Preliminary Final Report

Australian Foundation Investment Company Limited
1

Australian Foundation Investment Company Limited
Results for Announcement to the Market
The reporting period is the year ended 30 June 2025, with the prior corresponding period being the year
ended 30 June 2024.
This report is based on financial statements that are in the process of being audited.
Results for Announcement to the Market
> Net Profit was $285.0 million, down 3.9% from the
prior year.
> Net Profit attributable to members (excludi
ng
m
inority interests) was $284.9 million,
down 3.8% from the prior year.
> Revenue from operating activities was
$328.1 million, down 1.9% from the prior year.
> The Management Expense Ratio (“MER”)
calculated as the net expenses of managing t
he
C
ompany as a percentage of the average value of
its investments including cash over the year, wa
s
0
.16% for the year (2024: 0.15%).
> Net tangible assets as at 30 June 2025, befor
e
al
lowing for the final dividend and before t
he
pr
ovision for deferred tax on unrealised gains in t
he
i
nvestment portfolio were $8.33 per share (2024
:
$7.
88).
> A fully franked final dividend of 14.5 cents per
share, the same as last year’s final dividend will be
paid on 28 August 2025 to shareholders on t
he
r
egister on 6 August 2025. Shares are expected t
o
t
rade ex-dividend on 5 August 2025
.
> A
special dividend of 5 cents per share will also be
paid on 28 August 2025 to shareholders on t
he
r
egister on 6 August 2025. The special dividen
d
r
eflects part distribution of the significant amount of
realised capital gains and franking credits
generated from the trimming of our shareholding in
Commonwealth Bank of Australia during t
he
f
inancial year. There is no conduit foreign incom
e
c
omponent of either dividend.
> No New Zealand imputation credit is attached t
o
t
he final or special dividends.
> The Board has elected to source the entire 19.5
cents per share of the final and special dividend
s
f
rom capital gains, on which the Group has paid or
will pay tax. The amount of this pre-tax attributable
gai
n, equals 27.86 cents per share. This enables
some shareholders to claim a tax deduction in their
tax return. Further details will be on the divide
nd
s
tatements.
> The interim dividend of 12 cents per share (up from
11.5 cents in the previous corresponding period)
was paid to shareholders on 25 February 2025.
> The total dividend (including the special dividend)
for the financial year is therefore 31.5 cents per
share, fully franked, up from 26 cents per shar
e
f
ully franked last year.
> A Dividend Reinvestment Plan (DRP) and Divid
end
S
ubstitution Share Plan (DSSP) are available, t
he
pr
ice will be set at a nil discount to the Volum
e
W
eighted Average Price of the Company’s shares
traded on the ASX and Cboe automated tradi
ng
s
ystems over the five trading days after the shares
trade ex-dividend. Notices of participation in t
he
D
RP and DSSP need to be received by the shar
e
r
egistry by 5pm (AEST) on 7 August 2025. All
shares issued under the DRP and DSSP will rank
equally with existing shares.
> The Company will be providing a briefing on thes
e
r
esults via a webcast for shareholders on Monday
28 July 2025 at 3.30pm (AEST). Details are on t
he
w
ebsite afi.com.au.
>The 2025 AGM will be held at 10 am on Tuesday
30 September. Further details on how to participat
e
w
ill be sent to shareholders.
2

Australian Foundation Investment Company Limited
AFIC Announces 5 Cents Per Share Special Dividend.
Full-Year Report to 30 June 2025
AFIC’s investment focus is on a diversified portfolio of Australian equities, seeking to
provide attractive dividend and capital growth to shareholders over the medium to long
term. This is achieved at a low cost and with low portfolio turnover which produces tax-
effective outcomes for shareholders. AFIC’s management expense ratio is 0.16% with no
additional fees.
The Full Year Profit was $285.0 million, down from $296.4 million in the previous corresponding period. The
decrease in the profit from last year was primarily due to lower dividends as bank holdings were trimmed.
The final dividend was maintained at 14.5 cents per share fully franked. A special dividend of 5 cents per share
has also been declared. This reflects the significant amount of realised capital gains and franking credits
generated from the trimming of our shareholding in Commonwealth Bank of Australia during the financial year.
Total fully franked dividends applicable for the year including the special dividend are 31.5 cents per share, an
increase of 21.2% from the previous financial year’s total fully franked dividend of 26.0 cents per share.
Activity in the portfolio was focused primarily on recycling capital into existing holdings by trimming some
positions where companies were trading at extreme valuations during the year (the Commonwealth Bank of
Australia for example) and selling positions in companies where we felt they were facing significant challenges.
The portfolio returned 10.7% for the financial year in comparison to the S&P/ASX 200 Accumulation Index
return of 15.1% when the benefit of franking is included for both returns. In comparing AFIC’s one-year return
to the benchmark, a number of quality companies in the portfolio underperformed the market during the year.
We still consider the long term prospects for these companies remain strong. These include ARB Corporation,
James Hardie Industries, CSL and Reece Limited. Strength in the gold sector in which AFIC does not
traditionally invest also impacted relative performance given this sector was up 59.6% over the financial year.

Portfolio return (including the full benefit of franking) – per annum to 30 June 2025

Note AFIC on occasion incurs realised capital gains tax on the sale of shares. Not all the franking generated from these realised capital gains is
paid out immediately as dividends and is therefore not included in these performance figures.
AFIC’s performance figures are after costs.
Past performance may not be indicative of future performance.
3

Australian Foundation Investment Company Limited
Market Commentary and Portfolio
Performance
The ASX 200 Accumulation Index (not including the
benefit of franking) rose 13.8% in the financial year
with sector returns widely dispersed. The best
performing sectors were Banks up 31.1%,
Communication Services up 27.8% and Information
Technology up 24.2%. Industrials up 19.1%
outperformed the broader ASX 200 Index and was
significantly ahead of the Resources which was down
3.7%. Domestic economic conditions proved more
resilient than originally expected, providing a
supportive backdrop for Australian banks. A
significant portion of the Bank sector’s performance
has come from a re-rating higher of valuation
multiples and less from earnings growth. In the case
of Commonwealth Bank of Australia, we now view the
current valuation as extreme and accordingly have
been reducing our holding in recent months. Slowing
growth of fixed asset investment in China weighed on
the performance of the Resources sector. In addition
to the Resources sector, other sectors to
underperform the broader market return of 13.8%
included Energy (down 8.1%) and Healthcare (down
4.6%).
T
he portfolio including the benefit of franking returned
10.7%, underperforming the S&P/ASX 200
Accumulation Index return of 15.1% when franking is
included. Strong returns came from our holdings in
JB-Hi Fi, Wesfarmers, Coles Group, Computershare
and Netwealth Group which all materially
outperformed the market. A drag on performance
came from several quality companies that
underperformed the market during the year. These
included ARB Corporation, James Hardie Industries,
CSL and Reece Limited. We still consider the long
term prospects for these companies to remain strong.
IDP Education which has been a disappointing
investment for us also had a material negative impact
on performance. Additionally, having no exposure to
gold producers dragged on performance. The All-
Ordinaries Gold Index was up 59.6% during the year.
Widespread uncertainty regarding the direction of
global economic growth resulted in the perceived safe
haven asset of gold performing well. Gold producers
have historically shown a variable track record in
maintaining production and increasing profitability
over the medium to long term. On this basis AFIC has
not traditionally invested in this sector.
Portfolio Adjustments
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.
Portfolio adjustments through the year are consistent
with our focus of buying quality companies during
times of bad news and trimming holdings when
valuations reach extreme levels.
W
hile we endeavour to hold companies for the long
term, selling companies when we identify a significant
deterioration in future growth prospects remains
fundamental to meeting our long term investment
objectives. We exited Mineral Resources, Ramsay
Health C are and Domino’s Pizza Enterprises. We are
observing structural industry challenges for Domino’s
Pizza Enterprises and Ramsay Health C are which are
likely to weigh on the rate of earnings growth for both
these companies in the foreseeable future.
Competitive intensity has materially increased for both
Mineral Resources and Domino’s Pizza Enterprises
with the balance sheet for both companies fully
geared in a tougher operating environment.
W
hil e the trimming of the Commonwealth Bank of
Australia has weighed on returns given its ongoing
strength in the market, we still consider our average
sale price reflects a position where the shares were
sold at a time when they were trading at extreme
valuations.
T
he majority of purchases during the year were
undertaken to increase weightings in existing holdings
BHP, Goodman Group, ResMed, NEXTDC, Wisetech
Global and Cochlear.
W
e initiated positions in BlueScope Steel, Sigma
Healthcare, Telix Pharmaceuticals and Worley.
BlueScope Steel is a cyclical company with
operations predominantly in Australia and the US.
The company has a number of ‘self-help’ drivers
beyond the cycle likely to deliver significant earnings
growth over the medium term. These predominantly
relate to capital investment into growth projects.
Sigma Healthcare merged with Chemist Warehouse
during the year. We took a small position pre ACCC
approval of the merger. We are wishing to make our
holding significantly larger over time (at an
appropriate valuation) given the strong market
position and large market opportunity for Chemist
Warehouse.
4

Australian Foundation Investment Company Limited
Telix Pharmaceuticals is predominantly focused on
the diagnosis and treatment of prostate cancer. Telix
Pharmaceuticals uses a targeting agent with a
radioactive isotype concentrating radiation at the
tumour site for either imaging or therapy. The
technology is being widely adopted by industry
practitioners resulting in strong earnings growth.
The range of potential outcomes is widely dispersed,
accordingly we elected to establish a small holding
looking to increase our weighting should our
conviction grow.
W
orley is an engineering and professional services
company operating in the energy, chemicals and
resources end markets. Historically, Worley
contracted on a fixed price lump sum basis meaning
earnings were highly cyclical dependent on the
successful delivery of projects within budget.
Demand for engineering services particularly in the
energy market is growing strongly at a time when
professional service firms have substantially
consolidated. The result is more favourable
contracting terms on a cost plus model materially
reducing earnings risk.
International Portfolio
We have continued to manage the global portfolio
(within the AFIC portfolio) over the period. This
portfolio was first initiated in May 2021. Whilst
significant preparatory work has been done for
establishing a separate low-cost global investment
company in the future, w e are still considering the
most appropriate next steps for this initiative. AFIC
has invested a total of $103.5 million of shareholder
capital in the global portfolio, which is valued at
$168.1 million as at 30 June, 2025. At current value,
the global portfolio represents about 1.6% of the
overall AFIC portfolio.
AFIC’s global portfolio returned 14.0% for the financial
year, an attractive return for shareholders although
below our benchmark.
Gross returns in $A to 30 June 2025
Source: Northern Trust.
V
olatility stemming in part from changes to US
domestic and foreign policy resulted in a negative shift
in sentiment towards a number of our holdings,
although we continue to believe their characteristics
and prospects will produce attractive risk adjusted
returns for our shareholders over the long term.
During the year we established new positions in
Expand Energy, Spotify, Haleon, Builders FirstSource
and Zoetis. These investments were funded via
trimming our Costco position and the complete exits
of Cintas, UnitedHealth Group, Louis Vuitton, Estee
Lauder and Nike. In addition, we switched our GLP1
exposure from Novo Nordisk into Eli Lilly. During the
tariff induced sell off in April, we added to existing
holdings at attractive prices including Nvidia, Freeport
McMoran, Halma and Marriott.
Outlook
Market conditions remain unpredictable with the
outlook for economic growth unclear, consumer
confidence softening and the prospect for the
employment market remaining highly variable.
I
n this environment corporate earnings appear set to
slow as revenue growth appears harder to achieve
with many corporates now talking about cost out
initiatives.
T
he dispersion in market valuations between the
winners and losers is extremely wide and is also likely
to exacerbate volatility as we anticipate that the
market’s tolerance for earnings disappointment won’t
be high. Patient deployment of capital is required in
times like these.
F
inally geopolitical factors remain highly relevant with
ongoing conflicts and with politics, particularly out of
the US, driving sharp changes in market sentiment.
While we are aware of the volatile geopolitical
environment our focus continues to remain on the
fundamentals of the companies we seek to invest in.
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.
P
lease direct any enquiries to:
Ma
rk Freeman Geoff Driver
Managing Director General Manager
(03)
9225 2
122(03)
9225 2
102
2
8 July 2025
1 year
Since
Inception
% pa
% pa
AFIC Global Portfolio 14.0 14.0
Benchmark
18.5 14.0
Differential
(4.5)
0.0
3 years
% pa
21.0
20.3
0.7
5

Australian Foundation Investment Company Limited
Major Transactions in the Investment Portfolio
Acquisitions
Cost
($m)
BHP 95.4
Worley 55.2
Goodman Group 41.3
ResMed 38.6
NEXTDC 35.6

Disposals
Proceeds
($m)
Commonwealth Bank of Australia 375.4
Wesfarmers 90.7
Ramsay Health Care* 51.0
Mineral Resources* 35.3
Westpac Banking Corporation 35.1
* Complete disposal from the portfolio.

New Companies Added to the Portfolio
Worley
BlueScope Steel
Telix Pharmaceuticals
Sigma Healthcare


6

Australian Foundation Investment Company Limited
Top 25 Investments at 30 June 2025
Includes investments held in both the investment and trading portfolios.
Value at Closing Prices at 30 June 2025

Total Value
$ Million
% of the
Portfolio
1
Commonwealth Bank of Australia 968.5 9.4%
2
BHP 762.7 7.4%
3
CSL 632.9 6.2%
4
Macquarie Group 491.2 4.8%
5
National Australia Bank 485.5 4.7%
6
Wesfarmers 473.8 4.6%
7
Westpac Banking Corporation 449.7 4.4%
8
Goodman Group 394.6 3.8%
9
Transurban Group 369.0 3.6%
10
Telstra Group 305.7 3.0%
11
ResMed 252.9 2.5%
12
ANZ Group Holdings 216.2 2.1%
13
CAR Group 212.9 2.1%
14
James Hardie Industries* 211.4 2.1%
15
Woolworths Group 207.4 2.0%
16
Rio Tinto 199.5 1.9%
17
Woodside Energy Group 192.9 1.9%
18
Coles Group* 192.4 1.9%
19
Xero 150.1 1.5%
20
Mainfreight 149.6 1.5%
21
Computershare 144.8 1.4%
22
REA Group 138.8 1.4%
23
ARB Corporation 138.2 1.3%
24
Brambles 136.8 1.3%
25
Amcor 136.6 1.3%
Total 8,014.0
As percentage of total portfolio value (excludes cash)

78.1%
* Indicates that options were outstanding against part of the holding.


7

Australian Foundation Investment Company Limited
Portfolio Performance to 30 June 2025
Performance Measures to 30 June 2025 1 Year
3 Years
% pa
5 Years
% pa
10 Years
% pa
Portfolio Return – Net Asset Backing Return
Including Dividends Reinvested

9.2%

11.6%

10.7%

7.7%
S&P/ASX 200 Accumulation Index 13.8% 13.6% 11.8% 8.9%

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

10.7%

13.2%

12.3%

9.5%
S&P/ASX 200 Gross Accumulation Index* 15.1% 15.1% 13.3% 10.3%
* 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.
Past performance is not indicative of future performance.

8

Australian
Foundation
Investment
Company Limited
(AFIC)
Consolidated Annual Financial
Statements



30 June 2025

9

FINANCIAL STATEMENTS
Consolidated Income Statement for the Year Ended 30 June 2025




2025

2024

Note $’000 $’000
Dividends and distributions
A3 312,620 321,836
Interest income from deposits A3 9,195 6,963
Other revenue A3
6,311

5,555


Total revenue
328,126

334,354





Net gains on trading portfolio A3
2,294

4,901




Income from operating activities

330,420 339,255


Finance costs (1,208) (1,405)
Administration expenses B1 (22,991)
(18,915)


Profit before income tax expense 306,221 318,935
Income tax expense B2, E2 (21,250) (22,522)
Profit for the year 284,971
296,413


Profit is attributable to :


Equity holders of Australian Foundation Investment Company

284,912 296,174
Minority interest
59 239

284,971 296,413





Cents Cents
Basic earnings per share

A5 22.71 23.75

This Income Statement should be read in conjunction with the accompanying notes.
10

Consolidated Statement of Comprehensive Income for the Year Ended 30 June 2025


Year to 30 June 2025 Year to 30 June 2024

Revenue
1
Capital
1
Total Revenue
1
Capital
1
Total

$’000 $’000 $’000 $’000 $’000 $’000


Profit for the year 284,971 - 284,971 296,413 - 296,413


Other
Comprehensive
Income


Items that will not be recycled through
the Income Statement

Gains/(losses) for
the period
- 731,229
731,229 - 923,692 923,692
Tax on above - (222,552) (222,552) - (279,803) (279,803)


Total Other
Comprehensive
Income

- 508,677 508,677 - 643,889 643,889


Total
Comprehensive
Income

284,971 508,677 793,648 296,413 643,889 940,302

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 2025 Year to 30 June 2024

Revenue Capital Total Revenue Capital Total
$’000 $’000 $’000
$’000 $’000 $’000
Equity holders of Australian
Foundation Investment
Company
284,912 508,677 793,589 296,174 643,889 940,063
Minority Interests 59 - 59 239 - 239

284,971 508,677 793,648 296,413 643,889 940,302



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


11

Consolidated Balance Sheet as at 30 June 2025

2025 2024


Note $’000 $’000

Current assets

Cash D1 280,769 166,499

Receivables 39,534 42,425

Trading portfolio 5,773 5,387

Total current assets 326,076 214,311



Non-current assets

Investment portfolio A2 10,254,757 9,703,558

Fixtures & fittings 155 -

Total non-current assets 10,254,912 9,703,558

Total assets 10,580,988 9,917,869




Current liabilities

Payables 1,335 1,256

Borrowings – bank debt 10,000 10,000

Tax payable 113,483 34,105

Provisions 7,084 6,014

Total current liabilities 131,902 51,375

Non-current liabilities

Provisions 169 154

Deferred tax liabilities - other 233 1,237

Deferred tax liabilities – investment portfolio B2 1,707,918 1,603,716

Total non-current liabilities 1,708,320 1,605,107

Total liabilities 1,840,222 1,656,482




Net Assets 8,740,766 8,261,387


Shareholders' equity


Share capital A1, D6 3,210,196 3,204,950

Revaluation reserve A1, D3 3,651,333 3,449,280

Realised capital gains reserve A1, D4 799,329 546,953

General reserve A1 23,637 23,637

Retained profits A1, D5 1,054,439 1,034,794

Parent entity interest 8,738,934 8,259,614

Minority interest 1,832 1,773

Total equity 8,740,766 8,261,387


This Balance Sheet should be read in conjunction with the accompanying notes.
12

Consolidated Statement of Changes in Equity for the Year Ended 30 June 2025



Note
Share
Capital
Revaluation
Reserve
Realised
Capital
Gains
General
Reserve
Retained
Profits
Total
Parent
Entity

Minority
Interest Total
Year Ended 30 June 2025
$’000 $’000 $’000 $’000
$’000 $’000 $’000 $’000
Total equity at the beginning of the year 3,204,950 3,449,280 546,953 23,637 1,034,794 8,259,614 1,773 8,261,387

Dividends paid to shareholders A4 - - (54,248) - (265,267) (319,515) - (319,515)
Dividend Reinvestment Plan D6 71,842 - - - - 71,842 - 71,842
Share buybacks D6 (66,274) - - - - (66,274) (66,274)
Other share capital adjustments (322) - - - - (322) - (322)
Total transactions with shareholders 5,246 - (54,248) - (265,267) (314,269) - (314,269)


Profit for the year - - - - 284,912 284,912 59 284,971
Other Comprehensive Income (net of tax)
Net gains for the period - 508,677 - - - 508,677 - 508,677
Other Comprehensive Income for the year

- 508,677 - - - 508,677 - 508,677
Transfer to Realised Capital Gains of cumulative
gains on investments sold

- (306,624) 306,624 - - - - -
Total equity at the end of the year 3,210,196 3,651,333 799,329 23,637 1,054,439 8,738,934 1,832 8,740,766

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

13

Consolidated Statement of Changes in Equity for the Year Ended 30 June 2025 (continued)



Note
Share
Capital
Revaluation
Reserve
Realised
Capital
Gains
General
Reserve
Retained
Profits
Total
Parent
Entity

Minority
Interest Total
Year Ended 30 June 2024
$’000 $’000 $’000 $’000
$’000 $’000 $’000 $’000
Total equity at the beginning of the year 3,136,282 2,926,191 509,741 23,637 960,171 7,556,022 1,534 7,557,556
Dividends paid to shareholders A4 - - (83,588) - (221,551) (305,139) - (305,139)
- Dividend Reinvestment Plan D6 68,840 - - - - 68,840 - 68,840
Other share capital adjustments (172) - - - - (172) - (172)
Total transactions with shareholders 68,668 - (83,588) - (221,551) (236,471) - (236,471)

Profit for the year
- - - -
296,174 296,174 239 296,413
Other Comprehensive Income (net of tax)
Net gains for the period - 643,889 - - - 643,889 - 643,889
Other Comprehensive Income for the year

- 643,889 - - - 643,889 - 643,889
Transfer to Realised Capital Gains of cumulative
gains on investments sold

- (120,800) 120,800 - - - - -
Total equity at the end of the year 3,204,950 3,449,280 546,953 23,637 1,034,794 8,259,614 1,773 8,261,387


This Statement of Changes in Equity should be read in conjunction with the accompanying notes
14

Consolidated Cash Flow Statement for the Year Ended 30 June 2025


2025 2024

$’000 $’000

Inflows/ Inflows/

Note (Outflows) (Outflow)
Cash flows from operating activities
Sales from trading portfolio 20,481 13,346
Purchases for trading portfolio (18,573) (9,995)
Interest received 9,370 6,963
Dividends and distributions received 312,779 319,169

324,057 329,483


Other revenue 6,583 5,758
Administration expenses (21,921) (19,316)
Finance costs paid (1,208) (1,405)
Taxes paid (28,255) (25,172)
Net cash inflow/(outflow) from operating activities E1 279,256 289,348


Cash flows from investing activities
Sales from investment portfolio 791,260 489,873
Purchases for investment portfolio (609,806) (517,291)
Taxes paid on sales from investment portfolio (31,287) (24,571)
Payment for fixed assets (179) -
Net cash inflow/(outflow) from investing activities 149,988 (51,989)


Cash flows from financing activities
Share issue transaction costs (322) (172)
Share buybacks (66,274) -
Dividends paid (248,378) (236,073)
Net cash inflow/(outflow) from financing activities (314,974) (236,245)


Net increase/(decrease) in cash held 114,270 1,114
Cash at the beginning of the year 166,499 165,385
Cash at the end of the year D1 280,769 166,499

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.

15

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 stable to growing dividends over time and attractive total returns
over the medium to long term.
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:

2025
$’000
2024
$’000

Share capital 3,210,196 3,204,950

Revaluation reserve 3,651,333 3,449,280

Realised capital gains reserve 799,329 546,953

General reserve 23,637 23,637

Retained profits 1,054,439 1,034,794


8,738,934 8,259,614


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 consists 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:
2025
$’000
2024
$’000



Equity instruments (excluding below) 8,889,034 8,539,661

Equity instruments (over which options may be written) 1,201,664 1,019,386

Equity instruments (listed on non-Australian/NZ Exchanges) 164,059 144,511

10,254,757 9,703,558





16

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.
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 2025 and 30 June 2024 were as follows:










30 June
2025

30 June
2024
Net tangible asset backing per share $ $
Before tax 8.33 7.88
After tax 6.97 6.60
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 $791.7 million (2024: $486.6 million) of equity securities were sold. The cumulative gain on the
sale of securities was $306.6 million for the period after tax (2024: $120.8 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.







17

A3. Operating income
The total income received from AFIC’s investments is set out below.
Dividends and Distributions
2025
$’000
2024
$’000
Income from securities held in investment portfolio at 30 June
302,257 316,100
Income from investment securities sold during the year
10,188 5,736
Income from securities held in trading portfolio at 30 June
175 -
Income from trading securities sold during the year
- -
312,620 321,836

Interest income

Revenue from deposits and cash management trusts 9,195 3 6,963
Other revenue
Administration fees 6,274 5,525
Other income 37 30
6,311 5,555
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.
Trading income
Net gains on the trading portfolio are set out below.

2025


2024

Net gains

$’000

$’000
Net realised gains/(losses) from trading portfolio – shares/securities
14 (77)
- options 3,179 4,119
Unrealised gains/(losses) from trading portfolio - shares/securities
(729) 937
- options (170) (78)
2,294 4,901
If all call options were exercised, this would lead to the sale of $42.9 million worth of securities at an agreed price
– the ‘exposure’ (2024: $34.5 million).

18

A4. Dividends paid
The dividends paid and payable for the year ended 30 June 2025 are shown below:

2025
$’000
2024
$’000
(a) Dividends paid during the year

Final dividend for the year ended 30 June 2024 of 14.5 cents fully franked at
30% paid 30 August 2024 ( 2024: 14 cents fully franked at 30% paid on 1
September 2023)
174,798 167,176
Interim dividend for the year ended 30 June 2025 of 12.0 cents per share
fully franked at 30% paid 25 February 2025 (2024: 11.5 cents fully franked
at 30% paid 26 February 2024)
144,717 137,963

319,515 305,139
Dividends paid or payable in cash
247,673 236,299
Dividends reinvested in shares
71,842 68,840

319,515 305,139
Dividends forgone via DSSP
12,331 11,856
(b) Franking credits

Opening balance of fr anking account at 1 July
263,771 248,712
Franking credits on dividends received
97,068 101,489
Tax paid during the year
59,026 49,428
Franking credits paid on ordinary dividends paid
(136,935) (130,774)
Franking credits deducted on DSSP shares issued
(5,287) (5,084)
Closing Balance of Franking Account
277,643 263,771
Adjustments for tax payable in respect of the current year’s profits and the
receipt of dividends recognised as receivables
121,079 42,488
Adjusted Closing Balance
398,722 306,259
Impact on the franking account of dividends declared but not recognised as
a liability at the end of the financial year:
(104,803) (77,776)
Net available 293,919 228,483
These franking account balances would allow AFIC to frank additional
dividend payments up to an amount of:
685,811 533,127
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.













19

(c) New Zealand imputation account
2025
$’000
2024
$’000
(Figures in A$ at year-end exchange rate : 2025 : $NZ$1.08:$A1; 2024 : $NZ1.097:$A1)
Opening balance
19,243 10,325
Imputation credits on dividends received
9,737 8,619
Imputation credits on dividends paid
(18,027) -
Closing balance
10,953 18,944
A NZ imputation credit on NZ 4.0 cents of the dividend was attached to the final dividend to be paid on 30 August
2024. There is no NZ imputation credit attached to the proposed final dividend for the year ended 30 June 2025.
(d ) Dividends declared after balance date
Since the end of the year Directors have declared a final dividend of 14.5 cents per share plus a special dividend
of 5 cents per share, both fully franked at 30%. The aggregate amount of the final and special dividends for the
year to 30 June 2025 to be paid on 28 August 2025, but not recognised as a liability at the end of the financial
year is 244,541

(e ) Listed Investment Company capital gain account



2025
$’000
2024
$’000
Balance of the Listed Investment Company (LIC) capital gain
account at 1 July:


64,650

92,813
Capital gains (incl LIC gains received from dividends) 272,172 55,425
LIC gains paid as part of dividend (54,248) (83,588)
Balance at 30 June 282,574 64,650
This equates to an attributable gain of: 403,677 92,357

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. $349.3 million attributable gain is attached to the final and special dividends to be paid on 28
August 2025.
A5. Earnings per share
The table below shows the earnings per share based on the
profit for the year:
2025 2024

Basic Earnings per share Number Number

Weighted average number of ordinary shares used as the
denominator
1,254,334,970 1,247,196,831




$’000 $’000
Profit for the year 284,912 296,174



Cents Cents
Basic earnings per share






22.71 23.75
20

B. Costs, Tax and Risk
B1. Management Costs
The total management expenses for the period are as follows:

2025
$’000
2024
$’000


Rental expense relating to non-cancellable leases (736) (702)
Employee benefit expenses (15,076) (12,390)
Depreciation charge (24) -
Other administration expenses
(7,155) (5,823)

(22,991) (18,915)
Employee benefit expenses
A major component of employee benefit expenses is Directors’ and Executives’ remuneration. This has been
summarised below:

Short-term


Post-employment


Total

$ $ $

2025
Non-executive
Directors 803,699 73,501 877,200
Executives 3,488,812 120,000 3,608,812
Total 4,292,511 193,501 4,486,012
2024
Non-executive
Directors 724,321 70,890 795,211
Executives 4,028,579 110,000 4,138,579
Total 4,752,900 180,890 4,933,790

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.





21

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.
Tax expense
The income tax expense for the period is shown below:
(a) Reconciliation of income tax expense to prima facie tax payable


2025
$’000
2024
$’000
Profit before income tax expense 306,221 318,935
Tax at the Australian tax rate of 30% (2024: 30%) 91,866 95,681
Tax offset for franked dividends received (67,947) (71,058)
Sundry items whose tax treatment differs from accounting treatment 514 619

24,433 25,242
Over provision in prior years (3,183) (2,720)


Total tax expense 21,250 22,522

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.

2025
$’000
2024
$’000
Deferred tax liabilities on unrealised gains in the investment portfolio 1,707,918 1,603,716
Opening balance at 1 July 1,603,716 1,355,200
Tax on realised gains (118,350) (31,287)
Charged to OCI for ordinary securities on gains or losses for the period 222,552 279,803
1,707,918 1,603,716


22

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% and 10%, if spread equally over all assets in the investment portfolio, would
have led to a reduction in AFIC’s comprehensive income of $358.9 million and $717.8 million respectively, at a
tax rate of 30% (2024: $339.6 million & $679.2 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.

AFIC’s total investment exposure by sector is as below:

2025 2024

% %
Energy 3.33 3.77
Materials 12.81 14.28
Industrials 11.51 10.75
Consumer Discretionary 7.41 7.95
Consumer Staples 3.85 4.08
Banks 20.17 20.81
Other Financials 9.90 9.23
Real Estate 5.09 5.01
Telecommunications 7.37 6.51
Health Care 12.31 13.17
Info Technology 3.55 2.72
Utilities 0.03 0.03
Cash 2.67 1.69

Securities representing over 5% of the investment portfolio at 30 June
were
Commonwealth Bank 9.4 10.1
BHP 7.4 8.1
CSL 6.2 7.8

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 (1.6%) part of the total portfolio (2024 : 1.5%).

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.




23

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 major commercial banks. In the unlikely event of a bank default, 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 2025, no such investments are held (2024 : 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 6 months.
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.





24

30 June 2025
Less than
6 months
6- 12
months
Greater
than 1
year
Total
contractual
cash flows
Carrying
Amount

$’000 $’000 $’000 $’000 $’000
Non-derivatives
Payables
1,335
- - 1,335 1,335
Borrowings
10,000
- - 10,000 10,000

11,335 - - 11,335 11,335
Derivatives
Options in trading portfolio* - - - - -
- - - - -

30 June 2024 Less than 6
months
6- 12
months
Greater
than 1
year
Total
contractual
cash flows
Carrying
Amount

$’000 $’000 $’000 $’000 $’000
Non-derivatives
Payables 1,256 - - 1,256 1,256
Borrowings 10,000 - - 10,000 10,000
11,256 - - 11,256 11,256
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
th
June 2025 or 30
th
June 2024.

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.

25

Further information that shareholders 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

2025
$’000
2024
$’000

Cash at bank 280,181 166,262

Cash with custodian 588 237


280,769 166,499

Cash holdings yielded an average floating interest rate of 4.08% (2024: 4.30%). All cash investments are held
in a transactional account, with a custodian or in an ‘at call’ deposit account with the Commonwealth Bank of
Australia and Macquarie Bank.
D2. Credit Facilities


2025
$’000

2024
$’000

Commonwealth Bank of Australia – cash advance facility 80,000 110,000

Amount drawn down at 30 June 0 0

Undrawn facilities at 30 June 80,000 110,000



National Australia Bank- cash advance facility 20,000 20,000

Amount drawn down at 30 June 10,000 10,000

Undrawn facilities at 30 June 10,000 10,000



Total short-term loan facilities 100,000 130,000

Total drawn down at 30 June 10,000 10,000

Total undrawn facilities at 30 June 90,000 120,000


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 Board decided to reduce the total amount of facilities during the year.
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% 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 2025 the market value of the securities pledged as collateral was $17.1
million (2024 : $15.1 million).

26

D3. Revaluation reserve

2025
$’000
2024
$’000

Opening balance at 1 July 3,449,280 2,926,191

Gains/(losses) on investment portfolio

- Equity Instruments 731,229 923,692

Provision for tax on above (222,552) (279,803)

Cumulative taxable realised (gains)/losses (net of tax) (306,624) (120,800)

3,651,333 3,449,280


This reserve is used to record increments and decrements on the revaluation of the investment portfolio
as described in accounting policy note A2.


D4. Realised capital gains reserve




Opening balance at 1 July 546,953 509,741

Dividends paid (54,248) (83,588)
Cumulative taxable realised gains/(losses) (net of tax) 306,624 120,800
799,329 546,953

This reserve records gains or losses after applicable taxation arising from disposal of securities in the
investment portfolio as described in A2.

D5. Retained profits




Opening balance at 1 July 1,034,794

960,171

Dividends paid (265,267) (221,551)

Profit for the year 284,912 296,174

1,054,439 1,034,794

This reserve relates to past profits.










27

D6. Share capital


Movements in Share Capital

Date Details Notes Number
of shares

Issue
price
Paid-up
Capital

’000 $ $’000
1/07/2023 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
26 /02/2024 Dividend Reinvestment Plan i 4,292
7.39 31,719
26 /02/2024
Dividend Substitution Share
Plan
ii 729
7.39 n/a
Various Costs of issue -
- (172)
30/06/2024 Balance 1,251,570
3,204,950
30/08/2024 Dividend Reinvestment Plan i 5,461 7.26 39,650
30/08/2024
Dividend Substitution Share
Plan
ii 920 7.26 n/a
25 /02/2025 Dividend Reinvestment Plan i 4,350
7.40 32,192
25 /02/2025
Dividend Substitution Share
Plan
ii 764
7.40 n/a
Various Share buy-backs iii (9,006)
- (66,274)
Various Costs of issue -
- (322)
30/06/2025 Balance 1,254,059
3,210,196
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 & 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 programme. During the financial year, 9.0 million shares
were bought back at an average price of $7.36 (2024: Nil).
All shares have been fully paid, rank pari passu and have no par value.











28

E. Income statement reconciliations
E1. Reconciliation of net cash flows from operating activities to profit

2025
$’000
2024
$’000
Profit for the year 284,971
296,413
Net decrease/(increase) in trading portfolio (386) (1,550)
Dividends received as securities under DRP investments (1,420)
-
Decrease/(increase) in current receivables 2,891
2,284
- Less increase/(decrease) in receivables for investment portfolio 504
(3,223)
Increase/(decrease) in deferred tax liabilities 103,198
248,923
- Less (increase)/decrease in deferred tax liability on investment portfolio (104,202)
(248,516)
Increase/(decrease) in current payables 79
(12)
- Less (increase)/decrease in dividends payable 714
(226)
- Less (increase)/decrease in payables for investment portfolio (509)
-
Increase/(decrease) in provision for tax payable 79,378
1,949
Capital gains tax charge taken through equity (118,350)
(31,287)
Prior year taxes paid relating to capital gains 31,287
24,571
Depreciation 24
-
Increase/(decrease) in other provisions/non-cash items 1,077
22
Net cash flows from operating activities 279,256
289,348

E2. Tax reconciliations

Tax expense composition

Charge for tax payable relating to the current year 25,437 24,835
Over provision in prior years (3,183) (2,720)
Increase/(decrease) in deferred tax liabilities (1,004) 407

21,250 22,522

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 portfolio 222,552 279,803

222,552 279,803






29

Deferred tax assets & liabilities
The deferred tax balances are attributable to:
2025
$’000
2024
$’000

(a) Tax on unrealised gains or losses in the trading portfolio (127) (362)

(b)
Provisions and expenses charged to the accounting profit
which are not yet tax deductible
2,393 1,856

(c)
Interest and dividend income receivable which is not
assessable for tax until receipt
(2,499) (2,731)


(233) (1,237)


Movements:

Opening balance at 1 July (1,237) (830)

Credited/(charged) to Income statement 1,004 (407)


(233) (1,237)

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.

30

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) AICS transactions with minority interests
The below transactions were with Djerriwarrh Investments Ltd as a minority interest holder in the Company’s subsidiary.

2025
$’000
2024
$’000
Administration expenses charged for the year 2,738 2,566
At the end of June, the Company’s investment in Djerriwarrh Investments Limited, which is measured at fair value
through OCI as part of the investment portfolio, was valued at $22.7 million (2024 : $22.1 million) and it received
dividend income during the year of $1.1 million (2024 : $1.1 million).
(b) AICS transactions with other Listed Investment Companies
AICS had the following transactions with other Listed Investment Companies to which it provides services :

Administration expenses charged for the year to Mirrabooka Investments Ltd 2,448 2,139
Administration expenses charged for the year to AMCIL Ltd 1,343
1,011
At the end of June, the Company’s investment in Mirrabooka Investments Limited, which is measured at fair
value through OCI as part of the investment portfolio, was valued at $49.9 million (2024 : $27.7 million)
which
included participation in Mirrabooka’s 1-for-7 rights issue and capital raising and it received dividend income
during the year of $1.2 million (2024 ; $1.3 million). The Company did not have an investment in AMCIL Ltd
during the year.
F2. Remuneration of auditors
For the year the auditor earned or will earn the following remuneration including GST:

2025
$

2024
$
PricewaterhouseCoopers
Audit Services
Audit or review of financial reports 184,884 178,115
Audit related Services

AFSL compliance audit and review 9,868 9,507
Permitted Non-Audit Services

Review of realised CGT balances 67,760 67,760
Preparation and lodgement of tax returns 40,623 37,479


Total remuneration 303,135 292,861
31

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 1 investment comprising
more than 10% of AFIC’s income – BHP 12.0% (2024 2 investments : BHP (12.4%) and CBA (10.6%)).
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 28 July 2025 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:
Phrase AASB Terminology
Market Value Fair Value for Actively Traded Securities
Cash Cash & Cash Equivalents
Share Capital Contributed Equity
Options

Hybrids
Derivatives written over equity instruments that are
valued at fair value through Profit or Loss
Equity instruments that have some of the
characteristics of debt


AFIC complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (“IASB”). 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 2025 (“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.
32

Basis of accounting
The financial statements are prepared using the valuation methods described in 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.
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 2025 or 30 June 2024.
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
corporate bond rate information provided by Milliman via the G100.
(iii)Cash incentives
Cash incentives are provided under the 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.
(iv)Share incentives
Share incentives are provided under the Incentive Plan and the Employee Share Acquisition Scheme.
For the Employee Share Acquisition Scheme and the 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 the Incentive Plan is recognised on the Balance
Sheet.
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.
33

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. T hese 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) Incentive Plan
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.
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% 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% 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.
20,309 AFIC shares for the Incentive Plan (2024: 10,291 shares) were purchased by executives in the year (in
relation to the prior year) with a fair value (being the acquisition price) of $148,606 ( 2024: $72,717). Executives
are allowed to buy shares in any of the LICs that AICS administers in order to meet this requirement.
(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 $6,000 per annum. After PAYG is deducted, $3,000
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 $6,000. 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, 79% of the possible maximum was awarded, and 50% of this was used
to buy shares in Djerriwarrh 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 were as follows (ESAS only) :
34

2025
$’000
2024
$’000
Share-based payment expense 64 47
(d) L
iability
The total liability arising from share based payment transactions is included in the 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% 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
Incorporation
Class of
shares
Equity holding
2025 2024
Australian Investment Company Services
Ltd
Australia Ordinary 75% 75%
The investment in AICS is accounted for at cost in the individual financial statements of AFIC.
F9. Lease Commitments
The Group has entered into a non-cancellable operating lease for the use of its premises for 6 years with effect
from 1 July 2022. Current commitments relating to leases at balance date, for the current lease (incl. GST), is:
2025
$’000
2024
$’000
Due within one year 589 561
Later than one year but less than five 1,266 1,855
Greater than five years - -
1,855 2,416
35

F10. Parent Entity Financial Information
S
ummary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
2025 2024
$'000 $'000
Balance sheet
Current assets 313,566 202,583
Total assets 10,568,324 9,906,291
Current liabilities 124,232 46,579
Total liabilities 1,834,736 1,651,840
Shareholders’ equity
Issued capital 3,210,346 3,205,100
Reserves
Revaluation reserve 3,651,333 3,449,280
Realised capital gains reserve 799,329 546,953
General reserve 23,637 23,637
Retained earnings 1,048,943 1,029,481
5,523,242 5,049,351
Total shareholders’ equity 8,733,588 8,254,451
Profit or loss for the year 284,735 295,457
Total comprehensive income 793,412 939,346
36