Final Results

RNS Number : 9229Y

Majedie Investments PLC

05 December 2014

 



MAJEDIE INVESTMENTS PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2014

The full Annual Report and Accounts will shortly be available via the Company's website at www.majedie.co.uk or by contacting the Company Secretary on telephone number 020 7954 9527.

The Directors present the results of the Company for the year ended 30 September 2014.

Investment Objective

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.

Highlights	2014
Total shareholder return (including dividends):	+49.7%
Net asset value total return (including dividends	+10.8%
and  debt  at par value):
Total dividends (per share):	7.5p
Directors' valuation of investment
in Majedie Asset Management Limited:	£41.3m

Year's Summary

Group Capital Structure	Note	2014	2013	%
as at 30 September
Total Assets	1	£167.9m	£159.0m	+5.6
Which are attributable to:
Debenture holders (Debt at par value)	2	£33.9m	£33.8m
Equity shareholders		£134.0m	£125.2m	+7.0
Gearing	4	23.4%	21.5%
Potential Gearing	4	25.3%	27.0%
Group total returns
(capital growth plus dividends)	5
Net asset value per share (debt at par value)	3	+10.8%	+16.9%
Net asset value per share (debt at fair value)	3	+12.4%	+20.2%
Share price		+49.7%	+9.7%
Group capital returns
Net asset value per share (debt at par value)	3	256.7p	240.5p	+6.7
Net asset value per share (debt at fair value)		241.8p	223.4p	+8.2
Share price		229.0p	160.0p	+43.1
Discount of share price to net
asset value per share
Debt at par value		10.8%	33.5%
Debt at fair value		5.3%	28.4%
Group revenue and dividends
Net Revenue available to Equity Shareholders	6	£4.9m	£3.7m
Net revenue return per share	6	9.4p	6.8p	+38.2
Total dividends per share		7.5p	10.5p
Total administrative expenses	6	£1.9m	£2.0m
Ongoing charges:	7
Group (including costs of running subsidiary entities)	6	1.8%	2.1%
Company (costs of operating the Company)		1.7%	1.7%

Notes

Definitions of terms used in the above summary are as follows:

1.   Total Assets Total assets are defined as total assets less current liabilities.

2.   Debt at par or fair value Par value is the nominal or face value attaching to the debentures which will be paid by the Company to the debenture holders on maturity. Fair value is the estimated market price the Company would pay (on the relevant year end date), as a willing buyer, to a debenture holder, as a willing seller, in an arms-length transaction.

3.   Net Asset Value The Net Asset Value (NAV) is the value of all the Company's assets less any liabilities. The NAV is usually expressed as an amount per share.

4.   Gearing and Potential Gearing Gearing represents the amount of borrowings that a company has and is calculated using AIC guidance. It is usually expressed as a percentage of Equity Shareholders Funds and a positive percentage or ratio above one shows the extent of the borrowings. Gearing is calculated as borrowings less net current assets to arrive at a net borrowings figure. Potential Gearing excludes cash from the calculation. Details of the calculation for the Company are in note 26.

5.   Total Return Total returns include any dividends paid as well as capital returns as a result of an increase or decrease in a company's share price or net asset value.

6.   Includes both continuing and discontinued operations.

7.   Ongoing charges Ongoing charges are a measure of the normal ongoing costs of running a company. Further information is contained in the Business Review section of the Strategic Report below.

Year's high/low		2014	2013
Share price	high	240.0p	183.0p
	low	160.0p	151.5p
Net asset value - debt at par	high	256.7p	240.5p
	low	228.6p	211.9p
Discount (debt at par)	high	33.5%	33.5%
	low	1.4%	21.7%
Premium/ Discount  - debt at fair value	high	28.4%	28.4%
	low	(4.6)%	13.2%

Ten Year Record to 30 September 2014

										Company
Year	Total†	Equity	NAV Per	Share			Dividend		Potential	Ongoing
End	Assets	share-	Share	Price	Discount	Earnings	Pence	Gearing†	Gearing	Charges#
	£000	holders'	(Debt at	Pence	%	Pence		%	%	%
		Funds	Par)
		£000	Pence
2004	172,144	138,893	266.5	227.5	14.63	5.25	8.75	14.51	24.25	1.36
2005	212,600	178,845	343.0	303.5	11.52	8.94	9.05**	16.18	18.65	1.19
2006*	242,903	209,189	403.2	338.3	16.09	12.45	9.50**	13.94	16.12	1.28
2007*	286,944	253,216	490.7	413.3	15.77	13.60	14.50**	10.65	13.32	1.24
2008	187,209	153,465	296.5	250.0	15.68	12.45	12.75**	16.69	21.99	1.61
2009	157,943	124,181	238.7	189.8	20.51	8.14	10.50**	17.22	27.19	2.06
2010	150,940	117,159	225.2	191.5	15.00	11.83	13.00**	24.11	28.83	2.36
2011	145,683	111,634	214.5	139.5	34.96	4.66	10.50**	(1.72)	30.28	1.92
2012	146,057	112,234	215.6	155.8	27.74	4.90	10.50**	9.24	30.14	1.83
2013	159,013	125,166	240.5	160.0	33.47	6.80	10.50**	21.47	27.04	1.73
2014	167,934	134,061	256.7	229.0	10.79	9.36	7.50**	23.39	25.27	1.66

Notes:

* Restated to reflect the review of the treatment of the investment in Majedie Asset Management Limited.

** Net dividends represent dividends that relate to the Company's financial year. Under International Financial

Reporting Standards (IFRSs) dividends are not accrued until paid or approved.

ˆ Includes both continuing and discontinued operations.

# As from May 2012, Ongoing Charges replace previous cost ratios.

† Calculated in accordance with AIC guidance.

Strategic Report

Chairman's Statement

The Company undertook a major change in the past year with the closure of Javelin Capital LLP and the movement of the management of the majority of the Company's assets to Majedie Asset Management (MAM). I am glad to say that the change has gone well, and I am particularly pleased that the reorganisation has led to a significant re-rating of the Company's share price, with the shares regularly trading at a premium to NAV having, historically, traded at a significant discount.

During the year, the NAV and share price returned 10.8% and 49.7% respectively on a total return basis.

Results and Dividends

Under IFRS the Company is required to disclose separately continuing operations from discontinued operations, which relate to Javelin Capital. The capital return from continuing operations for the year was £11.0m compared to £15.7m in 2013. The capital loss from discontinued operations for the year was £2.6m, reflecting principally the £2.1m write off of the Company's investment in Javelin Capital. This write off was taken in January and April 2014 and Javelin Capital has now been fully written down.

The net revenue return from continuing operations increased from £3.9m in 2013 to £5.1m and is due primarily to an increase in the dividend paid by MAM.

Total administrative and management fees, on a continuing basis, have risen from £0.7m in 2013 to £1.6m in 2014 whilst the discontinued expenses relating to Javelin have fallen from £1.3m to £0.7m. The increase in continuing administrative and management fees reflects the investment management fees paid to MAM, which were not incurred in 2013, and the Company paying certain expenses previously borne by Javelin. The future reduction of administrative expenses is a key area of focus for the Board and they will, over time, fall. However the self managed nature of the Company means that ongoing costs will remain higher than those of the average investment trust.

The Board announced in January 2014 that the full year dividend would be rebased to not less than  7.5 pence per share. In line with that announcement, following the payment of an interim dividend of 3.0 pence per share in June 2014, the final dividend will be 4.5 pence per share. The final dividend will be paid on 21 January 2015 to shareholders on the register on 9 January 2015.

Alternative Investment Fund Managers Directive (AIFMD or the Directive)

Under AIFMD, the Company is treated as an Alternative Investment Fund (AIF) and has applied for authorisation by the Financial Conduct Authority (FCA) to act as its own Alternative Investment Fund Manager (AIFM). Pursuant to the AIFMD the Company appointed Bank of New York Mellon Trust and Depositary (UK) Limited (BNYM (UK)) to act as the Company's Depositary and Bank of New York Mellon SA/NV London Branch has been appointed as its Custodian. The appointment of a Depositary will increase costs.

AGM

The AGM will be held on 14 January 2015 at 12.00 noon at the City of London Club, 19 Old Broad Street, London EC2N 1DS. Details are set out in the notice of meeting on page 93 of the Company's Annual Report and Accounts. There will be presentations and an opportunity to ask questions. I do hope you will be able to attend.

Summary

The past year has been transformational for the Company and I am pleased with the positive reaction of investors. This is partially due to a general narrowing of investment trust discounts as investors have noted the attractions of investment trusts for broad equity exposure following recent changes to legislation. More specifically, it reflects recognition of the unique nature of the Company's asset allocation. The Company's investments are now managed by a leading boutique manager across a variety of strategies, including an absolute return fund, and the Company retains a significant investment in MAM.

In the past year, the Company has issued a small amount of stock from its EBT at a premium to NAV and also has permission to issue up to 10% of its equity at a premium to the prevailing NAV. It is intended to renew this permission at the AGM. The benefits for shareholders, of an increase in stock in issue, will be a dilution in gearing and the cost of debentures, a reduction in administrative expenses per share and increased liquidity in the Company's shares.

I would like to thank my fellow directors and particularly the staff for their contributions and hard work throughout the restructuring of the Company and I look forward to further progress being made in the current year.

Andrew J Adcock Chairman

4 December 2014

Extracts from the Strategic Report

Business Review

Introduction and Strategy

Majedie Investments PLC (the Company) is an investment trust company and self managed AIF, with an investment objective to maximise total shareholder return, whilst increasing dividends by more than the rate of inflation over the long term. In seeking to achieve this objective, the Board has determined an investment policy and related guidelines or limits (as described below). The investment objective and policy (as detailed below) were both approved by shareholders at a General Meeting of the Company on 27 February 2014 (which incorporated various changes following the restructuring of the Group, including the appointment of MAM). Further details concerning the restructuring that occurred during the year are detailed in the Chief Executive's Report below).

The year under review also saw the introduction of the AIFMD, which applies to the Company. Following careful analysis the Board has chosen to become its own AIFM under the Directive and has appointed BNYM (UK) to be its depositary. This meant that the Company applied to become authorised and regulated by the FCA for the first time. Further details concerning the Company's regulatory environment are set out below.

In January 2014, the Company joined the Association of Investment Companies (AIC) (the trade body for closed-ended investment companies).

The purpose of the Strategic Report (which is the Strategic Report for the Group) is to inform the shareholders of the Company and help them assess how the directors have performed their duty to promote the success of the Company in accordance with section 172 of the Companies Act 2006 by:

·   analysing development and performance using appropriate Key Performance Indicators (KPIs);

·   providing a fair and balanced review of the Company's business;

·   outlining the principal risks and uncertainties affecting the Company;

·   describing how the Company manages these risks;

·   setting out the Company's environmental, social and ethical policy;

·   outlining the main trends and factors likely to affect the future development, performance and position of the Company's business; and

·   explaining the future business plans of the Company.

Business Model

In pursuing its investment objective, the Company's business model includes other entities which together form the Group. Active companies in the Group currently consist of the Company (as a global equity investment trust and FCA regulated self-managed AIF) and Majedie Portfolio Management Limited (which is the FCA regulated Majedie Investments PLC Share Plan Manager). Further details about subsidiary entities can be found in note 14 to the Accounts below.

The business model currently used by the Company delegates certain arrangements to other service providers. These delegations are in accordance with the AIFMD, (the details of the material delegations can be found on pages  20 and 21 of the Company's Annual Report and Accounts), but the Board, as an AIFM and in accordance with the Company's investment objective and policy, directs, controls and monitors the overall performance or operations and direction of the Company.

Investment Objective

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.

Investment Policy

●              General

The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in MAM. Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of adoption of this investment policy, (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 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% of the value of its gross assets save that the Company may invest up to 25% of its gross assets in any single fund managed by its investment manager 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 will be allocated principally between investments in publicly quoted companies worldwide and in investments intended to provide an absolute return (in each case either directly or through other funds or collective investment schemes managed by the Company's investment manager) and the Company's investment in MAM itself.

●              Benchmark

The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. Any investments made into funds managed by the Company's investment manager will be measured against the benchmark or benchmarks, if any, whose constituent investments appear to the Company to correspond most closely to those investments. 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 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.

Regulatory and Competitive Environment

The Company is an investment trust and has a premium listing on the London Stock Exchange. It is subject to United Kingdom and European legislation and regulations including UK company law, International Financial Reporting Standards, Listing, Prospectus and Disclosure and Transparency Rules, taxation law and the Company's own Articles of Association. The directors are charged with ensuring that the Company complies with its objectives as well as these regulations.

Under the Companies Act 2006, section 833, the Company is defined as an investment company.

As outlined previously the Company has become subject to the AIFMD during the year. The AIFMD regulates investment entities defined as AIFs, as from 22 July 2014.

The AIFMD requires that all AIFs are managed by a regulated AIFM in accordance with the requirements of the Directive. These requirements are in respect of risk management, conflicts of interest, leverage, liquidity management, delegation, the requirement to appoint a depositary, regulatory capital, valuations, disclosure of information to investors or potential investors, remuneration and marketing.

In accordance with the AIFMD, the Company has  applied to become authorised and regulated by the FCA as its own AIFM (becoming an internally, or self managed AIF).

The financial statements, below, report on profits, the changes in equity, the balance sheet position and the cash flows in the current and prior financial period. This is in compliance with current International Financial Reporting Standards (IFRS) as adopted by the EU, supplemented by the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts (SORP) issued in January 2009. The principal accounting policies of the Company are set out in note 1 to the accounts. The Auditor's opinion on the financial statements, which is unqualified, appears below.

Total Return Philosophy & Dividend Policy

The directors believe that investment returns will be maximised if a total return policy is followed whereby the Investment Manager pursues the best opportunities. The policy aim is to increase dividends by more than inflation over the long term. The Board has decided to rebase the dividend as from this financial year. Further details are under the Dividend Growth section below. The Company has a comparatively high level of revenue reserves for the investment trust sector. At £21.9m, the revenue reserves represent approximately five times the current annual dividend distribution. The strength of these reserves will assist in underpinning the Company's progressive dividend policy in years when the income from the portfolio is insufficient to cover completely the annual distribution, although it is not currently anticipated.

Performance Management

The Board uses the following Key Performance Indicators (KPIs) to help assess progress against the Company's objectives. Further comments on these KPIs are contained in the Chairman's Statement and Chief Executive's Report sections of the Strategic Report respectively.

·   Net Asset Value (NAV) and Total Shareholder Return: The Board believes that asset return is fundamental to delivering value over the long term and is a key determinant of shareholder return. The Board further believes that, in accordance with the Company's objective, the total return basis (which includes dividends paid out to shareholders) is the best measure of how to measure long term shareholder return. The Board, at each meeting, receives reports detailing the Company's NAV and shareholder total return performance, asset allocation and related analyses. Details of the NAV and share price total return performance for the year are shown below.

·   Investment Group performance:

The Board believes that after asset allocation, the performance of each of the investment groups is the key driver of NAV return and hence shareholder return. The Board receives, at each meeting, detailed reports showing the performance of the investment groups which also includes relevant attribution analysis. The Chief Executive's Report provides further detail on each investment group's performance for the year.

·   Share price premium/discount:

As a closed ended listed investment company, the share price of the Company can and does differ from that of the NAV. This can give rise to either a premium or discount and as such is another component of Total Shareholder Return. During the year the Company's share price gain outperformed the gain in the Company's NAV resulting in the Company regularly trading at a premium.

The Board continually monitors the Company's premium or discount, and has received approval (and is seeking to renew such approval for another year) to issue new shares, at a premium to the relevant NAV, in order to meet natural market demand. Additionally for maximum flexibility the Board does have the ability to buy back shares if thought appropriate, although it must be noted that this ability is limited by the majority shareholding held by members of the Barlow family. Details of movements in the Company's share price discount or premium over the year is shown in the Year's Summary above.

·   Expenses:

The Board is aware of the impact of costs on returns and is conscious of seeking to minimise these both at the Company and Group level. The industry wide measure for investment trusts is ongoing charges, which seeks to quantify the ongoing costs of running the Company. This measures the annual normal ongoing costs of an investment trust, excluding performance fees, one off expenses and investment dealing costs, as a percentage of average equity shareholders' funds. Any investments made into pooled funds are included using the Company's share of estimated ongoing fund running costs. The Board does also pay close attention to costs in the subsidiary entities. Details of ongoing charges for the year are shown in the Year's Summary above.

·   Dividend Growth:

Dividends paid to shareholders are an important component of Total Shareholder Return and this has been included in the Company's investment objective. The Board is aware of the importance of this objective to the Company's shareholders and in recent years has maintained the dividend by using some of the Company's large revenue reserves. The Board had hoped that a successful development of Javelin Capital would allow the Company to maintain and grow its dividend with the benefit of income from Javelin Capital. With the closure of Javelin Capital, the Board has resolved to rebase the annual dividend with a view to moving to a sustainable and progressive dividend policy, paying dividends out of current year income rather than from revenue reserves. The Board receives detailed management accounts and forecasts which show the actual and forecast financial outturns for the Company and the Group. For the year to 30 September 2013, being the period prior to the rebasing of the dividend, dividend growth since 1985 has been 4.7% (5.3% including special dividends) which is ahead of inflation over that period.

Principal Risks

The principal risks and the Company's policies for managing these risks and the policy and practices with regard to financial instruments are summarised below and in note 26 to the accounts.

i.    Investment Risk:          

The Company has a range of equity investments, including a substantial investment in an unlisted asset management business, UK and global equities (both on a direct basis (via the MAM UK Equity Segregated Fund (UKESF)) and via collective investment vehicles (the Funds), and an investment in an absolute return fund, the Tortoise Fund (Tortoise). The major risk for the Company remains investment risk, primarily market risk; however it is recognised that the investment in MAM continues to represent a degree of concentration risk for the Company, (although reducing given the divestment programme announced as part of the restructuring in January 2014).

The number of investments held, together with the geographic and sector diversity of the portfolio, enables the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams.

Under the terms of the Investment Agreement the Investment Manager manages the majority of the Company's investment assets. The portfolios of UKESF and the Funds are actively managed by MAM against benchmarks and each have specific limits for individual stocks and market sectors that are monitored in real time. It should be noted that UKESF and the Funds' returns will differ from the benchmark returns. The Tortoise Fund is an absolute return fund whose returns are not correlated to equity markets. The principal risks are moderated by strict control of position sizing, low use of leverage and investing in liquid stocks. Also the level of risk at a net asset value level increases with gearing. In certain circumstances cash balances may be raised to reduce the effective level of gearing. This would result in a lower level of risk in absolute terms.

Other risks faced by the Company include the following:

ii.   Strategy Risk:

An inappropriate investment strategy could result in poor returns for shareholders and the introduction of or a widening of the discount of the share price to the NAV per share. The Board regularly reviews strategy in relation to a range of issues including investment policy and objective, the allocation of assets between investment groups, the level and effect of gearing and currency or geographic exposure;

iii   Business Risk:

Inappropriate management or controls in the Company or at MAM could result in financial loss, reputational risk and regulatory censure. The Board has representation on the MAM governing board to monitor business financial performance and operations and receives detailed reports from Company management on financial and non-financial performance;

iv.   Compliance Risk:

Failure to comply with regulations could result in the Company losing its listing, losing its FCA authorisation as a self managed AIF or being subjected to corporation tax on its capital gains. The Board receives and reviews regular reports from its service providers and Company management on the controls in place to prevent non-compliance of the Company with rules and regulations. The Board also receives regular investment listings and income forecasts as part of its monitoring of compliance with sections 1158 to 1162 of the Corporation Tax Act 2010; and

v.    Operational Risk:

Inadequate financial controls and failure by an outsourced supplier to perform to the required standard could result in misappropriation of assets, loss of income and debtor receipts and mis-reporting of NAVs. The Board and Audit Committee regularly review statements on internal controls and procedures and subject the books and records of the Company to an annual external audit. The Corporate Governance statement and the Report of the Audit Committee in the Company's Annual Report and Accounts provide further information in respect of internal control systems and risk management procedures.

On behalf of the Board

Andrew J Adcock

Chairman

4 December 2014

Chief Executive's Report

Introduction

In January 2014 the Company announced the closure of Javelin Capital LLP and that the majority of the Company's assets would be managed by MAM. The changes were detailed in a letter to shareholders dated 5 February 2014 which preceded the General Meeting of the Company to approve the changes. Under the new investment management arrangements the Company's assets, other than the direct stake in MAM and the residual non core portfolio, are allocated at the discretion of the Board between investment strategies managed by MAM. Initially the assets were allocated to a segregated fund tracking MAM's UK Equity Fund, to MAM's UK Income Fund and to MAM'S Tortoise Fund. In June the Company allocated £5m each to the MAM Global Equity, MAM Global Focus and MAM US Equity funds, at their launch, the investments being funded by reducing the assets in the segregated fund.

MAM Funds

The UK Equity Fund is the flagship product of MAM having started in March 2003 and since inception to September 2014 has returned 14.0% per annum net of fees with a relative outperformance against its benchmark FTSE All Share Index of 4.2% per annum. The Company's assets are invested in a segregated fund that is managed in parallel to the MAM UK Equity Fund. The assets are predominantly UK equities with overseas equities limited to 20%, and the strategy incorporates a dedicated allocation to UK smaller companies. The sum invested by the Company in the segregated fund at 30 September 2014 was £65.5m, representing 39.1% of the Company's total assets.

The Tortoise Fund is a global equity absolute return fund which started in August 2007 and has returned 10.5% per annum net of fees since that date. The total sum invested in the Tortoise Fund at 30 September 2014 was £27.7m, representing 16.5% of the Company's total assets.

The UK Income Fund is an income fund which started in December 2011 and has returned 22.6% per annum net of fees with a relative outperformance against its benchmark of 9.5% per annum. The assets are predominantly UK equities, with overseas equities limited to 20%. The total sum invested by the Company in the UK Income Fund at 30 September 2014 was £17.5m, representing 10.4% of the Company's total assets.

Following the recruitment of experienced Fund Managers the Global Equity, Global Focus Fund and US Equity Funds were launched by MAM in June 2014 and the Company invested £5m in each. The total sums invested in the Global Equity, Global Focus and US Equity funds by the Company as at 30 September 2014 were £5.1m, £5.0m and £5.4m which represents 3.0%, 3.0% and 3.2% respectively of total assets.

Performance

The Company's assets were managed by Javelin Capital until January 2014 and thereafter the majority have been managed by MAM. Under Javelin Capital the assets were split between the Core Portfolio, which comprised holdings in large cap UK and international companies and was measured against a benchmark of 70% FTSE All Share and 30% ROW ex UK, and investments in the Javelin Emerging Alpha Fund. The return on the Core Portfolio was 6.1%, which was an outperformance of 0.7% against its index. The Javelin Emerging Market Alpha Fund was an Absolute Return Fund which returned -3.0% from 30 September 2014 until its closure in January 2014. The Company received £29.5m which was invested in MAM Funds.

In the period from the Company's investment in January 2014, the MAM UK Equity Segregated Fund returned -1.7% net of fees compared to the benchmark of -0.7%. This return is net of the trading costs incurred in restructuring the portfolio following the appointment of MAM. Details of the principal investments held within the segregated portfolio are set out on page 14 of the Company's Annual Report and Accounts. The cumulative geographic and sector split of the UK Segregated Fund, UK Income Fund, Global Equity Fund, Global Equity Focus Fund and US Equity Fund are shown on page 14 of the Company's Annual Report and Accounts.

The Tortoise Fund had a difficult period following the Company's investment in the Fund in January with a return of -4.9% net of fees. In the period from January 2014, the UK Income Fund returned 4.4% net of fees compared to its benchmark of 2.7%. The Global Equity and Global Equity Focus Funds returned 1.7% and -0.1% net of fees compared to their benchmark (MSCI World Sterling) of 3.0% in the three months from their launches to 30 September. The US Equity Fund had a good return in the same period of 7.5% net of fees compared to its benchmark (S&P Sterling) of 6.1%. The return was enhanced by the strength of the US dollar against sterling. The sterling share classes in the Global and US Funds are not hedged.

MAM

MAM had a strong year with assets under management rising from £7.7bn to £10.2bn over the year to 30 September 2014. The increase in assets is across all existing MAM Funds which reflects rising markets, fund performance and fund inflows. The new Global Equity, Global Focus and US Funds have not materially influenced the growth in assets under management due to their recent launch in June 2014.

In March 2014 the Company sold 10% of MAM for £18.0m and now holds 18%; the shares sold were subsequently cancelled. It is intended that further reductions will be made over the next four years, with the Company having agreed to sell up to 2.5% of MAM each year. These shares will be acquired by an employee benefit trust or by MAM for cancellation. The Board has raised the value of its holding in MAM at 30 September 2014 to £41.3m, which represents 24.6% of the Company's total assets.

Realisation portfolio and cash

The realisation portfolio and cash are 0.1% and 0.1% of total assets. The cash figure excludes cash held in the MAM Segregated Fund and other MAM Funds in which the Company is invested.

Javelin Capital

Javelin Capital has been written down by £2.1m and is now held at zero. It is in the process of being liquidated.

Development of Net Asset Value

The chart below demonstrates the Group's Net Asset Value (NAV) development during the year to 30 September 2014. In aggregate, the NAV has increased by £8.9m, having incurred net administration (including both continuing and discontinuing operations) and finance costs of £4.6m and having paid out £4.8m in dividends (being comprised of the 6.3p 2013 final dividend and the 3p 2014 interim). In relation to the Group's investments, the UKES portfolio (and Core Portfolio to January 2014) gained £4.2m, including dividend receipts, whilst MAM provided a total contribution of £18.1m (comprised of dividends of £3.6m and total capital gains of £14.5m). Lastly the realisation portfolio declined by £0.4m, the JCEMAF by £1.0m, the MAM funds, as a group, by £0.5m. Additionally, Javelin Capital was written down by £2.1m.

NAV 20.09.2013	£125.2m
Core & MAM UKES Portfolio	+£4.2m
MAM	+£18.1m
MAM Funds	(£0.5m)
JCEMA	(£1.0m)
Realisation Portfolio	(£0.4m)
Admin Costs	(£1.8m)
Capital write down of Javelin Capital	(£2.1m)
Finance Costs	(£2.8m)
Dividend Paid	(£4.8m)
NAV 30.09.2014	£134.1m

Note: Net admin costs are net of Javelin Capital management fee income as received from external investors and also in respect of the Company's investment in the JCEMAF. They also include the net increase from the sale of the EIT shares.

MAM Fund Performance	% Fund return (net of fees)	% Benchmark Return
MAM UK Equity Segregated Fund	-1.5	-0.7
MAM UK Income Fund	4.4	2.8
MAM Global Equity Fund	1.8	3.0
MAM Global Focus Fund	-0.1	3.0
MAM US Equity Fund	7.9	6.1
MAM Tortoise Fund	-4.9	-

Notes:

The MAM UK Equity Segregated Fund commenced on 22 January 2014.

The investment in the MAM UK Income Fund was made on 29 January and 19 March 2014.

The investments in the MAM Global Equity, MAM Global Focus and MAM US Equity were made on 27 June 2014 and funded from the MAM UK Equity Segregated Fund.

The investment in the MAM Tortoise Fund was made on 29 January and 18 March 2014. The fund is an absolute return fund and therefore has no benchmark.

William Barlow CEO

Majedie Investments Plc

4 December 2014

Fund Analysis at 30 September 2014

Geographical Analysis

	% of Total
UK		70
Europe		10.9
US		13.9
Japan		0.7
Developed Asia		0.2
Emerging Markets		1.1
Cash		3.2
	100.0

Sector Analysis

	% of Total
Basic Materials		3.0
Consumer Goods		2.1
Consumer Services		17.2
Financials		20.0
Health Care		11.0
Industrials		10.7
Oil & Gas		11.4
Technology		5.3
Telecommunications		11.2
Utilities		4.9
Cash		3.2
	100.0

Notes:

Exposures are based on the stock exchange on which the underlying equity is listed and FTSE sector classification.

The assets analysed above are the aggregate exposure of MAM UK Equity Segregated Fund, MAM UK Income Fund, MAM Global Equity Fund, MAM Global Focus Fund and MAM US Equity Fund Investments. The aggregate represent a total of 58.7% of the Company total assets.

Twenty Largest UK MAM UK Equity Segregated Fund Holdings at 30 September 2014

	Market Value	% of UK
Company	£000	Segregated Fund
MAM Special Situations Fund	5,722	9.1
Royal Dutch Shell plc	4,299	6.8
GlaxoSmithKline plc	3,946	6.3
BP plc	3,877	6.1
Vodafone Group Plc	3,171	5.0
AstraZeneca PLC	2,879	4.6
BAE Systems PLC	2,637	4.2
Marks & Spencer Group PLC	2,120	3.4
Orange SA	1,971	3.1
Centrica plc	1,942	3.1
BT Group plc	1,905	3.0
HSBC Holdings plc	1,643	2.6
Telecom Italia SpA	1,419	2.3
Tesco PLC	1,272	2.0
Royal KPN NV	1,264	2.0
Royal Bank of Scotland Group plc	1,243	2.0
Carnival plc	1,155	1.8
Standard Life plc	989	1.6
Aviva PLC	964	1.5
National Grid plc	905	1.4
	45,323	71.9

Director's Report

The directors submit their report and the accounts for the year ended 30 September 2014.

Introduction

The Directors' Report includes the Corporate Governance statement, the Report of the Audit Committee, and the Directors' Remuneration Report.  A review of the Company's business is contained in the Strategic Report which includes the Chairman's statement and should be read in conjunction with the Directors' Report.

Principal Activity and Status

The Company is a public limited company and an investment company under section 833 of the Companies Act 2006. It operates as an investment trust and is not a close company. The Company is also a member of the AIC.

The Company has received written confirmation from HM Revenue & Customs that it meets the eligibility conditions and is an approved investment trust for taxation purposes under sections 1158/59 of the Corporation Tax Act 2010, with effect from 1 October 2012, subject to it continuing to meet the eligibility conditions and on-going requirements. In the opinion of the directors, the Company continues to direct its affairs so as to enable it to continue to qualify as an approved investment trust.

Results and Dividend

The consolidated net revenue return before taxation arising from continuing operations amounted to £5,148,000 (2013: £3,995,000), and the net loss before taxation arising from discontinued operations amounted to £232,000 (2013: £339,000). The directors recommend a final ordinary dividend of 4.5p per ordinary share, payable on 21 January 2015 to shareholders on the register at the close of business on 9 January 2015. Together with the interim dividend of 3.0p per share paid on 27 June 2014, this makes a total distribution of 7.5p per share in respect of the financial year (2013: 10.5p per share).

Risk Management and Objectives

The Company as an investment trust, and the Group, are subject to various risks in pursuing their objectives. The nature of these risks and the controls and policies in place across the Group that are used to minimise these risks are further detailed in the Strategic Report and in note 26 of the Accounts.

Directors

The directors in office at the date of this report are listed on page 16 of the Company's Annual Report and Accounts.

Directors' retirement by rotation and appointment is subject to the Company's Articles of Association and the UK Corporate Governance Code.

The Company's Articles of Association require that at every Annual General Meeting any director who has not retired from office at the preceding two Annual General Meetings shall stand for re-appointment by the Company.

Therefore in accordance with the Company's Articles of Association, Mr AJ Adcock, having been last re-appointed at the Annual General Meeting in 2012, will retire at the forthcoming Annual General Meeting and, being eligible, will offer himself for re-appointment. Additionally Mr RDC Henderson, having last been appointed at the Annual General Meeting in 2012, will retire at the forthcoming Annual General Meeting and, being eligible, will offer himself for re-appointment.

In accordance with Listing Rule 15.2.13A and in accordance with the UK Corporate Governance Code with respect of directors who have served over nine years, Mr JWM Barlow, being a non-executive director of Majedie Asset Management Limited, the Investment Manager, must submit himself for annual re-appointment.

The Board has considered the continued appointment of Mr JWM Barlow who has served for over 14 years. The Board's view is that length of tenure does not compromise independence and that experience and continuity can add strength to a Board. Given the restructuring that was undertaken during the year the Board is conscious of the need to maintain continuity on the Board and believes retaining directors with sufficient experience of both the Company and the markets is of great benefit to the shareholders. The Board believes that the performance of Mr JWM Barlow continues to be effective, that he demonstrates commitment to his role and has a range of business, financial and asset management skills and experience relevant to the direction and control of the Company.

The Board, having considered the retiring directors' performance within the annual Board performance evaluation, hereby recommends that shareholders vote in favour of the proposed re-appointments.

Qualifying Third Party Indemnity Provisions

There are no qualifying third party indemnity provisions or qualifying pension scheme indemnity provisions which would require disclosure under section 236 of the Companies Act 2006.

Directors' Interests

Beneficial interests in ordinary shares as at:

	30 September	1 October
	2014	2013
Mr AJ Adcock	50,000	20,000
Mr JWM Barlow	676,083	676,038*
Mr PD Gadd	30,000	10,000
Mr RDC Henderson	4,700	Nil

* The Company's Annual Report and Accounts for the year ended 30 September 2013 incorrectly stated Mr JWM Barlow's beneficial holding as being 658,779 ordinary shares. Mr JWM Barlow's beneficial holding has remained unchanged since the disclosure to the market made on 5 October 2010.

Non-beneficial interests in ordinary shares as trustees for various settlements as at:

	30 September	1 October
	2014	2013
Mr JWM Barlow	1,897,165	1,897,165†

† The Company's Annual Report and Accounts for the year ended 30 September 2013 incorrectly stated Mr JWM Barlow's non-beneficial holding as being 2,160,779.

There have been no changes to any of the above holdings between 30 September 2014 and the date of this report.

Substantial Shareholdings

At 30 November 2014 the Company has been notified of the following substantial holdings in shares carrying voting rights:

Mr HS Barlow	Beneficial	15,017,619	28.59%
	Non-beneficial	613,084	1.17%
Axa Group		7,103,119	13.52%
Mr MHD Barlow	Beneficial	1,776,241	3.38%
	Non-beneficial	1,360,750	2.59%
Sir JK Barlow	Beneficial	1,561,805	2.97%
	Non-beneficial	869,086	1.65%
Mr GB Barlow		877,433	1.67%
Miss AE Barlow		2,034,948	3.87%
Mr JWM Barlow	Beneficial	676,083	1.29%
	Non-beneficial	1,897,165	3.61%

The substantial voting rights disclosed above include the total holdings of shares within certain trusts where there are other beneficiaries.

There have been no changes to any of the above holdings between 30 November 2014 and the date of this report.

Annual General Meeting

The Annual General Meeting will be held at City of London Club, 19 Old Broad Street, London EC2N 1DS on Wednesday, 14 January 2015 at 12 noon. The notice convening the Annual General Meeting is available on the Company's website.

The Board considers that Resolutions 1 to 13 are likely to promote the success of the Company and are in the best interests of the Company and its shareholders as a whole. The Directors unanimously recommend that you vote in favour of the Resolutions as they intend to do in respect of their own beneficial holdings.

Issue and Buyback of Shares

As part of the restructuring of the Company during the year the Board received approval, at a General Meeting on 27 February 2014, to allot new shares for cash, and without first offering them to existing shareholders in proportion to their holdings, up to a maximum of 5,200,000 shares (being approximately 9.99% of the Company's existing share capital). These two authorities will expire at the 2015 Annual General Meeting. The directors undertake not to allot any such new shares unless they are allotted at a price representing a premium to the Company's then prevailing NAV per share, with debt at market value. No shares have been allotted from the date of the General Meeting to 30 September 2014, or subsequently to the date of this report.

During the year, 175,000 shares were sold by the Company's Employee Incentive Trust.

The directors are of the view that they are prepared to issue new shares in order to meet natural market demand, subject to the restriction that any new shares will be issued at a premium as above, and as such shareholder approval is sought at the Annual General Meeting to renew the authority to issue new shares, without first offering them to existing shareholders in proportion to their holdings, up to a maximum of 5,200,000 shares (being approximately 9.99% of the Company's existing share capital).

Since 1 October 2013, and up to the date of this report, the Company has made no buybacks for cancellation of its ordinary shares. At the Annual General Meeting in 2014 the directors were given power to buy back 7,873,947 ordinary shares (being 14.99% of the Company's existing share capital). Since the Annual General Meeting the directors have not bought any shares under this authority. This authority will expire at the 2015 Annual General Meeting.

In order to provide maximum flexibility, the directors consider it appropriate that the Company be authorised to make such purchases and accordingly shareholder approval is sought at the Annual General Meeting to renew the authority of the Company to exercise the power contained in its Articles of Association to make buybacks of its own shares. The maximum number of shares which may be purchased is 14.99% of the issued share capital. Any shares so purchased will be cancelled. The restrictions on such purchases, (including minimum and maximum prices), are outlined in the Notice of Meeting. The Authority will be used where the directors consider it to be in the best interests of the shareholders.

Capital Structure

As part of its corporate governance the Board keeps under review the capital structure of the Company. At 30 September 2014, the Company had a nominal issued share capital of £5,252,800, comprising 52,528,000 ordinary shares of 10p each, carrying one vote each. All of the shares of the Company are listed on the London Stock Exchange which is a regulated market.

The directors consider that new shares should be issued to meet natural market demand, so long as any such shares are issued at a premium to the Company's NAV (as measured with debt at fair value).

Additionally the Board has each year renewed the authority of the Company to make market buybacks of its own shares. However, the Board is only likely to use such authority in special circumstances. In general the directors believe that a discount to net assets will be reduced sustainably over the long term by the creation of value through the development of the business.

The Company deploys gearing through two long term debentures: £15m 9.5% debenture stock 2020 and £25m 7.25% debenture stock 2025, which were issued in 1994 and 2000 respectively. In 2004 the Company redeemed £1.5m of the 2020 issue and £4.3m of the 2025 issue as an opportunity arose to redeem at an attractive price.

The limits on the ability to borrow are described in the investment policy above. The Board is responsible for managing the overall gearing of the Company. Details of gearing levels are contained in the Year's Summary above, and in note 26 to the Accounts.

There is one employee share scheme operated by the Group. Further details are in note 25 to the accounts.

There are: no restrictions on voting rights; no restrictions concerning the transfer of securities in the Company; no special rights with regard to control attached to securities; no agreements between holders of securities regarding their transfer known to the Company; and no agreements which the Company is party to that might affect its control or trigger any compensatory payments for directors, following a takeover bid.

Notice period for general meetings

The Board believes that it is in the best interests of shareholders of the Company to have the ability to call meetings on 14 days' clear notice should a matter require urgency. The Board will therefore, as last year, propose a resolution at the Annual General Meeting to approve the reduction in the minimum notice period from 21 clear days to 14 clear days for all general meetings other than annual general meetings. The directors do not intend to use fewer than 21 clear days' notice unless immediate action is required.

Future Developments

The Chairman's Statement and the Chief Executive's report above provide details as concerning relevant future developments of the Company and the Group in the forthcoming year.

Employees, Social, Environmental, Ethical and Human Rights policy

The Company, as an investment trust, has a limited direct impact upon the environment. In carrying out its activities and relationships with its employees, suppliers and the community, the Company aims to conduct itself responsibly, ethically and fairly.

The Company has appointed MAM to manage the majority of its investment assets. In doing so it takes account of social, environmental, ethical and human rights factors, where appropriate.

Carbon Reporting

In accordance with the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013, the Company is required to report on its greenhouse gas emissions for those financial years ending on or after 30 September 2013. In accordance with the regulations, the Company has determined that its organisational boundary, to which entities the regulations apply, is consistent with its consolidated accounts.

The Group operates in the financial services sector and in common with many organisations employs outsourcing such that most of its activities are performed by other outside organisations which do not give rise to any reportable emissions by the Group.

However the Group, as a self managed investment trust, does undertake activities at its leased premises. In accordance with the provision of the centrally provided building services (including heating, light, cooling etc) to all lessees in the building by the landlord it is considered that the Group does not have emissions responsibility in respect of these services, which rather rest with the landlord. The Group does however have responsibility for various other emissions in the usage of electricity by its office equipment in the course of undertaking its duties but it is not able to determine their amounts as compared to those provided by the landlord.

Additionally, the Company has many investments in companies around the world, however the Company does not have the ability to control the activities of these investee companies and as such has no responsibility for their emissions. Therefore the directors believe that the Group has no reportable emissions for the year ended 30 September 2014 (2013: nil).

Donations

The Company made no political or charitable donations during the year (2013: nil) to organisations either within or outside of the EU.

Gender Diversity

The Board are aware of the recommendations made in the Lord Davies Review in 2011 in respect to Board diversity. The Company's policy on diversity is included in the section on the Nomination Committee on pages 24 and 25 of the Company's Annual Report and Accounts and this is applied when a new appointment to the Board is required. There has been no change in the Board and at the year end the composition of the Board was that all the directors were male. The composition of the Company's employees is 66.6% male and 33.3% female.

Post Balance Sheet Events

There have been no significant post balance sheet events of the Company or its subsidiaries.

Material Contracts

• Majedie Asset Management Limited

      The Board has appointed MAM, as its investment manager, the terms of which are defined under an Investment Agreement dated 13 January 2014. The agreement divides the Company's investment assets into a combination of a segregated portfolio and the MAM in-house funds, with the Board having the ability, subject to certain capacity constraints in respect of the MAM funds, for the determination of the asset allocation of its investment assets, both initially and on an on-going basis.

The Investment Agreement provides that the segregated portfolio is to be managed within MAM's UK Equity Fund, with initial investments into the MAM Tortoise Fund and MAM Income Fund. Additionally it was agreed that the Company would invest, by amending its initial asset allocation, into other named funds scheduled to be launched by MAM within 12 months. Accordingly the Company amended its allocation to the segregated portfolio and invested into the MAM Global Equity Fund, the MAM Global Focus Fund and the MAM US Equity Fund in June 2014.

The fees payable under the Investment Agreement are detailed below:

	Management	Performance
Portfolio/Fund*	Fee^	Fee^
MAM UK Equity
Segregated Fund	0.75% p.a.	Nil
MAM Tortoise Fund	1.50% p.a.	20%†
MAM UK Income Fund	0.75% p.a.	Nil
MAM Global Equity Fund	0.75% p.a.	Nil
MAM Global Focus Fund	0 - 1.00% p.a.**	Nil
MAM US Equity Fund	0.75% p.a.	Nil†

* The fees are calculated under the terms of the Investment Agreement or the relevant fund prospectus.

^† The performance fee entitlement only occurs once the hurdle has
been exceeded and is calculated on a high water mark basis.

** The management fee range reflects the investments made into different share classes.

^ The fees charged to the MAM UK Equity Segregated Fund are charged directly to the Company's Statement of Comprehensive
Income. All other fund fees are charged within the relevant fund.

The Investment Agreement entitles either party to terminate the arrangement with six months' notice after an initial period ending on 31 December 2015.

·     BNY Mellon Trust& Depositary (UK) Limited

The Company has appointed BNYM (UK) Limited (BNYM (UK)) to provide depositary services as required by the AIFMD and certain other associated services under the terms of a depositary agreement dated 19 June 2014. The services provided by BNYM (UK) as Depositary for the Company include:

·   general oversight responsibilities over the issue and cancellation of the Company's share capital, the carrying out of net asset value calculations, the application of income, and the ex-post review of investment transactions;

·   monitoring of the Company's cash flows and ensuring that all cash is booked in appropriate accounts in the name of the Company or BNYM (UK) acting on behalf of the Company; and

·   ensuring that the Bank of New York Mellon SA/ NV, London Branch (BNYM) (to whom BNYM (UK) has delegated the safekeeping of all assets held within the Company's investment portfolio, including those classed as financial instruments for the purpose of the AIFMD), in accordance with the terms of a Global Custody Agreement, retains custody of the Company's financial instruments in segregated accounts so that they can be clearly identified as belonging to the Company and maintains records sufficient for verification of the Company's ownership rights in relation to assets other than financial instruments.

No specific conflicts have been identified as arising as a result of the delegation of the provision of custody and safekeeping services by BNYM (UK) to BNYM. The terms of the depositary agreement provide that, where certain assets of the Company are invested in a country whose laws require certain financial instruments to be held in custody by a local entity and no such entity is able to satisfy the requirements under the AIFMD in relation to use of delegates by depositaries, BNYM (UK) may still delegate its functions to such a local entity and be fully discharged of all liability for loss of financial instruments of the Company by such local entity.

The Depositary receives an annual fee for its services on a sliding scale of 0.04% up to total gross portfolio assets of £100 million and 0.035% between £100 million and £250 million and 0.03% above £250 million, payable monthly in arrears. The depositary agreement in place with BNYM (UK) and the related custody agreement in place with BNYM continues unless and until terminated: without cause upon the Company and BNYM (UK) giving not less than 90 days' notice and upon BNYM (UK) giving notice expiring not less than 18 months after the date of the agreement, in each case such notice to be effective only if a new Depositary has been appointed.

·     Capita Sinclair Henderson Limited

The Board has appointed Capita Sinclair Henderson Limited (trading as Capita Asset Services) in November 2000 to act as Company Secretary and undertake fund administration services. The terms of Capita Sinclair Henderson Limited's appointment are defined under a Secretarial and Administration Services Agreement dated 6 February 2012. The agreement entitles either party to terminate the arrangement with twelve months' notice.

Listing Rule Disclosure

The Company is listed on the London Stock Exchange and is subject to the UKLA listing rules. These require various disclosures, which are included in this report, and now also include the requirement, under Listing Rule 9.8.4R, to disclose, where applicable, certain specific items separately. These as they apply to the Company, in respect of the year ended 30 September 2014, are:

·   that the Company has not capitalised any interest during the year (all interest has been included in the Group and Company's respective Statement of Comprehensive Income);

·   that no director waived or has agreed to waive any entitlements during the year, nor for any future periods;

·   that the Company had a contract of significance in respect of Javelin Capital LLP, in which Mr JWM Barlow was a partner and received profit shares. Details of these entitlements are contained in the Report on Directors' Remuneration; and

·   that the Company's Employee Incentive Trust has, in accordance with its Trust Deed dated 19 January 1998, agreed to waive its entitlement to dividends in respect of its holdings of Company shares, to the extent that they exceed 0.001p per share. Further details in respect of the Employee Incentive Trust are contained in note 20 to the accounts.

AIFMD

The Company, as from 22 July 2014, is subject to the AIFMD, which requires certain financial and non-financial disclosures in respect of Annual Reports.

These disclosures are already made by the Company in its Annual Report. In addition certain specific disclosures are required which are:

·   Remuneration

Total remuneration details for the directors (who are considered to be code staff under the Directive) are shown in the Report on Directors' Remuneration. Remuneration details for staff are included in Note 7. There was no variable remuneration paid during the year.

·   Leverage

Under the AIFMD, the Company is required to disclose its actual leverage (calculated in accordance with the Directive under the Gross & Commitment methods) and it must also set a limit in respect of leverage it can use. The Company has set a limit of 1.5 times (1 being no leverage) and as at 30 September 2014 had leverage of 1.23 under the Gross method and 1.26 under the Commitment method. Note 26 provides further details.

·   Investor Pre-investment information The AIFMD requires that potential investors are provided with certain information. The Company provides this information on its website at www.majedieinvestments.com and there have been no material changes since 22 July 2014 to the date of this report.

Disclosure of Information to Auditors

As far as each of the directors are aware:

·   there is no relevant audit information of which the Company's Auditors are unaware; and

·   they have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the Company's Auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.

Auditors

Ernst& Young LLP were re-appointed as Auditors on 15 January 2014. Ernst & Young LLP have indicated their willingness to continue in office and a resolution will be proposed at the Annual General Meeting to re-appoint them as Auditors.

Going Concern

The directors believe, after review and due consideration of future forecast and cashflow projections, that the Company has adequate financial resources to continue in operational existence for the foreseeable future. For this reason and taking account of the large number of readily realisable investments held within its portfolio, the Board continues to adopt the going concern basis in preparing the financial statements.

By Order of the Board

Capita Sinclair Henderson Limited Company Secretary

4 December 2014

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the Group financial statements in accordance with applicable United Kingdom law and those IFRSs as adopted by the European Union. Under Company Law the Directors must not approve the Group financial statements unless they are satisfied that they present fairly the financial position, financial performance and cash flows of the Group for that period. In preparing the Group financial statements the Directors are required to:

·     select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

·     present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

·     provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance;

·     state that the Group has complied with IFRSs, subject to any material departures disclosed and explained in the financial statements;

·     make judgements and estimates that are reasonable and prudent; and

·     state that the Annual Report, taken as a whole, is fair, balanced and understandable and provides sufficient information to allow shareholders to assess the Group's performance.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at anytime the financial position of the Group and enable them to ensure that the Group financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, a Corporate Governance Statement, A Director's Remuneration Report and a Directors' Report that comply with that law and those regulations.

The Directors of the Company, whose names are shown on page 16 of the Company's Annual Report and Accounts, each confirm to the best of their knowledge that:

·   the financial statements, which have been prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;

·     the Annual Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces; and

·     they consider that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

By order of the Board

Andrew J Adcock Chairman

4 December 2014

Report of the Depositary

Report of the Depositary of the shareholders of Majedie Investments PLC

Depositary responsibilities

The Depositary is responsible for the safekeeping of all custodial assets of the Company, for verifying and maintaining a record of all other assets of the Company and for the collection of income that arises from those assets.

It is the duty of the Depositary to take reasonable care to ensure that the Company is managed in accordance with the Alternative Investment Fund Managers Directive (AIFMD), the FUND Sourcebook and the Company's Instrument of Incorporation, in relation to the calculation of the net asset value per share and the application of income of the Company. The Depositary also has a duty to monitor the Company's compliance with investment restrictions and leverage limits set in its offering documents.

Report of the Depositary to the shareholders of Majedie Investments PLC for the year ended 30 September 2014

Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the Company, it is our opinion, based on the information available to us and the explanations provided, that in all material respects the Company, acting through the AIFM has been managed in accordance with AIFMD, the FUND sourcebook, the Instrument of Incorporation of the Company in relation to the calculation of the net asset value per share, the application of income of the Company; and with investment restrictions and leverage limits set in its offering documents.

For and on behalf of BNY Mellon Trust & Depositary (UK) Limited

160 Queen Victoria Street

London EC4V 4LA

Manager

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the years ended 30 September 2014 and 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the Registrar of Companies, and those for 2014 will be delivered in due course. The Auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditors' report can be found in the Company's full Annual Report and Accounts at www.majedie.co.uk.

Consolidated Statement of Comprehensive Income for the year ended 30 September 2014

			2014		2013
		Revenue	Capital		Revenue	Capital
		return	return	Total	return	return	Total
	Notes	£000	£000	£000	£000	£000	£000
Investments
Gains on investment at fair
value through profit or loss	13		13,933	13,933		18,046	18,046
Net investment result			13,933	13,933		18,046	18,046
Income
Income from investments	3	6,549		6,549	5,120		5,120
Other income	3	47		47	93		93
Total income		6,596		6,596	5,213		5,213
Expenses
Management fees	4	(93)	(280)	(373)
Administrative expenses	5	(653)	(528)	(1,181)	(516)	(197)	(713)
Return before finance cost
and taxation		5,850	13,125	18,975	4,697	17,849	22,546
Finance costs	8	(702)	(2,107)	(2,809)	(702)	(2,105)	(2,807)
Net return before taxation		5,148	11,018	16,166	3,995	15,744	19,739
Taxation	9	(45)		(45)	(115)		(115)
Net return after taxation for
the year from  continuing
operations		5,103	11,018	16,121	3,880	15,744	19,624
Discontinued operations
Net return after taxation for
The year from discontinued
operations	15	(232)	(2,584)	(2,816)	(339)	(912)	(1,251)
Total comprehensive income
for the year		4,871	8,434	13,305	3,541	14,832	18,373
Return per ordinary share:		pence	pence	pence	pence	pence	pence
Basic and diluted for
continuing operations	11	9.8	21.2	31.0	7.5	30.3	37.8
Basic and diluted for
discounted operations	11	(0.4)	(5.0)	(5.4)	(0.7)	(1.8)	(2.5)
Basic and diluted total	11	9.4	16.2	25.6	6.8	28.5	35.3

The total column of this statement is the Consolidated Statement of Comprehensive Income of the Group prepared in accordance with IFRSs as adopted by the European Union. The supplementary revenue return and capital return columns are prepared under guidance published by the AIC.

The notes below form part of these accounts.

Company Statement of Comprehensive Income for the year ended 30 September 2014

			2014			2013
		Revenue	Capital		Revenue	Capital
		return	return	Total	return	return	Total
	Notes	£000	£000	£000	£000	£000	£000
Investments
Gains on investments at
fair value through profit or
loss	13		6,008	6,008		17,679	17,679
Net investment result			6,008	6,008		17,679	17,679
Income
Income from investments	3	6,549		6,549	5,120		5,120
Other income	3	56		56	112		112
Total income		6,605		6,605	5,232		5,232
Expenses
Management fees	4	(207)	(404)	(611)	(404)	(415)	(819)
Administrative expenses	5	(691)	(641)	(1,332)	(516)	(197)	(713)
Return before finance
costs and taxation		5,707	4,963	10,670	4,312	17,067	21,379
Finance costs	8	(702)	(2,107)	(2,809)	(702)	(2,105)	(2,807)
Net return before taxation		5,005	2,856	7,861	3,610	14,962	18,572
Taxation	9	(45)		(45)	(115)		(115)
Net return after taxation for
the year		4,960	2,856	7,816	3,495	14,962	18,457
Return per ordinary share		pence	pence	pence	pence	pence	pence
Basic and diluted	11	9.5	5.5	15.0	6.7	28.8	35.5

The total column of this statement is the Statement of Comprehensive Income of the Company prepared under IFRSs as adopted by the European Union. The supplementary revenue return and capital return columns are prepared under guidance published by the AIC.

All revenue and capital items in the above statement derive from continuing operations.

The notes below form part of these accounts.

Consolidated Statement of Changes in Equity for the year ended 30 September 2014

				Capital	Share			Own
		Share	Share	redemption	options	Capital	Revenue	shares
		capital	premium	reserve	reserve	reserve	reserve	reserve	Total
	Notes	£000	£000	£000	£000	£000	£000	£000	£000
Year ended 30 September 2014
As at 1 October 2013		5,253	785	56	(123)	102,654	18,169	(1,628)	125,166
Net return for the year from
continuing operations						11,018	5,103		16,121
Net return for the year from
discontinued operations	15					(2,584)	(232)		(2,816)
Share options expense	25				19				19
Sale of own shares by Employee Incentive Trust (EIT)	20					(178)		589	411
Dividends declared and paid in year	10						(4,840)		(4,840)
As at 30 September 2014		5,253	785	56	(104)	110,910	18,200	(1,039)	134,061
Year ended 30 September 2013
As at 1 October 2012		5,253	785	56	(147)	87,822	20,093	(1,628)	112,234
Net return for the year from
continuing operations						15,744	3,880		19,624
Net return for the year from
Discontinued operations	15					(912)	(339)		(1,251)
Share options expense	25				24				24
Dividends declared and paid in year	10						(5,465)		(5,465)
As at 30 September 2013		5,253	785	56	(123)	102,654	18,169	(1,628)	125,165

The notes form part of these accounts.

Company Statement of Changes in Equity for the year ended 30 September 2014

				Capital	Share			Own
		Share	Share	redemption	options	Capital	Revenue	shares
		capital	premium	reserve	reserve	reserve	reserve	reserve	Total
	Notes	£000	£000	£000	£000	£000	£000	£000	£000
Year ended 30 September 2014
As at 1 October 2013		5,253	785	56	(123)	104,534	21,778	(1,628)	130,655
Net return for the year						2,856	4,960		7,816
Share options expense	25				19				19
Sale of own shares by Employee Incentive  Trust (EIT)	20					(178)		589	(4,840)
Dividends declared and paid in year	10						(4,840)
As at 30 September 2014		5,253	785	56	(104)	107,212	21,898	(1,039)	134,061
Year ended 30 September 2013		5,253	785	56	(147)	89,572	23,748	(1,628)	117,639
As at 1 October 2012
Net return for the year						14,962	3,495		18,457
Share options expense	25				24				24
Dividends declared and paid in year	10						(5,465)		(5,465)
As at 30 September 2013		5,253	785	56	(123)	104,534	21,778	(1,628)	130,655

The notes below form part of these accounts.

Consolidated Balance Sheet as at 30 September 2014

		2014	2013
	Notes	£000	£000
Non-current assets
Property and equipment	12	80	105
Investments held at fair value through profit or loss	13	165,342	151,939
		165,422	152,044
Current assets
Trade and other receivables	16	338	2,690
Cash and cash equivalents	17	3,512	5,523
		3,850	8,213
Total assets		169,272	160,257
Current liabilities
Trade and other payables	18	(1,338)	(1,244)
Total assets less current liabilities		167,934	159,013
Non-current liabilities
Debentures	18	(33,873)	(33,847)
Total liabilities		(35,211)	(35,091)
Net assets		134,061	125,166
Represented by:
Ordinary share capital	19	5,253	5,253
Share premium		785	785
Capital redemption reserve		56	56
Share options reserve		(104)	(123)
Capital reserve		110,910	102,654
Revenue reserve		18,200	18,169
Own shares reserve	20	(1,039)	(1,628)
Equity Shareholders' Funds		134,061	125,166
Net asset value per share		pence	pence
Basic and fully diluted	21	256.7	240.5

Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 4 December 2014.

Andrew J Adcock

Director

The notes below form part of these accounts.

Company Balance Sheet as at 30 September 2014

		2014	2013
	Notes	£000	£000
Non-current assets
Property and equipment	12	80	98
Investments held at fair value through profit or loss	13	165,342	151,939
Investments in subsidiaries held at fair value through profit or loss	13	172	8,193
		165,594	160,230
Current assets
Trade and other receivables	16	432	1,313
Cash and cash equivalents	17	3,246	3,991
		3,678	5,304
Total assets		169,272	165,534
Current liabilities
Trade and other payables	18	(1,338)	(1,032)
Total assets less current liabilities		167,934	164,502
Non-current liabilities
Debentures	18	(33,873)	(33,847)
Total liabilities		(35,211)	(34,879)
Net assets		134,061	130,655
Represented by:
Ordinary share capital	19	5,253	5,253
Share premium		785	785
Capital redemption reserve		56	56
Share options reserve		(104)	(123)
Capital reserve		107,212	104,534
Revenue reserve		21,898	21,778
Own shares reserve	20	(1,039)	(1,628)
Equity Shareholders' Funds		134,061	130,655

Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 4 December 2014.

Andrew J Adcock

Director

The notes below form part of these accounts.

Consolidated Cash Flow Statement for the year ended 30 September 2014

		2014	2013
	Notes	£000	£000
Net cash flow from operating activities
Consolidated net return before taxation from continuing operations		16,166	19,739
Consolidated net return before taxation from discontinued operations		(2,816)	(1,251)
Adjustments for:
Gains on investments relating to continuing operations	13	(13,933)	(18,046)
Losses on investments relating to discontinued operations	15	2,084
Consolidation adjustment on Javelin Capital fee income		118	368
Share based remuneration		19	24
Depreciation		25	142
Purchases of investments		(145,143)	(31,862)
Sales of investments		145,976	19,724
		2,496	(11,162)
Finance costs		2,809	2,807
Operating cash flows before movements in working capital		5,305	(8,355)
Decrease in trade and other payables		(9)	(137)
Increase in trade and other receivables		(54)	(916)
Net cash inflow(outflow) from operating activities before tax		5,242	(9,408)
Tax recovered		26	28
Tax on unfranked income		(67)	(136)
Net cash inflow/ (outflow) from operating activities		5,201	(9,516)
Attributable to:
Net cash inflow/ (outflow) from tax from operating activities attributable to continuing operations		7,907	(8,288)
Net cash outflow from operating activities attributable to discontinued operations		(2,706)	(1,228)
Financing activities
Interest paid		(2,783)	(2,783)
Dividends paid		(4,840)	(5,465)
Proceeds from sale of own shares by EIT		411
Net cash outflow from financing activities attributable to continuing operations		(7,212)	(8,248)
Decrease in cash and cash equivalents for year	22	(2,011)	(17,764)
Cash and cash equivalents at start of year		5,523	23,287
Cash and cash equivalents at end of year		3,512	5,523

The notes below form part of these accounts.

Company Cash Flow Statement for the year ended 30 September 2014

		2014	2013
	Notes	£'000	£000
Net cash flow from operating activities
Company net return before taxation		7,861	18,572
Adjustments for:
Gains on investments	13	(6,008)	(17,679)
Share based remuneration		19	24
Depreciation		18	35
Purchases of investments		(145,143)	(31,862)
Sales of investments		145,983	19,724
		2,730	(11,186)
Finance costs		2,809	2,807
Operating cashflows before movements in working capital		5,539	(8,379)
Increase/(decrease) in trade and other payables		203	(94)
Decrease/(increase) in trade and other receivables		559	(102)
Net cash inflow/(outflow) from operating activities before tax		6,301	(8,575)
Tax recovered		26	28
Tax on unfranked income		(67)	(136)
Net cash inflow/(outflow) from operating activities		6,260	(8,683)
Investing activities
Proceeds from liquidation of subsidiaries		207
Net cash inflow from investing activities		207
Financing activities
Interest paid		(2,783)	(2,783)
Dividends paid		(4,840)	(5,465)
Proceeds from sale of own shares by EIT		411
Net cash outflow from financing activities		(7,212)	(8,248)
Decrease in cash and cash equivalents at start of year	22	(745)	(16,931)
Cash and cash equivalents at start of year		3,991	20,922
Cash and cash equivalents at end of year		3,246	3,991

The notes below form part of these accounts.

Notes to the Accounts

General Information

Majedie Investments PLC is a company incorporated in England under the Companies Act 2006. The Company is registered as a public limited company and is an investment company as defined by Section 833 of the Companies Act 2006. The address of the registered office is given below. The nature of the Group's operations and its principal activities are set out in the Business Review above.

Critical Accounting Assumptions and Judgements

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting assumptions. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas requiring a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are set out below.

Assessment as investment entity

Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them. The criteria which define an investment entity are, as follows:

·     obtains funds from one or more investors for the purpose of providing those investors with investment services;

·     commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

·     measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Board has agreed with the recommendation of the Audit Committee that the Company meets the definition of an investment entity. These conclusions will be reassessed on an annual basis, if any of these criteria or characteristics change.

As an investment trust, the Company's stated investment policy, details its objective of providing investment management services to investors which includes investing in UK and global equities, fixed income securities and certain derivative instruments for the purpose of returns in the form of investment income and capital appreciation.

The Group reports regularly to its shareholders via monthly and quarterly investor information, and to its management, via internal management reports, on a fair value basis. All investments are reported at fair value to the extent allowed by IFRSs in the Group's Half-Yearly and Annual Reports.

The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; it has ownership interests in the form of equity and similar interests; it has more than one investor and its investors are not related parties.

Unquoted Investments

Unquoted investments are valued at management's best estimate of fair value in accordance with IFRSs having regard to International Private Equity and Venture Capital Valuation Guidelines as recommended by the British Venture Capital Association. The principles which the Group applies are set out in these Notes. The inputs into the valuation methodologies adopted include historical data such as earnings or cash flow as well as more subjective data such as earnings forecasts or discount rates. As a result of this, the determination of fair value requires significant management judgement. At the year end, unquoted investments (including MAM) represent 31.1% (2013: 37.4%) of consolidated shareholders' funds.

1 Significant Accounting Policies

The principal accounting policies adopted are set out as follows:

The accounts comprise the audited results of the Company and its subsidiaries for the year ended 30 September 2014, and are presented in pounds sterling rounded to the nearest thousand, as this is the functional currency in which the Group and Company transactions are undertaken.

Going Concern

The Directors have a reasonable expectation that the Company has sufficient resources to continue in operational existence for the foreseeable future. Accordingly the Financial Statements have been prepared on a going concern basis.

Presentation of Statement of Comprehensive Income

In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. Additionally the net revenue is the measure that the directors believe to be appropriate in assessing the Company's compliance with certain requirements set out in section 1158 of the Corporation Tax Act 2010.

Basis of Accounting

The accounts of the Group and the Company have been prepared in accordance with IFRSs. They comprise standards and interpretations approved by the International Accounting Standards Board and International Financial Reporting Committee, interpretations approved by the International Accounting Standards Committee that remain in effect, to the extent they have been adopted by the European Union.

Where presentational guidance set out in the SORP regarding the Financial Statements of Investment Trust Companies and Venture Capital Trusts issued by the AIC in January 2009 is not inconsistent with the requirements of IFRSs, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

Discontinued operations

On 13 January 2014, the Company publicly announced the decision of the Board to close Javelin Capital LLP, including its two wholly owned subsidiaries - Javelin Capital Services Limited and Javelin Capital Fund Management Limited - following the appointment of MAM to become the Investment Manager for the Company. The Company also decided to wind down its wholly owned subsidiary, Majedie Unit Trust. Accordingly these have been classified as discontinued operations of the Group.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the Consolidated Statement of Comprehensive Income.

Additional disclosures are provided in note 15. All other notes to the financial statements include amounts for continuing operations, unless otherwise mentioned.

Basis of Consolidation

The Company is an investment entity as defined by IFRS 10 and, as such, does not consolidate the entities it controls which do not provide investment related services to the Company. Instead, interests in such entities are classified as fair value through profit or loss, and measured at fair value.

The Consolidated Accounts incorporate the accounts of the Company and entities controlled by the Company which provide investment related services made up to 30 September each year. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The results of subsidiaries acquired or disposed of are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or disposal as appropriate. When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. All Group entities have the same year end date.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Standards Issued But Not Yet Effective

At the date of authorisation of these financial statements, the following relevant Standards and Interpretations have not been applied in these financial statements since they were in issue but not yet effective and/or adopted:

International Accounting Standards and Interpretations (IAS/IFRS/IFRICs)		Effective date
IFRS 9	Financial Instrument: Classification & Measurement	1 January 2018
IFRS 15	Revenue from Contracts with Customers	1 January 2017
IAS 24	Related Party Disclosures*	1 January 2013
IAS 32	Financial Instruments: Presentation*	1 January 2014
IAS 36	Impairment of Assets*	1 January 2014
IAS 39	Financial Instruments: Recognition & Measurement*	1 January 2014
IFRIC 21	Levies	1 January 2014

* Amendments to current standards.

The Directors do not anticipate that the adoption of the above Standards and Interpretations would have no material impact on the financial statements in the period of initial application.

Management anticipates that all of the relevant pronouncements will be adopted in the next accounting period.

The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the financial statements in the period of initial application.

Changes in accounting policies and disclosures

New and amended standards and interpretations

IFRS 13 Fair Value Measurement

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted the fair value measurements carried out by the Group.

IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures.

Foreign Currencies

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates, i.e. its functional currency. For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Pounds Sterling (Sterling) which is the functional currency of the Company, and the presentational currency of the Group. Transactions in currencies other than Sterling are recorded at the rate of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items and non-monetary assets and liabilities that are fair valued and are denominated in foreign currencies are re-translated at the rates prevailing on the balance sheet date.

Segmental Reporting

A segment is a distinguishable component of the Group that is engaged in business activities from which it may earn revenues and incur expenses (including intra-group revenues and expenses), for which discrete financial information is available and whose operating results are regularly reviewed by the entity's chief decision maker who can make decisions on resource allocation and performance assessment. An operating segment could engage in business activities in order to earn potential future revenues.

Income

Dividend income from investments is taken to the revenue account on an ex-dividend basis. UK dividends are included net of tax credits. Overseas dividends are included gross of any withholding tax. Where the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend is recognised in the capital column.

The fixed return on a debt security is recognised on a time apportionment basis so as to reflect the effective yield on the debt security. Deposit interest and other interest receivable is included on an accruals basis.

Special dividends are taken to the revenue or capital account depending on their nature.

Expenses

All administrative expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the Statement of Comprehensive Income, all expenses have been presented as revenue items except as follows:

·     Expenses which are incidental to the acquisition or disposal of an investment are treated as capital costs and separately identified and disclosed (see note 13).

·     Expenses are split and presented partly as capital items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated, and accordingly the investment management expenses have been allocated 75% to capital, in order to reflect the directors' expected long-term view of the nature of the investment returns of the Company.

·     The investment management performance fee, which is based on capital out-performance, is charged wholly to capital.

Pension Costs

Payments made to the Group's defined contribution group personal pension plan are charged as an expense as they fall due on an accruals basis.

Finance Costs

75% of finance costs arising from the debenture stocks are allocated to capital; 25% of the finance costs are charged on the same basis to the revenue account. Premiums payable on early repurchase of debenture stock are charged 100% to capital. In addition, other interest payable is allocated 75% to capital and 25% to the revenue account. Finance costs are debited on an accruals basis.

Share Based Payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value determined at the date of grant, which is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of shares that will eventually vest. Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Taxation

The tax charge represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Statement of Comprehensive Income is the marginal basis. Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Statement of Comprehensive Income, then no tax relief is transferred to the capital return column.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

No provision is made for tax on capital gains since the Company operates as an investment trust for tax purposes.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Leasehold improvements are written off in equal annual instalments over the minimum period of the lease whereas depreciation for other tangible assets is provided for at 25% to 33% per annum using the straight-line method.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.

Investments Held at Fair Value Through Profit or Loss

The Group classifies its investments in debt and equity securities, and derivatives, as financial assets or financial liabilities at fair value through profit or loss.

When a purchase or sale is made under a contract, the terms of which require delivery within the timeframe of the relevant market, the investments concerned are recognised or derecognised on the trade date.

All investments are classified as fair value through profit or loss as defined by IAS 39.

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 for listed securities, 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.

Fair values for unquoted investments, or investments for which the market is inactive, are established by using various valuation techniques in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These may include recent arm's length market transactions, the current fair value of another instrument which has substantially the same earnings multiples, discounted cash flow analysis and option pricing models. Where there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised.

The fair value of an investment at the beginning of the year is used when an investment is transferred between hierarchy levels.

Changes in the fair value of investments and gains on the sale of investments are recognised as they arise in the Statement of Comprehensive Income.

Investment in Subsidiaries

In its separate financial statements the Company recognises its investment in subsidiaries at fair value.

Financial Instruments

Financial assets and financial liabilities are recognised on the Group's Balance Sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.

Trade Receivables

Trade receivables do not carry any interest and are stated at carrying value which equates to their fair value as reduced by appropriate allowances for estimated irrecoverable amounts.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash deposited with banks, cash balances at brokers and short-term highly liquid investments with maturities of three months or less from the date of acquisition.

Financial Liabilities and Equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Financial liabilities are either classified as financial liabilities at fair value through profit or loss and are recognised initially at fair value or 'other financial liabilities' (including borrowings and trade and other payables that are classified and subsequently measured at amortised cost). Financial liabilities are subsequently measured at fair value and changes in fair value are recognised in the Statement of Comprehensive Income.

Non current liabilities

The debentures are initially recognised at cost, being the fair value of the consideration received less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future payments over the expected life of the financial liabilities to the net carrying amount on initial recognition.

Trade Payables

Trade payables are not interest bearing and are stated at carrying value which equates to their fair value.

Reserves

Gains and losses on the sale of investments and investment holding gains and losses are accounted for in the Statement of Comprehensive Income and subsequently in the capital reserve.

Share options reserve represents the expense of share based payments. The deemed expense is transferred to the share options reserve.

Share premium account represents the excess over nominal value of consideration received for equity shares, net of expenses of the share issue.

Own Shares

The consideration paid for own shares is treated as a deduction from shareholders' funds, and not recognised as an asset.

Dividends payable to shareholders

Dividends to shareholders are accounted for in the period in which they are paid or approved in general meetings. Dividends payable to shareholders are recognised in the Statement of Changes in Equity.

2 Business segments

For management purposes for the year ended 30 September 2014, the Group was organised into the following two principal activities:

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 and exposure to different currencies is disclosed in note 26.

Investment management services

To complement this investment objective and create income and capital for the Group, Javelin Capital LLP was launched to market a range of funds to third party investors and provide investment management and advisory services.

Javelin Capital LLP has now been discontinued please see note 15 for further information. Therefore, going forward the Group's activities comprise solely investing activities.

		Group				Group
		2014				2013
		Investment				Investment
		management				management
	Investing	and advisory			Investing	and advisory
	activities	services	Eliminations	Total	activities	services	Eliminations	Total
	£000	£000	£000	£000	£000	£000	£000	£000
External income
from investment
management services		4		4		31		31
Intra-group income from
investment management
services		356	(356)			1,187	(1,187)
Other operating and
investment income	6,605	(10)	(9)	6,586	5,232	(6)	(19)	5,207
	6,605	350	(365)	6,590	5,232	1,212	(1,206)	5,238
Share based
payments charge	(19)			(19)	(24)			(24)
Other administrative costs	(1,686)	(525)	9	(2,202)	(688)	(1,162)	19	(1,831)
Intra-group investment
management services
expenses	(238)	(118)	356		(819)	(368)	1,187
Other operating expenses		(45)		(45)		(134)		(134)
	(1,943)	(688)	365	(2,266)	(1,531)	(1,664)	1,206	(1,989)
Operating profit/(loss)	4,662	(338)		4,324	3,701	(452)		3,249
Finance costs	(2,809)			(2,809)	(2,807)			(2,807)
Gain on fair value through
profit and loss	13,801	(1,966)		11,835	17,678	368		18,046
Profit /(loss) before tax	15,654	(2,304)		13,350	18,572	(84)		18,488
Attributable to:
Continuing operations	15,805		361	16,166	18,572		1,167	19,739
Discontinued operations	(151)	(2,304)	(361)	(2,816)		(84)	(1,167)	(1,251)
Total assets	169,272			169,272	157,026	3,231		160,257
Total liabilities	(35,211)			(35,211)	(34,945)	(146)		(35,091)
Intra-group
assets/(liabilities)					8,542	(542)	(8,000)
Net assets	134,061			134,061	130,623	2,543	(8,000)	125,166

3 Income

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Income from investments
Franked investment income†	6,165		4,114		6,165		4,114
UK unfranked investment income	30		63		30		63
Overseas dividends	354		943		354		943
Fixed interest and convertible bonds
		6,549		5,120		6,549		5,120
Other income
Deposit interest	13		19		12		19
Sundry income	34		74		44		93
		47		93		56		112
Total income		6,596		5,213		6,605		5,232
Total income comprises:
Dividends	6,549		5,120		6,549		5,120
Interest	13		19		12		19
Other income	34		74		44		93
		6,596		5,213		6,605		5,232
Income from investments
Listed UK	2,576		1,917		2,576		1,917
Listed overseas	354		943		354		943
Unlisted	3,619		2,260		3,619		2,260
		6,549		5,120		6,549		5,120

† Includes MAM ordinary dividend income of £3,619,000 (2013: £2,260,000).

4 Management Fees

		Group				Group
		2014				2013
	Revenue	Capital			Revenue	Capital
	return	return	Total		return	return	Total
	£000	£000	£000		£000	£000	£000
Investment management	93	280	373
	93	280	373

		Company				Company
		2014				2013
	Revenue	Capital			Revenue	Capital
	return	return	Total		return	return	Total
	£000	£000	£000		£000	£000	£000
Investment management	134	404	538		139	415	554
Administration	73		73		265		265
	207	404	611		404	415	819

The Group's accounts now include an investment management fee expense following the appointment of an external investment manager (MAM). Investment management fees of £165,000 (2013: 554,000) were paid to Javelin Capital LLP under the terms of the agreement which has now been terminated. Under this agreement an administration fee was also due. The Company's investment management fee is higher than the Group due to the Javelin Capital LLP management fee being consolidated out of the Group.

A summary of the terms of the Investment Agreement for the Company with MAM is given in the Directors' Report. At 30 September 2014, an amount of £132,000 was outstanding for payment of investment management fees when due to MAM (2013: £nil). At 30 September 2014, an amount of nil was outstanding for Javelin Capital LLP investment management fees (2013: £47,000) and outstanding administration fees of £nil (2013: £22,000).

There were no performance fees during the year (2013: nil).

5 Administrative Expenses

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Staff costs - note 7	225		24		225		24
Other staff costs and directors' fees	220		206		220		206
Advisers' costs	327		261		327		261
Information costs	54		33		54		33
Establishment costs	61				61
Operating lease rentals - premises	65				65
Depreciation on tangible assets	18		35		18		35
Auditor's remuneration (see below)	53		57		53		57
Other expenses	158		97		309		97
		1,181		713		1,332		713

A charge of £808,000 (2013: £197,000) to capital and an equivalent credit to revenue has been made in the Group and a charge of £1,045,000 (2013: £612,000) in the Company has been made to recognise the accounting policy of 75% of direct investment management expenses to capital.

Administration expense disclosures are in respect of continuing operations only. Further details on discontinued operations are in note 15.

Total fees charged by the Auditor for the year, all of which were charged to revenue, comprised:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Audit Services
- statutory audit	44		50		44		50
Other assurance services	9		7		9		7
		53		57		53		57

Additional statutory audit fees of £6,500 are included within the administrative expenses of the discontinued operations in note 15.

6 Directors' Emoluments

	Company		Company
	2014		2013
	£000		£000
Fees	176		185
Salary	84		45
Other benefits	6		5
Partnership profit shares	50		66
		316		301

The Report on Directors' Remuneration in the Company's Annual Report and Accounts explains the Company's policy on remuneration for directors for the year. It also provides further details of directors' remuneration.

7 Staff Costs including CEO

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Salaries and other payments	171				171
Social security costs	21				21
Pension contributions	14				14
Share based remuneration
-note 25	19		24		19		24
		225		24		225		24

		Group	Group
		2014	2013
		Number	Number
Average number of employees:
Management and office staff		2	5

8 Finance Costs

	Group and Company			Group and Company
		2014			2013
	Revenue	Capital		Revenue		Capital
	return	return	Total	return		return		Total
	£000	£000	£000	£000		£000		£000
Interest on 9.5% debenture stock 2020	321	961	1,282	321		962		1,283
Interest on 7.25% debenture stock 2025	375	1,126	1,501	375		1,125		1,500
Amortisation of expenses associated with debenture issue	6	20	26	6		18		24
	702	2,107	2,809	702		2,105		2,807

Further details of the debenture stocks in issue are provided in note 18.

9 Taxation

Analysis of tax charge

	Group	Group	Company	Company
	2014	2013	2014	2013
	£000	£000	£000	£000
Tax on overseas dividends	45	115	45	115

Reconciliation of tax charge:

The current taxation rate for the year is higher (2013: lower) than the standard rate of corporation tax in the UK of 22% (2013: 23.5%). The differences are explained below:

	Group	Group		Company		Company
	2014	2013		2014		2013
	£000	£000		£000		£000
Net return before taxation for the year from continuing operations	16,135		19,739		7,861		18,572
Net return before taxation for the year from discontinued operations	(2,816)		(1,251)
Net return before taxation		13,350		18,488		7,861		18,572
Taxation at UK Corporation Tax rate of 22% (2013: 23.5%)	2,937		4,345		1,729		4,364
Effects of:
- UK dividends which are not taxable	(1,365)		(985)		(1,365)		(985)
- foreign dividends which are not taxable	(76)		(213)		(76)		(213)
- gains on investments which are not taxable	(2,607)		(4,241)		(1,321)		(4,155)
- expenses not deductible for tax purposes	52		22		54		22
- excess expenses for current year	1,059		1,072		979		967
- overseas taxation which is not recoverable	45		115		45		115
Actual current tax charge		45		115		45		115

Group

After claiming relief against accrued income taxable on receipt, the Group has unrelieved excess expenses of £76,940,000 (2013: £72,126,000). It is not yet certain that the Group will generate sufficient taxable income in the future to utilise these expenses and therefore no deferred tax asset has been recognised.

Company

After claiming relief against accrued income taxable on receipt, the Company has unrelieved excess expenses of £69,688,000 (2013: £64,796,000). It is not yet certain that the Company will generate sufficient taxable income in the future to utilise these expenses and therefore no deferred tax asset has been recognised.

The allocation of expenses to capital does not result in any tax effect. Due to the Company's status as an investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

10 Dividends

The following table summarises the amounts recognised as distributions to equity shareholders in the period:

	Group and		Group and
	Company		Company
	2014		2013
	£000		£000
2012 Final dividend of 6.30p paid on 23 January 2013			3,279
2013 Interim dividend of 4.20p paid on 26 June 2013			2,186
2013 Final dividend of 6.30p paid on 22 January 2014	3,279
2013 Interim dividend of 3.00p paid on 27 June 2014	1,561
		4,840		5,465
	2014		2013
	£000		£000
Proposed final dividend for the year ended
30 September 2014 of 4.50p (2013: final
dividend of 6.30p) per ordinary share	2,350		3,279
		2,350		3,279

The proposed final dividend has not been included as a liability in these accounts in accordance with IAS 10: Events after the Balance Sheet date.

Set out below is the total dividend to be paid in respect of the financial year. This is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered.

	2014		2013
	£000		£000
Interim dividend for the year ended 30 September 2014 of
3.00p (2013: 4.20p) per ordinary share	1,561		2,186
Proposed final dividend for the year ended 30 September
2014 of 4.50p (2013: 6.30p) per ordinary share	2,350		3,279
		3,911		5,465

Distributable reserves of the Company comprise the Capital & Revenue Reserves.

Dividends for the period (and for 2013) have been solely made from the Revenue Reserve.

11 Return per Ordinary Share

Basic return per ordinary share from continuing and discontinued operations is based on 52,055,573 (2013: 52,044,613) ordinary shares, being the weighted average number of shares in issue having adjusted for the shares held by the EIT referred to in note 20. Basic returns per ordinary share from continuing and discontinued operations are based on the net return after taxation attributable to equity shareholders. There are 224,414 potentially dilutive shares arising from the share options referred to in note 25. These do not give rise to a material dilution to the return per ordinary share and therefore no diluted return per ordinary share has been calculated.

	Group		Group
	2014		2013
	£000		£000
Basic and diluted revenue returns from continuing operations
are based on net revenue after taxation of:	5,103		3,880
Basic and diluted revenue returns from discontinued
operations are based on net revenue after taxation of:	(232)		(339)
Basic and diluted capital returns from continuing operations
are based on net capital return of:	11,018		15,744
Basic and diluted capital returns from discontinued
operations are based on net capital return of:	2,584		(912)
Basic and diluted total returns are based on return of:		13,305		18,373

	Company		Company
	2014		2013
	£000		£000
Basic and diluted revenue returns are based on net
revenue after taxation of:			3,495
Basic and diluted capital returns are based on net
capital return of:	(2,856)		14,962
Basic and diluted total returns are based on return of:		7,816		18,457

12 Property and Equipment

	Group		Group
	Leasehold		Office
	Improvements		Equipment		Total
	£000		£000		£000
Cost:
At 1 October 2013	171		583		754
Additions
Disposals			(3)		(3)
At 30 September 2014		171		580		751
Depreciation:
At 1 October 2013	75		574		649
Charge for year*	16		9		25
Disposals			(3)		(3)
At 30 September 2014		91		580		671
Net book value:
At 30 September 2014		80				80
At 30 September 2013		96		9		105

* The charge for the year includes both continuing and discontinued operations.

	Company		Company
	Leasehold		Office
	Improvements		Equipment		Total
	£000		£000		£000
Cost:
At 1 October 2013	171		168		339
Additions
Disposals
At 30 September 2014		171		168		339
Depreciation:
At 1 October 2013	75		166		241
Charge for year*	16		2		18
Disposals
At 30 September 2014		91		168		259
Net book value:
At 30 September 2014		80				80
At 30 September 2013		96		2		98

* Charge for the year includes both continuing & discontinued operations.

13 Investments at Fair Value Through Profit or Loss

		Group			Group
		2014			2013
	Listed	Unlisted*	Total	Listed	Unlisted	Total
	£000	£000	£000	£000	£000	£000
Opening cost at beginning of year	94,334	4,575	98,909	75,563	10,331	85,894
Gains at beginning of year	10,741	42,289	53,030	4,863	31,604	36,467
Opening fair value at beginning of year	105,075	46,864	151,939	80,426	41,935	122,361
Purchases at cost	145,246		145,246	31,987		31,987
Sales - proceeds	(126,419)	(19,239)	(145,658)	(14,189)	5,898	(20,087)
Gains on sales	11,562	18,747	30,309	994	121	1,115
(Decrease)/increase in investment holding gains	(11,777)	(4,717)	(16,494)	5,878	10,685	16,563
Transfer on de-listing of shares				(21)	21
Closing fair value at end of year	123,687	41,655	165,342	105,075	46,864	151,939
Closing cost at end of year	124,723	4,083	128,806	94,334	4,575	98,909
Gains at end of year	(1,036)	37,572	36,536	10,741	42,289	53,030
Closing fair value at end of year	123,687	41,655	165,342	105,075	46,864	151,939

* The decrease in investment holding gains for unlisted investments in 2014 is comprised of a £17,788,000 reversal of unrealized gains to realised gains and a £13,071,000 change in unrealized gains for the year.

	Company
	2014
			Related
			and
			Subsidiary
	Listed	Unlisted*	Companies	Total
	£000	£000	£000	£000
Opening cost at beginning of year	94,333	4,534	9,010	107,877
Gains/(losses) at beginning of year	10,742	42,330	(817)	52,255
Opening fair value at beginning of year	105,075	46,864	8,193	160,132
Purchases at cost Sales	145,246			145,246
- proceeds	(126,426)	(19,239)	(207)	(145,872)
Gains/(losses) on sales**	11,570	18,764	(7,793)	22,541
Decrease in investment holding gains	(11,778)	(4,734)	(21)	(16,533)
Closing fair value at end of year	123,687	41,655	172	165,514
Closing cost at end of year	124,723	4,059	1,010	129,792
(Losses)/gains at end of year	(1,036)	37,596	(838)	35,722
Closing fair value at end of year	123,687	41,655	172	165,514

* The decrease in investment holding gains for unlisted investments in 2014 is comprised of a £17,788,000 reversal of unrealized gains to realized gains and a £13,071,000 change in unrealised gains for the year.

** The loss of £7,793,000 represents the write off of the investment in Javelin Capital LLP, net of recoverable capital.

	Company
	2013
			Related
			and
			subsidiary
	Listed	Unlisted	Companies	Total
	£000	£000	£000	£000
Opening cost at beginning of year	75,562	10,283	9,010	94,855
Gains/(losses) at beginning of year	4,864	31,652	(818)	35,698
Opening fair value at beginning of year	80,426	41,935	8,192	130,553
Purchases at cost	31,987			31,987
Sales - proceeds	(14,189)	(5,898)		(20,087)
Gains on sales	994	128		1,122
Increase in investment holding gains	5,878	10,678	1	16,557
Transfer on de-listing of shares	(21)	21
Closing fair value at end of year	105,075	46,864	8,193	160,132
Closing cost at end of year	94,333	4,534	9,010	107,877
Gains/(losses) at end of year	10,742	42,330	(817)	52,255
Closing fair value at end of year	105,075	46,864	8,193	160,132

All operating subsidiaries are held at fair value.

Unlisted investments include an amount of £355,000 in 4 various companies (2013: £864,000 in 5 companies) and £41,300,000 (2013: £46,000,000) for the Company's investment in MAM as detailed below.

During the year the Company incurred transaction costs amounting to £396,000 (2013: £105,000) of which £56,000 (2013: £78,000) related to the purchases of investments and £340,000 (2013: £27,000) related to the sales of investments. These amounts are included in gains on investments at fair value through profit or loss, as disclosed in the Consolidated and Company Statement of Comprehensive Income.

The composition of the investment return is analysed below:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Net gains on sales of equity investments	30,309		1,115		22,541		1,122
Decrease /increase in holding gains on equity investments	(16,494)		16,563		(16,533)		16,557
Consolidation adjustment on Javelin Capital fee income	118		368
Net return on investments		13,933		18,046		6,008		17,679

Fair value hierarchy disclosures

The Group is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following three levels:

·     Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

      An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume on an ongoing basis such that quoted prices reflect prices at which an orderly transaction would take place between market participants at the measurement date. Quoted prices provided by external pricing services, brokers and vendors are included in Level 1, if they reflect actual and regularly occurring market transactions on an arm's length basis.

·     Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 2 inputs include the following:

·     quoted prices for similar (ie not identical) assets in active markets.

·     inputs other than quoted prices that are observable for the asset (for example, interest rates and yield curves observable at commonly quoted intervals).

·     inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (market-corroborated inputs).

·     Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level in the fair value hierarchy within which an asset or liability is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement of the asset. For this purpose, the significance of an input is assessed against the fair value measurement of an asset or liability in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes 'observable' requires significant judgement by the Group. The Group considers observable data to be investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date, without adjustment for transaction costs necessary to realise the asset.

The table below sets out fair value measurements of financial assets in accordance with the IFRS fair value hierarchy system:

	Group				Group
	2014				2013
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities	123,687			123,687	104,893			104,893
Unlisted equity securities			41,655	41,655			46,864	46,864
Listed exchange traded funds					182			182
	123,687		41,655	165,342	105,075		46,864	151,939

	Company				Company
	2014				2013
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities	123,687			123,687	104,893			104,893
Unlisted equity securities			41,827	41,827			55,057	55,057
Listed exchange traded funds					182			182
	123,687		41,827	165,514	105,075		55,057	160,132

Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1, include active listed equities. The Group does not adjust the quoted price for these instruments.

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. During the year there were transfers of £nil (2013: £193,000) from Level 2 to Level 1 for Listed exchange traded funds.

Investments classified within Level 3 have significant unobservable inputs. Level 3 instruments include private equity and corporate debt securities. As observable prices are not available for these securities, the Group has used valuation techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with International Private Equity and Venture Capital ("IPEVC") Valuation Guidelines. New investments are initially carried at cost, for a limited period, being the price of the most recent investment in the investee. This is in accordance with IPEVC Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.

The following table presents the movement in Level 3 instruments for the year ended 30 September 2014:

		Group	Group
		Equity	2013	Equity
	Total	investments	Total	investments
	£000	£000	£000	£000
Opening balance	46,864	46,864	41,935	41,935
Transfers from Level 1			21	21
Sales - proceeds	(19,239)	(19,239)	(5,898)	(5,898)
Total gains for the year included in the   Statement of Comprehensive Income	14,030	14,030	10,806	10,806
	41,655	41,655	46,864	46,864

	Company		Company
	2014		2013
		Equity		Equity
	Total	investments	Total	Investments
	£000	£000	£000	£000
Opening balance	55,057	55,057	50,127	50,127
Transfers from Level 1			21	21
Sales - proceeds	(19,446)	(19,446)	(5,898)	(5,898)
Total gains for the year included in the Statement of Comprehensive Income	6,216	6,216	10,807	10,807
	41,827	41,827	55,057	55,057

Substantial Share Interests

Javelin Capital Emerging Alpha Fund (JCEMAF)

The Company invested £33.2m of seed capital into the JCEMAF resulting in a substantial majority interest in the Fund. The JCEMAF was closed in January 2014 and the Company received £29.5m which has since been invested in MAM Funds as described in the Strategic Report. The investment in JCEMAF is shown in the Company and Group accounts as an investment held at fair value through profit or loss rather than being consolidated which is in accordance with the Investment Entities amendment to IFRS 10, which the Group early adopted last year.

Majedie Asset Management (MAM)

MAM is a UK based asset management firm providing investment management and advisory services primarily relating to UK equities.

The carrying value of the investment in MAM is included in the Consolidated Balance Sheet as part of investments at fair value through profit or loss:

	2014		2013
	£000		£000
Deemed cost of investment	627		1,038
Holding gains	40,673		44,962
Fair value at 30 September		41,300		46,000

The carrying value is assessed twice a year by the Directors and is approved in the Audit Committee. The fair value of MAM is based on the price at which the Company can sell its shares back to MAM, which is currently considered to be the sole market for the Company's shares. The significant input in assessing the price is the earnings of MAM and a 5% increase/decrease in MAM's earnings would result in an increase/decrease of 4.3% in the carrying value of MAM.of MAM in the 30 September 2014 Consolidated Financial Statements is its fair value as assessed at 30 September 2014. Details of the determination of the fair value of MAM are included in the Report of the Audit Committee in the Company's Annual Report.

In accordance with the revised shareholders' agreement, the Company will sell a certain number of shares to the MAM Employee Benefit Trust (EBT) usually annually, and at the relevant prescribed price (as calculated in accordance with the revised shareholders' agreement).

During the year the Company sold 43,747 (2013: 1,975) for a total consideration of £19,177,000 (2013: £5,899,000) resulting in a realised gain of £18,766,000 (2013: £5,739,000).

After these transactions the Company holds 66,828 (2013: 110,575) ordinary 0.1p shares which represents a 18.0% (2013: 26.7%) shareholding in MAM.

14 Investment in Subsidiaries

Subsidiary undertakings at 30 September 2014

	Company
	Country of				Profit after
	Registration	Number and		Capital	tax for the
	Incorporation	class of shares	Group	Reserves at	year ended
Company and business	and Operation	held by group	Holding	30.09.14	30.09.14
				thousand	thousand
Majedie Portfolio Management Limited	UK	1,000,000	100%	£162
- Majedie share plan manager, authorised  and regulated by the FCA		Ordinary shares
Majedie Unit Trust
- Unauthorised unit trust	UK	10,000	100%	(£3,521)	(£63)

As at 30 September 2014 the Company, in addition to Majedie Portfolio Management Limited and Majedie Unit Trust as above, had residual holdings in the following subsidiary undertakings; Javelin Capital LLP, Javelin Capital Services Limited and Javelin Capital Fund Management Limited. These subsidiary undertakings are in the process of being liquidated. There are no further write offs in respect of these holdings and any costs of liquidation will be met by the Company. Details of the transactions can be found in note 27 Related Party Transactions.

15 Discontinued operations

On 13 January 2014, the Board announced that it would close Javelin Capital LLP, including its two wholly owned subsidiaries - Javelin Capital Services Limited and Javelin Capital Fund Management Limited - following the appointment of MAM to become the Investment Manager for the Company. The Company also decided to wind down its wholly owned subsidiary, Majedie Unit Trust.

Accordingly these have been classified as a disposal group with a fair value of its combined net assets of £10,000. During the year ended 30 September 2014, a net loss after tax of £2,816,000 (2013: £883,000) was recorded in respect of these subsidiaries as disclosed within the Consolidated Statement of Comprehensive Income.

The financial statements as at 30 September 2013 have been re-presented to reflect the disposal group. This has had an impact on all the primary statements, with the exception of the Balance Sheet, and a number of the Notes to the Accounts. The investment management and advisory services segment detailed in note 2 has ceased to exist, consequently, the investing activity segment is the only active segment at the year end.

		2014			2013
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Discontinued operations
Income
Other income	4		4	34		34
Total income	4		4	34		34
Expenses
Administration expense	(236)	(500)	(736)	(373)	(912)	(1,285)
Write off on disposal		(2,084)	(2,084)
Net return before taxation for the year from discontinued
operations	232	(2,584)	(2,816)	(339)	(912)	(1,251)
Net return after taxation for the year
from discontinued operations	(232)	(2584)	(2,816)	(339)	(912)	(1,251)

16 Trade and Other Receivables

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Sales for future settlement	45		363		45		363
Prepayments	127		2,044		127		30
Dividends receivable	127		240		127		240
Accrued income
Taxation recoverable	39		43		39		43
Amounts due from subsidiary
undertakings					94		637
		338		2,690		432		1,313

The Directors consider that the carrying amounts of trade and other receivables approximates to their fair value.

17 Cash and Cash Equivalents

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Deposits at banks	2,684		4,641		2,684		3,466
Collateral cash held with brokers			91
Cash attributable to discontinued
operations	9
Other balances	819		791		562		525
		3,512		5,523		3,246		3,991

18 Trade and Other Payables Amounts falling due within one year:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Purchases for future settlement	228		125		228		125
Accrued expenses	314		313		314		178
Other creditors	796		806		796		729
		1,338		1,244		1,338		1,032

 The Directors consider that the carrying amounts of trade and other receivables approximates to their fair value.

 Amounts falling due after more than one year:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
£13.5m (2013: £13.5m) 9.5%
debenture stock 2020	13,421		13,410		13,471		13,410
£20.7m (2013: £20.7m) 7.25%
debenture stock 2025	20,452		20,437		20,452		20,437
		33,873		33,847		33,873		33,847

Both debenture stocks are secured by a floating charge over the Company's assets. Expenses associated with the issue of debenture stocks were deducted from the gross proceeds and are being amortised over the life of the debentures. Further details on interest and the amortisation of issue expenses are provided in note 8.

19 Called Up Share Capital

	Company		Company
	2014		2013
	£000		£000
Allotted and fully paid at 30 September:
52,528,000 (2013: 52,528,000) ordinary shares of 10p each		5,253		5,253

There are 308,387 (2013: 483,387) ordinary shares of 10p each held by the Employee Incentive Trust. See note 20.

Ordinary shares carry one vote each on a poll. The Companies Act 2006 abolished the requirement for the Company to have authorised share capital. The Company adopted new Articles of Association on 20 January 2010 which, inter alia, reflected the new legislation. Accordingly the Company has no authorised share capital. The Directors will still be limited as the number of shares they can allot at any one time as the Companies Act 2006 requires that directors seek authority from the shareholders for the allotment of new shares.

20 Own Shares

The total number of options outstanding at the date of this report is 214,628 (2013: 214,628) under the Long Term Incentive Plan ("LTIP") and the total shareholding of the Employee Incentive Trust is 308,387 (2013: 483,387) ordinary shares. The shares will be held by the Trust until the relevant options are exercised, until they lapse or until they are sold back to the market. They are presented on the Balance Sheet as a deduction from shareholders' funds, in accordance with the policy detailed in note 1.

On 1 September 2014 and 11 September 2014 the Employee Incentive Trust sold 50,000 ordinary shares and 125,000 ordinary shares respectively back to the market, both at 236 pence per share. The own shares reserve has been reduced to reflect the cost of the shares sold and the resultant loss of £178,000 has been taken to capital reserve.

				Group and
				Company
				Own Shares
		Number of		Reserve
		Shares		£000
As at 1 October 2013		483,387		(1,628)
Options exercised
Shares sold		(175,000)		589
As at 30 September 2014			308,387		(1,039)

21 Net Asset Value

The consolidated net asset value per share has been calculated based on equity shareholders' funds of £• (2013:

£125,166,000) and on 52,219,613 (2013: 52,044,613) ordinary shares, being the shares in issue at the yearend having deducted the number of shares held by the Employee Incentive Trust.

22 Analysis of Changes in Net Debt

	At 30				Non		At 30
	September		Cash		Cash		September
	2013		Flows		Items		2014
Group	£000		£000		£000		£000
Cash at bank and with brokers	5,523		(2,011)				3,512
Debt due after one year	(33,847)				(26)		(33,873)
		(28,324)		(2,011)		(26)		(30,361)
	At 30				Non		At 30
	September		Cash		Cash		September
	2013		Flows		Items		2014
Company	£000		£000		£000		£000
Cash at bank	3,991		(745)				3,246
Debt due after one year	(33,847)				(26)		(33,873)
		(29,856)		(745)		(26)		(30,627)

23 Operating Lease Commitments

The Group entered into a 10 year non-cancellable operating lease (with a rent review and break clause in 5 years) in respect of premises, which included a rent free period. During the year the Group extended the lease for a further period of 2 years which included an additional rent free period. The rent free elements have been apportioned over the term of the lease. The Group has an annual commitment at 30 September 2014 under the lease of £163,000 (2013: £145,000). This operating lease commitment is disclosed in the table below:

Expiry Date	Group		Group
	2014		2013
	£000		£000
Within one year	163		159
Between one and two years	38		163
Between two and three years			41
		201		363

24 Financial Commitments

At 30 September 2014 the Group had no financial commitments which had not been accrued for (2013: none).

25 Share-based Payments

The Group currently operates one share-based (equity settled) payment scheme being the 2006 LTIP which in turn has two sections relating to Total Shareholder Return ("TSR") based Awards and Matching Awards.

Long Term Incentive Plan: TSR-based Awards

Awards of restricted shares up to a maximum value of one year's salary have performance conditions based on total shareholder return in relation to two separate performance conditions over a period of five years. The performance conditions contain higher and lower thresholds that determine the extent of the vesting of the award. In accordance with the LTIP rules existing awards increase by any dividends declared by the Company until they are exercised.

Long Term Incentive Plan: Matching Awards

Executive directors and senior executives receive a certain percentage of their overall bonus for the year in deferred shares. The shares granted according to these matching awards only vest once the executive has completed three years' further service. There are no other performance conditions. In accordance with the LTIP rules existing awards increase by any dividends declared by the Company until they are exercised.

	Group
	2014
	TSR - based		Matching
	Awards		Awards
		Weighted		Weighted
	No.	Average	No.	Average
	of	Exercise	of	Exercise
	Options	Price (p)	Options	Price (p)
Outstanding at 1 October 2013	292,759	0.0	11,869	0.0
During the year:
Awarded
Forfeited
Exercised
Expired
Increase in awards due to   dividends paid	9,232	0.0	554	0.0
Outstanding at 30 September 2014	211,991	0.0	12,423	0.0
Exercisable at 30 September 2014	125,664	0.0	12,423	0.0

	Group
	2013
	TSR - based		Matching
	Awards		Awards
		Weighted		Weighted
	No.	Average	No.	Average
	of	Exercise	of	Exercise
	Options	Price (p)	Options	Price (p)
Outstanding at 1 October 2012	190,453	0.0	11,148	0.0
During the year:
Awarded
Forfeited
Exercised
Expired
Increase in awards due to   dividends paid	12,306	0.0	721	0.0
Outstanding at 30 September 2013	202,759	0.0	11,869	0.0
Exercisable at 30 September 2013	36,208	0.0	11,869	0.0

The awards outstanding at 30 September 2014 had a weighted average remaining contractual life of 0.08 years and nil in respect of the TSR-based Awards and Matching Awards respectively (2013: 0.6 years and nil years respectively).

Awards and options are usually forfeited if the employee leaves employment before vesting. The TSR-based awards have a final vesting date of 8 December 2014, after which it is anticipated all relevant awards (including Matching Awards) will be exercised and the scheme wound up.

26 Financial Instruments and Risk Profile

For the year ended 30 September 2014, the Company recognised a total share options expense of £19,000 (2013: £24,000) relating to share-based payment transactions.

As an investment trust, the Company invests in securities for the long term in order to achieve its investment objective as stated above. Accordingly it is the Board's policy that no trading in investments or other financial instruments be undertaken. The risk management processes of the Company are aligned with those of the Group as a whole and it is at the Group level that the majority of the risk management procedures are performed. Where relevant and materially different to the Group position, Company specific risk exposures are explained alongside those of the Group. The following risk and sensitivity analysis included in this note are based on the ongoing operations of the Group and Company.

Management of market risk                                                               

Management of market risk is fundamental to the Group's investment objective and the investment portfolio is continually monitored to ensure an appropriate balance of risk and reward.

Exposure to any one entity is monitored by the Board and the Investment Manager. The Board have complied with the investment policy requirement not to invest more than 15% of the total value of its gross assets, save that the Company can invest up to 25% of its gross assets in any single fund managed by MAM where the Board believes that the investment policy of such funds is consistent with the Company's objective of spreading investment risk.

From time to time, the Group may seek to reduce or increase its exposure to stock markets and currencies by taking positions in currency forward contracts, index futures and options relating to one or more stock markets. There are no such positions as at 30 September 2014. These instruments are used for the purpose of hedging some or all of the existing exposure within the Group's investment portfolio to those currencies or particular markets or to enable increased exposure when deemed appropriate and with the specific approval of the Board.

The Company's financial instruments comprise its investment portfolio - see note 13 - cash balances, debtors and creditors that arise directly from its operations such as sales and purchases awaiting settlement and accrued income, and the debenture loans used to finance its operations. The Company, (as distinct from the Group), is unlikely to use derivatives for hedging purposes and then only in exceptional circumstances with the specific prior approval of the Board. No hedging was used during the year.

In pursuing its investment objective the Company is exposed to various risks which could cause short term variation in its net assets and which could result in both or either a reduction in its net assets or a reduction in the profits available for distribution by way of dividend. The main risk exposures for the Company from its financial instruments are market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.

The Board sets the overall investment strategy and has in place various controls and limits and receives various reports in order to monitor the Company's and Group's exposure to these risks. The risk management policies identified in this note have not changed materially from the previous accounting period in respect of the Company.

Market Risk

The principal risk in the management of the portfolio is market risk i.e. the risk that values and future cashflows will fluctuate due to changes in market prices. This comprises:

·     foreign currency risk;

·     interest rate risk; and

·     other price risk i.e. movements in the value of investment holdings caused by factors other than interest rate or currency movements.

These risks are taken into account when setting investment policy and making investment decisions.

Foreign Currency Risk

Exposure to foreign currency risk arises through investments in securities listed on overseas stock markets. A proportion of the net assets of the Group and Company are denominated in currencies other than sterling, with the effect that the balance sheet and total return can be materially affected by currency movements. The Group and Company's exposure to foreign currencies through its investments in overseas securities as at 30 September 2014 was £10,190,000 and £10,190,000 respectively (2013: £26,424,000 and £26,291,000 respectively).

The Company's investments in the MAM Funds are in sterling denominated share classes. Within the MAM Funds the foreign exchange exposure is not hedged.

In respect of the Company, the Investment Manager monitors the Company's exposure to foreign currencies and the Board receives reports on a regular basis.

The Group is able, although unlikely to enter into forward currency contracts as a means of limiting or increasing its exposure to particular currencies. Such contracts can be used for the purpose of hedging the existing currency exposure of elements of the Group's portfolio (as a means of reducing risk) or to enable increased exposure when this is deemed appropriate,

The currency risk of the Group and Company's non-sterling monetary financial assets and liabilities at the Balance Sheet date was:

	Group 2014			Group 2013
		Net	Total		Net	Total
	Overseas	monetary	currency	Overseas	monetary	currency
	investments	assets	exposure	investments	assets	exposure
Currency exposure	£000	£000	£000	£000	£000	£000
US Dollar	1,771		1,771	16,068	91	16,159
Euro	8,028		8,028	2,941		2,941
Yen	275		275	2,241		2,241
Other non-sterling	116		116	5,083		5,083
	10,190		10,190	26,333	91	26,424

	Company 2014			Company 2013
		Net	Total		Net	Total
	Overseas	monetary	currency	Overseas	monetary	currency
	investments	assets	exposure	investments	assets	exposure
Currency exposure	£000	£000	£000	£000	£000	£000
US Dollar	1,771		1,771	16,026		16,026
Euro	8,028		8,028	2,941		2,941
Yen	275		275	2,241		2,241
Other non-sterling	116		116	5,083		5,083
	10,190		10,190	26,291		26,291

Sensitivity analysis

If sterling had strengthened by 5% relative to all currencies on the reporting date, with all the other variables held constant, the income and the net assets attributable to equity holders of the parent would have decreased by the amounts shown below. The analysis is performed on the same basis for 2013. The revenue impact is an estimated figure for 12 months based on the relevant foreign currency denominated balances at the reporting date.

	Group		Group		Company		Company
Income Statement	2014		2013		2014		2013
	£000		£000		£000		£000
Revenue return
Capital return	(510)		(1,321)		(510)		(1,315)
Net assets		(510)		(1,321)		(510)		(1,315)

A 5% weakening of sterling against the above currencies would have resulted in an equal and opposite effect on the above amounts, on the basis that all other variables remain constant. The Company's exposure has been calculated as at the year end and may not be representative of the year as a whole.

Interest Rate Risk

The Company's direct interest rate risk exposure affects the interest received on cash balances and the fair value of its fixed rate portfolio investments and debentures. Indirect exposure to interest rate risk arises through the effect of interest rate changes on the valuation of the investment portfolio. The vast majority of the financial assets held by the Company are equity shares, which pay dividends, not interest. The Company may however from time to time hold small investments which pay a fixed rate of interest.

Derivative contracts are not used to hedge against the exposure to interest rate risk.

The Board sets limits for cash balances and receives regular reports on the cash balances of the Company. The Company's fixed rate debentures introduce an element of gearing to the Company which is monitored within limits and reported to the Board. Cash balances are used to manage the level of gearing within a range set by the Board. The Board sets an overall investment strategy and also has various limits on the investment portfolio which aim to spread the portfolio investments to reduce the impact of interest rate risk on company valuations. Regular reports are received by the Board in respect of the Company's investment portfolio and the respective limits.

The interest rate risk profile of the financial assets and liabilities at the Balance Sheet date was:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Floating rate financial assets
UK sterling	3,512		5,432		3,246		11,991
US dollars			91
Financial assets not carrying interest	165,680		154,734		165,946		153,543
		169,192		160,257		169,192		165,534
Fixed rate financial liabilities UK sterling	(33,873)		(33,847)		(33,873)		(33,847)
Financial liabilities not carrying interest	(1,338)		(1,244)		(1,338)		(1,032)
		(35,211)		(35,091)		(35,211)		(34,879)

Floating rate financial assets usually comprise cash on deposit with banks which is repayable on demand and receive a rate of interest based on the base rates in force over the period. The fixed rate financial liabilities comprise the Group and Company's debentures totaling £34.2m nominal. They pay a weighted average rate of interest of 8.1% per annum and mature in 2020 (£13.5m) and 2025 (£20.7m).

Sensitivity analysis

Based on closing cash balances held on deposits with banks, a 0.5% decrease (2013: 0.5%) in base interest rates would have the following effect on net assets and profit before tax of the Group and Company:

	Group		Group		Company		Company
Income Statement	2014		2013		2014		2013
	£000		£000		£000		£000
Revenue return	(13)		(16)		(13)		(14)
Net assets		(13)		(16)		(13)		(14)

A 0.5% increase (2013: 0.5%) in interest rates would have resulted in a proportionate equal and opposite effect on the above amounts on the basis that all other variables remain constant. The above analysis is based on closing balances only and is not representative of the year as a whole.

Other Price Risk

Exposure to market price risk is significant and comprises mainly movements in the market prices and hence value of the Company's listed equity investments which are disclosed in note 13. The Company also has unlisted investments which are indirectly impacted by movements in listed equity prices and related variables. The Board sets an overall investment strategy to achieve a spread of investments across sectors and regions in order to reduce risk. The Board receives reports on the investment portfolio, performance and volatility on a regular basis in order to ensure that the investment portfolio is in accordance with the investment policy.

The Investment Manager's policy is to manage risk through a combination of monitoring the exposure to individual securities, industry and geographic sectors, whilst maintaining a constant awareness in real time of the portfolio exposures in accordance with the investment strategy. Derivative positions are marked to market and exposure to counterparties is also monitored on a daily basis by the Investment Manager; the Board review it on a quarterly basis.

As mentioned earlier, the Investment Manager may use derivative instruments in order to 'hedge' the market risk inherent in the portfolio. The Investment Manager reviews the risk associated with individual investments and where they believe it appropriate may use derivatives to mitigate the risk of adverse market or currency movements. The Investment Manager discusses the hedging strategy with the Board at its quarterly meetings.

The following table details the exposure to market price risk on the quoted and unquoted equity investments:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Non-current Asset Investments at
fair Value through Profit and Loss
Listed equity investments	123,687		105,075		123,687		105,075
Unlisted	41,655		46,864		41,655		46,864
Related and Subsidiary Companies					172		8,193
		165,342		151,939		165,514		160,132

Sensitivity analysis

If share prices on listed equity investments had decreased by 10% at the reporting date with all other variables remaining constant, the profit before tax and the net assets attributable to the equity holders of the Group would have decreased by the amounts shown below.

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Revenue return	(12,369)		(10,508)		(12,369)		(10,508)
Net assets		(12,369)		(10,568)		(12,369)		(10,508)

A 10% increase (2013: 10%) in share prices would have resulted in a proportionate equal and opposite effect on the above amounts on the basis that all other variables remain constant. The analysis has been calculated on the investments held at the year end and this may not be representative of the year as a whole.

Credit Risk

Credit risk is the risk of other parties failing to discharge an obligation causing the Group financial loss. The Group's exposure to credit risk is managed by the following:

·     The Company's listed investments are held on its behalf by Bank of New York Mellon SA/NV, London Branch, the Company's custodian which if it became bankrupt or insolvent could cause the Company's rights with respect to securities held to be delayed. However under the AIFMD, the Company's Depositary provides certain indemnities in respect of the Company's investments. The Company receives regular internal control reports from the Custodian which are reviewed by the Investment Manager and reported to the Audit Committee.

·     Investment transactions are undertaken by the Investment Manager with a number of approved brokers in the ordinary course of business on a delivery versus payment basis. All new brokers are reviewed by the Investment Manager for credit worthiness and added to an approved brokers list if not considered to be a credit risk.

·     Credit risk is mitigated by diversifying the counterparties through whom the Investment Manager conducts investment transactions. The credit standing of all counterparties is reviewed periodically with limits set on amounts due from any one counterparty.

·     Cash is held at banks that are considered to be reputable and high quality. Cash balances are spread across a range of banks to reduce concentration risk.

·     Where the Company makes an investment in a loan or other security with credit risk, that credit risk is assessed and considered as part of the investment decision making process by the Investment Manager. The Board receives regular reports on the composition of the investment portfolio.

·     A credit exposure could arise in respect of derivatives contracts entered into by the Group if the counterparty were unable to fulfill its contractual obligations.

Credit Risk Exposure

At the reporting date, the financial assets exposed to credit risk amounted to the following:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Cash on deposit and at banks	3,512		5,432		3,246		3,991
Collateral cash held with brokers			91
Sales for future settlement	45		363		45		363
Interest, dividends and other receivables	293		2,327		387		950
		3,850		8,213		3,678		5,304
Minimum exposure during the year	3,850		7,758		3,678		4,953
Maximum exposure during the year	20,331		10,098		19,814		7,263

All amounts included in the analysis above are based on their carrying values.

None of the financial assets were past due or impaired at the reporting date (2013: none).

Liquidity Risk

Liquidity risk is the risk that the Group or Company will encounter difficulties meeting its obligations as they fall due.

The Company may periodically invest in derivatives contracts and debt securities that are traded over the counter. The Company is exposed to the daily settlement of margin calls on derivatives.

Liquidity risk is monitored although it is recognised that the majority of the Group's assets are investments in quoted equities and other quoted securities that are readily realisable. The Board has various limits in respect of how much of the Group's resources can be invested in any one company. The unlisted investments in the portfolio are subject to liquidity risk but such investments are subject to limits set by the Board and liquidity risk is taken into account by the directors when arriving at their valuation. The Company does have exposure to concentration risk due to its investment in MAM at 24.9 % (2013: 29.2% in relation to MAM) of the Company's investment portfolio. The Company closely monitors this investment and receives regular financial reports and believes that the current concentration risk is in-line with the Company's objective of diversifying its investment portfolio into the investment groups as per its investment policy.

The Group maintains an appropriate level of cash balances in order to finance its operations and the Investment Manager regularly monitors the Group's cash balances to ensure all known or forecasted liabilities can be met. The Board receives regular reports on the level of the Group's cash balances. The Group does not have any overdraft or other borrowing facilities to provide liquidity.

A maturity analysis of financial liabilities showing the remaining contractual maturities is detailed below:

			Group 2014
		Due	Due	Due
	Due	between	between	3 years
	within	1 and 2	2 and 3	and
Undiscounted cash flows	1 year	Years	years	beyond	Total
	£000	£000	£000	£000	£000
9.5% debenture stock 2020				13,500	13,500
7.25% debenture stock 2025				20,700	20,700
Interest on financial liabilities	2,783	2,783	2,783	14,463	22,812
Trade payables and other liabilities	1,338				1,338
	4,121	2,783	2,783	48,663	58,350

			Group 2013
Undiscounted cash flows	Due	Due between	Due between	Due
	Within	1 and 2	2 and 3	3 Years
	1 year	years	Years	and beyond	Total
	£000	£000	£000	£000	£000
9.5% debenture stock 2020				13,500	13,500
7.25% debenture stock 2025				20,700	20,700
Interest on financial liabilities	2,783	2,783	2,783	17,246	25,595
Trade payables and other liabilities	1,244				1,244
	4,027	2,783	2,783	51,446	61,039

			Company 2014
Undiscounted cash flows	Due	Due between	Due between	Due
	Within	1 and 2	2 and 3	3 Years
	1 year	years	Years	and beyond	Total
	£000	£000	£000	£000	£000
9.5% debenture stock 2020				13,500	13,500
7.25% debenture stock 2025				20,700	20,700
Interest on financial liabilities	2,783	2,783	2,783	14,463	22,812
Trade payables and other liabilities	1,338				1,338
	4,121	2,783	2,783	48,663	58,350

			Company 2013
Undiscounted cash flows	Due	Due between	Due between	Due
	Within	1 and 2	2 and 3	3 Years
	1 year	years	Years	and beyond	Total
	£000	£000	£000	£000	£000
9.5% debenture stock 2020				13,500	13,500
7.25% debenture stock 2025				20,700	20,700
Interest on financial liabilities	2,783	2,783	2,783	17,246	25,595
Trade payables and other liabilities	1,032				1,032
	3,815	2,783	2,783	51,446	60,827

Categories of financial assets and liabilities

The following table analyses the carrying amounts of the financial assets and liabilities by categories as defined in IAS 39:

	Group		Group		Company		Company
	2014		2013		2014		2013
Financial assets	£000		£000		£000		£000
Financial assets at fair value
through profit or     loss
Equity securities	165,342		151,939		165,514		160,132
		165,342		151,939		165,514		160,132
Other financial assets1		3,850		8,213		3,678		5,304
		169,192		160,152		169,192		165,436
Financial liabilities measured at amortised cost2	35,211		35,091		35,211		34,879
		35,211		35,091		35,211		34,879

¹ Other financial assets include: cash and cash equivalents, due from brokers, cash collateral on securities borrowed, dividend and interest receivables, other receivables and prepayments.

² Financial liabilities measured at amortised cost include: debenture stock issued, due to brokers, fees and other payables and accrued expenses.

The investment portfolio has been valued in accordance with the accounting policy in note 1 to the accounts, i.e. at fair value. The debenture stocks are classified as level 3 under fair value hierarchy. The fair value of the debenture stock is calculated using Discounted Cash Flow analysis and by reference to the redemption yields of a similar companies' debt instrument, with an appropriate margin spread added.

	Book		Book		Fair		Fair
	Value		Value		Value		Value
Group and Company	2014		2013		2014		2013
Financial liabilities	£000		£000		£000		£000
£13.5m (2012: £13.5m) 9.5% debenture stock 2020	13,421		13,410		16,916		17,768
£20.7m (2012: £20.7m) 7.25% debenture stock 2025	20,452		20,437		24,737		24,995
		33,873		33,847		41,653		42,763

Capital Management Policies and Procedures

The Company's capital management objectives are:

·     to ensure that it is able to continue as a going concern; and

·     to maximise the revenue and capital returns to its equity shareholders through an appropriate mix of equity capital and debt. The Board sets a range for the Company's debt (comprised of debentures less cash) at any one time which is maintained by management of the Company's cash balances.

Capital at 30 September comprises:

	Group		Group		Company		Company
	2014		2013		2014		2013
	£000		£000		£000		£000
Net Debt
Net current assets	(2,512)		(6,969)		(2,340)		(4,272)
Debentures	33,873		33,847		33,873		33,847
Sub total		31,361		26,878		31,533		29,575
Equity
Equity share capital	5,253		5,253		5,253		5,253
Retained earnings and other reserves	128,808		119,913		128,808		125,402
Shareholders' funds		134,061		125,166		134,061		130,655
Gearing (calculated using AIC guidance)
Net Debt as a percentage of shareholders' funds		23.4%		21.5%		23.5%		22.6%

Maximum potential gearing represents the highest gearing percentage on the assumption that the Group or Company had no net current assets. As at 30 September 2014, in respect of the Group and the Company, this was 25.3% and 25.3% respectively (2013: Group and Company; 27.0% and 25.9% respectively).

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. The review includes:

·     the level of gearing, taking into account the Investment Manager's views on the market;

·     the level of the Company's free float of shares as the Barlow family owns approximately 55% of the share capital of the Company; and

·     the extent to which revenue in excess of that required to be distributed should be retained. These objectives, policies and processes for managing capital are unchanged from the prior period.

The Company is subject to various externally imposed capital requirements:

·     the debentures are not to exceed in aggregate 66²/3% of adjusted share capital and reserves in accordance with the respective Trust Deeds; and

·     the Company has to comply with statutory requirements relating to dividend distributions.

·     The AIFMD imposes a requirement for all AIFs to have in place a limit on the amount of leverage that they may hold. It is then the responsibility of the relevant AIFM to ensure that this limit is not exceeded, which in this case is the Company (being an internally managed AIF).

Leverage is similar to gearing (as calculated in accordance with AIC guidelines above) but the AIFMD mandates a

certain calculation methodology which must be applied (leverage is comparable to the gearing calculation under the

AIC guidelines in that it reduces borrowings by including sterling cash balances held within the Company). Leverage

as calculated under the AIFMD methodology in respect of the Company is:

	Group	Company
	2014	2014
Gross method	£000	£000
Investments held at fair value through profit or loss	165,342	165,342
Investments in subsidiaries held at fair value through profit or loss		172
Non sterling dominated cash balances
Total investments at exposure value as defined under AIFMD	165,342	165,514
Equity Shareholders Funds	134,061	134,061
Leverage	1.23	1.23

	Group	Company
	2014	2014
Commitment method	£000	£000
Investments held at fair value through profit or loss	165,342	165,342
Investments in subsidiaries held at fair value through profit or loss		172
Cash and cash equivalents	3,512	3,246
Total investments at exposure value as defined under AIFMD	168,854	168,760
Equity Shareholders Funds	134,061	134,061
Leverage	1.26	1.26

The leverage figures above represent leverage as calculated under the gross and commitment methods as defined under the AIFMD (a figure of 1 represents no leverage or borrowings). The two methods differ in their treatment of amounts outstanding under derivative contracts with the same counterparty, which are not applicable to the Company and their treatment of cash balances. In both methods the Company has included debentures by including the value of investments purchased by those borrowings, rather than their balance sheet value. The Company's leverage limit under the AIFMD is 1.5 which equates to a borrowing level of 50% (the Company has not exceeded this limit as any time during the past year.

These requirements (except for AIFMD leverage requirement), are unchanged since last year and the Company has complied with them.

27 Related Party Transactions

Javelin Capital LLP

Javelin Capital LLP (Javelin Capital) was the Investment Manager and General Administrator to the Company until 13 January 2014, when Majedie Asset Management Limited (MAM) was appointed as Investment Manager, and is also the parent entity of Javelin Capital Fund Management Limited (JCFM) and Javelin Capital Services Limited (JCS) all of which are consolidated into the group accounts. As part of the appointment of MAM it was also announced that Javelin Capital would cease operations. As such all Javelin Capital entities have ceased trading and are in the process of being liquidated. This included the Company assuming various operating costs and certain staff from Javelin Capital from 1 April 2014.

Javelin Capital Strategies Plc was an Irish Stock Exchange listed Qualifying Investment Fund (QIF). The QIF was liquidated during the year with a small residual surplus of €10,000 being returned to the Company.

Javelin Capital Emerging Markets Alpha Fund (JCEMAF) was a sub-fund of the Serviced Platform SICAV, a Luxembourg Undertakings for Collective Investment Scheme (UCITS), as established by Goldman Sachs International. Javelin Capital did act as investment manager to JCEMAF and was entitled to receive management and performance fees. As a consequence of the announcement made on 13 January 2014 the JCEMA was closed with all investor monies being redeemed. The Company received, in total, £29.5m for its holding in the JCEMAF.

In addition to any fees received from JCEMAF, Javelin Capital was also entitled to receive management,

performance and administration fees from the Company itself in accordance with the relevant agreements up until 13 January 2014. These agreements did take account of any fees charged at the JCEMAF level so that no double charging occurred.

JCS provided administrative services to the group and in performing these services it incurred expenses. Additionally, for administrative, reasons the Company did pay certain expenses on behalf of the Group. In both cases recharges and/or management fees were used such that each group entity bears its appropriate relevant portion of the group expenses incurred. The Company allowed Javelin Capital group entities use of various assets to perform their respective functions for which it received a lease fee, however this could be waived by the Company at its discretion.

During the year, Mr JWM Barlow ceased to be a partner of Javelin Capital in conjunction with the closure of Javelin Capital. Further details are contained in the Directors Remuneration Report.

The Company pays certain costs on behalf of Majedie Portfolio Management Limited (MPM) for operating 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.

Majedie Asset Management (MAM)

As noted above MAM became investment manager to the Company from 13 January 2014 under the terms of an investment agreement. The agreement provides for MAM to manage the Company's investment assets on both a segregated account basis and also by investments into various MAM collective investment vehicles or funds. Details of the investment agreement are contained in the material contracts section of the directors' report above . As investment manager MAM is entitled to receive investment management fees. In respect of segregated account investments these are charged directly to the Company and are shown as an expense in its accounts. Any fees due in respect of investments made into any MAM funds are charged to the fund and are therefore included as part of the investment value of the relevant holdings. Details of the Company's investments in the MAM funds are shown in the Chief Executive's report above.

In addition to the above the Company retains an investment in MAM itself. Mr JWM Barlow is a non-executive director of MAM but receives no remuneration for this role.

MAM is accounted for as an investment in both the Company and Group accounts and is valued at fair value through profit or loss. During the year the Company received dividends from MAM of £3,619,000 (2013: £2,260,000) and proceeds of £19,177,000 (2013: £5,899,000), as a result of the sale of shares to the MAM Employee Benefit Trust and to MAM for cancellation, of which none was outstanding at year end (2013: nil outstanding).

The table below discloses the transactions and balances between those entities:

	2014	2013
	£000	£000
JCEMAF advisory fee revenue due to Javelin Capital (from the Company)	122	368
Company management fee revenue due to Javelin Capital	165	554
Company administration fee revenue due to Javelin Capital	73	265
Company lease charge to JCS	9	19
JCS management fee income from Javelin Capital	571	1,292
MPM costs recharged by the Company	35	35
Management fee income due to MAM (segregated account only)	373
Balances outstanding at the end of the period:
Between JCS and the Company		542
Between JCS and Javelin Capital		377
Between the Company and MPM	95	95
Between JCFM and Javelin Capital		9
Between the Company and MAM (investment management fees)	132

Transactions between group companies during the year were made on terms equivalent to those that occur in arm's length transactions.

Remuneration

The remuneration of the directors, who are the key management personnel of the Company, is set out below in aggregate for each of the categories specified in IAS24: Related Party Disclosures. There are no amounts outstanding at 30 September 2014 for directors' fees (2013;nil). Further information about the remuneration of individual directors is provided in the audited part of the Report on Directors Remuneration in the Company's Annual Report and Accounts.

	2014		2013
	£000		£000
Short term employee benefits	266		235
Partnership profit shares	50		66
		316		301

Shareholder Information

Registered Office	Registrars
Tower 42	Computershare Investor Services PLC
25 Old Broad Street	The Pavilions
London EC2N 1HQ	Bridgwater Road
Telephone: [phone]	Bristol BS99 6ZZ
Fax: [phone]	Telephone: [phone]
E-mail: [e-mail]	Shareholders should notify all changes of name and
Registered Number: 109305 England	address in writing to the Registrars. Shareholders may
	check details of their holdings, historical dividends,
Company Secretary & Fund Administrator	graphs and other data by accessing
Capita Sinclair Henderson Limited	www.computershare.com.
Trading as Capita Asset Services
Beaufort House	Shareholders wishing to receive communications from
51 New North Road	the Registrars by email (including notification of the
Exeter EX4 4EP	publication of the annual and interim reports) should
Telephone: [phone]	register on-line at http://www-uk.computershare.com/
Fax: [phone]	investor. Shareholders will need their shareholder
	number, shown on their share certificate and dividend
Investment Manager	vouchers, in order to access both of the above
Majedie Asset Management Limited	services.
10 Old Bailey London
EC4M 7NG	Auditors
Telephone: [phone]	Ernst & Young LLP
Email: [e-mail]	1 More London Place
	London SE1 2AF
	Stockbrokers
Depositary	Westhouse Securities Limited
BNY Mellon Trust Depositary (UK) Limited	Heron Tower
One Canada Square	110 Bishopsgate
London EC4V 4LA	London EC2N 4AY
The Depositary has delegated the safe keeping of
the Company's assets to the Custodian. The Bank
of New York Mellon SA/NV, London Branch
AIFM
Majedie Investments PLC

National Storage Mechanism

A copy of the Annual Report and Financial Statements will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: http://www.morningstar.co.uk/uk/NSM.

A copy of the Annual Report and Accounts and Notice of Annual General Meeting will be delivered to shareholders shortly and can also be found at www.majedie.co.uk.

Annual General Meeting

The Company's Annual General Meeting will be held on 15 January 2015 at 12.00 pm at City of London Club, 19 Old Broad Street, London EC2N 1DS.

ENQUIRIES

If you have any enquiries regarding this announcement please contact Mr William Barlow on 020 7382 8185.

END

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

FR EADALEEELFAF