Announcement PDF Appendix 4D Hearts and Minds Investments Limited (HM1) ABN 61 628 753 220 Financial Report Results for Announcement to the Market for the Half Year ended 31 December 2024 Change 31 Dec 2024 31 Dec 2023 $’000 $’000 Total net investment income 429% 137,515 25,990 Profit/(Loss) from ordinary activities after tax 532% 91,947 14,547 Total comprehensive income/(loss) net of tax 727% 115,290 13,945 31 Dec 2024 $3.73 31 Dec 2023 $2.91 Net tax benefit/(liability) per ordinary share ($0.26) $0.03 Post-tax NTA per ordinary share $3.47 $2.94 Net Tangible Assets (NTA) Per Ordinary Share Pre-tax NTA per ordinary share Dividends The Directors of HM1 have declared a half-year fully franked dividend of 8.0 cents per share payable on 17 April 2025. The Dividend Reinvestment Plan (DRP) will be in operation and participating shareholders can reinvest their cash dividend in new HM1 shares at the DRP issue price. The DRP issue price will be based on the market price of shares acquired under the on market acquisition provisions of the DRP. Dividend per ordinary share Cents per Ordinary share Franking % 8.0 100% Dividend dates: Ex-dividend date: 26 February 2025 Record date: 27 February 2025 DRP election date: Payment date: 12 March 2025 17 April 2025 _____________________________________________ Hearts and Minds Investments Limited ACN 628 753 220 A: 12.04A, Chifley Tower, 2 Chifley Square, Sydney NSW 2000 | W: HM1.com.au | E: ir@hm1.com.au | P: 1300 737 760 or +61 2 9290 9600 Appendix 4D Brief Explanation of Results: For the half year ended 31 December 2024, Hearts and Minds Investments Limited (“HM1” or “the Company”) reported a total comprehensive income after tax of $115.3 million (2023: total comprehensive income after tax of $13.9 million). The result for the half year reflects very good returns from our investment portfolio buoyed by a fall in the Australian dollar. The pre-tax investment return, less expenses, was 23.6% for the half year. The investment returns for the half year were primarily driven by realised gains and increases in the market value of our Core Portfolio holdings. After the provision for tax, post-tax NTA increased by 16.2% over the half year, prior to the payment of the half-year fully franked dividend of 7.5 cents per share in October 2024. After the payment of the half-year dividend, post-tax NTA increased from $3.05 per share to $3.47 per share, an increase of 13.8%. In line with its philanthropic objective, HM1 provides financial support to leading Australian medical research organisations in order to help the development of new medicines and treatments and drive a new generation of medical research in Australia. HM1 and its participating fund managers forego any fees and instead an amount equivalent to 1.5% of net tangible assets per annum is donated to designated medical research organisations. In the half year to 31 December 2024, the Company paid $4.5 million in funding to medical research and has accrued a further $5.6 million as of 31 December 2024. This report is based on the Financial Report for the half year ended 31 December 2024 which has been subject to independent review by Pitcher Partners Sydney. All the documents comprise the information required by Listing Rule 4.2A. The information should be read in conjunction with the 30 June 2024 Annual Report. _____________________________________________ Hearts and Minds Investments Limited ACN 628 753 220 A: 12.04A, Chifley Tower, 2 Chifley Square, Sydney NSW 2000 | W: HM1.com.au | E: ir@hm1.com.au | P: 1300 737 760 or +61 2 9290 9600 Hearts and Minds Investments Limited Financial Report For the half year ended 31 December 2024 ACN 628 753 220 Hearts and Minds Investments Limited For the half year ended 31 December 2024 Contents Corporate Directory 1 Directors’ Report to Shareholders 3 Auditor’s Independence Declaration 8 Financial Statements Statement of Comprehensive Income 9 Statement of Financial Position 10 Statement of Changes in Equity 11 Statement of Cash Flows 12 Notes to the Financial Statements 13 Directors’ Declaration 22 Independent Auditor’s Review Report to the Shareholders 23 Hearts and Minds Investments Limited ACN 628 753 220 Corporate Directory Corporate Directory Directors (Pro bono) Christopher Cuffe AO Lorraine Berends AM Guy Fowler OAM Matthew Grounds AM Michael Traill AM Gary Weiss AM Geoffrey Wilson AO David Wright Chair and Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Company Secretary (Pro bono) Eryl Baron Investment Committee (Pro bono) Lorraine Berends AM David Wright Christopher Cuffe AO Matthew Grounds AM Brett Paton Paul Rayson Conference Fund Manager Selection Committee (Pro Bono) David Wright Gary Weiss AM Michael Walsh Charlie Lanchester Core Fund Managers (Pro bono) Caledonia (Private) Investments Cooper Investors Magellan Asset Management Munro Partners Regal Funds Management TDM Growth Partners Tribeca Investment Partners 2024 Conference Fund Managers (Pro bono) Advent Global Antipodes Ellerston Capital Eminence Capital IFM Investors JO Hambro Registered Office Boardroom Pty Limited Level 8, 210 George Street Sydney NSW 2000 Auditor Pitcher Partners Level 16, Tower 2 Darling Park 201 Sussex Street, NSW 2000 Telephone: (02) 9221 2099 Administrator Citco Fund Services (Australia) Pty Limited Level 22, 45 Clarence Street Sydney NSW 2000 Telephone: (02) 9005 0400 Chair Loftus Peak Northcape Capital Scalar Gauge Tekne Capital Terra Capital 1 Hearts and Minds Investments Limited ACN 628 753 220 (continued) Corporate Directory Corporate Directory (continued) Share Registrar Boardroom Pty Limited Level 8, 210 George Street Sydney NSW 2000 Telephone: (02) 9290 9600 Stock Exchange Australian Securities Exchange The home exchange is Sydney ASX code: HM1 Ordinary Shares 2 Hearts and Minds Investments Limited Directors’ Report to Shareholders For the half year ended 31 December 2024 Directors’ Report to Shareholders The Directors of Hearts and Minds Investments Limited (hereafter referred to as “HM1” or “the Company”) present their report together with the financial report for the half year ended 31 December 2024. Comparative figures shown below are for the half year ended 31 December 2023. Directors The following persons were Directors of the Company during the half year ended 31 December 2024 and up to the date of this report: Christopher Cuffe AO Lorraine Berends AM Guy Fowler OAM Matthew Grounds AM Michael Traill AM Gary Weiss AM Geoffrey Wilson AO David Wright Chair and Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Investment Objective and Principal Activity HM1 is a listed investment company that was established in 2018 with the combined objective of providing a concentrated portfolio of the highest conviction ideas from respected fund managers, whilst also supporting Australian medical research organisations. It was born out of the investment and philanthropic vision of the Sohn Hearts & Minds Investment Leaders Conference. HM1 seeks to provide shareholders with a compelling and attractive investment proposition by creating a concentrated portfolio of Australian and international securities based on the highest conviction ideas from two groups of fund managers. a) HM1 has allocated 35% of its investment portfolio based on the annual recommendations of fund managers who present at the Sohn Hearts & Minds Investment Leaders Conference (known as the Conference Fund Managers). b) HM1 has allocated 65% of its investment portfolio based on the highest conviction ideas of seven respected fund managers (known as the Core Fund Managers). The Core Fund Managers are Caledonia (Private) Investments, Cooper Investors, Magellan Asset Management, Munro Partners, Regal Partners, TDM Growth Partners and Tribeca Investment Partners. No change in this activity took place during the half year or is likely in the future. Operating and Financial Review For the half year ended 31 December 2024, the Company reported a total comprehensive income after tax of $115.3 million (2023: total comprehensive income after tax of $13.9 million). The result for the half year reflects very good returns from our investment portfolio buoyed by a fall in the Australian dollar. The pre-tax investment return, less expenses, was 23.6% for the half year. The investment returns for the half year were primarily driven by realised gains and increases in the market value of our Core Portfolio holdings. After the provision for tax, post-tax NTA increased by 16.2% over the half year, prior to the payment of the half-year fully franked dividend of 7.5 cents per share in October 2024. After the payment of the half-year dividend, post-tax NTA increased from $3.05 per share to $3.47 per share, an increase of 13.8% 3 Hearts and Minds Investments Limited Directors’ Report to Shareholders For the half year ended 31 December 2024 Dividends HM1 provides shareholders with exposure to a concentrated portfolio of Australian and international securities. As such, returns to shareholders are predominantly delivered through capital growth which, when realised from the sale of securities, is taxed at the corporate tax rate and may be paid as franked dividends to shareholders. The Board is committed to paying fully franked dividends to shareholders provided the Company has sufficient profit reserves and franking credits and it is within prudent business practice. A half-year fully franked dividend of 7.5 cents per share was paid to shareholders on 17 October 2024. The Board is pleased to announce that the next half-year fully franked dividend of 8.0 cents per share will be paid on 17 April 2025. Company Performance As a listed investment company, we use three key measures to evaluate the performance of HM1: 1. 2. 3. Investment portfolio performance, which measures the growth of the investment portfolio on a pre-tax basis and after the payment of all expenses, including the donation payments and provisions. Our investment benchmark, the MSCI World Index (AUD), is also measured before taxes. Our investment performance compared to this benchmark is reported to shareholders monthly; Net tangible asset (NTA) growth, which represents the change in the value of the Company’s assets less liabilities. The post-tax NTA of the Company is essentially the realisable value of the Company at a point in time. The pre-tax and post-tax NTA per share of the Company are reported to shareholders on a weekly basis; and Total shareholder return, which measures the total return to shareholders from share price growth and dividends paid. Each of these is discussed below in more detail. 1. Investment Portfolio Performance Since Inception1 per annum Performance to 31 December 2024 6 Months 1 Year 3 Years per annum HM1 investment portfolio performance 23.6% 33.9% 3.1% 12.3% MSCI World Index (AUD) 13.9% 29.3% 10.5% 13.2% 1.Inception was 14 November 2018. The HM1 investment portfolio generated very good returns over the six months buoyed by a fall in the Australian dollar. The pre-tax investment return, less expenses, was 23.6% for the six months to 31 December 2024. The Core Portfolio drove most of the investment returns with strong gains across most holdings. Stand out performers over the half year were Zillow up 60%, Guzman Y Gomez up 48%, Brookfield Corp up 45%, Rokt up 40% and Block up 32%. The returns from our US holdings were boosted by a fall in the A$ over the six months from 66.7 US cents on 30 June 2024 to 61.9 US cents on 31 December 2024. The strong performance of the investment portfolio, and in markets generally, over the last eighteen months has boosted our investment returns since inception to 12.3% per annum. 4 Hearts and Minds Investments Limited Directors’ Report to Shareholders For the half year ended 31 December 2024 2. Change in Net Tangible Assets (NTA) The following chart shows the components of the change in post-tax NTA per share over the half year to 31 December 2024. The major increase in value over the half year came from unrealised and realised gains from the investment portfolio equating to 75 cents per share. On a pre-tax basis, investment returns less the payment and provision for donations and expenses drove a 23.6% increase in pre-tax NTA. After the provision for tax and prior to the payment of the half-year dividend, the post-tax NTA increased by 16.2% over the half year. A fully franked dividend of 7.5 cents per share was paid on 17 October 2024. After the payment of the half year dividend, post-tax NTA increased from $3.05 per share to $3.47 per share, an increase of 13.8%. The NTA on 31 December 2024 does not include the value of franking credits that have been generated on tax paid. Change in Net Tangible Assets per share Half Year to 31 December 2024 $3.900 $0.189 $(0.024) $3.700 $(0.004) $0.558 $(0.215) $3.500 $3.475 $(0.075) $3.300 $3.100 $3.046 $2.900 $2.700 $2.500 NTA 1 Jul 24 3. Unrealised Gains Realised Gains Donations Expenses Tax Expense Net Dividend NTA 31 Dec 24 Total Shareholder Return Total shareholder return measures the change in the HM1 share price plus dividends paid. HM1’s share price increased 20% over the half year from $2.58 on 30 June 2024 to $3.10 on 31 December 2024. In addition, HM1 paid a fully franked dividend of 7.5 cents per share during the half year amounting to a total shareholder return for the six months of 23%. Since inception, HM1 has paid fully franked dividends amounting to a total of 60.5 cents per share to shareholders. The notional value of a $10,000 invested in HM1 shares from the date of listing, assuming the reinvestment of dividends, would be $15,705 on 31 December 2024, an increase of 57% or 7.6% per annum. The share price of $3.10 on 31 December 2024 represented an 11% discount to the NTA per share of HM1 of $3.47. 5 Hearts and Minds Investments Limited Directors’ Report to Shareholders For the half year ended 31 December 2024 Medical Research In line with its philanthropic objective, HM1 provides financial support to leading Australian medical research organisations to help the development of new medicines and treatments and drive a new generation of medical research in Australia. HM1 and its participating fund managers and service providers forego any fees and instead an amount equivalent to 1.5% of net tangible assets per annum is donated to designated charities. In the half year to 31 December 2024 the Company paid $4.5 million in donations and has accrued a further $5.6 million as of 31 December 2024. We would like to thank our participating fund managers and service providers for their outstanding and continued generosity since listing. 6 Hearts and Minds Investments Limited Directors’ Report to Shareholders For the half year ended 31 December 2024 Corporate Tax Rate The Company is taxed at the corporate rate of 30.0% The Company maintains a franking account and may declare franked dividends to shareholders. Significant Changes in State of Affairs In the opinion of the Directors, there were no significant changes in the state of affairs of the Company that occurred during the period other than disclosed in the report and the Company’s announcements to the ASX. Subsequent Events Since the end of the half year, the Directors have declared a half-year fully franked dividend of 8.0 cents per share payable on 17 April 2025. In the latest release to the ASX, the Company reported a NTA per share as of 7 February 2025, as follows: Net Tangible Assets per Share 7 Feb 2025 31 Dec 2024 Pre-tax NTA per ordinary share $3.91 $3.73 Post-tax NTA per ordinary share $3.60 $3.47 Auditors Independence Declaration A copy of the Auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 in relation to the review for the half year is set out on page 8 of this Financial Report. Rounding of Amounts to Nearest Dollar In accordance with ASIC Corporations (rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the Directors’ Report and Interim Financial Report have been rounded to the nearest dollar, unless otherwise indicated. Signed in accordance with a resolution of the Board of Directors. Christopher Cuffe AO Chair and Independent Director Sydney 20 February 2025 7 Pitcher Partners Sydney ABN 17 795 780 962 Level 16, Tower 2 Darling Park 201 Sussex Street Sydney NSW 2000 Postal address GPO Box 1615 Sydney NSW 2001 +61 2 9221 2099 sydneypartners@pitcher.com.au pitcher.com.au Auditor’s Independence Declaration To the Directors of Hearts and Minds Investments Limited ABN 61 628 753 220 In relation to the independent auditor’s review of Hearts and Minds Investments Limited for the half year ended 31 December 2024, to the best of my knowledge and belief there have been: (i) no contraventions of the auditor independence requirements of the Corporations Act 2001; and (ii) no contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards). Richard King Partner Pitcher Partners Sydney 20 February 2025 Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney 8 Pitcher Partners is an association of independent firms. Pitcher Partners Sydney ABN 17 795 780 962. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Hearts and Minds Investments Limited Statement of Comprehensive Income For the half year ended 31 December 2024 For the half year ended 31 December 2024 $ For the half year ended 31 December 2023 $ 29,496,537 (5,640,721) 97,948,190 (5,407,244) 9,344,042 5,876,316 256,930 28,889,176 (6,076,696) 5,341,655 3,472,722 4,245 137,514,771 25,990,381 (5,551,530) (495,238) – (358,036) (4,903,053) (514,553) (6) (365,908) (6,404,804) (5,783,520) Income before income tax 131,109,967 20,206,861 Income tax expense (39,163,020) (5,659,846) Net income for the period 91,946,947 14,547,015 6 9,060,521 531,599 6 14,282,333 (1,133,536) Net realised and unrealised gains/(losses) on investments taken to equity, net of tax 23,342,854 (601,937) Other comprehensive income/(loss) for the period, net of tax 23,342,854 (601,937) Total comprehensive income for the period 115,289,801 13,945,078 Cents Cents 40.15 6.36 Notes Investment earnings from ordinary activities Net realised gains/(losses) on financial assets at fair value through profit or loss Net unrealised gains on financial assets at fair value through profit or loss Net realised losses on foreign exchange transactions Net unrealised gains on foreign exchange transactions Dividend income Other income Total investment income Expenses Donations Employee costs Interest expense Other expenses 3 Total expenses Other comprehensive income Items that will not be reclassified to profit or loss: Net realised gains on investments taken to equity, net of tax Net unrealised gains/(losses) on investments taken to equity, net of tax Earnings per share attributable to the ordinary equity holders of the Company: Basic and diluted earnings per share The accompanying notes form part of these half year financial statements. 9 Hearts and Minds Investments Limited Statement of Financial Position 31 December 2024 31 December 2024 $ 30 June 2024 $ 55,954,377 698,105,053 – 352,962 65,924,833 553,555,134 6,960,236 242,582 754,412,392 626,682,785 107,713,794 – 94,080,593 9,744,087 Total non-current assets 107,713,794 103,824,680 Total assets 862,126,186 730,507,465 7,485,888 3,382,852 – 170,000 6,443,840 – 6,992,717 140,000 Total current liabilities 11,038,740 13,576,557 Non-current liabilities Deferred tax liabilities 55,563,565 19,523,404 Total non-current liabilities 55,563,565 19,523,404 Total liabilities 66,602,305 33,099,961 Net assets 795,523,881 697,407,504 574,939,172 156,662,138 63,922,571 574,939,172 133,650,323 (11,181,991) 795,523,881 697,407,504 Notes Assets Current assets Cash and cash equivalents Financial assets at fair value through profit or loss Amounts due from brokers Other receivables 7 Total current assets Non-current assets Financial assets at fair value through other comprehensive income Deferred tax assets 7 Liabilities Current liabilities Donation provision Current tax liabilities Amounts due to brokers Other payables 3 Equity Share capital Reserves Retained earnings/accumulated losses 5 6 Total equity The accompanying notes form part of these half year financial statements. 10 Hearts and Minds Investments Limited Statement of Changes in Equity For the half year ended 31 December 2024 Note Balance at 1 July 2023 Net income for the period Other comprehensive income, net of tax Transfer to profits reserve Investment portfolio Share revaluation capital reserve $ $ 574,476,801 – – – Transactions with equity holders in their capacity as owners: Dividends – Balance at 31 December 2023 Balance at 1 July 2024 Net income for the period Other comprehensive income, net of tax Transfer to profits reserve 6 6 9,886,072 153,270,754 – – (601,937) – (531,599) 531,599 – (16,016,126) Retained earnings $ Total $ (62,110,751) 675,522,876 14,547,015 14,547,015 – (601,937) – – – (16,016,126) 574,476,801 8,752,536 137,786,227 (47,563,736) 673,451,828 574,939,172 – – – 732,053 132,918,270 – – 23,342,854 – (9,060,521) 25,902,906 (11,181,991) 697,407,504 91,946,947 91,946,947 – 23,342,854 (16,842,385) – Transactions with equity holders in their capacity as owners: Dividends Balance at 31 December 2024 Profits reserve $ – 574,939,172 – (17,173,424) 15,014,386 141,647,752 The accompanying notes form part of these half year financial statements. 11 – (17,173,424) 63,922,571 795,523,881 Hearts and Minds Investments Limited Statement of Cash Flows For the half year ended 31 December 2024 For the half year ended 31 December 2024 $ For the half year ended 31 December 2023 $ 6,022,866 – – (4,509,482) (823,274) 4,285,776 6,196 (6) (4,979,692) (969,706) 690,110 (1,657,432) 265,478,627 (262,902,567) 200,749,886 (212,586,135) 2,576,060 (11,836,249) (17,173,424) (16,016,126) Net cash used in financing activities (17,173,424) (16,016,126) Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the period (13,907,254) 65,924,833 (29,509,807) 59,246,589 Effect of foreign currency exchange rate changes on cash and cash equivalents 3,936,798 (735,041) Cash and cash equivalents at end of the period 55,954,377 29,001,741 Note Cash flows from operating activities Dividends received Other income received Interest paid Donations paid Payments for other expenses Net cash provided by/(used in) operating activities Cash flows from investing activities Proceeds from sales of investments Payments for purchases of investments Net cash provided by/(used in) investing activities Cash flows from financing activities Dividends paid 6(c) The accompanying notes form part of these half year financial statements. 12 Hearts and Minds Investments Limited Notes to the Financial Statements For the half year ended 31 December 2024 1 General information The half year financial statements of the Company are for the half year ended 31 December 2024. The half year financial statements were authorised for issue on 20 February 2025 by the Board of Directors. 2 Summary of material accounting policies Basis of preparation These general purpose financial statements for the half year ended 31 December 2024 have been prepared in accordance with Australian Accounting Standards Board (“AASB”) 134 Interim Financial Reporting and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2024 and any public announcements made by the Company during the half year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The material accounting policies adopted are consistent with those of the 30 June 2024 financial statements. In accordance with ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/191, the amounts in the half year financial report have been rounded to the nearest dollar, unless otherwise indicated. The Company has adopted all of the new and amended Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period and there was no material impact on adoption. 3 Donations In line with the Company’s philanthropic objectives, the Company donates a percentage of the Company’s net tangible assets to leading Australian medical research organisations every six months. The donations are equal to 1.5% per annum of the average monthly net tangible assets for the previous half year and roughly equivalent to the value of the investment management fees foregone by participating fund managers. The donations accrue monthly and will vary month-to-month in proportion to the net tangible asset value. The accrual of the donation amount each month increases expenses and decreases the Company’s net tangible assets. 4 Dividend franking account For the half year ended 31 December 2024 $ For the year ended 30 June 2024 $ Opening balance Franking credits on dividends received Franking credits on dividends paid 41,288,184 – (7,360,039) 54,424,109 592,220 (13,728,145) Closing balance of franking account 33,928,145 41,288,184 Franking credits on dividends receivable – – 33,928,145 41,288,184 Franking credits available for use in subsequent reporting periods 13 Hearts and Minds Investments Limited Notes to the Financial Statements (continued) For the half year ended 31 December 2024 5 Share capital (a) Issued capital 31 December 2024 No. of shares 31 December 2024 $ 228,982,167 574,939,172 30 June 2024 No. of shares 30 June 2024 $ 228,982,167 574,939,172 For the half year ended 31 December 2024 No. of shares For the half year ended 31 December 2024 $ Opening balance 228,982,167 574,939,172 Closing balance 228,982,167 574,939,172 For the year ended 30 June 2024 No. of shares For the year ended 30 June 2024 $ Opening balance Shares issued at $2.59 per share 228,802,420 179,747 574,476,801 462,371 Closing balance 228,982,167 574,939,172 31 December 2024 $ 30 June 2024 $ Investment portfolio revaluation reserve Profits reserve 15,014,386 141,647,752 732,053 132,918,270 Total reserves 156,662,138 133,650,323 Ordinary shares Ordinary shares (b) Movements in share capital 6 Reserves (a) Reserves 14 Hearts and Minds Investments Limited Notes to the Financial Statements (continued) For the half year ended 31 December 2024 6 Reserves (continued) (b) Investment portfolio revaluation reserve For the half year ended 31 December 2024 $ For the year ended 30 June 2024 $ Opening balance Net realised gains on investments taken to equity Income tax expense on net realised gains on investments taken to equity Net unrealised gains/(losses) on investments taken to equity Deferred income tax (expense)/credit on net unrealised gains/(losses) on investments taken to equity Transfer to profits reserve 732,053 12,943,601 9,886,072 16,685,763 (3,883,080) 20,403,333 (5,005,729) (13,077,170) (6,121,000) (9,060,521) 3,923,151 (11,680,034) Closing balance 15,014,386 732,053 For the half year ended 31 December 2024 $ For the year ended 30 June 2024 $ Opening balance Transfer from retained earnings Transfer from investment portfolio revaluation reserve Dividends 132,918,270 16,842,385 9,060,521 (17,173,424) 153,270,754 – 11,680,034 (32,032,518) Closing balance 141,647,752 132,918,270 (c) Profits reserve (d) Dividends During the half year ended 31 December 2024, the Company paid a fully franked dividend of 7.5 cents per share to shareholders amounting to a total dividend payment of $17,173,424, of which $5,312,280 was reinvested by shareholders in HM1 shares via the dividend reinvestment plan. On 17 October 2024, 708,304 fully paid shares were acquired on market and transferred to shareholders pursuant to the dividend reinvestment plan. During the year ended 30 June 2024, the Company paid a fully franked dividend of 14 cents per share to shareholders amounting to a total dividend payment of $32,032,518, of which $3,524,039 was reinvested by shareholders in HM1 shares via the dividend reinvestment plan. (e) Dividends not recognised at year end In addition to the above dividends, since the end of the half year, the Directors have declared a half-year fully franked dividend of 8.0 cents per share payable on 17 April 2025. This dividend has not been recognised as a liability at 31 December 2024. 15 Hearts and Minds Investments Limited Notes to the Financial Statements (continued) For the half year ended 31 December 2024 7 Financial assets Fair value measurements (a) Fair value estimation Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset takes place either in the principal market for the asse