Australian Foundation Investment Company Limited/Announcement

2021 Statutory Annual Report, Review and AGM Documents

AGM30 August 2021AFIFinancials

30 August 2021
The Manager
ASX Market Announcements
Australian Securities Exchange
Exchange Centre
Level 4
20 Bridge Street
Sydney NSW 2000
Electronic Lodgement
Australian Foundation Investment Company Limited
Statutory Annual Report, Annual Shareholder Review and
Annual General Meeting Documentation
Dear Sir / Madam
P
lease find attached the 2021 Statutory Annual Report, Annual Shareholder
Review and Annual General Meeting Documentation being sent to
shareholders.
Y
ours faithfully
Matthew Rowe
Company Secretary

A
uthorised by the Company Secretary

Annual Report
2021

2 DIRECTORS’
REPORT
2 5 Year Summary
4 About the Company
6 Review of Operations
and Activities
12 Top 25 Investments
13 Company Position
14 Board Members
17 Senior Executives
18 Remuneration Report
32 Non-audit Services
33 Auditor’s Independence
Declaration

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

Year in Summary
* Assumes a shareholder can take full advantage of the franking credits.
Profit for
the Year
$235.1m
$240.4m in 2020.
Down 2.2%
Total
Shareholder
Return
35.2%
Share price plus
dividend, including
franking*
Management
Expense
Ratio
0.14%
0.13%
in 2020
Total
Portfolio
Return
31.9%
Including franking*
S&P/ASX 200
Accumulation Index
including franking*
29.1%
Fully
Franked
Dividend
14
¢
Final
24
¢
Total
24 cents total
in 2020
2021
Total
Portfolio
$9.1b
Including cash
at 30 June.
$7.2 billion in 2020
1Australian Foundation Investment Company Limited Annual Report 2021

DIRECTORS’ REPORT
5 Year Summary
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Dividends Per Share
(Cents)
(b)
Investments at Market Value
($ Million)
(e)
Net Asset Backing Per Share
($)
(d)
Number of Shareholders
(30 June)
272.2134.2
(a)
279.0
245.3
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
240.4
6.49
6.27
5.89
5.96
138,671
129,948
119,463
153,588
32
(c)
24
24
24
24
34.0
23.6
21.3
19.9
7,566
7,274
6,790
7,122
235.1
19.38,978
247.45159,500
8
(c)
Notes
(a) Participation in the Rio Tinto and BHP off-market share buy-backs, special dividends and the receipt of a dividend because of the Coles
demerger from Wesfarmers.
(b) All dividends were fully franked. The LIC attributable gain attached to the dividend was 2021: 4.29 cents, 2020: 7.14 cents, 2019: 7.14 cents,
2018: 2.86 cents, 2017: nil.
(c) 8 cents fully franked special dividend paid with the interim dividend.
(d) Net asset backing per share based on year-end data before the provision for the final dividend. The figures do not include a provision for capital
gains tax that would apply if all securities held as non-current investments had been sold at balance date as Directors do not intend to dispose
of the portfolio.
(e) Excludes cash.
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Dividends Per Share
(Cents)
(b)
Investments at Market Value
($ Million)
(e)
Net Asset Backing Per Share
($)
(d)
Number of Shareholders
(30 June)
272.2134.2
(a)
279.0
245.3
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
240.4
6.49
6.27
5.89
5.96
138,671
129,948
119,463
153,588
32
(c)
24
24
24
24
34.0
23.6
21.3
19.9
7,566
7,274
6,790
7,122
235.119.38,978
247.45159,500
8
(c)
2Australian Foundation Investment Company Limited Annual Report 2021

About the Company
Australian Foundation Investment Company (AFIC)
is a listed investment company investing in Australian
and New Zealand equities.
Investment Objectives
The Company aims to provide shareholders with attractive
investment returns through access to a growing stream
of fully franked dividends and growth in capital invested.
The Company’s primary investment goals are:
• to pay dividends which, over time, grow faster than
the rate of inflation; and
• to provide attractive total returns over the medium
to long term.
How AFIC Invests – What We Look For in Companies
A portfolio that
is managed to
achieve long term
capital and dividend
growth
Quality FirstGrowth
Including dividends
Value
Approach to Investing
Investment Philosophy
The investment philosophy is built
on taking a medium to long term view
on companies in a diversified portfolio
with an emphasis on identifying quality
companies that are likely to sustainably
grow their earnings and dividends over
this time frame.
Quality in this context is an outcome
of our assessment of the board and
management as well as some key
financial metrics. These include
return
on capital employed, return on equity,
the level of gearing in the balance
sheet, margins and free cash flow. The
structure of the industry and a company’s
competitive position in this industry is also
an important indicator of quality. Linked to
this assessment of quality is the ability
of companies to grow earnings over time,
which ultimately should produce good
dividend growth.
Recognising value is also an important
aspect of sound long term investing.
Short term measures such as the price
earnings ratio, price to book or price to
sales may be of some value, but aren’t
necessarily strong predictors of future
performance. Our assessment of value
tries to capture the opportunity a business
has to prosper and thrive over the
medium to long term.
In building the investment portfolio in this
way, we believe we can offer investors a
well-diversified portfolio of high-quality
companies that is intended to deliver total
returns ahead of the Australian equity
market and with less volatility over
the long term.
The Company also uses options
written against a small proportion of its
investments and a small trading portfolio
to generate additional income.
From time to time, some borrowings
may be used where potential investment
returns justify the use of debt. This is
managed within very conservative limits,
as determined by the Board.
AFIC is managed for the benefit of its
shareholders with fees based on the
recovery of costs rather than as a fixed
percentage of the portfolio. There are no
performance fees. As a result, the benefit
of scale over time results in a very low
expense ratio for investors. For the twelve
months to 30 June 2021 this was 0.14 per
cent, or 14 cents for each $100 invested.
Approach to Environmental,
Social and Governance (ESG)
Issues When Investing
Assessment of Environmental, Social and
Governance (ESG) issues is an important
part of our investment process. As a
long term investor, we seek to invest in
companies that have strong governance
4Australian Foundation Investment Company Limited Annual Report 2021

and risk management processes, which
includes consideration of environmental and
social risks. We regularly review companies
to ensure ongoing alignment with our
investment framework:
• We believe environmental factors,
including the impact of climate change,
can have a material impact on society.
These factors are considered when
assessing a company’s assets, long
term sustainability of earnings and cash
flow, cost of capital and future growth
opportunities.
• We believe that aligning ourselves
with high-quality management and
boards building sustainable long term
businesses is the best approach to
avoiding socially harmful businesses.
We are attracted to companies
that act in the best interest of all
their stakeholders, including their
employees, customers, suppliers,
and wider communities.
• We invest in high-quality companies
with strong governance processes,
and management and boards whose
interests are closely aligned with
shareholders. The investment process
includes an assessment of their
past performance, history of capital
allocation, level of accountability,
mix of skills, relevant experience and
succession planning. We also closely
scrutinise a company’s degree of
transparency and disclosure.
Engagement with Companies
Voting on resolutions is one of the key
functions that a shareholder has in ensuring
better long term returns and management
of investment risk:
• We take input from proxy advisers but
conduct our own evaluation of the
merits of any resolution.
• We vote on all company resolutions
as part of our regular engagement
with the companies in the portfolio.
• We actively engage with companies
when we have concerns those
resolutions are not aligned with
shareholders’ interests.

We acknowledge that high-quality
companies may face ESG challenges
from time to time. We seek to stay engaged
with the companies and satisfy ourselves
that the issues are taken seriously and
worked through constructively. Ideally, in
this instance, we seek to remain invested
to influence a satisfactory outcome for
stakeholders.
5Australian Foundation Investment Company Limited Annual Report 2021

6Australian Foundation Investment Company Limited Annual Report 2021
Review of Operations and Activities
Profit and Dividend
The full year profit was $235.1 million,
down from $240.4 million in the previous
corresponding period. The profit to
30 June 2021 includes a demerger
dividend of $36.5 million (which was non-
cash and carries no franking) resulting
from the Endeavour Group demerger
from Woolworths Group. Excluding this
one-off item, the profit figure to 30 June
2021 was $198.6 million. This fall in profit
versus the corresponding period last year
was a result of the decline in underlying
income as the economic impact of the
COVID-19 pandemic continued to
limit dividends for many holdings
in the portfolio.
Earnings per share were 19.3 cents
(16.3 cents excluding the Endeavour
demerger dividend), down from
19.9 cents. AFIC, as a long-standing
listed investment company, has reserves
that can be used in difficult times.
Drawing upon these reserves and some
realised capital gains after tax generated
by some sales in the portfolio, the final
dividend was maintained at 14 cents
per share fully franked despite the fall in
income over the year. Total fully franked
dividends applicable for the year are
24 cents per share, the same as last
year. Despite the significant disruption
to income arising from COVID-19 over
the last two years, AFIC has maintained
its dividends to shareholders through
this period.
Three cents of the final dividend are
sourced from taxable capital gains,
on which the Company has paid or
will pay tax. The amount of the pre-tax
attributable gain on this portion of the
dividend, known as an ‘LIC capital gain’,
is therefore 4.29 cents. The enables some
shareholders to claim a tax deduction
in their tax return.
Market and Portfolio
Performance
The Australian share market delivered a
very strong performance for the financial
year (Figure 1) as concerns about the
lingering effects of COVID-19 were put
aside by the positive stimulus provided
by Government and central banks, and
better than expected company earnings.
The positive mood of investors was also
reinforced by the efficacy of vaccines and
their deployment in a number of major
markets.
The increase in the Australian market
was widespread across sectors, with
information technology and the banking
sectors very strong (Figure 2). The
banking sector has risen from previous
lows during the year supported by a
recovering economy, lower bad debt
charges and more sustainable dividend
payout ratios.
The S&P/ASX 200 Accumulation Index
delivered a positive performance in
11 of the 12 months for the financial year,
culminating in a 12-month return of
29.1 per cent, including franking – one
of the strongest returns on record. AFIC’s
portfolio outperformed over this period,
with a return of 31.9 per cent, which also
includes the benefit of franking.
Companies in the portfolio that
contributed strongly to the positive
relative return to the Index through the
12-month period were Reece, Mainfreight,
ARB Corporation, James Hardie
Industries and ALS.
The long term performance of the
portfolio, which is better aligned with the
Company’s investment timeframes, was
11.0 per cent per annum for the 10 years
to 30 June 2021. This is slightly ahead
of the Index return over the same period
of 10.8 per cent. Both of these figures
include the benefit of franking. AFIC’s
performance numbers are after costs.
Source: FactSet
7,400
7,200
7,000
6,800
6,600
6,400
6,200
6,000
5,800
5,600
Jul 20
Jun 20
Aug 20
Sep 20
Oct 20
Nov 20
Dec 20
Jan 21
Feb 21
Mar 21
Apr 21
May 21
Jun 21
Figure 1: Performance of the S&P/ASX 200 Price Index for the Financial Year
160
140
120
100
0
S&P/ASX 200 Industrials
Index
S&P/ASX 200 Banks
S&P/ASX 200 Information Technology
S&P/ASX 200 Resources
Jul 20
Aug 20
Sep 20
Oct 20
Nov 20
Dec 20
Jan 21
Feb 21
Mar 21
Apr 21
May 21
Jun 21
Jul 21
Figure 2: Performance of Selected Sectors of the Market
Source: FactSet

7Australian Foundation Investment Company Limited Annual Report 2021

The short and long term performance
have been achieved with low portfolio
turnover, providing very tax-effective
returns for shareholders. These returns
have also been delivered with very low
volatility, achieving an attractive profile
of return relative to risk for investors.

Positioning the Portfolio
A number of purchases were undertaken
during the financial year. The largest
was participation in the IPO of PEXA
Group. While the pricing reflected the
strong market conditions towards the
end of the period, the company appears
well positioned as a good long term
investment. Other new holdings added
to the portfolio were Endeavour Group,
due to its demerger from Woolworths
Group, FINEOS Corporation (including
participation in its placement), Domino’s
Pizza Enterprises, Temple & Webster,
Nanosonics and IDP Education. Periods
of volatility throughout the year also
provided opportunities to add to holdings
with strong market positions such as
Woolworths Group and ASX.
Details of companies added to the
portfolio during the financial year:
• PEXA Group engages in the
development and provision of
electronic conveyancing system
in Australia and the United Kingdom.
• FINEOS Corporation is a global
software company that provides
software solutions to the life, accident
and health insurance industry.
• Domino’s Pizza Enterprises engages
in the management of retail food outlets
and franchise services. It operates
through the following geographical
segments: Australia/New Zealand,
Europe and Japan.
• Temple & Webster is a leading online
retailer of furnishings and homewares
in Australia.
• Nanosonics is a developer of infection
control and decontamination products
with a market-leading position in
ultrasound disinfection.
• IDP Education is an international
education organisation offering student
placement in Australia, New Zealand,
the United States, United Kingdom,
Republic of Ireland and Canada.
Major sales included the complete
disposal of holdings in South32, Alumina
and Brickworks, and these funds were
deployed elsewhere in the portfolio.
There was also some trimming of the
positions in Qube Holdings, Brambles
and Oil Search.
Figure 4 highlights the profile of AFIC’s
portfolio by the various sectors of the
market at the end of the financial year
and how it differs from the Index.
International Portfolio
As first signalled at the AGM in
October 2020, a small part of our
funds, $48 million (which represents
approximately 0.5 per cent of the
portfolio) was invested into a diversified
global equities portfolio during the latter
half of the financial year.
8Australian Foundation Investment Company Limited Annual Report 2021
Review of Operations and Activities
continued
Net asset per share growth plus dividends,
including franking
S&P/ASX 200 Accumulation Index,
including franking
Assumes an investor can take full advantage of franking credits. Past performance is not indicative of future performance.
3 year return
12.5%
11.0%
5 year return
12.8%
12.6%
10 year return
11.0%
10.8%
1 year return
31.9%
29.1%
Figure 3: Portfolio Performance – Per Annum Returns to 30 June 2021
AFIC portfolio weightS&P/ASX 200 Index weight
19.2%14.4%14.4%14.4%8.9%7.7%1.0%6.0%2.5%4.6%1.1%1.7%4.4%
20%
15%
10%
5%
0%
Banks
Industrials
Healthcare
Materials
Other
Financials
Consumer
Discretionary
Information
Technology
Communication
Services
Consumer
Staples
Real
Estate
Energy
Cash
Utilities
Figure 4: AFIC Investment by Sector Versus the S&P/ASX 200 Index as
at 30 June 2021 – Excludes International Holdings

Leveraging our investment philosophy
in the domestic market, the approach
to international equities is similar. The
international strategy invests in publicly
listed companies outside the Australian
and New Zealand markets with a medium
to long term investment time horizon.
It focuses on high-quality companies
with strong management teams and
competitive advantages that we view as
sustainable, often underpinned by long
term secular growth trends. With inherent
business characteristics that allow these
companies to generate an attractive
return on capital, the selected companies
are expected to generate a reasonable
level of return for our shareholders
through a combination of earnings growth
and dividends. We look to invest at a
starting valuation that is sensible in the
context of the expected return and the
risk associated with each investment.
Holdings at 30 June 2021 are listed
on page 69.
This activity is potentially a precursor
to establishing a separate low-cost
international Listed Investment
Company in the future.
Share Price Return
The share price return, including
reinvestment of dividends and franking
credits, over the 12 months to 30 June
2021 was 35.2 per cent, which is ahead
of the portfolio return for the year. The
share price was trading at a premium
of 5.0 per cent to the net asset backing
(before tax on unrealised gains) at the
end of June 2021, whereas at 30 June
2020 the premium was 2.2 per cent
(Figure 5).
Importantly, the long term, 10-year
return is 12.3 per cent for the share price
in comparison to 10.8 per cent for the
Index. The figures for the Index and share
price assumes a shareholder can take
full advantage of the franking credits
attached to the dividends paid (Figure 6.).
Outlook
Equity markets delivered near-record
growth over the year with valuations
recovering from the effects of COVID-19
as interest rates remain very low
(Figure 7). However, the outlook for
corporate earnings remains uncertain,
as supportive government stimulus
measures are unlikely to be repeated
and underlying economic conditions
remain variable. Cost inflation is also
starting to percolate, and companies are
facing disruption to their supply chains
which may lead to rising costs for many
companies. In this environment, it is
our expectation that market volatility will
increase over the coming 12 months.
In recent years we have increased the
weighting of holdings in the portfolio that
meet our definition of quality companies.
In an economy where input costs may
be rising, we believe the companies in
the portfolio are generally well positioned
given their market strength and ability
to further leverage their efficiencies.
Any pressure on valuations because of
these conditions may result in purchases
in more of our preferred companies
at attractive prices. At present, we
are looking to remain patient with our
capital until these opportunities present
themselves.
9Australian Foundation Investment Company Limited Annual Report 2021
15%
-10%
-5%
0%
5%
10%
Jun 10
Jun 1
1
Jun 1
2
Jun 1
3
Jun 1
5
Jun 1
4
Jun 1
6
Jun 1
7
Jun 1
8
Jun 19Jun 20Jun 21
Figure 5: Share Price Premium/Discount to Net Asset Backing
10 year return
12.3%
10.8%
5 year return
13.4%
12.6%
3 year return
14.9%
11.0%
1 year return
35.2%
29.1%
Share price growth plus dividends,
including franking
S&P/ASX 200 Accumulation Index,
including franking
Figure 6: Share Price Return − to 30 June 2021

Directorship Matters
Ms Julie Fahey was appointed as an
Independent Non-Executive Director
of the Company on 22 April 2021.
Ms Fahey has over 30 years of experience
in technology, including in major
organisations such as Western Mining,
Exxon, Roy Morgan, General Motors and
SAP, covering consulting, software vendor
and Chief Information Officer roles.
In addition to her industry experience,
she spent 10 years at KPMG as a
Partner with the firm, during which
time she held roles as National Lead
Partner Telecommunications, Media and
Technology, and National Managing
Partner – Markets. Ms Fahey was also
a member of the KPMG National
Executive Committee.
10Australian Foundation Investment Company Limited Annual Report 2021
Times
20
18
16
14
12
10
20152013201420112012
2016
2017
2018
2019
2020
2021
10-year
average
15.3
Figure 7: Valuation of the Market – Price Earnings Ratio
of the S&P/ASX 200 Index
Review of Operations and Activities
continued
Source: FactSet

Ms Fahey is a Non-Executive Director
of Seek Limited, IRESS Limited, Vocus
Group Limited, Datacom Group Limited,
CenITex and a member of the Australian
Red Cross Blood Service Board and the
La Trobe University Council.
Mr Craig Drummond was appointed as
an Independent Non-Executive Director
of the Company on 1 July 2021.
Mr Drummond was Chief Executive
Officer of Medibank Private Limited
from 2016 to 2021. He has had over 30
years’ experience in the financial sector
– Group Executive Finance and Strategy
at National Australia Bank from 2013 to
2016, Bank of America Merrill Lynch as
Chief Executive Officer and Country Head
from 2009 to 2013, and Goldman Sachs
JBWere (1986 to 2009) in various roles
(including being a leading investment
analyst and subsequently Director of
Research and Investment Strategy)
culminating in being appointed Chief
Executive Officer.
Mr Drummond is a Senior Fellow of the
Financial Services Institute of Australasia
and is a Chartered Accountant. He is a
Non-Executive Director of Transurban and
is President of the Geelong Football Club.
He is also a Governor of the Ian Potter
Foundation.
We are delighted to welcome both
Ms Fahey and Mr Drummond to the
Board. Their depth of knowledge and
experience will be of great assistance
to the Company.
Mr Ross Barker retired as a Director on
30 June 2021. Mr Barker transitioned to
Non-Executive Director in January 2018
having been appointed Chief Executive
Officer of the Company in February 2001
and Managing Director in October 2001.
Prior to October 2001 he was an Alternate
Director of the Company, a position he
had held since April 1987. Mr Barker
was integrally involved, through the late
1990s and early 2000s, in building AFIC’s
capabilities to be a fully and strongly
independent entity in its own right.
His contribution to Board deliberations
will be missed. The Board wishes to
record its thanks to Mr Barker for his
valued and outstanding service to the
Company and to shareholders for
almost 35 years and wishes him
well for the future.
11Australian Foundation Investment Company Limited Annual Report 2021

Includes investments held in both the investment and trading portfolios.

Value at Closing Prices at 30 June 2021
Total Value
$ Million
% of the
Portfolio
1Commonwealth Bank of Australia789.08.8
2BHP Group 651.57.3
3CSL 623.26.9
4Wesfarmers 435.74.9
5Westpac Banking Corporation401.24.5
6Macquarie Group 345.23.8
7Transurban Group 339.63.8
8National Australia Bank 292.53.3
9Woolworths Group 244.62.7
10Australia and New Zealand Banking Group 238.92.7
11Rio Tinto 235.82.6
12Mainfreight 234.02.6
13James Hardie Industries*207.62.3
14Telstra Corporation*204.32.3
15Amcor175.52.0
16Reece 170.01.9
17ARB Corporation 151.31.7
18Sydney Airport148.31.7
19Sonic Healthcare 142.21.6
20Goodman Group141.51.6
21ResMed139.21.6
22Coles Group 120.81.3
23Seek 120.71.3
24Ramsay Health Care 120.51.3
25Carsales.com 119.61.3
Total6,792.9
As percentage of total portfolio value (excludes cash)75.7%
* Indicates that options were outstanding against part of the holding.
Top 25 Investments
As at 30 June 2021
12Australian Foundation Investment Company Limited Annual Report 2021

Capital Changes
The following changes occurred to the
Company’ share capital during the year:
• Under the Company’s Dividend
Substitution Share Plan, 776,243
new shares were issued at nil cost
in September 2020 and 527,443
new shares were issued at nil cost
in February 2021.
• Under the Company’s Dividend
Reinvestment Plan, 5,581,720 new
shares were issued at a price of $6.30
in September 2020 and 3,586,947
new shares were issued at a price
of $7.10 in February 2021.
The Company’s buy-back facility remains
open although no shares were bought
back during the year.
The Company’s contributed equity, net of
share issue costs, rose $60.5 million to
$3.0 billion. At the close of the year the
Company had 1,221 million shares on issue.
Dividends
Directors have declared a fully franked
final dividend of 14 cents per share,
the same as last year.
The dividends paid during the year ended
30 June 2021 were as follows:
$’000
Final dividend for the year
ended 30 June 2020 of 14 cents
fully franked at 30 per cent
paid 1 September 2020 164,556
Interim dividend for the year
ended 30 June 2021 of
10 cents per share fully
franked at 30 per cent,
paid 23 February 2021117,917
282,473
Dividend Substitution
Share Plan (DSSP)
The Company has in place a Dividend
Substitution Share Plan.
This enables shareholders to elect to
receive shares in the Company instead
of dividends, forgoing any franking credit
and LIC gains that would otherwise be
attached to the dividend but deferring any
tax due on the receipt of such shares (for
Australian tax payers) until such time as
the shareholding is sold. Shareholders will
need to seek their own taxation advice in
determining if this plan is suitable for them.
Further details are available on the
Company’s website or by request from
the Company’s Share Registrar.
Financial Condition
The Company’s primary source of funds
consists of its shareholders’ funds.
The Company also had agreements
with Commonwealth Bank of Australia
for loan facilities totalling $50 million
(see Note D2). The facilities were not
used during the year. The Board takes
a prudent and conservative approach
to the use of borrowed funds. Currently,
when used, they are maintained within
a limit of 10 per cent of total assets. As at
30 June 2021, the facilities are undrawn.
Listed Investment Company
Capital Gains
Listed Investment Companies (LIC)
which make capital gains on the sale of
investments held for more than one year
are able to attach to their dividends an
LIC capital gains amount which some
shareholders are able to use to claim a tax
deduction. This is called an ‘LIC capital
gain attributable part’. The purpose of this
is to put shareholders in Listed Investment
Companies on a similar footing with
holders of managed investment trusts
with respect to capital gains tax on the
sale of underlying investments.
Tax legislation sets out the definition of
a ‘Listed Investment Company’ which
AFIC satisfies. Furthermore, from time
to time the Company sells securities out
of the investment portfolio held for more
than one year which may result in capital
gains being made and tax being paid.
The Company is therefore on occasion
in a position to be able to make available
to shareholders a LIC capital gain
attributable part with our dividends.
In respect of this year’s final dividend of
14.0 cents per share for the year ended
30 June 2021, it carries with it a 4.29 cents
per share LIC capital gain attributable part
(2020: 7.14 cents). The amount which
shareholders may be able to claim as a
tax deduction depends on their individual
situation. Further details are provided in
the dividend statements.
Likely Developments
The Company intends to continue
investing on behalf of its shareholders as
it has been doing since 1928. The results
of these investment activities will depend
upon the performance of the companies
and securities in which we invest. Their
performance in turn depends on many
economic factors (macro, which include
economic growth rates, inflation, interest
rates, exchange rates and taxation
levels and micro which includes industry
economics and competitive behaviour)
and their approach to, and management
of, material Environmental, Social and
Governance (ESG) risks.
We do not believe it is possible or
appropriate to make a prediction
on the future course of markets or
the performance of our investments.
Accordingly, we do not provide a forecast
of the likely results of our activities.
However, the Company’s focus is on
results over the medium to long term and
its twin objectives are to grow dividends at
a rate faster than inflation and to provide
shareholders with attractive capital growth.
Significant Changes in the
State of Affairs
Directors are not aware of any other
significant changes in the operations of
the Company, or the environment in which
it operates, that will adversely affect the
results in subsequent years.
Events Since Balance Date
The Directors are not aware of any matter
or circumstance not otherwise disclosed
in the financial statements or the Directors’
Report which has arisen since the end of
the financial year that has affected or may
affect the operations, or the results of those
operations, or the state of affairs of the
Company in subsequent financial years.
Environmental Regulations
The Company’s operations are such that
they are not directly materially affected
by environmental regulations.
Rounding of Amounts
The Company is of the kind referred to
in the ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument
2016/191, relating to the ‘rounding off’ of
amounts in the Financial Report. Amounts
in the Financial Report have been rounded
off in accordance with that Instrument, to
the nearest thousand dollars, or in certain
cases, to the nearest dollar.
Corporate Governance
Statement
The Company’s Corporate Governance
Statement for the financial year ended
30 June 2021 will be found on the
Company’s website at:
afi.com.au/corporate-governance
As an overseas listed issuer on the
New Zealand Stock Exchange (NZX), the
Company is generally deemed to comply
with the NZX Listing Rules provided that
the Company remains listed on the ASX,
complies with the ASX Listing Rules and
provides the NZX with all the information
and notices that it provides to the ASX.
Company Position
13Australian Foundation Investment Company Limited Annual Report 2021

Chairman of the Investment Committee. Member of the Remuneration,
Nomination and Audit Committees. Director of the Company’s subsidiary,
Australian Investment Company Services Limited (AICS).
Mr Paterson is a company Director who was appointed to the Board in
June 2005 and Chairman in 2018. He was a former Alternate Director of the
Company for Mr Campbell from April 1987 to June 2005. He is Chairman
of Djerriwarrh Investments Limited. He was formerly a Director of Goldman
Sachs JBWere and is a former member of the Board of Guardians of
Australia’s Future Fund.
Member of the Investment and Nomination Committees.
Ms Dee-Bradbury was previously Chief Executive Officer/President of
Developed Markets (Asia Pacific and ANZ) for Mondelez from 2010 to
2014. Before joining Mondelez Ms Dee-Bradbury was Group CEO of the
global Barbeques Galore group, and has held other senior executive roles
in organisations including Maxxium, Burger King Corporation and Lion
Nathan/Pepsi Cola Bottlers. Ms Dee-Bradbury is a Non-Executive Director
of BlueScope Steel Limited (appointed April 2014), a Director of Energy
Australia Holdings following her appointment in April 2017, an inaugural
member of the Business Advisory Board at Monash Business School and
a member of Chief Executive Women and of the Women Corporate
Directors Foundation. Ms Dee-Bradbury was formerly a Non-Executive
Director of Grain Corp Limited (from 2014 to 2020) and Tower Limited
(NZ) until her resignation in 2016 and a former member of the Federal
Government’s Asian Century Strategic Advisory Board.
Managing Director of the Company’s subsidiary, Australian Investment
Company Services Limited (AICS). Member of the Investment Committee.
Mr Freeman became Chief Executive Officer and Managing Director in
January 2018 having been Chief Investment Officer since joining the
Company in February 2007. Prior to this he was a Partner with Goldman
Sachs JBWere where he spent 12 years advising the investment
companies on their investment and dealing activities. He has a deep
knowledge and experience of investments markets and the Company’s
approaches, policies and processes. He is also Managing Director
of Djerriwarrh Investments Limited, AMCIL Limited and Mirrabooka
Investments Limited.
Mr Drummond was appointed to the Board in July 2021. He was Chief
Executive Officer of Medibank Private Limited from 2016 to 2021. He has
had over 30 years’ experience in the financial sector – Group Executive
Finance and Strategy at NAB from 2013 to 2016, Bank of America Merrill
Lynch as Chief Executive Officer and Country Head from 2009 to 2013,
Goldman Sachs JBWere (1986 to 2009), in various roles (including being
a leading investment analyst and subsequently Director of Research and
Investment Strategy) culminating in being appointed Chief Executive Officer.
Mr Drummond is a Senior Fellow of the Financial Services Institute of
Australasia and is a Chartered Accountant. He is also a Non-Executive
Director of Transurban and is President of the Geelong Football Club.
He is also a Governor of the Ian Potter Foundation.
John Paterson
Chairman and
Independent
Non-Executive
Director
BCom (Hons)(Melb),
CPA, F Fin
Rebecca
Dee-Bradbury
Independent
Non-Executive
Director
BBus, GAICD
Mark Freeman
Managing Director
BE, MBA, Grad Dip
App Fin (Sec Inst),
AMP (INSEAD)
Craig
Drummond
Independent
Non-Executive
Director
BCom (Melb),
SF FIN, FCA
Board Members
14Australian Foundation Investment Company Limited Annual Report 2021

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

Board Members
continued
Meetings of Directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year ended 30 June 2021
and the numbers of meetings attended by each Director were:
BoardInvestmentAuditRemunerationNomination
Eligible
to AttendAttended
Eligible
to AttendAttended
Eligible
to AttendAttended
Eligible
to AttendAttended
Eligible
to AttendAttended
J Paterson12122020442244
M Freeman12122020-4
#
-2
#
--
RE Barker**12122019-4
#
-2
#
-1
#
RP Dee-Bradbury12112018-4
#
--44
JA Fahey3
^
3-2
#
-1
#
----
GR Liebelt 1212-13
#
-3
#
22-1
#
DA Peever 12123*1644---1
#
CM Walter12122020442244
PJ Williams1211201944-2
#
44
# Attended meetings by invitation.
* Mr DA Peever was appointed to the Investment Committee on 19 May 2021.
** Mr RE Barker retired from the Board on 30 June 2021.
^ Ms JA Fahey was appointed to the Board on 22 April 2021.
Insurance of Directors and Officers
During the financial year, the Company paid insurance premiums to insure the Directors and officers named in this report to the extent
allowable by law. The terms of the insurance contract preclude disclosure of further details.

Chairman of the Audit Committee. Member of the Investment and
Nomination Committees. Chairman of the Company’s subsidiary,
Australian Investment Company Services Limited (AICS).
Mr Williams was appointed to the Board in February 2010. He is Chairman
of NAB Trustees Services Limited (NAB Subsidiary), Director of Cricket
Victoria Ltd and ARUMA (formerly House with No Steps), an Advisory
Board Member of TLC Aged Care Limited and Chairman of MIPS Advisory
Committee for FIIG Securities Limited. Mr Williams was formerly Managing
Director of Equity Trustees Limited, Director and Treasurer of Foundation
for Young Australians, Chairman of Olympic Park Sports Medical Centre
Pty Ltd, a Director of the Trustee Corporations Association of Australia,
a Director of the Australian Baseball Federation Inc and a General Manager
with AXA/National Mutual in Australia and Hong Kong.
Peter J Williams
Independent
Non-Executive
Director
Dip.All, MAICD, FAIM
16Australian Foundation Investment Company Limited Annual Report 2021

Senior Executives
Mr Driver joined the Company in January 2003. Previously, he was
with National Australia Bank Ltd for 18 years in various roles covering
business strategy, marketing, distribution, investor relations and business
operations. Mr Driver was formerly Chairman of Trust for Nature (Victoria).
Mr Rowe joined the Company in July 2016. He is a Chartered Secretary with
over 15 years of experience in corporate governance with a particular focus
in listed investment companies. He was previously a corporate governance
advisor at a professional services firm which included acting as Company
Secretary for three ASX listed companies. Prior to that Mr Rowe was the
Company Secretarial Manager for a funds management company based
in the United Kingdom.
Mr Porter joined the Company in January 2005. He is a Chartered
Accountant and has had over 26 years’ experience in accounting and
financial management both in the United Kingdom with Andersen
Consulting and Credit Suisse First Boston, and in Australia where he was
Regional Chief Operating Officer for the Corporate and Investment Banking
Division of CSFB. He is the immediate former Chair of The Group of 100
(G100), the peak body for CFOs and remains on the Board, is a Director
of the Auditing and Assurance Standards Board (AUASB) and a Director
of the Anglican Foundation.
Geoffrey N Driver
General Manager,
Business Development
and Investor Relations
B Ec, Grad Dip
Finance, MAICD
Matthew Rowe
Company Secretary
BA (Hons), MSc Corp
Gov, FGIA, FCIS
Andrew JB Porter
Chief Financial Officer
MA (Hons) (St And),
FCA, MAICD
17Australian Foundation Investment Company Limited Annual Report 2021

Contents
The Directors present AFIC’s 2021 Remuneration Report which outlines key aspects of our remuneration policy and remuneration
awarded this year.
As outlined in last year’s Remuneration Report, the Remuneration Committee has adjusted the metrics used to calculate the vesting
of both the annual and long term incentive. The effects have been:
1. To increase the proportion of incentive that vests should the investment performance of AFIC and the other LICs to which the
Executives provide services outperform the relevant benchmarks (from 37 per cent to 60 per cent).
2. To increase the amount of incentive that vests according to the performance of the other LICs, thus reducing the overall cost
to AFIC (from 53 per cent to 40 per cent – see below).
3. AFIC Shareholder Return (i.e. the movement of the Company’s share price plus dividends reinvested) is now measured under
the Long Term Incentive Plan (LTIP), not the Annual Incentive. Note that this change is effective from the 2020-2024 LTIP.
The Directors believe that these changes further enhance the long term alignment of the incentive plans with shareholders’ interests.
It should be noted that AFIC also invests directly or indirectly in these other LICs, so their performance impacts AFIC’s performance.
The new incentive plans are also designed to enhance employee retention, which is expected to bring benefits to AFIC shareholders.
Shareholders should be aware that AFIC does not bear the total cost of remuneration alone. Due to agreements that the Group’s
subsidiary, Australian Investment Company Services Limited (AICS) also has with Djerriwarrh Investments Limited, Mirrabooka
Investments Limited and AMCIL Limited, a substantial proportion of the total remuneration cost (usually 30 per cent to 40 per cent,
depending on the individual), is borne by these other companies (collectively, the ‘LICs’). AICS expenses the total amount and recovers
the proportion borne by the investment companies through the fees that it charges. This report, therefore, shows the total expense that
is borne by AICS and the remuneration that an individual receives. Each investment company bears the cost directly of any incentive
paid due to that company’s outperformance of the relevant benchmarks. This is accomplished by adjusting the amounts payable by
each company in the following year, and these adjustments will therefore appear on a lagging basis.
The report is structured as follows:
1. Remuneration Policy, Link to Performance and Outcomes
2. Structure of Remuneration
3. Executive Remuneration Expense
4. Contract Terms
5. Non-Executive Director Remuneration
Appendix
A. Remuneration Governance
B. Annual Incentives: Details of Outcomes and Conditions
C. Long Term Incentives: Details of Outcomes and Conditions
D. Directors and Executives: Equity Holdings and Other Transactions
E. Detailed Performance Measures by Investment Company
1. Remuneration Policy, Link to Performance and Outcomes
1.1 What is Our Remuneration Policy?
AFIC is an investor in securities listed primarily in Australia and New Zealand. Our primary objectives are to grow dividends at a faster
rate than inflation and provide shareholders with capital growth over the medium to long term. To achieve this, we need to attract and
retain professional, competent and highly motivated Executives and staff through offering attractive remuneration arrangements which:
• reflect market conditions;
• recognise the skills, experience, roles and responsibilities of the individuals;
• align with shareholder interests; and
• align with the risk management strategies.
Generally, we seek to set total remuneration at the upper or second quartile of the sectors in which we operate.
Periodically, we review our remuneration policies and plans seeking to ensure that they continue to meet these objectives.
Remuneration Report
18Australian Foundation Investment Company Limited Annual Report 2021

Remuneration for the Group’s Executives has two main elements:
• fixed annual remuneration (FAR), and
• performance-related pay, being annual incentives and long term incentives (LTI).
FAR is determined with reference to levels necessary to recruit and retain staff with the relevant skills and experience in the industry in
which the Group operates. We utilise external input, seeking to ensure that the FAR meets these conditions. This includes industry data
provided by the Financial Institutions Remuneration Group Inc. (FIRG) and McLagan for the financial services industry. The costs of the
FAR (and the personal element of the annual incentive) are allocated to the LICs based on an internal estimate of work performed which
is subject to Board approval.
Through performance-related pay, the remuneration is adjusted to reflect the risks that the Company and its shareholders face and how
the Company has responded to those risks. In particular:
• The key performance indicators chosen to determine performance-related pay are those that the Company considers most relevant
to its objectives of improving shareholder wealth over the medium to long term, whilst also considering the relative levels of risk.
• The focus is on performance over the medium to long term, with only a small proportion of both annual incentives and LTI being
dependent on a single year’s performance.
• Executives agree to invest 25 per cent of the pre-tax annual cash incentive in AFIC shares and/or shares of the other investment
companies (AMCIL Limited, Djerriwarrh Investments Limited and Mirrabooka Investments Limited) and to hold these shares for
a minimum of four years.
The Board may, at its discretion, direct that any performance rights that are yet to vest or to be tested be cancelled in the event
of negative issues that arise, including material misstatement of the Company’s financial statements.
1.2 What is Our Target Remuneration Mix?
The target remuneration mix for Executives is as follows:
Managing Director’s Target
Remuneration Mix
Annual incentive 29%
Long term incentive 12%
Fixed annual remuneration 59%
Other Executives’ Target
Remuneration Mix
Annual incentive 21%
Long term incentive 10%
Fixed annual remuneration 69%
1.3 How is the Remuneration Paid in 2021 Linked to Performance?
1.3.1 Fixed Remuneration
Most Executives received modest inflationary increases in their fixed annual remuneration this year. AFIC continues to operate in a
highly competitive market, and salary levels are reviewed at least annually with the aim of remunerating its Executives to the extent
required to attract and retain Executives who are leaders in their field.
19Australian Foundation Investment Company Limited Annual Report 2021

1.3.2 Performance-related Pay
This section shows:
• How Annual Incentive measurements are split between AFIC and the other investment companies.
%Result
AFIC investment performance32Table 2
AFIC other metrics 8Table 1
Percentage of Annual Incentive determined by AFIC performance40
Other LIC investment performance28Table 15
Other LIC other metrics12Table 15
Percentage of Annual Incentive determined by other LICs performance40
Total percentage of Annual Incentive determined by AFIC/other LIC performance80
Personal metrics20n/a
100
See Table 5 for more details on the measures used in determining the Annual Incentives.
• The outcomes for the two long term incentive awards (LTI) that were tested for vesting during the year are shown in Table 3.
Refer to Sections 2.2 and 2.3 for explanations of the measures used.
2021 was a very strong year for the investment performance for AFIC. This has helped AFIC outperform its benchmarks for all of the
years under consideration – one, three, five and 10 years. This was echoed by strong outperformance from AMCIL and Mirrabooka.
In the case of these two LICs, performance was such that stretch targets were achieved. Following a reset of the strategy for Djerriwarrh,
this LIC outperformed over the short term (one-year period) but fell short of the return benchmark over the medium to longer term.
However, the other objective for Djerriwarrh, to pay a higher yield than the market, has been met over all the years assessed.
It should be noted that AFIC’s returns are after taxes and expenses and represent the ‘net’ return to shareholders, whereas Index
returns do not include either. Furthermore, many returns quoted by managed funds exclude either tax or expenses, or both. The use of
‘gross returns’ mitigates the tax disparity to some extent, as it adds back franking credits to the nominal dividend that the Index pays,
and also that AFIC pays.
The management expense ratio (MER – see Table 11) continues to be of importance to the Board. Despite the increase in expenses
flagged last year due to the commencement of the international portfolio, the MER increased only marginally to 0.14 per cent, thanks
to tight expense control elsewhere and the increase in portfolio value during the year largely outweighing these additional costs.
It is expected that next year’s expenses will be higher as a full year’s expenses for the international portfolio team is borne and due to
the consequences of a higher percentage of incentive vesting for the 2020 – 2021 year than was the case in the current year. The Board
exercised its discretion in this area.
The 2017 – 2021 award under the Executive Long Term Incentive Plan was available for vesting as of 30 June 2021. However, the
calculations needed to determine how much actually vests are not performed until after the date of the Annual Report. Therefore,
the full amount that may vest is shown, and the actual settlement of the 2017– 2021 award will take place in the year ended 30 June
2022. The actual amount settled will be reported in the relevant year. The 2016 – 2020 award vested in part for the year ended 30 June
2020. The total shareholder return of AFIC was 8.45 per cent per annum over the four-year vesting period, which was above the Target
Benchmark, as independently verified by external consultants. 25.5 per cent of the 50 per cent available under this metric was therefore
deemed to have vested.
The total portfolio return over the same period was narrowly behind its benchmark and therefore no incentive vested under this metric.
A total of 74.5 per cent of the total was forfeited. It is this forfeiture which is reflected in Table 4 on page 22.
The investment team LTIP to which Mr Freeman was entitled encompasses all of the investment companies (unlike the Executives
Plan for which only the AFIC performance is counted) and is measured over four years for all of the investment companies. The data
show outperformance for Mirrabooka and AMCIL whilst AFIC, although it outperformed its Index, did not do so by 20 per cent and
consequently only part of the award under this measure vested. Djerriwarrh underperformed. Consequently, 68.9 per cent of the
available LTIP was deemed to have vested. Detailed information about the performance of each investment company is provided
in Section E of the Appendix (Table 15).
Remuneration Report
continued
20Australian Foundation Investment Company Limited Annual Report 2021

Table 1: Non-investment Return Performance Measures
Performance Measure
Benchmark
Result
AFIC
Result
Comparison to
Benchmark
Growth in net operating result 1.1%-3.0%Unfavourable
Management expense ratio n/a0.14%Favourable
Outcome

Achieved

Partially achieved

Not achieved
Table 2: Investment Return Performance Measures
Measure
Benchmark
Result
AFIC
Result
Comparison to
Benchmark
Investment return – 1 year27.80%30.28%Favourable
Investment return – 3 years9.59%11.13%Favourable
Investment return – 5 years11.16%11.37%Favourable
Investment return – 10 years9.26%9.42%Favourable
Gross return – 1 year29.12%31.92%Favourable
Gross return – 3 years10.99%12.49%Favourable
Gross return – 5 years12.64%12.76%Favourable
Gross return – 10 years10.85%10.96%Favourable
Outcome

Achieved

Partially achieved

Not achieved
Table 3: Vesting and Forfeiture of Long Term Incentives During the Year
Award Date
Assessment
DatesMeasure Tested
Benchmark
ResultAFIC Result% Vested % Forfeited
ELTIP – performance rights*
1 July 201630 June 2020Total gross shareholder return8.42%8.45%25.5%24.5%
Total portfolio return6.52%6.48%0%50%
Investment team LTI
1 July 201730 June 2021Gross return11.89%12.54%68.9%31.1%
* Of the rights awarded on 1 July 2016, 74.5 per cent were forfeited as the relevant targets were not achieved and 25.5 per cent vested. For the
investment team LTI, outperformance by AFIC (to a limited extent), Mirrabooka and AMCIL mean that some vesting occurred. See Table 15.
1.3.3 Remuneration Outcomes
Table 4 discloses the actual remuneration outcomes received by the Company’s Executives during the year and the LTI that may
vest in future years. These amounts are different to the statutory remuneration expense disclosed in Table 7. The Directors consider
the information about remuneration outcomes in Table 4 relevant for users because the statutory remuneration expense includes
accounting charges for long term incentives that may or may not be received in future years.
21Australian Foundation Investment Company Limited Annual Report 2021

Table 4: Actual Executive Remuneration Outcomes
Total FAR
$
Annual
Incentive
$
Prior
Years’ LTI
Received*
$
Total
Remune-
ration
$
Annual
Incentive
Forfeited
$
LTI
Forfeited
$
Possible
Future LTI
(to Vest
Over Next
4 Years)
#
$
Mark Freeman – Managing Director
2021884,340409,53857,3331,351,211(32,632)(25,867)851,543
2020867,000232,44325,3761,124,819(199,584)(141,024)549,116
Andrew Porter – Chief Financial Officer
2021693,600190,97631,362915,938(17,104)(91,707)577,261
2020680,000108,344-788,344(96,492)(112,238)454,773
Geoff Driver – General Manager – Business Development and Investor Relations
2021571,200158,47425,842755,516(12,886)(75,767)475,533
2020560,00087,881-647,881(80,808)(92,484)374,684
Matthew Rowe – Company Secretary
2021300,00083,1429,838392,980(6,858)(28,772)226,533
2020275,00043,238-318,238(39,600)-164,608
For Mark Freeman, the amount forfeited is the difference between the target amount that would have been paid if all targets were met and the amount
paid, under the investment team LTI. The amount shown for the other Executives is the amount that would have been paid to them with respect to the
2016–2020 LTIP in the event that all targets had been achieved (2020: 2015– 2019 LTIP – note Matthew Rowe was not eligible). See Table 3.
The value of annual incentive forfeited is the difference between the target amount and the amount awarded. See Table 10.
The differences between the amounts disclosed in Table 4 and the amounts in Table 7 are as follows:
* Prior year’s LTI received in Table 4 shows the value of performance shares that vested during the year, measured at the price on the day that they
were received. In respect of Mark Freeman, it shows the cash payment received in respect of LTIP vesting from his time as Chief Investment Officer.
In contrast, Table 7 shows the accounting expense recognised in relation to the LTI Plans during the year.
# The future LTI in Table 4 reflects potential future remuneration that may be received by the Executives over the next four years if the performance
conditions are satisfied. This includes the estimated amounts payable under the two LTIP Plans assuming the performance conditions will be satisfied
at the time of vesting. For accounting purposes, these amounts are recognised as expense over the vesting period.
Ross Barker, who retired on 31 December 2017 as Managing Director, is not included in the above table or in Table 7 as he ceased to be an Executive.
However, he is still entitled to ELTIP for the years in which he was employed (see Table 12). $60,993 (25.5 per cent) of ELTIP for the 2016–2020 year
vested during the year ended 30 June 2021, and the after-tax amount was used to purchase AFIC shares. Mr Barker thus forfeited $178,357 (74.5 per cent) of
ELTIP. At the end of 30 June 2021, the total value of the ELTIP yet to vest for Mr Barker was $147,934 for the 2017–2021 plan, which is the last plan under
which he is entitled to an award.
Information about Non-Executive Director remuneration is provided in Section 5 Non-Executive Director remuneration.
2. Structure of Remuneration
2.1 Fixed Annual Remuneration (FAR)
The FAR component of an Executive’s remuneration comprises base salary, superannuation guarantee contributions and fringe
benefits. Executives can elect to receive a portion of their FAR in the form of additional superannuation contributions or fringe benefits.
This will not affect the gross amount payable by the Group.
2.2 Annual Incentive
Table 5 on the following page outlines the key terms and conditions of the annual incentive plan.
Remuneration Report
continued
22Australian Foundation Investment Company Limited Annual Report 2021

Table 5: Annual Incentives – Key Terms and Conditions
MDOther Executives
Targeted % of FAR 50 per cent30 per cent
ObjectivesAlign remuneration with the creation of shareholder wealth over the past year and over
a longer period.
Measures reflect the management of the Group and the other investment companies,
as well as the key investment returns that reflect the creation of shareholder wealth.
Performance measures• Company performance (20 per cent)
• Investment performance (60 per cent)
• Personal objectives (20 per cent)
• See Table 11 for more details
Relative weightings of
investment companies for
investment and company-
related performance
AFIC: 40 per cent
Djerriwarrh Investments Limited: 16 per cent
AMCIL Limited: 12 per cent
Mirrabooka Investments Limited: 12 per cent
Personal objectives: 20 per cent (allocated on same basis as FAR)
Delivery of awardIncentive is paid in cash, but 25 per cent of the pre-tax amount received is used by recipients
to acquire shares in AFIC and/or the other investment companies which they agree to hold
for minimum of four years.
Performance measured in 2021Investment measures all achieved as was MER. EPS target not achieved.
Outcomes for 2021
(see Table 10 for details)
92.6 per centAverage 92.2 per cent
The performance measures of each annual incentive plan are reviewed by the Remuneration Committee. The Committee may,
from time to time, revise the performance conditions and weightings in order to better meet the objectives of the annual incentive
policies. They may also change or suspend any part of the incentive payment arrangements. If relevant targets are not achieved but
performance is close to the target, some of the incentive may be paid. This would be noted as ‘partially achieved’ in Table 2. Where
stretch levels of performance are achieved above target, then higher amounts may be paid. To date, total annual incentives paid to each
Executive have never exceeded target.
For more detailed information about the annual incentive performance conditions and outcomes for 2021 please refer to Section B
Annual Incentives: Details of Outcomes and Conditions in the Appendix.
2.3 Long Term Incentive Plans (LTIP)
As is the case for the annual incentives, there are also two LTI Plans, one for the Executives (excluding the CIO) which is called the
ELTIP, and one for the CIO (this is the last year that amounts vest under the plan, the old ‘Investment Team’ LTIP). Table 6 outlines
the purpose and the key terms and conditions of each plan.
Table 6: Long Term Incentives – Key Terms and Conditions
Executive LTIP
(Performance Rights)Investment Team LTI Plan
Target 50 per cent of targeted annual incentive 20 per cent of FAR
Objectives
Align remuneration with growth in shareholder wealth over a forward-looking period of four years.
Reward outperformance.
Performance measuresSee Table 15 in the Appendix for details. See Table 15 in the Appendix for details.
Performance for awards
tested in 2021 (Table 3)
July 2016: 25.5 per cent vested (see Table 3).July 2017: 68.9 per cent vested (see Table 3).
For more detailed information about the LTI Plans and their performance conditions, including vesting schedules and outcomes for 2021,
please refer to Section C Long Term Incentives: Details of Outcomes and Conditions in the Appendix.
23Australian Foundation Investment Company Limited Annual Report 2021

3. Executive Remuneration Expense
This section discloses the remuneration expense recognised under accounting standards for each Executive (Table 7). These amounts
are different to the remuneration outcomes disclosed in Table 4 as noted in that table.
Table 7: Remuneration Expense
Short Term
Post-
employment
Total Fixed
Remuneration
$
Short Term
Long Term
Share-based
Payments
Other
Long Term
Payments*
$
Total
Remuneration
$
%
Fixed/
Performance
Related
Base Salary
$
Super-
annuation
$
Annual
Incentives
$
LTI Cash-
settled*
$
Mark Freeman – Managing Director
2021859,34025,000884,340409,538282,468(120,224)1,456,12261%/39%
2020842,00025,000867,000232,443117,747(100,800)1,116,39078%/22%
Andrew Porter – Chief Financial Officer
2021668,60025,000693,600190,976107,598-992,17470%/30%
2020655,00025,000680,000108,3443,818-792,16286%/14%
Geoff Driver – General Manager – Business Development and Investor Relations
2021546,20025,000571,200158,47488,423-818,09770%/30%
2020535,00025,000560,00087,8813,134-651,01586%/14%
Matthew Rowe – Company Secretary
2021275,47624,524300,00083,14248,345-431,48770%/30%
2020251,14223,858275,00043,23841,951-360,18976%/24%
* Includes amounts credited for non-vesting.
4. Contract Terms
Each Executive is employed under an open-ended contract, the terms of which can be varied by mutual agreement. There are no
contractual provisions for cessation of employment other than statutory requirements. Either the Company or the Executive can give
notice in accordance with statutory requirements. There are no specific payments to be made as a consequence of termination beyond
those required by statute. Should there be any payments, these will be at the Board’s discretion.
Material breaches of the terms of employment will normally result in the termination of an Executive’s employment.
5. Non-Executive Director Remuneration
Shareholders approve the maximum aggregate amount of remuneration per year available to be allocated between Non-Executive
Directors (NEDs). In proposing the amount for consideration by shareholders, the Remuneration Committee takes into account the time
demands made on Directors together with such factors as the general level of fees paid to Australian corporate Directors.
For NEDs, who are charged with the responsibility of oversight of the Company’s activities, a fixed annual fee is paid with no element
of performance-related pay.
The amount approved at the AGM in October 2019 was $1,250,000 per annum, which is the maximum amount that may be paid in total
to all NEDs. Retirement allowances for Directors were frozen at 30 June 2004.
On appointment, the Company enters into a deed of access and indemnity with each NED. There are no termination payments due
at the cessation of office, and any Director may retire or resign from the Board, or be removed by a resolution of shareholders.
The amounts paid to each NED, and the figures for the corresponding period, are set out in Table 8.
Remuneration Report
continued
24Australian Foundation Investment Company Limited Annual Report 2021

Table 8: Non-Executive Director Remuneration
Primary (Fee/
Base Salary)
$
Post-
employment
(Superannuation)
$
Total
Remuneration
$
J Paterson – Chairman
2021179,22217,028196,250
2020178,08016,920195,000
RE Barker – Non-Executive Director (retired 30 June 2021)
202189,6118,51498,125
202089,0408,46097,500
RP Dee-Bradbury – Non-Executive Director
202196,0102,11598,125
202093,2704,23097,500
JA Fahey – Non-Executive Director (appointed 22 April 2021)
202117,5621,66819,230
GR Liebelt – Non-Executive Director
202198,125-98,125
202089,0408,46097,500
DA Peever – Non-Executive Director
202189,6118,51498,125
202089,0408,46097,500
CM Walter AM – Non-Executive Director
202189,6118,51498,125
202089,0408,46097,500
PJ Williams – Non-Executive Director
202189,6118,51498,125
202089,0408,46097,500
Total remuneration of Non-Executive Directors
2021749,36354,867804,230
2020716,55063,450780,000
Amounts Payable on Retirement
The amounts payable to the current NEDs who were in office at 30 June 2004, which will be paid when they retire, are set out in Table 9.
These amounts were expensed in prior years as the retirement allowances accrued.
Table 9: Non-Executive Director Retirement Allowance
Amount Payable on Retirement
$
CM Walter AM 42,385
Total42,385
25Australian Foundation Investment Company Limited Annual Report 2021

Appendix
A. Remuneration Governance
Responsibilities of the Board and the Remuneration Committee
It is the Board’s responsibility to review and approve the recommendations of the Remuneration Committee.
For more information, the Charter of the Board is available on the Company’s website.
The Remuneration Committee’s primary responsibilities include:
• reviewing the level of fees for NEDs and the Chairman;
• reviewing the Managing Director’s remuneration arrangements;
• evaluating the Managing Director’s performance;
• reviewing the remuneration arrangements for other senior Executives;
• monitoring legislative developments with regards to Executive remuneration; and
• monitoring the Group’s compliance with requirements in this area.
For more information, the Charter of the Remuneration Committee is available on the Company’s website.
The Remuneration Committee is composed of three NEDs (GR Liebelt (Chairman), J Paterson and CM Walter AM) and meets at least
twice per year.
Policy on Hedging
The Company provides no lending or leveraging arrangements to its Executives, who are prohibited by Company policy from entering
into hedging arrangements that mitigate the possibility that ‘at risk’ incentive payments may not vest.
Use of Remuneration Consultants
A report was commissioned by the Remuneration Committee from Mercers during the year with regard to the benchmarking
of remuneration for all staff.
The Managing Director makes recommendations to the Remuneration Committee with regards to the remuneration levels
and structure of the key management personnel (KMP).
Mercers are also employed as an organisation to provide market performance data with regard to Australian domestic funds.
These data are used, amongst other things, as one of the components to determine the vesting of the ELTIP.
During the year, Mercers were paid $72,765 for their work benchmarking salary levels, and $14,920 for the provision of data
(all inclusive of GST).
Ernst & Young reviews the calculations used in determining the vesting of awards and certifies them as being correct
and in accordance with the terms and conditions of the ELTIP.
Ernst & Young were paid $17,510 (inclusive of GST) during the year ended 30 June 2021 for general remuneration advice which
consisted of verifying the calculations used for the vesting of the ELTIP (2020: $14,729 for a report on NED fee benchmarking) and
during the year the Group also paid $166,683 for other professional advice received which included acting as the internal auditor
for AICS and general taxation and accountancy advice (2020: $111,210) (all including GST).
Ernst & Young were remunerated on an invoiced basis, based on work performed.
The Company also participates in the annual McLagan and FIRG surveys of fund managers to understand current remuneration
levels and practices.
Remuneration Report
continued
26Australian Foundation Investment Company Limited Annual Report 2021

B. Annual Incentives: Details of Outcomes and Conditions
Table 10 below shows the annual incentives paid to individual Executives as a result of AFIC’s and the other investment companies’
performance on financial metrics and the individual’s achievement of their own personal objectives. Table 11 sets out the detailed terms
and conditions of the annual incentives. For a high-level summary see Section 2.2 and Table 5.
Table 10: Annual Incentive Outcomes
Executive% of Target Paid$ Paid% of Target Forfeited$ Forfeited
Mark Freeman92.6%$409,5387.4%$32,632
Geoff Driver92.5%$158,4747.5%$12,886
Matthew Rowe92.4%$83,1427.6%$6,858
Andrew Porter91.8%$190,9768.2%$17,104
Table 11: Executive Annual Incentive Performance Conditions
Performance Areas
and Relative WeightingPerformance MeasuresPurpose of Measure
Company performance (20 per cent)
The relevant weightings of the
investment companies are:
• AFIC: 50 per cent
• Djerriwarrh Investments Limited:
20 per cent
• AMCIL Limited: 15 per cent
• Mirrabooka Investments Limited:
15 per cent
• Operating result – measured against
prior years.
• Management expense ratio (MER):
at Board discretion, generally measured
against prior years’ results.
• Dividend yield (DJW only).
• Net operating result reflects the ability of the
Company to meet its stated aim of ‘paying out
dividends which, over time, grow faster than
the rate of inflation.’ The dividends of both MIR
and AMH vary from year to year and is not a key
objective for those companies. This metric is thus
not considered appropriate for them.
• MER reflects the costs of running the Company.
• Maintaining a dividend yield being above the
market’s is an important object for DJW.
Investment performance
(60 per cent )
The relevant weightings of the
investment companies are:
• AFIC: 50 per cent
• Djerriwarrh Investments Limited:
20 per cent
• AMCIL Limited: 15 per cent
• Mirrabooka Investments Limited:
15 per cent
• Relative investment return: measure
of the return on the portfolio invested
(including cash) over the previous one,
three, five and 10 years, relative to
the S&P/ASX 200 Accumulation Index
(Combined Mid Cap 50 and Small
Ordinaries for Mirrabooka and modified
S&P ASX 200 Accumulation Index for
Djerriwarrh).
• Gross return (GR): measure of the
movement in the net asset backing
of the Company (per share) plus the
dividends assumed to be reinvested
grossed up for franking credits over the
previous one, three, five and 10 years.
This return is compared to the S&P/
ASX 200 Accumulation Index grossed
up for franking credits (Combined
Mid Cap 50 and Small Ordinaries for
Mirrabooka and modified S&P ASX 200
Accumulation Index for Djerriwarrh).
The Board considers that the metrics used reflect,
over the medium to long term, the stated objectives
of the Company, namely ‘to provide attractive total
returns and pay dividends, which, over time, grow
faster than the rate of inflation’.
• Investment return: reflects the returns generated
by the mix of the investments that the Company
has invested in. These reflect the value added to
shareholders’ wealth by the investment decisions
of the Company.
• Gross return (GR): reflects the movement in the
value of the underlying portfolio over the period
with the additional recognition of the importance
of franking credits.
Note: The Remuneration Committee has discretion
to determine, at the time of the review, what it
considers to be the appropriate level of return
to be used.
Personal objectives (20 per cent )
These costs are allocated to AFIC
and to the LICs on the same
proportion as the FAR
Includes:
• advice to the Board;
• succession planning;
• management of staff;
• risk management; and
• shareholder stewardship.
These measures all contribute to the
efficient running of the Group, and the
other investment companies, enhancing
investment outcomes.
Personal objectives are included in incentive
calculations to encourage outperformance on
non-financial metrics. These metrics can be
important determinants of business success in
the medium term. The Managing Director reviews
the performance of each Executive with the
Remuneration Committee, and the Remuneration
Committee alone determines how the Managing
Director is performing against these objectives.
50 per cent is awarded based on the individual’s
capability and improvement and 50 per cent on
alignment with the Company’s values and culture.
27Australian Foundation Investment Company Limited Annual Report 2021

C. Long Term Incentives: Details of Outcomes and Conditions
This section shows the outstanding cash bonuses under the ELTIP and the investment team LTI Schemes (Table 12). It also explains
the detailed terms and conditions of the two LTIs that are currently in operation (Table 13). For a high-level overview see Section 2.3
of the main body of the Remuneration Report.
Table 12: Vesting of ELTIP and Investment Team LTI
ELTIP
Award Date
Vesting Date
Subject to
Performance
Hurdles
Value at
Award Date
$
Number of
Rights
Awarded
Value
Per Right
$
Award Vested
for the Year
Number of
Rights/%
Value Yet to Vest
30 June 2021
$
Ross Barker – Managing Director (until 31 December 2017)
1 July 201630 June 2020$185,97533,205$5.6018,462/25.5%-
1 July 201730 June 2021$92,88816,153$5.757-$147,934
$147,934
Mark Freeman – Managing Director (from 1 January 2018)
1 Jan 201830 June 2021$85,00014,765$5.757-$135,227
1 July 201830 June 2022$170,00027,974$6.077-$246,194
1 July 201930 June 2023$173,40028,217$6.145-$235,807
1 July 202030 June 2024$176,86829,125$6.073$234,315
$851,543
Andrew Porter – Chief Financial Officer
1 July 201630 June 2020$95,62517,074$5.6014,351/25.5%-
1 July 201730 June 2021$98,01617,026$5.757-$155,934
1 July 201830 June 2022$99,97616,451$6.077-$144,785
1 July 201930 June 2023$102,00016,598$6.145-$138,710
1 July 202030 June 2024$104,04017,132$6.073-$137,832
$577,261
Geoff Driver – General Manager – Business Development and Investor Relations
1 July 201630 June 2020$78,79514,069$5.6013,585/25.5%-
1 July 201730 June 2021$80,76514,030$5.757-$128,489
1 July 201830 June 2022$82,38013,556$6.077-$119,303
1 July 201930 June 2023$84,00013,669$6.145-$114,232
J July 202030 June 2024$85,68014,109$6.073-$113,509
$475,533
Matthew Rowe – Company Secretary (joined 11 July 2016)
11 July 201630 June 2020$30,0005,356$5.6011,365/25.5%-
1 July 201730 June 2021$35,2506,123$5.757-$56,079
1 July 201830 June 2022$37,8006,220$6.077-$54,742
1 July 201930 June 2023$41,2506,713$6.145-$56,096
1 July 202030 June 2024$45,0007,410$6.073-$59,616
$226,533
Investment Team
LTI Award Date
Vesting Date Subject to
Performance Hurdles
Target Amount
$
Award Vested for the Year
Value Yet to Vest
30 June 2021
$$%
Mark Freeman – Chief Investment Officer (investment team LTI) – until 31 December 2017
1 July 201730 June 2021$83,20057,33368.9%-
-
See Table 4 for actual amounts vested and Table 3 for details of vesting calculations.
Remuneration Report
continued
28Australian Foundation Investment Company Limited Annual Report 2021

The value of the outstanding ELTIP performance rights as in the table above was estimated at 30 June 2021 using the Total Share
Return (TSR – which includes dividends reinvested) based on a closing price on 30 June 2021 of AFI shares of $7.82 (the TSR
for AFI at 30 June 2021 was 12.3 per cent p.a. for four years, 12.9 per cent p.a. for three years, 16.1 per cent for two years and
33.1 per cent for one year.
Actual amounts awarded may vary from this amount, depending on performance over the four-year vesting period.

During the year, 15.25 per cent of the 2016 –2020 Investment Team Long Term Incentive that vested in the prior year was paid to
Mr Freeman. 68.9 per cent of the 2017-2021 Investment Team Long Term Incentive vested and will be paid in the year ended
30 June 2022.
Table 13: Long Term Incentive Plans
ELTIP (Performance Rights)
Nature of grantRights to receive cash that must then be used by the Executives to acquire AFIC shares on market.
Performance
conditions
1. Total gross shareholder return (50 per cent): the movement in the AFIC share price, grossed
up to reflect the value of franking credits. This is compared to that of the market such that only
outperformance is rewarded. Outperformance of this Index over time should be an indicator of
the value added by the Company to shareholders’ wealth. Both the Company’s return and the
Index return are smoothed over 30 days to remove excess volatility.
2. Total portfolio return (50 per cent): the movement in the net asset backing of the Company (per share)
plus the dividends paid by the Company reinvested. This compares AFIC’s investment performance
against that of other fund managers (based on the Mercer Investment Consulting Survey of Australian
Retail Fund Managers which provides the industry benchmark of funds management performance over
the relevant period), so that only outperformance relative to its peers is rewarded.
Note that from the 2020 – 2024 Plan onwards total gross shareholder return will be the only performance condition.
This is balanced by the removal of TSR from the Annual Incentive performance conditions.
Vesting schedule: total
gross shareholder return
Company performance relative
to gross accumulation indexPercentage of rights vesting
Underperformance 0 per cent
< or = 20 per cent outperformanceStraight line between 25 per cent and 50 per cent
> 20 per cent outperformance50 per cent
Vesting schedule:
total portfolio return
Company performance Percentage of rights vesting
Less than median performance0 per cent
Median to < or = 75th percentileStraight line between 25 per cent and 50 per cent
> 75 per cent percentile50 per cent
Valuation of
performance rights
At 1 July each year, the 30-day volume weighted average price of AFIC shares up to, but not including
1 July will be calculated. The amount of ELTIP available will then be divided by this average price to
determine the number of performance rights that may vest in four years’ time.
The value of the performance rights will be adjusted each year by the total shareholder return for the year,
calculated based on the 30-day volume weighted average price of AFIC shares up to 1 July. At vesting
time, the value of the performance rights that will vest is converted to cash, based on the value of the
rights at that time.
Accounting treatmentUnder current accounting standards, the ELTIP scheme is classified as a cash-settled scheme.
The expected amount payable upon vesting must therefore be estimated each year and adjusted
not only for the likelihood of vesting, but also for changes in the value of the performance rights.
In the first year, 25 per cent of the expected amount payable will be booked as an expense. At the end
of the second year, 50 per cent of the new expected final value less the amount booked in the previous
year will be booked. At the end of the third year, 75 per cent of the total estimated final value less amounts
previously expensed will be booked. At the end of the fourth year, the actual liability will be calculated
and a balancing adjustment made.
29Australian Foundation Investment Company Limited Annual Report 2021

Table 13: Long Term Incentive Plans continued
Investment Team LTI Plan
Nature of grantCash or shares, at discretion of the Company.
Performance conditionGross return which measures the movement in the net asset backing of the Company (per share) plus the
dividends assumed to be reinvested grossed up for franking credits. This return is compared to the relevant
accumulating index as set out below.
Indices which investment
portfolios are assessed
against
Investment portfolioRelevant accumulation index
AFIC (60 per cent)S&P/ASX 200 Accumulation Index,
grossed up for franking credits
Djerriwarrh Investments Limited (25 per cent)S&P/ASX 200 Accumulation Index,
grossed up for franking credits
Mirrabooka Investments Limited (10 per cent)S&P/ASX Mid Cap 50 Accumulation Index and
the S&P/ASX Small Ordinaries Accumulation
Index, grossed up for franking credits
AMCIL Limited (5 per cent)S&P/ASX 200 Accumulation Index,
grossed up for franking credits
Vesting schedule:
Company gross return
Company performance relative to
the relevant accumulation indexPercentage of rights vesting
< 90 per cent performance0 per cent
90 – 99 per cent performanceBoard discretion
> 100 per cent up to 110 per cent performanceStraight line between 50 per cent and 100 per cent
> 110 per cent up to 120 per cent performanceStraight line between 100 per cent and 150 per cent
120 per cent + performance150 per cent
For details of Incentive Plans that vested or were awarded in the comparative year, please see the 2020 Annual Report, available on the
Company’s website.

D. Directors and Executives: Equity Holdings and Other Transactions
Table 14 sets out reconciliations of shares issued by the Group and held directly, indirectly or beneficially by Non-Executive Directors
and Executives of the Group, or by entities to which they were related.
Table 14: Shareholdings of Directors and Executives at 30 June 2021
Opening
Balance
Changes
During Year
Closing
Balance
J Paterson612,1273,205615,332
M Freeman154,0756,107160,182
RE Barker908,7735,100913,873
RP Dee-Bradbury14,21320014,413
JA Faheyn/a--
GR Liebelt527,708-527,708
DA Peever31,4391,15232,591
CM Walter353,84812,958366,806
PJ Williams86,422(36,666)49,756
GN Driver139,1173,972143,089
MJ Rowe3,8241,8815,705
AJB Porter170,7565,560176,316
Other Arrangements with Non-Executive Directors
Non-Executive Directors Ross Barker (who retired on 30 June 2021), John Paterson and Catherine Walter have rented office space
and, for Ross Barker and John Paterson, a parking space from the Group at commercial rates during the year. Sub-lease rental income
(included in revenue) received or receivable, including GST, by the Group during the year was:
Rental Income
Received/Receivable
$
RE Barker23,126
J Paterson29,802
CM Walter15,941
Remuneration Report
continued
30Australian Foundation Investment Company Limited Annual Report 2021

E. Detailed Performance Measures by Investment Company
Table 15 shows the performance of AFIC and the other investment companies over the past five years, including details of total
shareholder return (TSR), total portfolio return (TPR) and gross return (GR). These measures, which represent growth in shareholder
wealth, determine the vesting of AFIC’s incentive plans to executives and the investment team.
Table 15: Detailed Performance Measures for AFIC and the Other Investment Companies
Year Ending 30 June
10 Year
Return
5 Year
Return
4 Year
Return
3 Year
Return 20212020201920182017
Comparative returns
S&P/ASX 200 Accumulation Return9.26%11.16%10.43%9.59%27.80%-7.7%11.6%13.0%14.1%
Modified S&P/ASX 200 Accumulation*8.73%10.06%n/a8.96%21.71%----
Gross S&P/ASX 200
Accumulation Return10.85%12.64%11.89%10.99%29.12%-6.6%13.4%14.6%15.7%
Modified Gross S&P/ASX 200
Accumulation Return*9.84%11.10%n/a9.94%22.64%----
Combined Mid Cap 50 and Small
Ordinaries Accumulation Return (used
for Mirrabooka Investments Limited)8.92%12.61%12.59%10.42%34.42%-2.6%2.8%19.3%12.7%
Gross Combined Mid Cap 50 and Small
Ordinaries Accumulation Return (used
for Mirrabooka Investments Limited)9.90%13.56%13.49%11.26%35.22%-1.9%3.8%20.4%13.8%
Yield on ASX 200 grossed
up for franking creditsn/an/an/an/a2.9%5.8%5.2%5.2%5.4%
Australian Foundation
Investment Company Limited
Total gross shareholder return12.34%13.36%14.25%14.93%35.17%1.2%6.9%10.3%8.0%
Growth in net operating result per sharen/an/an/an/a-3.0%-41.5%44.1%9.6%-9.6%
Management expense ration/an/an/an/a0.14%0.13%0.13%0.14%0.14%
Gross return10.96%12.76%12.54%12.49%31.92%-3.1%11.4%12.7%13.7%
Investment return9.42%11.37%11.15%11.13%30.28%-4.1%9.8%11.3%12.3%
Djerriwarrh Investments Limited
Growth in net operating profit per sharen/an/an/an/a-4.5%-26.0%3.7%5.7%-19.9%
Management expense ration/an/an/an/a0.45%0.45%0.43%0.44%0.46%
Gross return9.17%10.27%8.75%7.78%29.58%-11.5%9.1%11.7%16.6%
Investment return7.46%8.28%7.14%6.54%25.83%-10.0%6.8%9.7%13.0%
Gross yield on NTA at end of June n/an/an/an/a4.7%5.6%8.6%8.6%8.8%
Mirrabooka Investments Limited
Management expense ration/an/an/an/a0.50%0.63%0.61%0.60%0.62%
Gross return16.04%17.19%19.09%19.59%50.92%7.1%5.9%17.3%9.9%
Investment return15.42%16.12%17.90%18.61%49.80%6.3%4.8%16.0%9.3%
AMCIL Limited
Management expense ration/an/an/an/a0.56%0.66%0.72%0.69%0.68%
Gross return12.69%13.13%14.73%14.92%31.76%7.6%7.0%13.9%7.0%
Investment return12.57%13.22%14.79%15.09%34.36%7.2%5.8%14.0%7.1%
* Note that the Modified S&P/ASX 200 Index is used for the Djerriwarrh figures to take into account the effect that option writing has on the investment
return. It is a new measure and has not been calculated individually for prior years.
31Australian Foundation Investment Company Limited Annual Report 2021

Details of non-audit services performed by the auditors may be found in Note F2 of the Financial Report.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity
of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in the Corporations Act 2001
including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Company,
acting as advocate for the Company, or jointly sharing economic risk and rewards.
A copy of the Auditor’s Independence Declaration is set out on page 33.
This report is made in accordance with a resolution of the Directors.

John Paterson
Chairman
26 July 2021
Non-audit Services
32Australian Foundation Investment Company Limited Annual Report 2021

Auditor’s Independence Declaration
33Australian Foundation Investment Company Limited Annual Report 2021

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

41 NOTES TO
THE FINANCIAL
STATEMENTS
41 A. Understanding AFIC’s
Financial Performance
41 A1. How AFIC Manages
its Capital
41 A2. Investments Held and How
They Are Measured
42 A3. Operating Income
43 A4. Dividends Paid
44 A5. Earnings Per Share
45 B. Costs, Tax and Risk
45 B1. Management Costs
45 B2. Tax
46 B3. Risk
48 C. Unrecognised Items
48 C1. Contingencies
49 D. Balance Sheet
Reconciliations
49 D1. Current Assets – Cash
49 D2. Credit Facilities
49 D3. Revaluation Reserve
50 D4. Realised Capital
Gains Reserve
50 D5. Retained Profits
50 D6. Shared Capital
51 E. Income Statement
Reconciliations
51 E1. Reconciliation of Net Cash
Flows From Operating
Activities to Profit
51 E2. Tax Reconciliations
52 F. Further Information
52 F1. Related Parties
52 F2. Remuneration of Auditors
52 F3. Segment Reporting
53 F4. Summary of Other
Accounting Policies
55 F5. Performance Bond
55 F6. Share-based Payments
56 F7. Principles of Consolidation
56 F8. Subsidiaries
57 F9. Parent Entity Financial
Information
34Australian Foundation Investment Company Limited Annual Report 2020

Note
2021
$’000
2020
$’000
Dividends and distributionsA3257,874257,858
Interest income from depositsA31161,554
Other revenueA34,8314,895
Total revenue262,821264,307
Net gains/(losses) on trading portfolioA32,4729,740
Income from operating activities265,293274,047
Finance costs(1,831)(1,047)
Administration expensesB1(15,509)(14,759)
Profit before income tax expense247,953258,241
Income tax expenseB2, E2(12,858)(17,846)
Profit for the year235,095240,395
Profit is attributable to:
Equity holders of Australian Foundation Investment Company Ltd234,651239,931
Minority interest444464
235,095240,395
CentsCents
Basic earnings per shareA519.2819.88
This Income Statement should be read in conjunction with the accompanying notes.
Consolidated Income Statement
For the Year Ended 30 June 2021
35Australian Foundation Investment Company Limited Annual Report 2021

Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2021
Year to 30 June 2021Year to 30 June 2020
Revenue
1

$’000
Capital
1

$’000
Total
$’000
Revenue
1

$’000
Capital
1

$’000
Total
$’000
Profit for the year235,095-235,095240,395-240,395
Other comprehensive income
Items that will not be recycled
through the Income Statement
Gains/(losses) for the period -1,881,2611,881,261-(568,806)(568,806)
Tax on above-(575,865)(575,865)-167,602167,602
Total other comprehensive income-1,305,3961,305,396-(401,204)(401,204)
Total comprehensive income 235,0951,305,3961,540,491240,395(401,204)(160,809)
1. ‘Capital’ includes realised or unrealised gains or losses (and the tax on those) on securities in the investment portfolio, including non-equity
investments held 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 2021Year to 30 June 2020
Revenue
$’000
Capital
$’000
Total
$’000
Revenue
$’000
Capital
$’000
Total
$’000
Equity holders of Australian Foundation
Investment Company Ltd234,6511,305,3961,540,047239,931(401,204)(161,273)
Minority interests444-444464-464
235,0951,305,3961,540,491240,395(401,204)(160,809)
This Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
36Australian Foundation Investment Company Limited Annual Report 2021

Consolidated Balance Sheet
As at 30 June 2021
Note
2021
$’000
2020
$’000
Current assets
Cash D197,122111,318
Receivables40,01117,347
Trading portfolio4,7454,304
Total current assets141,878132,969
Non-current assets
Investment portfolioA28,973,0807,117,970
Deferred tax assets59872
Total non-current assets8,973,1397,118,842
Total assets9,115,0177,251,811
Current liabilities
Payables1,020884
Tax payable12,62130,771
Provisions5,2354,765
Total current liabilities18,87636,420
Non-current liabilities
Provisions8881,375
Deferred tax liabilities – investment portfolioB21,536,231973,499
Total non-current liabilities1,537,119974,874
Total liabilities1,555,9951,011,294
Net assets7,559,0226,240,517
Shareholders’ equity
Share capitalA1, D63,007,7302,947,243
Revaluation reserveA1, D33,394,2972,166,030
Realised capital gains reserveA1, D4416,071397,712
General reserveA123,63723,637
Retained profitsA1, D5716,221705,273
Parent entity interest7,557,9566,239,895
Minority interest1,066622
Total equity7,559,0226,240,517
This Balance Sheet should be read in conjunction with the accompanying notes.
37Australian Foundation Investment Company Limited Annual Report 2021

Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
Year Ended 30 June 2021Note
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 year2,947,2432,166,030397,71223,637705,2736,239,8956226,240,517
Dividends paid to shareholdersA4--(58,770)-(223,703)(282,473)-(282,473)
– Dividend Reinvestment PlanD660,632----60,632-60,632
Other share capital adjustments(145)----(145)-(145)
Total transactions with shareholders60,487-(58,770)-(223,703)(221,986)-(221,986)
Profit for the year----234,651234,651444235,095
Other comprehensive income (net of tax)
Net gains for the period-1,305,396
---1,305,396-1,305,396
Other comprehensive income for the year-1,305,396---1,305,396-1,305,396
Transfer to realised capital gains of cumulative gains on investments sold-(77,129)77,129-----
Total equity at the end of the year3,007,7303,394,297416,07123,637716,2217,557,9561,0667,559,022
Year Ended 30 June 2020Note
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 year2,888,1362,561,314462,25723,637688,2446,623,5881,1586,624,746
Dividends paid to shareholdersA4--(58,625)-(222,902)(281,527)-(281,527)
– Dividend Reinvestment PlanD659,249----59,249-59,249
Other share capital adjustments(142)----(142)-(142)
Total transactions with shareholders59,107-(58,625)-(222,902)(222,420)-(222,420)
Profit for the year----239,931239,931464240,395
Other comprehensive income (net of tax)
Net losses for the period-(401,204)
---(401,204)-(401,204)
Other comprehensive income for the year-(401,204)---(401,204)-(401,204)
Transfer to realised capital gains of cumulative losses on investments sold-5,920(5,920)-----
Dividend paid to minority interests by AICS------(1,000)(1,000)
Total equity at the end of the year2,947,2432,166,030397,71223,637705,2736,239,8956226,240,517
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
38Australian Foundation Investment Company Limited Annual Report 2021

Year Ended 30 June 2021Note
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 year2,947,2432,166,030397,71223,637705,2736,239,8956226,240,517
Dividends paid to shareholdersA4--(58,770)-(223,703)(282,473)-(282,473)
– Dividend Reinvestment PlanD660,632----60,632-60,632
Other share capital adjustments(145)----(145)-(145)
Total transactions with shareholders60,487-(58,770)-(223,703)(221,986)-(221,986)
Profit for the year----234,651234,651444235,095
Other comprehensive income (net of tax)
Net gains for the period-1,305,396
---1,305,396-1,305,396
Other comprehensive income for the year-1,305,396---1,305,396-1,305,396
Transfer to realised capital gains of cumulative gains on investments sold-(77,129)77,129-----
Total equity at the end of the year3,007,7303,394,297416,07123,637716,2217,557,9561,0667,559,022
Year Ended 30 June 2020Note
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 year2,888,1362,561,314462,25723,637688,2446,623,5881,1586,624,746
Dividends paid to shareholdersA4--(58,625)-(222,902)(281,527)-(281,527)
– Dividend Reinvestment PlanD659,249----59,249-59,249
Other share capital adjustments(142)----(142)-(142)
Total transactions with shareholders59,107-(58,625)-(222,902)(222,420)-(222,420)
Profit for the year----239,931239,931464240,395
Other comprehensive income (net of tax)
Net losses for the period-(401,204)
---(401,204)-(401,204)
Other comprehensive income for the year-(401,204)---(401,204)-(401,204)
Transfer to realised capital gains of cumulative losses on investments sold-5,920(5,920)-----
Dividend paid to minority interests by AICS------(1,000)(1,000)
Total equity at the end of the year2,947,2432,166,030397,71223,637705,2736,239,8956226,240,517
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
39Australian Foundation Investment Company Limited Annual Report 2021

Note
2021
$’000
Inflows/
(Outflows)
2020
$’000
Inflows/
(Outflow)
Cash flows from operating activities
Sales from trading portfolio 14,77639,663
Purchases for trading portfolio (1,297)(25,160)
Interest received1161,573
Dividends and distributions received196,351255,492
209,946271,568
Other receipts4,8785,095
Administration expenses(15,445)(14,403)
Finance costs paid(1,831)(1,047)
Taxes paid(18,781)(6,578)
Net cash inflow/(outflow) from operating activitiesE1178,767254,635
Cash flows from investing activities
Sales from investment portfolio469,102589,059
Purchases for investment portfolio (416,321)(694,841)
Taxes paid on capital gains(23,798)(20,394)
Net cash inflow/(outflow) from investing activities28,983(126,176)
Cash flows from financing activities
Net bank borrowings--
Share issue transaction costs(145)(142)
Dividends paid(221,801)(223,428)
Net cash inflow/(outflow) from financing activities(221,946)(223,570)
Net increase/(decrease) in cash held(14,196)(95,111)
Cash at the beginning of the year111,318206,429
Cash at the end of the yearD197,122111,318
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.
Consolidated Cash Flow Statement
For the Year Ended 30 June 2021
40Australian Foundation Investment Company Limited Annual Report 2021

A. Understanding AFIC’s Financial Performance
A1. How AFIC Manages its Capital
AFIC’s objective is to provide shareholders with attractive investment returns through access to a growing stream of fully franked
dividends and enhancement of capital invested.
AFIC recognises that its capital will fluctuate with market conditions. In order to manage those fluctuations, the Board may adjust
the amount of dividends paid, issue new shares, buy back the Company’s shares or sell assets.
AFIC’s capital consists of its shareholders’ equity plus any net borrowings. A summary of the balances in equity is provided below:
2021
$’000
2020
$’000
Share capital3,007,7302,947,243
Revaluation reserve3,394,2972,166,030
Realised capital gains reserve416,071397,712
General reserve23,63723,637
Retained profits716,221705,273
7,557,9566,239,895
Refer to Notes D3 –D6 for a reconciliation of movement from period to period for each equity account (except the general reserve,
which is historical, relates to past profits which can be distributed and has had no movement).
A2. Investments Held and How They Are Measured
AFIC has two portfolios of securities: the investment portfolio and the trading portfolio.
The investment portfolio holds securities which the Company intends to retain on a long term basis, and includes a small sub-component
over which options may be written and an additional small sub-component of international (i.e. non-Australian/New Zealand listed) stocks.
The trading portfolio consist of securities that are held for short term trading only, including call option contracts written over securities
that are held in the specific sub-component of the investment portfolio and on occasion put options and is relatively small in size. The
Board has therefore focused the information in this section on the investment portfolio. Details of all holdings (except for the specific
option holdings) as at the end of the reporting period can be found at the end of the Annual Report.
The balance and composition of the investment portfolio (all at market value) was:
2021
$’000
2020
$’000
Equity instruments (excluding below) 8,502,2246,661,720
Equity instruments (over which options may be written)423,249456,250
Equity instruments (listed on non-Australian/NZ Exchanges)47,607-
8,973,0807,117,970
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 and the
investment in PEXA Group, which is also Level 2 as it did not start trading until 1 July 2021). 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.
NOTES TO THE FINANCIAL STATEMENTS
41Australian Foundation Investment Company Limited Annual Report 2021

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 2021
and 30 June 2020 were as follows:
30 June 2021
$
30 June 2020
$
Net tangible asset backing per share
Before tax7.455.96
After tax6.195.16
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, 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 $511.1 million (2020: $584.6 million) of equity securities were sold. The cumulative gain on the sale of securities was
$77.1 million for the period after tax (2020: $5.9 million loss). This has been transferred from the revaluation reserve to the realisation
reserve (see Consolidated Statement of Changes in Equity). These sales were accounted for at the date of trade.
A3. Operating Income
The total income received from AFIC’s investments in 2021 is set out below.
Dividends and Distributions
2021
$’000
2020
$’000
Income from securities held in investment portfolio at 30 June251,687242,790
Income from investment securities sold during the year5,97615,068
Income from securities held in trading portfolio at 30 June211-
Income from trading securities sold during the year--
257,874257,858
Interest income
Revenue from deposits and cash management trusts1161,554
Other revenue
Administration fees4,8314,853
Other income -42
4,8314,895
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.
Notes to the Financial Statements
continued
42Australian Foundation Investment Company Limited Annual Report 2021

Trading Income
Net gains on the trading and options portfolio are set out below.
Net gains
2021
$’000
2020
$’000
Net realised gains/(losses) from trading portfolio – shares1491,038
– options1,7248,428
Unrealised gains/(losses) from trading portfolio – shares897243
– options(298)31
2,4729,740
$152.3 million of shares are lodged with the ASX Clear Pty Ltd as collateral for sold option positions written by the Group (2020:
$108.4 million). These shares are lodged with ASX Clear under the terms of ASX Clear Pty Ltd which require participants in the
exchange traded option market to lodge collateral, and are recorded as part of the Group’s investment portfolio. If all call options
were exercised, this would lead to the sale of $44.5 million worth of securities at an agreed price – the ‘exposure’ (2020: $32.0 million).
There were no put options in the portfolio at 30 June 2021 (2020: $nil).
A4. Dividends Paid
The dividends paid and payable for the year ended 30 June 2021 are shown below:
2021
$’000
2020
$’000
(a) Dividends Paid During the Year
Final dividend for the year ended 30 June 2020 of 14 cents fully franked at 30 per cent paid
on 1 September 2020 (2020: 14 cents fully franked at 30 per cent paid on 29 August 2019)164,556164,150
Interim dividend for the year ended 30 June 2021 of 10 cents per share fully franked at 30 per cent
paid on 23 February 2021 (2020: 10 cents fully franked at 30 per cent paid on 24 February 2020)117,917117,377
282,473281,527
Dividends paid in cash221,841222,278
Dividends reinvested in shares60,63259,249
282,473281,527
Dividends forgone via DSSP8,6357,111
(b) Franking Credits
Opening balance of franking account at 1 July174,053182,607
Franking credits on dividends received67,29588,920
Tax paid during the year41,42826,234
Franking credits paid on ordinary dividends paid(121,060)(120,654)
Franking credits deducted on DSSP shares issued(3,707)(3,054)
Closing balance of franking account158,009174,053
Adjustments for tax payable in respect of the current year’s profits
and the receipt of dividends recognised as receivables19,61033,803
Adjusted closing balance177,619207,856
Impact on the franking account of dividends declared but not recognised
as a liability at the end of the financial year:(73,250)(72,622)
Net available104,369135,234
These franking account balances would allow AFIC to frank additional
dividend payments up to an amount of:243,528315,546
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.
43Australian Foundation Investment Company Limited Annual Report 2021

2021
$’000
2020
$’000
(c) New Zealand Imputation Account
(Figures in A$ at year-end exchange rate: 2021: $NZ1.074:$A1; 2020: $NZ1.071:$A1)
Opening balance8,47014,381
Imputation credits on dividends received4,7797,187
Imputation credits on dividends paid-(13,074)
Closing balance13,2498,494
There will be no NZ imputation credit attached to the proposed dividend payable
on 31 August 2021.
(d) Dividends Declared After Balance Date
Since the end of the year Directors have declared a final dividend of 14 cents per share fully
franked at 30 per cent. The aggregate amount of the final dividend for the year to 30 June 2021
to be paid on 31 August 2021, but not recognised as a liability at the end of the financial year is:170,917
(e) Listed Investment Company Capital Gain Account
Balance of the Listed Investment Company (LIC) capital gain account at 1 July:62,91263,335
Capital gains (including LIC gains received from dividends)39,65158,202
LIC gains paid as part of dividend(58,770)(58,625)
Balance at 30 June43,79362,912
This equates to an attributable gain of:62,56289,874
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. $52.3 million attributable gain is attached to the final
dividend to be paid on 31 August 2021.
A5. Earnings Per Share
The table below shows the earnings per share based on the profit for the year:
Basic Earnings Per Share
2021
Number
2020
Number
Weighted average number of ordinary shares used as the denominator1,217,056,5771,206,707,394
$’000$’000
Profit for the year 234,651239,931
Cents Cents
Basic earnings per share19.2819.88
Notes to the Financial Statements
continued
44Australian Foundation Investment Company Limited Annual Report 2021

B. Costs, Tax and Risk
B1. Management Costs
The total management expenses for the period are as follows:
2021
$’000
2020
$’000
Rental expense relating to non-cancellable leases (747)(699)
Employee benefit expenses (9,304)(8,587)
Depreciation charge--
Other administration expenses(5,458)(5,473)
(15,509)(14,759)
Employee Benefit Expenses
A major component of employee benefit expenses is Directors’ and Executives’ remuneration. This has been summarised below:
Short Term
Benefits
$
Other Long
Term Benefits
$
Post-
employment
Benefits
$
Share-based
Payments
$
Total
$
2021
Non-Executive Directors 749,363-54,867-804,230
Executives3,191,746(120,224)99,524526,8343,697,880
Total3,941,109(120,224)154,391526,8344,502,110
2020
Non-Executive Directors716,550-63,450-780,000
Executives2,755,048(100,800)98,858166,6502,919,756
Total3,471,598(100,800)162,308166,6503,699,756
Detailed remuneration disclosures are provided in the Remuneration Report.
The above figures include share-based expenses incurred in respect of Ross Barker, former Managing Director, who was eligible
for vesting under these plans during the year. This is the final year for which Mr Barker is eligible for awards under these plans.
The Group (i.e. AFIC and its subsidiary, Australian Investment Company Services (AICS) – see Note F8) does not make loans
to Directors or Executives.
B2. Tax
AFIC’s tax position, and how it accounts for tax, is explained here. Detailed reconciliations of tax accounting to the financial statements
can be found in Note E2.
The income tax expense for the period is the tax payable on this financial year’s taxable income, adjusted for any changes in deferred
tax assets and liabilities attributable to temporary differences and for any unused tax losses. Deferred tax assets and liabilities (except
for those related to the unrealised gains or losses in the investment portfolio) are offset, as all current and deferred taxes relate to the
Australian Taxation Office and can legally be settled on a net basis.
A provision has been made for taxes on any unrealised gains or losses on securities valued at fair value through the Income Statement
– i.e. the trading portfolio, puttable instruments and convertible notes that are classified as debt.
A provision also has to be made for any taxes that could arise on sale of securities in the investment portfolio, even though there is
no intention to dispose of them. Where AFIC disposes of such securities, tax is calculated according to the particular parcels allocated
to the sale for tax purposes, offset against any capital losses carried forward.
45Australian Foundation Investment Company Limited Annual Report 2021

Tax Expense
The income tax expense for the period is shown below:
(a) Reconciliation of Income Tax Expense to Prima Facie Tax Payable
2021
$’000
2020
$’000
Profit before income tax expense 247,953258,241
Tax at the Australian tax rate of 30 per cent (2020: 30 per cent)74,38677,472
Tax offset for franked dividends received(47,106)(61,344)
Demerger dividend non-taxable(10,952)-
Sundry items whose tax treatment differs from accounting treatment(1,234)4,171
15,09420,299
Over provision in prior years(2,236)(2,453)
Total tax expense12,85817,846
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.
2021
$’000
2020
$’000
Deferred tax liabilities on unrealised gains in the investment portfolio1,536,231973,499
Opening balance at 1 July973,4991,163,749
Tax on realised gains(13,133)(22,648)
Charged to OCI for ordinary securities on gains or losses for the period575,865(167,602)
1,536,231973,499
B3. Risk
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
As a Listed Investment Company that invests in tradeable securities, AFIC can never be free of market risk as it invests its capital in
securities which are not risk free – the market price of these securities will fluctuate.
A general fall in market prices of 5 per cent and 10 per cent, if spread equally over all assets in the investment portfolio, would have
led to a reduction in AFIC’s comprehensive income of $314.1 million and $628.1 million respectively, at a tax rate of 30 per cent
(2020: $249.1 million and $498.3 million).
AFIC seeks to reduce market risk at the investment portfolio level by ensuring that it is not, in the opinion of the Investment Committee,
overly exposed to one company or one particular sector of the market. The relative weightings of the individual securities and the
relevant market sectors are reviewed by the Investment Committee and risk can be managed by reducing exposure where necessary.
AFIC does not have a minimum or maximum amount of the portfolio that can be invested in a single company or sector.
Notes to the Financial Statements
continued
46Australian Foundation Investment Company Limited Annual Report 2021

AFIC’s total investment exposure by sector is as below:
2021
%
2020
%
Energy1.963.01
Materials14.3215.76
Industrials14.4015.88
Consumer Discretionary7.835.98
Consumer Staples 4.424.60
Banks 18.9717.16
Other Financials8.888.26
Real Estate2.471.74
Telecommunications5.994.42
Healthcare14.4016.62
Information Technology4.634.00
Utilities0.661.03
Cash1.071.54
Securities representing over 5 per cent of the investment portfolio at 30 June were
Commonwealth Bank8.87.7
BHP7.37.0
CSL6.98.5
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 (0.5 per cent) part of the total portfolio.
The writing of call options provides some protection against a fall in market prices as it generates income to partially compensate for
a fall in capital values. Options are only written against securities that are held in the trading or the specific sub-section of the
investment portfolio.
Interest Rate Risk
The Group is not currently materially exposed to interest rate risk as all its cash investments and borrowings are short term for a fixed
interest rate.
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. AFIC is exposed to credit risk from cash, receivables, securities in the trading portfolio and securities in the investment
portfolio respectively. None of these assets are overdue. The risk in relation to each of these items is set out below.
Cash
All cash investments not held in a transactional account (including with a custodian) are invested in short term deposits with Australia’s
‘big four’ commercial banks or in cash management trusts which invest predominantly in short term securities with an A1+ rating. In the
unlikely event of a bank default or default on the underlying securities in the cash trust, there is a risk of losing the cash deposits and
any accrued unpaid interest.
Receivables
Outstanding settlements are on the terms operating in the securities industry, which usually require settlement within two days of the
date of a transaction. Receivables are non-interest-bearing and unsecured. In the event of a payment default, there is a risk of losing
any difference between the price of the securities sold and the price of the recovered securities from the discontinued sale. Receivables
also include dividends from securities that have passed the record date for the distribution but have not paid as at balance date.
Trading and Investment Portfolios
Converting and convertible notes or other interest-bearing securities that are not equity securities carry credit risk to the extent of their
carrying value. This risk will be realised in the event of a shortfall on winding-up of the issuing companies. AFIC engages a custodian,
Northern Trust, to hold the shares that are in the sub-component of the investment portfolio that contains international shares. AFIC
receives a GS007 report on Internal Controls for Custody, Investment Administration, Registry Monitoring and Related Information
Technology Services from Northern Trust every six months.
47Australian Foundation Investment Company Limited Annual Report 2021

Liquidity Risk
Liquidity risk is the risk that an entity will not be able to meet its financial liabilities.
AFIC monitors its cash flow requirements daily. The Investment Committee also monitors the level of contingent payments on a regular
basis by reference to known sales and purchases of securities, dividends and distributions to be paid or received, put options that may
require AFIC to purchase securities, and facilities that need to be repaid. AFIC ensures that it has either cash or access to short term
borrowing facilities sufficient to meet these contingent payments.
AFIC’s inward cash flows depend upon the dividends received. Should these drop by a material amount, AFIC would amend its
outward cash flows accordingly. AFIC’s major cash outflows are the purchase of securities and dividends paid to shareholders, and
both of these can be adjusted by the Board and management. Furthermore, the assets of AFIC are largely in the form of readily
tradeable securities which can be sold on-market if necessary.
The table below analyses AFIC’s financial liabilities into relevant maturity groupings. The amounts disclosed in the table are the
contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting
is not significant.
30 June 2021
Less Than
6 Months
$’000
6–12 Months
$’000
Greater
Than 1 Year
$’000
Total
Contractual
Cash Flows
$’000
Carrying
Amount
$’000
Non-derivatives
Payables1,020--1,0201,020
1,020--1,0201,020
Derivatives
Options in trading portfolio*-----
-----
30 June 2020
Less Than
6 Months
$’000
6–12 Months
$’000
Greater
Than 1 Year
$’000
Total
Contractual
Cash Flows
$’000
Carrying
Amount
$’000
Non-derivatives
Payables884--884884
884--884884
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 30th June 2021.
C. Unrecognised Items
C1. Contingencies
Directors are not aware of any material contingent liabilities or contingent assets other than those already disclosed elsewhere
in the Financial Report.
Notes to the Financial Statements
continued
48Australian Foundation Investment Company Limited Annual Report 2021

Further information that shareholder may find useful is included here. It is grouped into three sections:
D. Balance Sheet Reconciliations
E. Income Statement Reconciliations
F. Further Information
D. Balance Sheet Reconciliations
These notes provide further information about the basis of calculation of line items in the financial statements.
D1. Current Assets – Cash
2021
$’000
2020
$’000
Cash at bank and in hand (including on-call)97,122111,318
97,122111,318
Cash holdings yielded an average floating interest rate of 0.14 per cent (2020: 1.02 per cent). All cash investments are held in
a transactional account, with a custodian or in an overnight ‘at call’ account invested in cash management trusts which invest
predominantly in short term securities with an A1+ rating.
D2. Credit Facilities
2021
$’000
2020
$’000
Commonwealth Bank of Australia – cash advance facilities50,000250,000
Amount drawn down --
Undrawn facilities50,000250,000
The above borrowings 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.
After 30 June 2021, additional facilities have been written with Commonwealth Bank of Australia for an additional $60 million.
During the previous year, the Group had an additional facility available of $120 million in order to take advantage of any potential
opportunities that may have arisen due to the circumstances surrounding COVID-19 and the responses to it. This facility was not
renewed during the current year.
D3. Revaluation Reserve
2021
$’000
2020
$’000
Opening balance at 1 July2,166,0302,561,314
Gains/(losses) on investment portfolio
Equity instruments1,881,261(568,806)
Provision for tax on above(575,865)167,602
Cumulative taxable realised (gains)/losses (net of tax)(77,129)5,920
3,394,2972,166,030
This reserve is used to record increments and decrements on the revaluation of the investment portfolio as described in accounting
policy Note A2.
49Australian Foundation Investment Company Limited Annual Report 2021

D4. Realised Capital Gains Reserve
2021
$’000
2020
$’000
Opening balance at 1 July397,712462,257
Dividends paid(58,770)(58,625)
Cumulative taxable realised gains/(losses) for period through OCI (net of tax)77,129(5,920)
416,071397,712
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
2021
$’000
2020
$’000
Opening balance at 1 July705,273688,244
Dividends paid(223,703)(222,902)
Profit for the year234,651239,931
716,221705,273
This reserve relates to past profits.
D6. Share Capital
Movements in Share Capital
DateDetailsNotes
Number
of Shares
’000
Issue Price
$
Paid-up
Capital
$’000
1/07/2019Balance1,200,1482,888,136
29/08/2019Dividend Reinvestment Plani5,5416.2134,407
29/08/2019Dividend Substitution Share Planii6226.21n/a
24/02/2020Dividend Reinvestment Plani3,5856.9324,842
24/02/2020Dividend Substitution Share Planii4686.93n/a
VariousCosts of issue--(142)
30/06/2020Balance1,210,3642,947,243
01/09/2020Dividend Reinvestment Plani5,5836.3035,165
01/09/2020Dividend Substitution Share Planii7766.30n/a
23/02/2021Dividend Reinvestment Plani3,5877.1025,467
23/02/2021Dividend Substitution Share Planii5277.10n/a
VariousCosts of issue--(145)
30/06/2021Balance1,220,8373,007,730
i. Shareholders elect to have all or part of their dividend payment reinvested in new ordinary shares under the Dividend Reinvestment Plan (DRP).
The price of the new DRP shares is based on the average selling price of shares traded on the Australian Securities Exchange and Chi-X in the
five days after the shares begin trading on an ex-dividend basis.
ii. The Group has a Dividend Substitution Share Plan (DSSP) whereby shareholders may elect to forgo a dividend and receive shares instead.
Pricing for the DSSP shares is done as per the DRP shares.
iii. The Group has an on-market share buy-back program. During the financial year, no shares were bought back (2020: nil).
All shares have been fully paid, rank pari passu and have no par value.
Notes to the Financial Statements
continued
50Australian Foundation Investment Company Limited Annual Report 2021

E. Income Statement Reconciliations
E1. Reconciliation of Net Cash Flows From Operating Activities to Profit
2021
$’000
2020
$’000
Profit for the year235,095240,395
Net decrease/(increase) in trading portfolio(441)(11,337)
Dividends received as securities under DRP investments-(8,355)
Demerger dividend – non-cash item(36,505)-
Decrease/(increase) in current receivables(22,664)22,781
– Less increase/(decrease) in receivables for investment portfolio9,875-
Increase/(decrease) in deferred tax liabilities563,545(191,222)
– Less (increase)/decrease in deferred tax liability on investment portfolio(562,732)190,250
Increase/(decrease) in current payables136(48)
– Less increase/(decrease) in dividends payable(40)151
Increase/(decrease) in provision for tax payable(18,150)13,719
Capital gains tax charge taken through equity(13,133)(22,648)
Prior year taxes paid relating to capital gains23,79820,394
Increase/(decrease) in other provisions/non-cash items (17)555
Net cash flows from operating activities178,767254,635
E2. Tax Reconciliations
Tax Expense Composition
2021
$’000
2020
$’000
Charge for tax payable relating to the current year14,28121,271
Over provision in prior years(2,236)(2,453)
(Increase)/Decrease in deferred tax assets813(972)
12,85817,846
Amounts Recognised Directly Through Other Comprehensive Income
Net movement in deferred tax liabilities relating to capital gains tax on the movement
in gains in the investment portfolio575,865(167,602)
575,865(167,602)
Deferred Tax Assets and Liabilities
The deferred tax balances are attributable to:
2021
$’000
2020
$’000
(a) Tax on unrealised gains or losses in the trading portfolio(253)(82)
(b) Provisions and expenses charged to the accounting profit which are not yet tax deductible1,8511,849
(c) Interest and dividend income receivable which is not assessable for tax until receipt(1,539)(895)
59872
Movements:
Opening balance at 1 July872(100)
Credited/(charged) to Income Statement(813)972
59872
Deferred tax assets 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.
51Australian Foundation Investment Company Limited Annual Report 2021

F. Further Information
This section covers information that is not directly related to specific line items in the financial statements, including information about
related party transactions, share-based payments, assets pledged as security and other statutory information.
F1. Related Parties
All transactions with deemed related parties were made on normal commercial terms and conditions and approved by
Independent Directors.
(a) Arrangements with Non-Executive Directors
Non-Executive Directors R Barker (who retired on 30 June 2021), J Paterson and C Walter have rented office space and, for R Barker
and J Paterson, a parking space from the Group at commercial rates during the year. Sub-lease rental income (included in revenue)
received or receivable by the Group, excluding GST, during the year was $62,608 (2020: $62,565).
(b) AICS Transactions With Minority Interests
The below transactions were with Djerriwarrh Investments Ltd as a minority interest holder in the Company’s subsidiary.
2021
$’000
2020
$’000
Administration expenses charged for the year2,5282,634
(c) AICS Transactions With Other Listed Investment Companies
AICS had the following transactions with other Listed Investment Companies to which it provides services:
2021
$’000
2020
$’000
Administration expenses charged for the year to Mirrabooka Investments Ltd1,4671,454
Administration expenses charged for the year to AMCIL Ltd916839
F2. Remuneration of Auditors
For the year the auditor earned or will earn the following remuneration:
2021
$
2020
$
PricewaterhouseCoopers
Audit services
Audit or review of Financial Reports 210,050202,815
Audit-related services
AFSL compliance audit and review8,3318,168
Permitted non-audit services
Preparation and lodgement of tax returns32,94032,293
Total remuneration251,321243,276
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.
Notes to the Financial Statements
continued
52Australian Foundation Investment Company Limited Annual Report 2021

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 two investments comprising more than 10 per cent of AFIC’s income, including
realised income from the trading and options written portfolios – Woolworths Group (16.1 per cent as a result of the demerger dividend
received in conjunction with the Endeavour Group demerger) and BHP (11.0 per cent) (2020: two investments: Commonwealth Bank
(12.4 per cent) and BHP (10.5 per cent)).
F4. Summary of Other Accounting Policies
This general purpose Financial Report has been prepared in accordance with Australian Accounting Standards, Interpretations issued
by the Australian Accounting Standards Board and the Corporations Act 2001. This Financial Report has been authorised for issue on
26 July 2021 in accordance with a resolution of the Board and is presented in the Australian currency. The Directors of the Company
have the power to amend and reissue the Financial Report.
AFIC has attempted to improve the transparency of its reporting by adopting ‘plain English’ where possible. Key ‘plain English’ phrases
and their equivalent AASB terminology are as follows:
PhraseAASB Terminology
Market valueFair value for actively traded securities
CashCash and cash equivalents
Share capitalContributed equity
OptionsDerivatives written over equity instruments that are valued at fair value through profit or loss
HybridsEquity instruments that have some of the characteristics of debt
AFIC complies with International Financial Reporting Standards (IFRS). AFIC is a ‘for profit’ entity.
AFIC has not applied any Australian Accounting Standards or AASB Interpretations that have been issued as at balance date but are
not yet operative for the year ended 30 June 2021 (‘the inoperative standards’). The impact of the inoperative standards has been
assessed and the impact has been identified as not being material. AFIC only intends to adopt other inoperative standards at the
date at which their adoption becomes mandatory.
Basis of Accounting
The financial statements are prepared using the valuation methods described in 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.
53Australian Foundation Investment Company Limited Annual Report 2021

Employee Benefits
(i) Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including annual leave, expected to be settled within 12 months of balance date are recognised as
current provisions in respect of employees’ services up to balance date and are measured at the amounts expected to be paid when
the liabilities are settled.
(ii) Long Service Leave
In calculating the value of long service leave, consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at balance date on national
government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
(iii) Cash Incentives
Cash incentives are provided under the Executive Annual Incentive Plan and are dependent upon the performance of the Group.
A provision is made for the cost of unsettled cash incentives at balance date. The Investment Team Annual Incentive Plans are also
settled on a cash basis.
(iv) Share Incentives
Share incentives are provided under the Executive Annual Incentive Plan, Executive Long Term Incentive Plan and the Employee Share
Acquisition Scheme.
For the Employee Share Acquisition Scheme and the Executive Annual 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.
For the Employee Share Acquisition Scheme and a portion of the Executive Annual Incentive, the recipient agrees to purchase
(or have purchased for them) shares on-market, but receives a cash amount. A provision for the amount payable under the Annual
Incentive Plans is recognised on the Balance Sheet.
For the Investment Team Long Term Incentive Plan, the incentives are based on the performance of the Group and investment
companies to which the group provides administration services over a four-year period. The incentives may be settled in shares
(but based on a cash amount) or cash. Historically, all awards have been cash. Expenses are recognised over the four-year
assessment period based on the amount expected to be payable under this plan, resulting in a provision for incentive payable being
built up on the Balance Sheet over the assessment period.
Under the Executive Long Term Incentive Plan which was introduced for the year ended 30 June 2013, the amount awarded is represented
by performance shares. The 30-day volume weighted average price (VWAP) of AFIC shares up to but not including 1 July is calculated.
The amount of ELTIP available is then divided by this 30-day VWAP price to determine the number of performance shares that may vest
at the vesting point in four years’ time. The value of each performance shares will be adjusted by the accumulation return on the AFI
share price (being the movement in the share price assuming the reinvestment of any dividends) up to vesting date, based on a final
share price calculated on the 30-day VWAP price up to 30 June. 17,763 shares vested during the year ended 30 June 2021.
The expense will be charged directly through the Income Statement in the following manner – 25 per cent of the total estimated cost
in Year 1, 50 per cent of the total estimated cost in Year 2 less the expense charged in Year 1, 75 per cent of the total estimated cost
in Year 3 less the expense charged in Years 1 and 2 and 100 per cent of the total estimated cost in Year 4 less the expense charged
in Years 1, 2 and 3.
Directors’ Retirement Allowances
The Group recognises as ‘amounts payable’ Directors’ retirement allowances that have been crystallised. No further amounts will be
expensed as retirement allowances.
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.
Notes to the Financial Statements
continued
54Australian Foundation Investment Company Limited Annual Report 2021

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-based Payments
Share-based Payments
The Group has a number of share incentive arrangements. These are accounted for in accordance with Note F4. Where shares are
issued to employees of AICS, AICS compensates AFIC for the fair value of the shares.
(a) Executive Incentive Plans
The Executives’ remuneration arrangements incorporate an ‘at risk’ component as set out in the Remuneration Report. Part of this
‘at risk’ component is paid in shares in the Group.
(i) Executive Annual Incentive Plan
Each financial year, the Remuneration Committee sets the target (cash) amount of remuneration that could be paid should all
performance targets and measures be achieved. If all are achieved, 100 per cent of the remuneration will be awarded. If stretch levels
of performance are achieved above target, then higher amounts may be paid. On the other hand there is no set minimum that will be
paid regardless of performance.
The performance measures are a combination of the performance of the Group, the investment companies to which the Group
provides administration services, and personal objectives.
All of the incentive remuneration awarded is paid in cash, with 50 per cent of the after-tax amount being used by the Executive
to purchase shares. 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.
21,736 shares for both LTIP and Annual Incentive (2020: 12,565 shares) were purchased by Executives in the year (in relation to the
prior year) with a fair value (being the acquisition price) of $149,306 (2020: $81,835).
(ii) Executive Long Term Incentive Plan
Under the Executive Long Term Incentive Plan, the amount awarded will be represented by performance rights. The 30-day Volume
Weighted Average Price (VWAP) of AFIC shares up to but not including 1 July will be calculated. The amount of ELTIP available will then
be divided by this 30-day VWAP price to determine the number of performance rights that may vest at the vesting point in four years’
time. The value of each performance right will be adjusted by the accumulation return on the AFI share price (being the movement in
the share price assuming the reinvestment of any dividends) up to vesting date, based on a final share price calculated on the 30-day
VWAP price up to 30 June.
The estimated fair value of the award will be calculated in accordance with AASB 2 – Share Based Payments at the end of each year
until the final year of vesting. The liability shown after the final year of vesting will represent the actual amount being paid to eligible
employees as a cash-settled share-based payment.
67,777 rights were awarded under the plan during the year ended 30 June 2021 (2020: 65,198). An expense of $826,722
(2020: $462,267) was incurred for the 2017/18, 2018/19, 2019/20 and 2020/21 plans. 51,941 rights under the 2016/17 plan
were forfeited during the year (74.5 per cent).
55Australian Foundation Investment Company Limited Annual Report 2021

(b) Employee Share Acquisition Scheme
Under the current Employee Share Acquisition Scheme, each employee who is not a participant in the Executive or Investment Team
Incentive Plans is awarded $5,000 per annum. After PAYG is deducted, $2,500 is used to buy shares in the Company, which needs to
be held for three years. After three years, or the departure of the employee from employment with the Group, the shares come out of
the holding lock.
In addition, each employee is eligible for an additional award of up to $5,000. 50 per cent 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, 28 per cent of the possible maximum was
awarded, and 50 per cent of this was used to buy shares in AMCIL Limited, as part of the Group’s policy of rotating these purchases
amongst the LICs other than AFIC to which AICS provides services.
(c) Expenses Arising from Share-based Payment Transactions
Total expenses arising from share-based payment transactions recognised during the period as part of the employee benefit expense
(excluding any reversals and the Investment Team Long Term Incentive Plan) were as follows:
2021
$’000
2020
$’000
Share-based payment expense879507
(d) Liability
The total liability arising from share-based payment transactions is included in the current and non-current liabilities for ‘provisions’.
F7. Principles of Consolidation
AFIC’s consolidated financial statements consist of the financial statements of AFIC, the parent, and its subsidiary, Australian
Investment Company Services Ltd (AICS). 25 per cent of AICS is owned by Djerriwarrh Investments Ltd, another investment company
for which AICS performs operational and investment administration services, and for which it is paid monthly.
No subsidiaries were acquired or disposed of during the year. Intercompany transactions and balances between AFIC and AICS are
eliminated on consolidation.
The financial information for the parent entity, disclosed in F9 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:
Country of
Incorporation
Equity Holding
Name of EntityClass of Shares20212020
Australian Investment Company Services LtdAustralia Ordinary75%75%
The investment in AICS is accounted for at cost in the individual financial statements of AFIC.
Notes to the Financial Statements
continued
56Australian Foundation Investment Company Limited Annual Report 2021

F9. Parent Entity Financial Information
Summary Financial Information
The individual financial statements for the parent entity show the following aggregate amounts:
2021
$’000
2020
$’000
Balance Sheet
Current assets133,183125,705
Total assets9,106,1067,243,674
Current liabilities13,27130,965
Total liabilities1,551,3481,005,486
Shareholders’ equity
Issued capital3,007,7302,947,243
Reserves
Revaluation reserve3,394,2972,166,030
Realised capital gains reserve416,071397,712
General reserve23,63723,637
Retained earnings713,023703,566
4,547,0283,290,945
Total shareholders’ equity7,554,7586,238,188
Profit or loss for the year233,319238,539
Total comprehensive income 1,538,715(162,665)
57Australian Foundation Investment Company Limited Annual Report 2021

In the Directors’ opinion:
1) the financial statements and notes set out on pages 35 to 57 are in accordance with the Corporations Act 2001 including:
a) complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
b) giving a true and fair view of the entity’s financial position as at 30 June 2021 and of its performance for the financial year ended
on that date; and
2) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Note F4 to the financial statements confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Directors.
This declaration has been made after receiving the declarations required to be made to the Directors by the Managing Director and the
Chief Financial Officer regarding the financial statements in accordance with Section 295A of the Corporations Act 2001 for the financial
year ended 30 June 2021. The declarations received were that, in the opinion of the Managing Director and the Chief Financial Officer
to the best of their knowledge, the financial records of the Company have been properly maintained, that the financial statements
comply with Accounting Standards and that they give a true and fair view.

John Paterson
Chairman
Melbourne
26 July 2021
DIRECTORS’ DECLARATION
58Australian Foundation Investment Company Limited Annual Report 2021

INDEPENDENT AUDIT REPORT
59Australian Foundation Investment Company Limited Annual Report 2021

INDEPENDENT AUDIT REPORT
continued
60Australian Foundation Investment Company Limited Annual Report 2021

61Australian Foundation Investment Company Limited Annual Report 2021

INDEPENDENT AUDIT REPORT
continued
62Australian Foundation Investment Company Limited Annual Report 2021

63Australian Foundation Investment Company Limited Annual Report 2021

Information About Shareholders
At 20 July 2021 there were 159,883 holdings of ordinary shares. These holdings were distributed in the following categories:
Size of HoldingShareholdingsPercentage
1 to 1,00060,7182.02%
1,001 to 5,00051,78710.81%
5,001 to 10,00020,66312.27%
10,001 to 100,00025,67051.67%
100,000 and over1,04523.23%
Total159,883100%
Percentage held by the 20 largest holders6.50%
Average shareholding7,635
There were 2,923 shareholdings of less than a marketable parcel of $500 (63 shares).
Voting Rights of Ordinary Shares
The Constitution provides for votes to be cast:
(i) on a show of hands, one vote for each shareholder; and
(ii) on a poll, one vote for each fully paid ordinary share.
Major Shareholders
The 20 largest registered holdings of ordinary shares as at 20 July 2021 are listed below:
Ordinary Shares
RankNameUnits% Units
1HSBC Custody Nominees (Australia) Limited22,109,6801.81
2Citicorp Nominees Pty Limited9,019,9990.74
3Nulis Nominees (Australia) Limited <Navigator Mast Plan Sett A/C> 5,540,5780.45
4Netwealth Investments Limited <Wrap Services A/C>5,334,6560.44
5Australian Executor Trustees Limited <IPS Super A/C>4,623,1790.38
6Bougainville Copper Limited4,461,0000.37
7Navigator Australia Ltd <MLC Investment Sett A/C>3,946,9020.32
8Bushways Pty Ltd2,570,5920.21
9Custodial Services Limited <Beneficiaries Holding A/C>2,568,0150.21
10Investment Custodial Services Limited <C A/C>2,393,4210.20
11Investment Custodial Services Limited <C A/C>2,375,4240.19
12BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd <Drp A/C>2,231,2540.18
13Netwealth Investments Limited <Super Services A/C>2,042,2070.17
14Australian Executor Trustees Limited <IPS IDPS A/C>1,737,7910.14
15Kalymna Pty Ltd1,510,8860.12
16HSBC Custody Nominees (Australia) Limited <Euroclear Bank SA NV A/C>1,500,2590.12
17Twibill Pty Ltd1,443,2160.12
18Australian Executor Trustees Limited <No 1 Account>1,368,3760.11
19BNP Paribas Nominees Pty Ltd <Pitcher Partners Drp>1,303,2650.11
20Mr Bruce Teele <The Teele Family A/C>1,248,2900.10
OTHER INFORMATION
64Australian Foundation Investment Company Limited Annual Report 2021

Sub-underwriting

During the year the Company did not participate as a sub-underwriter in any issues of securities.
Substantial Shareholders
The Company has not been notified of any substantial shareholders.
Transactions in Securities
During the year ended 30 June 2021, the Company recorded 643 transactions in securities (including derivatives).
$2,279,146 in brokerage (including GST) was paid or accrued for the year.
65Australian Foundation Investment Company Limited Annual Report 2021

Acquisitions
Cost
($’000)
PEXA Group50,000
Endeavour Group (demerger from Woolworths Group)39,713
FINEOS Corporation (includes participation in placement at $4.26 per share)30,981
ASX28,444
Woolworths Group28,184
Domino’s Pizza Enterprises24,743
Temple & Webster24,547
Nanosonics21,520
Disposals
Proceeds
($’000)
Qube Holdings41,399
South32
#
35,848
National Australia Bank (because of the exercise of call options)35,413
Alumina
#
34,778
Brickworks
#
32,698
Brambles28,973
Oil Search26,537
# Complete disposal from the portfolio.
New Companies Added to the Portfolio
PEXA Group
Endeavour Group
FINEOS Corporation
Domino’s Pizza Enterprises
Temple & Webster
Nanosonics
IDP Education
Major Transactions in the Investment Portfolio
66Australian Foundation Investment Company Limited Annual Report 2021

Individual investments for the combined investment and trading portfolios as at 30 June 2021 are listed below. The list should not,
however, be used to evaluate portfolio performance or to determine the net asset backing per share at other dates. Net asset backing
is advised to the Australian Securities Exchange each month and is recorded on the toll free telephone service at 1800 780 784 and
posted to AFIC’s website afi.com.au.
Individual holdings in the portfolios may change during the course of the year. In addition, holdings which are part of the trading
portfolio may be subject to call options or sale commitments by which they may be sold at a price significantly different from
the market price prevailing at the time of the exercise or sale.
CodeOrdinary Shares, Trust Units or Stapled Securities
Number
Held
2020
’000
Number
Held
2021
’000
Market
Value
2021
$’000
AIAAuckland International Airport6,0736,07341,056
ALQALS7,5427,01291,439
ALUAltium30846617,079
AMCAmcor12,06011,600175,509
ANNAnsell1,0791,07946,941
ANZAustralia and New Zealand Banking Group9,1888,488238,929
APAAPA Group6,6656,66559,319
ARBARB Corporation3,5033,503151,283
ASXASX Limited1,0541,432111,281
AUBAUB Group2,5262,52656,553
BHPBHP Group13,93513,413651,477
BXBBrambles12,1399,279106,148
CARCarsales.com5,0336,053119,609
CBACommonwealth Bank of Australia7,9007,900788,973
COHCochlear33433484,102
COLColes Group7,0687,068120,784
CPUComputershare4,3804,04368,318
CSLCSL2,1202,185623,229
CWYCleanaway Waste Management25,51617,01444,917
DJWDjerriwarrh Investments7,5057,50523,041
DMPDomino’s Pizza Enterprises025430,610
DUIDiversified United Investments12,03012,03062,437
EDVEndeavour Group04,76629,976
EQTEQT Holdings1,3221,32236,212
FCLFINEOS Corporation07,33828,619
FPHFisher & Paykel Healthcare3,4853,913113,150
GMGGoodman Group6,6856,685141,521
IAG*Insurance Australia Group6,9559,52748,797
IELIDP Education056613,894
IREIRESS5,9297,09191,547
IVCInvoCare2,9843,51240,639
JHX*James Hardie Industries5,1884,590207,635
LICLifestyle Communities2,7762,00031,220
MFTMainfreight (NZX listed)3,2683,268234,039
MIRMirrabooka Investments8,7288,72831,158
M LTMilton Corporation9,7768,09250,982
MQGMacquarie Group2,1702,207345,168
NABNational Australia Bank12,91711,155292,479
NANNanosonics03,54520,809
NWLNetwealth Group1,1002,09035,844
NXTNEXTDC7,8647,86493,273
ORGOrigin Energy6,5006,50029,315
Holdings of Securities
At 30 June 2021
67Australian Foundation Investment Company Limited Annual Report 2021

CodeOrdinary Shares, Trust Units or Stapled Securities
Number
Held
2020
’000
Number
Held
2021
’000
Market
Value
2021
$’000
ORIOrica2,2262,22629,558
OSHOil Search26,24417,98568,523
PXAPEXA Group02,91950,000
QUBQube Holdings35,30221,63568,582
REAREA Group55355393,441
REHReece7,9517,201170,023
RHCRamsay Health Care2,0201,915120,549
RIORio Tinto2,0011,862235,806
RMDResMed3,9354,250139,230
RWCReliance Worldwide Corporation13,13410,96357,667
RYMRyman Health (NZX listed)88088010,754
SEKSeek4,1603,641120,651
SHLSonic Healthcare4,0543,704142,242
SYDSydney Airport21,44325,606148,260
TCLTransurban Group23,13723,867339,624
TLS*Telstra Corporation54,51054,510204,331
TPWTemple & Webster02,36725,537
WBCWestpac Banking Corporation15,98515,545401,216
WESWesfarmers7,3727,372435,685
WOWWoolworths Group5,6676,416244,631
WPLWoodside Petroleum4,4603,62080,392
XROXero871833114,204
Total8,930,218
* Part of the holding was subject to call options written by the Company.
Holdings of Securities
At 30 June 2021 continued
68Australian Foundation Investment Company Limited Annual Report 2021

Holdings of International Securities
At 30 June 2021
Ordinary Shares, Trust Units or Stapled Securities
Number
Held
2021
Market
Value
2021
A$
ACN-USAccenture2,760 1,083,742
AENA-ESAena4,993 1,090,771
9988-HKAlibaba45,556 1,718,828
GOOGL-USAlphabet642 2,088,086
AMZN-USAmazon349 1,599,223
AAPL-USApple4,788 873,475
CMG-USChipotle714 1,474,453
CTAS-USCintas1,994 1,014,587
COST-USCostco1,589 837,705
CCI-USCrown Castle4,226 1,098,211
EL-USEstée Lauder2,046 866,849
FB-USFacebook3,553 1,645,572
FERG-GBFerguson6,357 1,175,600
FTNT-USFortinet4,102 1,301,442
HCA-USHCA Healthcare5,511 1,517,619
HD-USHome Depot2,757 1,171,063
ICE-USIntercontinental7,772 1,228,831
OR-FRL’Oréal790 468,960
MC-FRLVMH Moët1,240 1,295,304
MAR-USMarriott6,266 1,139,409
MA-USMastercard1,421 691,032
MCD-USMcDonald’s4,188 1,288,564
MSFT-USMicrosoft7,066 2,549,695
NESN-CHNestlé9,176 1,523,491
NFLX-USNetflix2,257 1,587,980
NEE-USNextera5,861 572,092
NKE-USNike7,784 1,601,792
NOVOB-DKNovo Nordisk8,634 963,641
PYPL-USPaypal3,116 1,209,787
PEP-USPepsiCo5,323 1,050,547
ROG-CHRoche2,790 1,401,333
SPGI-USS&P Global2,558 1,398,510
SU-FRSchneider5,527 1,158,349
SOON-CHSonova1,814 909,667
SBUX-USStarbucks8,598 1,280,500
669-HKTechtronic31,777 739,133
TMO-USThermo Fisher1,684 1,131,564
ULVR-GBUnilever10,047 782,159
V-USVisa3,461 1,077,928
Total47,607,493
69Australian Foundation Investment Company Limited Annual Report 2021

Date of IssueTypePriceRemarks
23 February 2021DRP/DSSP$7.105 per cent discount
1 September 2020DRP/DSSP$6.30
24 February 2020DRP/DSSP$6.932.5 per cent discount
29 August 2020DRP/DSSP$6.21
25 February 2019DRP/DSSP$5.932.5 per cent discount
31 August 2018DRP/DSSP$6.18
23 February 2018DRP/DSSP$6.11
30 August 2017DRP/DSSP*$5.92
24 February 2017DRP/DSSP*$5.84
30 August 2016DRP/DSSP*$5.582.5 per cent discount
19 February 2016DRP/DSSP*$5.432.5 per cent discount
25 November 2015SPP$5.515.0 per cent discount
28 August 2015DRP/DSSP*$6.032.5 per cent discount
20 February 2015DRP/DSSP*$5.972.5 per cent discount
6 October 2014 SPP$5.882.5 per cent discount
29 August 2014 DRP/DSSP*$5.932.5 per cent discount
21 February 2014DRP/DSSP*$5.862.5 per cent discount
30 August 2013DRP/DSSP*$5.642.5 per cent discount
DSSP: Dividend Substitution Share Plan
22 February 2013DRP$5.37
31 August 2012DRP$4.36
24 February 2012DRP$4.26
19 December 2011Convertible Notes$100 face valueMature 28 February 2017. Interest rate 6.25 per cent
per annum. Conversion price: $5.0864
31 August 2011DRP$4.18
25 February 2011DRP$4.722.5 per cent discount
1 September 2010DRP$4.652.5 per cent discount
2 June 2010SPP$4.622.5 per cent discount
SPP = Share Purchase Plan
26 February 2010DRP$4.825 per cent discount
1 September 2009DRP$4.695 per cent discount
2 March 2009 DRP$3.725 per cent discount
25 August 2008 DRP$4.98
Issues of Securities
70Australian Foundation Investment Company Limited Annual Report 2021

Date of IssueTypePriceRemarks
11 April 2008SAP$5.26
27 February 2008DRP$5.265 per cent discount
22 August 2007DRP$5.78
8 March 2007DRP $5.60
22 December 2006SAP$4.90
23 August 2006DRP $4.70
7 March 2006DRP $4.55
4 November 2005SAP $3.96
23 August 2005DRP $3.90
18 March 2005DRP $3.68
19 August 2004DRP $3.29
12 March 2004DRP $3.29
22 October 20031 for 8 rights issue $3.00
15 August 2003DRP $3.47
16 April 2003SAP $3.04
7 March 2003DRP $3.11
14 August 2002DRP $3.11
5 April 2002SAP$3.16
7 March 2002DRP$3.24
15 August 2001DRP$3.08
29 June 2001DRP $2.87
7 March 2001DRP $2.56
16 August 2000DRP$2.47
7 March 2000DRP $2.64
11 August 1999DRP $2.95
12 April 1999SAP$2.54 SAP = Share Acquisition Plan
15 March 1998DRP $2.79
4 September 1998DRP $2.43 DRP = Dividend Reinvestment Plan
Note for issues of securities in earlier years please consult the Company’s website, afi.com.au or via telephone (03) 9650 9911.
* Note that for the shares issued under the DSSP, the price shown is the indicative price used to determine the number of shares issued to participants.
Shares issued under the DSSP are issued at nil cost. Shareholders who sell shares issued under the DSSP should consult their tax adviser as to the
correct treatment of such sales for taxation purposes.
71Australian Foundation Investment Company Limited Annual Report 2021

Australian Foundation Investment
Company Limited (AFIC)
ABN 56 004 147 120
Directors
John Paterson, Chairman
Mark Freeman, Managing Director
Rebecca P Dee-Bradbury
Craig M Drummond
Julie A Fahey
Graeme R Liebelt
David A Peever
Catherine M Walter AM
Peter J Williams
Company Secretaries
Matthew J Rowe
Andrew JB Porter
Auditor
PricewaterhouseCoopers
Chartered Accountants
Country of Incorporation
Australia
Registered Office and Mailing Address
Level 21, 101 Collins Street
Melbourne, Victoria, 3000
Contact Details
Telephone (03) 9650 9911
Facsimile (03) 9650 9100
Website afi.com.au
Email invest@afi.com.au
For enquiries regarding net asset backing (as advised each
month to the Australian Securities Exchange):
Telephone 1800 780 784 (toll free)
Company Particulars
72Australian Foundation Investment Company Limited Annual Report 2021

Share Registrar
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford Victoria 3067
New Zealand
Computershare Investor Services Limited
159 Hurstmere Road
Takapuna
Auckland 0622
Shareholder
Enquiry Line 1300 662 270 (Australia)
0800 333 501 (New Zealand)
+61 3 9415 4373 (from overseas)
Facsimile (03) 9473 2500
Website investorcentre.com/contact
For all enquiries relating to shareholdings, dividends and related
matters, please contact the share registrar as above.
Securities Exchange Codes
AFI Ordinary shares (ASX and NZX)
Annual General Meeting
Time 10.00am
Date Tuesday 5 October 2021
Venue Clarendon Auditorium
Melbourne Convention and
Exhibition Centre (MCEC)
Location 2 Clarendon Street Southbank
Victoria Australia 3006
Subject to any change in the government restrictions for public
gatherings, the AGM will be a hybrid meeting with a physical meeting
and access via an online platform. Further details are provided in the
Notice of Annual General Meeting.
Our intention is to hold shareholder meetings in each of the state capital
cities (other than Hobart) during October 2021 after the AGM. Given
the uncertainty because of COVID-19, shareholders will be notified
separately of date and venue if these meetings can safely proceed.
Shareholder Information
Australian Foundation Investment Company Limited Annual Report 202173

Design: MDM Investorcom
Printed on environmentally friendly paper

Annual Review
2021

2 5 Year Summary
4 About the Company
8 Review of Operations
and Activities
18 Top 25 Investments
19 Income Statement
20 Balance Sheet
21 Summarised Statement
of Changes in Equity
22 Holdings of Securities
25 Holdings of International
Securities
27 Major Transactions in the
Investment Portfolio
28 Company Particulars
29 Shareholder Information
Contents
AUSTRALIAN FOUNDATION
INVESTMENT COMPANY
IS A LISTED INVESTMENT
COMPANY INVESTING

IN AUSTRALIAN AND
NEW ZEALAND EQUITIES.
Australian Foundation Investment Company Limited ABN 56 004 147 120

Year in Summary
* Assumes a shareholder can take full advantage of the franking credits.
Profit for
the Year
$235.1m
$240.4m in 2020.
Down 2.2%
Total
Shareholder
Return
35.2%
Share price plus
dividend, including
franking*
Management
Expense
Ratio
0.14%
0.13%
in 2020
Total
Portfolio
Return
31.9%
Including franking*
S&P/ASX 200
Accumulation
Index including
franking* 29.1%
Fully
Franked
Dividend
14
¢
Final
24
¢
Total
24 cents total
in 2020
2021
Total
Portfolio
$9.1b
Including cash
at 30 June.
$7.2 billion in 2020
1Australian Foundation Investment Company Limited Annual Review 2021

5 Year Summary
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Dividends Per Share
(Cents)
(b)
Investments at Market Value
($ Million)
(e)
Net Asset Backing Per Share
($)
(d)
Number of Shareholders
(30 June)
272.2134.2
(a)
279.0
245.3
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
240.4
6.49
6.27
5.89
5.96
138,671
129,948
119,463
153,588
32
(c)
24
24
24
24
34.0
23.6
21.3
19.9
7,566
7,274
6,790
7,122
235.119.38,978
247.45159,500
8
(c)
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Dividends Per Share
(Cents)
(b)
Investments at Market Value
($ Million)
(e)
Net Asset Backing Per Share
($)
(d)
Number of Shareholders
(30 June)
272.2134.2
(a)
279.0
245.3
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
240.4
6.49
6.27
5.89
5.96
138,671
129,948
119,463
153,588
32
(c)
24
24
24
24
34.0
23.6
21.3
19.9
7,566
7,274
6,790
7,122
235.1
19.38,978
247.45159,500
8
(c)
2Australian Foundation Investment Company Limited Annual Review 2021

Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Dividends Per Share
(Cents)
(b)
Investments at Market Value
($ Million)
(e)
Net Asset Backing Per Share
($)
(d)
Number of Shareholders
(30 June)
272.2134.2
(a)
279.0
245.3
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
240.4
6.49
6.27
5.89
5.96
138,671
129,948
119,463
153,588
32
(c)
24
24
24
24
34.0
23.6
21.3
19.9
7,566
7,274
6,790
7,122
235.119.38,978
247.45159,500
8
(c)
Net Profit After Tax
($ Million)
Net Profit Per Share
(Cents)
Dividends Per Share
(Cents)
(b)
Investments at Market Value
($ Million)
(e)
Net Asset Backing Per Share
($)
(d)
Number of Shareholders
(30 June)
272.2134.2
(a)
279.0
245.3
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
240.4
6.49
6.27
5.89
5.96
138,671
129,948
119,463
153,588
32
(c)
24
24
24
24
34.0
23.6
21.3
19.9
7,566
7,274
6,790
7,122
235.1
19.38,978
247.45
159,500
8
(c)
Notes
(a) Participation in the Rio Tinto and BHP
off-market share buy-backs, special
dividends and the receipt of a dividend
because of the Coles demerger from
Wesfarmers.
(b) All dividends were fully franked.
The LIC attributable gain attached
to the dividend was 2021: 4.29 cents,
2020: 7.14 cents, 2019: 7.14 cents,
2018: 2.86 cents, 2017: nil.
(c) 8 cents fully franked special dividend
paid with the interim dividend.
(d) Net asset backing per share based on
year-end data before the provision for
the final dividend. The figures do not
include a provision for capital gains
tax that would apply if all securities held
as non-current investments had been
sold at balance date as Directors do
not intend to dispose of the portfolio.
(e) Excludes cash.
3Australian Foundation Investment Company Limited Annual Review 2021

Investment Philosophy
The investment philosophy is built
on taking a medium to long term view
on companies in a diversified portfolio
with an emphasis on identifying quality
companies that are likely to sustainably
grow their earnings and dividends over
this time frame.
Quality in this context is an outcome
of our assessment of the board and
management as well as some key
financial metrics. These include
return
on capital employed, return on equity,
the level of gearing in the balance
sheet, margins and free cash flow. The
structure of the industry and a company’s
competitive position in this industry is also
an important indicator of quality. Linked to
this assessment of quality is the ability
of companies to grow earnings over time,
which ultimately should produce good
dividend growth.
Recognising value is also an important
aspect of sound long term investing.
Short term measures such as the price
earnings ratio, price to book or price to
sales may be of some value, but aren’t
necessarily strong predictors of future
performance. Our assessment of value
tries to capture the opportunity a business
has to prosper and thrive over the medium
to long term.
In building the investment portfolio in this
way, we believe we can offer investors a
well-diversified portfolio of high-quality
companies that is intended to deliver total
returns ahead of the Australian equity
market and with less volatility over
the long term.
The Company also uses options
written against a small proportion of its
investments and a small trading portfolio
to generate additional income.
From time to time, some borrowings
may be used where potential investment
returns justify the use of debt. This is
managed within very conservative limits,
as determined by the Board.
AFIC is managed for the benefit of its
shareholders with fees based on the
recovery of costs rather than as a fixed
percentage of the portfolio. There are no
performance fees. As a result, the benefit
of scale over time results in a very low
expense ratio for investors. For the twelve
months to 30 June 2021 this was 0.14 per
cent, or 14 cents for each $100 invested.
Approach to Investing
5Australian Foundation Investment Company Limited Annual Review 2021

Approach to Environmental,
Social and Governance (ESG)
Issues When Investing
Assessment of Environmental, Social and
Governance (ESG) issues is an important
part of our investment process. As a
long term investor, we seek to invest in
companies that have strong governance
and risk management processes, which
includes consideration of environmental and
social risks. We regularly review companies
to ensure ongoing alignment with our
investment framework:
• We believe environmental factors,
including the impact of climate change,
can have a material impact on society.
These factors are considered when
assessing a company’s assets, long
term sustainability of earnings and cash
flow, cost of capital and future growth
opportunities.
• We believe that aligning ourselves
with high-quality management and
boards building sustainable long term
businesses is the best approach to
avoiding socially harmful businesses.
We are attracted to companies
that act in the best interest of all
their stakeholders, including their
employees, customers, suppliers,
and wider communities.
• We invest in high-quality companies
with strong governance processes,
and management and boards whose
interests are closely aligned with
shareholders. The investment process
includes an assessment of their
past performance, history of capital
allocation, level of accountability,
mix of skills, relevant experience and
succession planning. We also closely
scrutinise a company’s degree of
transparency and disclosure.
Engagement with Companies
Voting on resolutions is one of the key
functions that a shareholder has in ensuring
better long term returns and management
of investment risk:
• We take input from proxy advisers but
conduct our own evaluation of the
merits of any resolution.
• We vote on all company resolutions as
part of our regular engagement with the
companies in the portfolio.
• We actively engage with companies
when we have concerns those
resolutions are not aligned with
shareholders’ interests.

We acknowledge that high-quality
companies may face ESG challenges from
time to time. We seek to stay engaged
with the companies and satisfy ourselves
that the issues are taken seriously and
worked through constructively. Ideally, in
this instance, we seek to remain invested
to influence a satisfactory outcome for
stakeholders.
About the Company
continued
Approach to Investing continued
6Australian Foundation Investment Company Limited Annual Review 2021

7Australian Foundation Investment Company Limited Annual Review 2021

Profit and Dividend
The full year profit was $235.1 million,
down from $240.4 million in the previous
corresponding period. The profit to
30 June 2021 includes a demerger
dividend of $36.5 million (which was non-
cash and carries no franking) resulting
from the Endeavour Group demerger from
Woolworths Group. Excluding this one-off
item, the profit figure to 30 June 2021 was
$198.6 million. This fall in profit versus
the corresponding period last year was a
result of the decline in underlying income
as the economic impact of the COVID-19
pandemic continued to limit dividends for
many holdings in the portfolio.
Earnings per share were 19.3 cents
(16.3 cents excluding the Endeavour
demerger dividend), down from
19.9 cents. AFIC, as a long-standing
listed investment company, has reserves
that can be used in difficult times.
Drawing upon these reserves and some
realised capital gains after tax generated
by some sales in the portfolio, the final
dividend was maintained at 14 cents
per share fully franked despite the fall in
income over the year. Total fully franked
dividends applicable for the year are
24 cents per share, the same as last
year. Despite the significant disruption
to income arising from COVID-19 over
the last two years, AFIC has maintained
its dividends to shareholders through
this period.
Three cents of the final dividend are
sourced from taxable capital gains,
on which the Company has paid or
Review of Operations and Activities
7,400
7,200
7,000
6,800
6,600
6,400
6,200
6,000
5,800
5,600
Jul 20
Jun 20
Aug 20
Sep 20
Oct 20
Nov 20
Dec 20
Jan 21
Feb 21
Mar 21
Apr 21
May 21
Jun 21
Figure 1: Performance of the S&P/ASX 200 Price Index for the Financial Year
Source: FactSet
8Australian Foundation Investment Company Limited Annual Review 2021

will pay tax. The amount of the pre-tax
attributable gain on this portion of the
dividend, known as an ‘LIC capital gain’,
is therefore 4.29 cents. The enables some
shareholders to claim a tax deduction
in their tax return.
Market and Portfolio
Performance
The Australian share market delivered a
very strong performance for the financial
year (Figure 1) as concerns about the
lingering effects of COVID-19 were put
aside by the positive stimulus provided
by Government and central banks, and
better than expected company earnings.
The positive mood of investors was also
reinforced by the efficacy of vaccines and
their deployment in a number of major
markets.
The increase in the Australian market
was widespread across sectors, with
information technology and the banking
sectors very strong (Figure 2). The
banking sector has risen from previous
lows during the year supported by a
recovering economy, lower bad debt
charges and more sustainable dividend
payout ratios.
The S&P/ASX 200 Accumulation Index
delivered a positive performance in
11 of the 12 months for the financial
year, culminating in a 12-month return of
29.1 per cent, including franking – one
of the strongest returns on record. AFIC’s
portfolio outperformed over this period,
with a return of 31.9 per cent, which
also includes the benefit of franking.
Figure 2: Performance of Selected Sectors of the Market
160
140
120
100
0
S&P/ASX 200 Industrials
Index
S&P/ASX 200 Banks
S&P/ASX 200 Information Technology
S&P/ASX 200 Resources
Jul 20
Aug 20
Sep 20
Oct 20
Nov 20
Dec 20
Jan 21
Feb 21
Mar 21
Apr 21
May 21
Jun 21
Jul 21
Source: FactSet
9Australian Foundation Investment Company Limited Annual Review 2021

Companies in the portfolio that contributed
strongly to the positive relative return
to the Index through the 12-month
period were Reece, Mainfreight, ARB
Corporation, James Hardie Industries
and ALS.
The long term performance of the
portfolio, which is better aligned with the
Company’s investment timeframes, was
11.0 per cent per annum for the 10 years
to 30 June 2021. This is slightly ahead
of the Index return over the same period
of 10.8 per cent. Both of these figures
include the benefit of franking. AFIC’s
performance numbers are after costs.
The short and long term performance
have been achieved with low portfolio
turnover, providing very tax-effective
returns for shareholders. These returns
have also been delivered with very low
volatility, achieving an attractive profile
of return relative to risk for investors.
Review of Operations and Activities
continued
10Australian Foundation Investment Company Limited Annual Review 2021

Net asset per share growth plus dividends,
including franking
S&P/ASX 200 Accumulation Index,
including franking
Assumes an investor can take full advantage of franking credits. Past performance is not indicative of future performance.
3 year return
12.5%
11.0%
5 year return
12.8%
12.6%
10 year return
11.0%
10.8%
1 year return
31.9%
29.1%
Figure 3: Portfolio Performance – Per Annum Returns to 30 June 2021
11Australian Foundation Investment Company Limited Annual Review 2021

Review of Operations and Activities
continued
Positioning the Portfolio
A number of purchases were undertaken
during the financial year. The largest
was participation in the IPO of PEXA
Group. While the pricing reflected the
strong market conditions towards the
end of the period, the company appears
well positioned as a good long term
investment. Other new holdings added
to the portfolio were Endeavour Group,
due to its demerger from Woolworths
Group, FINEOS Corporation (including
participation in its placement), Domino’s
Pizza Enterprises, Temple & Webster,
Nanosonics and IDP Education. Periods
of volatility throughout the year also
provided opportunities to add to holdings
with strong market positions such as
Woolworths Group and ASX.
Details of companies added to the
portfolio during the financial year:
• PEXA Group engages in the
development and provision of
electronic conveyancing system
in Australia and the United Kingdom.
• FINEOS Corporation is a global
software company that provides
software solutions to the life, accident
and health insurance industry.
• Domino’s Pizza Enterprises engages in
the management of retail food outlets
and franchise services. It operates
through the following geographical
segments: Australia/New Zealand,
Europe and Japan.
• Temple & Webster is a leading online
retailer of furnishings and homewares
in Australia.
• Nanosonics is a developer of infection
control and decontamination products
with a market-leading position in
ultrasound disinfection.
• IDP Education is an international
education organisation offering student
placement in Australia, New Zealand,
the United States, United Kingdom,
Republic of Ireland and Canada.
Major sales included the complete
disposal of holdings in South32, Alumina
and Brickworks, and these funds were
deployed elsewhere in the portfolio.
There was also some trimming of the
positions in Qube Holdings, Brambles
and Oil Search.
Figure 4 highlights the profile of AFIC’s
portfolio by the various sectors of the
market at the end of the financial year
and how it differs from the Index.
International Portfolio
As first signalled at the AGM in
October 2020, a small part of our
funds, $48 million (which represents
approximately 0.5 per cent of the
portfolio) was invested into a diversified
global equities portfolio during the latter
half of the financial year.
Leveraging our investment philosophy
in the domestic market, the approach
to international equities is similar. The
international strategy invests in publicly
listed companies outside the Australian
and New Zealand markets with a medium
to long term investment time horizon.
12Australian Foundation Investment Company Limited Annual Review 2021

AFIC portfolio weightS&P/ASX 200 Index weight
19.2%14.4%14.4%14.4%8.9%7.7%1.0%6.0%2.5%4.6%1.1%1.7%4.4%
20%
15%
10%
5%
0%
Banks
Industrials
Healthcare
Materials
Other
Financials
Consumer
Discretionary
Information
Technology
Communication
Services
Consumer
Staples
Real
Estate
Energy
Cash
Utilities
Figure 4: AFIC Investment by Sector Versus the S&P/ASX 200 Index
as at 30 June 2021 – Excludes International Holdings
It focuses on high-quality companies
with strong management teams and
competitive advantages that we view as
sustainable, often underpinned by long
term secular growth trends. With inherent
business characteristics that allow these
companies to generate an attractive return
on capital, the selected companies are
expected to generate a reasonable level
of return for our shareholders through
a combination of earnings growth and
dividends. We look to invest at a starting
valuation that is sensible in the context
of the expected return and the risk
associated with each investment.
Holdings at 30 June 2021 are listed
on pages 25 and 26.
This activity is potentially a precursor
to establishing a separate low-cost
international Listed Investment
Company in the future.
Share Price Return
The share price return, including
reinvestment of dividends and franking
credits, over the 12 months to 30 June
2021 was 35.2 per cent, which is ahead
of the portfolio return for the year. The
share price was trading at a premium
of 5.0 per cent to the net asset backing
(before tax on unrealised gains) at the
end of June 2021, whereas at 30 June
2020 the premium was 2.2 per cent
(Figure 5 on page 14).
13Australian Foundation Investment Company Limited Annual Review 2021

Review of Operations and Activities
continued
15%
-10%
-5%
0%
5%
10%
Jun 10
Jun 1
1
Jun 1
2
Jun 1
3
Jun 1
5
Jun 1
4
Jun 1
6
Jun 1
7
Jun 1
8
Jun 19Jun 20Jun 21
10 year return
12.3%
10.8%
5 year return
13.4%
12.6%
3 year return
14.9%
11.0%
1 year return
35.2%
29.1%
Share price growth plus dividends,
including franking
S&P/ASX 200 Accumulation Index,
including franking
Figure 5: Share Price Premium/Discount to Net Asset Backing
Figure 6: Share Price Return − to 30 June 2021
14Australian Foundation Investment Company Limited Annual Review 2021

Importantly, the long term, 10-year return
is 12.3 per cent for the share price in
comparison to 10.8 per cent for the Index.
The figures for the Index and share price
assumes a shareholder can take full
advantage of the franking credits attached
to the dividends paid (Figure 6).
Outlook
Equity markets delivered near-record
growth over the year with valuations
recovering from the effects of COVID-19
as interest rates remain very low
(Figure 7). However, the outlook for
corporate earnings remains uncertain,
as supportive government stimulus
measures are unlikely to be repeated
and underlying economic conditions
remain variable. Cost inflation is also
starting to percolate, and companies
are facing disruption to their supply
chains which may lead to rising costs for
many companies. In this environment, it
is our expectation that market volatility will
increase over the coming 12 months.
In recent years we have increased the
weighting of holdings in the portfolio that
meet our definition of quality companies.
In an economy where input costs may
be rising, we believe the companies in
the portfolio are generally well positioned
given their market strength and ability
to further leverage their efficiencies.
Any pressure on valuations because of
these conditions may result in purchases
in more of our preferred companies
at attractive prices. At present, we
are looking to remain patient with our
capital until these opportunities present
themselves.
15Australian Foundation Investment Company Limited Annual Review 2021

Review of Operations and Activities
continued
Directorship Matters
Ms Julie Fahey was appointed as an
Independent Non-Executive Director
of the Company on 22 April 2021.
Ms Fahey has over 30 years of experience
in technology, including in major
organisations such as Western Mining,
Exxon, Roy Morgan, General Motors and
SAP, covering consulting, software vendor
and Chief Information Officer roles.
In addition to her industry experience,
she spent 10 years at KPMG as a
Partner with the firm, during which
time she held roles as National Lead
Partner Telecommunications, Media and
Technology, and National Managing
Partner – Markets. Ms Fahey was also a
member of the KPMG National Executive
Committee.
Ms Fahey is a Non-Executive Director
of Seek Limited, IRESS Limited, Vocus
Group Limited, Datacom Group Limited,
CenITex and a member of the Australian
Red Cross Blood Service Board and the
La Trobe University Council.
Mr Craig Drummond was appointed as
an Independent Non-Executive Director
of the Company on 1 July 2021.
Times
20
18
16
14
12
10
20152013201420112012
2016
2017
2018
2019
2020
2021
10-year
average
15.3
Figure 7: Valuation of the Market – Price Earnings Ratio
of the S&P/ASX 200 Index
Source: FactSet
16Australian Foundation Investment Company Limited Annual Review 2021

Mr Drummond was Chief Executive
Officer of Medibank Private Limited
from 2016 to 2021. He has had over 30
years’ experience in the financial sector
– Group Executive Finance and Strategy
at National Australia Bank from 2013 to
2016, Bank of America Merrill Lynch as
Chief Executive Officer and Country Head
from 2009 to 2013, and Goldman Sachs
JBWere (1986 to 2009) in various roles
(including being a leading investment
analyst and subsequently Director of
Research and Investment Strategy)
culminating in being appointed Chief
Executive Officer.
Mr Drummond is a Senior Fellow of the
Financial Services Institute of Australasia
and is a Chartered Accountant. He is a
Non-Executive Director of Transurban and
is President of the Geelong Football Club.
He is also a Governor of the Ian Potter
Foundation.
We are delighted to welcome both
Ms Fahey and Mr Drummond to the
Board. Their depth of knowledge and
experience will be of great assistance
to the Company.
Mr Ross Barker retired as a Director on
30 June 2021. Mr Barker transitioned to
Non-Executive Director in January 2018
having been appointed Chief Executive
Officer of the Company in February 2001
and Managing Director in October 2001.
Prior to October 2001 he was an Alternate
Director of the Company, a position he
had held since April 1987. Mr Barker
was integrally involved, through the late
1990s and early 2000s, in building AFIC’s
capabilities to be a fully and strongly
independent entity in its own right.
His contribution to Board deliberations will
be missed. The Board wishes to record
its thanks to Mr Barker for his valued and
outstanding service to the Company and
to shareholders for almost 35 years and
wishes him well for the future.
17Australian Foundation Investment Company Limited Annual Review 2021

Includes investments held in both the investment and trading portfolios.
Value at Closing Prices at 30 June 2021
Total Value
$ Million
% of the
Portfolio
1Commonwealth Bank of Australia789.08.8
2BHP Group 651.57.3
3CSL 623.26.9
4Wesfarmers 435.74.9
5Westpac Banking Corporation401.24.5
6Macquarie Group 345.23.8
7Transurban Group 339.63.8
8National Australia Bank 292.53.3
9Woolworths Group 244.62.7
10Australia and New Zealand Banking Group 238.92.7
11Rio Tinto 235.82.6
12Mainfreight 234.02.6
13James Hardie Industries*207.62.3
14Telstra Corporation*204.32.3
15Amcor175.52.0
16Reece 170.01.9
17ARB Corporation 151.31.7
18Sydney Airport148.31.7
19Sonic Healthcare 142.21.6
20Goodman Group141.51.6
21ResMed139.21.6
22Coles Group 120.81.3
23Seek 120.71.3
24Ramsay Health Care 120.51.3
25Carsales.com 119.61.3
Total6,792.9
As percentage of total portfolio value (excludes cash)75.7%
* Indicates that options were outstanding against part of the holding.
Top 25 Investments
As at 30 June 2021
18Australian Foundation Investment Company Limited Annual Review 2021

2021
$’000
2020
$’000
Dividends and distributions257,874257,858
Revenue from deposits and bank bills1161,554
Other revenue-42
Net gains on trading portfolio
(including unrealised gains or losses)2,4729,740
Total income260,462269,194
Finance costs(1,831)(1,047)
Administration expenses (net of recoveries)(10,678)(9,906)
Profit before income tax 247,953258,241
Income tax (12,858)(17,846)
Net profit 235,095240,395
CentsCents
Net profit per share19.2819.88
Income Statement
For The Year Ended 30 June 2021
19Australian Foundation Investment Company Limited Annual Review 2021

2021
$’000
2020
$’000
Current assets
Cash 97,122111,318
Receivables40,01117,347
Trading portfolio4,7454,304
Total current assets141,878132,969
Non-current assets
Investment portfolio 8,973,0807,117,970
Deferred tax assets59872
Total non-current assets8,973,1397,118,842
Total assets9,115,0177,251,811
Current liabilities
Payables1,020884
Tax payable12,62130,771
Provisions5,2354,765
Total current liabilities18,87636,420
Non-current liabilities
Provisions8881,375
Deferred tax liabilities – investment portfolio1,536,231973,499
Total non-current liabilities1,537,119974,874
Total liabilities1,555,9951,011,294
Net assets7,559,0226,240,517
Shareholders’ equity
Share capital3,007,7802,947,293
Revaluation reserve3,394,2972,166,030
Realised capital gains reserve416,071397,712
General reserve23,63723,637
Retained profits717,237705,845
Total shareholders’ equity (including minority interests)7,559,0226,240,517
Balance Sheet
As at 30 June 2021
20Australian Foundation Investment Company Limited Annual Review 2021

2021
$’000
2020
$’000
Total equity at the beginning of the year6,240,5176,624,746
Dividends paid(282,473)(281,527)
Shares issued – Dividend Reinvestment Plan60,63259,249
Other share capital adjustments(145)(142)
Total transactions with shareholders(221,986)(222,420)
Profit for the year 235,095240,395
Revaluation of investment portfolio1,881,261(568,806)
Provision for tax on revaluation(575,865)167,602
Revaluation of investment portfolio (after tax)1,305,396(401,204)
Total comprehensive income for the year1,540,491(160,809)
Realised gains on securities sold90,26216,728
Tax expense on realised gains on securities sold(13,133)(22,648)
Net realised gains/(losses) on securities sold77,129(5,920)
Transfer from revaluation reserve to realised gains reserve(77,129)5,920
Dividend paid to minority interests-(1,000)
Total equity at the end of the year7,559,0226,240,517
A full set of AFIC’s final accounts are available on the Company’s website.
Summarised Statement of Changes in Equity
For the Year Ended 30 June 2021
21Australian Foundation Investment Company Limited Annual Review 2021

Code
Ordinary Shares, Trust Units
or Stapled Securities
Number
Held
2020
’000
Number
Held
2021
’000
Market
Value
2021
$’000
DMPDomino’s Pizza Enterprises025430,610
DUIDiversified United Investments 12,03012,03062,437
EDVEndeavour Group04,76629,976
EQTEQT Holdings1,3221,32236,212
FCLFINEOS Corporation07,33828,619
FPHFisher & Paykel Healthcare3,4853,913113,150
GMGGoodman Group6,6856,685141,521
IAG*Insurance Australia Group6,9559,52748,797
IELIDP Education056613,894
IREIRESS5,9297,09191,547
IVCInvoCare2,9843,51240,639
JHX*James Hardie Industries5,1884,590207,635
LICLifestyle Communities2,7762,00031,220
MFTMainfreight (NZX listed)3,2683,268234,039
MIRMirrabooka Investments8,7288,72831,158
M LTMilton Corporation9,7768,09250,982
MQGMacquarie Group2,1702,207345,168
NABNational Australia Bank12,91711,155292,479
NANNanosonics03,54520,809
NWLNetwealth Group1,1002,09035,844
NXTNEXTDC7,8647,86493,273
ORGOrigin Energy6,5006,50029,315
ORIOrica2,2262,22629,558
OSHOil Search26,24417,98568,523
PXAPEXA Group02,91950,000
QUBQube Holdings35,30221,63568,582
REAREA Group55355393,441
REHReece7,9517,201170,023
RHCRamsay Health Care2,0201,915120,549
RIORio Tinto2,0011,862235,806
RMDResMed3,9354,250139,230
23Australian Foundation Investment Company Limited Annual Review 2021

Holdings of Securities
At 30 June 2021 continued
Code
Ordinary Shares, Trust Units
or Stapled Securities
Number
Held
2020
’000
Number
Held
2021
’000
Market
Value
2021
$’000
RWCReliance Worldwide Corporation13,13410,96357,667
RYMRyman Health (NZX listed)88088010,754
SEKSeek4,1603,641120,651
SHLSonic Healthcare4,0543,704142,242
SYDSydney Airport21,44325,606148,260
TCLTransurban Group23,13723,867339,624
TLS*Telstra Corporation54,51054,510204,331
TPWTemple & Webster02,36725,537
WBCWestpac Banking Corporation 15,98515,545401,216
WESWesfarmers7,3727,372435,685
WOWWoolworths Group5,6676,416244,631
WPLWoodside Petroleum4,4603,62080,392
XROXero871833114,204
Total8,930,218
* Part of the holding was subject to call options written by the Company.
24Australian Foundation Investment Company Limited Annual Review 2021

Holdings of International Securities
At 30 June 2021
Code
Ordinary Shares, Trust
Units or Stapled Securities
Number
Held
2021
Market
Value
2021
A$
ACN-USAccenture2,760 1,083,742
AENA-ESAena4,993 1,090,771
9988-HKAlibaba45,556 1,718,828
GOOGL-USAlphabet642 2,088,086
AMZN-USAmazon349 1,599,223
AAPL-USApple4,788 873,475
CMG-USChipotle714 1,474,453
CTAS-USCintas1,994 1,014,587
COST-USCostco1,589 837,705
CCI-USCrown Castle4,226 1,098,211
EL-USEstée Lauder2,046 866,849
FB-USFacebook3,553 1,645,572
FERG-GBFerguson6,357 1,175,600
FTNT-USFortinet4,102 1,301,442
HCA-USHCA Healthcare5,511 1,517,619
HD-USHome Depot2,757 1,171,063
ICE-USIntercontinental7,772 1,228,831
OR-FRL’Oréal790 468,960
MC-FRLVMH Moët1,240 1,295,304
MAR-USMarriott6,266 1,139,409
MA-USMastercard1,421 691,032
MCD-USMcDonald’s4,188 1,288,564
MSFT-USMicrosoft7,066 2,549,695
NESN-CHNestlé9,176 1,523,491
NFLX-USNetflix2,257 1,587,980
NEE-USNextera5,861 572,092
NKE-USNike7,784 1,601,792
NOVOB-DKNovo Nordisk8,634 963,641
PYPL-USPaypal3,116 1,209,787
25Australian Foundation Investment Company Limited Annual Review 2021

Holdings of International Securities
At 30 June 2021 continued
Code
Ordinary Shares, Trust
Units or Stapled Securities
Number
Held
2021
Market
Value
2021
A$
PEP-USPepsiCo5,323 1,050,547
ROG-CHRoche2,790 1,401,333
SPGI-USS&P Global2,558 1,398,510
SU-FRSchneider5,527 1,158,349
SOON-CHSonova1,814 909,667
SBUX-USStarbucks8,598 1,280,500
669-HKTechtronic31,777 739,133
TMO-USThermo Fisher1,684 1,131,564
ULVR-GBUnilever10,047 782,159
V-USVisa3,461 1,077,928
Total47,607,493
26Australian Foundation Investment Company Limited Annual Review 2021

Acquisitions
Cost
($’000)
PEXA Group50,000
Endeavour Group (demerger from Woolworths Group)39,713
FINEOS Corporation (includes participation in placement at $4.26 per share)30,981
ASX28,444
Woolworths Group28,184
Domino’s Pizza Enterprises24,743
Temple & Webster24,547
Nanosonics21,520
Disposals
Proceeds
($’000)
Qube Holdings41,399
South32
#
35,848
National Australia Bank (because of the exercise of call options)35,413
Alumina
#
34,778
Brickworks
#
32,698
Brambles28,973
Oil Search26,537
# Complete disposal from the portfolio.
New Companies Added to the Portfolio
PEXA Group
Endeavour Group
FINEOS Corporation
Domino’s Pizza Enterprises
Temple & Webster
Nanosonics
IDP Education
Major Transactions in the
Investment Portfolio
27Australian Foundation Investment Company Limited Annual Review 2021

Australian Foundation Investment
Company Limited (AFIC)
ABN 56 004 147 120
AFIC is a listed investment company.
As such it is an investor in equities and
similar securities on the stock market
primarily in Australia.
Directors
John Paterson, Chairman
Mark Freeman, Managing Director
Rebecca Dee-Bradbury
Craig M Drummond
Julie A Fahey
Graeme R Liebelt
David A Peever
Catherine M Walter AM
Peter J Williams
Company Secretaries
Matthew J Rowe
Andrew JB Porter
Auditor
PricewaterhouseCoopers
Chartered Accountants
Country of Incorporation
Australia
Registered Office
and Mailing Address
Level 21, 101 Collins Street
Melbourne Victoria 3000
Contact Details
Telephone (03) 9650 9911
Facsimile (03) 9650 9100
Website afi.com.au
Email invest@afi.com.au
For enquiries regarding net asset backing
(as advised each month to the Australian
Securities Exchange)
Telephone 1800 780 784 (toll free)
Company Particulars
28Australian Foundation Investment Company Limited Annual Review 2021

Share Registrar
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street
Abbotsford Victoria 3067
New Zealand
Computershare Investor Services Limited
159 Hurstmere Road
Takapuna Auckland 0622
Shareholder
Enquiry Lines 1300 662 270 (Australia)
0800 333 501 (New Zealand)
+61 3 9415 4373 (from overseas)
Facsimile (03) 9473 2500
Website investorcentre.com.au/contact
For all enquiries relating to shareholdings, dividends and related matters,
please contact the share registrar in your country.
Securities Exchange Codes
AFI Ordinary shares
(ASX and NZX)
Annual General Meeting
Time 10.00am
Date Tuesday 5 October 2021
Venue Clarendon Auditorium
Melbourne Convention
and Exhibition Centre (MCEC)
Location 2 Clarendon Street Southbank
Victoria Australia 3006
Subject to any change in the Government restrictions for public gatherings, the
AGM will be a hybrid meeting with a physical meeting and access via an online
platform. Further details are provided in the Notice of Annual General Meeting.
Our intention is to hold shareholder meetings in each of the state capital cities
(other than Hobart) during October 2021 after the AGM. Given the uncertainty
because of COVID-19, shareholders will be notified separately of date and venue
if these meetings can safely proceed.
Shareholder Information
29Australian Foundation Investment Company Limited Annual Review 2021

Design: MDM Investorcom
Printed on environmentally friendly paper

Notice of Annual
General Meeting
2021
The Annual General Meeting of Australian Foundation
Investment Company Limited, ABN: 56 004 147 120
(‘the Company’) will be held at 10.00am (AEDT)
on Tuesday 5 October 2021

2Australian Foundation Investment Company Limited
Dear Shareholder,
On behalf of the Board of Australian Foundation Investment Company Limited (AFIC) I confirm that AFIC’s 93rd Annual
General Meeting (AGM) will be held on Tuesday 5 October 2021 commencing at 10.00am (AEDT). Attached is our
Notice of Meeting that sets out the business of the AGM.
Given the continued uncertainty surrounding the COVID-19 pandemic, this year our AGM will be a hybrid one and
will take place at the Clarendon Auditorium, Melbourne Convention and Exhibition Centre (MCEC),
2 Clarendon Street, Southbank, Victoria, Australia and via an online platform.
We are closely monitoring developments in relation to the COVID-19 virus in Australia and we are following guidance
from the Federal and State Governments. While shareholders maybe able to attend in person, circumstances relating to
COVID-19 can change rapidly and shareholders are encouraged to participate online. Further information regarding the
conditions of entry and the COVID-19 safety measures that apply to the meeting are set out on page 11. Should either
Federal or State Government guidance provide that a physical meeting is inadvisable or not able to be held, we will revert
to a virtual only AGM format and advise shareholders prior to 5 October 2021 via the Company’s website at afi.com.au
and the ASX announcement platform.

We received positive feedback on the accessibility provided by last year’s fully online AGM and this also provides
flexibility in the event of further restrictions. You will find details of the hybrid meeting format in the attached Notice
of Meeting, together with various methods for you to vote, ask questions and otherwise participate in the meeting.
We look forward to your attendance either in person or virtually.
Yours sincerely
John Paterson
Chairman
30 August 2021

3Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
The Annual General Meeting of Australian Foundation Investment Company Limited, ABN: 56 004 147 120 (‘the Company’) will
be held at 10.00am (AEDT) on Tuesday 5 October 2021 and will take place physically at the Clarendon Auditorium, Melbourne
Convention and Exhibition Centre (MCEC), 2 Clarendon Street, Southbank, Victoria, Australia and via an online platform
at web.lumiagm.com using code: 336-635-717.
Shareholders are requested to participate in the AGM in person, via our online AGM platform or via the appointment of a proxy. Further
information on how to participate virtually is set out in this Notice and the Online Meeting Guide. Shareholders should refer to page 11
for the possible impact of COVID-19 restrictions on the ability to attend the AGM in person.
The Company has determined that, for the purpose of voting at the meeting, shares will be taken to be held by those persons recorded
on the Company’s register at 7.00pm (AEDT) on Sunday 3 October 2021.
1. Financial Statements and Reports
To consider the Directors’ Report, Financial Statements and Independent Audit Report for the financial year ended 30 June 2021.
(Please note that no resolution will be required to be passed on this matter).
2. Adoption of Remuneration Report
To consider and, if thought fit, to pass the following resolution (as an ordinary resolution):
“That the Remuneration Report for the financial year ended 30 June 2021 be adopted.”
(Please note that the vote on this item is advisory only)
3. to 5. Election and Re-election of Directors
To consider and, if thought fit, to pass the following resolutions (as ordinary resolutions):
3. “That Craig Drummond, a Director appointed to the Board since the last Annual General Meeting and retiring from office
in accordance with Rule 45 of the Constitution, being eligible is elected as a Director of the Company.”
4. “That Julie Fahey, a Director appointed to the Board since the last Annual General Meeting and retiring from office in accordance
with Rule 45 of the Constitution, being eligible is elected as a Director of the Company.”
5. “That Graeme Liebelt, a Director retiring from office in accordance with Rule 46 of the Constitution, being eligible is re-elected
as a Director of the Company.”
6. Renewal of Proportional Takeover Provisions in the Constitution
To consider and, if thought fit, pass the following resolution (as a special resolution):
“That, pursuant to Sections 136(2) and 648G of the Corporations Act 2001 (Cth), the proportional takeover provisions in Rules 79 and 80
of the Company’s constitution are renewed for a period of three years from the date of this meeting”.
By Order of the Board

Matthew Rowe
Company Secretary
30 August 2021
BUSINESS OF THE MEETING

4Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
The Explanatory Notes below provide
additional information regarding the items
of business proposed for the Annual
General Meeting.
IMPORTANT: Shareholders are urged
to direct their proxy how to vote by
clearly marking the relevant box for
each item on the proxy form.
Please ensure that your properly
completed proxy form reaches the
share registry by the deadline of
10.00am (AEDT) on Sunday 3 October
2021.
Where permitted, the Chairman of the
meeting intends to vote undirected
proxies in favour of all items of
business.
1. Financial Statements
and Reports
During this item there will be a reasonable
opportunity for shareholders to ask
questions and comment on the Directors’
Report, Financial Statements and
Independent Audit Report for the financial
year ended 30 June 2021. No resolution
will be required to be passed on this
matter.
Shareholders who have not elected to
receive a hard copy of the Company’s
2021 Annual Report can view or
download it from the Company’s
website at:
afi.com.au/our-company#
Companyreports
2. Adoption of
Remuneration Report
During this item there will be a
reasonable opportunity for shareholders
at the meeting to comment on and ask
questions about the Remuneration Report
which can be found in the Company’s
2021 Annual Report.
As prescribed by the Corporations Act
2001, the vote on the proposed resolution
is an advisory one.
Voting Exclusions on Item 2
Pursuant to Sections 250BD and 250R
of the Corporations Act 2001 (Cth),
votes may not be cast, and the Company
will disregard any votes cast, on
the resolution proposed in Item 2
(‘Resolution 2’):
• by or on behalf of any member of
the key management personnel
of the Company’s consolidated
group (a ‘KMP member’) whose
remuneration details are included in
the Remuneration Report and includes
Directors, or any of their closely related
parties, regardless of the capacity in
which the votes are cast; or
• by any person who is a KMP member
as at the time Resolution 2 is voted on
at the Annual General Meeting, or any
of their closely related parties, as a
proxy,
unless the votes are cast as a proxy
for a person who is entitled to vote on
Resolution 2:
• in accordance with a direction in the
proxy appointment; or
• by the Chairman of the Annual General
Meeting in accordance with an express
authorisation in the proxy appointment
to cast the votes even if Resolution 2 is
connected directly or indirectly with the
remuneration of a KMP member.
If the Chairman of the Annual General
Meeting is appointed, or taken to be
appointed, as a proxy, the shareholder
can direct the Chairman to vote for or
against, or to abstain from voting on,
Resolution 2 by marking the appropriate
box opposite Item 2 on the proxy form.
Pursuant to Sections 250BD(2) and
250R(5) of the Corporations Act 2001, if
the Chairman of the meeting is a proxy
and the relevant shareholder does not
mark any of the boxes opposite Item 2,
the relevant shareholder will be expressly
authorising the Chairman to exercise the
proxy in relation to Item 2.
EXPLANATORY NOTES

5Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
For the purposes of these voting
exclusions:
• A ‘closely related party’ of a KMP
member means (1) a spouse or child
of the KMP member, (2) a child of
the KMP member’s spouse, (3) a
dependant of the KMP member or
of the KMP member’s spouse, (4)
anyone else who is one of the KMP
member’s family and may be expected
to influence the KMP member, or be
influenced by the KMP member, in
the KMP member’s dealings with the
Company, or (5) a company the KMP
member controls.
• The Company will also apply these
voting exclusions to persons appointed
as attorney by a shareholder to attend
and vote at the Annual General Meeting
under a power of attorney, as if they
were appointed as a proxy.
The Chairman intends to exercise
such proxies by voting them in favour
of the adoption of the Remuneration
Report.
The Board recommends that
shareholders vote in favour of
adopting the Remuneration Report.
3. to 5. Election and
Re-election of Directors
Board recommendation and
undirected proxies: The Board
recommends (with the exception
of each Director in relation to their
own election or re-election) that
shareholders vote in FAVOUR of
Items 3 to 5. The Chairman of the
meeting intends to vote undirected
proxies in FAVOUR of Items 3 to 5.
Mr Craig Drummond and Ms Julie Fahey
were appointed to the Board on 1 July
2021 and 22 April 2021 respectively
and so are required to seek election by
shareholders at this AGM. Mr Graeme
Liebelt was re-elected as a Director
by shareholders at the 2018 AGM. As
such he is required to seek re-election
by shareholders at this AGM. Their
biographical details are set out below:
Craig Drummond
BCom (Melb), SF FIN, CFA.
Independent Non-Executive Director
Mr Drummond was appointed to the
Board in July 2021. He was Chief
Executive Officer of Medibank Private
Limited from 2016 to 2021. He has had
over 30 years’ experience in the financial
sector – Group Executive Finance and
Strategy at NAB from 2013 to 2016;
Bank of America Merrill Lynch as Chief
Executive Officer and Country Head from
2009 to 2013, Goldman Sachs JBWere
(1986 to 2009), in various roles (including
being a leading investment analyst and
subsequently Director of Research and
Investment Strategy) culminating in being
appointed Chief Executive Officer.
Craig is a Senior Fellow of the Financial
Services Institute of Australasia and is
a Chartered Accountant. Craig is also a
Non-Executive Director of Transurban and
is President of the Geelong Football Club.
He is also a Governor of the Ian Potter
Foundation.
Julie Fahey
BAS. Independent Non-Executive
Director
Ms Fahey was appointed to the Board
in April 2021. She has over 30 years of
experience in technology, including in
major organisations such as Western
Mining, Exxon, Roy Morgan, General
Motors and SAP, covering consulting,
software vendor and Chief Information
Officer roles. In addition to her industry
experience, Julie spent 10 years at KPMG
as a partner with the firm, during which
time she held roles as National Lead
Partner Telecommunications, Media and
Technology, and National Managing
Partner – Markets. Julie was also a
member of the KPMG National Executive
Committee.
Julie is a Non-Executive Director of Seek
Limited, IRESS Limited, Vocus Group
Limited, Datacom Group Limited, CenITex
and a member of the Australian Red
Cross Blood Service Board and the
La Trobe University Council.
Graeme R Liebelt
B Ec (Hons), FAICD FTSE.
Independent Non-Executive Director.
Chairman of the Remuneration
Committee.
Mr Liebelt was appointed to the Board
in June 2012. He is Chairman of Amcor
Limited, a Director of Australia and
New Zealand Banking Group Limited,
and a Director of Carey Baptist Grammar
School. He is a Fellow of the Australian
Academy of Technological Sciences
and Engineering and a Fellow of the
Australian Institute of Company Directors.
He was formerly Chairman and Director
of DuluxGroup Limited, Chairman and
Director of the Global Foundation, Deputy
Chairman of Melbourne Business School
and Managing Director and CEO of
Orica Limited.
Further information regarding the
Company’s Corporate Governance
arrangements and the Board’s role can
be found on the Company’s website at:
afi.com.au/corporate-governance

6Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
6. Renewal of Proportional
Takeover Provisions in
the Constitution
Board recommendation and
undirected proxies: The Board
recommends that shareholders vote
in FAVOUR of Item 6. The Chairman
of the meeting intends to vote
undirected proxies in FAVOUR
of Item 6.
Background
The Corporations Act 2001 (Cth)
permits a company to include rules in its
Constitution which enable the company
to refuse to register a transfer of shares
resulting from a proportional takeover bid
unless shareholders in the bid class in a
meeting approve the takeover bid.
It is a requirement of the Corporations Act
that such proportional takeover approval
provisions in a company’s constitution
apply for a maximum period of three
years, unless earlier renewed. In the
case of the Company, such proportional
takeover approval provisions (existing
Rules 79 and 80 of the Company’s
constitution) were approved by
shareholders at the 2018 AGM and
will expire on 9 October 2021.
The Directors consider that it is in the
best interests of shareholders to renew
these provisions in their existing form.
Accordingly, a special resolution is being
put to shareholders under Section 648G
of the Corporations Act to renew Rules 79
and 80 of the Company’s constitution.
If approved by shareholders at the
meeting, Rules 79 and 80 will operate for
three years from the date of the meeting
(that is, until 5 October 2024) unless
renewed earlier.
Proportional Takeover Bids
A proportional takeover bid involves the
bidder offering to buy a proportion only
of each shareholder’s shares in the
target company.
This means that control of the target
company may pass without members
having the chance to sell all their
shares to the bidder. It also means the
bidder may acquire control of the target
company without paying an adequate
premium for gaining control.
To address this possibility, a company
may provide in its Constitution that, in
the event of a proportional takeover bid
being made for shares in the company,
the directors must convene a meeting
of shareholders to vote on a resolution
to approve that bid.
A meeting convened under the
proportional takeover approval provisions
is treated as a general meeting of the
company and the majority decision of
the company’s members will be binding
on all individual members.
Effect of Proposed Proportional
Takeover Approval Provisions
Where a proportional takeover bid is
made, the Directors must convene a
meeting of shareholders to vote on a
resolution to approve the proportional
bid before the 14th day prior to the
closing of the bid period.
The vote is decided on a simple majority.
Each person who, as at the end of the
day on which the first offer under the
takeover bid was made, held bid class
shares is entitled to vote. Neither the
bidder nor its associates are entitled
to vote on the resolution.
If a meeting is not held, Section 648E of
the Corporations Act deems a resolution
approving the proportional bid to have
been passed thereby allowing the
proportional bid to proceed. Further, the
Directors will contravene the Act if they fail
to ensure a resolution to approve the bid
is voted on.
If the resolution is rejected, the
registration of any transfer of shares
resulting from that proportional takeover
bid will be prohibited and the bid will be
deemed to be withdrawn. If the resolution
is passed or deemed to have been
passed, the transfer of shares resulting
from acceptance of an offer under that
bid will be permitted and the transfer of
shares will be registered provided they
comply with the other provisions of the
Constitution.
Rules 79 and 80 will not apply to full
takeover bids.
Reason For Proposing
the Resolution
The Directors consider that the renewal
of Rules 79 and 80 is in the best interests
of all shareholders of the Company. In the
Directors’ view, shareholders should have
the opportunity to vote on a proposed
proportional takeover bid.
In the absence of Rules 79 and 80 (as
renewed), a proportional takeover bid
for the Company may enable effective
control of the Company to be acquired
by a party who has not offered to acquire
100 per cent of the Company’s shares
(and, therefore, has not offered to pay
a ‘control premium’ that reflects
100 per cent ownership).
EXPLANATORY NOTES
continued

7Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
As a result, if a proportional takeover
bid for the Company is made:
• shareholders may not have the
opportunity to dispose of all their
shares; and
• shareholders risk being locked into a
minority position in the Company or
suffering loss following such a change
of control if the bid causes a decrease
in the market value of shares.
If Rules 79 and 80 are renewed, the Board
considers that this risk will be minimised
by enabling shareholders to decide
whether or not a proportional takeover
bid should be allowed to proceed.
Present Acquisition Proposals
As at the date of this notice, the Directors
are not aware of any proposal by any
person to acquire, or increase the extent
of, a substantial interest in the Company.
Review of Proportional Takeover
Approval Provisions
The Corporations Act requires
these explanatory notes to discuss
retrospectively the potential advantages
and disadvantages of the proportional
takeover approval provisions for both
Directors and shareholders.
While the proportional takeover approval
provisions have been in effect, there have
been no takeover bids for the Company
– either proportional or otherwise. So
there are no actual examples against
which to review the advantages and
disadvantages of the existing proportional
takeover approval provisions for the
Directors and shareholders of the
Company. The Directors are not aware
of any potential takeover bid which was
discouraged by Rules 79 and 80.
In addition to looking at the provisions
retrospectively, the Corporations Act
also requires these explanatory notes to
discuss the potential future advantages
and disadvantages of the proposed
proportional takeover approval provisions
for both Directors and shareholders.
The Directors consider that there are
no advantages or disadvantages for
the Directors in renewing the proposed
proportional takeover approval provisions.
In particular, there is no restriction on
their ability to make a recommendation
on whether a proportional takeover bid
should be accepted.
For shareholders, the potential advantage
of renewing the proportional takeover
approval provisions is that they provide
shareholders with the opportunity to
consider, discuss in a meeting called
specifically for the purpose, and vote
on whether a proportional takeover bid
should be approved. This ensures that
shareholders have an opportunity to have
a say in the future ownership and control
of the Company. The Directors believe
that this would encourage any future
proportional bids to be structured so as to
be attractive to a majority of shareholders.
It may also discourage the making of a
proportional takeover bid that might be
considered opportunistic. Finally, knowing
the view of a majority of the shareholders
may help each individual shareholder
to assess the likely outcome of the
proportional takeover bid and decide
whether or not to accept an offer under
the bid.
A potential disadvantage for shareholders
arising from renewing the proportional
takeover approval provisions is that they
may discourage proportional takeover
bids being made and may reduce any
speculative element in the market price
of the Company’s shares arising from
the possibility of a proportional bid being
made. As a result, shareholders may
not have the opportunity to dispose of
a portion of their shares at an attractive
price where the majority rejects an
offer from a party seeking control
of the Company.
The Directors consider that the potential
advantages for shareholders of the
proposed proportional takeover approval
provisions outweigh the potential
disadvantages.
Shareholder Approval
To pass as a special resolution, this
item of business requires the support
of 75 per cent or more of the votes cast
on the resolution.

8Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
SHAREHOLDER INFORMATION
Shareholders and Proxyholders have three options for participating at the AGM:
In person
Online via the ‘Lumi Online Platform’ (access via web.lumiagm.com and meeting ID: 336-635-717)
Via telephone (listen only)
In Person
The AGM will be held at the Auditorium, Melbourne Convention and Exhibition Centre (MCEC), 2 Clarendon Street,
Southbank, Victoria, Australia.
Shareholders are currently expected to be able to physically attend the meeting whilst following COVID safe practices at the meeting.
Shareholders are encouraged to allow additional time for these COVID safe practices. While shareholder can attend in person,
circumstances relating to COVID-19 can change rapidly and shareholders are encouraged to participate online. The Company will
continue to monitor Federal and State Government restrictions on public gatherings and should either Federal or State Government
guidance provide that a physical meeting is inadvisable or not able to be held, we will revert to a virtual only AGM format and
advise shareholders prior to 5 October 2021 via the Company’s website at afi.com.au and the ASX announcement platform.
Further information regarding COVID-19 safety measures are set out on page 11.
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Entry/Exit
Loading Dock
Entry
Loading
Dock Exit
Wright Walk
Dukes Walk
Orrs Walk
Rona Walk
Orrs Walk
DFO Homemaker
Pan Pacific Hotel
South Wharf Promenade
Polly Woodside
DFO
Wilson Parking
South Wharf
Novotel
Hotel
Link to
Novotel Hotel
Normanby Road
Wurundjeri Way
Convention Centre Place
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Door 12
Door 11
Kiosk D
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Hotel
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VIP Suites
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Terrace
Sovereign
Room
MCEC
Level One
Convention Centre
Place Entrance
Clarendon Street
Entrance
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Convention Centre
Exhibition Centre
Doors 1121
Exhibition Centre
Doors 110
MEC Basement Car Park
Parking
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Bike Route
Bike Parking
Tram Line
Taxis
Buses/Skybus
Polly Woodside
Boardroom
Business Centre
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Organiser Office
H1
Hospitality Suites
SP1
Speaker Prep Room
Showers
First Aid
Prayer Room
Accessible Toilet
Male Toilet
Female Toilet
Parents Room
Cafe
Cloak Room
Cutomer Service
Kiosk
Security
Escalator
Lifts
Stairs
Entry/Exit
Transfer Points
Clarendon
Auditorium
Clarendon Auditorium
Directional Map

9Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
Via the Online Platform
Please use the following link
web.lumiagm.com using code:
336-635-717.
Using an online platform via a computer,
mobile phone or iPad/tablet device with
internet access you will be able to join
and participate in the meeting.
Shareholders and proxyholders will have
the ability to vote and ask questions in
real time during the AGM and to hear all
of the discussion via the online platform,
subject to connectivity of your device.
You will need to provide your shareholder
details (including your SRN or HIN and
registered postcode) to be verified as a
shareholder. Proxy holders will need to
phone the Computershare call centre
one hour before the meeting to obtain
their login details.
A detailed guide on how to participate
virtually is set out in the Online Meeting
Guide on our website afi.com.au. This
Guide explains how you can ensure your
browser is compatible with the online
platform, as well as a step-by-step guide
to successfully log in and navigate
the site.
Via Telephone
To join via the teleconference, please use
the details below:
Telephone: 1800 175 864
(free call within Australia)
1300 212 365 (mobile,
free call within Australia)
+61 2 8373 3550
(outside Australia)
Conference ID: 9288523
Joining the Conference Call
1. In the 10 minutes prior to the call
start time, call the appropriate dial-in
number.
2. Enter the Event Plus passcode
9288523, followed by the pound
or # key and leave any information
requested after the tone. You will be
joined automatically to the conference.
International dial-in numbers will be
available via the Company’s website.
Shareholders and proxyholders will be
able to listen into the presentation and
discussion via telephone. There will not
be a facility to ask questions via the
telephone.
Voting Options For the AGM
• Voting in person at the meeting
• Direct voting via the online AGM
platform during the AGM
• Appointing a proxy
All Resolutions Will Be
Conducted By Poll
As some shareholders may participate
virtually in the Meeting each resolution
considered at the Meeting will be
conducted by a poll. The Board considers
voting by poll to be in the interests of the
shareholders as a whole and ensures
the views of as many shareholders as
possible are represented at the Meeting.
Direct Voting Via Online
AGM Platform – During
the AGM
In accordance the Company’s
Constitution (‘Constitution’), the Directors
have determined that at the AGM, a
shareholder who is entitled to vote on
a resolution at the AGM is entitled to a
direct vote in respect of that resolution
and have approved the use the online
AGM platform as the means by which
shareholders can deliver their direct
vote in real time during the AGM.
Shareholders can participate in the AGM
via the online AGM platform and will be
able to vote directly through the online
platform in real time. Shareholders and
proxyholders can vote directly online at
any time between the start of the AGM at
10.00am (AEDT) and the closure of voting
as announced by the Chairman during
the Meeting.
More information regarding direct voting
during the AGM is detailed in the Online
Meeting Guide available on our website
afi.com.au.

10Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
Proxies
If you cannot attend the meeting online at
the scheduled time, you can participate in
the AGM by appointing a proxy to attend
and vote at the AGM. Shareholders can
appoint a proxy on the enclosed Proxy
Form, instructions on how to lodge the
Proxy Form are contained in the attached
Notice of Meeting.
1. A shareholder entitled to attend and
vote at this meeting is entitled to
appoint not more than two proxies
(who need not be members of the
Company) to attend, vote and speak
in the shareholder’s place and to join
in any demand for a poll.
2. A shareholder who appoints two
proxies may specify a proportion or
number of the shareholder’s votes
each proxy is appointed to exercise.
Where no such specification is made,
each proxy may exercise half of the
votes (any fractions of votes resulting
from this are disregarded).
3. Proxy forms may be lodged online
by visiting investorvote.com.au or
by scanning the QR Code on the
proxy form with a mobile device.
4. Relevant custodians may lodge
their proxy forms online by visiting
intermediaryonline.com
5. Proxy forms and any authorities (or
certified copies of those authorities)
under which they are signed may be
also delivered, by mail or by fax to the
Company’s Share Registry (see details
below) no later than 48 hours before
the meeting, being 10.00am (AEDT)
on Sunday 3 October 2021. Further
details are on the proxy form.
6. A proxy need not vote in that capacity
on a poll (unless the proxy is the
Chairman of the meeting). However, if
the proxy’s appointment specifies the
way to vote on a resolution, and the
proxy decides to vote in that capacity
on that resolution, the proxy must vote
the way specified (subject to the other
provisions of this Notice, including the
voting exclusions noted above).
7. In certain circumstances the Chairman
of the meeting will be taken to have
been appointed as the proxy of the
relevant shareholder in respect of the
meeting or the poll on that resolution
even if the shareholder has not
expressly appointed the Chairman
of the meeting as their proxy. This
will occur where:
• an appointment of a proxy specifies
the way the proxy is to vote on
a particular resolution;
• the appointed proxy is not the
Chairman of the meeting;
• at the meeting, a poll is called
on the resolution; and
• either of the following apply:
– if a record of attendance is made
for the AGM and the proxy is not
recorded as attending
– the proxy does not vote on the
resolution.
Corporate Representatives
A body corporate which is a shareholder,
or which has been appointed as a proxy,
may appoint an individual to act as its
representative at the meeting. Evidence
of the appointment of a corporate
representative must comply with Section
250D of the Corporations Act 2001 and
be lodged with the Company before
the AGM.
Attorneys
A shareholder may appoint an attorney
to vote on their behalf. To be effective
for the meeting, the instrument effecting
the appointment (or a certified copy of it)
must be received by the deadline for the
receipt of proxy forms (see above), being
no later than 48 hours before the meeting.
Questions from Shareholders
Shareholders who are unable to attend
the meeting or who prefer to register
questions in advance are invited
to use the question form included
with their proxy form or via email
agm@afi.com.au. The deadline for
receipt of questions by email to be
considered at the AGM is 21 September
2021. During the course of the meeting,
the Chairman will endeavour to address
the themes most frequently raised in the
submitted question forms. Please note
that individual responses will not be sent
to shareholders.
You may also submit questions and
comments during the AGM in real time
via the online platform. Please note,
only shareholders may ask questions
online. More information regarding asking
questions during the AGM is detailed in
the Online Meeting Guide available on
our website afi.com.au.
SHAREHOLDER INFORMATION
continued

11Australian Foundation Investment Company LimitedNotice of Annual General Meeting 2021
Share Registry
The Company’s Share Registry details
are as follows:
Computershare Investor
Services Pty Limited
Street Address
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Postal Address
GPO Box 242
Melbourne VIC 3001
Telephone
1300 662 270 (within Australia)
0800 333 501 (within New Zealand)
+61 3 9415 4373 (outside Australia)
Facsimile
1800 783 447 (within Australia)
+61 3 9473 2555 (outside Australia)
Internet
investorcentre.com/contact
COVID-19 Safety
In attending the meeting, please:
1. Play Your Part to Keep Our
Community Safe:
• Stay at home if you are feeling unwell
• Adhere to physical distancing
measures
• Practice good personal hygiene,
wash your hands often
• Follow appropriate cough and
sneeze etiquette
• Download the COVIDSafe app
2. Register Your Attendance
Visitor contact details (inclusive of contact
name and phone number) must be
collected as part of the AGM registration
process and for contact tracing purposes.
This is in accordance with Victorian
Government guidelines to assist with
rapid contact tracing in the event of a
confirmed COVID-19 case. This can be
done via the Services Victoria app by
scanning the QR code on your smart
device on arrival, or by providing you
details to the Share Registry staff when
registering your attendance at the AGM.
3. Temperature Checks
To ensure the safety of anyone who
enters the venue, MCEC has placed
temperature checks at each building entry
point. Anyone attending the AGM will be
screened on arrival prior to being able to
obtain access to the venue. Temperature
checks are conducted by non-invasive
thermal imaging technology allowing
multiple people to be scanned at once
or by a handheld device.
4. Restricted Building Access
MCEC has identified a specific entry
and exit point to help manage physical
distancing and maintain sanitisation
stations and temperature checks. The
following entry and exit point are identified
for building access, however are subject
to change based on event demand.
• Clarendon Street entrance which will
have a dedicated entrance door.
Please note: Contract tracing information
and temperature checks will take
place at the entry point, upon entering
the building. We thank you for your
understanding.

275814_01_V3

ABN 56 004 147 120
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1300 662 270 (within Australia)
+61 3 9415 4373 (outside Australia)
All your securities will be voted in accordance with your directions. Each resolution considered
at the meeting will be conducted by a poll.

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Sunday 3 October 2021.
PARTICIPATING IN THE MEETING
Corporate Representative
If a representative of a corporate securityholder or proxy is to participate in the
meeting you will need to provide the appropriate “Appointment of Corporate
Representative”. A form may be obtained from Computershare or online at
www.investorcentre.com under the help tab, “Printable Forms”.
XX

651+,1,
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AFI
056$06$03/(
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275814_01_V3
I/We being a shareholder/s of AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED hereby appoint
the Chairman
of the meeting
OR
or failing the individual or body corporate named in relation to the meeting generally or in relation to a poll on a given resolution, or if no individual or
body corporate is named, the Chairman of the meeting, as my/our proxy to act generally at the meeting or in relation to a poll on the given resolution
(as applicable) on my/our behalf, including to vote in accordance with the following directions (or if no directions have been given, and to the extent
permitted by law, as the proxy sees fi t), at the Annual General Meeting of Australian Foundation Investment Company Limited will be held
at Clarendon Auditorium, Melbourne Convention and Exhibition Centre (MCEC), 2 Clarendon Street, Southbank Victoria
and via an online platform at 10.00am (AEDT) on Tuesday 5 October 2021
and at any adjournment or postponement of that meeting.
Chairman to vote undirected proxies as follows: I/We acknowledge that the Chairman of the meeting intends to vote undirected proxies
in favour of each item of business, to the extent permitted by law.
Chairman authorised to exercise proxies on remuneration related matters: If I/we have appointed the Chairman of the meeting as my/our
proxy (or the Chairman of the meeting becomes my/our proxy by default), I/we expressly authorise the Chairman of the meeting, to the extent
permitted by law, to exercise my/our proxy in respect of item 2 even though item 2 is connected directly or indirectly with the remuneration of a
member of key management personnel of Australian Foundation Investment Company Limited and its consolidated group, which includes the
Chairman of the meeting.
Items of Business
STEP 2
PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your
behalf on a poll and your votes will not be counted in computing the required majority
Appoint a proxy to vote on your behalf
Signature of Shareholder(s) This section must be completed.
SIGN
STEP 1
PLEASE NOTE: Leave this box blank if
you have selected the Chairman of the
meeting. Do not insert your own name(s).
Individual or Shareholder 1
Sole Director and Sole Company Secretary
Shareholder 2
Director
Shareholder 3
Director/Company Secretary
Contact
Name
Contact
Daytime
Telephone
Date
/ /
Please mark to indicate your directions
Proxy Form
Change of address. If incorrect,
mark this box and make the correction
in the space to the left. Shareholders
sponsored by a broker (reference
number commences with ’X’) should
advise their broker of any changes.
AFI275814A
For
Against
Abstain
Item 2Adoption of Remuneration Report
Item 3Election of Director - Mr Craig Drummond
Item 4Election of Director - Ms Julie Fahey
Item 5Re-election of Director - Mr Graeme R Liebelt
Item 6Renewal of Proportional Takeover Provisions in the Constitution
The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business, to the extent permitted by law. In exceptional
circumstances, the Chairman of the Meeting my change his/her voting intention on any resolution, in which case an ASX announcement will be
made.
I 9999999999 I N D
XX
MR JOHN SAMPLE
FLAT 123
123 SAMPLE STREET
THE SAMPLE HILL
SAMPLE ESTATE
SAMPLEVILLE VIC 3030
*I1234567890*

AFI
Questions from Shareholders

Question(s): Please mark X if it is a question directed to the auditor

1 ___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
2 ___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
3 ___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
4 ___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
All correspondence to:
AFI Share Registrar
Computershare Investor Services Pty Limited
GPO Box 242
Melbourne Victoria 3001
Australia
275814_04_V2
The Annual General Meeting (AGM) of Australian Foundation Investment Company Limited will be held at Clarendon Auditorium,
Melbourne Convention and Exhibition Centre (MCEC), 2 Clarendon Street, Southbank Victoria and via an online platform at
10.00am (AEDT) on Tuesday 5 October 2021. Shareholders who are unable to attend the meeting, or who prefer to register
questions in advance, are invited to submit any questions they have by completing and returning this form.
Please return your completed question form to our Share Registrar, Computershare Investor Services Pty Limited, GPO Box 242,
Melbourne VIC 3001, or by facsimile to 1800 783 447 (outside Australia +61 3 9473 2555) by Tuesday 21 September 2021.
The envelope provided for the return of your proxy form may also be used for this purpose.
You may also submit written questions to the auditor if the questions are relevant to the content of the auditor’s report or the conduct
of the audit of the fi nancial statements to be considered at the AGM.
We will endeavour, during the course of the AGM, to address the themes most frequently raised in the submitted question forms.
Please note that individual responses will not be sent to shareholders.
ABN 56 004 147 120

ASX Dividend Form containing DRP/DSSP price and FX rates Appendix 3Y – Change of Director’s Interest Notice x5

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.