Half-yearly Report

Majedie Investments PLC Half-Yearly Financial Report 31 March 2013 The Directors announce the unaudited half-yearly financial report for the six months to 31 March 2013 as follows:- Copies of the half yearly-report can be obtained from the following website: www.majedie.co.uk Majedie Investments PLC is an investment trust with total portfolio assets under management of over £154 million as at 31 March 2013. Our Objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. Financial Highlights for the half year ended 31 March 2013 net assets per share increased by 7.2% to 231.1p Share price increased by 7.8% to 168.0p Discount to net assets narrowed from 27.8% to 27.3% Revenue Return per share unchanged at 2.8p Interim dividend unchanged at 4.2p Performance Net asset value total return of 10.3% Total shareholder return of 12.3% Investment Objective and Policy Statement Investment Objective The Company's objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. Investment Policy General The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by Javelin Capital LLP, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in Majedie Asset Management Limited. Investments in unquoted securities, other than those managed by Javelin Capital LLP, (measured by reference to the Company's cost of investment) will not exceed 10% of the Company's gross assets. Risk diversification Whilst the Company will at all times invest and manage its assets in a manner that is consistent with spreading investment risk, there will be no rigid industry, sector, region or country restrictions. The overall approach is based on an analysis of global economies sector trends with a focus on companies and sectors judged likely to deliver strong growth over the long term. The number of investments held, together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams. The Company will not invest in any holding that would, at the time of investment, represent more than 15 per cent. of the value of its gross assets save that the Company may invest up to 25 per cent. of its gross assets in any single fund managed by Javelin Capital. The Company will only invest in funds managed by Javelin Capital where the Board believes that the investment policy of such funds is consistent with the Company's objective of spreading investment risk. The Company may utilise derivative instruments including index-linked notes, contracts for difference, covered options and other equity-related derivative instruments for efficient portfolio management and investment purposes. Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described above. Asset allocation The assets of the Company are split into four major groups. These are the Core Portfolio, funds managed by Javelin Capital LLP, and the Company's investments in Majedie Asset Management Limited and Javelin Capital LLP. Benchmark The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. For the actively managed Core Portfolio the benchmark comprises 70% FTSE All-Share Index and 30% FTSE World ex-UK Index (Sterling) on a total return basis. Any investments made into Javelin Capital LLP products are measured against the relevant fund benchmark as contained in the fund's prospectus. It is important to note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time, which remain subject to the investment restrictions set out in this section. Gearing The Company uses gearing currently via long term debentures. The Board has the ability to borrow up to 100% of adjusted capital and reserves. The Board also reviews the level of net gearing (borrowings less cash) on an ongoing basis and sets a range at its discretion as appropriate. The Company's current debenture borrowings are limited by covenant to 66 2/3% and any additional indebtedness is not to exceed 20% of adjusted capital and reserves. Chairman's Statement World equity markets continued their recovery in the six months to 31 March 2013. However, the economic environment remains relatively fragile. Whilst evidence of growth can be seen in the US (and to a lesser extent in the UK), Europe continues to flat line against a background of unprecedented Central Bank intervention. The Company's investment portfolio produced a steady return given its defensive nature and its holding in the low volatility Javelin Capital UCITS Fund. The NAV and share price performance over the period returned 10.3% and 12.3% respectively, both on a total return basis. I highlight below various aspects of performance for the period which is further detailed and explained in the Investment Manager's Report below. Results and Dividends The Group results for the six months to 31 March 2013 include the consolidation of the investment held in the Javelin Capital Emerging Markets Alpha Fund (UCITS), held under the classification of `Investments Held for Sale', and the small residual interest of the previous investment in the Javelin Capital Global Equity Strategies Fund (QIF), currently in liquidation, both on a basis consistent with prior periods. The Group's net revenue return before tax for the six months to 31 March 2013 was £1.5m, which is the same as the prior year period. Group income however was down to £2.3m from £2.7m in the prior year period reflecting a reduction in dividend receipts from investee companies and Majedie Asset Management (MAM), the latter being a timing difference as a result of a rebalancing of dividend payments between interim and final. Group income for the period also included a modest contribution from Javelin Capital LLP, comprising external fee income earned. Total Group costs for the six months to 31 March 2013 were £1.1m as compared to £1.7m in the prior year period. The decrease reflects the closure of the QIF and cost reductions achieved in Javelin Capital LLP with Company only costs remaining at the same level as the prior year. Cost control remains a key focus for the Company and at Javelin Capital LLP. The Board has decided that the interim dividend is to be maintained at 4.2 pence per share, which is consistent with previous years. The interim dividend will be paid on 26 June 2013 to shareholders on the register on 7 June 2013. The investment in MAM is held at fair value in both the Company and Group accounts with its valuation being reviewed by the Board regularly. In conjunction with the sale of MAM shares, as detailed further below, the Board has determined that the carrying value of the Company's holding be increased to £43.5m as at 31 March 2013. Javelin Capital is consolidated into the Group accounts, and the weekly published Group NAV, at its net asset value of £2.5m, as required under IFRS, but is held in the Company accounts as an investment at cost in accordance with our policy for unquoted investments. The Board has also reviewed the valuation of the investment in Javelin Capital and has determined that the valuation will remain at cost of £8.0m, in the Company accounts, as at 31 March 2013. With the closure of the QIF the Company now only has an investment in the Javelin Capital UCITS fund. This investment is held at fair value, which is £31.7m as at 31 March 2013. Investment Portfolio The Investment Managers Report below provides the detailed commentary on the Company's investment activity and performance in the period. However as in previous periods I would like to provide an overview of the key issues affecting the outturn for the period. Firstly, the Core Portfolio performed below its benchmark. The portfolio whilst being predominantly defensive has been slightly tilted towards more cyclical exposure which in rising markets would normally outperform. Over the first half this has not been the case and hence the underperformance of the portfolio. We also compare our performance against a peer group of top income funds and against these we have exceeded median returns. Secondly, the funds managed by Javelin Capital LLP. These are now consolidated in the UCITS Fund which is on the Goldman Sachs Platform. It produced a negative return of 2.8% which is disappointing. This should be seen against a background of negative returns in Emerging Markets in contrast to Developed Markets combined with volatility falling to levels that have not been seen previously. Thirdly, MAM continues to perform well financially and in terms of investment performance. The company recently marked its tenth anniversary since inception. Given MAM's level of excess capital, your Company, alongside and in equal proportion to the other founding shareholders, has sold shares equal to 3.5% of the total MAM shares in issue. Some shares have been sold for cancellation and some used to broaden the employee ownership of the company. The price received is in excess of the historic carrying valuation of the business and therefore the valuation of the stake has been increased at the interim stage. The transaction has been legally agreed in May and will be settled in June. Javelin Capital The business continues to focus on gaining additional assets under management, notwithstanding the difficult market conditions for long/short emerging market managers, which is central to achieving the objectives as set out in its business plan. The Javelin Capital management remains very cost conscious and has continued to reduce its cost base over the last six months such that the breakeven point for external AUM has fallen to circa £50m. Summary The Group has overall produced a steady return for the six months to 31 March 2013 and although not all investments have performed as I would like, the spread of the investments, into the distinct and quite separate groups, should enable us to maintain lower risk adjusted returns in what are still difficult times, notwithstanding the strong equity markets recently. Andrew J Adcock Chairman 28 May 2013 Investment Manager's Report Market Background & Outlook Markets performed well over the first six months of the Company's financial year, although most of the performance came in the second half of the period. The deferral of the US `fiscal cliff' at the end of 2012 allowed markets to rally strongly during January. However, although the outlook for US growth brightened somewhat and the Japanese market picked up strongly on news of a substantial new monetary initiative, the Eurozone in general showed no signs of economic recovery and Italy, one of the largest economies, remained without a government following an inconclusive General Election. . Cyprus, where proposals to confiscate substantial bank deposits in order to bail out the country's banking system, also cast a shadow over the economic prospects of the more peripheral countries. In the UK, the downgrading of the economy's debt rating and worries about the lack of growth caused sterling to fall against most major currencies apart from a notably weak yen. Towards the end of the period, the prospects for growth in China once again came into question, exacerbating falls in the prices of most major commodities. At a corporate level, results from a large number of global companies continued to provide a degree of reassurance although merger and acquisition activity fell to meagre levels, reflecting uncertainties about global growth prospects. Corporate balance sheets in general are particularly robust, but there remains a reticence to deploy hard cash whilst growth numbers for many major economies are still being revised downwards. There appears, as yet, little sign of inflationary pressures or a need for an early rise in interest rates globally so it is possible that corporate activity will pick up as the year progresses. The expansionary measures taken in Japan to counteract years of deflationary pressures have had the effect of diverting cash flow into the equity market there; this has not been an isolated phenomenon and there has been strong evidence that globally investors have become more cautious of fixed interest investments and have selectively been rotating funds into equities. The core fund is positioned to take advantage of these trends as a natural initial home for such funds are more defensive, higher yielding equities. Investment Report The Company's assets are managed in four distinct groups; the Core Portfolio, Javelin Capital funds and the Company's investments in Majedie Asset Management and Javelin Capital LLP. The Board believes this provides the correct asset allocation to achieve the Investment Objective of maximising total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. The Development of Net Asset Value section below shows the impact that each investment group has made on the Net Assets Performance during the period. Core Portfolio The Core Portfolio comprises holdings in large-cap UK and international stocks and a small number of carefully selected mid-cap companies. The Portfolio is managed under an equity income investment mandate, with a long term composite benchmark of 70% FTSE All-Share, 30% FTSE World (ex-UK) on a total-return basis. As at 31 March 2013, the value of the Core Portfolio was £74.2m, representing 48.1% of the investment portfolio (as defined below). During the period the Core Portfolio Total Return was +13.2%. This was a little disappointing as it was 2.2% behind the benchmark return, but it was again some way ahead of the return of a number of the large dedicated UK equity income funds and was only 1.3% behind the FTSE All-Share index return, reflecting the strength of non-UK markets in sterling terms. This has again been a relatively strong period for global equities and the Core Portfolio, with an income orientated mandate and somewhat more defensive stock and sector positioning, tends to lag a little against the index during such times. A key part of the investment mandate is to maintain a balance between companies where a significant component of their total return comprises of dividend payments and other companies more orientated towards capital growth. A feature of the period under review was that a small number of large global consumer stocks such as Diageo and Reckitt Benckiser, unrepresented in the core portfolio, rallied particularly strongly whilst some more defensive stocks such as Royal Dutch Shell and BP drifted out of investor favour. The mining sector, unusually in a rising market, was also a particularly poor performer as commodity prices came under pressure. However, good performance was seen in relatively recently introduced stocks such as ITV, GKN, Investec and Kellogg whilst longer standing holdings in Europe such as Roche and Telenor also performed well. We also manage a small non-core realisation portfolio, consisting of early stage investments that were initiated between 2005 and 2008. The objective of this portfolio is to maximise the value and speed of capital return by seeking to exit these positions, although by nature the positions are illiquid. As at 31 March 2013, the value of the non-core realisation portfolio was £2.0m. This represents around 1.3% of the investment portfolio and will reduce over time as further liquidations are achieved. Javelin Capital Funds In late September 2010 a £20m seed capital investment was made into the first flagship product to be launched by Javelin Capital LLP, the Javelin Capital Global Equity Strategies Fund (QIF). A second UCITS fund, the Javelin Capital Emerging Markets Alpha Fund, was launched in early 2012 with a seed investment of £15m, on a platform of funds managed by Goldman Sachs International, who assist in the distribution of the fund through their global network. The first fund has now ceased operations and is being wound up with the Company's investment proceeds having been consolidated into the UCITS vehicle. Over the half year, the UCITS fund has fallen in value by around 2.8% in Sterling terms. As at 31 March 2013, the value of the Javelin Capital fund holding was £31.7m, representing 20.6% of the investment portfolio. Majedie Asset Management (MAM) MAM was launched in 2002 using finance provided by the Company, which, at 31 March 2013, retains a near 30% equity interest. It now manages approximately £7 billion, for over 100 institutional clients and the business continues to perform strongly. During the period we received £1.1m as a final dividend for the year ended 30 September 2012 and sold £0.68m of shares to the MAM Employee Benefit Trust. Furthermore in conjunction with the ten year anniversary it was agreed, in May, that the Company would sell for cancellation further shares equal to 3.5% of the total MAM shares in issue. The Board has decided to increase the valuation of this holding to £43.5m, representing 28.2% of the investment portfolio. Javelin Capital LLP Javelin Capital LLP was launched in September 2010 and currently has one fund in operation. Significant progress has been made in reducing costs and the business remains very focussed on gaining AUM on which its business plan is predicated. As at 31 March 2013 the net assets in Javelin Capital LLP have been included in the Group accounts at £2.5m representing 1.6% of the investment portfolio. This represents the investments made less start-up costs and losses to date and is in accordance with consolidation accounting rules. In the Company accounts the holding continues to be carried at cost being £8.0m. Development of Net Asset Value In aggregate, the NAV has increased by £8.1m. The Core Portfolio and MAM contributed £8.9m and £6.3m respectively, both through a combination of dividend income and capital appreciation, the Non-Core Realisation Portfolio was down by £0.9m whilst the Javelin Capital UCITS fund lost £0.6m. Total costs during the period were £2.3m of which net administration costs were £0.9m, which include Javelin Capital LLP, and finance costs were £1.4m. A final dividend of £3.3m (6.3p per share) was paid in January 2013. Nick Rundle Investment Director, Javelin Capital LLP 28 May 2013 Portfolio Information at 31 March 2013 Fund Analysis Market Value % of £'000 Fund Oil & Gas 11,323 7.3 Basic Materials 7,185 4.6 Industrials 9,190 6.0 Consumer Goods 6,783 4.4 Health Care 5,126 3.3 Consumer Services 7,503 4.9 Telecommunications 4,423 2.9 Utilities 3,865 2.5 Financials 14,298 9.3 Technology 779 0.5 Javelin Capital Global Emerging Markets Alpha 31,721 20.6 Fund Unlisted (note 8) 45,519 29.5 Total Investments at Fair Value 147,715 95.8 Cash and other 6,508 4.2 154,223 100.0 United Kingdom 90,466 58.6 North America 13,723 8.9 Europe (ex UK) 6,439 4.2 Rest of World 5,366 3.5 Javelin Capital Global Emerging Markets Alpha 31,721 20.6 Fund Total Investment' at Fair Value 147,715 95.8 Cash and other 6,508 4.2 154,223 100.0 The Fund as used in the analysis above and below comprises total investments held at fair value through profit or loss of £115,994,000; the investment in the JCEMA fund of £31,721,000; and cash/other (as adjusted for amounts due to/ from brokers for settlement and other net assets) of £6,508,000. Unlisted investments comprise an amount of £43,500,000 in respect of the investment of Majedie Asset Management and £2,019,000 in respect of equity investments in various companies. Suspended stocks have been analysed in their listed sectors. Twenty Largest UK Investments at 31 March 2013 Company Market % of Company Market % of Value Fund Value Fund £'000 £'000 Majedie Asset Management 43,500 28.2 Antofagasta 1,230 0.8 Royal Dutch Shell `B' 3,933 2.6 ITV 1,165 0.8 BP 3,104 2.0 Smiths Group 1,131 0.7 HSBC 2,810 1.8 Unilever 1,114 0.7 GlaxoSmithKline 2,462 1.6 GKN 1,058 0.7 Vodafone 2,286 1.5 Legal & General 1,036 0.7 Rio Tinto 2,005 1.3 BG Group 1,016 0.7 BHP Billiton 1,628 1.1 SSE 965 0.6 Barclays 1,601 1.0 Aviva 963 0.6 Centrica 1,287 0.8 British Land 951 0.6 Ten Largest Overseas Investments at 31 March 2013 Company Market % of Company Market % of Value Fund Value Fund £'000 £'000 Javelin Capital Emerging Markets Alpha (Lux) 31,721 20.6 Schlumberger (USA) 887 0.6 McDonalds (USA) 952 0.6 Wells Fargo (USA) 876 0.6 Telenor (Norway) 937 0.6 Southern Copper 865 0.6 (USA) Roche (Europe) 922 0.6 Siemens (Germany) 852 0.6 Altria (USA) 905 0.6 AT&T (USA) 846 0.5 Interim Management Report The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chairman's Statement and Investment Manager's Report as set out above. The financial statements continue to be prepared on a going concern basis. The approach used for the Annual Report is applied, including proper consideration of financial and cashflow forecasts, such that it is believed that the Company has adequate financial resources to continue to operate for the foreseeable future. The principal risks facing the company are substantially unchanged since the date of the Annual Report for the year ended 30 September 2012 and continue to be as set out in that report with no particular subsequent heightened uncertainty. Risks faced by the Company include, but are not limited to, market risk, discount volatility, regulatory risk, financial risk, risks associated with banking and hedging and non-compliance with Section 1158 of the Corporation Tax Act 2010. Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report In accordance with the Disclosure and Transparency Rules 4.2.7R and 4.2.8R, we confirm that to the best of our knowledge: a. The condensed set of financial statements has been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, as adopted by the European Union, as required by the Disclosure and Transparency Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and financial position of the Company; b. The Chairman's Statement and Investment Manager's Report includes a fair review of the information required to be disclosed under the Disclosure and Transparency Rule 4.2.7R, interim management report. This includes (i) an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements presented in the Half-Yearly Financial Report and (ii) a description of the principal risks and uncertainties for the remaining six months of the financial year; and c. There were no changes in the transactions or arrangements with related parties as described in the Group's Annual Report for the year ended 30 September 2012 that would have had a material effect on the financial position or performance of the Group in the first six months of the current financial year. Andrew J Adcock Chairman For and on behalf of the Board 28 May 2013 Independent Review Report to Majedie Investments PLC Introduction We have been engaged by the Company to review the condensed set of financial statements in the Half-Yearly Financial Report for the six months ended 31 March 2013 which comprises the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Balance Sheet, Condensed Consolidated Cash Flow Statement and related notes 1 to 14. We have read the other information contained in the Half-Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' Responsibilities The Half-Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half-Yearly Financial Report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland), "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half-Yearly Financial Report for the six months ended 31 March 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. Ernst & Young LLP London 28 May 2013 Condensed Consolidated Statement of Comprehensive Income for the half year ended 31 March 2013 Half year ended Half year ended Year ended 31 March 2013 31 March 2012 30 September 2012 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total return return £'000 return return £'000 return return £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investments Gains on 11,534 11,534 7,794 7,794 7,832 7,832 investments at fair value (840) (840) through profit or loss Exchange loss on disposal of foreign subsidiary Net investment 11,534 11,534 7,794 7,794 6,992 6,992 result Income Income from 2 2,287 2,287 2,639 2,639 5,100 5,100 investments Other income 2 53 53 27 27 63 63 Total income 2,340 2,340 2,666 2,666 5,163 5,163 Expenses Administration (489) (615) (1,104) (804) (887) (1,691) (1,777) (1,442) (3,219) expenses Return before 1,851 10,919 12,770 1,862 6,907 8,769 3,386 5,550 8,936 finance costs and taxation Finance costs (351) (1,052) (1,403) (353) (1,061) (1,414) (705) (2,115) (2,820) Net return 1,500 9,867 11,367 1,509 5,846 7,355 2,681 3,435 6,116 before taxation Taxation 3 (50) (50) (53) (53) (132) (132) Net return 1,450 9,867 11,317 1,456 5,846 7,302 2,549 3,435 5,984 after taxation for the period Other comprehensive income - exchange differences on translation of foreign operations Attributable to: Equity holders (492) (492) 37 37 of the company Non-controlling (7) (7) interest Total 1,450 9,867 11,317 1,456 5,347 6,803 2,549 3,472 6,021 comprehensive income for the period Net return after taxation attributable to: Equity holders 1,450 9,867 11,317 1,457 5,852 7,309 2,552 3,445 5,997 of the Company Non-controlling (1) (6) (7) (3) (10) (13) interest 1,450 9,867 11,317 1,456 5,846 7,302 2,549 3,435 5,984 Return per pence pence pence pence pence pence pence pence pence ordinary share: Basic and 4 2.8 19.0 21.8 2.8 11.2 14.0 4.9 6.6 11.5 diluted The total column of this statement is the Consolidated Statement of Comprehensive Income of the Group, prepared in accordance with International Financial Reporting Standards (IFRS). The supplementary revenue return and capital return columns are prepared under guidance published by the Association of Investment Companies. All items in the above statement relate to continuing operations. See notes 1 to 14. Condensed Consolidated Statement of Changes in Equity for the half year ended 31 March 2013 Notes Share Share Capital Share Capital Revenue Own Currency Non- Total capital premium redemption options reserve reserve shares translation Controlling £'000 £'000 £'000 reserve reserve £'000 £'000 reserve reserve interest £'000 £'000 £'000 £'000 £'000 Half year ended 31 March 2013 30 September 5,253 785 56 (147) 87,822 20,093 (1,628) 112,234 2012 Net return 9,867 1,450 11,317 after tax for the period Share options 5 13 13 expense Dividends 7 (3,279) (3,279) declared and paid in period 31 March 2013 5,253 785 56 (134) 97,689 18,264 (1,628) 120,285 Half year ended 31 March 2012 30 September 5,253 785 56 (178) 84,377 23,006 (1,628) (37) 248 111,882 2011 Net return 5,852 1,457 (7) 7,302 after tax for the period Other (492) (7) (499) comprehensive income Share options 5 15 15 expense Dividends 7 (3,279) (3,279) declared and paid in period 31 March 2012 5,253 785 56 (163) 90,229 21,184 (1,628) (529) 234 115,421 Year ended 30 September 2012 30 September 5,253 785 56 (178) 84,377 23,006 (1,628) (37) 248 111,882 2011 Net return for 3,445 2,552 (13) 5,984 the year Other 37 37 comprehensive income Share options 5 31 31 expense Dividends 7 (5,465) (5,465) declared and paid in year Cessation of (235) (235) Non-controlling interest 30 September 5,253 785 56 (147) 87,822 20,093 (1,628) 112,234 2012 Condensed Consolidated Balance Sheet at 31 March 2013 Notes 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 Non-current assets Property and equipment 170 331 247 Investments at fair value through 8 115,994 111,479 108,217 profit or loss 116,164 111,810 108,464 Current assets Derivative instruments 235 Trade and other receivables 2,636 1,437 1,418 Cash and cash equivalents 5,122 22,858 23,287 7,758 24,530 24,705 Asset classified as held for sale 8 43,911 14,817 14,199 Total current assets 51,669 39,347 38,904 Total assets 167,833 151,157 147,368 Current liabilities Trade and other payables (1,524) (1,396) (1,256) Financial liabilities at fair (439) value through profit or loss (1,524) (1,835) (1,256) Liabilities directly associated 8 (12,190) (89) (55) with the assets classified as held for sale Total current liabilities (13,714) (1,924) (1,311) Total assets less current 154,119 149,233 146,057 liabilities Non-current liabilities Debentures (33,834) (33,812) (33,823) Total liabilities (47,548) (35,736) (35,134) Net assets 120,285 115,421 112,234 Represented by: Ordinary share capital 5,253 5,253 5,253 Share premium 785 785 785 Capital redemption reserve 56 56 56 Share options reserve (134) (163) (147) Capital reserve 97,689 90,229 87,822 Revenue reserve 18,264 21,184 20,093 Own shares reserve (1,628) (1,628) (1,628) Currency translation reserve (529) Equity Shareholders' Funds 120,285 115,187 112,234 Non-controlling interest 234 Total equity 120,285 115,421 112,234 Net asset value per share pence pence pence Basic and fully diluted 10 231.1 221.3 215.6 Condensed Consolidated Cash Flow Statement for the half year ended 31 March 2013 Notes Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 Net cash Inflow/(out 11 4,656 (10,010) 8,989 flow) from operating activities Investing activities Purchases of tangible (2) (3) assets Investment in Javelin (18,150) (14,990) UCITS fund classified as asset held for sale Net cash outflow from (18,150) (2) (14,993) investing activities Financing activities Interest paid (1,392) (1,404) (2,797) Dividends paid (3,279) (3,279) (5,465) Net cash outflow from (4,671) (4,683) (8,262) financing activities Decrease in cash and 12 (18,165) (14,695) (14,266) cash equivalents for period Cash and cash 23,287 37,553 37,553 equivalents at start of period Cash and cash 5,122 22,858 23,287 equivalents at end of period Notes to the Condensed Consolidated Financial Statements as at 31 March 2013 1. Accounting Policies The Condensed Consolidated Financial Statements above comprise the unaudited results of the Company and subsidiaries for the six months to 31 March 2013 and are presented in pounds sterling, as this is the functional currency of the Group. The Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting". They do not include all financial information required for full annual financial statements. The Condensed Consolidated Financial Statements have been prepared using the accounting policies adopted in the audited financial statements for the year ended 30 September 2012. 2. Income Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 Income from investments Franked investment 1,800 2,256 4,113 income* UK unfranked 91 135 investment income Overseas dividends 396 369 835 Fixed interest and 14 17 convertible bonds 2,287 2,639 5,100 Other income Deposit interest 14 25 32 Sundry income 39 2 31 53 27 63 Total income 2,340 2,666 5,163 Total income comprises: Dividends 2,287 2,625 5,083 Interest 14 39 49 Other income 39 2 31 2,340 2,666 5,163 Income from investments Listed UK 761 934 2,033 Listed overseas 396 369 852 Unlisted* 1,130 1,336 2,215 2,287 2,639 5,100 * Includes MAM dividend income of £1,130,000 (31 March 2012 & 30 September 2012: £1,322,000 and £2,215,000). 3. Taxation The charge for the half year to 31 March 2013 is £50,000 (half year to 31 March 2012: £53,000; year ended 30 September 2012: £132,000). These amounts represent irrecoverable withholding tax paid on overseas investment income. The Company has an effective corporation tax rate of 0%. As investment gains are exempt from tax owing to the Company's status as an Investment Trust and there is expected to be an excess of management expenses over taxable income there is no charge for corporation tax. 4. Calculation of Returns per Ordinary Share Basic returns per ordinary share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. Basic return per ordinary share for the period is based on 52,044,613 (half year ended 31 March 2012 and year ended 30 September 2012: 52,044,613) shares, being the weighted average number of shares in issue after adjustment for the shares held by the Employee Incentive Trust. There is no dilution to the basic return per ordinary share since share options, if exercised, would be satisfied by shares already held by the Employee Incentive Trust. 5. Share-based payments The Group currently operates one share-based payment scheme being the 2006 Long Term Incentive Plan which in turn has two sections relating to TSR-based Awards and Matching Awards. With the introduction of Javelin Capital LLP and the resultant employee transfers from the Company no further awards will be made under the LTIP. Javelin Capital LLP does not operate any share-based payment schemes. The number of outstanding options granted by the Company are summarised in the table below: 31 March 31 March 30 September 2013 2012 2012 Number of outstanding options LTIP: TSR-based Awards 197,725 185,232 190,453 LTIP: Matching Awards 11,574 10,842 11,148 209,299 196,074 201,601 During the half-year ended 31 March 2013 the number of options outstanding under the LTIP TSR-based and Matching awards increased by 7,272 and 426 respectively. This is as a result of the 2012 6.3p final dividend, which is in accordance with the LTIP rules. During the half year to 31 March 2013 the Group recognised a total charge for share-based payment transactions of £13,000 (half year ended 31 March 2012: £15,000; year ended 30 September 2012: £31,000). The total shareholding of the Majedie Investments PLC Incentive Trust is 483,387 (31 March 2012: 483,387; 30 September 2012: 483,387) ordinary shares. The shares are held by the Trust until the relevant options are exercised or until they lapse. The cost of the shares is presented in the Condensed Consolidated Balance Sheet under the heading `Own shares reserve', as a deduction from shareholders' funds in accordance with IFRS 2: Share-based payments. 6. Segment reporting As detailed in the Company's Annual Report for the year ended 30 September 2012, geographical segments are considered to be the Group's primary reporting segment and business segments the secondary reporting segment. The Group has two business segments: its activity as an Investment Trust, which is the business of the parent company, and the business of the subsidiary, Javelin Capital LLP, which provides management services within the United Kingdom only. Investing activities The Company's Investment Objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. The Company operates as an investment trust company and its portfolio contains investments in companies listed in a number of countries. Geographical information about the portfolio is provided above. Investment management services To complement this investment objective and create income and capital for the Group, Javelin Capital LLP has been launched to market a range of funds to third party investors and provide investment management and advisory services. Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 Investing Investment Investing Investment Investing Investment activities management activities management activities management £'000 and £'000 and £'000 and advisory advisory advisory services services services £'000 £'000 £'000 Revenue from 2,324* 16 2,664* 2 5,145* 18 external customers Carrying amount 117,781 2,504 113,403 2,018 109,609 2,625 of net assets * The investment and other income of the parent company and the Javelin Capital funds (QIF and UCITS). 7. Dividends In accordance with International Accounting Standard 10: Events After the Balance Sheet Date, interim dividends are not accounted for until paid. The following table summarises the amounts recognised as distributions to equity holders in the relevant period: Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 2012 Final dividend of 6.30p 3,279 paid on 23 January 2013 2012 Interim dividend of 2,186 4.20p paid on 27 June 2012 2011 Final dividend of 6.30p 3,279 3,279 paid on 25 January 2012 3,279 3,279 5,465 The Directors propose an interim dividend for 2013 of 4.2p per share, to be paid on 26 June 2013. 8. Investments All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open ended investment companies are valued at the closing price, the bid price or the single price as appropriate, released by the relevant investment manager. Unlisted investments are formally valued on a semi-annual basis by the Board of Directors taking into account relevant information as appropriate including market prices, latest dealings, accounting information, professional advice and the guidelines issued by the International Private Equity and Venture Capital Association. In between the formal valuations the Directors review these investments for any significant changes and incorporate such changes as they consider necessary. Unlisted investments disclosed in the Portfolio Information set out above total £45,519,000 of which £2,019,000 is invested in 6 companies and £43,500,000 is the carrying value of our investment in MAM as detailed in note 9 below. Assets classified as held-for-sale The Company has made two investments into the Javelin Capital Emerging Markets Alpha Fund (JCEMA), a UCITS fund, being £15million on 16 January 2012 and £18.15million on 2 November 2012 which represent a controlling interest and in accordance with IFRS 5 this holding has been classified as a non-current asset held-for-sale. Whilst this fund continues to be actively marketed to third party investors market conditions have meant that the Company retains a controlling interest. The Company currently anticipates that the Investment entities amendment to IFRS 10 will be adopted by the European Union such that in the 2013 Annual Report the Company will be able to adopt the amendment with the effect that this investment will no longer be required to be consolidated and will be held as an investment held at fair value through profit and loss in a manner consistent with its other existing investments. During the period ended 31 March 2013 the Group recorded an unrealised loss of £398,000 (half year ended 31 March 2012: unrealised loss of £262,000; year ended 30 September 2012: realised loss of £10,000 and an unrealised loss of £716,000) in respect of this holding. 9. Majedie Asset Management Limited (MAM) During the period the Company owned a near 30% equity shareholding in MAM which provides investment management and advisory services primarily relating to UK equities. The carrying value of the investment in MAM is included in the Condensed Consolidated Balance Sheet as part of investments at fair value through profit or loss: 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 Deemed cost of investment 1,179 1,197 1,197 Holding gains 42,321 37,493 37,803 Fair value at period end 43,500 38,690 39,000 During the period the Company disposed of a small part of its equity shareholding to the MAM Employee Benefit Trust as disclosed in note 13. Additionally it has been agreed in May 2013 that the Company will sell further equity shares equal to 3.5% of the MAM total shares in issue, for cancellation in its case, as part of a package aimed at broadening employee ownership following its tenth anniversary. The carrying value of MAM in the 31 March 2013 Condensed Consolidated Financial Statements is its fair value as assessed at 31 March 2013. 10. Net Asset Value The net asset value per share has been calculated based on equity Shareholders' funds and on 52,044,613 (31 March 2012 and 30 September 2012: 52,044,613) ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. 11. Reconciliation of Operating Profit to Operating Cash Flow Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 Consolidated net return before 11,367 7,355 6,116 taxation Adjustments for: Gains on investments (11,534) (7,794) (7,832) Exchange movements (499) Share-based remuneration 13 15 31 Depreciation 77 81 166 Purchases of investments* (4,132) (221,250) (116,131) Sales of investments* 8,080 210,672 125,175 Proceeds from derivative 322 (911) contracts 3,871 (11,098) 6,614 Finance costs 1,403 1,415 2,820 Operating cash flows before 5,274 (9,683) 9,434 movements in working capital Decrease in trade and other (112) (592) (528) payables (Increase)/decrease in trade (450) 316 204 and other receivables Net cash inflow/(outflow) from 4,712 (9,959) 9,110 operating activities before tax Tax recovered 7 11 37 Tax on unfranked income (63) (62) (158) Net cash inflow/(outflow) from 4,656 (10,010) 8,989 operating activities * Reflects the high turnover investment strategy in the QIF in line with its investment approach and industry peers. Values have reduced in the current period due to the QIF ceasing operations in September 2012. 12. Reconciliation of Net Cash Flow to Movement in Net Debt Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 £'000 £'000 £'000 Decrease in cash (18,165) (14,695) (14,266) Non cash items (11) (11) (22) Change in net debt (18,176) (14,706) (14,288) Net (debt)/funds beginning of (10,536) 3,752 3,752 period Net debt at end of period (28,712) (10,954) (10,536) 13. Related Party Transactions Javelin Capital LLP Javelin Capital LLP (Javelin Capital) is the investment manager and general administrator to the Company and is also the parent entity of Javelin Capital Services Limited (JCS) which is consolidated in the Group accounts. Javelin Capital Fund Management Limited (JCFM) ceased operations on 19 June 2012. Javelin Capital Strategies plc is an Irish Stock Exchange listed Qualifying Investment Fund (QIF) and is currently in liquidation. The Company receives any residual interest on liquidation and is consolidated into the Group accounts on that basis. The Javelin Capital Emerging Markets Alpha Fund (UCITS) is a sub-fund of the SICAV platform in Luxembourg established by Goldman Sachs International and Javelin Capital receives management and performance fees from the fund in accordance with the agreements, including from the Company. In addition to any fees received from the UCITS, Javelin Capital is also entitled to receive management, performance and administration fees as from the Company itself in accordance with the relevant agreements. These agreements take account of any fees charged at the fund level so that no double charging occurs. JCS provides administrative services to the Group. In performing these services it incurs expenses which are recovered by way of recharges and management fees. The Company allows the Javelin Capital group entities use of various assets to perform their respective functions for which it receives a lease fee, however this can be waived by the Company at its discretion. The Company has made a £33.15m investment in the Javelin Capital Emerging Markets Alpha Fund, which is currently valued at £31.7m. This investment is subject to management and performance fees in accordance with the fund's prospectus and supplement. Javelin Capital as investment manager is required to, or chooses to do so, under certain circumstances make payments to its funds or managed accounts in order to reimburse them for expense rebates or compensation payments. The Company pays certain costs on behalf of Majedie Portfolio Management Limited (MPM) in connection with the Majedie Investments PLC Share Plan and additionally is charged a management fee by MPM. Any such costs paid by the Company are recharged to MPM net of any management fees due. The table below discloses the transactions and balances between those entities: Half year ended Half year ended Year ended 31 March 31 March 30 September 2013 2012 2012 £'000 £0'000 £'000 Transactions during the period: QIF fee revenue due to JCFM or 125 240 Javelin Capital Advisory fee revenue due to 104 145 Javelin Capital from JCFM UCITS fee revenue due to 190 39 145 Javelin Capital (including from the Company) Company management fee revenue 274 286 549 due to Javelin Capital Company administration fee 132 132 265 revenue due to Javelin Capital Company lease charge to JCS JCS management fee income from 720 1,030 1,878 Javelin Capital Javelin Capital payments to 1 funds MPM costs recharged by the 18 18 35 Company Balances outstanding at the end of the period: Between JCS and the Company 469 369 426 Between JCS and Javelin 275 34 131 Capital Between JCS and JCFM 1 2 1 Between Javelin Capital and 103 104 104 the Company or UCITS/QIF Between the Company and MPM 95 94 95 Between JCFM and Javelin 9 33 18 Capital Between JCFM and the QIF 20 Transactions between group companies during the period were made on terms equivalent to those that occur in arm's length transactions. Majedie Asset Management (MAM) MAM is accounted for as an investment held at fair value through profit or loss in both the Company and Group accounts. During the period the Company sold shares to the MAM Employee Benefit Trust for consideration of £686,000, none of which was outstanding at the period end (half year ended 31 March 2012: £324,000 and nil; year ended 30 September 2012: £324,000 and nil). Additionally the Company received dividends from MAM of £1,130,000 of which none was outstanding at period end (half year ended 31 March 2012: £1,322,000 and nil; year ended 30 September 2012: £2,215,000 and nil). The Company has no investments in any MAM funds. 14. Financial Information The financial information contained in this Half-Yearly Financial Report does not constitute full statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the six months ended 31 March 2013 and 31 March 2012 have not been audited, but have been reviewed by the Company's auditors and their report is above. The information for the year ended 30 September 2012 has been extracted from the latest published audited accounts. Those accounts have been filed with the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. Those statutory accounts were prepared in accordance with International Financial Reporting Standards, as adopted by the European Union. Company Information Board of Directors Investment Manager A J Adcock, Chairman Javelin Capital LLP J W M Barlow Tower 42 P D Gadd 25 Old Broad Street R D C Henderson London EC2N 1HQ J W M Barlow (Executive) Telephone: 020 7382 8170 All Directors are non-executive unless Fax: 020 7382 4854 indicated Email: info@javelincapital.com Registered Office Registrars Tower 42 Computershare Investor Services PLC 25 Old Broad Street The Pavilions London EC2N 1HQ Bridgwater Road Bristol BS99 6ZZ Telephone: 020 7626 1243 Telephone: 0870 707 1159 E-mail: majedie@majedie.co.uk Registered number: 109305 England Auditors Company Secretary Ernst & Young LLP Capita Sinclair Henderson Limited 1 More London Place (trading as Capita Financial Group - London SE1 2AF Specialist Fund Services) Beaufort House 51 New North Road Exeter EX4 4EP Telephone: 01392 412122 Fax: 01392 253282 Stockbrokers Cenkos Securities plc 6.7.8 Tokenhouse Yard London EC2R 7AS Website www.majedie.co.uk

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