AMCIL LIMITED — Interim / Quarterly Report 2011

Jan 23, 2011

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AMCIL LIMITED

ABN 57 073 990 735

APPENDIX 4D STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CONTENTS

 Results for announcement to the market

 Media Release

 Appendix 4D Accounts

 Independent Auditors’ Review Report

This half-year report is presented under listing rule 4.2A and should be read in conjunction with the Company’s 2010 Annual Report.

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RESULTS FOR ANNOUNCEMENT TO THE MARKET

The reporting period is the half-year ended 31 December 2010 with the previous corresponding period being the half-year ended 31 December 2009.

Results for announcement to the market

• Net Operating Profit before net gains on investments was $3.3 million, up 18.9% from $2.8 million in the previous corresponding period.

• Reported Profit for the half-year was $5.0 million, up 21.1% from the previous corresponding period. This figure includes unrealised gains or losses on puttable instruments in the investment portfolio and on open options positions. The previous corresponding period’s reported profit of $4.2 million has been restated to include unrealised gains on puttable instruments. It also included realised capital gains on the Company’s investment portfolio until the adoption of the new accounting standard AASB 9 on 7 December 2009.

• Revenue from investments was $3.8 million, up 33.9% from $2.8 million in the previous corresponding period.

• Net tangible asset backing per share before any provision for tax on unrealised gains at 31 December 2010 was 79 cents per share, up from 74 cents at the end of the previous corresponding period. This figure is before accounting for the Company’s Share Purchase Plan, which raised $7.1 million of additional capital and resulted in 11.2 million new shares being issued on 5 January 2011.

• A final dividend of 2 cents per share (fully franked) in respect of the financial year ended 30 June 2010 was paid on 27 August 2010.

• In line with the Company’s previous practice, no interim dividend has been declared in respect of the half year ended 31 December 2010.

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PORTFOLIO OUTPERFORMS AS MARKET GAINS MOMENTUM

MEDIA RELEASE - HALF YEAR RESULT TO 31 DECEMBER 2010

24 January 2011

AMCIL’s portfolio return over the six months to 31 December 2010 was an increase of 15.2 per cent compared to the broader Australian equity market which increased by 12.8 per cent. This reflects the benefit of AMCIL’s investment approach which allows it to include companies from across the entire market in a concentrated portfolio in ways that can materially impact performance.

In particular, share prices of companies in the resources and resource related services sectors have been very strong. In this context AMCIL’s portfolio benefited from the gains in holdings such as Iluka Resources, BHP Billiton, Pan Australian Resources, Bradken, Alumina and Campbell Brothers. Other companies to generate sound returns in this period were Hastings Diversified Utility Fund, Mitchell Communications, which was taken-over by Aegis Group Plc, Transurban, Brambles, Victoria Petroleum and Oil Search.

The Net Operating Profit for the half increased to $3.3 million from $2.8 million last year, an increase of 18.9 percent. This increase was a result of two factors. The first was the lift in dividends received as many companies, particularly the banks, restored dividends toward pre financial crises levels. Secondly the portfolio was larger following investment of funds raised in the share purchase plan in December 2009.

Reported Profit for the half was $5.0 million versus $4.2 million over the corresponding period last year. These figures include the movement in the unrealised value of the Company’s investment in Hastings Diversified Utilities Fund, which is required under current accounting standards.

In line with the Company’s previous practice the Board has not declared an interim dividend.

AMCIL made a number of purchases over the six months to 31 December 2010, many of which were through placements. Major purchases during the period were in iSelect, which is currently unlisted, Victoria Petroleum, ANZ Banking Group, Trust Company, Amalgamated Holdings, Eastern Star Gas and Australian Infrastructure Fund. iSelect and Amalgamated Holdings are new to the portfolio.

The market moves into the second half of the financial year with some renewed confidence in global growth emerging. AMCIL has completed another successful share purchase plan in January 2011 which raised just over $7 million. As a result the Company has $8 million of cash to invest, which is approximately 5 percent of the total portfolio. Whilst the recent momentum in the market has been in the resources and related sectors the share price performance of many companies with attractive long term business models have not been as strong. In our view, for a thematic investor like AMCIL, this is likely to provide opportunities to invest these funds at attractive valuations as we move into the remainder of the financial year.

Please direct any enquiries to:

Bruce Teele Ross Barker Geoff Driver Chairman Managing Director General Manager (03) 9679 1361 (03) 9924 0380 (03) 9679 1659

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MAJOR TRANSACTIONS IN THE INVESTMENT PORTFOLIO

Acquisitions (above $500,000)	Cost
	$’000
iSelect*	1,500
Victoria Petroleum	1,485
ANZ Banking Group	1,267
Trust Company	936
Amalgamated Holdings*	750
Eastern Star Gas	689
Australian Infrastructure Fund	625
Disposals (above $500,000)	Proceeds
	$’000
Mitchell Communications^	4,309
PrimeAg Australia	654

• New holding

^ Taken over by Aegis Group Plc

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TOP INVESTMENTS AS AT 31 DECEMBER 2010

Includes investments held in both the Investment and Trading Portfolios

Valued at closing prices at 31 December 2010

1 Hastings Diversified Utilities Fund 2 BHP Billiton 3 Commonwealth Bank of Australia 4 Westpac Banking Corporation 5 National Australia Bank 6 Transurban Group 7 Bradken 8 * Australia & New Zealand Banking Group 9 QBE Insurance Group 10 Telstra Corporation 11 Iluka Resources 12 Peet 13 Tox Free Solutions 14 ASG Group 15 Oil Search 16 Australian Infrastructure Fund 17 REA Group 18 Brambles 19 Amcor 20 Coca-Cola Amatil As % of Total Portfolio (excludes Cash)**	Total Value $ '000 9,831 9,050 8,954 8,152 6,333 6,318 6,307 5,552 5,369 4,749 4,570 4,533 4,478 4,333 4,287 4,155 4,126 3,916 3,822 3,801
	112,637
	72.8%

*Indicates that options were outstanding against all or part of the holding

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AMCIL LIMITED

ABN 57 073 990 735

- HALF YEAR REPORT 31 DECEMBER 2010

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COMPANY PARTICULARS

AMCIL Limited (“AMH”)

ABN 57 073 990 735

AMCIL is a Listed Investment Company. It is an investor in equities and similar securities on the stock market primarily in Australia.

Directors: Bruce Teele, Chairman Ross Barker, Managing Director Peter Barnett Terry Campbell AO Rupert Myer AM Richard (Bob) Santamaria Stan Wallis AC Company Secretaries: Simon Pordage Andrew Porter Auditor: PricewaterhouseCoopers, Chartered Accountants Country of Australia incorporation: Registered office: Level 21 101 Collins Street Melbourne, Victoria 3000 Contact Details: Mail Address: GPO Box 2114, Melbourne, Victoria 3001 Telephone: (03) 9650 9911 Facsimile: (03) 9650 9100 Email: invest@amcil.com.au Internet address: www.amcil.com.au For enquiries regarding net asset backing (as advised each month to the Australian Securities Exchange): Telephone: 1800 780 784 (toll free) Share Registrar: Computershare Investor Services Pty Limited Mail Address: GPO Box 2975EE, Melbourne, Victoria 3000 Yarra Falls, 452 Johnston Street, Abbotsford, Victoria 3067 AMH Shareholder enquiry line: 1300 653 916 +613 9415 4224 (from overseas) Facsimile: (03) 9473 2500 Email: web.queries@computershare.com.au Internet: www.computershare.com.au For all enquiries relating to shareholdings, dividends and related matters, please contact the share registrar as above.

Stock Exchange Code: AMH Ordinary shares

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DIRECTORS' REPORT

This report in relation to the half-year to 31 December 2010 is presented by the Directors of AMCIL Limited (‘the Company’) in accordance with a resolution of Directors.

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 December 2003)

• R.E. Barker (appointed May 1996)

• P.C. Barnett (appointed August 1996)

• T.A. Campbell AO (appointed May 1996)

• R.H. Myer AM (appointed January 2000) R.B. Santamaria (appointed August 1996)

• S.D.M. Wallis AC (appointed March 2004)

Company operations and results

Overview

Since 2003, the Company has been a thematic investor primarily in securities listed on the Australian Securities Exchange.

Performance Indicators and Outcomes

The net operating profit, which excludes unrealised gains or losses from open options positions and realised gains on investments, was $3.3 million for the six months ended 31 December 2010, up from $2.8 million last year, an increase of 18.9%. The net operating profit for the six months was equivalent to 1.69 cents per share.

Reported profit after tax, which includes unrealised gains or losses from open options positions and puttable instruments in the investment portfolio was $5.0 million, up 21.1% from the previous corresponding period. The profit for the comparative period also included realised gains on sales from the investment portfolio until 7 December 2009 which was the date of the adoption of a new accounting standard dealing with, amongst other things, the treatment of realised gains and losses from sales from the investment portfolio. The comparative period figures have been restated to include unrealised gains on puttable instruments (see Note 10 to the financial statements).

A key component of earnings was distributions from the companies in which we invest of $3.7 million. Of this amount, $2.7 million was from the receipt of fully franked dividends.

The Board has decided not to declare an interim dividend.

Auditors’ independence declaration

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 10.

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INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Note Dividends and distributions Revenue from deposits and bank bills Total revenue Net gains/(losses) on trading portfolio Realised gains/(losses) from options written portfolio Other income Income from operating activities Finance costs Administration expenses Operating profit before income tax expense Income tax expense Net operating profit for the half-year Net gains/(losses) on investments Net gains/(losses) on open options positions Deferred tax on net gains/losses on open options positions Net gains on puttable instruments Tax on net gains on puttable instruments Net gains on securities sold from the investment portfolio before 7 December 2009 Profit for the half-year Basic earnings per share7*	Half-year 2010 $’000 3,723 65 3,788 253 20 - 4,061 (48) (601) 3,412 (84) 3,328 (11) 3 2,459 (738) - 1,713 5,041 Cents 2.56 Half-year 2010 $’000	Half-year 2009 $’000 2,565 263
		2,828 562 - 48
		3,438 - (591)
		2,847 (48)
		2,799 - - 1,194 (358) 526
		1,362
		4,161
		Cents 2.31 Half-year 2009 $’000

* Total Tax Expense 819 406

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

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STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

ENDED31 DECEMBER2010
Net Profit Other Comprehensive Income Unrealised gains/(losses) for the period on securities in the portfolio on 31 December (excl. puttable instruments) Deferred tax expense on above Plus gains/(losses) for the period on securities realised before 7 December 2009 Plus gains for the period on securities realised after 7 December 2009 Transfer to Income Statement of cumulative gains on investments realised prior to 7 December 2009 Total Other Comprehensive Income1 **Total comprehensive income2 **	Half-Year to 31 December 2010 Revenue Capital Total $’000 $’000 $000 3,328 1,713 5,041 - 13,632 13,632 - (4,681) (4,681) - - - - 1,500 1,500 - - - - 10,451 10,451 3,328 12,164 15,492	Half-Year to 31 December 2009 Revenue Capital Total $’000 $’000 $’000 2,799 1,362 4,161 - 25,617 25,617 - (4,719) (4,719) - 267 267 - 306 306 - (526) (526)
		- 20,945 20,945
		2,799 22,307 25,106

1 These are the net capital gains/(losses) not recorded through the Income Statement.

2 This is the company’s Net Return for the year, which includes the Net Operating Profit plus the net realised and unrealised gains or losses on the Company’s investment portfolio and net gains/(losses) on open options positions.

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

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BALANCE SHEET AS AT 31 DECEMBER 2010

Note Current assets Cash Receivables Trading portfolio Total current assets Non-current assets Investment portfolio Deferred tax assets Total non-current assets Total assets Current liabilities Payables Tax payable Options written Total current liabilities Non-current liabilities Deferred tax liabilities - investment portfolio 4 Total non-current liabilities Total liabilities Net Assets Shareholders' equity Share Capital 5 Revaluation Reserve Retained Profits Total shareholders' equity	31 Dec 2010 $’000 1,035 470 5,578 7,083 149,059 142 149,201 156,284 561 118 - 679 7,402 7,402 8,081 148,203 122,273 22,222 3,708 148,203	30 June 2010 $’000 4,955 1,046 5,095
		11,096
		126,484 264
		126,748
		137,844
		851 159 69
		1,079
		1,983
		1,983
		3,062
		134,782
		120,447 11,500 2,835
		134,782

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

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STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

Half-Year 2010 Note Total equity at the beginning of the half-year Dividends paid 6 Shares issued - Dividend Reinvestment Plan Total transactions with share-holders Profit for the half-year Other Comprehensive Income for the half-year Net unrealised gains for the period for investments held at 31 December Net gains for the period on investments realised Transfer to Retained Profits of cumulative gains on investments realised Other Comprehensive Income for the half-year Total equity at the end of the half-year	Share Capital $000 Revaluation Reserve $000 Retained Profits $’000 Total $’000 120,447 11,500 2,835 134,782 - - (3,897) (3,897) 1,826 - - 1,826
	1,826 - (3,897) (2,071) - 1,721 3,320 5,041 - ,951 - - ,500 - 8 8,951 1 1,500 - (1,450) 1,450 -
	- 9,001 1,450 10,451
	122,273 22,222 3,708 148,203

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

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STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2010 (CONT.)

			‘Impairment’
			Revaluation
Half-Year 2009	Note	Share	Charge	Revaluation	Retained
		Capital	Reserve	Reserve	Profits	Total
		$000	$000	$000	$’000	$’000
Total equity at the beginning of the half-year as reported		109,135	(5,085)	1,969	634	106,653
Adoption of AASB 9		-	5,085	(5,085)	-	-
Restated total equity at the beginning of the half-year		109,135	-	(3,116)	634	106,653
Dividends paid	6	-	-	-	(3,538)	(3,538)
Shares issued - Dividend Reinvestment Plan		1,475	-	-	-	1,475
- Share Purchase Plan		9,894	-	-	-	9,894
Other Share Capital Adjustments		(36)	-	-	-	(36)
Total transactions with share-holders		11,333	-	-	(3,538)	7,795
Profit for the half-year		-	-	836	3,325	4,161
Other Comprehensive Income for the half-year
Net unrealised gains for the period for investments held at 31		-	-	20,898	-	20,898
December (excl. puttable instruments)
Net gains for the period for investments realised before 7		-	-	267	-	267
December 2009
Net gains for the period for investments realised after 7		-	-	306	-	306
December 2009
Transfer to Income Statement of cumulative gains on		-	-	(526)	-	(526)
investments realised before 7 December 2009
Transfer to Retained Profits of cumulative gains on investments		-	-	(396)	396	-
realised after 7 December 2009
Other Comprehensive Income for the half-year		-	-	20,549	396	20,945
Total equity at the end of the half-year		120,468	-	18,269	817	139,554
This Statement of Changes in Equity should be read in conjunction		with the accompanying notes.

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CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

CASHFLOWSTATEMENT FOR THEHALF-YE **DECEMBER2010 **	ARENDED31
Cash flows from operating activities Sales from trading portfolio Purchases for trading portfolio Interest received Proceeds from entering into options in options written portfolio Payment to close out options in options written portfolio Dividends and distributions received Administration expenses Finance costs paid Taxes paid Other receipts Net cash inflow/(outflow) from operating activities Cash flows from investing activities Sales from investment portfolio Purchases for investment portfolio Net cash inflow/(outflow) from investing activities Cash flows from financing activities Share issues under Share Purchase Plan Share issues under Dividend Reinvestment Plan Share issues transaction costs Dividends paid Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash held Cash at the beginning of the half-year Cash at the end of the half-year	Half-year 2010 $’000 INFLOWS/ (OUTFLOWS) 1,737 (1,787) 82 - (60) 3,037 3,009 (594) (51) - - 2,364 6,400 (10,613) (4,213) - 1,833 (7) (3,897) (2,071) (3,920) 4,955 1,035	Half-year 2009 $’000 INFLOWS/ (OUTFLOWS) 2,280 (5,047) 258 - - 1,517
		(992) (587) - (88) 48
		(1,619)
		2,399 (11,509)
		(9,110)
		9,894 1,475 (36) (3,538)
		7,795
		(2,934) 21,975
		19,041

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

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

1. Basis of preparation of half-year financial report

This general purpose half-year financial report has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This 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 2010 Annual Report and public announcements made by the Company during the half-year, in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

The Company 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 as quoted

on the ASX

2. Financial reporting by segments

The Company operates as a Listed Investment Company in Australia. It has no reportable business or geographic segments.

3. 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 potentially required the Company, if they were exercised, to deliver securities to the value of $0.8 million (30 June 2010 : $3.4 million).

4. Deferred tax liabilities – investment portfolio

At balance date, the Company had unused losses on the sale of investments available to set-off against future capital gains of $6.3 million (30 June 2010: $7.3 million). During the half-year, $1.0 million worth of brought forward losses were applied to realised capital gains.

The Deferred Tax liability of $7.4 million (30 June 2010 : $2.0 million) is after the application of the unused losses noted above.

5. Shareholders’ equity – share capital

Movements in Share Capital of the Company during the half-year were as follows:

Date	Details	Notes	Number	Issue	Paid-up
			of shares	price	Capital
			’000	$	$’000
01/07/2010	Opening Balance		194,870		120,447
27/08/2010	Dividend Reinvestment Plan	i	3,055	0.60	1,826
31/12/2010	Balance		197,925		122,273

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• i The Company has a Dividend Reinvestment Plan under which 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 issue was at a 2.5% discount to the calculated price.

6. Dividends	Half-year	Half-year
	2010	2009
	$’000	$’000
Dividends provided for or paid during the period	3,897	3,538
	(2 cents per	(2 cents per
	share)	share)
7. Earnings per Share	Half-year 2010	Half-year 2009
	Number	Number
Weighted average number of ordinary shares used as the	196,961,840	180,302,080
denominator
Basic earnings per share
	$’000	$’000
Profit for the half-year	5,041	4,161
	Cents	Cents
Basic earnings per share	2.56	2.31
Net operating profit before net gains on investments per
share
	$’000	$’000
Net operating profit for the half-year	3,328	2,799
	Cents	Cents
Net operating profit per share	1.69	1.55

Dilution

As there are no options, convertible notes or other dilutive instruments on issue, diluted net profit per share is the same as basic net profit per share. This similarly applies to diluted net operating profit before net gains on investments per share.

8. Events subsequent to balance date

On 5 January 2011, the Company issued 11.2 million of shares for a total of $7.1 million in additional capital as a consequence of its Share Purchase Plan.

Since 31 December 2010 to the date of this report there has been no other event of which the Directors are aware which has had a material effect on the Company or its financial position.

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9. 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.

10. Effects of Restatement of Prior Year Interim Results

Subsequent to the release of the results for the 6 months ended 31 December 2009, the Board has revised the accounting policy regarding the treatment of gains or losses on puttable instruments held within the Investment Portfolio.

As noted in the 2010 Annual Report, puttable instruments in the Investment Portfolio provide the Company with a beneficial interest in the net assets of the investment and a right to receive distributions and they are therefore monitored by the Company in the same way as the other instruments in the investment portfolio. Under some closely defined circumstances, the issuer of these instruments has a contractual obligation to repurchase or redeem that instrument for cash or another financial asset on exercise of the put. Although these instruments can be classified by the issuer as ‘equity instruments’ under AASB 132 where certain criteria are fulfilled, this classification is unavailable to the Company under AASB 9 and therefore these must now be classified as ‘fair value through profit or loss.’

The effect of this change (after tax) would have had a material impact on the results for the 6 months to the end of 31 December 2009, as noted below :

(i) Net Profit

The unrealised gains, and the deferred tax expense on the gains, on puttable instruments previously recorded through Other Comprehensive Income as part of the unrealised gains on the investment portfolio are now recorded as part of profit. There is no impact on net operating profit, but it does result in the following restatement of net profit for the 6 months ending 31 December 2009 :

Net operating profit for the half-year Net gains on investments Profit for the half-year	As previously reported $’000 Unrealised gain on puttable instruments $’000 Restated $’000 2,799 - 2,799 526 836 1,362
	3,325 836 4,161

(ii) Other Comprehensive Income

Other Comprehensive Income is therefore reduced by the same amount, resulting in the following restatement of Other Comprehensive Income for the 6 months ending 31 December 2009 :

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Unrealised gains for the period on securities in the portfolio on 31 December Deferred tax expense on above Other movements Other Comprehensive Income for the half-	As previously reported $’000 Unrealised gain on puttable instruments $’000 Restated $’000 26,811 (1,194) 25,617 (5,077) 358 (4,719) 47 - 47
	21,781 (836) 20,945

year

(iii) Earnings per share

Earnings per share, although not net operating profit per share, are also affected by the change in accounting treatment.

change in accounting treatment.
		Unrealised
	As	gain on
	previously	puttable
	reported	instruments	Restated
	Cents	(per share)	Cents
		Cents
Basic Earnings per share	1.84	0.47	2.31

(iv) Shareholders’ equity

There is no impact on shareholders’ equity from the above changes, as the changes move unrealised gains from one part of Comprehensive Income (Other Comprehensive Income) to another (Net Profit).

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