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Investments Limited
Annual
Report
For the year ended
30 June 2021
ACN 628 753 220
Hearts and Minds Investments Limited
For the year ended 30 June 2021
Contents
Corporate Directory
Chairman and Chief Executive Officer’s Letter
Investment Committee Report
Medical Research Report
Directors’ Report to Shareholders
Auditor’s Independence Declaration
Financial Statements
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Review Report to the Shareholders
ASX Additional Information
1
2
7
14
19
31
32
33
34
35
36
57
58
62
Corporate Directory
Directors
(Pro bono)
Company Secretary
(Pro bono)
Investment Committee
(Pro bono)
Core Fund Managers
(Pro bono)
2020 Conference Fund Managers
(Pro bono)
Registered Office
Auditor
Administrator
Share Registrar
Stock Exchange
Hearts and Minds Investments Limited
ACN 628 753 220
Corporate Directory
Chairman and Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chairman
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds AM
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Tom Bloomfield
David Wright
Christopher Cuffe AO
Lorraine Berends
Brett Paton
Paul Rayson
Caledonia (Private) Investments
Cooper Investors
Magellan Asset Management
Paradice Investment Management
Regal Funds Management
TDM Growth Partners
Jericho Capital Asset Management (USA)
Cota Capital (USA)
Tekne Capital Management (USA) Tribeca Investment Partners
ARK Invest (USA)
Prince Street Capital (SG)
Paradice Investment Management VGI Partners
Atreides Management (USA)
TDM Growth Partners
Regal Funds Management
Milford Asset Management
Munro Partners
Cooper Investors
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Pitcher Partners
Level 16, Tower 2 Darling Park
201 Sussex Street, NSW 2000
Telephone: (02) 9221 2099
Citco Fund Services (Australia) Pty Limited
Level 22, 45 Clarence Street
Sydney NSW 2000
Telephone: (02) 9005 0400
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Telephone: (02) 9290 9600
Australian Securities Exchange
The home exchange is Sydney
ASX code: HM1 Ordinary Shares
1
Hearts and Minds Investments Limited
Chairman and Chief Executive Officer’s Letter
For the year ended 30 June 2021
Chairman and Chief Executive Officer’s Letter
Dear Shareholders,
On behalf of the Board and management we would like to thank you for your support of Hearts and Minds Investments
Limited (hereafter referred to as ‘HM1’ or the ‘Company’) and we are delighted to share the Annual Report for the year
ended 30 June 2021.
HM1 is a listed investment company that was established in 2018 with the combined objective of providing a
concentrated securities portfolio of the highest conviction ideas from respected fund managers, whilst also supporting
Australian medical research institutes. It was born out of the investment and philanthropic vision of the Sohn Hearts &
Minds Investment Leaders Conference.
The COVID-19 pandemic continues to be a major challenge for communities around the world and many families and
businesses have been severely impacted by the ongoing health crisis, rolling lockdowns and economic impact. Despite
this backdrop, global share markets soared over the last financial year, rebounding from the lows of the pandemic
induced recession and posting returns well in excess of long term averages.
The HM1 portfolio posted a very pleasing pre-tax investment return of 28.0% for the year ended 30 June 2021, in line
with the significant increase in the global equity benchmark, the MSCI World Net Total Return (AUD) Index, which
increased 27.5% over the same period. Since the inception of the Company in November 2018, HM1 has generated a
compound annual pre-tax investment return of 28.1% compared to the MSCI World Net Total Return (AUD) Index
increase of 16.6% per annum over the same period.
For the year ended 30 June 2021, HM1 recorded total comprehensive income after tax of $157,948,475 (2020:
$117,553,802). The result was partly driven by net realised gains from the 2019 Conference Portfolio which was
disposed of during the year. Further net realised gains were generated from both the Core Portfolio and the 2020
Conference Portfolio where our fund managers recommended the taking of some profits on investment holdings that
had exceeded expectations. In addition to the net realised gains, the financial result for the year reflects net unrealised
gains in the market value of our total investment portfolio on 30 June 2021. Further details of the performance of the
investment portfolio can be found in the Investment Committee Report. HM1’s post-tax net tangible assets have
increased 18.1% over the year from $750.5 million on 30 June 2020 to $886.0 million as of 30 June 2021.
In April 2021 HM1 paid its first dividend to shareholders. A fully franked dividend of 12 cents per ordinary share
amounting to a total dividend of $27.0 million was paid on 20 April 2021. Our dividend reinvestment plan was operational
and many shareholders reinvested their dividend in HM1 shares at a 2.5% discount to the prevailing market price. The
dividend policy of HM1 aims to pay a fully franked annual dividend in April each year following the realisation of the
previous year’s Conference Portfolio, subject to sufficient cash reserves and available franking credits and it is within
prudent business practice.
In line with its philanthropic objective, HM1 provides financial contributions 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 forego any investment fees and instead donate an
amount equivalent to 1.5% of net tangible assets per annum to designated medical research organisations.
The current designated medical research organisations are Victor Chang Cardiac Research Institute, Black Dog
Institute, Charlie Teo Foundation, The Children’s Hospital at Westmead – Kids Critical Care Research, The Florey
Institute of Neuroscience and Mental Health, Multiple Sclerosis Research Australia, Orygen, Centre of Human
Psychopharmacology at Swinburne University and RPA Green Light Institute. More information on the wonderful work
of these organisations can be found in the Medical Research Report.
During the year ended 30 June 2021, HM1 paid $11.3 million to its designated medical research organisations and
made provision for a further $6.4 million. These donated monies will be used by the medical research organisations to
fund important research into the prevention and treatment of chronic diseases and mental health disorders. The current
pandemic highlights the critical importance of medical research to global health outcomes and economic prosperity.
2
Hearts and Minds Investments Limited
Chairman and Chief Executive Officer’s Letter (continued)
For the year ended 30 June 2021
HM1’s Investment Approach
HM1 seeks to provide shareholders with a compelling and attractive investment proposition by creating a concentrated
portfolio of long positions in Australian and international listed securities based on the highest conviction ideas from
two groups of fund managers.
• HM1 has invested approximately 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).
• HM1 has invested approximately 65% of its investment portfolio based on the highest conviction ideas of six
respected fund managers (known as the Core Fund Managers). These fund managers are Caledonia (Private)
Investments, Cooper Investors, Magellan Asset Management, Paradice Investment Management, Regal
Funds Management and TDM Growth Partners.
The Board’s view is that the investment strategy offers investors an opportunity to:
•
•
•
gain exposure to the highest conviction ideas, investment approach and expertise of each fund manager, a
number of whom are not otherwise readily accessible to retail investors;
benefit from having a portfolio that is not concentrated on the philosophy or investment style of just one fund
manager; and
access a concentrated portfolio of Australian and international listed securities which are expected to provide
attractive shareholder returns over the long term (being five years or more).
Company Performance
As a listed investment company, we use three key measures to evaluate the performance of HM1:
1.
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 Net Total Return (AUD) Index, is also measured before taxes. Our investment
performance compared to this benchmark is reported to shareholders on a monthly basis;
2. Net tangible asset (NTA) growth, which is a post-tax measure and 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- and post-tax NTA per share of the Company is reported to shareholders
on a weekly basis; and
3. 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
Performance to 30 June 2021
6 months
1 year
Since inception1
HM1 investment portfolio performance
MSCI World Net Total Return (AUD) Index
Out/(Under) performance
1. Inception 14 November 2018
28.0%
27.5%
0.5%
28.1% p.a.
16.6% p.a.
11.5% p.a.
10.5%
16.2%
(5.7%)
3
Hearts and Minds Investments Limited
Chairman and Chief Executive Officer’s Letter (continued)
For the year ended 30 June 2021
Global share markets soared over the last financial year rebounding from the lows of the pandemic induced recession
and posting returns well in excess of long term averages. In the first part of the year market returns were largely driven
by the continuing growth in new economy sectors that benefited from the accelerated shift to online commerce and
behaviour. As economic recovery gained traction, propelled by massive monetary and fiscal stimulus, the latter part of
the financial year saw very strong market gains in more traditional sectors such as financials, industrials, resources and
property sectors.
Over the year the HM1 portfolio also posted a very high return in line with the broader market, largely driven by our
portfolio holdings that are overweight in new economy sectors. HM1 outperformed the market in the first half of the year
but underperformed the market in the latter six months (while still posting a very healthy 10.5% return for the half), as
traditional sectors gained favour. The overall portfolio investment return for the year of 28.0% was driven by strong
realised and unrealised gains across both our Core and Conference Portfolios.
Since inception of the Company in November 2018, HM1 has generated a compound annual investment return of
28.1% compared to the MSCI World Net Total Return (AUD) Index of 16.6% per annum over the same period.
2. NTA Growth
HM1’s post-tax NTA increased 18.1% over the year from $750.5 million on 30 June 2020 to $886.0 million as of 30 June
2021. The following chart shows the components of the change in post-tax NTA over this period. The major increase
in post-tax NTA came from realised and unrealised gains from the investment portfolio, partially offset by the tax
expense on realised gains and the donation expense. HM1 also paid a fully franked dividend of 12 cents per share
amounting to a total dividend payment of $27.0 million. An amount of $4.5 million was reinvested by shareholders in
additional HM1 shares via the dividend reinvestment plan. On a per share basis, HM1’s post-tax NTA per share has
increased from $3.34 on 30 June 2020 to $3.92 on 30 June 2021. The pre-tax NTA per share on 30 June 2021 was
$4.33.
HM1 NTA Performance
4
Hearts and Minds Investments Limited
Chairman and Chief Executive Officer’s Letter (continued)
For the year ended 30 June 2021
3. Total Shareholder Return
Total shareholder return measures the change in the HM1 share price plus dividends paid. HM1’s share price has
increased from $2.50 at listing on 14 November 2018 to $4.32 on 30 June 2021. In addition, HM1 paid a fully franked
dividend of 12 cents per share to shareholders in April 2021. The chart below depicts HM1’s total shareholder return
to 30 June 2021 represented as the increase in the value of a $10,000 investment in HM1 shares from the date of
listing, assuming the reinvestment of dividends. The value of the initial investment has grown 82.1% to $18,213 on 30
June 2021.
Dividend Policy
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. 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. HM1 aims to pay a fully franked annual dividend to its shareholders in April each year
following the realisation of the previous year’s Conference portfolio.
Fund Managers and Service Providers
Through their investment in HM1, shareholders gain exposure to the highest conviction ideas, investment approach
and expertise of respected fund managers, and make a significant contribution to advancing medical research in
Australia. This is made possible by all of our participating fund managers foregoing investment management and
performance fees. The Board of Directors, the Investment Committee and many of our service providers also work on
a pro bono basis.
We note that over the past 18 months each of our service providers enacted their business continuity plans due to the
pandemic providing HM1 with uninterrupted service delivery.
5
Hearts and Minds Investments Limited
Chairman and Chief Executive Officer’s Letter (continued)
For the year ended 30 June 2021
We sincerely thank our fund managers and service providers for their ongoing involvement and generosity in supporting
the operations and objectives of HM1. The notional value of the investment and performance fees foregone by the
participating fund managers totalled $12.7 million for the year. The notional value of the service providers and the Board
and Investment Committee working on a pro bono basis totalled $0.7 million for the year.
Finally, we would also like to thank you, our shareholders, for supporting HM1’s combined objective of providing a
compelling and attractive investment proposition whilst also supporting the advancement of medical research in
Australia.
Christopher Cuffe AO
Chairman
Paul Rayson
Chief Executive Officer
Sydney
26 August 2021
6
Hearts and Minds Investments Limited
Investment Committee Report
For the year ended 30 June 2021
Investment Committee Report
The Investment Committee of HM1, in conjunction with the Chief Investment Officer (CIO), is responsible for
implementing the Company’s investment strategy, including the selection of fund managers, managing the investment
portfolio and reviewing fund manager performance. The Company’s Investment Committee consists of David Wright
(Chairman), Christopher Cuffe, Lorraine Berends, Paul Rayson and Brett Paton. The Investment Committee’s
experience and qualifications are provided in the Directors Report.
HM1 Investment Strategy
HM1 seeks to provide shareholders with a compelling investment proposition by creating a concentrated portfolio of
long positions in Australian and international listed securities based on the highest conviction ideas from two groups of
fund managers.
•
•
65% of the investment portfolio is held in up to 18 securities based on the highest conviction ideas of our Core
Fund Managers. On a quarterly basis, the Core Fund Managers provide or confirm with HM1 their top three
security holding recommendations and a weighting for each security.
35% of the investment portfolio is held in 10 to 15 securities based on the annual investment recommendations
of our Conference Fund Managers. HM1 generally allocates an equal weight investment to each of these
recommendations. These securities are expected to be held in the portfolio for a period of up to 12 months.
After this period the securities are expected to be sold in order to invest in the recommendations of the selected
Conference Fund Managers who present at the next Conference.
HM1 may vary the holding period for Conference Portfolio securities in certain circumstances. This may include if the
original investment thesis of the fund manager has played out, or if factors have changed such that the original
investment thesis no longer applies. Where a security is held for a shorter period, HM1 may hold cash until the end of
the annual period or reinvest in the remaining securities based on updated recommendations from Conference Fund
Managers. The holding period of a security may be extended if the original investment thesis of the fund manager
remains in place but the potential value is not yet reflected in the security price.
HM1 aims to be fully invested subject to an appropriate cash buffer to meet tax liabilities, dividend payments, donation
payments and general expenses.
HM1 Portfolio Performance
As noted in the Chairman and Chief Executive Officer’s Letter, the investment portfolio has returned 28.0% on a pre-
tax basis for the year ended 30 June 2021. By way of comparison, the MSCI World Net Total Return (AUD) Index
benchmark increased by 27.5% over the same period. Since inception on 14 November 2018, the investment portfolio
has generated a compound annual return of 28.1% compared to the benchmark index of 16.6% per annum over the
same period.
Performance to 30 June 2021
6 months
1 year
Since inception1
HM1 investment portfolio performance
MSCI World Net Total Return (AUD) Index
Out/(Under) performance
1. Inception 14 November 2018
28.0%
27.5%
0.5%
28.1% p.a.
16.6% p.a.
11.5% p.a.
10.5%
16.2%
(5.7%)
7
Hearts and Minds Investments Limited
Investment Committee Report (continued)
For the year ended 30 June 2021
Global share markets soared over the last financial year rebounding from the lows of the pandemic-induced recession
and posting returns well in excess of long term averages. In the first part of the year market returns were largely driven
by the continuing growth in new economy sectors that benefited from the accelerated shift to online commerce and
behaviour. As economic recovery gained traction, propelled by massive monetary and fiscal stimulus, the latter part of
the financial year saw very strong market gains in more traditional sectors such as financials, industrials, resources and
property sectors.
The HM1 portfolio posted a very high return in line with the broader market, largely driven by our portfolio holdings that
are overweight in new economy sectors. HM1 outperformed the market in the first half but underperformed the market
in the latter six months (while still posting a very healthy 10.5% return for the half), as traditional sectors gained favour.
The overall portfolio investment return for the year of 28.0% was driven by strong realised and mark-to-market gains
across both our Core and Conference Portfolios.
The 2019 Conference Portfolio was sold in November 2020 realising a pre-tax gain of 67% for the 12 month holding
period. Most stocks in the 2019 Conference Portfolio performed well with the major contributors being Tesla Inc. (TLS),
Spotify Technology S.A. (SPOT), GDS Holdings Ltd (GDS), The Trade Desk Inc (TTD), Floor & Decor Holdings Inc.
(FND) and Mineral Resources Ltd (MIN). Note that roughly two thirds of the market gains from the 2019 Conference
Portfolio were reported in the financial year ended 30 June 2020.
The 2020 Conference portfolio is also tracking well. At 30 June 2021, the 2020 Conference Portfolio had generated a
pre-tax return on investment of 28% in realised and unrealised gains over the 7 month holding period. Major contributors
to the 2020 Conference portfolio return to date are Yeakha Limited (9923.HK), Slack Technologies Inc. (WORK),
Bill.com Holdings Inc (BILL), HelloFresh SE (HFG.DE), Target Corporation (TGT), Shenzhou International Group
(2313.HK) and Treasury Wine Estates (TWE.AX). Under performers in the Conference portfolio to date are Yext Inc.
(YEXT), Ping An Healthcare and Technology (1833.HK) and Teladoc Health Inc. (TDOC).
The Core Portfolio has delivered an annualised pre-tax return of 20% since inception in both realised and unrealised
gains. Major contributors to the Core Portfolio return in the year to 30 June 2021 have been Zillow Group Inc (Z),
Alphabet Inc. (GOOG), Microsoft Corporation (MSFT), Megaport Ltd (MP1), Danaher Corporation (DHR), Appen
Limited (APX) and AIA Group Limited (1299.HK). Detractors from the performance of the Core Portfolio over the year
to 30 June 2021 were Nuix Limited (NXL), Opthea Limited (OPT) and Orica Limited (ORI).
Set out on the next page is a table of the portfolio holdings of HM1 on 30 June 2021 ranked by the market value of
HM1’s holdings.
8
HM1 Portfolio Holdings on 30 June 2021
Company Name
Zillow Group, Inc. - C
Mineral Resources Ltd
Alphabet, Inc. Class C
Megaport Ltd
HelloFresh SE
Bill.com Holdings, Inc.
Microsoft Corporation
Formula One Group
Hearts and Minds Investments Limited
Investment Committee Report (continued)
For the year ended 30 June 2021
Exchange
Listing
No. of Securities
Held
30 June 2021
Market Value of
Securities Held
30 June 2021
Percentage of
Portfolio
United States
510,000
$83,120,683
Australia
1,200,000
$64,476,000
United States
16,600
$55,480,613
Australia
Germany
United States
United States
United States
2,094,601
$38,603,496
275,001
$35,649,240
140,000
$34,198,160
85,000
$30,706,094
475,000
$30,537,072
Just Eat Takeaway.com N.V.
United States
1,224,575
$29,818,295
Alibaba Group Holding Ltd
AIA Group Ltd
Twitter, Inc.
Target Corporation
Tyro Payments Ltd
United States
Hong Kong
United States
United States
97,000
$29,334,125
1,750,000
$29,001,132
300,000
$27,527,670
85,000
$27,400,853
Australia
6,545,455
$24,087,274
Shenzhou International Group Ltd
Hong Kong
700,000
$23,573,563
Treasury Wine Estates Ltd
Danaher Corporation
Netflix, Inc.
Australia
United States
United States
2,000,000
$23,360,000
65,000
$23,260,968
32,000
$22,539,965
Temple & Webster Group Ltd
Australia
2,000,000
$21,580,000
Spotify Technology S.A
HDFC Bank Ltd
Nintendo Co. Ltd
CSL Ltd
Yext, Inc.
Teladoc Health, Inc.
United States
United States
Japan
Australia
United States
United States
55,000
$20,212,628
200,000
$19,501,267
25,000
$19,388,779
65,000
$18,537,350
965,000
$18,388,919
80,000
$17,739,965
Ping An Healthcare and Technology Ltd
Hong Kong
1,050,000
$17,436,744
Orica Ltd
Opthea Ltd
Australia
Australia
1,150,000
$15,272,000
10,000,000
$13,350,000
Dish Network Corporation
United States
225,000
$12,541,673
IDP Education Ltd
T-Mobile US, Inc.
Australia
475,000
$11,656,500
United States
60,000
$11,587,945
Fisher & Paykel Healthcare Corp. Ltd
Australia
400,000
$11,568,000
Total Equity Securities
$861,436,973
100.00%
9
9.65%
7.48%
6.44%
4.48%
4.14%
3.97%
3.56%
3.54%
3.46%
3.41%
3.37%
3.20%
3.18%
2.80%
2.74%
2.71%
2.70%
2.62%
2.51%
2.35%
2.26%
2.25%
2.15%
2.13%
2.06%
2.02%
1.77%
1.55%
1.46%
1.35%
1.35%
1.34%
Hearts and Minds Investments Limited
Investment Committee Report (continued)
For the year ended 30 June 2021
Risk Analysis
The following information summarises the risk metrics of the security holdings in the HM1 portfolio on 30 June 2021
based on analysis prepared by Zenith Investment Partners. The analysis is a snapshot of the portfolio structure and
biases at that point in time and does not reflect any future biases within the portfolio.
Industry Exposure Biases
While the portfolio is concentrated in a relatively small number of securities, sector exposure is diverse but clearly
weighted to certain industry sectors. Compared to the broad MSCI World Index ex Australia the HM1 portfolio exhibits
positive biases to the Internet Software and Services, Diversified Metals, Retailing, Media, IT Services and Software
and Consumer Durables. The portfolio has negative (underweight) biases to the Financial, Computers and Electronics,
Transportation, Machinery, Pharmaceuticals, Utilities, Semiconductors and Real Estate sectors. The chart below shows
the differences in sector exposure of the portfolio compared to the broad MSCI World Index ex Australia on 30 June
2021. Note industry sectors where there is not a major difference in exposure are not shown in the chart.
Active Style Biases
The chart below illustrates the style tilts exhibited in the portfolio based on the securities in the portfolio on 30 June
2021.
10
Hearts and Minds Investments Limited
Investment Committee Report (continued)
For the year ended 30 June 2021
Consistent with HM1’s capital growth objective, the portfolio exhibits a strong factor bias to securities categorised as
growth securities with consequently higher volatility. Other significant style biases include a negative bias to size,
dividend yielding securities and value categorised securities. Despite strong liquidity in the portfolio holdings, the
negative size factor indicates a bias to mid capitalisation securities in the portfolio compared to that of the comparative
benchmark, the MSCI World Index (AUD). Eleven of the companies in the portfolio have a market capitalisation of over
US$50 billion. The smallest security is capitalised at A$430 million.
Risk Metrics
The following table provides a number of risk measures associated with the blend of securities that form the HM1
portfolio on 30 June 2021 compared to the MSCI World Index (AUD). As these risk measures are taken at a specific
point in time, these factors may not be predictive of the risk characteristics of the HM1 portfolio going forward. The
portfolio displays a very high active share measure which indicates the portfolio is a true ‘stock pickers’ portfolio, is
actively managed and does not closely track either the composition or performance of the MSCI World Index (AUD).
HM1 Portfolio Risk Metrics (current portfolio since inception to 30 June 2021)
Portfolio Beta
Tracking Error
Active Share
Portfolio Volatility
Correlation (with Benchmark)
Sharpe Ratio
Upside Capture
Downside Capture
1.13
24.4%
93.5%
28.1%
0.49
0.75
109.5%
86.5%
David Wright
Chairman
Rory Lucas
Chief Investment Officer
11
Hearts and Minds Investments Limited
Investment Committee Report (continued)
For the year ended 30 June 2021
Our Fund Managers
We sincerely thank our participating fund managers that provide their time, expertise and highest conviction investment
ideas on a pro bono basis. The notional value to HM1 of the investment management fees and performance fees
foregone is equivalent to $12.7m.
Core Fund Managers
Six Core Fund Managers each provide their three highest conviction investment ideas which are reviewed quarterly.
These securities represent 65% of the total investment portfolio. Each Core Fund Manager has made a minimum three-
year commitment to HM1.
Core Fund Managers
Caledonia (Private) Investments Pty Limited is a global investment management firm with offices
in Sydney and New York. With over 25 years’ investment experience, Caledonia’s goal is to
achieve high absolute returns for their clients over a long-term time horizon. The firm manages
a long short equity strategy with a focus on deep fundamental research and high conviction
long-term investing.
Cooper Investors Pty Limited is a specialist equities fund manager with funds under
management of approximately $14 billion. Cooper Investors commenced operations in 2001
and manages money for a range of clients, including large pension and superannuation funds,
religious institutions, Australian State Government agencies, school endowments, charities, high
net worth families and retail clients. Cooper Investors is 100% owned by its employees. Cooper
Investors seeks to invest in quality companies with a strong value proposition.
Magellan Asset Management Limited is an Australian-based asset manager that is a wholly-
owned subsidiary of Magellan Financial Group Limited, an ASX top-100 company that was
formed by Hamish Douglass and Chris Mackay in Sydney in 2006. Magellan manages more
than $100 billion across its global equities, global listed infrastructure and Australian equities
strategies for retail, high net worth and institutional investors and employs over 120 staff globally.
Paradice Investment Management Pty Limited is a privately-owned Australian boutique funds
management business established in 1999 by David Paradice. Paradice currently manages
over $15 billion in assets across five distinct investment strategies including Australian small
cap, mid cap and large cap equities, global small cap equities and emerging market equities.
Paradice has offices in Sydney, Denver and San Francisco.
Regal Funds Management Pty Limited is a specialist alternatives investment manager. It was
founded in early 2004 and services a wide range of institutional investors and high net worth
individuals. The investment team has extensive investment experience through many market
cycles and a long track record of delivering superior returns for investors. Regal offers a range
of products to suit different investment objectives.
TDM Growth Partners Pty Limited is a global investment firm with offices in Sydney and New
York. TDM invests in fast growing companies run by passionate management teams. Their
unique and flexible mandate allows them to invest in public and private companies globally.
They operate on long-term time horizons, fully aligned incentives, and a commitment to help
scale businesses they are proud of. TDM has a highly focused approach to investing, with a
portfolio of no more than 15 investments globally.
12
Hearts and Minds Investments Limited
Investment Committee Report (continued)
For the year ended 30 June 2021
Conference Fund Managers
The remaining 35% of the investment portfolio is invested in 10 to 15 recommendations from the fund managers who
present at the annual Sohn Hearts & Minds Investment Leaders Conference. Each year this group of fund managers
will change based on the conference program of speakers and their eligible recommendations. The speakers are invited
onto the program following a rigorous six-month selection process by the HM1 Board and Investment Committee. The
2020 Conference Fund Managers are set out below.
Babak Poushanchi
Cota Capital (USA)
Beeneet Kothari
Tekne Capital Management (USA)
Catherine Wood
ARK Invest (USA)
David Halpert
Prince Street Capital (SG)
David Moberley
Paradice Investment Management
Gavin Baker
Atreides Management (USA)
Hamish Corlett
TDM Growth Partners
Josh Resnick
Jericho Capital Asset Management (USA)
Jun Bei Liu
Tribeca Investment Partners
Nick Griffin
Munro Partners
Qiao Ma
Cooper Investors
Robert Luciano
VGI Partners
Todd Guyot
Regal Funds Management
William Curtayne
Milford Asset Management
13
Hearts and Minds Investments Limited
Medical Research Report
For the year ended 30 June 2021
The Black Dog Institute
As the only medical research institute in Australia to investigate mental health across the lifespan, Black Dog’s
aim is to create a mentally healthier world for everyone. They do this through translational research, integrating
their research studies, education programs, digital tools and apps, clinical services, and public resources to
discover new solutions, foster connections and create real-world change. Black Dog’s partnerships with people
with lived experience, federal, state and local governments, communities, schools, corporate Australia and
others in the mental health sector enables them to drive evidence-informed change in mental health where it’s
needed most. Continuing to expand and progress their work through the pandemic, Black Dog’s FY20/21
highlights include:
•
•
•
•
•
•
•
•
Expansion and recruitment for the Future Proofing Study, a world-first research study aiming to prevent
depression and anxiety in young people. Over 7,400 high school students have been enrolled to date.
Serviced over 35,000 healthcare workers through The Essential Network (TEN), an e-health hub
developed by health professionals for frontline workers as part of the Australian Government’s COVID-
19 response.
Building on the extensive efforts across the suicide prevention sector, Black Dog Institute developed and
released a white paper that takes a major step towards addressing the critical research gap.
Launched the Bush Fire Support Service which offers emergency service workers and their adult family
members up to twelve one-on-one psychological mental health care sessions with experts, free of charge
via Telehealth.
Released COVID-19 resources for stress and anxiety to offer support and skills for those feeling anxious,
stressed or depressed as a result of the current changes.
Launched the LifeBuoy trial, a smartphone application designed to help young people manage suicidal
thoughts and negative feelings in daily life.
Developed Healthy Mind, a website that uses Easy Read tools to help people with an intellectual disability
recognise and regulate their thoughts and feelings.
The Aboriginal and Torres Strait Islander Lived Experience Network launched a universal definition of
lived experience as experienced by those communities, in a bid to help mental health and suicide
prevention service provision.
https://www.blackdoginstitute.org.au/
Charlie Teo Foundation
Funding game-changing brain cancer research with a low-cost and transparent model that’s redefining how
charities operate. The Charlie Teo Foundation’s goal is to develop better treatments and tools for brain cancer
to extend life and ultimately find a cure. Brain cancer survival has not improved in over 35 years, so research
is vital.
Key research goals are to produce and share more high-quality, well-annotated, biological and clinical data;
create better analytical, methodological and clinical tools; and to empower ‘out of the box’ thinkers to pursue
creative and unusual scientific ideas, challenging the orthodox way of thinking.
Exciting recent developments from funded research:
•
•
•
•
A space biologist at the University of Technology, Sydney has now built the world’s first fully functioning
brain tumour on a microchip. He plans to launch the chip into space to study it at zero gravity, aiming to
mimic changes with new drug treatments for brain cancer.
Experimental drug PXS-5505 is being tested in brain cancer under a collaboration between an Australian
pharmaceutical research company, and a major cancer centre in the U.S. The drug has potential to treat
brain cancer, by breaking down the tumour’s surrounding environment to enhance the effect of
treatments.
It has recently been discovered that the gut microbiome may cause some other neurological conditions
and cancers. A gastroenterologist and world expert in gut health at the Weizmann Institute of Science in
Israel is exploring whether there is potential link between the gut microbiome and brain cancer.
Charlie Teo Foundation Brain Tumour Bank has been established as the largest, certified, brain tumour
biobank of its kind in the southern hemisphere. The biobank continued to operate during COVID-19 under
emergency procedures, now housing samples from over 600 brain tumour patients, removed by Dr
Charlie Teo with patient consent. It is open-access and last year close to 200 samples were accessed by
Australian scientists to aid their research.
https://charlieteofoundation.org.au/
Suicide is the
leading cause of
death for
Australians
between 15 and
44 years of age.
Brain cancer kills
more children in
Australia than any
other disease.
14
Hearts and Minds Investments Limited
Medical Research Report (continued)
For the year ended 30 June 2021
The Florey Institute
In 1941, Howard Florey took the existing discovery of penicillin and through research and translation turned it
into a form that could be delivered to patients. In the process he changed millions of lives by providing treatment
to people who would otherwise have died or continued to suffer terribly, if not for penicillin. This example is
what drives all at the Florey Institute of Neuroscience and Mental Health. Just as we all know someone whose
life has been changed by penicillin, we also know someone who has been affected by at least one condition
that is studied at the Florey. Through the example of the Florey’s namesake, the Florey makes a difference to
the lives of people living with terrible diseases and disorders that affect the brain and mind.
In 2020, Florey researchers published 689 scientific papers relating to 18 different diseases including
depression, MND, epilepsy, stroke, dementia and Parkinson’s disease. The incredible advances happening at
the Florey were referenced in 41 countries. Several highlights of this world-class research include:
•
•
•
•
•
•
•
•
•
•
•
Pioneering new approaches to diagnose and treat Parkinson’s disease: developed a remarkable
approach to combating neuro-degeneration using stem cells. Researchers provided first-of-its-kind pre-
clinical evidence that stem cell and gene therapies together could be used to restore motor function in
Parkinson’s disease.
How the link between loss of smell and Parkinson’s could lead to ways to diagnose the disease earlier.
Bringing life-changing technologies to all Australians living with epilepsy through a nationwide network of
community hubs.
A new therapeutic compound for types of epilepsy that are experienced by children.
Advances on understanding stroke in children.
Study of the impact of the pandemic on stroke care.
Another world-first can improve the lives of people with diabetes and a further study trialled a method to
reduce disability as a result of stroke.
Translating a new treatment for sepsis to patient care: the treatment was successfully used in the
compassionate care of a patient who was critically ill with COVID-19.
Understanding how epigenetics and how gene-environment interactions may be passed down and affect
future generations to inform the latest approaches to diagnosing and treating dementia.
How we can improve brain health as we get older.
Better understanding the complex relationship between alcohol and stress.
https://www.florey.edu.au/
Kids Critical Care Research - The Children’s Hospital Westmead
Kids Critical Care Research (KCCR) at The Children’s Hospital at Westmead coordinates and conducts
research to inform practice in the largest paediatric intensive care unit (PICU) in NSW. Their vision is to deliver
world class, innovative, collaborative, flexible, research-informed care to enable positive patient and family
experiences. Half of their patients are less than 1 year of age and the impact of critical illness on future
neurodevelopment is a key focus of research.
The purpose of KCCR is to partner with consumers and staff to enable the study of critical illness in the young
to acquire new knowledge that can improve outcomes for critically ill children and their families in the future.
This year, KCCR organised and hosted a strategic research symposium to identify collaborators and partners
to leverage research opportunities within and outside the Westmead precinct. Four major themes of research
that will underpin the future research program at KCCR were explored, including:
Every year over
4.7 million
Australians are
directly affected
by one of the
illnesses that the
Florey
researches.
Data Science and Paediatric Critical Care Trial Design.
•
• Genomics, Transcriptomics and Metabolomics in Paediatric Critical Illness.
•
•
Red cell and Microvascular adaption to Paediatric Critical Illness.
Brain and Nervous System health and recovery from Paediatric Critical Illness.
Planning for investment of HM1 funds in each of these thematic research areas is underway, and most recently
KCCR committed significant start-up funding to a joint research collaboration between paediatric and neonatal
intensive care and anaesthesia called “Big Data in Little People”. The aim of this new collaborative is to capture
and analyse high frequency physiological data to predict and prevent adverse outcomes in intensive care,
operating theatres and the rest of the hospital using big data and artificial intelligence.
KCCR’s ultimate aim is to enable children to fulfil their potential by neuroprotection and early intervention for
any detected disability.
Each year the
PICU cares for
more than 1500
children with life-
threatening
conditions.
www.kidsresearch.org.au/research/kids-critical-care-research
15
Hearts and Minds Investments Limited
Medical Research Report (continued)
For the year ended 30 June 2021
MS Research Australia
MS Research Australia is the largest not-for-profit organisation dedicated to funding, coordinating, educating
and advocating for research into multiple sclerosis (MS). MS Research Australia is an internationally renowned
organisation and is part of a worldwide effort to solve MS. MS Research Australia has invested over $47 million
into funding and facilitating vital MS research and has awarded over 320 research grants where researchers
have made incredible progress. MS Research Australia believes the most exciting advances in MS research
are yet to occur, with their funding powering some incredible progress over the last year:
•
•
•
•
•
•
•
•
26 new MS research grants were awarded in 2021.
Important MS research projects around Australia received a funding lifeline of $275K and a 6-month
funding extension to enable vital research to continue despite the impact of COVID-19 lockdowns and
restrictions.
Research identified two genes that may influence MS onset, but failed to find any genes that influence
the severity of MS. This suggests that other factors play a major role in MS severity.
Epstein-Barr Virus (EBV), which has been implicated in MS onset, was found to interact with genes that
increase the risk of MS. This interaction could be blocked using a chemical that interferes with an EBV
protein. Investigations continue to see if this could be used as a therapy.
Autologous haemopoietic stem cell transplant (AHSCT), a treatment to remove immune cells that are
attacking the brain and spinal cord in MS, was found to stimulate the regrowth of a particular type of
immune cell that can suppress autoimmunity.
Two guides, one for people living with MS and one for healthcare professionals, were launched with
evidence-based recommendations on how people living with MS could modify their lifestyle to manage
their MS. They are the first of their kind to be published in Australia.
Two new treatments for relapsing remitting MS were approved by the Therapeutic Goods Administration
(TGA) and added to the Pharmaceutical Benefits Scheme (PBS).
The first ever treatment for secondary progressive MS was added to the PBS
10 people on
average are
diagnosed with
MS every week.
https://msra.org.au/
Orygen
Orygen is the world’s leading youth mental health organisation for young people aged 12-25. Working directly
with young people, their families and friends to combine evidenced-based research, innovative clinical
programs, advocate policy changes, and develop training programs to pioneer new, positive approaches to the
prevention and treatment of mental disorders. Orygen believes in treating early and focusing on recovery.
With thanks to Cooper Investors and HM1, Orygen has been able to trial innovative models of care for young
people with Bipolar Disorders (BLEND) and conduct a systematic review of the Sudarshan Kriya Yoga (SKY)
program.
BLEND will evaluate whether an innovative blended digital clinical model for young people with Bipolar
Disorders (BD) is safe, acceptable and better than usual care. The study will include a cohort of 160 young
people aged 15 to 25 years presenting with symptoms in the first few years after the onset of BD. Young people
will be randomly allocated to receive the BLEND intervention or standard treatments. The main outcomes of
interest are safety of the model, acceptability of the different components of the model and improvement in
depressive symptoms over 6 months. To deliver this study, Orygen have a team of young people, creative
writers, cartoonists, digital intervention experts, data analysts, psychologists and psychiatrists.
The SKY project, in collaboration with Sri Sri Institute of Advanced Research (SSIAR) India aims to trial an
innovative yoga-based intervention program for young people with anxiety and/or depression. In this
collaboration, Orygen propose to conduct three studies. First, a systematic review of SKY interventions in
mental health conditions. Second, explore the acceptability of the SKY intervention as piloted in US university
settings. Third, evaluate the efficacy of adding the SKY intervention to a standard package of care for youth
anxiety attending Orygen headspace settings.
Three-quarters of
people who
experience
mental illness do
so before they
turn 25.
www.orygen.org.au
16
Hearts and Minds Investments Limited
Medical Research Report (continued)
For the year ended 30 June 2021
RPA Green Light Institute
Despite the disruptions and challenges surrounding the ongoing COVID-19 health response, 2021 to 2023 is
shaping up to be an exciting period for the RPA Green Light Institute. We have expanded from two clinician
researchers to a team of 12 which has extended our emergency research capacity with leadership in numerous
research projects, across multiple sites and enabled partnerships with other research institutes.
The RPA Green Light Institute for emergency care is a unique research service embedded wholly within a
clinical service, with researchers from the institute working clinically in co-located emergency departments and
holding senior roles in looking after patients clinically. This creates many opportunities for research
engagement and translation and allows for clinical and research activities to occur simultaneously.
The RPA Green Light Institute remains acutely focused on emergency presentations and improving the
emergency service experienced by patients. They are currently leading and supporting more than 15 research
projects ranging from evaluating clinical procedures and medications to manage injury, improving cardiac
arrest and sepsis outcomes, analysing stroke presentations as well as studies looking at improving patient
flow, reducing waiting times and enhancing patient experience.
https://www.slhd.nsw.gov.au/research/department_details.html?research=emergencydept
One in five
Australians
present
to an Emergency
Department for
health care
each year.
Swinburne’s Centre for Human Psychopharmacology
Swinburne University of Technology is where people and technology come together for a better world.
Swinburne’s Centre for Human Psychopharmacology researches the biological determinants of cognitive
health across the lifespan. They research the ways diet, microbiome, oxidative stress and inflammatory
processes affect cognition as we age and develop novel interventions to improve cognition and improve mental
health and wellbeing.
Swinburne is proud to partner with Cooper Investors and HM1, applying scientific rigour and the latest
technology to study and improve mental health and wellbeing in early and later life.
Emotional Intelligence in Children and Adolescents: HM1 funds have enabled the employment of two talented
female scientists researching whether focused emotional intelligence development programs can improve
educational outcomes, well-being and future employability for Australian children and adolescents in low socio-
economic schools. Interactive online programs will enable the program to be delivered at scale across schools.
Healthy Cognitive Ageing: HM1 is supporting a team of young elite researchers studying the biological basis
of cognitive ageing. Findings indicate a relationship between telomeres, increased inflammation, oxidative
stress and cognitive ageing. This study utilises Swinburne’s comprehensive neuroimaging facility to
understand how anti-oxidants protect the brain from age. This research will lead to new interventions to reduce
cognitive ageing and promote wellbeing in the elderly.
Improving the Microbiome with Evidence-Based Yoga Interventions: In support of Cooper Investors’
collaboration with the Art of Living Institute in India we are conducting the first randomised controlled trial to
examine whether yoga improves the composition of our microbiome. The results for this study have important
implications for dozens of disorders related to our microbiome and for wellbeing in our community. Future
studies will use neuroimaging to better understand the neural processes associated with yoga based breathing
exercises and wellbeing.
http://www.swinburne.edu.au/research/human-psychopharmacology/
Worldwide,
around 50
million people
have dementia,
and there are
nearly 10 million
new cases every
year.
17
Hearts and Minds Investments Limited
Medical Research Report (continued)
For the year ended 30 June 2021
Victor Chang Cardiac Research Institute
The Victor Chang Cardiac Research Institute is dedicated to finding and accelerating the cures for heart
disease through world-class medical research. Its scientists are engaged in pioneering science that has
transformed the treatment of the world’s biggest killer.
The Institute holds a unique position of delivering clinical and fundamental research excellence that is focused
on ensuring new treatments, medications and strategies for heart disease reach GP surgeries and hospitals
on a whole new scale.
Research highlights
•
The Institute’s scientists based in Western Australia made a breakthrough discovery that could deliver
the first ever treatment for children with hypertrophic cardiomyopathy, the leading cause of sudden cardiac
death in children aged between five and 15.
There is currently no treatment that prevents the development of the disease, but hope is now on the
horizon. Using mouse models, researchers have discovered that by targeting a calcium channel in the
heart with medication they can prevent the disease from occurring altogether and may also be able to
reverse it.
•
The Institute’s Executive Director Professor Jason Kovacic has been working with an international team
of scientists who have discovered there are vast differences between men and women in what causes
diseases of the blood vessels at a genetic level. This research involved mapping the genetic profile of
hundreds of men and women at risk of coronary heart disease.
Whilst doctors have known there are different symptoms and different risk factors for heart attack for men
and women, this has allowed scientists for the first time to finally understand some of the core
mechanisms of Australia’s biggest killer and pave the way for new sex specific treatments in the future.
Heart attacks
claim the lives of
21 Australians
each day.
https://www.victorchang.edu.au/
18
Hearts and Minds Investments Limited
Directors’ Report to Shareholders
For the year ended 30 June 2021
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 annual report of the Company (Annual Report) for the year ended 30 June 2021.
Investment Objectives and Principal Activity
HM1 was established in 2018 with the combined objective of providing a concentrated investment portfolio of the
highest conviction ideas from respected fund managers, while also supporting Australian medical research
organisations.
HM1 seeks to provide shareholders with a compelling investment proposition by creating a concentrated investment
portfolio of long positions in 25 to 30 Australian and international listed securities based on the highest conviction ideas
from two groups:
•
•
HM1 has allocated 35% of the investment portfolio based on the annual investment recommendations of fund
managers who present at the Sohn Hearts & Minds Investment Leaders Conference (known as the Conference
Fund Managers).
HM1 has allocated 65% of the investment portfolio based on the highest conviction investment
recommendations of six leading fund managers (known as the Core Fund Managers). The Core Fund Managers
are Caledonia (Private) Investments Pty Limited, Cooper Investors Pty Limited, Magellan Asset Management
Limited, Paradice Investment Management Pty Limited, Regal Funds Management Pty Limited and TDM Growth
Partners Pty Limited.
No change in this activity took place during the period or is likely in the future.
Review of Operations
For the year ended 30 June 2021, HM1 reported total comprehensive income after tax of $158,177,548 (2020:
$117,553,802). The result reflects the strong performance of our investment portfolio and investment markets more
broadly over the year. The pre-tax return of the investment portfolio was 28.0% for the year ended 30 June 2021,
broadly in line with the global equity benchmark, the MSCI World Net Total Return (AUD) Index, which increased 27.5%
over the same period. The investment performance was primarily driven by net realised gains from the 2019 Conference
Portfolio which was disposed of during the financial year. Further net realised gains were generated from both the Core
Portfolio and the 2020 Conference Portfolio where our fund managers recommended the taking of some profits on
investment holdings that had exceeded expectations. In addition to the net realised gains, the financial result for the
period reflects the increase in net unrealised gains in the market value of our investment portfolio as at 30 June 2021.
The COVID-19 pandemic is a major challenge for communities around the world and many families and businesses
have been severely impacted by the ongoing health crisis and economic impact. Despite the economic impact, global
share markets have posted strong returns supported by significant monetary and fiscal stimulus and signs of post
pandemic recovery. The investment portfolio of HM1 has continued to perform well generating another year of strong
investment performance. Since the inception of HM1 in November 2018, HM1 has generated an annual investment
return of 28.1% compared to the MSCI World Net Total Return (AUD) Index return of 16.6% per annum over the same
period. Further details on the performance of the investment portfolio can be found in the Investment Committee Report.
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 forego any investment fees and instead donate an
amount equivalent to 1.5% of net tangible assets per annum to designated medical research organisations.
During the year ended 30 June 2021, HM1 paid $11.3 million to its designated medical research organisations and
provided a further $6.4m which will be paid at the end of August 2021. These donated monies will be used by the
medical research organisations to fund important research into the prevention and treatment of chronic diseases and
mental health disorders. The current pandemic highlights the critical importance of medical research to global health
outcomes and economic prosperity.
Further information on the financial performance of the Company is contained in the Chairman and Chief Executive
Officer’s Letter.
19
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Financial Position
HM1’s net tangible assets have increased from $750.5 million on 30 June 2020 to $886.0 million on 30 June 2021, an
increase of 18.1% over the financial year. In April 2021, HM1 paid an inaugural fully franked dividend of 12 cents per
share amounting to a total dividend of $27.0 million paid to shareholders. Shareholders electing to participate in the
dividend reinvestment plan reinvested $4.5 million of the dividend payment in the share capital of the Company resulting
in the issue of 1,033,817 new HM1 shares.
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.
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.
HM1 aims to pay a fully franked annual dividend to its shareholders in April each year following the realisation of the
previous year’s Conference Portfolio.
In April 2021, the Company paid an inaugural fully franked dividend of 12 cents per share. The Directors will consider
the next annual dividend payment after the half year ending 31 December 2021, following the disposal of the 2020
Conference Portfolio.
Directors
The following persons held office as Directors during the period or since the end of the period and up to the date of this
report:
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds AM
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Information of Directors
Chairman and Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Christopher Cuffe AO (Chairman and Independent Director)
Experience and expertise
Commencing his career as a chartered accountant, Christopher Cuffe entered the fund management industry in 1985.
In 1988, he joined Colonial First State where he was CEO from 1990 until 2003. In 2003, he became CEO of the listed
Challenger Group.
He holds a Bachelor of Commerce from the University of New South Wales and a Diploma from the Securities Institute
of Australia. He is a Fellow of the Chartered Accountants in Australia and New Zealand, a Fellow of the Institute of
Company Directors and an Associate of the Financial Services Institute of Australasia. In October 2007 Chris was
inducted into the Australian Fund Manager’s RBS Hall of Fame for services to the investment industry.
Christopher Cuffe has been Chairman of the Company since 12 September 2018, the date of incorporation.
20
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Information of Directors (continued)
Christopher Cuffe AO (Chairman and Independent Director) (continued)
Other current directorships
Christopher Cuffe is currently involved in a portfolio of activities in the investment and non-profit sectors which include:
member of the investment committee of UniSuper (a $95 billion profit-for-members superannuation fund); member of
the investment committee of the Paul Ramsay Foundation (Australia’s largest charitable foundation); Chairman of
Australian Philanthropic Services (a not for profit organisation assisting individuals, families and professional advisers
with effective philanthropy); Director of various listed companies including Global Value Fund Limited, Antipodes Global
Investment Company Limited and Argo Investments Limited; and founder, director and manager of Third Link Growth
Fund.
Former directorship in the last 3 years
Christopher Cuffe was a non-executive director of Class Limited from October 2017 to January 2020.
Special responsibilities
Chairman of the Board and member of the Investment Committee.
Interests in shares of the Company
Details of Christopher Cuffe’s interests in shares of the Company are included later in this report.
Interests in contracts
Christopher Cuffe has no interest in contracts of the Company.
Lorraine Berends (Independent Director)
Experience and expertise
Lorraine Berends has worked in the financial services industry for 40 years and possesses extensive experience in
both investment management and superannuation. Before moving to a non-executive career in 2014, she worked for
15 years with US based investment manager Marvin & Palmer Associates. She contributed extensively to industry
associations throughout her executive career, serving on the boards of the Investment Management Consultants
Association (now the CIMA Society of Australia) for 13 years (7 years as Chair) and the Association of Superannuation
Funds Australia (ASFA) for 12 years (3 years as Chair). She has been awarded life membership of both the CIMA
Society and ASFA. She holds a Bachelor of Science from Monash University, is a fellow of the Actuaries Institute and
a fellow of ASFA.
Other current directorships
Lorraine Berends is an independent non-executive director of ASX listed Pinnacle Investment Management Group
Limited and of listed investment companies Antipodes Global Investment Company Limited, Plato Income Maximiser
Limited and Spheria Emerging Companies Limited. She is also a company appointed director of Qantas
Superannuation Limited.
Special responsibilities
Member of the Investment Committee.
Interests in shares of the Company
Details of Lorraine Berends’ interests in shares of the Company are included later in this report.
Interests in contracts
Lorraine Berends has no interest in contracts of the Company.
21
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Information of Directors (continued)
Guy Fowler (Independent Director)
Experience and expertise
Guy Fowler is a co-founder of the Hearts and Minds Investment Leaders Conference. Guy is also the founder and Co-
Executive Chairman of Barrenjoey Capital Partners Pty Ltd. He worked in a range of senior positions at UBS Australia
for over 25 years including as the Head of Capital Markets and as the Head of the Corporate Advisory business. In
these roles he has advised on many of the largest and most complex equity capital markets and corporate transactions
completed in Australia. He is a qualified Chartered Accountant.
Other current directorships
None.
Special responsibilities
None.
Interests in shares of the Company
Details of Guy Fowler’s interests in shares of the Company are included later in this report.
Interests in contracts
Guy Fowler has no interest in contracts of the Company.
Matthew Grounds AM (Independent Director)
Experience and expertise
Matthew Grounds is a co-founder of the Hearts and Minds Investment Leaders Conference. Matthew is also the Co-
Executive Chairman of Barrenjoey Capital Partners Pty Ltd. Over the past 25 years, he held a variety of senior roles at
UBS including CEO and Country Head, Joint Global Head of the Investment Banking business, Head of Capital Markets
and Head of the Corporate Advisory business. In these roles, he has advised on many of the largest and most complex
equity capital markets and corporate transactions completed in Australia. He is also a Council Member of the University
of NSW, Chairman of Victor Chang Cardiac Research Institute and a Director of the Financial Markets Foundation for
Children. He holds a Bachelor of Commerce (Finance major) and a Bachelor of Laws from the University of New South
Wales.
Other current directorships
None.
Special responsibilities
None.
Interests in shares of the Company
Details of Matthew Grounds’ interests in shares of the Company are included later in this report.
Interests in contracts
Matthew Grounds is Chairman of Victor Chang Cardiac Research Institute which is a designated charitable beneficiary
of Hearts and Minds Investments Limited.
22
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Information of Directors (continued)
Michael Traill AM (Independent Director)
Experience and expertise
Michael Traill founded Social Ventures Australia in 2002, after 15 years as a co-founder and Executive Director of
Macquarie Group’s private equity arm, Macquarie Direct Investment. He is the author of “Jumping Ship – From the
world of corporate Australia to the heart of social investment” which won the prestigious Ashurst Business Literature
Prize. In 2010, he was made a member of the Order of Australia in recognition of his services to non-profit organisations.
He holds a BA (Hons) from the University of Melbourne and an MBA from Harvard University. He is also an Adjunct
Professor for the Centre for Social Impact (UNSW) and Chair of the Federal Government Task Force on Social Impact
Investing.
Other current directorships
Michael Traill currently has a range of primarily social purpose Chair and board roles including Chair of the Paul Ramsay
Foundation, Executive Director of For Purpose Investments, a Director of M H Carnegie & Co, Non-Executive Director
of Catalyst Education, Sunsuper (and Chair of the Investment Committee), and Australian Philanthropic Services.
Special responsibilities
None.
Interests in shares of the Company
Details of Michael Traill’s interests in shares of the Company are included later in this report.
Interests in contracts
Michael Traill has no interest in contracts of the Company.
Gary Weiss AM (Independent Director)
Experience and expertise
Gary Weiss is a co-founder of the Sohn Hearts & Minds Investment Leaders Conference. Gary was formerly Chairman
of Clearview Wealth Limited and Coats PLC, is a former Non-Executive Director of Premier Investments Limited and
Pro-Pac Packaging Limited, a former Executive Director of Whitlam, Turnbull & Co and Guinness Peat Group PLC and
sat on the board of Westfield Holdings Limited and many other public companies. He has also been involved in
overseeing large businesses with operations in many regions including Europe, China and India and is familiar with
investments across a wide range of industries, corporate finance and private equity type deals. He holds an LLB (Hons)
and LLM from Victoria University of Wellington and a Doctor of the Science of Law (JSD) from Cornell University. He
was admitted as a Barrister and Solicitor of the Supreme Court of New Zealand, a Barrister and Solicitor of the Supreme
Court of Victoria and as a Solicitor of the Supreme Court of New South Wales. He is also a Commissioner of the
Australian Rugby League Commission.
Other current directorships
Gary Weiss is currently the Executive Director of Ariadne Australia Limited. He is Chairman of Ardent Leisure Group,
Cromwell Property Group and Estia Health Limited, and a Non-Executive Director of Victor Chang Cardiac Research
Institute, Thorney Opportunities Limited.
Special responsibilities
None.
Interests in shares of the Company
Details of Gary Weiss’ interests in shares of the Company are included later in this report.
23
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Information of Directors (continued)
Gary Weiss AM (Independent Director) (continued)
Interests in contracts
Gary Weiss is a Non-Executive Director of Victor Chang Cardiac Research Institute which is a designated charitable
beneficiary of Hearts and Minds Investments Limited.
Geoffrey Wilson AO (Independent Director)
Experience and expertise
Geoffrey Wilson has over 41 years direct experience in investment markets having held a variety of senior investment
roles in Australia, the UK and the US. He founded Wilson Asset Management in 1997 and created Australia’s first listed
philanthropic wealth creation vehicles, the Future Generation companies. He holds a Bachelor of Science, a Graduate
Management Qualification and is a Fellow of the Financial Services Institute of Australia and the Australian Institute of
Company Directors.
Other current directorships
Geoffrey Wilson is currently Chairman of WAM Capital Limited, WAM Leaders Limited, WAM Research Limited, WAM
Active Limited, WAM Microcap Limited, WAM Global Limited, WAM Strategic Value Limited and the Australian
Stockbrokers Foundation. He is the Founder and a Director of Future Generation Global Investment Company Limited,
Future Generation Investment Company Limited, Wilson Asset Management (International) Pty Limited and MAM Pty
Limited, and a Director of WAM Alternative Assets Limited, Global Value Fund Limited, Wealth Defender Equities Pty
Limited, Wollongong 2022 Limited, Century Australia Investments Pty Limited, Incubator Capital Limited, Concentrated
Leaders Fund Pty Limited, Sporting Chance Cancer Foundation, the Australian Fund Managers Foundation and the
Australian Children’s Music Foundation. He is a member of the Second Bite NSW Advisory Committee.
Special responsibilities
None.
Interests in shares of the Company
Details of Geoffrey Wilson’s interests in shares of the Company are included later in this report.
Interests in contracts
Geoffrey Wilson has no interest in contracts of the Company.
David Wright (Independent Director)
Experience and expertise
David is the CEO and joint founder of Zenith Investment Partners (‘Zenith’), which was established in October 2002.
He has overall responsibility for the management of the Zenith Group but also remains closely involved in servicing the
company’s investment consulting clients with portfolio construction, management and monitoring advice.
He has a wealth of investment industry experience acquired over his extensive career. Prior to establishing Zenith,
David held senior positions within the financial services industry including IWL Limited (Head of Research), an ASX
listed company in which he was also a significant equity holder. Past roles included Associate Director and Head of
Managed Funds research at Lonsdale Limited and an analyst with the Advisor Group, a national financial planning
group.
Other current directorships
David Wright is currently a director of Zenith Investment Partners Pty Ltd, Zenith Partners Group Pty Ltd, Zenith
Investment Partners NZ Limited, Zenith CW Pty Ltd, ZIP Holdco Pty Ltd and Heuristic Investment Systems Pty Ltd.
24
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Information of Directors (continued)
David Wright (Independent Director) (continued)
Special responsibilities
Chair of the Investment Committee.
Interests in shares of the Company
Details of David Wright’s interests in shares of the Company are included later in this report.
Interests in contracts
David Wright has no interest in contracts of the Company.
Chief Executive Officer
Paul Rayson
Paul Rayson is a Chartered Accountant and has worked in the financial services industry for over 20 years and has
extensive experience in investment markets, technology, retail banking, risk management and insurance.
He is the former Managing Director of CommSec, Australia’s leading online broker and former Managing Director of
Australian Investment Exchange Limited and Colonial Mutual Life Assurance Society Limited. He has also held a
number of CFO and governance positions across large financial services businesses. Prior to financial services, he
held senior roles in Chartered Accounting and Consulting firms specialising in corporate advisory, risk management
and strategy.
He holds a Commerce degree from Swinburne University and is a Fellow of the Institute of Chartered Accountants and
a member of the Australian Institute of Company Directors.
Chief Investment Officer
Rory Lucas
Rory Lucas has worked in the Australian and global equity markets for nearly 30 years. Whilst having worked in a
variety of roles, his specialty is in trade execution as well as portfolio construction and risk management.
He has had previous roles with Rothschild Australia Asset Management in managing a fund of funds. His specific
responsibility was to source and vet potential managers as well as to determine the allocation of capital between them
and manage the consolidated risk of the portfolio.
In 2006, he took up a senior Equity Facilitation role at UBS Australia. As part of this role, he oversaw the management
of a high conviction portfolio of UBS Equity Research ideas known as alpha preferences. He was responsible for
portfolio execution, re-weighting and all aspects of the portfolio trading strategy. More recently, he has held trading and
execution roles at Commonwealth Bank of Australia, prior to their exit from the institutional equities business.
Company Secretary
Tom Bloomfield
Tom Bloomfield held the position of Company Secretary during the financial period. Tom has over fifteen years of
international Corporate Secretarial experience working for global organisations, both ‘in-house’ and for corporate
services providers. He has experience working with and consulting to a range of international and domestic clients. He
acts as Company Secretary to a number of ASX listed, unlisted and private companies in Australia in numerous industry
sectors. Tom is a Chartered Company Secretary, Fellow of ICSA (Institute of Chartered Secretaries and Administrators)
and Member of the Australian Institute of Company Directors. He holds a Law degree with Honours and a Graduate
Diploma in Applied Corporate Governance.
25
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Members of the Investment Committee
The experience and qualifications of the members of the Investment Committee at the end of the financial period, up
to the date of this report are set out below:
Brett Paton
Brett Paton is currently Chairman of the management company of Escala Partners, an Australian wealth management
advisory group, and Chairman of Pointsbet Holdings Limited. He has worked in a range of senior positions including
Vice Chairman at UBS Australia where he spent 23 years. He also spent 5 years at Citi serving as Vice Chairman
Australia, Institutional Clients Group. He has served as a Non-Executive Director of Tabcorp and Chair of Audit and
Risk for its demerged entity, Echo Entertainment, giving him valuable insights into the functions expected of ASX 100
boards.
He was previously a Council Member at RMIT University and Chair of the Risk and Audit Committee. He was previously
Chairman of PLC VC, a global venture capital investment organisation. He is a qualified Chartered Accountant.
Christopher Cuffe AO
Christopher Cuffe is also a Director. Please refer to the Directors’ Report to Shareholders for details of Christopher
Cuffe’s experience and qualifications.
Lorraine Berends
Lorraine Berends is also a Director. Please refer to the Directors’ Report to Shareholders for details of Lorraine
Berends’ experience and qualifications.
David Wright
David Wright is also a Director. Please refer to the Directors’ Report to Shareholders for details of David Wright’s
experience and qualifications.
Paul Rayson
Paul Rayson is also Chief Executive Officer. Please refer to the Directors’ Report to Shareholders for details of Paul
Rayson’s experience and qualifications.
Remuneration Report (Audited)
The responsibility for the Company’s remuneration policy rests with the Board of Directors. Given the size of the
Company, its charitable nature, that the Company has only three employees and that Directors have agreed to waive
Directors’ fees on an ongoing basis, the Company has not formed a separate remuneration committee.
a) Remuneration of Directors and Other Key Management Personnel
Key management personnel (KMP) include the Directors, the Chief Executive Officer and the Chief Investment Officer.
Directors have agreed to waive their Directors’ fees on an ongoing basis. For the year ended 30 June 2021, no
Directors’ fees were paid by the Company. The remuneration of the Chief Executive Officer and the Chief Investment
Officer is set out below. The Chief Executive Officer and the Chief Investment Officer are employed under standard
employment contracts with a three month notice period. The remuneration of the Chief Executive Officer and the Chief
Investment Officer is salary based and does not include securities or options in the Company and no element of the
remuneration is tied to Company performance. The Chief Executive Officer and the Chief Investment Officer are not
provided with retirement benefits apart from statutory superannuation.
26
Remuneration Report (Audited) (continued)
Year ended 30 June 2021
Paul Rayson
Rory Lucas
Year ended 30 June 2020
Paul Rayson
Rory Lucas
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Short-term
benefits
Salary
$
169,909
180,688
Post-employment
benefits
Superannuation
$
15,992
16,586
Total
Remuneration
$
185,901
197,274
Short-term
benefits
Salary
$
150,000
175,000
Post-employment
benefits
Superannuation
$
14,157
15,938
Total
Remuneration
$
164,157
190,938
Company performance measures and total KMP remuneration
Net profit/(loss)
Total Comprehensive Income
Net Tangible Assets (at balance date)
Net Tangible Asset backing per share (at balance date)
Share Price (at balance date)
Total KMP remuneration
b) Other KMP Related Transactions
Year ended
30 June 2021
$
(12,464,141)
157,948,475
885,999,277
3.92
4.32
383,175
Year ended
30 June 2020
$
(2,684,949)
117,553,802
750,506,830
3.34
3.11
355,095
The Company Secretary has waived his right to receive fees. The Company holds professional indemnity insurance to
his benefit. He receives an indemnity as an officer of the Company to the maximum extent permitted by law and is
entitled to be reimbursed for any external costs and expenses he incurs. The Company Secretary is a General Manager
of Boardroom Pty Limited. Boardroom Pty Limited provide company secretarial services to the Company.
Matthew Grounds is Chairman of Victor Chang Cardiac Research Institute which is a designated medical research
beneficiary of Hearts and Minds Investments Limited. Hearts and Minds Investments Limited donated $4,518,246 to
Victor Chang Cardiac Research Institute for the year ended 30 June 2021 (2020: $1,653,500).
Gary Weiss is a Non-Executive Director of Victor Chang Cardiac Research Institute which is a designated medical
research beneficiary of Hearts and Minds Investments Limited. Hearts and Minds Investments Limited donated
$4,518,246 to Victor Chang Cardiac Research Institute for the year ended 30 June 2021 (2020: $1,653,500).
Michael Traill is a Director of Paul Ramsay Foundation. Paul Ramsay Foundation holds 4,009,419 shares in HM1 on
30 June 2021.
Michael Traill is a Director of Australian Philanthropic Services. Australian Philanthropic Services provides due diligence
services on HM1’s medical research beneficiaries on normal commercial terms.
Chris Cuffe is a Director of Australian Philanthropic Services. Australian Philanthropic Services provides due diligence
services on HM1’s medical research beneficiaries on normal commercial terms.
27
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Remuneration Report (Audited) (continued)
c) Equity Instruments Disclosures of Directors, Other Key Management Personnel and Related Parties
As the date of this report, the Directors, other key management personnel and their related parties held the following
interest in the Company:
Ordinary shares held
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds AM
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Paul Rayson
Rory Lucas
Balance at
beginning of
the period Acquisitions
1,475,000
–
45,000
–
1,258,042
–
1,201,397
–
1,422,281
–
495,002
–
1,687,500
–
50,000
45,000
149,907
–
15,650
113,984
Disposals
(375,000)
–
–
–
(250,000)
–
–
–
–
(13,593)
As at the date
of this report
1,100,000
45,000
1,258,042
1,201,397
1,172,281
495,002
1,687,500
95,000
149,907
116,041
Directors, other key management personnel and Director related entities disposed of and acquired ordinary shares in
the Company on the same terms and conditions available to other shareholders. The Directors have not, during or
since the end of financial period, been granted options over unissued shares or interests in shares of the Company as
part of their remuneration.
For further details, please refer to the key management personnel compensation note in the financial statements.
- End of remuneration report -
Directors’ Meetings
Director
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds AM
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Investment Committee Meetings
Member
Christopher Cuffe AO
Lorraine Berends
Brett Paton
David Wright
Paul Rayson
No. of eligible
to attend
4
4
4
4
4
4
4
4
No. of eligible
to attend
4
4
4
4
4
Attended
4
4
4
4
4
4
4
4
Attended
4
4
3
4
4
28
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Events Occurring After the Reporting Period
The Directors are not aware of any events subsequent to 30 June 2021 that would materially affect the operations of
the Company, the results of those operations, or the state of affairs of the Company.
Future Developments
HM1’s future performance is dependent on the performance of the HM1’s investment portfolio, which in turn, is
impacted by investee company-specific factors and prevailing industry conditions. In addition, a range of external
factors including economic growth rates, interest rates, exchange rates and macro-economic conditions impact the
overall equity market. Accordingly, it is not possible or appropriate to accurately predict the future performance of HM1’s
investment portfolio and HM1’s performance.
Environmental Regulation
The Company’s operations are not subject to any particular or significant environmental regulation under a law of the
Commonwealth or of a State or Territory in Australia.
Risk Management Philosophy and Approach
The Board of Directors’ risk policies and controls are designed to be robust and relevant to the investment objectives
and investment strategy. The Board of Directors is committed to robust corporate governance practices to create value
and provide accountability and a control system commensurate with the risk involved. The Board of Directors will
monitor the investment portfolio to ensure compliance with the investment strategy and the investment guidelines.
The Investment Committee, in conjunction with the Chief Investment Officer, is responsible for managing the investment
portfolio. The Investment Committee meets quarterly, and more frequently as required, to review the investment
portfolio and ensure that HM1 continues to deliver on its investment objective and investment strategy.
Indemnification and Insurance of Officers and Directors
The Company has entered into director protection deeds with each Director. Under these deeds, the Company has
agreed to indemnify, to the extent permitted by the Corporations Act, each Director in respect of certain liabilities which
the Director may incur as a result of, or by reason of (whether solely of in part), being or acting as a Director of the
Company. The Company has also agreed to maintain in favour of each officer of the Company, a directors’ and officers’
policy of insurance for the period that they are officers and for seven years after they cease to act as officers.
No indemnities have been given or insurance premiums paid during or since the end of the financial period, for any
person who is or has been an auditor of the Company.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
The Company was not a party to any such proceedings during the year.
29
Hearts and Minds Investments Limited
Directors’ Report to Shareholders (continued)
For the year ended 30 June 2021
Non-Audit Services
During the year, Pitcher Partners, the Company’s auditor, did not perform any non-assurance services in addition to
their statutory duties for the Company. Related entities of Pitcher Partners perform certain taxation services for the
Company. Details of the amounts paid to the auditors are disclosed in Note 5 to the financial statements.
The Board of Directors is satisfied that the provision of non-audit services during the period is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that
the services disclosed in Note 6 did not compromise the external auditor’s independence for the following reasons:
•
•
all non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not
adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence
in accordance with the APES 110: Code of Ethics for Professional Accountants including Independence
Standards set by the Accounting Professional and Ethical Standards Board.
Rounding of Amounts
In accordance with the ASIC Corporations (rounding in Financial/Directors) Instrument 2016/191, the amounts in the
Directors’ Report to Shareholders and Annual Report have been rounded off in accordance with that Class Order to
the nearest dollar or unless otherwise indicated.
Corporate Governance Statement
The Company’s Corporate Governance Statement for the year ended 30 June 2021 is provided on the Company
website at heartsandmindsinvestments.com.au
Auditor’s Independence Declaration
A copy of the Auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on the following page.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
Christopher Cuffe AO
Chairman and Independent Director
Sydney
26 August 2021
30
Hearts and Minds Investments Limited
Auditor’s Independence Declaration
For the year ended 30 June 2021
31
Hearts and Minds Investments Limited
Statement of Comprehensive Income
For the year ended 30 June 2021
Notes
4
7
For the
year ended
30 June
2021
$
(13,125,427)
2,509,954
608
5,258,123
13,514
For the
year ended
30 June
2020
$
(1,463,491)
(186,677)
49,565
6,355,593
20,572
(5,343,228)
4,775,562
(12,567,003)
(5,493)
(541,098)
(639,286)
(9,237,640)
(4,094)
(497,445)
(218,411)
(13,752,880)
(9,957,590)
(19,096,108)
(5,182,028)
3
6,631,967
2,497,079
(12,464,141)
(2,684,949)
Investment (loss)/income from ordinary activities
Net realised loss on foreign exchange transactions
Net unrealised gain/(loss) on foreign exchange transactions
Interest income
Dividend income, net of withholding tax of $136,237
(30 June 2020: $212,910)
Sundry income
Total investment (loss)/income
Expenses
Donations
Interest expense
Employee costs
Other expenses
Total expenses
Loss before income tax
Income tax benefit
Net loss for the year
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net realised gains on investments, net of tax
Net unrealised gains on investments, net of tax
9
9
136,100,038
34,312,578
69,299,376
50,939,375
Net realised and unrealised gains on investments taken to
equity, net of tax
170,412,616
120,238,751
Other comprehensive income, net of tax
170,412,616
120,238,751
Total comprehensive income for the year
157,948,475
117,553,802
Loss per share attributable to the ordinary equity holders of
the Company:
Basic and diluted loss per share
12
(5.53)
(1.26)
Cents
Cents
The accompanying notes form part of these financial statements.
32
Assets
Current assets
Cash and cash equivalents
Prepayments
Other receivables
Total current assets
Hearts and Minds Investments Limited
Statement of Financial Position
30 June 2021
Notes
30 June
2021
$
30 June
2020
$
10
6
123,588,147
–
275,326
52,255,304
229,071
401,677
123,863,473
52,886,052
Non-current assets
Financial assets at fair value through other comprehensive income
Deferred tax assets
14
3
Total non-current assets
Total assets
Liabilities
Current liabilities
Current tax liability
Donation provision
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Total equity
3
7
3
8
9
861,436,973
1,752,506
779,308,148
2,484,033
863,189,479
781,792,181
987,052,952
834,678,233
29,337,532
6,375,278
28,370,880
5,128,890
35,712,810
33,499,770
65,340,865
50,671,633
65,340,865
50,671,633
101,053,675
84,171,403
885,999,277
750,506,830
567,043,973
318,955,304
562,500,001
188,006,829
885,999,277
750,506,830
The accompanying notes form part of these financial statements.
33
Hearts and Minds Investments Limited
Statement of Changes in Equity
For the year ended 30 June 2021
Investment
portfolio
Share revaluation
reserve
capital
$
$
Notes
Profits Accumulated
losses
reserve
$
$
Total
$
Balance at 1 July 2019
Net loss for the year
Other comprehensive income, net
of tax
Transfer to profits reserve
Transfer from profits reserve
8
9
9
9
9
500,000,001
–
67,020,422
–
4,178,905
–
(746,300) 570,453,028
(2,684,949)
(2,684,949)
– 120,238,751
–
–
–
(69,299,376) 69,299,376
(3,431,249)
–
– 120,238,751
–
–
3,431,249
–
Transactions with equity
holders in their capacity as
owners:
Shares issued
8
62,500,000
–
–
–
62,500,000
Balance at 30 June 2020
562,500,001 117,959,797
70,047,032
– 750,506,830
Balance at 1 July 2020
Net loss for the year
Other comprehensive income, net
of tax
Transfer to profits reserve
Transfer to profits reserve
8
9
9
9
9
562,500,001 117,959,797
–
–
70,047,032
–
– 750,506,830
(12,464,141) (12,464,141)
– 170,412,616
–
– (136,100,038) 136,100,038
(12,464,141)
–
–
– 170,412,616
–
–
12,464,141
–
Transactions with equity
holders in their capacity as
owners:
Shares issued
Dividends
8
4,9
4,543,972
–
–
–
–
(27,000,000)
–
–
4,543,972
(27,000,000)
Balance at 30 June 2021
567,043,973 152,272,375 166,682,929
– 885,999,277
The accompanying notes form part of these financial statements.
34
Hearts and Minds Investments Limited
Statement of Cash Flows
For the year ended 30 June 2021
Notes
For the
year ended
30 June
2021
$
608
5,378,652
19,336
(5,493)
–
(11,320,615)
(951,313)
(50,034,601)
For the
year ended
30 June
2020
$
49,565
6,016,504
11,482
(4,094)
(280,908)
(4,108,750)
(1,026,914)
(1,853,304)
Cash flows from operating activities
Interest received
Dividends received
Other income received
Interest paid
Offer costs paid
Donations paid
Payments for other expenses
Income tax paid
Net cash used in operating activities
11
(56,913,426)
(1,196,419)
Cash flows from investing activities
Proceeds from sales of investments
Payments for purchases of investments
674,467,408
(513,149,638)
501,356,938
(515,807,067)
Net cash provided by/(used in) investing activities
161,317,770
(14,450,129)
Cash flows from financing activities
Proceeds from issuance of shares
Dividend paid
–
(22,456,028)
62,500,000
–
Net cash (used in)/provided by financing activities
(22,456,028)
62,500,000
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
81,948,316
52,255,304
46,853,452
7,052,020
Effect of foreign currency exchange rate changes on cash and cash
equivalents
(10,615,473)
(1,650,168)
Cash and cash equivalents at the end of the year
10
123,588,147
52,255,304
The accompanying notes form part of these financial statements.
35
Hearts and Minds Investments Limited
Notes to the Financial Statements
For the year ended 30 June 2021
1
General information
Hearts and Minds Investments Limited (the “Company”) is a company limited by shares, incorporated and domiciled in
Australia, whose shares are publicly traded. The registered office is Level 12, 225 George Street, Sydney NSW 2000.
The Company was incorporated on 12 September 2018. Its shares were admitted for quotation on the Official List of
ASX Limited (“ASX”) on 9 November 2018 and commenced operations on 14 November 2018. The financial
statements of the Company are for the year ended 30 June 2021.
The financial statements were authorised for issue on 26 August 2021 by the Board of Directors.
2
Summary of significant accounting policies
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with the Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001. The financial statements of the Company also comply with
International Financial Reporting Standards as issued by the International Accounting Standards Board. The Company
is a for-profit entity for the purpose of preparing the financial statements. Material accounting policies adopted in the
preparation of these financial statements are presented below and have been consistently applied unless stated
otherwise.
These financial statements have been prepared on an accruals basis, and are based on historical cost convention
except for the revaluation of financial assets at fair value through other comprehensive income and cash flow
information.
In accordance with ASIC Corporations Instrument 2016/191, the amounts in the 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 year and there was no material impact on adoption.
(b) Investment income
(i) Dividends
Dividends are recognised as revenue in the Statement of Comprehensive Income when the right to receive payment is
established.
(ii)
Interest income
Interest income is recognised using the effective interest rate method, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
(c) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either
the purchase or sale of the asset (i.e. trade date accounting is adopted).
At initial recognition, the Company measures a financial asset at its fair value in the Statement of Financial Position.
Transaction costs for financial assets carried at fair value through other comprehensive income are included as part of
the initial measurement.
36
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
2
Summary of significant accounting policies (continued)
(c) Financial instruments (continued)
Classification of financial assets
Financial assets recognised by the Company are subsequently measured in their entirety at either amortised cost or
fair value, subject to their classification and whether the Company irrevocably designates the financial asset on initial
recognition at fair value through other comprehensive income (“FVTOCI”) in accordance with the relevant criteria in
AASB 9.
Financial assets not irrevocably designated on initial recognition at FVTOCI are classified as subsequently measured
at amortised cost.
Classification of financial liabilities
Financial liabilities recognised by the Company are subsequently measured at amortised cost.
Measurement
The fair value of financial assets is based on the price that would be received to sell an asset in an orderly transaction
between market participants at the measurement date. Usually, the quoted market prices on a recognised exchange
or, in its absence, the most advantageous market to which the Company has access at that date. The Company’s
accounting policy on fair value is disclosed in Note 14.
Changes in the fair value for financial assets at fair value through other comprehensive income are recognised through
the investment portfolio revaluation reserve after deducting a provision for the potential deferred tax liability.
When a financial asset held at fair value through other comprehensive income is disposed of, the cumulative gain or
loss, net of tax thereon, is transferred from the investment portfolio revaluation reserve to the profits reserve.
Other receivables
Other receivables are non-derivative financial assets and are stated at their amortised cost. At each reporting date, the
Company reviews the carrying values of its non-financial assets to determine whether there is any indication that those
assets may be impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and the value in use, is compared to the asset’s carrying value. Any excess of the
asset’s carrying value over its recoverable value is expensed to the Statement of Comprehensive Income.
Long-term equity instruments
Long-term equity instruments comprise ordinary shares in listed entities that are not held for trading. On initial
recognition, investments identified by the Company as long-term equity instruments are irrevocably designated (and
measured) at fair value through other comprehensive income. This election has been made as the Directors believe
that to otherwise recognise changes in the fair value of these investments in profit or loss would be inconsistent with
the objective of holding the investments for the long term.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the Company has substantially transferred all the risks and rewards of ownership.
When a financial asset held at fair value through other comprehensive income is disposed, the cumulative gain or loss,
net of tax thereon, is transferred from the investment portfolio revaluation reserve to the profits reserve.
(d) Donation provision
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 of the previous half-year. The donation provision represents the
amount provided for donations at the reporting date.
37
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
2
Summary of significant accounting policies (continued)
(e) Foreign currency translation
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in
which the Company operates. The financial statements are presented in Australian dollars (“AUD” or “$”) which is the
Company’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translations at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at
the date when fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of fair value gain or loss.
(f) Income tax
The income tax expense or benefit for the year is the tax payable on that year’s taxable income based on the applicable
income tax rate, adjusted by changes in deferred tax assets and deferred tax liabilities attributable to temporary
differences and unused tax losses, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amounts
of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to offset current tax
assets and current tax liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and liabilities are offset where the Company has a legally enforceable right to offset and intends to settle on a
net basis.
Current and deferred tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates
to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity as appropriate.
(g) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, unless GST incurred is not recoverable
from the Australian Taxation Office. In this case, it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the Statement of
Financial Position.
(h) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
38
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
2
Summary of significant accounting policies (continued)
(i) Issued capital
Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares have been recognised
in the Statement of Comprehensive Income, net of any tax effects.
(j) Profits reserve
A profits reserve is made up of amounts transferred from current and retained earnings and realised gains on disposal
of financial assets that is preserved for future dividend payments.
(k) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting year but not distributed at the end of the reporting year. In
accordance with the Corporations Act 2001, the Company may pay a dividend where the Company’s assets exceed
its liabilities, the payment of the dividend is fair and reasonable to the Company’s shareholders as a whole and the
payment of the dividend does not materially prejudice the Company’s ability to pay its creditors.
(l) Earnings/(loss) per share
(i) Basic earnings/(loss) per share is calculated by dividing:
•
the profit/(loss) attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares; and
• by the weighted average number of ordinary shares outstanding during the financial year.
(ii) Diluted earnings/(loss) per share
Diluted earnings/(loss) per share adjusts the figures used in the determination of basic earnings/(loss) per share to take
into account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
(m) Critical accounting estimates and judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data.
The investments of the Company are recommended by fund managers who provide their expertise and stock
recommendations to the Company on a pro bono basis. Therefore, the investment portfolio of the Company does not
incur any fund management fees. It is estimated that the investments fees forgone by the fund managers based on
normal commercial terms for the year ended 30 June 2021 equates to $12,700,000 (2020: $10,300,000). This notional
benefit to the Company is not included in the financial statements of the Company. Other than this estimate, there are
no estimates or judgements that have a material impact on the Company’s financial results for the year ended 30 June
2021 (2020: None).
(n) New standards and interpretations applicable and not yet adopted
There are no new standards or interpretations applicable and not yet adopted that would have a material impact for the
Company.
39
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
3
Income tax
(a) Income tax expense
The prima facie tax on loss before income tax is reconciled to the income tax expense as follows:
Prima facie income tax expense on the net profit at 30%
Imputation credits and foreign tax credits claimed at 100%
Imputation credits gross up on dividends received
Reversal of prepayments not claimed in 2020 tax return
Foreign tax credits gross up dividends received
Income tax benefit recognised in profit or loss
Deferred tax on net unrealised gains on investments
Income tax on net realised gains on investments
Income tax expense recognised in other comprehensive income
For the
year ended
30 June
2021
$
(5,728,832)
(1,388,365)
375,638
68,721
40,871
(6,631,967)
14,705,391
58,328,588
73,033,979
For the
year ended
30 June
2020
$
(1,554,608)
(1,346,387)
340,043
–
63,873
(2,497,079)
21,831,160
29,699,733
51,530,893
Total income tax expense
66,402,012
49,033,814
(b) Total income tax expense results in a:
Current income tax benefit
Deferred tax assets
Deferred tax liabilities
Income tax benefit recognised in profit or loss
Deferred tax liability on net unrealised gains on investments
Current income tax liability on net realised gains on investments
Income tax expense recognised in other comprehensive income
For the
year ended
30 June
2021
$
(7,327,335)
731,527
(36,159)
(6,631,967)
14,705,391
58,328,588
73,033,979
For the
year ended
30 June
2020
$
(1,404,813)
(1,193,993)
101,727
(2,497,079)
21,831,160
29,699,733
51,530,893
Total income tax expense
66,402,012
49,033,814
40
3
Income tax (continued)
(c) Deferred tax assets relate to the following:
Opening balance
Net unrealised (loss)/gain on foreign exchange transactions
Donation accrual not deductible
Costs associated with the issue of shares
2019 tax return adjustments
Provisions
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
30 June
2021
$
2,484,033
(808,989)
373,917
(296,455)
–
–
30 June
2020
$
1,290,040
52,337
1,538,667
(296,455)
(75,960)
(24,596)
Deferred tax assets
1,752,506
2,484,033
(d) Deferred tax liabilities relate to the following:
Opening balance
Net unrealised gains on investments
Dividend receivable on shares
Deferred tax liabilities
(e) Movement in deferred tax assets relate to the following:
Opening balance
Charged to profit or loss
Closing balance
(f) Movement in deferred tax liabilities relate to the following:
Opening balance
Charged to profit or loss
Charged to other comprehensive income
30 June
2021
$
30 June
2020
$
50,671,633
14,705,391
(36,159)
28,738,745
21,831,161
101,727
65,340,865
50,671,633
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
2,484,033
(731,527)
1,290,040
1,193,993
1,752,506
2,484,033
For the
year ended
30 June
2021
$
50,671,633
(36,159)
14,705,391
For the
year ended
30 June
2020
$
28,738,745
101,727
21,831,161
Closing balance
65,340,865
50,671,633
41
3
Income tax (continued)
(g) Dividend franking account
Opening balance
Franking credits on dividends received
Franking credits on dividends paid
Tax paid during the year
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
For the
year ended
30 June
2021
$
3,606,179
1,252,128
(11,571,429)
50,034,601
For the
year ended
30 June
2020
$
619,398
1,133,477
–
1,853,304
Closing balance of franking account
43,321,479
3,606,179
Franking credits on dividends receivable
Tax payable in respect of the year’s profit
–
29,337,532
160,500
28,370,880
Franking credits available for use in subsequent reporting years
72,659,011
32,137,559
4
Dividends
Dividend income
Dividend income - Investments sold during the year
Dividend income - Investments held at year end
Dividend income
Withholding tax on dividends
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
1,270,993
4,123,367
2,447,484
4,121,019
5,394,360
6,568,503
(136,237)
(212,910)
Dividend income, net of withholding tax
5,258,123
6,355,593
42
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
5
Remuneration of auditors
During the year, the following fees were paid or payable for services provided by the auditor of the Company, its related
practices and non-related audit firms:
Audit and review of financial statements
Other services provided by related practice of the auditor
taxation services
Total remuneration for audit and other assurance services
6
Other receivables
Dividend receivable
Other receivables
Total other receivables
7
Donation provision
Donation provision
Total donation provision
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
51,207
5,830
57,037
30 June
2021
$
270,918
4,408
49,052
14,000
63,052
30 June
2020
$
391,447
10,230
275,326
401,677
30 June
2021
$
30 June
2020
$
6,375,278
5,128,890
6,375,278
5,128,890
For the year ended 30 June 2021, the amount recognised in the Statement of Comprehensive Income as an expense
was $12,567,003 (2020: $9,237,640). This amount represents donations paid or payable to medical research
beneficiaries to advance medical research in Australia. As at 30 June 2021, the amount recorded as a donation
provision in the Statement of Financial Position of $6,375,278 (30 June 2020: $5,128,890) represents a provision for
donations payable to medical research beneficiaries at balance date.
43
8
Share capital
(a) Issued capital
Ordinary shares
Ordinary shares
(b) Movements in share capital
Opening balance
Shares issued at $4.39 per share
Closing balance
Opening balance
Shares issued at $2.50 per share
Closing balance
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
30 June
2021
No. of shares
30 June
2021
$
226,033,818
567,043,973
30 June
2020
No. of shares
30 June
2020
$
225,000,001
562,500,001
For the
year ended
30 June
2021
No. of shares
For the
year ended
30 June
2021
$
225,000,001
1,033,817
562,500,001
4,543,972
226,033,818
567,043,973
For the
year ended
30 June
2020
No. of shares
For the
year ended
30 June
2020
$
200,000,001
25,000,000
500,000,001
62,500,000
225,000,001
562,500,001
On 20 April 2021 the Company issued 1,033,817 fully paid ordinary shares at $4.39 pursuant to the dividend
reinvestment plan. In the prior financial year, on 27 December 2019 the Company issued 25,000,000 fully paid ordinary
shares at $2.50 pursuant to a fully renounceable rights issue.
44
9
Reserves and accumulated losses
(a) Reserves
Investment portfolio revaluation reserve
Profits reserve
Total reserves
(b) Investment portfolio revaluation reserve
Opening balance
Net realised gains on investments
Income tax on net realised gains on investments
Net unrealised gains on investments
Deferred income tax on unrealised gains on investments
Transfer to profits reserve
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
30 June
2021
$
30 June
2020
$
152,272,375
166,682,929
117,959,797
70,047,032
318,955,304
188,006,829
For the
year ended
30 June
2021
$
117,959,797
194,428,626
(58,328,588)
49,017,969
(14,705,391)
(136,100,038)
For the
year ended
30 June
2020
$
67,020,422
98,999,109
(29,699,733)
72,770,536
(21,831,161)
(69,299,376)
Closing balance
152,272,375
117,959,797
During the year a number of investments held at fair value through other comprehensive income were sold realising a
net gain as set out below. The investments were sold following recommendations from our portfolio fund managers and
in accordance with our investment strategy.
Proceeds from sale of investments
Original cost of investments sold
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
674,467,408
(480,038,782)
501,356,938
(402,357,829)
Net realised gains on investments before tax
194,428,626
98,999,109
45
9
Reserves and accumulated losses (continued)
(c) Profits reserve
Opening balance
Transfer from investment portfolio revaluation reserve
Transfer to accumulated losses
Dividends
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
For the
year ended
30 June
2021
$
70,047,032
136,100,038
(12,464,141)
(27,000,000)
For the
year ended
30 June
2020
$
4,178,905
69,299,376
(3,431,249)
–
Closing balance
166,682,929
70,047,032
During the year the Company paid a fully franked dividend of $0.12 per share to shareholders amounting to a total
dividend payment of $27,000,000.
(d) Accumulated losses
Opening balance
Net loss for the year
Transfer from profits reserve
Closing balance
10
Cash and cash equivalents
For the
year ended
30 June
2021
$
–
(12,464,141)
12,464,141
For the
year ended
30 June
2020
$
(746,300)
(2,684,949)
3,431,249
–
–
Cash at the end of the reporting year as shown in the Statement of Cash Flows is reconciled to the related items in the
Statement of Financial Position as follows:
Cash at bank
Cash at custodian
30 June
2021
$
30 June
2020
$
6,367,406
117,220,741
755,994
51,499,310
Total cash and cash equivalents
123,588,147
52,255,304
The cash at bank is denominated in AUD, is at call and is earning interest at a fixed rate of 0.01% (30 June 2020:
0.01%). The cash at custodian is at call and denominated in AUD, United States Dollars (“USD”), Japanese Yen
(“JPY”) and Hong Kong Dollars (“HKD”) and is non-interest bearing.
46
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
10
Cash and cash equivalents (continued)
Risk exposure
The Company’s exposure to interest rate risk is discussed in Note 13. The maximum exposure to credit risk in relation
to cash at the end of the reporting year is the carrying amount of cash in bank and cash at custodian.
Cash in bank is with Commonwealth Bank of Australia that has a Standard and Poor’s short-term rating of A-1+
(30 June 2020: A-1+) and long-term rating of AA- (30 June 2020: AA-). Cash at custodian is with JP Morgan Chase
Bank that has a short-term rating of A-1 (30 June 2020: A-1) and a long-term rating of A+ (30 June 2020: A+).
11
Reconciliation of net loss for the year to net cash provided by/(used in) operating activities
Net loss for the year
Effects of foreign currency exchange rate changes on cash and cash
equivalents
Change in operating assets and liabilities:
Decrease/(increase) in prepayments
Decrease/(increase) in other receivables
Decrease/(increase) in deferred tax assets
Decrease in current tax liability
Increase in donation provision
(Decrease)/increase in deferred tax liabilities
Decrease in other payables
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
(12,464,141)
(2,684,949)
10,615,473
1,650,168
229,071
126,351
731,527
(57,361,936)
1,246,388
(36,159)
–
(229,071)
(348,179)
(1,193,993)
(3,258,117)
5,128,890
101,727
(362,895)
Net cash used in operating activities
(56,913,426)
(1,196,419)
12
Basic and diluted loss per share
Net loss for the year used in the calculation of basic and diluted loss per
share attributable to the ordinary equity holders of the Company
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
(12,464,141)
(2,684,949)
For the
year ended
30 June
2021
$
For the
year ended
30 June
2020
$
Basic and diluted loss per share attributable to the ordinary equity holders of
the Company
(5.53)
(1.26)
47
12
Basic and diluted loss per share (continued)
Weighted average number of shares used as denominator
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
For the
year ended
30 June
2021
No. of shares
For the
year ended
30 June
2020
No. of shares
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share attributable to the ordinary equity
holders of the Company
225,203,932
212,708,570
At the end of the year, there were no outstanding securities that are potentially dilutive in nature for the Company
(30 June 2020: None).
13
Financial risk management
The Company’s financial instruments consist mainly of cash and cash equivalents, other receivables, financial assets
at fair value through other comprehensive income and other payables.
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk,
and equity price risk), credit risk, liquidity risk and other risks. The Board of the Company have implemented a risk
management framework to mitigate these risks.
Risks are managed in the context of the Company’s strategic objectives, the size and complexity of its operations, and
the Board’s expectations and attitude to risk. The Company has implemented a risk management framework based on
the Australian New Zealand International Standard Organisation 31000:2009 Risk management – Principles and
guidelines. Details of the Company’s risk management framework are available on the Company’s website.
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.
The investment portfolio is exposed to market risk. The market risk of securities in the Company’s investment portfolio
can fluctuate as a result of market conditions. The value of the investment portfolio may be impacted by factors such
as economic conditions, interest rates, currency exchange rates, regulations, sentiment and geopolitical events as well
as environmental, social and technological changes. In addition, as the Company is listed on the ASX, its securities are
exposed to market risks. As a result, the security price may trade at a discount or a premium to its net tangible assets.
Currency risk
The Company holds monetary assets denominated in currencies other than the Australian dollar. The Company
monitors the exposure on all foreign currency denominated assets and liabilities.
The Company does not hedge against its foreign exchange exposure, and consequently, the impact of foreign
exchange movements is directly reflected in the Statement of Comprehensive Income.
48
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
13
Financial risk management (continued)
Market risk (continued)
Currency risk (continued)
While the Company has direct exposure to foreign exchange rate changes on the price of non-Australian dollar
denominated investments, it may also be indirectly affected by the impact of foreign exchange rate changes on the
earnings of certain investments in which the Company invests, even if those investments are denominated in Australian
dollars. For that reason, the sensitivity analysis below may not necessarily indicate the total effect on the Company’s
equity of future movements in foreign exchange rates.
The table below summarises the Company’s monetary assets exposed to foreign currency risk at 30 June 2021 and
30 June 2020:
United States Dollar
Hong Kong Dollar
Euro
Japanese Yen
Pound Sterling
Total
* As percentage of investment portfolio exposure.
Sensitivity
30 June 2021
Net currency
exposure*
%
30 June 2020
Net currency
exposure*
%
58
8
4
1
–
71
62
3
–
1
1
67
The following tables illustrate the sensitivities of the Company’s monetary assets and liabilities to foreign exchange
risk. The analysis is based on the assumption that the AUD weakened/strengthened by 10% against the other
currencies.
30 June 2021
USD impact
AUD
HKD impact
AUD
EUR impact
AUD
JPY impact
AUD
Impact on total comprehensive income
+/- 39,285,122
+/- 4,931,157
+/- 2,495,447
+/- 1,383,867
30 June 2020
USD impact
AUD
HKD impact
AUD
JPY impact
AUD
GBP impact
AUD
Impact on total comprehensive income
+/- 36,245,847
+/- 1,655,164
+/- 458,754
+/- 838,900
Equity price risk
The Company is exposed to price risk on its financial assets classified in the Statement of Financial Position as financial
assets at fair value through other comprehensive income. There is a risk that securities will fall in value over short or
extended periods of time. Equity markets tend to move in cycles, and individual share prices may fluctuate and
underperform other asset classes over extended periods of time. The Company’s typical investment portfolio is
expected to hold 25 to 30 securities, which represents a high level of investment concentration. The lower the number
of investments, the higher the concentration and, in turn, the higher the potential volatility. The Company seeks to
manage and constrain market risk by diversification of the investment portfolio across a number of fund managers.
49
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
13
Financial risk management (continued)
Market risk (continued)
Equity price risk (continued)
Sensitivity
The following table illustrates the effect on the Company’s equity from possible changes in the fair value of financial
assets that were reasonably possible based on the market risk that the Company was exposed to at reporting date,
assuming a tax rate of 30%.
Impacts on total comprehensive income
MSCI World Index (AUD)
Change in variable +/- 5%
Change in variable +/- 10%
Cash flow and interest rate risk
30 June 2021
$
30 June 2020
$
30,150,294
60,300,588
26,048,384
52,096,769
The Company’s interest-bearing financial assets expose it to risks associated with the effects of fluctuations in the
prevailing levels of market interest rates on its financial position and cash flows. The tables below summarise the
Company’s exposure to interest rate risks:
30 June 2021
Financial assets
Cash and cash equivalents
Financial assets at fair value through other comprehensive
income
Other receivables
Total financial assets
Financial liabilities
Donation provision
Total financial liabilities
30 June 2020
Financial assets
Cash and cash equivalents
Financial assets at fair value through other comprehensive
income
Other receivables
Total financial assets
Financial liabilities
Donation provision
Total financial liabilities
50
Interest
bearing
$
Non-interest
bearing
$
Total
$
6,367,406
117,220,741
123,588,147
–
–
861,436,973
275,326
861,436,973
275,326
6,367,406
978,933,040
985,300,446
–
–
6,375,278
6,375,278
6,375,278
6,375,278
Interest
bearing
$
Non-interest
bearing
$
Total
$
755,994
51,499,310
52,255,304
–
–
779,308,148
401,677
779,308,148
401,677
755,994
831,209,135
831,965,129
–
–
5,128,890
5,128,890
5,128,890
5,128,890
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
13
Financial risk management (continued)
Market risk (continued)
Cash flow and interest rate risk (continued)
Sensitivity
Profit or loss is sensitive to higher/lower interest income from cash and cash equivalents as a result of changes in
interest rates. At 30 June 2021, if interest rates had increased by 100 basis points (bps) or decreased by 100 bps from
the year end rates with all other variables held constant, post tax profit for the year would have been $615,452
(2020: $330,321) higher or $615,452 (2020: $330,321) lower, as a result of higher or lower interest income from cash
and cash equivalents.
Interest rate risk also arises from the effects of fluctuations in the prevailing levels of market interest rates on the
Company’s financial assets at fair value through other comprehensive income. The sensitivity to changes in the value
of financial assets at fair value through other comprehensive income is set out in the price risk and currency risk
sensitivity tables. The Directors do not consider it meaningful to provide a separate analysis of the sensitivity of the
investment portfolio to changes in interest rates.
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.
Credit risk primarily arises from cash and cash equivalents, deposits with banks and other financial institutions and
other receivables.
The maximum exposure to credit risk at balance sheet date of recognised financial assets is the carrying amount, net
of any provisions for expected credit losses of those assets, as disclosed in the Statement of Financial Position and
Note 10 to the financial statements.
The Company held no collateral as security or any other credit enhancements. None of the assets exposed to a credit
risk are overdue or considered to be impaired.
Liquidity risk
Liquidity risk is defined as the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities. The Board and Investment Committee monitor the Company’s cash flow requirements in relation to the
investment portfolio taking into account dividends, tax payments and investing activity.
The Company’s inward cash flows depend on the level of dividend and interest revenue received, investment disposals
and capital raising initiatives from time to time. Should these decrease by a material amount, the Company would
amend its outward cash flows accordingly. The major cash outflows are investments, donations, general expenditure
and future dividends paid to shareholders and the level of these outflows is managed by the Board and Investment
Committee. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities. A
sufficient level of the Company’s cash is held at call to meet cash outflows and mitigate liquidity risk.
51
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
13
Financial risk management (continued)
Liquidity risk (continued)
The tables below summarise the maturity profile of the Company’s financial assets and financial liabilities based on
contractual undiscounted cash flows:
1 to 3
months
$
3 to
12 months
$
More than
12 months
$
No fixed
maturity
$
Total
$
–
–
–
–
–
–
–
–
30 June 2021
Financial assets
Cash and cash equivalents
Financial assets at fair value
through other comprehensive
income
Other receivables
On demand
$
123,588,147
–
275,326
Total financial assets
123,863,473
Financial liabilities
Donation provision
Total financial liabilities
–
–
6,375,278
6,375,278
30 June 2020
Financial assets
Cash and cash equivalents
Financial assets at fair value
through other comprehensive
income
Other receivables
On demand
$
52,255,304
–
401,677
Total financial assets
52,656,981
–
–
5,128,890
5,128,890
Financial liabilities
Donation provision
Total financial liabilities
14
Financial assets
Fair value measurements
(a) Fair value estimation
1 to 3
months
$
3 to
12 months
$
More than
12 months
$
No fixed
maturity
$
Total
$
–
–
–
–
–
–
–
– 123,588,147
– 861,436,973 861,436,973
275,326
–
–
– 861,436,973 985,300,446
–
–
–
–
6,375,278
6,375,278
–
–
–
–
–
–
–
–
52,255,304
– 779,308,148 779,308,148
401,677
–
–
– 779,308,148 831,965,129
–
–
–
–
5,128,890
5,128,890
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 asset or, in the absence of a principal market, in the most advantageous
market for the asset. The principal or the most advantageous market must be accessible to the Company. The fair
value of an asset is measured using the assumptions that market participants would use when pricing the asset,
assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset
takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and
best use or by selling it to another market participant that would use the asset in its highest and best use.
52
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
14
Financial assets (continued)
Fair value measurements (continued)
(a) Fair value estimation (continued)
For all other financial instruments not traded in an active market, the fair value is determined using valuation techniques
deemed to be appropriate in the circumstances. Valuation techniques include the market approach (i.e., using recent
arm’s length market transactions, adjusted as necessary, and reference to the current market value of another
instrument that is substantially the same) and the income approach (i.e., discounted cash flow analysis and option
pricing models making as much use of available and supportable market data as possible).
For assets that are measured at fair value on a recurring basis, the Company identifies transfers between levels in the
hierarchy by re-assessing the categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole), and deems transfers to have occurred at the beginning of each reporting year.
(b) Fair value hierarchy
AASB 13 Fair Value Measurement requires the disclosure of fair value information using a fair value hierarchy reflecting
the significance of the inputs in making the measurements. The fair value hierarchy consists of the following levels:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
•
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
•
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
The following tables present the Company’s assets and liabilities measured and recognised at fair value at:
30 June 2021
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets at fair value through other
comprehensive income
Listed equity securities on major exchanges
861,436,973
Total financial assets at fair value through
other comprehensive income
861,436,973
–
–
–
–
861,436,973
861,436,973
30 June 2020
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets at fair value through other
comprehensive income
Listed equity securities on major exchanges
779,308,148
Total financial assets at fair value through
other comprehensive income
779,308,148
–
–
–
–
779,308,148
779,308,148
There were no transfers between levels for recurring fair value measurements during the year (2020: None).
The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the
reporting year.
The carrying amounts of other receivables and other payables are assumed to approximate their fair values due to their
short-term nature.
53
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
15
Segment information
The Company is solely engaged in investment activities, deriving revenue from dividend income, interest income and
from the sale of its investments. It has no reportable business or geographical segments.
The Company’s investments are listed equity securities on major exchanges. The split of the Company’s investments
by the country of listing is set out below.
30 June 2021
30 June 2020
Country of Listing Country of Listing
%
%
United States
Australia
Hong Kong
Germany
Japan
United Kingdom
58
29
8
4
1
–
62
33
3
–
1
1
100
100
16
Key management personnel compensation
The names and positions held of the Company’s key management personnel (KMP) (including Directors in office at
any time during the year ended 30 June 2021) are:
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds AM
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Paul Rayson
Rory Lucas
(a) Remuneration
Chairman and Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chief Executive Officer
Chief Investment Officer
KMP include the Directors, the Chief Executive Officer and the Chief Investment Officer. Directors have agreed to waive
their Directors’ fees on an ongoing basis. For the year ended 30 June 2021, no Directors’ fees were paid by the
Company. The remuneration of the Chief Executive Officer and the Chief Investment Officer are set out below. The
Chief Executive Officer and the Chief Investment Officer are employed under standard employment contracts with a
three month notice period. The remuneration of the Chief Executive Officer and the Chief Investment Officer is salary
based and does not include securities or options in the Company and no element of the remuneration is tied to Company
performance. The Chief Executive Officer and the Chief Investment Officer are not provided with retirement benefits
apart from statutory superannuation.
Year ended 30 June 2021
Paul Rayson
Rory Lucas
Post-
Short-term
benefits
employment
Total
benefits Remuneration
Salary Superannuation
$
$
169,909
180,688
15,992
16,586
$
185,901
197,274
54
16
Key management personnel compensation (continued)
(a) Remuneration (continued)
Year ended 30 June 2020
Paul Rayson
Rory Lucas
(b) Shareholdings
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
Post-
Short-term
benefits
employment
Total
benefits Remuneration
Salary Superannuation
$
$
150,000
175,000
14,157
15,938
$
164,157
190,938
The Company’s KMP and their related parties held the following interests in the Company:
30 June 2021
Directors and Key Management
Opening
balance Acquisitions
Disposals
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds AM
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Paul Rayson
Rory Lucas
1,475,000
45,000
1,258,042
1,201,397
1,422,281
495,002
1,687,500
45,000
149,907
113,984
–
–
–
–
–
–
–
50,000
–
15,650
(375,000)
–
–
–
(250,000)
–
–
–
–
(13,593)
30 June 2020
Directors and Key Management
Opening
balance Acquisitions
Disposals
Christopher Cuffe AO
Lorraine Berends
Guy Fowler
Matthew Grounds
Michael Traill AM
Gary Weiss AM
Geoffrey Wilson AO
David Wright
Paul Rayson
Rory Lucas
1,300,000
40,000
1,000,000
1,000,000
1,208,031
440,002
1,500,000
40,000
133,250
80,694
175,000
5,000
258,042
201,397
214,250
55,000
187,500
5,000
16,657
33,290
–
–
–
–
–
–
–
–
–
–
Closing
balance
1,100,000
45,000
1,258,042
1,201,397
1,172,281
495,002
1,687,500
95,000
149,907
116,041
Closing
balance
1,475,000
45,000
1,258,042
1,201,397
1,422,281
495,002
1,687,500
45,000
149,907
113,984
Directors, other KMP and Director related entities disposed of and acquired ordinary shares in the Company on the
same terms and conditions available to other shareholders. The Directors have not, during or since the end of financial
year, been granted options over unissued shares or interests in shares of the Company as part of their remuneration.
55
Hearts and Minds Investments Limited
Notes to the Financial Statements (continued)
For the year ended 30 June 2021
17
Related party transactions
All transactions with related entities were made on normal commercial terms and at market rates, except as noted
below.
Investment and management fees
The Company will forego any investment and management fees associated with implementing and managing the
investment strategy. Instead, donations will be paid by the Company to the designated charities every six months.
Matthew Grounds is Chairman of Victor Chang Cardiac Research Institute which is a designated medical research
beneficiary of Hearts and Minds Investments Limited. The Company donated $4,518,246 to Victor Chang Cardiac
Research Institute for the year ended 30 June 2021 (2020: $1,653,500).
Gary Weiss is a Non-Executive Director of Victor Chang Cardiac Research Institute which is a designated medical
research beneficiary of Hearts and Minds Investments Limited. The Company donated $4,518,246 to Victor Chang
Cardiac Research Institute for the year ended 30 June 2021 (2020: $1,653,500).
Michael Traill is a Director of Paul Ramsay Foundation. Paul Ramsay Foundation holds 4,009,419 shares in HM1 on
30 June 2021.
Michael Traill is a Director of Australian Philanthropic Services. Australian Philanthropic Services provides due diligence
services on HM1’s medical research beneficiaries on normal commercial terms.
Chris Cuffe is a Director of Australian Philanthropic Services. Australian Philanthropic Services provides due diligence
services on HM1’s medical research beneficiaries on normal commercial terms.
Directors’ fees
The Directors have agreed to waive any right to be paid director fees (see Note 16).
18
Commitments
The Company had no material contingent liabilities or commitments as at 30 June 2021 (30 June 2020: Nil).
19
Events occurring after the reporting year
No matter or circumstance has occurred subsequent to year end that has significantly affected, or may significantly
affect, the operations of the Company, the results of those operations or the state of affairs of the Company in
subsequent financial years.
56
Hearts and Minds Investments Limited
Directors’ Declaration
For the year ended 30 June 2021
Directors’ Declaration
In accordance with a resolution of the Directors of Hearts and Minds Investments Limited (the “Company”), the
Directors of the Company declare that:
(a) The financial report as set out in pages 32 to 56 and the additional disclosures included in the Directors’ Report
designated as ‘Remuneration Report’, as set out on pages 26 to 28, are in accordance with the Corporations Act
2001, including:
(i) complying with Australian Accounting Standards, which, as stated in Note 2 to the financial statements,
constitutes compliance with International Financial Reporting Standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the financial position of the Company as at 30 June 2021 and of its performance,
as represented by the results of the operations and the cash flows, for the year ended on that date; and
(b) At the date of this declaration, in the Director’s opinion there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable.
(c) The Directors have been given the declaration required by section 295A of the Corporations Act 2001 from the
person who performs the Chief Executive Officer and Chief Financial Officer functions, for the purpose of the
Corporations Act 2001.
Signed in accordance with a resolution of the Board of Directors made pursuant to section 295(5)(a) of the Corporations
Act 2001.
Christopher Cuffe AO
Chairman and Independent Director
Sydney
26 August 2021
57
Hearts and Minds Investments Limited
Independent Auditor’s Report to the Shareholders
For the year ended 30 June 2021
58
Hearts and Minds Investments Limited
Independent Auditor’s Report to the Shareholders (continued)
For the year ended 30 June 2021
59
Hearts and Minds Investments Limited
Independent Auditor’s Report to the Shareholders (continued)
For the year ended 30 June 2021
60
Hearts and Minds Investments Limited
Independent Auditor’s Report to the Shareholders (continued)
For the year ended 30 June 2021
61
Hearts and Minds Investments Limited
ASX Additional Information
For the year ended 30 June 2021
ADDITIONAL SECURITIES EXCHANGE INFORMATION
In accordance with ASX Listing Rule 4.10, the Company provides the following information to shareholders not
elsewhere disclosed in this Annual Report. The information is current as of 30 July 2021.
CORPORATE GOVERNANCE STATEMENT
The Company has prepared a statement which sets out the corporate governance practices that were in operation
throughout the financial year for the Company, identifies any Recommendations that have not been followed, and
provides reasons for not following such Recommendations (Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the Corporate Governance Statement will be available for
review on HM1’s website (heartsandmindsinvestments.com.au) and will be lodged together with an Appendix 4G with
ASX at the same time that this Annual Report is lodged with ASX.
NUMBER OF HOLDINGS OF EQUITY SECURITIES
As of 30 July 2021, the number of holders in each class of equity securities on issue in HM1 is as follows:
Security type
Fully Paid Ordinary Shares
VOTING RIGHTS OF EQUITY SECURITIES
No. of
securities
226,033,818
No. of
shareholders
8,995
The only class of equity securities on issue in the Company which carry voting rights is ordinary shares.
DISTRIBUTION OF HOLDERS OF ORDINARY SHARES
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Class of Ordinary Shares
Total
holders
1,545
3,077
1,577
2,619
177
8,995
Units
705,100
8,235,846
11,927,739
65,730,337
139,434,796
226,033,818
% Units
0.310
3.640
5.280
29.080
61.690
100.000
The number of shareholdings held in less than marketable parcels is 60.
UNMARKETABLE PARCELS
The number of holders of less than a marketable parcel of ordinary shares as of 30 July 2021, is as follows:
Unmarketable parcels as reporting date
Minimum $500.00 parcel at $4.60 per unit
SUBSTANTIAL HOLDERS
Minimum
parcel size
109
Holders
104
Units
1,638
There are no substantial holders (voting interest greater than 5%) in HM1 as of 30 July 2021 (2020: Nil).
62
Hearts and Minds Investments Limited
ASX Additional Information (continued)
For the year ended 30 June 2021
TWENTY LARGEST HOLDERS OF QUOTED EQUITY SECURITIES
The Company only has one class of quoted securities, being ordinary shares. The names of the 20 largest holders of
ordinary shares, the number of ordinary shares and the percentage of capital held by each holder as of 30 July 2021,
is as follows:
Shareholder name
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Netwealth Investments Limited
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