Half Yearly Report and Accounts as at 31 December 2023

Australian Foundation Investment Company Limited



Contents
• Results for Announcement to the Market
• Media Release
• Appendix 4D Accounts
• Independent Auditors’ Review Report
This half-year report is presented under listing rule 4.2A
and should be read in conjunction with the Company’s
2023 Annual Report.
This announcement was authorised for release by the
Board of Australian Foundation Investment Company
Limited.
Australian Foundation Investment Company Limited
ABN 56 004 147 120
1

Australian Foundation Investment Company Limited
Results for Announcement to the Market
The reporting period is the half year ended 31 December 2023, with the prior corresponding period being
the half year ended 31 December 2022.
The Half year financial report has been reviewed by the Company’s auditors.
> Portfolio return for the half year was 9.0%,
including franking. The return for the S&P/ASX
200 Accumulation Index was 8.3% including
franking over this period.
> Profit after tax was $150.1 million (down 8.3% on
the previous corresponding period’s $163.7
million).
> Profit after tax attributable to members was
$150.0 million (down 8.2% on the previous
corresponding period’s $163.5 million).
> Revenue from operating activities was $168.4
million, down $9.7 million or 5.4% from the
previous corresponding period. This excludes
capital gains on investments.
> The interim dividend is 11.5 cents per share, fully
franked, an increase from 11 cents in the
previous corresponding period. The dividend will
be paid on 26 February 2024 to ordinary
shareholders on the register on 5 February 2024,
and the shares are expected to commence
trading on an ex-dividend basis on 2 February
2024. There is no conduit foreign income
component of the dividend. No LIC gains are
attached to the interim dividend.
> A
Dividend Reinvestment Plan (DRP) and
Dividend Substitution Share Plan (DSSP) are
available, the price for which will be set at a nil
discount to the Volume Weighted Average Price
of the Company’s shares traded on the ASX and
Cboe automated trading systems over the five
trading days from when the shares trade ex-
dividend. The last date for the receipt of an
election notice for participation in the DRP and
DSSP is 5pm (AEST) on 6 February 2024.


> The final dividend for the 2023 financial year was
14 cents per share (fully franked), and it was
paid to shareholders on 1 September 2023.
> Net tangible assets per share before any
provision for deferred tax on the unrealised gains
on the long term investment portfolio as at 31
December 2023 were $7.62, up from $6.90 at 31
December 2022 (both before allowing for any
announced dividends).
> The Company will be providing an update on
these results via a webcast for shareholders on
Wednesday 24 January 2024 at 3.30 p.m.
(AEST). Details are on the website at afi.com.au.
2

Australian Foundation Investment Company Limited

Interim d ividend up 5%, portfolio outperforms in volatile
conditions.

Half Year Report to 31 December 2023
AFIC’s investment focus is on a diversified portfolio of Australian equities, seeking to
provide attractive income and capital growth to shareholders over the medium to long
term. This is achieved at a low cost, with lower volatility than the market
1
, and with low
portfolio turnover which produces tax-effective outcomes for shareholders. AFIC’s
management expense ratio is 0.14% (annualised) with no additional fees.
1
Based on the Mercer Investment Performance Survey of Wholesale Equity - Australia
Half Year Profit was $150.1 million. In the corresponding period last year, Half Year Profit was $163.7
million.

Investment income for the six months to 31 December 2023 was $ 162.7 million, down from $174.0 million
in the corresponding period last year. The fall was primarily as a result of the decline (as expected) in
dividends received from BHP, Rio Tinto and Woodside Energy Group in the six-month period.

Earnings per share for the half year was 12.1 cents per share. The interim dividend declared is 11.5 cents
per share fully franked, an increase of 0.5 cent per share from the previous corresponding period of 11.0
cents per share fully franked.

Portfolio return for the half year was 9.0%, including franking. The return for the S&P/ASX 200
Accumulation Index was 8.3% including franking over this period. In the 12 months to 31 December 2023
the portfolio return was 16.0%, ahead of the S&P/ASX 200 Accumulation Index return over this period
including franking of 14.0%. AFIC’s performance returns are after costs.

Portfolio return* (including the full benefit of franking) to 31 December 2023.



*Per annum returns other than for six months. AFIC’s performance figures are after costs.

Past performance is not indicative of future performance.
3

Australian Foundation Investment Company Limited

Market Co
mmentary and Portfolio
Performance
The S&P/ASX 200 Accumulation Index including
the benefit of franking, rose 8.3% in the six months
to 31 December 2023. The market rallied sharply
late in the period as investor sentiment swung from
expectations of an impending recession to the
increasing prospect of interest rate cuts in 2024.
Economic growth with inflation falling enhanced the
prospects of a soft landing. Best-performing
sectors were those highly sensitive to interest rates
being banks, real estate and consumer
discretionary. Share prices recovered strongly in a
number of companies whose value was previously
negatively impacted by higher interest rates. The
Materials sector delivered mixed performance as
iron ore and gold prices remained high, while the
lithium price retreated significantly from its previous
highs.
AFIC’s por
tfolio outperformed the Index with a
return of 9.0% including franking for the six months
to 31 December 2023.
The largest contributors to the relative
outperformance were James Hardie Industries,
CAR Group, ARB Corporation and Reece. These
companies in the prior corresponding period had
been a drag on relative performance given the
decline in the valuation of many quality companies
from their previous very high levels. It is
encouraging to see the contribution from these
long-term holdings despite recent volatility and we
believe this further reinforces the benefit of our
long-term investment approach focusing on quality
companies rather than short term cyclical
opportunities.
Five and ten-year portfolio return figures to 31
December 2023 including franking were 12.0%
and 8.7% per annum respectively. The S&P/ASX
200 Accumulation Index over these corresponding
periods including franking were 11.8% and 9.5%
per annum. These figures include the full benefit
of franking, with AFIC’s return after costs. This
performance has been achieved with lower
portfolio volatility than the market and more
consistent dividend income.







Portfolio Adjustments
During the period, we increased our holdings in
Telstra Group, National Australia Bank, CSL,
ResMed, ASX, WiseTech Global, Woodside
Energy Group and Goodman Group at attractive
prices.
We consider long term prospects for all these
companies remains strong. We expect both Telstra
and National Australia Bank to produce sound
dividend growth over the medium term.
Both CSL and ResMed were sold off heavily during
the period in response to the competitive threat
posed by the increased adoption of weight loss
drugs. We added to AFIC’s holding in these
companies, as we consider the increased
competition is unlikely to materially impact their
respective long term growth prospects. Both
companies maintain market leadership positions in
their core markets, generate significant free cash
flow and continue to heavily invest in research and
development.
We recently initiated positions in Mineral
Resources and Region Group. Mineral Resources
is an Australian mining services company and an
iron ore and lithium producer. We are particularly
attracted to the long term opportunity for low-cost
lithium production as demand for electric vehicles
continues to increase. Region Group owns a
portfolio of grocery anchored neighbourhood and
sub-regional shopping centres with a tenant mix
largely non-discretionary in nature. We purchased
our holding at a material discount to asset backing
at a price offering an attractive dividend yield.
We exited Ansell Limited and IRESS Limited,
considering the long term prospects for these
companies will be increasingly challenged as
competitive intensity increases. In the case of
Ansell, significant new supply has entered the
industry challenging the sustainability of price as a
driver of revenue growth. While for IRESS, the
company is increasing investment in its technology
platform to improve functionality as competition has
increased. The returns from this investment remain
highly uncertain. The small position in FINEOS
Corporation was also sold completely reflecting our
concern over the ability of the business to
demonstrate attractive long term returns on its
investments.

4

Australian Foundation Investment Company Limited
International Portfolio
We have continued to successfully invest in the
international portfolio over the period. We now
have approximately $125.9 million invested (which
represents approximately 1.3% of the portfolio).
This portfolio was first initiated in May 2021 as a
potential precursor to establishing a separate low-
cost international investment company in the
future.
We are encouraged by the performance of this
portfolio which has exceeded its benchmark index
(the MSCI World Index ex Australia) over the six
and 12 month periods, and since its inception.
Outlook
While the strength of recent market performance
has been pleasing, operating conditions remain
volatile and current market valuations make us
somewhat cautious.
Cost inflation is easing but remains elevated, while
consumer sentiment is weakening, and household
savings rates are starting to decline amid the
higher cost of living. It is also not yet entirely
apparent that the recent moderation in interest rate
expectations is justified. Geopolitical factors, which
have had little negative impact on the market more
recently, may still have a role to play in investor
sentiment as we move into this calendar year.
Given these conditions, it is even more important in
our opinion to maintain the focus on owning a
di versified portfolio of quality companies that are
not totally reliant upon the macroeconomic
environment to deliver earnings growth. In this
context it will be interesting to see how companies
are faring in the upcoming reporting season and
their expectations moving forward.
As patient investors, t he one certainty we do know
is that the market in periods like this will often
provide good buying opportunities across a range
of companies as it overreacts to short term news
flow. In this context, AFIC currently has sufficient
cash resources to take advantage of such
opportunities.
Please direct any enquiries to:

Mark Freeman Geoff Driver
Managing Director General Manager
(03) 9225 2101 (03) 9225 2102


24 January 2024
5

Australian Foundation Investment Company Limited
Major Transactions in the Investment Portfolio
Acquisitions
Cost
($’000)
Mineral Resources 52,113
Region Group 32,994
Telstra Corporation 30,326
National Australia Bank 30,289
CSL 27,440

Disposals
Proceeds
($’000)
James Hardie Industries 58,105
IRESS* 33,759
Ansell* 32,260
Woolworths Group 26,820
AUB Group 18,514
*Complete disposal from the portfolio.

New Companies Added to the Portfolio
Mineral Resources
Region Group

6

Australian Foundation Investment Company Limited

Top 25 Investments at 31 December 2023
Includes investments held in both the investment and trading portfolios.
Value at Closing Prices at 29 December 2023

Total Value
$ Million
% of the
Portfolio
1
BHP Group* 888.8 9.6%
2
Commonwealth Bank of Australia 860.6 9.3%
3
CSL 727.8 7.8%
4
National Australia Bank* 431.0 4.6%
5
Wesfarmers 420.5 4.5%
6
Macquarie Group 411.2 4.4%
7
Transurban Group* 373.2 4.0%
8
Westpac Banking Corporation 346.4 3.7%
9
Goodman Group 256.9 2.8%
10
Rio Tinto 252.6 2.7%
11
Woolworths Group 248.0 2.7%
12
James Hardie Industries 235.6 2.5%
13
Telstra Group 221.9 2.4%
14
ANZ Group Holdings 209.9 2.3%
15
Woodside Energy Group 200.0 2.2%
16
CAR Group* 190.8 2.1%
17
Mainfreight 169.5 1.8%
18
Coles Group 156.6 1.7%
19
Reece 143.1 1.5%
20
Amcor 138.5 1.5%
21
ResMed 135.5 1.5%
22
ARB Corporation 130.9 1.4%
23
ASX 110.8 1.2%
24
Sonic Healthcare* 106.3 1.1%
25
Santos 105.8 1.1%
Total 7,472.3
As percentage of total portfolio value (excludes cash)

80.5%
* Indicates that options were outstanding against part of the holding.

7

Australian Foundation Investment Company Limited

Portfolio Performance to 31 December 2023
Performance Measures to 31 December 2023 6 Months 1 Year
3 Years
% pa
5 Years
% pa
10 Years
% pa
Portfolio Return – Net Asset Backing Return
Including Dividends Reinvested

8.1%

14.3%

8.3%

10.2%

6.9%
S&P/ASX 200 Accumulation Index 7.6% 12.4% 9.2% 10.3% 7.9%

Portfolio Return – Net Asset Backing Gross
Return Including Dividends Reinvested*

9.0%

16.0%

9.9%

12.0%

8.7%
S&P/ASX 200 Gross Accumulation Index* 8.3% 14.0% 10.8% 11.8% 9.5%
* Incorporates the benefit of franking credits for those who can fully utilise them.
Note: AFIC net asset per share growth plus dividend series is calculated after management expenses,
income tax and capital gains tax on realised sales of investments. It should also be noted that
Index returns for the market do not include the impact of management expenses and tax on their
performance.

8

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








HALF-YEAR REPORT
31 DECEMBER 2023




9

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

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


AFIC Shareholder
enquiry lines :

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

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

AFI Ordinary shares (ASX and NZX)


10

DIRECTORS' REPORT

The Directors present their report in relation to the half-year to 31 December 2023 on the
consolidated entity (“the Group”) consisting of Australian Foundation Investment Company Limited
(“the Company” and “AFIC”) and its subsidiary, Australian Investment Company Services Limited
(“AICS”).

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

C.M. Drummond (appointed July 2021, appointed Chairman October 2023)
J. Paterson (appointed June 2005, retired October 2023)
R.P. Dee-Bradbury (appointed May 2019)
G.R. Liebelt (appointed June 2012)
J.A. Fahey (appointed April 2021)
K.M. Hudson (appointed January 2024)
R.L. Murray (appointed January 2024)
D.A. Peever (appointed November 2013)
C.M. Walter AM (appointed August 2002, retired October 2023)
R.M. Freeman (appointed January 2018)

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

Profit Per
formance and Dividend
Profit for the half-year was $150.1 million, down 8.3% from the previous corresponding period,
primarily due to the reduction in dividends received from holdings in t he resources sector.
The net profit per share for the six months to 31 December 2023 was 12.1 cents per share with an
interim dividend declared of 11.5 cents per share ful ly-franked, an increase of 0.5 cents on the
previous corresponding period.
The portfolio return for the 6 months (measured by change in net asset backing per share plus
dividends reinvested) was 8.1% compared to the return of the S&P/ASX 200 Accumulation Index
for the same period which was 7.6%. AFIC’s portfolio return is calculated after management fees,
income tax and capital gains tax on realised sales of investments and does not reflect the value of
franking credits or LIC credits attached to the dividends. Index returns for the market do not
include the impact of management expenses and tax on their performance.
During the half-year 6.2 million shares were issued under the DRP and the DSSP resulting in an
additional $37 million of capital (after costs).

11

12

13

CONSOLIDATED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31
DECEMBER 2023
Note Half-year
2023
Half-year
2022
$’000 $’000

Dividends and distributions 162,673 173,974
Revenue from deposits and bank bills 3,263 1,297
Other revenue 2,491 2,819

Total revenue
168,427

178,090

Net gains/(losses) on trading portfolio
1,332

2,890

Income from operating activities 3 169,759 180,980

Finance & related costs (700) (612)
Administration expenses (8,691) (8,249)
Profit before income tax expense

160,368 172,119
Income tax expense (10,289) (8,377)
Profit for the half-year 150,079 163,742


Profit is attributable to :
Equity holders (members) of Australian Foundation
Investment Company Ltd
149,997 163,467
Minority Interest 82 275
150,079 163,742

Cents

Cents
Basic earnings per share 8

12.05 13.25





This Income S tatement should be read in conjunction with the accompanying notes.

14

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
HALF-YEAR ENDED 31 DECEMBER 2023

Half-Year to 31 December 2023 Half-Year to 31 December 2022
Revenue Capital Total Revenue Capital Total
$’000 $’000 $’000 $’000 $’000 $’000

Profit for the half-year 150,079 - 150,079 163,742 - 163,742

Other Comprehensive Income
Items that will not be recycled through the Income Statement
Gains for the period on equity securities in
the investment portfolio
- 582,535 582,535 - 346,925 346,925
Tax on above - (176,807) (176,807) - (106,905) (106,905)
Total other comprehensive income
1
- 405,728 405,728 - 240,020 240,020

Total comprehensive income
2
150,079 405,728 555,807 163,742 240,020 403,762

1
Net capital income not accounted for through the Income Statement


2
This is the company’s Net Return for the half-year, which includes the Net Profit plus the net realised and
unrealised gains or losses on the Company’s investment portfolio.



Half-Year to 31 December 2023 Half-Year to 31 December 2022
Revenue Capital Total Revenue Capital Total
$’000 $’000 $’000 $’000 $’000 $’000
Total Comprehensive Income is
attributable to:

Equity holders of Australian Foundation
Investment Company Ltd
149,997 405,728 555,725 163,467 240,020 403,487
Minority Interest 82 - 82 275 - 275
150,079 405,728 555,807 163,742 240,020 403,762



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


15

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2023
31 Dec 30 June
2023 2023
Note $’000 $’000
Current assets
Cash 235,080 165,385
Receivables 12,264 44,709
Trading portfolio 4 1,179 3,837
Total current assets 248,523 213,931

Non-current assets
Investment portfolio 9,284,254 8,749,226
Deferred tax assets 1,993 -
Total non-current assets 9,286,247 8,749,226

Total assets 9,534,770 8,963,157

Current liabilities
Payables 1,628 1,268
Borrowings – bank debt 10,000 10,000
Tax payable 17,555 32,156
Provisions 3,939 6,057
Total current liabilities 33,122 49,481

Non-current liabilities
Provisions 159 90
Deferred tax liabilities - other - 830
Deferred tax liabilities - investment portfolio 5 1,518,271 1,355,200
Total non-current liabilities 1,518,430 1,356,120

Total liabilities 1,551,552 1,405,601

Net Assets 7,983,218 7,557,556

Shareholders' equity
Share Capital 6 3,173,313 3,136,282
Revaluation Reserve 3,272,450 2,926,191
Realised Capital Gains Reserve 485,622 509,741
General Reserve 23,637 23,637
Retained Profits 1,026,580 960,171
Parent Entity Interest 7,981,602 7,556,022
Minority Interest 1,616 1,534
Total equity 7,983,218 7,557,556



This Balance Sheet should be read in conjunction with the accompanying notes.
16

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2023

Attributable to members of Australian Foundation Investment Company
Ltd

Half-Year to 31 December 2023


Note


Share
Capital
$’000


Revaluation
Reserve
$’000

Realised
Capital
Gains
$’000


General
Reserve
$’000


Retained
Profits
$’000

Total
Parent
Entity
$’000


Minority
Interest
$’000



Total
$’000
Total equity at the beginning of the half-
year
3,136,282 2,926,191 509,741 23,637 960,171 7,556,022 1,534 7,557,556
Dividends paid 7 - - (83,588) - (83,588) (167,176) - (167,176)
Shares issued - Dividend Reinvestment Plan 6 37,121 - - - - 37,121 - 37,121
Other Share Capital Adjustments 6 (90) - - - - (90) - (90)
Total transactions with shareholders 37,031 - (83,588) - (83,588) (130,145) - (130,145)

Profit for the half-year - - - - 149,997 149,997 82 150,079

Net gains for the period on equity securities in
the investment portfolio - 405,728 - - - 405,728 - 405,728
Other Comprehensive Income for the half-
year
- 405,728 - - - 405,728 - 405,728
Transfer to Realised Capital Gains Reserve
of net c umulative gains (after tax) on
investments sold - (59,469) 59,469 - - - - -

Total equity at the end of the half-year 3,173,313 3,272,450 485,622 23,637 1,026,580 7,981,602 1,616 7,983,218

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



17

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2022


Attributable to members of Australian Foundation Investment
Company Ltd
Half-Year to 31 December 2022


Note


Share
Capital
$’000


Revaluation
Reserve
$’000

Realised
Capital
Gains
$’000


General
Reserve
$’000


Retained
Profits
$’000

Total
Parent
Entity
$’000


Minority
Interest
$’000



Total
$’000
Total equity at the beginning of the half-
year
3,070,163 2,556,466 510,503 23,637 828,634 6,989,403 1,086 6,990,489
Dividends paid
7
- - (118,476) - (47,390) (165,866) -
(165,866)
Shares issued - Dividend Reinvestment Plan 36,914 - - - - 36,914 - 36,914
Other Share Capital Adjustments

(49) - - - - (49) - (49)
Total transactions with shareholders

36,865 - (118,476) - (47,390) (129,001) - (129,001)
Profit for the half-year - - - - 163,467
163,467
275 163,742
Other Comprehensive Income for the half-year


Net gains for the period on equity securities in
the investment portfolio - 240,020 - - - 240,020 - 240,020
Other Comprehensive Income for the half-
year
- 240,020 - - - 24 0,020 - 240,020
Transfer to Realised Capital Gains Reserve
of net c umulative gains (after tax) on
investments sold - (46,267) 46,267 - - - - -

Total equity at the end of the half-year 3,107,028 2,750,219 438,294 23,637 944,711 7,263,889 1,361 7,265,250
This Statement of Changes in Equity should be read in conjunction with the accompanying notes


18

CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR
ENDED 31 DECEMBER 2023
Half-year Half-year
2023 2022
$’000 $’000
INFLOWS/ INFLOWS/
(OUTFLOWS) (OUTFLOWS)
Cash flows from operating activities
Sales from trading portfolio 10,229 16,354
Purchases for trading portfolio (6,240) (7,749)
Interest received 3,340 1,297
Dividends and distributions received 190,537 198,482
197,866 208,384

Other receipts 2,470 2,817
Administration expenses (10,903) (10,949)
Finance costs paid (700) (612)
Taxes paid (13,876) (2,834)
Net cash inflow/(outflow) from operating activities 174,857 196,806

Cash flows from investing activities
Sales from investment portfolio 332,260 225,943
Purchases for investment portfolio (281,529) (244,045)
Taxes paid on capital gains (26,246) (66,560)
Net cash inflow/(outflow) from investing activities 24,485 (84,662)

Cash flows from financing activities
Share issue costs (90) (49)
Dividends paid (129,557) (128,451)
Net cash inflow/(outflow) from financing activities (129,647) (128,500)

Net increase/(decrease) in cash held 69,695 (16,356)
Cash at the beginning of the half-year 165,385 144,619
Cash at the end of the half-year 235,080 128,263











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

19

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED
31 DECEMBER 2023
1. Basis of preparation of half-year financial report
This general purpose half-year financial report has been prepared in accordance with Accounting
Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.
This half-year financial report does not include all the notes of the type normally included in an
annual financial report. This report should be read in conjunction with the 2023 Annual Report
and public announcements made by the Group during the half-year, in accordance with the
continuous disclosure requirements of the Corporations Act 2001.
The accounting policies adopted are consistent with those of the previous financial year and
corresponding interim reporting period.
In the interests of transparency in its reporting, the Group uses the phrase “market value” in place
of the AASB terminology “fair value for actively traded securities.” The Company’s investments in
listed securities are valued at the closing price on the ASX on the last trading day before the
period end.

2. Financial reporting by segments
The Group consists of a Listed Investment Company and a subsidiary which provides
administration services to it and to other Listed Investment Companies in Australia. It has no
reportable business or geographic segments.
(a) Segment information provided to the Board
The internal reporting provided to the Board for the Group’s assets, liabilities and performance is
prepared on a consistent basis with the measurement and recognition principles of Australian
Accounting Standards, except that net assets are reviewed both before and after the effects of
capital gains tax on investments (as reported in the Group’s Net Tangible Asset announcements
to the ASX).
The relevant amounts as at 31 December 2023 and 31 December 2022 were as follows:
2023
$


2022
$
Net tangible asset backing per share
Before Tax 7.62 6.90
After Tax 6.40 5.88

(b) Other segment information
Segment Revenue
Revenues from external parties are derived fr om the receipt of dividend, distribution and interest
income, and income arising on the trading portfolio.
The Company is domiciled in Australia and the Group’s dividend and distribution income is
predominantly from entities which maintain a listing in Australia. The Group has a diversified
portfolio of investments, with only two investments comprising more than 10% of the Group’s
income (including trading portfolio) for the half- year ended 31 December 2023 – BHP 13.0% and
Commonwealth Bank 11.0% (2022 : 1 – BHP 21.1%).
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3. Income from operating activities
Half-year
2023
$'000

Half-year
2022
$'000
Income from operating activities is comprised of the fol lowing:

Dividends & distributions
• securities held in investment portfolio
162,596 173,974
• securities held in trading portfolio
77 -
162,673 173,974
Interest income
• deposits and income from bank bills
3,263 1,297
3,263 1,297
Net gains/(losses) and write downs
• net gains from trading portfolio sales
2,039 1,673
• unrealised gains/(losses) in trading portfolio (707) 1,217
1,332 2,890

Administration fees received from other Listed Investment
Companies
2,458 2,602
Expenses recovered from other Listed Investment
Companies
4 180
Other expenses recovered 27 37
Sundry income 2 -

169,759 180,980



4. Trading portfolio

As part of the activities of the trading portfolio, the Company enters into option contracts for the
purpose of enhancing returns, offsetting risk or providing opportunities to acquire or sell securities
at advantageous prices.
As at balance date there were call options outstanding which, if they were all exercised, would
require the Company to deliver securities to the value of $113.7 million (30 June 2023: $155.8
million).








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5. Deferred tax liabilities – investment portfolio
In accordance with AASB 112 Income Taxes, deferred tax liabilities have been recognised for
Capital Gains Tax on the unrealised gain in the investment portfolio at current tax rates (30%)
totalling $1,518.3 million (30 June 2023 : $1,355.2 million). As the Directors do not intend to
dispose of the portfolio, this tax liability may not be crystallised at this amount.
6. Shareholders’ equity – share capital
Movements in Share Capital of the Company during the half-y ear were as follows:
Date Details Notes Number
of shares
’000
Issue
pr ice
$
Paid-up
Capital
$’000
01/07/2023 Opening Balance

1,240,349 3,136,282
1/09/2023 Dividend Reinvestment Plan
i
5,280
7.03
37,121
1/09/2023 Dividend Substitution Share Plan
ii
920
7.03
n/a
Various Other Share Capital adjustments - (90)
31/12/2023 Balance 1,246,549 3,173,313

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

7. Dividends
Half-year
2023
$’000
Half-year
2022
$’000

Dividends (fully franked) paid during the period 167,176 165,866
(excluding DSSP shares) (14 cents per
share)
(14 cents per
share)
Dividends not recognised at period end
Since the end of the half-year the Directors have declared an
interim d ividend of 11.5 cents per share, fully franked. The
aggregate amount of the proposed interim dividend expected to
be paid on 26 February 2024, but not recognised as a liability at
the end of the half-year is 143,353







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8.Earnings per Share
Half-year
2023
Half-year
2022
Number Number
Weighted average number of ordinary shares used as the
denominator
1,244,426,335 1,233,729,034
$’000 $’000
Profit after tax for the half-year attributable to members of the
Company 149,997 163,467
Cents Cents
Basic earnings per share 12.05 13.25
There are no diluti ve instruments on issue and consequently diluted earnings per share are the
same as basic earnings per share.
9.Events subsequent to balance date
Since 31 December 2023 t o the date of thi s report there has been no event specific to the Group
of which the Directors are aware which has had a material effect on the Group or its fi nancial
position.
10.Contingencies
At balance date Directors are not aware of any material contingent liabilities o r contingent assets
other than those already disclosed elsewhere in the financial report.
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