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1 ABN APPENDIX 4D STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 CONTENTS Results for announcement to the market Media release Appendix 4D Accounts Independent Auditors Review Report This half-year report is presented under listing rule 4.2A and should be read in conjunction with the Group s 2012 Annual Report. 1

2 RESULTS FOR ANNOUNCEMENT TO THE MARKET The reporting period is the half-year ended 31 December 2012 with the previous corresponding period being the half-year ended 31 December The results have been reviewed by the Company s auditors. Results for announcement to the market Revenue from operating activities (excluding capital gains) was $134.5 million, 6.1% up from the previous corresponding period. Profit after tax attributable to members was $132.1 million (up 16.3% on last year s $113.6 million). This figure includes gains for the half-year on certain investments in the investment portfolio that are defined as puttable instruments or non-equity investments. Net Operating Result for the half-year was $123.7 million, 17.3% up from the previous corresponding period. The interim dividend is 8 cents per share, fully franked, the same as last year s interim dividend. It will be paid on 22 February 2013 to ordinary shareholders on the register on 11 February 2013 and the shares are expected to commence trading on an ex-dividend basis on 5 February The Company operates a Dividend Reinvestment Plan under which shareholders may elect to have all or part of their dividend payment reinvested in new ordinary shares. The price of shares issued under the Dividend Reinvestment Plan will be based on the average selling price of shares traded on the Australian Securities Exchange in the five days from the day the shares begin trading on an ex-dividend basis. No discount applies. The last date for the receipt of an election notice for participation in the plan is 5.00 pm (Melbourne time) on 11 February The final dividend for the 2012 financial year was 13 cents per share (fully franked), and it was paid to shareholders on 31 August Net tangible assets per share before any provision for deferred tax on the unrealised gains on the long-term investment portfolio as at 31 December 2012 were $4.93, up from $4.29 at the end of the previous corresponding period (both before allowing for interim dividends). The interest payment on the 6.25% Convertible Notes issued in December 2011 will be $ per $100 Note, payable on 28 February 2013 to note holders on the register on 20 February The notes are expected to commence trading on an ex-interest basis on 14 February

3 MEDIA RELEASE HALF-YEAR RESULT TO 31 DECEMBER January 2013 AFIC PERFORMS WELL IN BUOYANT MARKET Profit for the half-year to 31 December 2012 increased 16.3 % to $132.1 million from $113.6 million last half-year. The Net Operating Result which measures the underlying income generated by the portfolio was $123.7 million, up 17.3% from the previous halfyear s result of $105.5 million. The main contributors were an increase in income from the investment portfolio and a positive contribution from the trading portfolio of $6.5 million as the market rose compared to negative $13.0 million last half-year. The interim dividend has been maintained at 8 cents per share fully franked. The local equity market performed strongly over the first six months of the financial year. In a market that was undervalued against alternative investments, investors responded positively to falling interest rates in Australia and easing concerns about global economies. These factors drove the S&P/ASX 200 Accumulation Index up 16.4% for the half year with a focus on higher yielding securities. AFIC s portfolio return of 16.6% is after costs and tax paid, and continues AFIC s sound investment performance through widely varying market conditions. Reflecting AFIC s investment horizon as a long term investor, the 10 year return for AFIC was 9.9% per annum versus the Index return of 9.1% per annum. Major transactions in the portfolio included purchases in APA Group, as a result of its takeover of Hastings Diversified Utilities Fund, Coca-Cola Amatil, CSL, ANZ Banking Group, Suncorp, and Brambles. Sales included the disposal of holdings in Metcash, Peet and Seven West Media. The underlying economy faces some head winds including adjustment to falling terms of trade, a decline in new investment spending and the impact of the persistently high Australian dollar. In addition, subdued consumer and business confidence and expectations of low earnings growth suggests the market could be in for a period of consolidation. However with market commentators expecting the Reserve Bank to continue to reduce interest rates in response to these conditions, the market yield is expected to remain attractive to investors, providing support to the market. Please direct any enquiries to: Ross Barker Geoff Driver Managing Director General Manager (03) (03)

4 MAJOR TRANSACTIONS IN THE INVESTMENT PORTFOLIO Acquisitions (above $5 million) Cost () APA Group (a) 60,456 Coca-Cola Amatil 13,452 CSL 13,220 Australia and New Zealand Banking Group 8,880 Suncorp Group 8,551 Brambles 8,080 Iluka Resources 5,823 Insurance Australia Group 5,758 Hastings Diversified Utilities Fund 5,372 Disposals (above $5 million) Proceeds () Hastings Diversified Utilities Fund (b) 83,593 Metcash 12,420 Peet 6,045 Seven West Media 5,193 (a) Acquired as consideration in the takeover of Hastings Diversified Utilities Fund (b) Takeover by APT Pipelines Limited (APA Group) MAJOR TRANSACTIONS IN THE TRADING PORTFOLIO Net Acquisitions (above $2 million) Cost () BHP Billiton 11,917 National Australia Bank 8,462 Toll Holdings 3,522 Computershare 3,503 QBE Insurance Group 2,122 Net Disposals (above $2 million) Proceeds () Seven West Media 6,305 Origin Energy 3,663 Westpac Banking Corporation 3,365 Transurban Group 3,015 Australia and New Zealand Banking Group 2,497 Note These items are the net movements in the Trading Portfolio where there may have been both purchases and sales during the year. 4

5 TOP 25 INVESTMENTS AS AT 31 DECEMBER 2012 Includes investments held in both the Investment and Trading Portfolios Valued at closing prices at 31 December 2012 Total Value $ million 1 * BHP Billiton * Commonwealth Bank of Australia * Westpac Banking Corporation Wesfarmers (a) * National Australia Bank Rio Tinto * Telstra Corporation * Australia and New Zealand Banking Group Woolworths * Oil Search Australian Infrastructure Fund Woodside Petroleum * AMP Amcor Transurban Group * Santos * Brambles Origin Energy AGL Energy * Computershare * QBE Insurance Group * Orica Coca-Cola Amatil Incitec Pivot APA Group ,366.2 As % of Total Portfolio Value 83.3% (excludes Cash) *Indicates that options were outstanding against part or all of the holding in the Trading Portfolio (a) Includes $53.2 million of WESN partially protected securities 5

6 PORTFOLIO PERFORMANCE TO 31 DECEMBER 2012 ANNUALISED RETURNS PERFORMANCE MEASURES 6 MONTHS 1 YEAR 3 YEARS 5 YEARS 10 YEARS AFIC PORTFOLIO RETURN - NET ASSET BACKING INCLUDING DIVIDENDS REINVESTED* 16.6% 20.4% 3.9% 0.8% 9.9% S&P/ASX 200 ACCUMULATION INDEX 16.4% 20.3% 3.0% -1.6% 9.1% * Note: AFIC net asset per share growth plus dividend series is calculated after management fees, income tax and capital gains tax on realised sales of investments and does not reflect the value of franking credits or LIC credits attached to the dividends. It should also be noted that Index returns for the market do not include the impact of management expenses and tax on their performance. 6

7 AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED ABN HALF-YEAR REPORT 31 DECEMBER

8 COMPANY PARTICULARS Australian Foundation Investment Company Limited ( AFIC ) ABN 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: Company Secretaries: Auditor: Country of incorporation: Bruce B. Teele, Chairman Donald R. Argus AC Ross E. Barker, Managing Director Terrence A. Campbell AO, Deputy Chairman Graeme R. Liebelt John Paterson Fergus D. Ryan AO Catherine M. Walter AM Peter J. Williams Simon M. Pordage Andrew J.B. Porter PricewaterhouseCoopers, Chartered Accountants Australia Registered office: Level Collins Street Melbourne, Victoria 3000 Contact Details: Share Registrar: Mail Address: Telephone : Facsimile: Internet address: Mail Box 146, 101 Collins St., Melbourne, Victoria 3000 (03) (03) invest@afi.com.au For enquiries regarding net asset backing (as advised each month to the Australian Securities Exchange): Telephone: (toll free) Computershare Investor Services Limited Mail Address: AFIC Shareholder enquiry lines : Facsimile: Internet: GPO Box 2975, Melbourne, Victoria 3001 Yarra Falls, 452 Johnston Street, Abbotsford, Victoria (Aus) (NZ) (from overseas) (03) Securities Exchange Codes: For all enquiries relating to shareholdings, dividends and related matters, please contact the share registrar. AFI Ordinary shares AFIG 6.25% 2017 Convertible Notes 8

9 DIRECTORS' REPORT The Directors present their report in relation to the half-year to 31 December 2012 on the consolidated entity ( the Group ) consisting of Australian Foundation Investment Company Limited ( the Company and AFIC ) and its subsidiary, Australian Investment Company Services Limited ( AICS ). Directors The following persons were Directors of the Company during the half-year and up to the date of this report: B.B. Teele (appointed June 1966) D.R. Argus AC (appointed May 1999) R.E. Barker (appointed September 2001) T.A. Campbell AO (appointed September 1984) G.R. Liebelt (appointed June 2012) J. Paterson (appointed June 2005) F.D. Ryan AO (appointed August 2001) C.M. Walter AM (appointed August 2002) P.J. Williams (appointed February 2010) Review of the Group's operations and results Overview The Company maintains a diversified portfolio of equity and similar securities, predominantly in entities listed on the Australian Securities Exchange. There has been no change in the nature of the Company s activities during the period. Its primary objectives are to pay dividends which, over time, will grow at a faster rate than inflation, and to generate attractive total returns in terms of growth in net asset backing plus dividends. Profit Performance and Dividend Profit for the half-year, which includes gains on certain investments in the investment portfolio that are defined as puttable instruments or non-equity investments, was $132.1 million, up 16.3% from the previous corresponding period. Net operating result for the half-year, which primarily reflects on-going earnings from the Company s long term investment portfolio, increased to $123.7 million, up 17.3% from $105.5 million last year. The net operating result per share for the six months to 31 December 2012 was cents per share with an interim dividend declared of 8 cents per share fully-franked. The portfolio return for the 6 months (measured by change in net asset backing per share plus dividends reinvested) was 16.6% compared to the return of the S&P/ASX 200 Accumulation Index for the same period which was 16.4%. AFIC s portfolio return is calculated after management fees, income tax and capital gains tax on realised sales of investments and does not reflect the value of franking credits or LIC credits attached to the dividends. Index returns for the market do not include the impact of management expenses and tax on their performance. 9

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12 CONSOLIDATED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 Note Half-year Half-year Dividends and distributions 129, ,437 Revenue from deposits and bank bills 3,549 1,318 Other revenue 1,950 2,067 Total revenue 134, ,822 Net gains/(losses) on trading portfolio 6,544 (12,997) Income from operating activities 3 141, ,825 Finance & related costs (10,510) (4,187) Administration expenses (6,659) (6,469) Operating result before income tax expense 123, ,169 Income tax (expense)/credit* (258) 2,288 Net operating result for the half-year 123, ,457 Net gains on investments Net gains on puttable instruments and non-equity investments 12,095 11,701 Tax expense on net gains* (3,628) (3,510) 8,467 8,191 Profit for the half-year 132, ,648 Profit is attributable to : Equity holders (members) of Australian Foundation 132, ,585 Investment Company Ltd Minority Interest , ,648 Cents Cents Basic earnings per share Diluted earnings per share Half-year Half-year * Total Tax Expense 3,886 1,222 This Income Statement should be read in conjunction with the accompanying notes. 12

13 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 Half-Year to 31 December 2012 Half-Year to 31 December 2011 Revenue Capital Total Revenue Capital Total Net Profit for the half-year 123,658 8, , ,457 8, ,648 Other Comprehensive Income Unrealised gains/(losses) for the period on securities in the portfolio at 31 December - 617, ,024 - (509,146) (509,146) Deferred tax (expense)/credit on above - (188,165) (188,165) - 154, ,007 Losses for the period on securities realised - (2,725) (2,725) - (3,343) (3,343) Tax credit on above ,011 1,011 Net movement in fair value for interest rate - (259) (259) - (499) (499) swap Total other comprehensive income 1,3-426, ,699 - (357,970) (357,970) Total comprehensive income 2 123, , , ,457 (349,779) (244,322) 1 Net capital gains/(losses) not recorded through the Income Statement 2 This is the company s Net Return for the half-year, which includes the Net Operating Result plus the net realised and unrealised gains or losses on the Company s investment portfolio. 3 Total tax movement in other comprehensive income : $(187.3)m; $155.0m Note that none of the items included in Other Comprehensive Income will be recycled through the Income Statement. Half-Year to 31 December 2012 Half-Year to 31 December 2011 Revenue Capital Total Revenue Capital Total Total Comprehensive Income is attributable to: Equity holders of Australian Foundation 123, , , ,394 (349,779) (244,385) Investment Company Ltd Minority Interest , , , ,457 (349,779) (244,322) This Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 13

14 CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER Dec 30 June Note Current assets Cash 163, ,893 Receivables 9,755 54,484 Trading portfolio 4 116, ,849 Total current assets 289, ,226 Non-current assets Fixtures & fittings Investment portfolio 5,124,374 4,461,784 Income tax credit 8,893 - Deferred tax assets 6,496 27,666 Total non-current assets 5,140,033 4,489,786 Total assets 5,429,577 4,805,012 Current liabilities Payables 7,187 8,875 Tax payable - 1,106 Borrowings 100, ,000 Provisions 1,334 2,552 Interest-rate hedging contracts 1,852 1,593 Total current liabilities 110, ,126 Non-current liabilities Provisions 1,111 1,076 Convertible Notes 5 219, ,649 Deferred tax liabilities - investment portfolio 6 694, ,671 Total non-current liabilities 914, ,396 Total liabilities 1,024, ,522 Net Assets 4,404,616 3,951,490 Shareholders' equity Share Capital 7 1,984,838 1,956,931 Revaluation Reserve 1,657,541 1,231,372 Realised Capital Gains Reserve 301, ,586 General Reserve 23,637 23,637 Interest-rate Hedging Reserve (1,852) (1,593) Retained Profits 437, ,886 Parent Entity Interest 4,403,899 3,950,819 Minority Interest Total equity 4,404,616 3,951,490 This Balance Sheet should be read in conjunction with the accompanying notes. 14

15 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 Attributable to members of Australian Foundation Investment Company Ltd Half-Year to 31 December 2012 Note Share Capital Total equity at the beginning of the halfyear Revaluation Reserve Realised Capital Gains General Reserve Interest- Rate Hedging Retained Profits Total Parent Entity Minority Interest Total 1,956,931 1,231, ,586 23,637 (1,593) 447,886 3,950, ,951,490 Dividends paid (133,605) (133,605) - (133,605) Shares issued- Dividend Reinvestment Plan 7 27, ,844-27,844 Other Share Capital Adjustments Total transactions with share-holders 27, (133,605) (105,698) - (105,698) Profit for the half-year - 8, , , ,125 Other Comprehensive Income for the half-year Net unrealised gains for the period for investments held at 31 December - 428, , ,859 Net losses for the period on investments realised - (1,901) (1,901) - (1,901) Transfer to Realised Capital Gains Reserve of cumulative gains on investments sold - (9,256) 9, Net movement in fair value of swap contracts (259) - (259) - (259) Other Comprehensive Income for the halfyear - 417,702 9,256 - (259) - 426, ,699 Total equity at the end of the half-year 1,984,838 1,657, ,842 23,637 (1,852) 437,893 4,403, ,404,616 This Statement of Changes in Equity should be read in conjunction with the accompanying notes. 15

16 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DEC (CONT) Attributable to members of Australian Foundation Investment Company Ltd Half-Year to 31 December 2011 Note Share Capital Revaluation Reserve Realised Capital Gains General Reserve Interest- Rate Hedging Retained Profits Total Parent Entity Minority Interest Total Total equity at the beginning of the halfyear 1,911,440 1,492, ,385 23,637 (96) 456,166 4,234, ,234,795 Dividends paid (132,197) (132,197) - (132,197) Shares issued- Dividend Reinvestment Plan 28, ,309-28,309 Other Share Capital Adjustments (194) (194) - (194) Total transactions with share-holders 28, (132,197) (104,082) - (104,082) Profit for the half-year - 8, , , ,648 Other Comprehensive Income for the half-year Net unrealised losses for the period for investments held at 31 December - (355,139) (355,139) - (355,139) Net losses for the period on investments realised - (2,332) (2,332) - (2,332) Transfer to Realised Capital Gains Reserve of cumulative losses on investments sold - 50,434 (50,434) Net movement in fair value of swap contracts (499) - (499) - (499) Other Comprehensive Income for the halfyear - (307,037) (50,434) - (499) - (357,970) - (357,970) Total equity at the end of the half-year 1,939,555 1,193, ,951 23,637 (595) 429,363 3,885, ,886,391 This Statement of Changes in Equity should be read in conjunction with the accompanying notes 16

17 CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 Half-year Half-year INFLOWS/ INFLOWS/ (OUTFLOWS) (OUTFLOWS) Cash flows from operating activities Sales from trading portfolio 86,583 19,225 Purchases for trading portfolio (73,490) (2,696) Interest received 3,509 1,101 Dividends and distributions received 133, , , ,062 Other receipts 1,948 2,075 Administration expenses (6,450) (5,973) Finance costs paid (10,064) (4,357) Taxes paid (5,357) (7,771) Net cash inflow/(outflow) from operating activities 129, ,036 Cash flows from investing activities Sales from investment portfolio 119,921 98,967 Purchases for investment portfolio (133,381) (131,524) Net cash inflow/(outflow) from investing activities (13,460) (32,557) Cash flows from financing activities Proceeds from bank borrowings - 50,000 Repayment of bank borrowings - - Proceeds from Convertible Note issue - 222,651 Convertible Note issue costs - (4,105) Share issue costs (31) (29) Dividends paid (105,556) (103,795) Net cash inflow/(outflow) from financing activities (105,587) 164,722 Net increase/(decrease) in cash held 10, ,201 Cash at the beginning of the half-year 152,893 7,344 Cash at the end of the half-year 163, ,545 This Cash Flow Statement should be read in conjunction with the accompanying notes. 17

18 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER Basis of preparation of half-year financial report This general purpose half-year financial report has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act This interim financial report does not include all the notes of the type normally included in an annual financial report. This report should be read in conjunction with the 2012 Annual Report and public announcements made by the Group during the half-year, in accordance with the continuous disclosure requirements of the Corporations Act The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. The Group has attempted to improve the transparency of its reporting by adopting plain English where possible. Key plain English phrases and their equivalent AASB terminology are as follows: Phrase AASB Terminology Market Value Fair Value for Actively Traded Securities 2. Financial reporting by segments The Group consists of a Listed Investment Company and a subsidiary which provides administration services to it and to other Listed Investment Companies in Australia. It has no reportable business or geographic segments. (a) Segment information provided to the Board The internal reporting provided to the Board for the Group s assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of Australian Accounting Standards, except that net assets are reviewed both before and after the effects of capital gains tax on investments (as reported in the Group s Net Tangible Asset announcements to the ASX). The Board considers the Group s net operating result after tax to be a key measure of the Group s performance. This amount excludes the impact of any gains or losses on the Group s investment portfolio and reconciles to the Group s profit before tax as follows: Half-year 2012 $'000 Half-year 2011 $'000 Net Operating Result after income tax 123, ,457 Net gains/(losses) after tax on Puttable Instruments and nonequity 8,467 8,191 investments Profit for the half-year after tax 132, ,648 Add Total Tax Expense 3,886 1,222 Profit for the half-year before tax 136, ,870 18

19 In addition, the Investment Committee regularly reviews the net asset value per share both before and after provision for deferred tax on the unrealised gains in the Group s long-term investment portfolio. The relevant amounts as at 31 December 2012 and 31 December 2011 were as follows: 2012 $ 2011 $ Net tangible asset backing per share Before Tax After Tax (b) Other segment information Segment Revenue Revenues from external parties are derived from the receipt of dividend, distribution and interest income, and income arising on the trading portfolio. The company is domiciled in Australia and the Group s dividend and distribution income is predominantly from entities which maintain a listing in Australia. The Group has a diversified portfolio of investments, with only the Group s investment in Commonwealth Bank : 12.1% and Westpac Bank : 11.2% comprising more than 10% of the Group s income (including trading portfolio) for the half-year ending 31 December 2012 (2011 : Commonwealth Bank : 14.1%, Westpac Bank 12.6%). 3. Income from operating activities Half-year 2012 $'000 Income from operating activities is comprised of the following: Half-year 2011 $'000 Dividends & distributions securities held in investment portfolio 126, ,105 securities held in trading portfolio 2,623 4, , ,313 Interest income securities held in investment portfolio deposits and income from bank bills 3,549 1,318 3,672 1,442 Net gains/(losses) and write downs net gains/(losses) from trading portfolio sales (123) 529 unrealised gains/(losses) in trading portfolio 6,667 (13,526) 6,544 (12,997) Administration fees received from other Listed Investment 1,894 1,856 Companies Expenses recovered from other Listed Investment Companies Other expenses recovered Other income , ,825 19

20 4. Current assets trading portfolio The Company enters into option contracts in the trading portfolio for the purpose of enhancing returns, offsetting risk or providing opportunities to acquire or sell securities at advantageous prices. As at balance date there were call options outstanding which, if they were exercised, would require the Company to deliver securities to the value of $103.7 million (30 June 2012: $14.4 million). As at balance date the Company also had outstanding put options which at the option of the purchaser may have required the Company to buy $3.0 million worth of securities prior to the respective expiry dates if they were exercised (30 June 2012 : $Nil). 5. Non-current liabilities convertible notes 31 December 2012 $' June 2012 $'000 Non-current unsecured convertible notes at amortised cost 219, ,649 There were 2,226,511 convertible notes outstanding at 31 December 2012 each with a face value of $100 which were issued on 19 December These notes carry an interest entitlement of 6.25 per cent per annum. They may be converted at the option of the holder into ordinary shares based on a conversion price of $ per share on 28 February or 31 August each year until 28 February Notes not converted will be redeemed at their face value on 28 February At 31 December 2012, the face value of the convertible notes was $222.7 million. Terms of the notes are regulated under a trust deed between the Company and Australian Executor Trustees Ltd. As per the 2012 Annual Report, at issuance the residual value of the equity component of the convertible notes was calculated as nil. 6. Deferred tax liabilities investment portfolio In accordance with AASB 112 Income Taxes, deferred tax liabilities have been recognised for Capital Gains Tax on the unrealised gain in the investment portfolio at current tax rates (30%) totalling $694.4 million (30 June 2012 : $519.7 million). As the Directors do not intend to dispose of the portfolio, this tax liability may not be crystallised at this amount. 7. Shareholders equity share capital 31 Dec 31 Dec 30 June 30 June Shares Shares (a) Share Capital Ordinary shares fully paid 1,034,119 1,985,150 1,027,733 1,957,338 Less ELTIP shares adjustment - (312) - (407) 1,034,119 1,984,838 1,027,733 1,956,931 ELTIP is the Executive Long Term Incentive Plan 20

21 (b) Movements in Share Capital of the Company during the half-year were as follows: Date Details Notes Number of shares 000 Issue price $ Paid-up Capital 01/07/2012 Opening Balance 1,027,733 1,957,338 31/08/2012 Dividend Reinvestment Plan i 6, ,844 Various Other Share Capital adjustments - (32) 31/12/2012 Balance 1,034,119 1,985,150 i ii The Company has a Dividend Reinvestment Plan under which some shareholders elected to have all or part of their dividend payment reinvested in new ordinary shares. Pricing of the new DRP shares was based on the average selling price of shares traded on the Australian Securities Exchange in the five days from the day the shares begin trading on an ex-dividend basis. The Company introduced an on-market Buy-Back Programme in December This plan remains active. (c) Movements in ELTIP shares adjustment during the half-year were as follows ($): Date Opening balance Acquired on market Expense recognised Cancelled Closing balance 01/07/ ,015 - (94,525) - 312,490 Total 407,015 - (94,525) - 312, Dividends Half-year 2012 Half-year 2011 Dividends paid during the period 133, ,197 (13 cents per share) (13 cents per share) Dividends not recognised at period end Since the end of the half-year the Directors have declared an interim dividend of 8 cents per share fully franked. The aggregate amount of the proposed interim dividend expected to be paid on 22 February 2013, but not recognised as a liability at the end of the half-year is 82, Earnings per Share Half-year 2012 Half-year 2011 Weighted average number of ordinary shares used as the denominator Number Number 1,031,967,015 1,021,393,699 Profit after tax for the half-year attributable to members of the company 132, ,585 21

22 Half-year 2012 Half-year 2011 Cents Cents Basic earnings per share Net operating result after tax for the half-year 123, ,457 Cents Cents Net operating result per share Diluted* Weighted average number of ordinary shares attributable to members of the company Weighted maximum number of potential shares as a result of possible conversion Number Number 1,031,967,015 1,021,393,699 43,773,809 3,092,715 1,075,740,824 1,024,486,414 Profit after tax for the half-year attributable to members of the 132, ,585 company Interest on convertible notes (after tax) 4, Adjusted profit after tax attributable to members of the company 136, ,905 Cents Cents Diluted earnings per share Net operating result after tax for the half-year 123, ,457 Interest on convertible notes (after tax) 4, Adjusted net operating result after tax 128, ,777 Cents Cents Diluted net operating result per share *The calculation of diluted earnings per share for the half-year ended 31 December 2012 adjusts the profit or the net operating result attributable to ordinary equity holders and the weighted average number of shares on issue for the effect of the convertible notes on issue at 31 December Events subsequent to balance date Since 31 December 2012 to the date of this report there has been no event specific to the Company of which the Directors are aware which has had a material effect on the Group or its financial position. 11. Contingencies At balance date Directors are not aware of any material contingent liabilities or contingent assets other than those already disclosed elsewhere in the financial report. 22

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