Annual report
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WAM MICROCAP LIMITED ABN 34 617 838 418 Appendix 4E Preliminary Final Report for the year ended 30 June 2025 Results for Announcement to the Market All comparisons to the year ended 30 June 2024 $ up/down % mvmt Revenue from ordinary activities 69,361,109 up 20.9% Profit from ordinary activities before income tax expense 59,711,401 up 27.3% Net profit from ordinary activities after income tax expense 43,583,480 up 27.4% Dividend information Cents per share Franking % Tax rate for franking 2025 Final dividend cents per share 5.3c 100% 30% 2025 Interim dividend cents per share 5.3c 100% 30% Final dividend dates Ex-dividend date 16 October 2025 Record date 17 October 2025 Last election date for the DRP 21 October 2025 Payment date 29 October 2025 Dividend Reinvestment Plan The Dividend Reinvestment Plan (‘DRP’) is in operation and the recommended fully franked final dividend of 5.3 cents per share qualifies. Participating shareholders will be entitled to be allotted the number of shares (rounded to the nearest whole number) which the cash dividend would purchase at the relevant issue price. The relevant issue price will be calculated as the volume weighted average market price (‘VWAP’) of shares sold on the ASX over the four trading days commencing on the ex-dividend date for the relevant dividend. The DRP will operate without a discount for the final dividend. 30 Jun 25 30 Jun 24 Net tangible asset backing (before tax) per share $1.43 $1.39 Net tangible asset backing (after tax) per share $1.41 $1.36 This report is based on the Annual Report which has been audited by Pitcher Partners Sydney. The audit report is included with the Company’s Annual Report which accompanies this Appendix 4E. All the documents comprise the information required by Listing Rule 4.3A. For personal use only
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2025 Annual Report For personal use only
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2 WAM Microcap Annual Report 2025 ABN 34 617 838 418 WAM Microcap Limited (WAM Microcap or the Company) is a listed investment company and is a reporting entity. Listed on the ASX in June 2017, WAM Microcap provides investors access to a portfolio of undervalued micro-cap growth companies with a market capitalisation of less than $300 million at the time of acquisition. For personal use only
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wilsonassetmanagement.com.au 3 Contents 04 FY2025 financial highlights 07 Chairman’s letter 21 Lead Portfolio Manager update 25 Investment objectives and process 26 About Wilson Asset Management 32 Directors’ Report to shareholders 44 Auditor’s Independence Declaration 45 Consolidated entity disclosure statement 46 Statement of Comprehensive Income 47 Statement of Financial Position 48 Statement of Changes in Equity 49 Statement of Cash Flows 50 Notes to the financial statements 69 Directors’ Declaration 70 Independent Auditor’s Report 75 Investments at fair value 77 ASX additional information 78 Glossary 81 Corporate Directory For personal use only
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4 WAM Microcap Annual Report 2025 ABN 34 617 838 418 WAM Microcap’s investment portfolio has returned 16.3% per annum since inception, outperforming the market by 9.5% per annum. Notes: 1. The above graph reflects the period from inception in June 2017 to 30 June 2025. 2. WAM Microcap’s investment portfolio performance is before expenses, fees and taxes to compare to the S&P/ASX Small Ordinaries Accumulation Index which is also before expenses, fees and taxes. - 40 80 120 160 200 240 2017 2018 2019 2020 2021 2022 2023 2024 2025 Index re-based WAM Microcap Investment Portfolio S&P/ASX Small Ordinaries Accumulation Index FY2025 financial highlights Operating profit before tax in FY2025 $59.7m Investment portfolio performance in FY2025 +18.8% Investment portfolio outperformance of S&P/ASX Small Ordinaries Accumulation Index in FY2025 +6.5% Investment portfolio performance (pa since inception June 2017) +16.3% Fully franked full year dividend 10.6 cps Fully franked dividend yield 7.3% Grossed-up dividend yield: 10.4% For personal use only
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wilsonassetmanagement.com.au 5 Glossary of performance measures The key measures used to analyse and discuss our results are defined here to guide the reader through the FY2025 financial highlights, the Letter from the Chairman, and the Update from the Lead Portfolio Manager. A full glossary of terms is also located on pages 78 to 80. Dividend yield The annual dividend amount expressed as a percentage of the share price at a certain point in time. This is calculated as follows: Annual dividend amount per share ÷ share price Grossed-up dividend yield Grossed-up dividend yield includes the value of franking credits and is based on the corporate tax rate (generally 30.0%), assuming the dividend is fully franked. This is calculated as follows: Annual dividend yield % ÷ (1 – the corporate tax rate of 30.0%) Net tangible assets (NTA) before tax The NTA of a company, exclusive of current and deferred income tax assets or liabilities. The NTA before tax represents the investment portfolio of the Company, i.e. cash and investments, less any associated liabilities excluding tax and is the most comparable figure for a listed investment company (LIC) to an exchange traded fund (ETF) or managed fund. Share price premium or discount LIC’s shares are traded on the ASX and a LIC has a fixed amount of capital. At times, the LIC’s share price can fluctuate above or below its NTA value. When the share price is above the NTA of the company, the LIC is trading at a premium to NTA. When the share price is below the NTA, the LIC is trading at a discount to NTA. This is calculated as follows: (Share price – NTA before tax) ÷ NTA before tax Total shareholder return (TSR) Total share price return to shareholders, assuming all dividends received were reinvested without transaction costs and the compounding effect over the period. This measure is calculated before and after the value of franking credits attached to dividends paid to shareholders. This is calculated as follows: (Closing share price – starting share price + dividends paid + franking credits) ÷ starting share price Note: the TSR reported in the Annual Report and media release is calculated monthly, using the above formula, and includes the effect of compounding over the period. Assets $405.1m Market capitalisation $404.8m Dividends paid since inception, including franking credits $208.6m NTA before tax $1.43 Share price $1.45 Dividends paid since inception, including franking credits 100.1 cps 30 June 2025 snapshot For personal use only
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6 WAM Microcap Annual Report 2025 ABN 34 617 838 418 For personal use only
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wilsonassetmanagement.com.au 7 Letter from the Chairman Geoff Wilson AO Dear Fellow Shareholders, The 2025 financial year marks the eighth consecutive year since inception that the WAM Microcap investment portfolio has outperformed its benchmark, the S&P/ASX Small Ordinaries Accumulation Index. I would like to congratulate Oscar and the WAM Microcap investment team for achieving this outperformance across various market cycles through applying the Company’s proven investment process of identifying undervalued micro- cap companies that demonstrate earnings growth, management strength and a compelling valuation. The WAM Microcap investment portfolio increased 18.8%* for the 12 months to 30 June 2025, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 6.5%. The strong investment portfolio outperformance contributed to a 27.3% increase in the Company’s operating profit before tax of $59.7 million (FY2024: $46.9 million) and an operating profit after tax of $43.6 million (FY2024: $34.2 million) for the financial year to 30 June 2025. The WAM Microcap investment process is focused on identifying and investing in undervalued growth companies in the Australian micro-cap market, with a market capitalisation of less than $300 million at the time of acquisition. Since inception in June 2017, the investment portfolio has increased 16.3%* per annum, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 9.5% per annum. Investment portfolio performance in FY202 5* +18.8% Investment portfolio outperformance of the S&P/ASX Small Ordinaries Accumulation Index in FY2025 +6.5% Fully franked full year dividend 10.6 cps Fully franked dividend yield on the 30 June 2025 share price 7.3% Grossed -up dividend yiel d: 10.4% *Investment portfolio performance is before expenses, fees and taxes to compare to the relevant index which is also before expenses, fees and taxes. For personal use only
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8 WAM Microcap Annual Report 2025 ABN 34 617 838 418 The investment portfolio performance and the profits reserve available allowed the WAM Microcap Board of Directors to increase the fully franked full year dividend to 10.6 cents per share, with the fully franked final dividend being 5.3 cents per share. The fully franked full year dividend of 10.6 cents per share represents a high grossed-up fully franked dividend yield of 10.6% on the Company’s pre- tax NTA at 30 June 2025. After listing in June 2017 at $1.10 per share, WAM Microcap has paid 100.1 cents per share in fully franked dividends to shareholders, when including the value of franking credits. This has resulted in an average dividend yield on the initial public offering price of 8.5% and a grossed-up dividend yield of 12.1% when including the value of franking credits. Looking ahead to the 2026 financial year, the WAM Microcap investment team expects falling interest rates and an improving capital-markets backdrop to create an optimal environment for Australian micro-cap companies, particularly through renewed capital raisings and takeover activity. Remaining steadfast in our proven research-driven process, the investment team will focus on identifying undervalued growth businesses with clear catalysts and deploying capital into the most compelling opportunities. The 2025 financial year marks the eighth consecutive year since inception that the WAM Microcap investment portfolio has outperformed its benchmark, the S&P/ASX Small Ordinaries Accumulation Index. For personal use only
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wilsonassetmanagement.com.au 9 We encourage you to visit our website, subscribe to receive our updates and to call or email us with any questions or suggestions you have regarding WAM Microcap or Wilson Asset Management. Please contact me or the team on (02) 9247 6755 or email us at info@wilsonassetmanagement.com.au . Thank you for your continued support. Geoff Wilson AO Chairman For personal use only
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10 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Company performance Over four decades of investing, we have found three key measures crucial to the evaluation of a listed investment company’s (LIC) performance: For personal use only
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wilsonassetmanagement.com.au 11 Key performance measure 1 Investment portfolio performance Key performance measure 2 Net tangible asset growth Key performance measure 3 Total shareholder return Investment portfolio performance measures the growth of the underlying portfolio of equities and cash before expenses, fees and taxes. Each LIC is driven towards outperforming a benchmark index, or increasing the underlying investment portfolio of equities and cash at a faster rate. NTA growth is the change in value of the company’s assets, less liabilities and costs (after management and performance fees). The NTA growth includes dividends paid to shareholders and tax paid (franking credits), demonstrates the value of the investment portfolio performance and quantifies the impact of capital management decisions. TSR measures the tangible value shareholders gain from share price growth and dividends paid over the period, before and after the value of any franking credits distributed to shareholders through fully franked dividends. For personal use only
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12 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Key performance measure 1 Investment portfolio performance Investment portfolio performance measures the growth of the underlying portfolio of equities and cash before expenses, fees and taxes. A key objective of WAM Microcap is long- term outperformance against the S&P/ASX Small Ordinaries Accumulation Index, which is achieved by growing the investment portfolio at a greater rate. The S&P/ASX Small Ordinaries Accumulation Index is also measured before expenses, fees and taxes. WAM Microcap’s investment portfolio increased 18.8% in the year to 30 June 2025, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 6.5%, while holding on average 9.0% of the investment portfolio in cash. Since inception, WAM Microcap has achieved an investment portfolio return of 16.3% per annum, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 9.5% per annum. Set out on the next page is the performance of WAM Microcap since inception, on a financial year basis. The performance data excludes all expenses, fees and taxes, and is used as a guide to show how the Company’s investment portfolio has performed against the S&P/ASX Small Ordinaries Accumulation Index over the same period. Investment portfolio performance in the financial year to 30 June 2025 +18.8% For personal use only
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wilsonassetmanagement.com.au 13 WAM Microcap investment portfolio performance since inception Investment portfolio performance at 30 June 2025 1 yr 3 yrs %pa 5 yrs %pa Since inception %pa (Jun-17) WAM Microcap Investment Portfolio 18.8% 19.1% 16.6% 16.3% S&P/ASX Small Ordinaries Accumulation Index 12.3% 10.0% 7.4% 6.8% Outperformance +6.5% +9.1% +9.2% +9.5% Investment portfolio performance is before expenses, fees and taxes to compare to the relevant index which is also before expenses, fees and taxes. Investment portfolio performance by financial year Financial year WAM Microcap Investment Portfolio S&P/ASX Small Ordinaries Accumulation Index Outperformance 2017/2018 31.2% 24.2% +7.0% 2018/2019 7.3% 1.9% +5.4% 2019/2020 11.8% -5.7% +17.5% 2020/2021 53.2% 33.2% +20.0% 2021/2022 -16.8% -19.5% +2.7% 2022/2023 16.9% 8.4% +8.5% 2023/2024 21.6% 9.3% +12.3% 2024/2025 18.8% 12.3% +6.5% For personal use only
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14 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Key performance measure 2 Net tangible asset growth NTA growth is the change in value of the Company’s assets, less liabilities and costs (including management and performance fees). The NTA represents the realisable value of the Company and is provided to shareholders and announced on the ASX each month. WAM Microcap’s pre-tax NTA increased 16.5% in the 12 months to 30 June 2025, including 10.55 cents per share of fully franked dividends paid to shareholders during the year and corporate tax paid of 7.4 cents per share or 5.3%. The franking credits attached to corporate tax payments are available for distribution to shareholders through fully franked dividends. Performance fees payable of 1.0% was the major item of difference between the investment portfolio performance of 18.8% and the NTA performance of 16.5%. Other items contributing to the change in the value of the assets during the year were management fees of 1.0% and other company related expenses of 0.4%, partially offset by capital management accretion of 0.1%. NTA growth in the financial year to 30 June 2025 +16.5% For personal use only
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wilsonassetmanagement.com.au 15 WAM Microcap pre-tax NTA performance +$0.259 Portfolio performance Investment portfolio performance measures the growth of the underlying portfolio of equities and cash before expenses, fees and taxes. The WAM Microcap investment portfolio increased 18.8% for the 12 months to 30 June 2025. $0.1055 Dividends paid to Shareholders When the Company pays a dividend, it represents income that is returned to shareholders out of the Company’s assets and profits reserve. The dividend payment reduces the Company's NTA when paid. This excludes the value of franking credits attached to the dividend payment for shareholders. During the year, 10.55 cents per share of fully franked dividends were paid or 15.1 cents per share including the value of franking credits, comprising of the FY2024 fully franked final dividend of 5.25 cents per share and the FY2025 fully franked interim dividend of 5.3 cents per share. $0.074 Franking credits generated (tax paid) Tax paid reduces the pre-tax NTA of the Company, as it represents an outflow of cash from the investment portfolio at the time of payment. Shareholders receive the benefit of tax paid by the Company as franked dividend payments are made. Shareholders receive the cash dividend, plus the value of the attached franking credits. Shareholders can use these credits to help offset additional tax payable on their taxable income, or have it refunded to them if their tax rate is lower than the 30% franking rate (corporate tax rate) attached to the dividend. $0.014 Performance fee Under the investment management agreement, the Investment Manager is eligible to be paid a performance fee being 20% (plus GST), in circumstances where: • the S&P/ASX Small Ordinaries Accumulation Index has increased over that period, the amount by which the value of the portfolio exceeds this increase; or • the S&P/ASX Small Ordinaries Accumulation Index has decreased over that period, the amount of the increase in the value of the portfolio. No performance fee is payable in respect of any performance period where the value of the portfolio has decreased over that period. $0.014 Management fees In return for its duties as Investment Manager of the portfolio, the Investment Manager is entitled to be paid monthly a management fee equal to 0.0833334% per month or 1% per annum (plus GST) of the value of the portfolio (calculated on the last business day of each month and paid at the end of each month in arrears). $0.008 Company expenses paid Company related expenses include ASX, ASIC, Director, audit, tax, accounting, Company Secretary, registry fees and other expenses incurred that relate to the operation of the Company each year. +$0.001 Capital management accretion New shares issued at a premium or discount to NTA through the dividend reinvestment plan (DRP) can impact the value of the Company’s NTA. During the year, new shares were issued through the DRP in October 2024 for the FY2024 final dividend, and in April 2025 f or the FY2025 interim dividend. $1.39 30 June 2024 NTA before tax $1.43 30 June 2025 NTA before tax Paid to Shareholders as fully franked dividends For personal use only
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16 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Key performance measure 3 Total shareholder return TS R measures the tangible value shareholders gain from share price growth and dividends paid over the period, before and after the value of any franking credits distributed to shareholders through fully franked dividends. The TSR for WAM Microcap was 14.2% during the 12 months to 30 June 2025, including the value of franking credits distributed to shareholders through fully franked dividends. This was largely driven by the investment portfolio performance of 18.8% during the period. Excluding the value of franking credits, TSR was 10.8% for the period. TSR in the financial year to 30 June 2025 +14.2% For personal use only
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wilsonassetmanagement.com.au 17 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 WAM Microcap (ASX: WMI) share price WMI share price, plus dividends WMI share price, plus dividends including franking credits S&P/ASX Small Ordinaries Accumulation Index $25,181 $20,790 $17,172 $13,182 Growth of a $10,000 investment WAM Microcap versus the index N otes: 1. The above graph reflects the period from inception in June 2017 to 30 June 2025. 2. WAM Microcap’s share price performance is calculated using the adjusted closing monthly share price from IRESS, in Australian dollar terms. The closing monthly share price from IRESS is adjusted for corporate actions such as stock splits, dividends and rights offerings. 3. The S&P/ASX Small Ordinaries Accumulation Index has been chosen for comparison purposes only. The graph is not intended to be an indication of future performance of any asset class, index or the WAM Microcap investment portfolio. NTA growth and TSR calculations The table below reflects the Company’s total return to shareholders calculated on a per share basis by adding back dividends paid (including the value of tax paid or franking credits) to the change in the NTA before tax or share price during the year. The dividends are assumed to have been re- invested at the relevant net asset value or share price, respectively, on the date on which the shares were quoted ex-dividend. The movement in the NTA before tax is driven by the investment portfolio performance, with TSR being added or offset by the increase or narrowing in the share price premium or discount to NTA. 2025 NTA before tax Share price Premium to NTA At 30 June 2025 $1.4339 $1.45 1.1% At 30 June 2024 $1.3898 $1.405 1.1% Change in the year (capital) 3.2% 3.2% Impact of dividend reinvestments (income) 8.0% 7.6% Impact of tax paid/value of franking credits (income) 5.3% 3.4% Total return for the year 16.5% 14.2% A $10,000 investment in WAM Microcap shares in June 2017 would have grown to a value of $25,181 at 30 June 2025, taking into account the dividends reinvested and value of franking credits. For personal use only
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18 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Dividends Dividends paid since inception, including franking credits 100.1 cps The Board declared a fully franked full year dividend of 10.6 cents per share, with the fully franked final dividend being 5.3 cents per share. Since inception in June 2017, the Company has paid 70.05 cents per share in fully franked dividends to shareholders and 100.1 cents per share, including the value of franking credits. The Board is committed to paying a stream of fully franked dividends to shareholders, provided the Company has sufficient profits reserves and franking credits, and it is within prudent business practices. At 31 July 2025, the Company had 4.6 years of dividend coverage, based on the profits reserve of 48.3 cents per share, before the payment of the fully franked final dividend of 5.3 cents per share. The Dividend Reinvestment Plan (DRP) is available to shareholders and the recommended fully franked final dividend of 5.3 cents per share qualifies. Participating shareholders will be entitled to be allotted the number of shares (rounded to the nearest whole number) which the cash dividend would purchase at the relevant issue price. The relevant issue price will be calculated as the volume weighted average market price (VWAP) of shares sold on the ASX over the four trading days commencing on the ex- dividend date for the relevant dividend. Dividends are paid on a six-monthly basis and the DRP will operate without a discount for the final dividend. Fully franked full year dividend 10.6 cps Fully franked dividend yield 7.3% Grossed-up dividend yield: 10.4% For personal use only
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wilsonassetmanagement.com.au 19 Since inception, WAM Microcap has returned over $208.6 million or 100.1 cents per share in dividends and franking credits to shareholders. WAM Microcap fully franked dividends since inception Key dividend dates for the fully franked final dividend of 5.3 cents per share Ex-dividend date 16 October 2025 Dividend record date (7:00pm Sydney time) 17 October 2025 Last election date for DRP 21 October 2025 Payment date 29 October 2025 Cents per share 2.0 2.25 3.0 4.0 5.0 5.25 5.25 5.32.0 2.25 3.0 4.0 5.0 5.25 5.25 5.3 2.0 2.25 3.0 4.0 - 2.0 4.0 6.0 8.0 10.0 12.0 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Fully franked interim dividend Fully franked final dividend Fully franked special dividend For personal use only
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20 WAM Microcap Annual Report 2025 ABN 34 617 838 418 For personal use only
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wilsonassetmanagement.com.au 21 The WAM Microcap investment portfolio delivered strong outperformance in the 12-months to 30 June 2025, increasing 18.8% and outperforming the S&P/ASX Small Ordinaries Accumulation Index by 6.5%. The WAM Microcap investment team and I are pleased to deliver the eighth consecutive year of investment portfolio outperformance for shareholders. In the 2025 financial year, the investment team identified and invested in the most compelling micro-cap opportunities, applying WAM Microcap’s proven investment process, delivering consistent long-term returns across a range of market cycles. The 2025 financial year saw a more favourable equity market backdrop, albeit with significant volatility in the second half following US President Trump’s “Liberation Day” announcement proposing tariffs on trading partners globally. Easing inflation and the commencement of interest rate cutting cycles in Australia and the US generally supported equity markets. Geopolitical tensions in the Middle East presented significant trading opportunities for the WAM Microcap investment team. We have witnessed that during previous periods of heightened macro volatility, small and micro-cap investors gravitate towards assets that are perceived as ‘safer’, such as gold stocks and real estate investment trusts (REITs), while they wait for the volatility to subside. During the year, this trend was evidenced with gold stocks contributing to approximately half of S&P/ASX Small Ordinaries Accumulation Index returns while only constituting 13% of the Index. We are incredibly pleased with the outperformance of the WAM Microcap investment portfolio despite it having minimal exposure to gold stocks and REITs. The bottom-up catalyst approach of investing has led to the strong performance of several large investment portfolio positions for the year including Generation Development Group (ASX: GDG), Tuas (ASX: TUA) and Service Stream (ASX: SSM). We have held diversified financial services business Generation Development Group (ASX: GDG) in the investment portfolio since 2017 and were rewarded for this long-term view with the share price more than doubling in the 2025 financial year. Under the leadership of Chief Executive Officer Grant Hackett, we believed the market underappreciating the structural tailwinds within the managed accounts and investment bonds sectors. During the period, the company executed two earnings-accretive acquisitions: Generation Development Group moving to 100% ownership of Lonsec in July 2024, building on its initial 37% stake acquired in September 2020, and secured high growth managed accounts competitor Evidentia Group Holdings in February 2025, cementing its position as Australia’s largest provider of outsourced investment advice to financial planners. Generation Development Group was subsequently added to the S&P/ASX 300 and 200 indices, resulting in a significant valuation re- rating driven by a substantial increase in passive index buying. This has become an increasingly powerful driver of share prices. Update from the Lead Portfolio Manager Oscar Oberg CFA For personal use only
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22 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Telecommunications company Tuas (ASX: TUA) continued its momentum over the 2025 financial year with subscriptions in its mobile offering in Singapore continuing to grow and earnings materially exceeding analyst expectations. The company is in its early stages of launching its broadband offering with positive traction to date, while market expansion opportunities such as the enterprise segment and entry into the Malaysian market present material upside. Consolidation of the Singaporean telecommunications market is a key potential catalyst looking forward. Service Stream (ASX: SSM) which is an end-to-end asset life-cycle services provider for different industries also contributed to investment portfolio outperformance in the period. Management have done an excellent job in improving margins across the business, whilst the establishment of a new defence vertical is a key potential catalyst in the near term and various new potential contract wins have tender processes in the final stages. Aged care provider Regis Healthcare (ASX: REG) benefitted from ongoing industry tailwinds, with demand continuing to outstrip supply and government funding changes improving operator returns after an extended period of industry margin contraction. In addition, the investment team identified and invested in several new ideas that we believe will lead to continued positive performance including transport services company Kelsian Group (ASX: KLS), power and communications infrastructure and services provider GenusPlus Group (ASX: GNP) and software supplier to wholesale energy, environmental and carbon trading markets Energy One (ASX: EOL). Diversified investment portfolio by sector at 30 June 2025 • Financials: 24.5% Industrials: 16.1% Consumer discretionary: 14.8% • Information technology: 13.3% • Health care: 9.0% • Communication services: 6.0% • Materials: 4.8% • Real estate: 2.2% • Utilities: 1.7% • Energy: 0.4% • Consumer staples: 0.1% • Cash: 7.1% 24.4% 16.1% 14.8% 13.3% 9.0% 6.0% 4.8% 2.2% 1.7% 0.4% 0.1% 7.1% For personal use only
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wilsonassetmanagement.com.au 23 Companies that detracted from investment portfolio performance during the year included sustainable waste stream solutions company Close the Loop (ASX: CLG) and video game developer and publishing studio PlaySide Studios (ASX: PLY), both of which we have since sold out of, as well as engineering and manufacturing equipment manufacturer Austin Engineering (ASX: ANG). Capital markets activity was notably subdued in the first half of the financial year, however in the second half there were three takeovers in the investment portfolio which contributed significantly to investment portfolio performance including discount variety store chain The Reject Shop (ASX: TRS), fleet management provider SG Fleet Group (ASX: SGF) and EFTPOS provider Smartpay Holdings (ASX: SMP). These three companies were held in the WAM Microcap investment portfolio for several years and we are pleased to be able to see realisation of each company’s intrinsic value. We also participated in several initial public offerings including sustainable infrastructure business Infragreen Group (ASX: IFN) and construction group Symal Group (ASX: SYL), in addition to several capital raises including Zip Co (ASX: ZIP) and Qoria (ASX: QOR). We are optimistic about the capital transactions landscape in the 2026 financial year. Looking ahead, with global uncertainty improving sequentially and interest rate cutting cycles underway in Australia and New Zealand, we are positive on the outlook of small and micro-cap companies. Staying steadfast on our investment approach and strategy, we will continue to focus on identifying undervalued growth companies with catalysts that could be the industry leaders of tomorrow. Thank you for your continued support. Oscar Oberg CFA Lead Portfolio Manager For personal use only
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24 WAM Microcap Annual Report 2025 ABN 34 617 838 418 WAM Microcap top 20 holdings with portfolio weightings at 30 June 2025 Code Company name % TUA Tuas Limited 3.3% KLS Kelsian Group Limited 3.1% EOL Energy One Limited 3.0% QOR Qoria Limited 2.9% TEA Tasmea Limited 2.6% ASG Autosports Group Limited 2.5% EML EML Payments Limited 2.5% SMP Smartpay Holdings Limited 2.5% GNP GenusPlus Group Limited 2.4% DVP Develop Global Limited 2.1% ZIP Zip Co Limited 2.1% PGC Paragon Care Limited 2.1% GTK Gentrack Group Limited 2.0% NZM NZME Limited 2.0% EVO Embark Early Education Limited 1.9% FCL FINEOS Corporation Holdings PLC 1.9% n/a Xpansiv Limited 1.9% PLT Plenti Group Limited 1.9% TRA NZ Turners Automotive Group Limited 1.9% AFG Australian Finance Group Limited 1.8% The fair values of individual investments held at the end of the reporting period are disclosed on pages 75 to 76. For personal use only
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wilsonassetmanagement.com.au 25 Investment objectives The investment objectives of WAM Microcap are to: • deliver investors a stream of fully franked dividends; • provide capital growth over the medium-to- long term; and • preserve capital of the Company. Investment process WAM Microcap provides investors with access to a portfolio of undervalued micro-cap growth companies with a market capitalisation of less than $300 million at the time of acquisition, using Wilson Asset Management’s two distinctive investment processes: • a research-driven process focused on identifying undervalued micro-cap growth companies; and • a market-driven process that takes advantage of mispricing opportunities. Research-driven investing This investment process involves diligent and deep research that focuses on free cash flow, return on equity and the quality of a company. Each company is carefully rated with respect to management, earnings growth potential, valuation and industry position. Under this process, our investment team will only ever invest in a security once we can identify a catalyst or event that we expect will change the market’s valuation of the company. Market-driven investing This investment process takes advantage of short-term mispricing opportunities in the Australian equity market. This part of the investment portfolio is actively traded, and as such, opportunities are derived from initial public offerings, placements, block trades, rights issues, corporate transactions (such as takeovers, mergers, schemes of arrangement, corporate spin- offs and restructures), arbitrage opportunities, LIC discount arbitrages, short-selling and trading market themes and trends. Investment objectives and process Catalyst: a major event that alters the market’s perception of a company or its earnings momentum which will lead to a rerating of the investee company’s share price. Research Driven Process Market Driven Process Catalyst Diligent and deep research on undervalued micro-cap growth companies that focuses on free cash flow, return on equity, meeting management and the quality of a company. Takes advantage of short-term mispricing opportunities in the Australian equity market. For personal use only
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26 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Wilson Asset Management has been passionate about making a difference for shareholders and the community for over 27 years. As an investment manager, Wilson Asset Management invests $6.0 billion on behalf of more than 130,000 retail and wholesale investors. Wilson Asset Management is proud to be the Investment Manager for nine leading listed investment companies (LICs), WAM Capital (ASX: WAM), WAM Leaders (ASX: WLE), WAM Global (ASX: WGB), WAM Microcap (ASX: WMI), WAM Alternative Assets (ASX: WMA), WAM Income Maximiser (ASX: WMX), WAM Strategic Value (ASX: WAR), WAM Research (ASX: WAX) and WAM Active (ASX: WAA) and two unlisted funds: Wilson Asset Management Leaders Fund and Wilson Asset Management Founders Fund. Wilson Asset Management created and is the lead supporter of the first LICs to deliver both investment and social returns: Future Generation Australia (ASX: FGX) and Future Generation Global (ASX: FGG), as well as Future Generation Women. $6.0 billion in funds under management >250 years combined investment experience +27 years making a difference for shareholders 11 investment products About Wilson Asset Management For personal use only
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wilsonassetmanagement.com.au 27 Philanthropy Geoff Wilson founded Future Generation Australia in 2014 and Future Generation Global in 2015. The Future Generation companies are Australia’s first listed investment companies to provide both investment and social returns. The companies seek to deliver a stream of fully franked dividends, preserve shareholder capital and provide medium to long-term capital growth for investors by giving them unprecedented access to prominent Australian and global fund managers. These managers generously waive their performance and management fees, which enables the Future Generation companies to invest 1.0% of average net tangible assets each year in their social impact partners and other not-for-profit organisations. To date, the Future Generation companies have invested $87.2 million to organisations that support at-risk children and youth in Australia. The team at Wilson Asset Management continue to be the leading supporter of both companies and Future Generation Women. By 2030, Future Generation aims to have donated over $100 million, with $87.2 million donated since inception so far. The team at Wilson Asset Management continue to support both companies. Wilson Asset Management is a member of the global philanthropic Pledge 1% movement, is a significant funder of many Australian charities and provides all team members with $10,000 each year to donate to charities of their choice. During the year, Wilson Asset Management and Future Generation team members were proud to support 97 charities across several cause areas such as education, youth services, mental health and cancer research. All philanthropic investments are made by the Investment Manager. We are honoured to provide continued support to Olympic athletes, through managing funds for the Australian Olympic Committee (AOC) on a pro bono basis. The AOC provides crucial financial and institutional support to Australian athletes to compete at an Olympic level. All fees are foregone by the Investment Manager. We also support a number of organisations through sponsorships and partnerships across a range of initiatives including the Australian Shareholder’s Association, Sporting Chance Cancer Foundation, Sydney Women’s Fund, Raise Foundation, Eat Up Australia, Alpine Cycling Club, Bondi2Berry, Morgans Big Dry Friday, Macquarie University Applied Finance Investment and Scholarship Fund and more. All sponsorships and partnerships are paid for by the Investment Manager. For personal use only
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28 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Advocacy As part of our commitment to delivering value for both shareholders and the broader community, we continue to prioritise advocacy on behalf of retail investors in the Australian equity market. This work is underpinned by our core belief that all Australian investors should be treated equitably. In the financial year to date we have focused on five key policies: 1. Taxing unrealised gains in superannuation In February 2024, we made a formal submission to the Senate Economics Legislation Committee on Treasury Laws Amendment (Better Targeted Superannuation Concessions) opposing the Government’s proposal to tax unrealised gains and the failure to index the superannuation threshold of $3 million. At the time, we provided a simple solution to eliminate the need for a tax on unrealised gains, which unfortunately, to date, has not been adopted. Under the proposed changes, superannuants with balances over $3 million would be required to pay tax on the increase in the value of their assets, even if the assets are not sold and no cash has been generated to fund the tax. A lack of indexation on the $3 million means, on our estimates, that 8.1 million Australians, or half of all current superannuants, will be captured by 2053 due to the impact from ‘bracket creep’. In April 2025, we launched a discussion paper ‘Critiquing the Proposed Taxation on Unrealised Gains in Superannuation’. The evidence-based paper is grounded in economic principles and highlights the significant unintended consequences of the legislation. It is designed to contribute towards an important national conversation and has generated significant national media coverage. The paper shows how the proposed policy will undermine Australia’s $4.2 trillion superannuation system and damage the economy. Our modelling indicates $94.5 billion would be removed from the Australian economy through what economists term the Deadweight Loss of Taxation, and $155 billion of superannuation savings would be redirected into tax-free structures such as principal places of residence, exacerbating the housing affordability crisis that already weighs on younger Australians. In May 2025, we launched a petition ‘Stand with Us Against Taxing Unrealised Gains’ and invited Australians to call upon the Senate to stop the proposed legislation. To date, nearly 18,000 people have signed the petition. The legislation is set to go before the Senate after Parliament returns on 22 July 2025. 2. Australia’s evolving capital markets In May 2025, we made a submission in response to ASIC’s discussion paper ‘Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets’. Our submission called on ASIC to play a proactive role in safeguarding investor confidence, reducing regulatory burden, and preserving the features, like franking credits, that make Australia’s markets competitive and attractive for long-term investment. Our submission advocated for policy certainty on franking credits, especially ensuring refundable franking credits are protected to encourage domestic investment. It also made the case for For personal use only
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wilsonassetmanagement.com.au 29 ASX listings to be easier for smaller companies to prevent a shrinking public market that limits capital, hurts innovation, and reduces the diversity and strength of the share market that underpins superannuation savings. 3. Phase out of ‘bank hybrids’ In November 2024, we made a formal submission to the Australian Prudential Regulation Authority (APRA) in response to their discussion paper ‘A more effective capital framework for a crisis on the proposed phase out of Additional Tier 1 (AT1) capital, which are commonly known as ‘bank hybrids’. Our submission objected to the proposed phase out of retail access to ‘bank hybrids’, as we believe they play an important role in both retail investors’ portfolios and bank’s credit structures. In addition, they offer retail investors higher-yielding franked- income streams with both debt and equity characteristics. The removal of these securities from the retail investors’ investment universe will deprive their investment portfolio of diversification benefits with respect to risk and return. It will also reduce valuable franked income streams, especially for retirees and those in self-managed super funds (SMSF). On 9 December 2024, APRA announced its decision to phase out all Additional Tier 1 (AT1) capital instruments by 2032. 4. Sophisticated investor test (wholesale investor and wholesale client tests) In October 2024, Geoff Wilson AO appeared before the Parliamentary Joint Committee on Corporations and Financial Services to advocate our position on the sophisticated investor test (wholesale investor and wholesale client tests). This follows our formal submission in May 2024, where we proposed two regulatory changes that could help level the playing field between large and small investors: a) Abolish the wholesale investor test for listed companies, allowing all shareholders to participate in equity raisings by ASX- listed companies to ensure fairness to small shareholders. b) Enhance the sophisticated investor test that currently discriminates between investors according to their wealth by adding a new financial literacy test to enable those with the relevant experience and qualifications to qualify for the test and not be excluded simply because of their wealth. The Parliamentary Joint Committee on Corporations and Financial Services concluded its inquiry in February 2025. Notably, the Committee did not recommend immediate changes to the existing financial thresholds for classifying wholesale investors or clients. The Committee's final report made two key recommendations: a) That the Government establish a mechanism for the periodic review of the operation of the wholesale investor and client tests and should include mandatory requirements for engagement and consultation with Australia's investment industry. b) Subject to stakeholder consultation, the Committee advised amending the Corporations Act 2001 to remove the subjective elements of the sophisticated investor test with the aim of introducing objective criteria relating to the knowledge and experience of the investor. For personal use only
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30 WAM Microcap Annual Report 2025 ABN 34 617 838 418 The second recommendation aligns with our long- held position and ongoing advocacy on the issue. We understand that future consultations and evidence-based discussions will be integral to any potential reforms, and we will continue to engage with policy makers through the consultation process. 5. Virtual Annual General Meetings (AGMs) In July 2024, we made a formal submission to the Treasury’s Statutory Review of the Meetings and Documents Amendments. Our submission focused on the review into making temporary virtual AGMs permanent. We believe that AGMs of publicly listed companies should be held as hybrid meetings (a combination of in-person and virtual meetings), not exclusively as online meetings, as virtual only meetings shift the balance of power away from shareholders by eroding transparency, accountability and access. In February 2025, the Government released a response to the review that included eleven recommendations. The Government maintained that listed public companies and listed registered schemes can hold wholly virtual meetings only if explicitly permitted by their constitution. Recommendation 4, ‘future review of meeting laws’, states that a review of the formats of AGMs and other members’ meetings be undertaken in 5 years’ time. This would provide opportunities to observe how the conduct of meetings has evolved during the transition and whether any significant issues have arisen. We will continue to advocate for hybrid meetings as part of this process. For personal use only
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wilsonassetmanagement.com.au 31 Education We also remain committed to education initiatives which advocate for change and progress in corporate Australia. We support the University of New South Wales School of Mathematics and Statistics’ Do the Maths program, which aims to inspire girls in high school to consider tertiary studies and careers in mathematics and statistics. We believe in the importance of gender diversity in the financial services industry, in particular funds management, which provides rewarding career paths. We also host Women’s Investor Events which give likeminded women a platform to network and enhance financial literacy, while our Young Investor Events aim to inspire the next generation to begin their investment journey early. We encourage all shareholders to visit our website and subscribe to receive our updates. As always, please contact us by phone on (02) 9247 6755 or by email at info@wilsonassetmanagement.com.au if you ever have any questions or feedback. Shareholder engagement and communication WAM Microcap is your company and it is Wilson Asset Management’s responsibility to manage the Company on your behalf and be available to report to you on a regular basis. We encourage all shareholders to communicate with us and share their feedback. We have a variety of options to keep you informed, including: Email updates from the Chairman and CIO, the Lead Portfolio Managers and the Investment Team Shareholder presentations and events Investment insights including market and macroeconomic commentary, updates from meetings with investee management teams and ‘Talking Stocks’ videos Shareholder Q&A webinars and breakfast roundtable events Monthly NTA reports Social media engagement Investor education material Annual and interim results announcements with detailed updates on the investment portfolios and markets Media coverage and speaking engagements from our ongoing media partnerships with Livewire Markets, the ASX, Equity Mates, the Australian Shareholders’ Association, the SMSF Association and more. For personal use only
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32 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Directors’ Report to shareholders For the year ended 30 June 2025 The Directors present their report together with the financial report of WAM Microcap for the financial year ended 30 June 2025. Principal activity The principal activity of the Company is making investments in listed companies. The Company’s investment objectives are to deliver a stream of fully franked dividends, provide capital growth in the medium-to-long term and preserve capital. No change in this activity took place during the year or is likely to in the future. Operating and financial review Investment operations over the year resulted in an operating profit before tax of $59,711,401 (2024: $46,918,765) and an operating profit after tax of $43,583,480 (2024: $34,206,336). The operating profit for FY2025 is a result of the strong performance of the investment portfolio over the year. The investment portfolio increased 18.8% during the 12-month period to 30 June 2025, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 6.5%. The average cash weighting of the investment portfolio during the period was 9.0%. The operating profit for the year includes unrealised gains or losses arising from changes in the fair value of the investments held in the portfolio during the year. This movement in the fair value of investments can add to or reduce the realised gains and losses on the investment portfolio and other revenue from operating activities (such as dividend and interest income) in each period. This treatment under the Accounting Standards can cause large variations in reported operating profits between periods. The operating profit or loss for each financial period is reflective of the underlying investment portfolio performance and is important to understand with context to the overall performance of equity markets in any given period. As a result, we believe the more appropriate measures of the financial results for the period are the investment portfolio performance, the change in net tangible assets (NTA) and fully franked dividends, together with total shareholder return. Further information on the three key listed investment company performance measures and the operating and financial review of the Company is contained in the Chairman’s Letter. For personal use only
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wilsonassetmanagement.com.au 33 Financial position The net asset value of the Company as at 30 June 2025 was $394,870,515 (2024: $377,150,607). Further information on the financial position of the Company is contained in the Chairman’s Letter. Significant changes in state of affairs There was no significant change in the state of affairs of the Company during the year ended 30 June 2025. Dividends paid or recommended Dividends paid or declared during the year are as follows: $ Fully franked final FY2024 dividend of 5.25 cents per share paid on 29 October 2024 14,534,826 Fully franked interim FY2025 dividend of 5.3 cents per share paid on 30 April 2025 14,734,152 Since the end of the year, the Directors declared a fully franked final dividend of 5.3 cents per share to be paid on 29 October 2025. The Board is committed to paying a stream of fully franked dividends to shareholders, provided the Company has sufficient profits reserves and franking credits, and it is within prudent business practices. The ability to generate franking credits is reliant on the receipt of franked dividends from investee companies and the payment of tax on realised profits. For personal use only
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34 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Directors of the Company The following persons were Directors of the Company during the financial year and up to the date of this report: Geoff Wilson AO Kate Thorley Jacqueline Sullivan Adrian Siew Information on Directors Geoff Wilson AO (Chairman – non-independent) Chairman of the Company since March 2017 Experience and expertise Geoff Wilson has more than 45 years’ direct experience in investment markets having held a variety of senior investment roles in Australia, the UK and the US. Geoff founded Wilson Asset Management in 1997 and created Australia’s first listed philanthropic wealth creation vehicles, Future Generation Australia Limited and Future Generation Global Limited, as well as Future Generation Women. Geoff 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 (AICD). Other current listed company directorships Geoff Wilson is currently Chairman of WAM Capital Limited (appointed March 1999), WAM Research Limited (appointed June 2003), WAM Active Limited (appointed July 2007), WAM Leaders Limited (appointed March 2016), WAM Global Limited (appointed February 2018), WAM Strategic Value Limited (appointed March 2021) and WAM Income Maximiser Limited (appointed January 2025). He is the founder and a Director of Future Generation Australia Limited (appointed July 2014) and Future Generation Global Limited (appointed May 2015) and a Director of WAM Alternative Assets Limited (appointed September 2020), Staude Capital Global Value Fund Limited (appointed April 2014), Hearts and Minds Investments Limited (appointed September 2018), Keybridge Capital Limited (appointed February 2025) and Yowie Group Limited (appointed June 2025). For personal use only
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wilsonassetmanagement.com.au 35 Geoff Wilson AO (Chairman – non-independent) (cont’d) Former listed company directorships in the last 3 years None. Special responsibilities Chairman of the Board. Interests in shares of the Company Details of Geoff Wilson’s interests in shares of the Company are included later in this report. Interests in contracts Details of Geoff Wilson’s interests in contracts of the Company are included later in this report. Kate Thorley (Director – non-independent) Director of the Company since March 2017 Experience and expertise Kate Thorley has over 21 years’ experience in the funds management industry and more than 26 years of financial accounting and corporate governance experience. Kate is the Chief Executive Officer of Wilson Asset Management (International) Pty Limited, Director of WAM Capital Limited, WAM Active Limited, WAM Research Limited, WAM Leaders Limited, WAM Global Limited, WAM Strategic Value Limited, WAM Income Maximiser Limited, Future Generation Australia Limited and Future Generation Global Limited. She holds a Bachelor of Commerce, a Graduate Diploma in Applied Finance and Investment, Graduate Diploma of Applied Corporate Governance and is a fully qualified CA. She is a Graduate member of the AICD (GAICD). Other current listed company directorships Kate Thorley is a Director of WAM Active Limited (appointed July 2014), WAM Research Limited (appointed August 2014), Future Generation Australia Limited (appointed April 2015), WAM Leaders Limited (appointed March 2016), WAM Capital Limited (appointed August 2016), WAM Global Limited (appointed February 2018), Future Generation Global Limited (appointed March 2021), WAM Strategic Value Limited (appointed March 2021) and WAM Income Maximiser Limited (appointed January 2025). Former listed company directorships in the last 3 years None. Special responsibilities None. Interests in shares of the Company Details of Kate Thorley’s interests in shares of the Company are included later in this report. Interests in contracts None. For personal use only
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36 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Jacqueline Sullivan (Director – independent) Director of the Company since May 2017 Experience and expertise Jacqueline Sullivan has over 36 years’ funds management experience gained in a number of senior executive roles across the Australian and global AMP Capital businesses. In that time, Jacqueline led global distribution of AMP Capital with a focus on expansion into Asia, North America and Europe. As Head of Product, Jacqueline led the development of range of multi-manager products, listed funds, real assets and hedge funds. Jacqueline holds a Bachelor of Science, MBA, Graduate Diploma of Applied Finance and Investment and is a Graduate member of the AICD (GAICD). Other current listed company directorships Jacqueline Sullivan is a director of Sandon Capital Limited (appointed December 2021). Former listed company directorships in the last 3 years Jacqueline Sullivan resigned as a director of Mercantile Investment Company Limited in August 2023. Special responsibilities None. Interests in shares of the Company None. Interests in contracts None. Adrian Siew (Director – non-independent) Director of the Company since November 2020 Experience and expertise Adrian has 29 years’ experience in the financial industry. He started his career with the Goldman Sachs European investment banking team in London before moving to Hong Kong and Singapore as part of their mergers and acquisitions and corporate finance advisory teams. He later spent 11 years with The Carlyle Group as a Director of their private equity buyout investment team in Sydney and Singapore. Adrian was the Lead Portfolio Manager responsible for the alternative asset strategy of Wilson Asset Management (International) Pty Limited, and is now a board director and investment committee member of WAM Alternative Assets Limited. He is also the Chief Executive Officer of Wilson Family Office. He holds a First Class Honours in Bachelor of Science (Economics) Accounting and Finance from London School of Economics. Other current listed company directorships Adrian Siew is a Director of WAM Alternative Assets Limited (appointed September 2020). For personal use only
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wilsonassetmanagement.com.au 37 Adrian Siew (Director – non-independent) (cont’d) Former listed company directorships in the last 3 years None. Special responsibilities None. Interests in shares of the Company None. Interests in contracts None. Joint Company Secretaries The following persons held the position of Joint Company Secretary at the end of the financial year: Jesse Hamilton Joint Company Secretary of WAM Microcap Limited since November 2020 Jesse Hamilton is a Chartered Accountant with more than 17 years’ experience working in advisory and assurance services, specialising in funds management. As the Chief Financial Officer, Jesse oversees all finance and accounting of Wilson Asset Management (International) Pty Limited. Jesse is currently a non-executive Director of the Listed Investment Companies & Trusts Association, Chair and Company Secretary of Keybridge Capital Limited, Director and Company Secretary of Yowie Group Limited and Company Secretary for WAM Alternative Assets Limited and WAM Strategic Value Limited and Joint Company Secretary for WAM Capital Limited, WAM Leaders Limited, WAM Global Limited, WAM Microcap Limited, WAM Research Limited, WAM Active Limited and WAM Income Maximiser Limited, in addition to Future Generation Australia Limited and Future Generation Global Limited. Prior to joining Wilson Asset Management, Jesse worked as Chief Financial Officer of an ASX listed company and also worked as an advisor specialising in assurance services, valuations, mergers and acquisitions, financial due diligence and capital raising activities for listed investment companies. Linda Kiriczenko Joint Company Secretary of WAM Microcap Limited since March 2017 Linda Kiriczenko has over 21 years’ experience in financial accounting including more than 17 years in the funds management industry. As the Finance Manager of Wilson Asset Management (International) Pty Limited, Linda oversees finance and accounting and is also Joint Company Secretary for seven listed investment companies, WAM Capital Limited, WAM Leaders Limited, WAM Global Limited, WAM Microcap Limited, WAM Research Limited, WAM Active Limited and WAM Income Maximiser Limited. Linda holds a Bachelor of Commerce and is a fully qualified CPA. She is a certified member of the Governance Institute of Australia. For personal use only
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38 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Remuneration Report (Audited) This report details the nature and amount of remuneration for each Director of WAM Microcap. a) Remuneration of Directors All Directors of WAM Microcap are non-executive Directors. The Board from time to time determines remuneration of Directors within the maximum amount approved by the shareholders at the Annual General Meeting. Directors are not entitled to any other remuneration. Fees and payments to Directors reflect the demands that are made on and the responsibilities of the Directors and are reviewed annually by the Board. The Company determines the remuneration levels and ensures they are competitively set to attract and retain appropriately qualified and experienced Directors. The maximum total remuneration of the Directors of the Company has been set at $80,000 per annum. Directors do not receive bonuses nor are they issued options on securities as part of their remuneration. Directors’ fees cover all main Board activities and membership of committees. Directors’ remuneration received for the year ended 30 June 2025: Director Position Short-term employee benefits Directors’ Fees $ Post-employment benefits Superannuation $ Total $ Geoff Wilson Chairman 8,969 1,031 10,000 Kate Thorley Director 8,969 1,031 10,000 Jacqueline Sullivan Director 22,422 2,578 25,000 Adrian Siew Director 22,422 2,578 25,000 62,782 7,218 70,000 Directors receive a superannuation guarantee contribution required by the government, which was 11.5% of individuals’ benefits for FY2025 (FY2024: 11.0%) and do not receive any other retirement benefits. Directors may also elect to salary sacrifice their fees into superannuation. Directors’ remuneration received for the year ended 30 June 2024: Director Position Short-term employee benefits Directors’ Fees $ Post-employment benefits Superannuation $ Total $ Geoff Wilson Chairman 9,009 991 10,000 Kate Thorley Director 9,009 991 10,000 Jacqueline Sullivan Director 22,523 2,477 25,000 Adrian Siew Director 22,523 2,477 25,000 63,064 6,936 70,000 For personal use only
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wilsonassetmanagement.com.au 39 Remuneration Report (Audited) (cont’d) a) Remuneration of Directors (cont’d) The following table reflects the Company’s performance and Directors’ remuneration over five years: 2025 2024 2023 2022 2021 Operating profit/(loss) after tax ($) $43,583,480 $34,206,336 $26,321,283 ($36,095,190) $76,098,601 Dividends declared (cents per share) 10.6 10.5 10.5 10.0 12.0 Share price ($ per share) $1.45 $1.405 $1.41 $1.625 $1.825 NTA after tax ($ per share) $1.41 $1.36 $1.30 $1.28 $1.58 Total Directors’ remuneration ($) $70,000 $70,000 $70,000 $70,000 $59,897 Shareholder’s equity ($) $394,870,515 $377,150,607 $275,816,303 $268,208,723 $327,634,251 As outlined above, Directors’ fees are not directly linked to the Company’s performance. b) Director related entities remuneration All transactions with related entities during the year were made on normal commercial terms and conditions and at market rates. The Company has an investment management agreement with MAM Pty Limited (the Investment Manager or the Manager), part of the Wilson Asset Management Group. Geoff Wilson is the director of MAM Pty Limited, the entity appointed to manage the investment portfolio of WAM Microcap. Entities associated with Geoff Wilson hold 100% of the issued shares of MAM Pty Limited. In its capacity as the Manager and in accordance with the investment management agreement, MAM Pty Limited was paid a management fee of 1% p.a. (plus GST) of the value of the portfolio amounting to $4,443,712 inclusive of GST (2024: $3,325,548). As at 30 June 2025, the balance payable to the Manager was $371,014 inclusive of GST (2024: $358,556). In addition, MAM Pty Limited is eligible to be paid a performance fee being 20% (plus GST), in circumstances where: • the S&P/ASX Small Ordinaries Accumulation Index has increased over that period, the amount by which the value of the portfolio exceeds this increase; or • the S&P/ASX Small Ordinaries Accumulation Index has decreased over that period, the amount of the increase in the value of the portfolio. No performance fee is payable in respect of any performance period where the value of the portfolio has decreased over that period. For the year ended 30 June 2025, a performance fee of $4,282,786 inclusive of GST was payable to the Manager (2024: $6,531,138). Wilson Asset Management (International) Pty Limited has a service agreement in place with WAM Microcap to provide accounting and company secretarial services on commercial terms. For the year ended 30 June 2025, the fee for accounting services amounted to $68,750 inclusive of GST (2024: $55,000) and the fee for company secretarial services amounted to $23,650 inclusive of GST (2024: $19,800). These amounts are in addition to the above Directors’ remuneration. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than those detailed above) by reason of a contract made by the Company or a related company of the Director or with a firm of which they are a member or with a company in which they have substantial financial interest. For personal use only
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40 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Remuneration Report (Audited) (cont’d) c) Remuneration of executives There are no executives that are paid by the Company. MAM Pty Limited, the Investment Manager of the Company, provides the day-to-day management of the Company and is remunerated for these services as outlined above. d) Equity instruments disclosures of Directors and related parties As at the balance date, the Company’s Directors and their related parties held the following interests in the Company: Ordinary shares held Directors Balance at 30 June 2024 Acquisitions Disposals Balance at 30 June 2025 Geoff Wilson 1,082,911 - - 1,082,911 Kate Thorley 247,326 1,080 - 248,406 Jacqueline Sullivan - - - - Adrian Siew - - - - 1,330,237 1,080 - 1,331,317 There have been no changes in shareholdings disclosed above between 30 June 2025 and the date of the report. Directors 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 the financial year, been granted options over unissued shares or interests in shares of the Company as part of their remuneration. - End of Remuneration Report – For personal use only
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wilsonassetmanagement.com.au 41 Directors’ meetings Director No. eligible to attend Attended Geoff Wilson 4 3 Kate Thorley 4 4 Jacqueline Sullivan 4 4 Adrian Siew 4 4 Audit and Risk Committee The Company has not established an Audit and Risk Committee due to the Company’s size, Board composition and the nature of the Company’s operations. As such, the Company’s Board of Directors fulfil the role of the Audit and Risk Committee. After balance date events Since the end of the year, the Directors declared a fully franked final dividend of 5.3 cents per share to be paid on 29 October 2025. No other matters or circumstances have arisen since the end of the financial year, other than already disclosed, which significantly affect 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. Future developments The Company will continue to pursue investment activities - primarily investing in equities listed on the Australian Securities Exchange - to achieve the Company’s stated objectives. The Company’s future performance is dependent on the performance of the Company’s investments. In turn, the performance of these investments 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 and these investments. As such, we do not believe it is possible or appropriate to accurately predict the future performance of the Company’s investments and, therefore, the Company’s performance. Environmental regulation The Company’s operations are not regulated by any environmental regulation under a law of the Commonwealth or of a State or Territory of Australia. For personal use only
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42 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Indemnification and insurance of Officers or Auditors During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company Secretary and any related body corporate against liability incurred as such by a Director or Secretary to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. No indemnities have been given or insurance premiums paid during or since the end of the financial year, 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 the Court to bring proceedings on behalf of the Company or to 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. Non-audit services During the year Pitcher Partners Sydney, the Company’s auditor, performed taxation and other services for the Company. Details of the amounts paid to the auditors and their related parties are disclosed in Note 5 to the financial statements. The Board of Directors is satisfied that the provision of non-audit services during the year 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 5 did not compromise the external auditor’s independence for the following reasons: • all non-audit services are reviewed and approved by the Board of Directors 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 to nearest dollar In accordance with ASIC Corporations (rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the Directors’ Report have been rounded to the nearest dollar, unless otherwise indicated. Corporate Governance Statement The Company’s Corporate Governance Statement for the year ended 30 June 2025 is provided on the Company’s website at wilsonassetmanagement.com.au/wam-microcap/. For personal use only
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wilsonassetmanagement.com.au 43 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 page 44 of the Annual Report. Signed in accordance with a resolution of the Board of Directors. Geoff Wilson AO Chairman Dated this 25th day of August 2025 For personal use only
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Pitcher Partners Sydney ABN 17 795 780 962 Level 16, Tower 2 Darling Park 201 Sussex Street Sydney NSW 2000 Postal address GPO Box 1615 Sydney NSW 2001 +61 2 9221 2099 sydneypartners@pitcher.com.au pitcher.com.au Pitcher Partners is an association of independent firms. Pitcher Partners Sydney ABN 17 795 780 962. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney 44 Auditor’s Independence Declaration To the Directors of WAM Microcap Limited ABN 34 617 838 418 In relation to the independent audit of WAM Microcap Limited for the year ended 30 June 202 5, I declare that to the best of my knowledge and belief there have been: (i) no contraventions of the auditor’s independence requirements of the Corporations Act 2001; and (ii) no contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards). C I Chandran Partner Pitcher Partners Sydney 25 August 2025 For personal use only
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wilsonassetmanagement.com.au 45 Financial Report For the year ended 30 June 2025 This financial report is for WAM Microcap Limited (WAM Microcap or the Company) for the year ended 30 June 2025. WAM Microcap is a for-profit entity for financial reporting purposes under Australian Accounting Standards. WAM Microcap is a listed public company, incorporated and domiciled in Australia. The financial report was authorised for issue on 25 August 2025 by the Board of Directors. In addition to the relevant financial information, the notes to the financial statements include a description of the material accounting policies applied, and where applicable key judgements and estimates used by management in applying these policies. Consolidated entity disclosure statement WAM Microcap is not required to prepare consolidated financial statements by Australian Accounting Standards. Accordingly, in accordance with subsection 295(3A) of the Corporations Act 2001, no further information is required to be disclosed in the consolidated entity disclosure statement. For personal use only
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46 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Statement of Comprehensive Income (‘Profit or Loss’) For the year ended 30 June 2025 Note 2025 $ 2024 $ Net realised and unrealised gains on financial investments 59,921,863 50,836,442 Other revenue from operating activities 2 9,439,246 6,535,616 Management fees (4,140,732) (3,098,806) Performance fees (3,990,778) (6,085,833) Directors fees (70,000) (70,000) Brokerage expense on share purchases (776,895) (581,033) Custody fees (36,146) (28,752) ASX listing and CHESS fees (123,279) (119,141) Share registry fees (106,634) (102,917) Disbursements, mailing and printing (62,148) (53,668) ASIC industry funding levy (19,468) (12,079) Accounting fees (68,750) (55,000) Company secretary fees (23,650) (19,800) Other expenses from ordinary activities (231,228) (226,264) Profit before income tax 59,711,401 46,918,765 Income tax expense 3(a) (16,127,921) (12,712,429) Profit after income tax attributable to members of the Company 43,583,480 34,206,336 Other comprehensive income Other comprehensive income for the year, net of tax - - Total comprehensive income for the year 43,583,480 34,206,336 Basic and diluted earnings per share 14 15.69 cents 15.27 cents The accompanying notes form part of these financial statements. For personal use only
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wilsonassetmanagement.com.au 47 Statement of Financial Position (‘Balance Sheet’) As at 30 June 2025 Note 2025 $ 2024 $ Current assets Cash and cash equivalents 12 33,919,791 45,992,468 Trade and other receivables 6 938,317 701,218 Financial assets 7 376,494,319 349,634,273 Total current assets 411,352,427 396,327,959 Non-current assets Deferred tax assets 3(b) 191,988 3,944,497 Total non -current assets 191,988 3,944,497 Total assets 411,544,415 400,272,456 Current liabilities Trade and other payables 8 11,016,990 11,547,661 Current tax liabilities 3(c) 2,636,672 11,574,188 Total current liabilities 13,653,662 23,121,849 Non-current liabilities Deferred tax liabilities 3(d) 3,020,238 - Total non -current liabilities 3,020,238 - Total liabilities 16,673,900 23,121,849 Net assets 394,870,515 377,150,607 Equity Issued capital 9 347,776,302 344,370,896 Profits reserve 10 128,168,805 113,854,303 Accumulated losses 11 (81,074,592) (81,074,592) Total equity 394,870,515 377,150,607 The accompanying notes form part of these financial statements. For personal use only
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48 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Statement of Changes in Equity For the year ended 30 June 2025 Note Issued capital $ Accumulated losses $ Profits reserve $ Total equity $ Balance at 1 July 202 3 251,692,861 (81,074,592) 105,198,034 275,816,303 Profit for the year - 34,206,336 - 34,206,336 Transfer to profits reserve - (34,206,336) 34,206,336 - Other comprehensive income for the year - - - - Transactions with owners: Shares issued via Share Purchase Plan 9(b) 48,079,970 - - 48,079,970 Shares issued via Placement 9(b) 42,000,004 - - 42,000,004 Shares issued via dividend reinvestment plan 9(b) 3,273,992 - - 3,273,992 Share issue costs (net of tax) 9(b) (675,931) - - (675,931) Dividends paid 4(a) - - (25,550,067) (25,550,067) Balance at 30 June 202 4 344,370,896 (81,074,592) 113,854,303 377,150,607 Profit for the year - 43,583,480 - 43,583,480 Transfer to profits reserve - (43,583,480) 43,583,480 - Other comprehensive income for the year - - - - Transaction with owners: Shares issued via dividend reinvestment plan 9(b) 3,418,671 - - 3,418,671 Share issue costs (net of tax) 9(b) (13,265) - - (13,265) Dividends paid 4(a) - - (29,268,978) (29,268,978) Balance at 30 June 202 5 347,776,302 (81,074,59 2) 128,168,80 5 394,870,515 The accompanying notes form part of these financial statements. For personal use only
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wilsonassetmanagement.com.au 49 Statement of Cash Flows For the year ended 30 June 2025 Note 2025 $ 2024 $ Cash flows from operating activities Proceeds from sale of investments 733,122,183 468,579,599 Payments for purchase of investments (698,863,523) (505,773,251) Australian dividends received 6,392,146 4,492,403 Foreign dividends received 1,244,737 700,599 Interest and other investment income received 1,802,363 1,342,614 Management fee (GST inclusive) (4,431,254) (3,223,012) Performance fee (GST inclusive) (6,531,138) (4,100,477) Brokerage expense on share purchases (GST inclusive) (829,613) (621,166) Payments for administration expenses (GST inclusive) (698,763) (851,622) Income tax paid (18,287,005) (4,091,000) GST on brokerage expense on share sales (64,308) (39,442) Net GST received from ATO 940,755 573,865 Net cash provided by/(used in) operating activities 13 13,796,580 (43,010,890) Cash flows from financing activities Proceeds from issue of shares - 90,079,974 Dividends paid – net of reinvestment (25,850,307) (22,276,075) Share issue costs (18,950) (965,616) Net cash (used in)/provided by financing activities (25,869,257) 66,838,283 Net (decrease)/increase in cash and cash equivalents held (12,072,677) 23,827,393 Cash and cash equivalents at beginning of the year 45,992,468 22,165,075 Cash and cash equivalents at the end of the year 12 33,919,791 45,992,468 Non-cash transactions: Shares issued via dividend reinvestment plan 9(b) 3,418,671 3,273,992 The accompanying notes form part of these financial statements. For personal use only
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50 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Notes to the financial statements For the year ended 30 June 2025 1. Basis of preparation The financial statements are general purpose financial statements, which: • have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001; • have been prepared on a for-profit entity basis; • comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB); • have been prepared on an accruals basis (except for cash flow information) and are based on historical costs, with the exception of certain financial assets which have been measured at fair value; • are presented in Australian dollars with all amounts in the Financial Report rounded to the nearest dollar, unless otherwise indicated, in accordance with ASIC Corporations (rounding in Financial/Directors’ Reports) Instrument 2016/191; • adopt all of the new or amended Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period. There was no material impact to the financial statements; and • do not adopt any new standards or interpretations issued but not yet effective. The impact of these standards or interpretations has been assessed and the impact has been identified as not being material. Material and other accounting policy information adopted in the preparation of these financial statements have been included with the relevant notes to the financial statements, and where applicable, key judgements and estimates used by management in applying these policies. For personal use only
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wilsonassetmanagement.com.au 51 2. Other revenue 2025 $ 2024 $ Australian sourced dividends 6,392,146 4,492,403 Interest income from cash and cash equivalents and other income 1,802,363 1,342,614 Foreign sourced dividends 1,244,737 700,599 9,439,246 6,535,616 3. Income tax Dividend revenue is recognised when the right to receive a dividend has been established (i.e. the ex- dividend date). All revenue is stated net of the amount of goods and services tax (GST) where applicable. Current income tax expense The current income tax expense is based on profit for the year adjusted for non-assessable or disallowed items, as well as franking credits (or imputation credits) received on franked dividend income from investee companies. It is calculated using tax rates that have been enacted or are substantially enacted at the reporting date (i.e. 30% corporate tax rate). Current tax liabilities/(assets) are measured at the amounts expected to be paid to/(refunded from) the relevant taxation authority in the next 12 months. Deferred tax assets and liabilities Deferred tax is accounted for using the balance sheet method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled (i.e. 30% corporate tax rate). Deferred tax is credited in the Statement of Comprehensive Income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred tax assets and liabilities relating to temporary differences on financial assets or liabilities and unused tax losses are recognised, to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Current tax assets and liabilities are offset only where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are only offset where: • a legally enforceable right of set-off exists; and • the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either: i) the same taxable entity; or ii) different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. For personal use only
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52 WAM Microcap Annual Report 2025 ABN 34 617 838 418 3. Income tax (cont’d) a) Income tax expense The prima facie tax on profit before income tax is reconciled to the income tax expense as follows: 2025 $ 2024 $ Prima facie tax on profit before income tax at 30% (2024: 30%) 17,913,420 14,075,630 Franking credit gross up 699,316 554,549 Franking credit offset (2,331,053) (1,848,498) Foreign income tax gross up 65,898 29,679 Foreign income tax offset (219,660) (98,931) 16,127,921 12,712,429 Total income tax expense results in a change to the following: 2025 $ 2024 $ Current tax liability 9,349,489 11,574,929 Deferred tax liability 3,020,238 - Deferred tax asset 3,758,194 1,137,500 16,127,921 12,712,429 b) Deferred tax assets 2025 $ 2024 $ Accruals 13,629 13,077 Capitalised share issue costs 178,359 240,226 Fair value adjustments - 3,691,194 191,988 3,944,497 Movement in deferred tax assets Balance at the beginning of the year 3,944,497 4,792,312 Charged to the Statement of Comprehensive Income (3,758,194) (1,137,500) Share issue costs 5,685 289,685 At reporting date 191,988 3,944,497 Effective tax rate 2025 $ 2024 $ The effective tax rate reflects the benefit to the Company from franking credits received on dividend income during the year. The decrease in the effective tax rate from the comparative year is reflective of the higher proportion of franked dividends received compared to the operating profit before tax for the year. 27.0% 27.1% For personal use only
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wilsonassetmanagement.com.au 53 3. Income tax (cont’d) c) Current tax liabilities 2025 $ 2024 $ Balance at the beginning of the year 11,574,188 4,090,259 Current year income tax on operating profit 9,349,489 11,574,929 Income tax paid (18,287,005) (4,091,000) At reporting date 2,636,67 2 11,574,188 d) Deferred tax liabilities 2025 $ 2024 $ Fair value adjustments 3,020,238 - 3,020,238 - Movement in deferred tax liabilities Balance at the beginning of the year - - Charged to the Statement of Comprehensive Income 3,020,238 - At reporting date 3,020,238 - 4. Dividends a) Ordinary dividends paid during the year 2025 $ 2024 $ Final dividend FY2024: 5.25 cents per share fully franked at 30% tax rate, paid 29 October 2024 (Final dividend FY2023: 5.25 cents per share fully franked) 14,534,826 11,076,454 Interim dividend FY2025: 5.3 cents per share fully franked at 30% tax rate, paid 30 April 2025 (Interim dividend FY2024: 5.25 cents per share fully franked) 14,734,152 14,473,613 29,268,978 25,550,067 b) Dividends not recognised at year end 2025 $ 2024 $ In addition to the above dividends, since the end of the year, the Directors have declared a 5.3 cents per share fully franked final dividend (2024: 5.25 cents per share fully franked final dividend) which has not been recognised as a liability at the end of the financial year 14,797,492 14,534,817 For personal use only
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54 WAM Microcap Annual Report 2025 ABN 34 617 838 418 4. Dividends (cont’d) c) Dividend franking account 2025 $ 2024 $ Balance of franking account at year end 13,234,375 5,160,168 Adjusted for franking credits arising from: - Estimated income tax payable 2,636,672 11,574,188 Subsequent to the reporting period, the franking account would be reduced by the proposed dividend disclosed in Note 4(b): (6,341,782) (6,229,207) 9,529,265 10,505,149 The Company’s ability to continue to pay franked dividends is dependent upon the receipt of franked dividends from investments and the payment of tax on realised profits. The balance of the franking account does not include the tax to be paid on unrealised investment gains (i.e. fair value movements) currently recognised as a deferred tax liability of $3,020,238 (2024: debit balance of $3,691,194 presented as a deferred tax asset). 5. Auditor’s remuneration 2025 $ 2024 $ Remuneration of the auditor for: Auditing and reviewing the financial report 62,442 55,006 Other services provided by a related practice of the auditor: Taxation services 5,225 10,780 67,667 65,786 The Company’s Board of Directors oversees the relationship with the Company’s external auditor. The Board reviews the scope of the audit and review and the proposed fee. It also reviews the cost and scope of other services provided by a related entity of the audit firm, to ensure that they do not compromise independence. For personal use only
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wilsonassetmanagement.com.au 55 6. Trade and other receivables 2025 $ 2024 $ Outstanding settlements 539,457 92,785 GST receivable 398,860 608,433 938,317 701,218 7. Financial assets Trade and other receivables are initially recognised at fair value. They are subsequently stated at amortised cost, less any provision for impairment (where applicable). As at reporting date, trade and other receivables primarily relates to outstanding trade settlements (i.e. settlement proceeds from the sale of securities that are receivable as at the balance date). Outstanding settlements are on the terms operating in the securities industry, which do not incur interest and require settlement within two days from the date of the transaction. Receivables also include GST recoverable from the Australian Taxation Office due to claimable items on expenses incurred by the Company. Initial recognition and measurement Financial assets are recognised when the Company becomes party to the contractual provisions of the instrument. Trade date accounting is adopted for the purchase or sale of financial assets, which is equivalent to the date that the Company commits itself to purchase or sell the assets. Financial instruments are initially measured at fair value. Transaction costs related to financial instruments are expensed to the Statement of Comprehensive Income immediately. Classification and subsequent measurement Financial assets are classified ‘at fair value through profit or loss’ when they are held for trading for the purpose of short-term profit taking. Realised and unrealised gains and losses arising from changes in fair value are included in the Statement of Comprehensive Income in the period in which they arise and form part of the Company’s net profit as a result. Financial instruments are subsequently measured at fair value. The fair values of financial instruments traded in active markets are based on the closing quoted last sale prices at the end of the reporting date. For all listed or unlisted securities that are not traded in an active market, valuation techniques are applied to determine fair value, including recent arm’s length transactions and reference to similar instruments. Refer to Note 15 for further details of these valuation techniques. Financial risk management Information regarding the Company’s exposure to financial risk management is set out in Note 15. For personal use only
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56 WAM Microcap Annual Report 2025 ABN 34 617 838 418 7. Financial assets (cont’d) 2025 $ 2024 $ Listed investments at fair value 361,653,729 335,504,665 Unlisted investments at fair value 14,840,590 14,129,608 376,494,319 349,634,273 The fair values of individual investments held at the end of the reporting period are disclosed on pages 75 to 76 of the Annual Report. The balance of unlisted investments held as at 30 June 2025 relate to unlisted investments and a convertible note. 8. Trade and other payables 2025 $ 2024 $ Outstanding settlements 6,211,100 4,567,585 Performance fee payable 4,282,786 6,531,138 Management fee payable 371,014 358,556 Sundry payables 152,090 90,382 11,016,99 0 11,547,661 Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the Company no longer has any significant continuing involvement in the risks and benefits associated with the asset. Trade and other payables are stated at amortised cost. As at reporting date, trade and other payables primarily relates to outstanding trade settlements (i.e. settlement proceeds from the purchase of securities that are payable as at the balance date) and performance fee payable. Outstanding trade settlements are on the terms operating in the securities industry, which do not incur interest and require settlement within two days from the date of the transaction. Sundry payables are settled within the terms of payment offered. No interest is applicable on these accounts. For personal use only
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wilsonassetmanagement.com.au 57 9. Issued capital a) Paid-up capital 2025 $ 2024 $ 279,197,962 ordinary shares fully paid (2024: 276,853,648) 347,776,302 344,370,896 b) Ordinary shares 2025 $ 2024 $ Balance at the beginning of the year 276,853,648 ordinary shares fully paid (2024: 210,979,923) 344,370,896 251,692,861 1,149,147 ordinary shares issued on 29 October 2024 under a dividend reinvestment plan 1,720,490 - 1,195,167 ordinary shares issued on 30 April 2025 under a dividend reinvestment plan 1,698,181 - Share issue costs (net of tax) (13,265) (675,931) 1,181,630 ordinary shares issued on 16 October 2023 under a dividend reinvestment plan - 1,665,002 33,906,890 ordinary shares issued on 30 April 2024 under a Share Purchase Plan - 48,079,970 29,619,185 ordinary shares issued on 2 May 2024 under a Placement - 42,000,004 1,166,020 ordinary shares issued on 30 May 2024 under a dividend reinvestment plan - 1,608,990 At reporting date 347,776,302 344,370,896 Holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at shareholder meetings, all substantive resolutions will be decided by a poll. In the event of winding up of the Company, ordinary shareholders rank after creditors and share in any proceeds on winding up in proportion to the number of shares held. Ordinary shares are classified as equity. Incremental costs (i.e. share issue costs) directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds raised by the Company. For personal use only
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58 WAM Microcap Annual Report 2025 ABN 34 617 838 418 9. Issued capital (cont’d) c) Capital management The Board manages the Company’s capital by regularly reviewing the most efficient manner by which the Company deploys its capital. At the core of this, the Board is of the belief that shareholder value should be preserved through the management of the level of distributions to shareholders, share placements, share purchase plans, option issues and share buy-backs. These capital management initiatives will be used when deemed appropriate by the Board. There have been no changes in the strategy adopted by the Board to manage the capital of the Company during the year. The Company is not subject to any externally imposed capital requirements. 10. Profits reserve 2025 $ 2024 $ Profits reserve 128,168,80 5 113,854,303 Movement in profits reserve Balance at the beginning of the year 113,854,303 105,198,034 Transfer of profits during the year 43,583,480 34,206,336 Final dividend paid (refer to Note 4(a)) (14,534,826) (11,076,454) Interim dividend paid (refer to Note 4(a)) (14,734,152) (14,473,613) At reporting date 128,168,80 5 113,854,303 The profits reserve is made up of amounts transferred from current period and prior year earnings that are preserved for future dividend payments to shareholders. The profits reserve is made up of both realised and unrealised amounts from the performance of the investment portfolio in each period. The profits reserve represents the ability of the Company to frank future dividend payments for shareholders, subject to the availability of franking credits. There can be situations where the franking account balance including franking credits generated from the receipt of franked dividends from investee companies, and the payment of tax on realised profits, may not match the profits reserve balance (which includes realised and unrealised profits). For personal use only
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wilsonassetmanagement.com.au 59 11. Accumulated losses 2025 $ 2024 $ Balance at the beginning of the year (81,074,592) (81,074,592) Profit for the year attributable to members of the Company 43,583,480 34,206,336 Transfer to profits reserve (43,583,480) (34,206,336) At reporting date (81,074,59 2) (81,074,592) 12. Cash and cash equivalents Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: 2025 $ 2024 $ Cash at bank 33,919,791 45,992,468 33,919,791 45,992,468 The weighted average interest rate for cash as at 30 June 2025 is 3.87% (2024: 4.50%). There were no term deposits held at 30 June 2025 (2024: nil). 13. Cash flow information 2025 $ 2024 $ Reconciliation of profit after tax to cash flows from operating activities: Profit after income tax 43,583,480 34,206,336 Fair value gains and movements in financial assets (25,663,203) (88,030,094) Changes in assets and liabilities: Decrease/(increase) in receivables 209,573 (254,758) Decrease in deferred tax assets 3,758,194 1,137,500 (Decrease)/increase in payables (2,174,186) 2,446,197 (Decrease)/increase in current tax liabilities (8,937,516) 7,483,929 Increase in deferred tax liabilities 3,020,238 - Net cash provided by/(used in) operating activities 13,796,580 (43,010,890) Cash and cash equivalents include cash on hand and at call deposits with banks or financial institutions. For personal use only
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60 WAM Microcap Annual Report 2025 ABN 34 617 838 418 14. Earnings per share 2025 Cents per share 2024 Cents per share Basic and diluted earnings per share 15.69 15.27 2025 $ 2024 $ Profit after income tax used in the calculation of basic and diluted earnings per share 43,583,480 34,206,336 There are no outstanding securities that are potentially dilutive in nature for the Company at the end of the year. 15. Financial risk management The Company’s financial instruments consist of listed and unlisted investments, trade receivables, trade payables and cash. The risks exposed to through these financial instruments are discussed below and include credit risk, liquidity risk and market risk, consisting of interest rate risk and other price risk. There have been no substantive changes in the types of risks the Company is exposed to, how these risks arise, or the Board’s objective, policies and processes for managing or measuring the risks during the period. Under delegation from the Board, MAM Pty Limited (the Investment Manager or the Manager) has the responsibility for assessing and monitoring the financial market risk of the Company. The Manager monitors these risks daily. On a formal basis, the investment team meet twice weekly to monitor and manage the below risks as appropriate. a) 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 a contracted obligation. The Manager monitors the credit worthiness of counterparties on an ongoing basis and evaluates the credit quality of all new counterparties before engaging with them. The maximum exposure to credit risk on financial assets, excluding investments of the Company which have been recognised in the Statement of Financial Position, is the carrying amount net of any expected credit losses of those assets. The Manager is responsible for ensuring there is appropriate diversification across counterparties and that they are of a sufficient quality rating. The Manager is satisfied that the counterparties are of sufficient quality and diversity to minimise any individual counterparty credit risk. The majority of the Company’s receivables arise from unsettled trades at year end which are settled two days after trade date. Engaging with counterparties via the Australian Securities Exchange facilitates the Company in both mitigating and managing its credit risk on an ongoing basis. 2025 No. 2024 No. Weighted average number of ordinary shares outstanding during the year used in calculating basic and diluted earnings per share 277,862,219 224,024,774 For personal use only
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wilsonassetmanagement.com.au 61 15. Financial risk management (cont’d) a) Credit risk (cont’d) Credit risk is not considered to be a major risk to the Company as the cash held by the Company or in its portfolios are invested with major Australian banks and their 100% owned banking subsidiaries that have a Standard and Poor’s short-term rating of A-1+ and long-term rating of AA-. The Company also holds cash with its custodian that has a Standard and Poor’s short-term rating of A-1 and long-term rating of A+. There were no term deposits held at 30 June 2025. None of the assets exposed to a credit risk are overdue or considered to be impaired. b) Liquidity risk Liquidity risk represents the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s major cash payments are the purchase of securities and dividends paid to shareholders, the levels of which are managed respectively by the Manager. The Company’s cash receipts depend upon the level of sales of securities, dividends and interest received, or other capital management initiatives that may be implemented by the Board from time to time. The Manager monitors the Company’s cash flow requirements daily by reference to known sales and purchases of securities, dividends and interest to be paid or received. Should these decrease by a material amount the Company can alter its cash outflows as appropriate. The Company also holds a portion of its portfolio in cash sufficient to ensure that it has cash readily available to meet all payments. Furthermore, the assets of the Company are largely in the form of tradable securities which, where liquidity is available, can be sold on market when and if required. The table below reflects an undiscounted contractual maturity analysis for the Company’s liabilities. The timing of cash flows presented in the table to settle liabilities reflects the earliest possible contractual settlement date to the reporting date. 30 June 2025 >1 month $ <1 month $ Total $ Liabilities Trade and other payables - 11,016,990 11,016,990 Total - 11,016,99 0 11,016,99 0 30 June 2024 >1 month $ <1 month $ Total $ Liabilities Trade and other payables - 11,547,661 11,547,661 Total - 11,547,661 11,547,661 For personal use only
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62 WAM Microcap Annual Report 2025 ABN 34 617 838 418 15. Financial risk management (cont’d) c) Market risk Market risk is the risk that changes in market prices, such as interest rates and other market prices will affect the fair value or future cash flows of the Company’s financial instruments. By its nature, as a listed investment company that invests in tradable securities, the Company will always be subject to market risk as it invests its capital in securities which are not risk free as the market price of these securities can fluctuate. (i) Interest rate risk The Company’s interest bearing financial assets expose it to risks associated with the effects of fluctuations in the prevailing level of market interest rates on its financial position and cash flows. The Company however is not materially exposed to interest rate risk as it did not hold any term deposits at the end of the period. As the Company’s exposure to interest rate risk is not significant, interest rate sensitivities have not been performed. At the end of the reporting period, the Company’s exposure to interest rate risk and the effective weighted average interest rate was as follows: 30 June 2025 Weighted average interest rate (% pa) Interest bearing $ Non-interest bearing $ Total $ Assets Cash and cash equivalents 3.87% 33,919,791 - 33,919,791 Trade and other receivables - 938,317 938,317 Financial assets - 376,494,319 376,494,319 Total 33,919,791 377,432,636 411,352,427 Liabilities Trade and other payables - 11,016,990 11,016,990 Total - 11,016,99 0 11,016,99 0 30 June 202 4 Weighted average interest rate (% pa) Interest bearing $ Non-interest bearing $ Total $ Assets Cash and cash equivalents 4.50% 45,992,468 - 45,992,468 Trade and other receivables - 701,218 701,218 Financial assets - 349,634,273 349,634,273 Total 45,992,468 350,335,491 396,327,959 Liabilities Trade and other payables - 11,547,661 11,547,661 Total - 11,547,661 11,547,661 For personal use only
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wilsonassetmanagement.com.au 63 15. Financial risk management (cont’d) c) Market risk (cont’d) (ii) Other price risk Other price risk is the risk that the value of an instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. As the majority of the Company’s investments are carried at fair value with fair value changes recognised in the Statement of Comprehensive Income, all changes in market conditions will directly affect net investment income. Due to the short-term nature of receivables and payables, the carrying amounts of these financial assets and financial liabilities approximate their fair values. The Manager seeks to manage and reduce the other price risk of the Company by diversification of the investment portfolio across numerous stocks and multiple industry sectors. The risks and relative weightings of the individual securities and market sectors are reviewed daily in order to manage risk. The Company does not have set parameters as to a minimum or maximum amount of the portfolio that can be invested in a single company or sector. The Company’s industry sector weighting of gross assets as at 30 June 2025 is as below: Industry sector 2025 % 2024 % Financials 24.5 18.2 Industrials 16.1 18.7 Consumer discretionary 14.8 16.1 Information technology 13.3 11.0 Health care 9.0 8.7 Communication services 6.0 9.0 Materials 4.8 4.9 Real estate 2.2 - Utilities 1.7 1.7 Energy 0.4 0.5 Consumer staples 0.1 0.4 Total 92.9 89.2 There were no securities representing over 5 per cent of the gross assets of the Company as at 30 June 2025 (2024: nil). For personal use only
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64 WAM Microcap Annual Report 2025 ABN 34 617 838 418 15. Financial risk management (cont’d) c) Market risk (cont’d) (ii) Other price risk (cont’d) Sensitivity analysis For investments held by the Company at the end of the reporting period, a sensitivity analysis was performed relating to its exposure to other price risk. This analysis demonstrates the effect on current year net assets after tax as a result of a reasonably possible change in the risk variable. The sensitivity assumes all other variables to remain constant. Investments represent 92.9% (2024: 89.2%) of gross assets at year end. At reporting date, if the fair value of each of the investments within the portfolio changed by 5%, the impact on the Company’s profit or loss after tax would have been an increase/decrease by $13,177,301 (2024: $12,237,200). This would result in the 30 June 2025 net asset backing after tax moving by 4.7 cents per share (2024: 4.4 cents per share). d) Financial instruments measured at fair value Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the closing quoted last sale prices at the end of the reporting period, excluding transaction costs. Included in Level 2 of the hierarchy are WAM Microcap’s investments in unlisted investments, an initial public offering and a convertible note with a maturity date after 30 June 2025. Valuation techniques such as comparisons to similar investments for which market observable prices are available, the net asset backing per share, at cost or the last sale price have been used to determine fair value for the unlisted investments. The investments in the initial public offering and convertible note have been valued at cost. There were no transfers between Level 1 and Level 2 during the year (2024: no transfers between Level 1 and Level 2). 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: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: 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 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). For personal use only
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wilsonassetmanagement.com.au 65 15. Financial risk management (cont’d) d) Financial instruments measured at fair value (cont’d) The following table presents the Company’s financial assets measured and recognised at fair value at 30 June 2025: 30 June 202 5 Level 1 $ Level 2 $ Level 3 $ Total $ Financial assets 361,653,729 14,840,590 - 376,494,319 Total 361,653,729 14,840,590 - 376,494,319 30 June 202 4 Level 1 $ Level 2 $ Level 3 $ Total $ Financial assets 335,504,665 14,129,608 - 349,634,273 Total 335,504,665 14,129,608 - 349,634,273 The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature. 16. Investment transactions The total number of contract notes that were issued for transactions in securities during the financial year was 5,215 (2024: 4,551). Each contract note could involve multiple transactions. The total brokerage paid on these contract notes was $1,812,957 (2024: $1,218,169). 17. Segment reporting The Company currently engages in investing activities, including cash, term deposits and equity investments. It has no reportable operating segments. 18. Capital commitments There were no capital commitments for the Company as at 30 June 2025 (2024: nil). 19. Contingent liabilities There were no contingent liabilities for the Company as at 30 June 2025 (2024: nil). For personal use only
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66 WAM Microcap Annual Report 2025 ABN 34 617 838 418 20. Key management personnel compensation The names and position held of the Company’s key management personnel (including Directors) in office at any time during the financial year are: • Geoff Wilson AO Chairman • Kate Thorley Director • Jacqueline Sullivan Director • Adrian Siew Director a) Remuneration There are no executives that are paid by the Company. MAM Pty Limited, the Investment Manager of the Company, provides the day-to-day management of the Company and is remunerated for these services as outlined in Note 21. Information regarding individual Directors’ remuneration is provided in the Remuneration Report of the Directors’ Report on pages 38 to 40, as required by Corporations Regulations 2M.3.03 and 2M.6.04. Short-term employee benefits Directors’ fees $ Post-employment benefits Superannuation $ Total $ Total Directors remuneration paid by the Company for the year ended 30 June 2025 62,782 7,218 70,000 Total Directors remuneration paid by the Company for the year ended 30 June 2024 63,064 6,936 70,000 b) Shareholdings At 30 June 2025, the Company’s key management personnel and their related parties held the following interests in the Company: Ordinary shares held Directors Balance at 30 June 2024 Acquisitions Disposals Balance at 30 June 2025 Geoff Wilson 1,082,911 - - 1,082,911 Kate Thorley 247,326 1,080 - 248,406 Jacqueline Sullivan - - - - Adrian Siew - - - - 1,330,237 1,080 - 1,331,317 For personal use only
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wilsonassetmanagement.com.au 67 20. Key management personnel compensation (cont’d) b) Shareholdings (cont’d) At 30 June 2024, the Company’s key management personnel and their related parties held the following interests in the Company: Ordinary shares held Directors Balance at 30 June 202 3 Acquisitions Disposals Balance at 30 June 202 4 Geoff Wilson 1,061,755 21,156 - 1,082,911 Kate Thorley 246,280 1,046 - 247,326 Jacqueline Sullivan - - - - Adrian Siew - - - - 1,308,035 22,202 - 1,330,237 Directors 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 the financial year, been granted options over unissued shares or interests in shares of the Company as part of their remuneration. 21. Related party transactions All transactions with related parties during the year were made on normal commercial terms and conditions and at market rates. The Company has an investment management agreement with MAM Pty Limited, part of the Wilson Asset Management Group. Geoff Wilson is the Director of MAM Pty Limited, the entity appointed to manage the investment portfolio of WAM Microcap. Entities associated with Geoff Wilson hold 100% of the issued shares of MAM Pty Limited. In its capacity as the Manager and in accordance with the investment management agreement, MAM Pty Limited was paid a management fee of 1% p.a. (plus GST) of the value of the portfolio amounting to $4,443,712 inclusive of GST (2024: $3,325,548). As at 30 June 2025, the balance payable to the Manager was $371,014 inclusive of GST (2024: $358,556). In addition, MAM Pty Limited is eligible to be paid a performance fee, being 20% (plus GST), in circumstances where: • the S&P/ASX Small Ordinaries Accumulation Index has increased over that period, the amount by which the value of the portfolio exceeds this increase; or • the S&P/ASX Small Ordinaries Accumulation Index has decreased over that period, the amount of the increase in the value of the portfolio. No performance fee is payable in respect of any performance period where the value of the portfolio has decreased over that period. For the year ended 30 June 2025, a performance fee of $4,282,786 inclusive of GST was payable to the MAM Pty Limited (2024: $6,531,138). For personal use only
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68 WAM Microcap Annual Report 2025 ABN 34 617 838 418 21. Related party transactions (cont’d) Wilson Asset Management (International) Pty Limited has a service agreement in place with WAM Microcap to provide accounting and company secretarial services on commercial terms. For the year ended 30 June 2025, the fee for accounting services amounted to $68,750 inclusive of GST (2024: $55,000) and the fee for company secretarial services amounted to $23,650 inclusive of GST (2024: $19,800). No Director has received or become entitled to receive a benefit (other than those detailed above) by reason of a contract made by the Company or a related company of the Director or with a firm of which they are a member or with a company in which they have substantial financial interest. 22. Events subsequent to reporting date Since the end of the year, the Directors declared a fully franked final dividend of 5.3 cents per share to be paid on 29 October 2025. No other matters or circumstances have arisen since the end of the financial year, other than already disclosed, which significantly affect 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. For personal use only
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wilsonassetmanagement.com.au 69 Directors’ Declaration The Directors of WAM Microcap Limited declare that: 1) The financial statements as set out in pages 45 to 68 and the additional disclosures included in the Directors’ Report designated as “Remuneration Report”, as set out on pages 38 to 40, are in accordance with the Corporations Act 2001, including: a) complying with Australian Accounting Standards, which, as stated in Note 1 to the financial statements, constitutes compliance with International Financial Reporting Standards (IFRS), the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b) giving a true and fair view of the financial position of the Company as at 30 June 2025 and of its performance, as represented by the results of the operations and the cash flows, for the year ended on that date. 2) The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer of the Manager, MAM Pty Limited. 3) At the date of this declaration, in the Directors’ 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. 4) The consolidated entity disclosure statement required by subsection 295(3A) of the Corporations Act 2001, as set out on page 45, is true and correct. Signed in accordance with a resolution of the Board of Directors. Geoff Wilson AO Chairman Dated this 25 th day of August 2025 For personal use only
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Pitcher Partners Sydney ABN 17 795 780 962 Level 16, Tower 2 Darling Park 201 Sussex Street Sydney NSW 2000 Postal address GPO Box 1615 Sydney NSW 2001 +61 2 9221 2099 sydneypartners@pitcher.com.au pitcher.com.au Pitcher Partners is an association of independent firms. Pitcher Partners Sydney ABN 17 795 780 962. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney 70 Independent Auditor’s Report To the Members of WAM Microcap Limited ABN 34 617 838 418 Report on the Audit of the Financial Report Opinion We have audited the financial report of WAM Microcap Limited (“the Company”), which comprises the statement of financial position as at 30 June 2025, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement, and the Directors’ declaration. In our opinion, the accompanying financial report of WAM Microcap Limited is in accordance with the Corporations Act 2001 , including: i. giving a true and fair view of the Company’s fin ancial position as at 30 June 2025 and of its financial performance for the year then ended; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001 . Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the Directors of the Company, would be in the same terms if given to the Directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. For personal use only
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Independent Auditor’s Report To the Members of WAM Microcap Limited ABN 34 617 838 418 71 Pitcher Partners Sydney ABN 17 795 780 962 An association of independent firms Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the matter Existence and Valuation of Financial Assets Refer to Note 7: Financial assets We focused our audit effort on the existence and valuation of the Company’s financial assets as they represent the most significant driver of the Company’s Net Tangible Assets and Profit. The Company’s investments are considered to be non-complex in nature with fair value based on readily observable data from the ASX or other observable markets. Consequently, these investments are disclosed as either “Level 1” (i.e. where the valuation is based on quoted prices in active markets) or “Level 2” (i.e. where key inputs to valuation are based on other observable inputs). Our procedures included, amongst others: Obtaining an understanding of and evaluating the design and implementation of the investment management processes and controls; Reviewing and evaluating the independent auditor’s report on the design and operating effectiveness of internal controls (ASAE 3402 Assurance Reports on Controls at a Service Organisation) for the Custodian; Obtaining confirmation of the investment holdings directly from the Custodian or alternatively directly from the investee; Assessing and recalculating the Company’s valuation of individual investment holdings using independent observable pricing sources and inputs; and Assessing the adequacy of disclosures in the financial statements. For personal use only
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Independent Auditor’s Report To the Members of WAM Microcap Limited ABN 34 617 838 418 72 Pitcher Partners Sydney ABN 17 795 780 962 An association of independent firms Key Audit Matters (Continued) Other Information The Directors are responsible for the other information. The other information comprises the information included in the Company’s Annual Report for the year ended 30 June 2025, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Key audit matter How our audit addressed the matter Accuracy of Management and Performance Fees Refer to Note 8: Trade and other payables and Note 21: Related party transactions We focused our audit effort on the accuracy of management and performance fees as they are significant expenses of the Company and their calculation requires adjustments and key inputs. Adjustments include company dividends, tax payments, capital raisings, capital reductions and other relevant expenses. Key inputs include the value of the portfolio, the performance of the relevant comparable benchmark and application of the correct fee percentage in accordance with the Investment Management Agreement between the Company and the Investment Manager. In addition, to their quantum, as these transactions are made with related parties, there are additional inherent risks associated with these transactions, including the potential for these transactions to be made on terms and conditions more favourable than if they had been with an independent third-party. Our procedures included, amongst others: Obtaining an understanding of and evaluating the design and implementation of the processes and controls for calculating the management and performance fees; Making enquiries with the Investment Manager and those charged with governance with respect to any significant events during the period and associated adjustments made as a result, in addition to reviewing ASX announcements and Board meeting minutes; Testing of adjustments such as company dividends, tax payments, capital raisings, capital reductions as well as any other relevant expenses used in the calculation of management and performance fees; Testing of key inputs including the value of the portfolio, the performance of the relevant comparable benchmark and application of the correct fee percentage in accordance with our understanding of the Investment Management Agreement; and Assessing the adequacy of disclosures made in the financial statements. For personal use only
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Independent Auditor’s Report To the Members of WAM Microcap Limited ABN 34 617 838 418 73 Pitcher Partners Sydney ABN 17 795 780 962 An association of independent firms Responsibilities of the Directors for the Financial Report The Directors of the Company are responsible for the preparation of: a) the financial report (other than the consolidate d entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 ; and b) the consolidated entity disclosure statement tha t is true and correct in accordance with the Corporations Act 2001 ; and for such internal controls as the Directors determine is necessary to enable the preparation of: (i) the financial report (other than the consolidat ed entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and (ii) the consolidated entity disclosure statement t hat is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstate ment of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control releva nt to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Evaluate the appropriateness of accounting policie s used and the reasonableness of accounting estimates and related disclosures made by the Directors. Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. For personal use only
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Independent Auditor’s Report To the Members of WAM Microcap Limited ABN 34 617 838 418 74 Pitcher Partners Sydney ABN 17 795 780 962 An association of independent firms Auditor’s Responsibilities for the Audit of the Financial Report (Continued) Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 38 to 40 of the Directors’ Report for the year ended 30 June 2025. In our opinion, the Remuneration Report of WAM Microcap Limited, for the year ended 30 June 2025, complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. C I Chandran Pitcher Partners Partner Sydney 25 August 2025 For personal use only
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wilsonassetmanagement.com.au 75 Investments at fair value as at 30 June 2025 Company Name Code Fair Value $ % of Gross Assets Financials EML Payments Limited EML 10,058,710 2.5% Smartpay Holdings Limited SMP 10,022,979 2.5% Zip Co Limited ZIP 8,610,923 2.1% Xpansiv Limited* n/a 7,640,000 1.9% Plenti Group Limited PLT 7,629,593 1.9% Australian Finance Group Limited AFG 7,352,888 1.8% Regal Partners Limited RPL 7,116,667 1.8% NZX Limited NZX NZ 7,060,868 1.7% Generation Development Group Limited GDG 7,053,569 1.7% Qualitas Limited QAL 6,772,847 1.7% COG Financial Services Limited COG 6,684,377 1.6% Tyro Payments Limited TYR 6,279,405 1.6% Moneyme Limited MME 3,124,753 0.8% Aura Ventures Growth SPV I* n/a 1,384,050 0.3% Pay.com.au Limited* n/a 1,184,220 0.3% Swyftx Pty Limited* n/a 1,007,756 0.3% Limepay Pty Limited* n/a 100,000 0.0% 99,083,605 24.5% Industrials Kelsian Group Limited KLS 12,718,967 3.1% Tasmea Limited TEA 10,411,452 2.6% GenusPlus Group Limited GNP 9,740,835 2.4% Austin Engineering Limited ANG 7,000,110 1.7% AI-Media Technologies Limited AIM 6,140,199 1.6% Service Stream Limited SSM 5,758,162 1.4% Symal Group Limited SYL 4,954,739 1.2% Mader Group Limited MAD 4,424,679 1.1% Infragreen Group Limited IFN 3,106,974 0.8% Alliance Aviation Services Limited AQZ 879,367 0.2% 65,135,484 16.1% Company Name Code Fair Value $ % of Gross Assets Consumer discretionary Autosports Group Limited ASG 10,286,668 2.5% Embark Early Education Limited EVO 7,772,518 1.9% Turners Automotive Group Limited TRA NZ 7,580,566 1.9% Supply Network Limited SNL 7,298,491 1.8% Betr Entertainment Limited BBT 5,719,368 1.4% Beacon Lighting Group Limited BLX 5,453,508 1.4% Myer Holdings Limited MYR 5,397,921 1.3% Universal Store Holdings Limited UNI 4,498,326 1.1% Restaurant Brands New Zealand Limited RBD NZ 4,411,198 1.1% Briscoe Group Limited BGP NZ 1,704,044 0.4% 60,122,608 14.8% Information technology Energy One Limited EOL 12,060,853 3.0% Qoria Limited QOR 11,592,440 2.9% Gentrack Group Limited GTK 8,263,932 2.0% FINEOS Corporation Holdings PLC FCL 7,757,502 1.9% Bravura Solutions Limited BVS 7,110,300 1.8% Ikegps Group Limited IKE 3,004,740 0.7% Praemium Limited PPS 2,076,413 0.5% Packform Pty Limited* n/a 1,824,564 0.4% Stepchange Holdings Limited* n/a 200,000 0.1% 53,890,744 13.3% For personal use only
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76 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Company Name Code Fair Value $ % of Gross Assets Health care Paragon Care Limited PGC 8,547,069 2.1% Regis Healthcare Limited REG 6,668,829 1.7% Integral Diagnostics Limited IDX 6,553,650 1.6% Imricor Medical Systems Inc. IMR 4,892,380 1.2% PYC Therapeutics Limited PYC 4,699,959 1.2% Australian Clinical Labs Limited ACL 4,093,230 1.0% Syntara Limited SNT 913,382 0.2% 36,368,499 9.0% Communication services Tuas Limited TUA 13,606,805 3.3% NZME Limited NZM 7,982,210 2.0% Superloop Limited SLC 2,768,180 0.7% 24,357,195 6.0% Materials Develop Global Limited DVP 8,731,281 2.1% FireFly Metals Limited FFM 5,393,432 1.3% Wagners Holding Company Limited WGN 2,511,486 0.6% Norcliffe Mining Services Limited^ n/a 1,500,000 0.4% Savannah Goldfields Limited SVG 693,333 0.2% Vysarn Limited VYS 633,786 0.2% 19,463,318 4.8% Company Name Code Fair Value $ % of Gross Assets Real estate Cedar Woods Properties Limited CWP 5,575,328 1.3% Eureka Group Holdings Limited EGH 3,478,780 0.9% 9,054,108 2.2% Utilities LGI Limited LGI 7,099,980 1.7% 7,099,980 1.7% Energy Alligator Energy Limited AGE 1,800,298 0.4% 1,800,298 0.4% Consumer staples SPC Global Holdings Limited SPG 118,480 0.1% 118,480 0.1% Total long portfolio 376,494,319 92.9% Total cash and cash equivalents, income receivable and net outstanding settlements 28,647,007 7.1% Gross assets 405,141,326 *Unlisted investment. ^Unlisted convertible note. The total number of stocks held at the end of the financial year was 68. For personal use only
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wilsonassetmanagement.com.au 77 ASX additional information Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report. Shareholdings • Substantial shareholders (as at 31 July 2025) – there are currently no substantial shareholders. • On-market buy back (as at 31 July 2025) – there is no current on-market buy back. Distribution of shareholders (as at 31 July 2025) Category Number of shareholders % of issued capital held 1 – 1,000 815 0.2% 1,001 – 5,000 1,794 1.8% 5,001 – 10,000 1,409 3.9% 10,001 – 100,000 5,048 59.6% 100,001 and over 373 34.5% 9,439 100.0% The number of shareholders holding a less than marketable parcel is 372. Twenty largest shareholders – Ordinary shares (as at 31 July 2025) Name Number of ordinary shares held % of issued capital held BNP Paribas Nominees Pty Limited 9,720,866 3.5% HSBC Custody Nominees (Australia) Limited 5,823,186 2.1% Sysha Pty Limited 4,200,000 1.5% Netwealth Investments Limited 1,970,383 0.7% Citicorp Nominees Pty Limited 1,963,597 0.7% Intech Solutions Pty Limited 1,800,000 0.6% IOOF Investment Services Limited 1,492,346 0.5% Entities associated with Mr Geoff Wilson 1,082,910 0.4% Australian Investors Pty Limited 1,082,271 0.4% Barefoot Super Pty Limited 1,000,952 0.4% 888 Corporation Pty Limited 1,000,000 0.4% Gold Tiger Equities Pty Limited 871,156 0.3% Bond Street Custodians Limited 838,122 0.3% James & Diana Ramsay Foundation Pty Limited 766,115 0.3% BT Portfolio Services Limited 739,956 0.3% R W Kirby Pty Limited 724,997 0.3% Gaseous Pty Limited 682,222 0.2% Geat Incorporated 672,300 0.2% Fay Fuller Foundation Pty Limited 524,010 0.2% Mr D W Schubert 523,000 0.2% 37,478,389 13.5% Stock exchange listing Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the ASX Limited. For personal use only
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78 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Glossary Term Definition Benchmark A standard against which performance can be measured, usually an index that averages the performance of companies in a stock market or a segment of the market. Dividend coverage Dividend coverage represents the number of years the Company can maintain the current full year dividend payment paid semi-annually from the current level of profits reserve. This is calculated as follows: Profits reserve ÷ annual dividend amount Dividend yield The annual dividend amount expressed as a percentage of the share price at a certain point in time. This is calculated as follows: Annual dividend amount per share ÷ share price Franking credits Franking credits (also known as imputation credits) are tax credits attached to franked dividends that companies distribute to their shareholders. These credits represent the tax the company has already paid on its profits, which helps to avoid double taxation of those profits once distributed to shareholders. Shareholders can use franking credits to offset their income tax liabilities. Grossed-up dividend yield Grossed-up dividend yield includes the value of franking credits and is based on the corporate tax rate (generally 30.0%), assuming the dividend is fully franked. This is calculated as follows: Annual dividend yield % ÷ (1 – the corporate tax rate of 30.0%) Investment portfolio performance Investment portfolio performance measures the growth of the underlying portfolio of investments and cash before expenses, fees and taxes, to compare to the relevant benchmark which is also before expenses, fees and taxes. Listed investment company (LIC) LICs are corporate entities in a ‘company’ structure providing a permanent and stable closed-end pool of capital, established for the purpose of investing in a portfolio of securities or investments on behalf of shareholders. LICs are listed on an exchange, which in Australia is primarily the Australian Securities Exchange (ASX). Each company on the ASX has an ASX code, also known as a ‘ticker’. Management fee Management fee means the fee payable to the Investment Manager in return for its duties as Investment Manager of the Portfolio. The Investment Manager is entitled to be paid monthly a management fee equal to 0.0833334% per month or 1% per annum (plus GST) of the value of the portfolio (calculated on the last business day of each month and paid at the end of each month in arrears) in accordance with the Investment Management Agreement (IMA). Net tangible assets (NTA) The aggregate of a company’s assets (i.e. cash and investments) less its liabilities and current and deferred income tax. The NTA represents the value of the company and is announced on the ASX to shareholders each month. For personal use only
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wilsonassetmanagement.com.au 79 Term Definition NTA before tax The NTA of a company, exclusive of current and deferred income tax assets or liabilities. The NTA before tax represents the investment portfolio of the Company, i.e. cash and investments, less any associated liabilities excluding tax and is the most comparable figure for a LIC to an exchange traded fund (ETF) or managed fund. NTA after tax The NTA of a company, inclusive of current and deferred income tax assets or liabilities. Performance fee Performance fee means the fee payable to the Investment Manager under the IMA. The Investment Manager is eligible to be paid a performance fee being 20% (plus GST), in circumstances where: • the S&P/ASX Small Ordinaries Accumulation Index has increased over that period, the amount by which the value of the portfolio exceeds this increase; or • the S&P/ASX Small Ordinaries Accumulation Index has decreased over that period, the amount of the increase in the value of the portfolio. No performance fee is payable in respect of any performance period where the value of the portfolio has decreased over the period. Profits reserve The profits reserve is made up of amounts transferred from current and retained earnings that are preserved for future dividend payments. The profits reserve forms part of the NTA of the company and is invested in the market. The profits reserve is an accounting entry only that quarantines the profits of the LIC for future dividend payments. We convert the profits reserve amount into dividend years coverage for ease of seeing how sustainable the current dividend amount is. The ability to frank a dividend is dependent on the availability of franking credits which are generated from the receipt of franked dividends from investee companies and the payment of tax on realised profits. There can be situations where the franking account balance including franking credits generated from the receipt of franked dividends from investee companies and the payment of tax on realised profits, may not match the profits reserve balance (which includes realised and unrealised profits). Share price premium or discount LIC’s shares are traded on the ASX and a LIC has a fixed amount of capital. At times, the LIC’s share price can fluctuate above or below its NTA value. When the share price is above the NTA of the company, the LIC is trading at a premium to NTA. When the share price is below the NTA, the LIC is trading at a discount to NTA. This is calculated as follows: (Share price – NTA before tax) ÷ NTA before tax S&P/ASX Small Ordinaries Accumulation Index The S&P/ASX Small Ordinaries Accumulation Index is comprised of companies included in the S&P/ASX 300 Index, but not in the S&P/ASX 100 Index. This Index assumes that dividends are reinvested and measures both growth and dividend income. The S&P/ASX Small Ordinaries Accumulation Index is used as a benchmark for small-cap Australian equity portfolios. Three key measures of a LIC’s performance The three key measures crucial to the evaluation of a LIC’s performance are: investment portfolio performance, NTA growth and total shareholder return. For personal use only
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80 WAM Microcap Annual Report 2025 ABN 34 617 838 418 Term Definition Total shareholder return (TSR) Total share price return to shareholders, assuming all dividends received were reinvested without transaction costs and the compounding effect over the period. This measure is calculated before and after the value of franking credits attached to dividends paid to shareholders This is calculated as follows: (Closing share price – starting share price + dividends paid + franking credits) ÷ starting share price Note: the TSR reported in the Annual Report and media release is calculated monthly, using the above formula, and includes the effect of compounding over the period. For personal use only
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wilsonassetmanagement.com.au 81 Corporate Directory WAM Microcap Directors Geoff Wilson AO (Chairman) Kate Thorley Jacqueline Sullivan Adrian Siew Joint Company Secretaries Jesse Hamilton Linda Kiriczenko Investment Manager MAM Pty Limited Level 26, Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 (part of the Wilson Asset Management Group) Country of Incorporation Australia Australian Securities Exchange WAM Microcap Limited Ordinary Shares (WMI) Registered Office Level 26, Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Contact Details GPO Box 4658, Sydney NSW 2001 T (02) 9247 6755 E info@wilsonassetmanagement.com.au W wilsonassetmanagement.com.au Share Registry Boardroom Pty Limited Level 8, 210 George Street Sydney NSW 2000 T 1300 420 372 (in Australia) +61 2 8023 5472 (International) For enquiries relating to shareholdings, dividends (including participation in the dividend reinvestment plan) and related matters, please contact the share registry. Auditor Pitcher Partners Sydney For personal use only
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For personal use only