net asset backing per share based on
year-end data before the provision for the
final dividend. The figures do not include
a provision for capital gains tax that would
apply if all securities held as non-current
investments had been sold at balance date
as Directors do not intend to dispose
of the portfolio.
3Australian Foundation Investment Company Limited Annual Review 2023

About the Company
Australian Foundation Investment Company (AFIC)
is a listed investment company investing in Australian
and New Zealand equities.
Investment Objectives
The Company aims to provide
shareholders with attractive
investment returns through access
to a growing stream of fully franked
dividends and growth in capital
invested.
The Company’s primary investment
goals are:
• to pay dividends which, over
time, grow faster than the rate
of inflation; and
• to provide attractive total returns
over the medium to long term.
How AFIC Invests – What We Look For in Companies
A portfolio that
is managed to
achieve long term
capital and dividend
growth
Quality FirstGrowth
Including dividends
Value
4Australian Foundation Investment Company Limited Annual Review 2023

Approach to Investing
Investment Philosophy
Our investment philosophy is built on
taking a medium to long term view on
companies in a diversified portfolio with
an emphasis on identifying and investing
in quality companies that are likely to
sustainably grow their earnings and
dividends over this timeframe.
Quality in this context is an outcome of
our assessment of the following factors:
1. We prefer companies that have a
leadership position or are developing
one within the industry in which they
operate. This will often mean we are
investing in a unique set of assets with
competitive advantages that produces
attractive returns on invested capital.
2. As a long term, tax aware investor we
seek to be in companies that have a
long term sustainable business model,
with low risk of disruption. This helps
to ensure portfolio turnover remains
low. The analysis may consider
technological disruption, environmental
issues, including the impact of climate
change, and social risks as all of these
factors can have a material impact
on the assessment of a company’s
long term sustainability.
3. We consider how a company’s
business can be potentially impacted
by influences outside the control
of management such as change in
government regulation and/or policy.
4. We are attracted to companies with
outstanding management teams
and boards with strong governance
processes, whose interests are
closely aligned with shareholders,
and act in the best interest of all
their stakeholders, including their
employees, customers, suppliers
and wider communities. We consider
matters including safety, diversity,
social impacts, environmental impact,
and modern slavery where material
or appropriate in the context of that
company. We regularly review and
meet with companies to ensure
ongoing alignment with our investment
frameworks. Our process may
include an assessment of the board
in terms of their past performance,
history of capital allocation, level of
accountability, mix of skills, relevant
experience and succession planning.
We also consider a company’s degree
of transparency and disclosure.
Voting on resolutions is one of the
key functions that a shareholder has
in ensuring better long term returns
and management of investment risk.
We take input from proxy advisers
but conduct our own evaluation of
the merits of any resolution. We vote
on all company resolutions as part
of our regular engagement with the
companies in the portfolio and our
voting record is on the company’s
website. We actively engage with
companies when we are concerned
about resolutions that are not aligned
with shareholders’ interests. We seek
to stay engaged with the companies
and satisfy ourselves that any issues
are taken seriously and worked
through constructively. Ideally we
seek to remain invested to influence a
satisfactory outcome for stakeholders.
5. We prefer companies with more
stable income flows. We are wary
of companies that have large,
inconsistent profit streams.
5Australian Foundation Investment Company Limited Annual Review 2023