Half-yearly Report

Majedie Investments PLC Half-Yearly Financial Report 31 March 2014 The Directors announce the unaudited half-yearly financial report for the six months to 31 March 2014 as follows: Copies of the half yearly-report can be obtained from the following website: www.majedieinvestments.com Financial Highlights Total shareholder return (including dividends): +35.0% Net asset value total return (including dividends): +6.1% Revenue Return per share (from continuing operations): 5.8p Interim Dividend 3.0p Directors' valuation of investment in Majedie Asset Management Â£33.1m Total assets* Â£163.3m * Total assets are defined as total assets less current liabilities. Investment Objective and Policy Statement 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. 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 Majedie Asset Management Limited. Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of the 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 all times invest and manage its assets in a manner that is consistent with spreading investment risk, there will be no rigid industry, sector, region or country restrictions. The overall approach is based on an analysis of global economies sector trends with a focus on companies and sectors judged likely to deliver strong growth over the long term. The number of investments held, together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams. The Company will not invest in any holding that would, at the time of investment, represent more than 15 per cent of the value of its gross assets save that the Company may invest up to 25&% 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 publically quoted companies worldwide and in investments intended to provide an absolute return (in each case either directly or through other funds or collective investments schemes managed by the Company's investment manager) and the Company's investment in Majedie Asset Management Limited. 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 net gearing (borrowings less cash) on an on-going basis and sets a range at its discretion as appropriate. The Company's current debenture borrowings are limited by covenant to 66 2/3% and any additional indebtedness is not to exceed 20%, of adjusted capital and reserves. Chairman's Statement The Company has undertaken a major change since the publication of the Annual Report for the year ended 30 September 2013. As shareholders will be aware, Javelin Capital LLP has been closed and the majority of the Company's assets are now managed by Majedie Asset Management ("MAM"). Details of the reasons for the closure of Javelin and the appointment of MAM were set out in the circular to shareholders dated 5 February 2014. The majority of the Company's assets were transferred to MAM's management on 22 January 2014, with full investment being made following shareholder approval to the change in our investment policy, and the repurchase of part of our shareholding in MAM. The NAV and the share price performance for the period returned 6.1% and 35.0% respectively, both on a total return basis. Results and Dividends Under IFRS the Company is required to separate continuing operations from discontinued operations. Following the closure of Javelin Capital in January 2014 the income of the Company is effectively unchanged but, in accordance with IFRS, the administration expenses are split between continuing and discontinued operations. However certain administration expenses previously borne by Javelin Capital and included under discontinued operations will be transferred to the Company. The income from investments for 2014 has increased from Â£2.3m to Â£3.7m which reflects higher dividend receipts from the Company's investment in MAM. Administration expenses on an ongoing basis were Â£0.7m compared to Â£0.4m in the prior year period. The increase is due to the restructuring costs incurred by the Company in closing Javelin Capital. The discontinued capital costs were Â£ 2.4m which include a write off to capital of Â£2m, of which Â£1.8m was recognised in January 2014, as compared to Â£0.5m in the prior year period. The net revenue return on a continuing basis is Â£3.0m compared to Â£1.6m in the prior year period and including discontinued operations the net revenue return is Â£2.8m compared to Â£1.4m. Javelin Capital is currently valued at Â£0.8m and small further write offs may be necessary as it is liquidated. These are not expected to be material to the Group. The investment in MAM is held at fair value with its valuation being reviewed regularly by the Board. The carrying value of the Company's holding has been increased to Â£33.1m as at 31 March 2014. The Board announced in January that the full year dividend would be rebased to not less than 7.5 pence per share. In line with that announcement the interim dividend will be 3.0 pence per share. The interim dividend will be paid on 27 June 2014 to shareholders on the register on 13 June 2014. Fair Value of Debentures in the NAV of Majedie Investments The Board have reviewed the method of valuing the debentures for the purpose of calculating the Company's weekly published NAV. The calculation is currently based on the traded value of larger investment trust debentures with a margin spread added as the Majedie debentures themselves are illiquid. Those comparable debentures now trade very little themselves and so the Directors have concluded that they are no longer a reliable comparator for this purpose. In order to have a market related mechanism that is liquid the Board has concluded that the most appropriate method is to use the market price of UK Treasury bonds of equal duration plus 2.5%. The Board sees this mechanism as transparent, market related and consistent with best practice. This review will result in an increase in the Company's NAV (debt at fair value) of Â£1m, or approximately 1.9p per share. Alternative Investment Fund Management Directive ("AIFMD") The Company is applying for authorisation by the Financial Conduct Authority as an alternative investment fund manager under the AIFMD. Following the appointment of MAM to manage the Company's assets, the Company has appointed Bank of New York Mellon as Custodian of its assets.Under the AIFMD, the Company is also obliged to appoint a Depositary, and it is intended that Bank of New York Mellon will also act as Depositary. It is intended that the Company will act as its own AIFM. AIC The Company has joined the Association of Investment Companies (AIC). The AIC provides excellent information to Investment Companies and their shareholders and it acts as an effective conduit on behalf of Investment Companies to Regulators and Government. Summary The Company has undertaken a major transformation by appointing MAM to manage its assets. I am pleased both by the smooth transfer of the assets and by the market reaction to the appointment of MAM; the discount to NAV, having initially narrowed from 14.3% on 11 January 2014 to 7.6% on 30th March 2014, has since moved close to asset value. The Company has begun the long term process of explaining the new investment strategy to investors and this has been well received. The improvement in the share price since the reorganisation indicates that a broader group of shareholders and potential shareholders support the new structure. The Company has the authority to allot new shares, on a non-dilutive basis, for up to 10% of its issued share capital, and given, the right coincidence of circumstances will do so. I look forward to a strengthening relationship with MAM and to the Company benefitting from the broadening of MAM's product range. Andrew J Adcock Chairman 29 May 2014 Chief Executives Report In January 2014 the Company announced the closure of Javelin LLP and that the majority of the Company's assets would be managed by Majedie Asset Management (MAM). The changes were detailed in a letter to shareholders dated 5 February 2014 which preceded the General Meeting of the Company on 27 February. Under the new investment management arrangements the Company's assets, apart from the residual non core portfolio and the direct stake in Majedie Asset Management, will be allocated at the discretion of the Board between investment strategies managed by MAM. Initially the assets have been allocated to a segregated fund tracking MAM's UK Equity Fund, to MAM's UK Income Fund and to MAM's Tortoise Fund. The Tortoise Fund is an absolute return fund which should offer downside protection in falling markets. MAM's UK Equity Fund and UK Income Fund may invest up to 20% of their assets in non-UK assets. In the future it is intended that allocation of assets to the global funds that MAM plan to launch will broaden the geographic exposure. The UK Equity Fund is the flagship product of MAM, which started in March 2003 and since inception has returned 15.8% per annum, with a relative outperformance against its benchmark FTSE All-Share Index of 5.7% per annum. The Company's assets are invested in a segregated fund that is intended to track the MAM UK Equity Fund. Its assets are predominantly UK equities with overseas equities limited to 20%, and the strategy incorporates a dedicated allocation to smaller companies. The total sum invested by the Company in the segregated fund at 31 March 2014 was Â£81.5m, representing 50.2% of the Company's gross assets. The Tortoise Fund is a global equity absolute return fund which started in August 2007 and has returned 15.0% per annum since then. The total sum invested by the Company in the Tortoise Fund at 31 March 2014 was Â£28.8m, representing 17.6% of the Company's gross assets. The UK Income Fund is an income fund which started in December 2011 and has returned 26.2% per annum with a relative outperformance against its benchmark FTSE All-Share Index of 10.6% per annum. The total sum invested by the Company in the Income Fund at 31 March 2014 was Â£17.2m, representing 10.5% of gross assets. The Company's stake in MAM was reduced in March 2014 when shares representing 10% of MAM were sold back to MAM back to MAM for Â£18m and the shares were subsequently cancelled. The price received reflects an uplift from the holding value at 30 September 2013. The Company now holds 18% of MAM and it is intended that further reductions will be made over the next four years. These shares will be acquired by an Employee Benefit Trust or by MAM for cancellation and will facilitate the achievement of the goal of wider distribution of shares amongst employees within MAM. In past years the Company has reported on the performance of each distinct group of its assets. For the future that will continue and the asset groups will be MAM UK Equity Strategy Fund, MAM UK Income Fund, MAM Tortoise Fund and the direct stake in MAM, together with any other MAM funds in which the Company invests. During the half year to 31 March 2014 the Company's assets were managed by both Javelin and MAM. The Core Portfolio was managed by Javelin until 22 January 2014 and thereafter by MAM. When combined, the performance of the MAM UK Equity Strategies Segregated Fund and the Core Portfolio returned 5.8% compared to the benchmark of 5.2%. This includes 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 below. The Company's investments in the MAM Income and Tortoise Funds, having started on 29 January 2014, were fully completed by 31 March 2014. The delay in fully investing in the funds was due to the Company needing to obtain shareholder approval at the General Meeting on 27 February 2014. The Tortoise Fund returned 0.1%. The UK Income Fund returned 0.8% compared to a rise of 1.5% for the FTSE All-Share Index.The performance measurement is from 29 January 2014 to 31 March 2014 and is time weighted. MAM has had a good six months to 31 March with assets under management rising from Â£7.7bn at 30 September 2013 to Â£9.7bn at 31 March 2014 which reflects a rising market, fund inflows and good investment performance. The Board has raised the value of the Company's stake in MAM to Â£33.1m from Â£27.8m, which represents 20.3% of the Company's total assets. During the period the Company received Â£2.7m from MAM as a final dividend for the year ended 30 September 2013. The realisation portfolio and cash are 0.4% and 0.2% respectively, of gross assets. The cash figure excludes cash held within the segregated fund. Javelin Capital Funds The JCEMA (Javelin Capital Emerging Markets Alpha Fund) was closed in January 2014. The Company received Â£29.5m which has since been invested in the MAM Funds described above. The performance of JCEMA for the period up to closure was -3%. Javelin Capital Javelin Capital was written down by Â£1.8m on the announcement of its closure and is now held at Â£0.8m in the Group Accounts representing 0.5% of gross assets. It will be dissolved in the second half of the year and no material write downs are expected. Development of Net Asset Value The chart in the Half Year report (page 8) shows the development of the Group NAV over the period. The chart is complicated by the change in investment manager in January 2014. In aggregate the NAV has increased by Â£4.3m. The core portfolio and MAM contributed Â£4.4m and Â£9m respectively both through a combination of dividend income and capital appreciation. The non core realisation portfolio lost Â£0.2m and the Javelin Capital UCITS fund (which was closed in January 2014) lost Â£1.0m. The capital write down on Javelin Capital was Â£2.0m and the administration costs were Â£1.1m including restructuring expenses. The dividend paid to shareholders in January 2014 was Â£3.3m. MAM Fund Performance Return Benchmark UK Segregated Fund -0.8 -1.9 UK Income Fund +0.8 +1.5 Tortoise Fund +0.1 - The UK Segregated Fund started on 22 January 2014, The investment in the Tortoise Fund was made on the 29 January and the 19 March 2014, The investment in the UK Income Fund was made on 29 January, 12 March and 18 March 2014. William Barlow Chief Executive, For and on behalf of the Board 29 May 2014 Portfolio Information at 31 March 2014 Fund Analysis Market Value % of Â£'000 *Total Assets Oil & Gas 13,540 8.3 Basic Materials 195 0.1 Industrials 6,963 4.3 Consumer Goods 920 0.6 Health Care 8,572 5.2 Consumer Services 11,975 7.3 Telecommunications 11,102 6.8 Utilities 6,827 4.2 Financials 8,669 5.3 Technology 1,453 0.9 MAM Tortoise Fund 28,791 17.6 MAM UK Income Fund 17,213 10.5 MAM Special Situations Fund 7,510 4.6 Majedie Asset Management (note 8) 33,100 20.3 Unlisted other (note 8) 692 0.4 Total Investment at Fair Value 157,522 96.4 Cash and other 5,808 3.6 163,330 100.0 United Kingdom 92,059 56.4 North America 1,544 0.9 Europe (ex UK) 10,048 6.2 Japan 357 0.2 MAM Tortoise Fund 28,791 17.6 MAM UK Income Fund 17,213 10.5 MAM Special Situations Fund 7,510 4.6 Total Investment at Fair Value 157,522 96.4 Cash and other 5,808 3.6 163,330 100.0 *Total assets is defined as total assets less current liabilities. Twenty Largest Investments at 31March 2014 Market Value % of Company Â£'000 Total Assets Majedie Asset Management 33,100 20.3% MAM Tortoise 28,791 17.6% MAM UK Income X 17,213 10.5% MAM Special Situations Fund 7,510 4.6% Royal Dutch Shell 7,012 4.3% BP Plc 6,007 3.7% GlaxoSmithKline Plc 4,583 2.8% AstroZenica Plc 3,284 2.0% Vodafone Group 3,263 2.0% Centrica Plc 3,066 1.9% BT Group Plc 2,459 1.5% BAE Systems Plc 2,366 1.4% Marks & Spencer 2,324 1.4% Orange 2,142 1.3% Tesco Plc 2,095 1.3% KPN NV 1,656 1.0% HSBC Hldgs Plc 1,653 1.0% Telecom Italia Spa 1,582 1.0% National Grid Plc 1,209 0.7% Firstgroup Plc 1,189 0.7% 312,504 81.1% *Total assets is defined as total assets less current liabilities. Interim Management Report The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chairman's Statement and Chief Executive's Report as set out above. The financial statements continue to be prepared on a going concern basis. The approach used for the Annual Report is applied, including proper consideration of financial and cashflow forecasts, and it is believed that the Company has adequate financial resources to continue to operate for the foreseeable future. The principal risks facing the Company are substantially unchanged since the date of the Annual Report for the year ended 30 September 2013 and continue to be as set out in that report with no particular subsequent heightened uncertainty. Risks faced by the Company include, but are not limited to, market risk, discount volatility, regulatory risk, financial risk, risks associated with banking and hedging and non-compliance with Section 1158 of the Corporation Tax Act 2010. Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report In accordance with the Disclosure and Transparency Rules 4.2.7R and 4.2.8R, we confirm that to the best of our knowledge: the condensed set of financial statements has been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, as adopted by the European Union, as required by the Disclosure and Transparency Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and financial position of the Company; the Chairman's Statement and Investment Manager's Report includes a fair review of the information required to be disclosed under the Disclosure and Transparency Rule 4.2.7R, interim management report. This includes (i) an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements presented in the Half-Yearly Financial Report and (ii) a description of the principal risks and uncertainties for the remaining six months of the financial year; and there were no changes in the transactions or arrangements with related parties as described in the Group's Annual Report for the year ended 30 September 2013 that would have had a material effect on the financial position or performance of the Group in the first six months of the current financial year. Andrew J Adcock Chairman For and on behalf of the Board 29 May 2014 Independent Review Report to Majedie Investments PLC Introduction We have been engaged by the Company to review the condensed set of financial statements in the Half-Yearly Financial Report for the six months ended 31 March 2014 which comprises the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Balance Sheet, Condensed Consolidated Cash Flow Statement and related notes 1 to 17. We have read the other information contained in the Half-Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' Responsibilities The Half-Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half-Yearly Financial Report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland), "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half-Yearly Financial Report for the six months ended 31 March 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. Ernst & Young LLP London 29 May 2014 Condensed Consolidated Statement of Comprehensive Income for the half year ended 31 March 2014 *Restated *Restated Half year ended Year ended Half year ended 31 March 2014 31 March 2013 30 September 2013 Revenue Capital Revenue Capital Revenue Capital return return Total return return Total return return Total Note Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Investments Gains on investments at fair value 8,526 8,526 11,534 11,534 18,046 18,046 through profit or loss Net investment result 8,526 8,526 11,534 11,534 18,046 18,046 Income Income from investments 2 3,668 3,668 2,284 2,284 5,129 5,129 Other income 2 36 36 36 36 84 84 Total income 3,704 3,704 2,320 2,320 5,213 5,213 Expenses Administration expenses (341) (326) (667) (283) (104) (387) (516) (197) (713) Return before finance costs and taxation 3,363 8,200 11,563 2,037 11,430 13,467 4,697 17,849 22,546 Finance costs (351) (1,053) (1,404) (351) (1,052) (1,403) (702) (2,105) (2,807) Net return before taxation 3,012 7,147 10,159 1,686 10,378 12,064 3,995 15,774 19,624 Taxation 3 (16) (16) (50) (50) (115) (115) Net return after taxation for the period from continuing operation 2,996 7,147 10,143 1,636 10,378 12,064 3,880 15,744 19,624 Discontinued operations Net loss after taxation for the period from discontinued operation 11 (191) (2,378) (2,569) (186) (511) (697) (339) (912) (1,251) Return per ordinary share: pence pence pence pence pence pence pence pence pence Basic and diluted for continuing 4 5.8 13.7 19.5 3.1 20.0 23.1 7.5 30.3 37.8 operations Basic and diluted for (0.4) (4.5) (4.9) (0.3) (1.0) (1.3) (0.7) (1.8) (2.5) discontinuing operations Basic and diluted total 5.4 9.2 14.6 2.8 19.0 21.8 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 International Financial Reporting Standards (IFRS). The supplementary revenue return and capital return columns are prepared under guidance published by the Association of Investment Companies. All items in the above statement relate to continuing operations. See notes 1 to 17. *Comparative figures have been restated for the subsidiaries which are now treated as a discontinued operation, See note 11 below. Condensed Consolidated Statement of Changes in Equity for the half year ended 31 March 2014 Capita Share Own Share Share redemption options Capital Revenue shares capital premium reserve reserve reserve reserve reserve Total Notes Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Half year ended 31 March 2014 30 September 2013 5,253 785 56 (123) 102,654 18,169 (1,628) 125,166 Net return after tax for the period from continuing operations 7,147 2,996 10,143 Net loss after tax for the period from discontinued operations (2,378) (191) (2,569) Share options expense 5 10 10 Dividends declared and paid in period 7 (3,279) (3,279) 31 March 2014 5,253 785 56 (113) 107,423 17,695 (1,628) 129,471 Half year ended 31 March 2013 30 September 2012 5,253 785 56 (147) 87,882 20,093 (1,628) 112,234 Net return after tax for the period from continuing operations 10,378 1,636 12,014 Net loss after tax for the period from discontinued operations (511) (186) (697) Share options expense 5 13 13 Share options expense 7 (3,279) (3,279) 31 March 2013 5,253 785 56 (134) 97,689 18,264 (1,628) 120,285 Year ended 30 September 2013 30 September 2012 5,253 785 56 (147) 87,822 20,093 (1,628) 112,234 Net return after tax for the period from continuing operations 15,744 3,880 19,624 Net loss after tax for the period from discontinued operations (912) (339) (1,251) Share options expense 5 24 24 Dividends declared and paid in period 7 (5,465) (5,465) 30 September 2013 5,253 785 56 (123) 102,654 18,169 (1,628) 125,166 Condensed Consolidated Balance Sheet at 31 March 2014 *Restated *Restated 31 March 31 March 30September Notes 2014 2013 2013 Â£'000 Â£'000 Â£'000 Non-current assets Property and equipment 89 170 105 Investments at fair value through profit or loss 8 157,522 147,715 151,939 157,611 147,885 152,044 Current assets Trade and other receivables 483 2,636 2,690 Cash and cash equivalents 5,482 5,122 5,523 5,965 7,758 8,213 Assets of the discontinued operation 1,041 Total current assets 7,006 7,758 8,213 Total assets 164,617 155,643 160,257 Current liabilities Trade and other payables (1,024) (1,524) (1,244) Liabilities directly associated with the assets of the discontinued operation (263) Total current liabilities (1,287) (1,524) (1,244) Total assets less current liabilities 163,330 154,119 159,013 Non-current liabilities Debentures (33,859) (33,834) (33,847) Total liabilities (35,146) (35,358) (35,091) Net assets 129,471 120,285 125,166 *Comparative figures have been restated for the review of the treatment of the investment in JCEMAF, see note 1. 30 31 March 31 March September 2014 2013 2013 Notes Â£'000 Â£'000 Â£'000 Represented by: Ordinary share capital 5,253 5,253 5,253 Share premium 785 785 785 Capital redemption reserve 56 56 56 Share options reserve (113) (134) (123) Capital reserve 107,423 97,689 102,654 Revenue reserve 17,695 18,264 18,169 Own shares reserve (1,628) (1,628) (1,628) Equity Shareholders' Funds 129,471 120,285 125,166 Net asset value per share pence pence pence Basic and fully diluted 13 248.8 231.1 240.5 Condensed Consolidated Cash Flow Statement for the half year ended 31 March 2014 Half year Half year Year ended ended ended 30 31 March 31 March September 2014 2013 2013 Notes Â£'000 Â£'000 Â£'000 Net cash Inflow/(outflow) from operating activities 14 5,546 13,494 (9,516) Financing activities Interest paid (1,392) (1,392) (2,783) Dividends paid (3,279) (3,279) (5,465) Net cash outflow from financing activities (4,671) (4,671) (8,248) Increase / (decrease) in cash and cash equivalents for period 15 875 (18,165) (17,764) Cash and cash equivalents at start of period 5,523 23,287 23,287 Cash and cash equivalents at end of period 6,398 5,122 5,523 Cash and cash equivalents from equivalents from continuing operations 5,482 3,695 4,248 Cash and cash equivalents attributed to discounted operations 916 1,427 1,275 6,398 5,122 5,523 Notes to the Condensed Consolidated Financial Statements as at 31 March 2014 1. Accounting Policies The Condensed Consolidated Financial Statements above comprise the unaudited results of the Company and subsidiaries for the six months to 31 March 2014 and are presented in pounds sterling, as this is the functional currency of the Group. The Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting". They do not include all financial information required for full annual financial statements. The Condensed Consolidated Financial Statements have been prepared using the accounting policies adopted in the audited financial statements for the year ended 30 September 2013. IFRS 10Consolidated Financial Statements and Investment Entities Amendments The financial statements have been restated following the early adoption of IFRS 10, further details can be found in Note 1 of the Company's Annual Report for the year ended 30 September 2013, as issued on 9 December 2013. New standards, interpretations and amendments adopted by the Group The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 September 2013, except for the adoption of new standards and interpretations effective as of 1 October 2013. The Group applies, for the first time, IFRS 13 Fair Value Measurement, this does not have any material impact on the financial statements. As required by IAS 34, the nature and the effect of these changes are disclosed below. Several other new standards and amendments apply for the first time in 2013. However, they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group. The nature and the impact of this new standard is described below: 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. Some of these disclosures are specifically required for financial instruments by IAS 34.16A(j), thereby affecting the interim condensed consolidated financial statements period. The Group provides these disclosures in Note 8. 2. Income * Restated * Restated Half year ended Year ended Year ended 31 March 2014 31 March 2013 30 September 2013 Â£'000 Â£'000 Â£'000 Income from investments Franked investment income* 3,484 1,800 4,114 UK unfranked investment income 30 91 63 Overseas dividends 154 393 952 3,668 2,284 5,129 Other income Deposit interest 12 13 19 Sundry income 24 23 65 36 36 84 Total income 3,704 2,320 5,213 Total income comprises Dividends 3,668 2,284 5,129 Interest 12 13 19 Other income 24 23 65 3,704 2,320 5,213 Income from investments Listed UK 831 761 1,917 Listed overseas 154 393 952 Unlisted** 2,683 1,130 2,260 3,668 2,284 5,129 * Includes MAM dividend income of Â£2,683,000 (31 March 2013 & 30 September 2013: Â£1,130,000 and Â£2,260,000). ** Includes MAM dividend income. 3. Taxation The charge for the half year to 31 March 2014 is Â£16,000 (half year to 31 March 2013: Â£50,000; year ended 30 September 2013: Â£115,000). These amounts represent irrecoverable withholding tax paid on overseas investment income. The Company has an effective corporation tax rate of 0%. As investment gains are exempt from tax owing to the Company's status as an Investment Trust and there is expected to be an excess of management expenses over taxable income there is no charge for corporation tax. 4. Calculation of Returns per Ordinary Share Basic returns per ordinary share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. Basic return per ordinary share for the period is based on 52,044,613 (half year ended 31 March 2013 and year ended 30 September 2013: 52,044,613) shares, being the weighted average number of shares in issue after adjustment for the shares held by the Employee Incentive Trust. There is no dilution to the basic return per ordinary share since share options, if exercised, would be satisfied by shares already held by the Employee Incentive Trust. 5. Share-based payments The Group currently operates one share-based payment scheme being the 2006 Long Term Incentive Plan which in turn has two components, firstly options that relate to TSR-based (Total Shareholder Return) awards and secondly those that relate to Matching Awards. No awards have been made under the scheme in the period. The number of outstanding options granted by the Company are summarised in the table below: 31 March 2014 31 March 2013 30 September 2013 Number of outstanding options LTIP: TSR-based Awards 209,318 197,725 202,759 LTIP: Matching Awards 12,253 11,574 11,869 221,571 209,299 214,628 During the half-year ended 31 March 2014 the number of options outstanding under the LTIP TSR-based and Matching awards increased by 6,559 and 384 respectively. This is as a result of the 2013 6.3p final dividend, which is in accordance with the LTIP rules. During the half year to 31 March 2014 the Group recognised a total charge for share-based payment transactions of Â£10,000 (Half year ended 31 March 2013: Â£ 13,000; Year ended 30 September 2013: Â£24,000). The total shareholding of the Majedie Investments PLC Incentive Trust is 483,387 (31 March 2013: 483,387; 30 September 2013: 483,387) ordinary shares. The shares are held by the Trust until the relevant options are exercised or until they lapse. The cost of the shares is presented in the Condensed Consolidated Balance Sheet under the heading 'Own shares reserve', as a deduction from shareholders' funds in accordance with IFRS 2: Share-based payments. 6. Segment reporting As detailed in the Company's Annual Report for the year ended 30 September 2013, geographical segments are considered to be the Group's primary reporting segment and business segments the secondary reporting segment. Following the announcement of the closure of Javelin Capital LLP in January 2014, the Group now has one business segment: its activity as an Investment Trust, which is the business of the parent company. Javelin Capital LLP previously operated a range of funds to third party investors and provided investment management and advisory services. 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. 31 March 2014 31 March 2013 30 September 2013 Investment Investment Investment Investing management Investing management Investing management activities and activities and activities and advisory advisory advisory Â£'000 services Â£'000 services Â£'000 services Â£'000 Â£'000 Â£'000 Revenue 3,700 4 2,324 16 5,207 31 from external customers Carrying 129,140 331 117,781 2,504 112,623 2,543 amount of net assets * The investment and other income of the parent company and the Javelin Capital funds (QIF and UCITS)prior to its closure in January 2014. 7.Dividends In accordance with International Accounting Standard 10: Events After the Balance Sheet Date, interim dividends are not accounted for until paid. The following table summarises the amounts recognised as distributions to equity holders in the relevant period: Half year Half year Year ended ended ended 30 31 March 31 March September 2014 2013 2013 Â£'000 Â£'000 Â£'000 2013 Final dividend of 6.30p paid on 22 January 2014 3,279 2013 Interim dividend of 4.20p paid on 26 June 2013 2,186 2012 Final dividend of 6.30p paid on 23 January 2013 3,279 3,279 3,279 3,279 5,465 The Directors propose an interim dividend for 2014 of 3.0p per share, to be paid on 27 June 2014. 8. Investments All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open ended investment companies are valued at the closing price, the bid price or the single price as appropriate, released by the relevant investment manager. Unlisted investments are formally valued on a semi-annual basis by the Board of Directors taking into account relevant information as appropriate including market prices, latest dealings, accounting information, professional advice and the guidelines issued by the International Private Equity and Venture Capital Association. In between the formal valuations the Directors review these investments for any significant changes and incorporate such changes as they consider necessary. The valuation of the Unlisted Investments require management to make certain assumptions about unobservable inputs. 9. Fair Value Hierarchy Except for the Company's 9.5% Debenture Stock 2020 and 7.25% Debenture Stock 2025, which is measured at amortised cost under the effective interest method, financial assets and financial liabilities of the Company are carried in the Balance Sheet at their fair value (investments) or the balance sheet amount is a reasonable approximation of fair value (due from brokers, dividends receivable, accrued income, cash at bank, due to brokers and provision for deferred tax). The fair value is the amount at which the asset could be sold or the liability transferred in a current transaction between market participants, other than a forced or liquidation sale. The table below sets out fair value measurements of financial assets in accordance with IFRS fair value hierarchy system: Group 31 March 2014 Level Level Level Total 1 2 3 Â£'000 Â£'000 Â£'000 Â£'000 Financial assets Financial assets designated at fair value through profit or loss Equities and managed funds 70,216 70,216 Listed equity securities 33,792 33,792 Unlisted equity securities Investment funds Listed Funds 53,514 53,514 123,730 33,792 157,522 Group 31 March 2013 Level Level Level Total 1 2 3 Â£'000 Â£'000 Â£'000 Â£'000 Financial assets Financial assets designated at fair value through profit or loss Equities and managed funds Listed equity securities 102,000 102,000 Unlisted equity securities 45,519 45,519 Listed exchange traded funds 196 196 102,196 45,519 147,715 Group 30 September 2013 Level Level Level Total 1 2 3 Â£'000 Â£'000 Â£'000 Â£'000 Financial assets Financial assets designated at fair value through profit or loss Equities and managed funds Listed equity securities 104,893 104,893 Unlisted equity securities 46,864 46,864 Listed exchange traded funds 182 182 105,075 46,864 151,939 There have been no transfers during the period between Levels 1 and 2, and no transfers into or out of Level 3. Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1, include active listed equities and listed investment funds. 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. 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 Company's current Level 3 classified investments comprise certain immaterial unlisted investments, which total in aggregate Â£692,000, and the investment in MAM valued at Â£33,100,000. In respect of the investment in MAM, the determination of the fair value uses a variety of factors including a pricing model. The pricing model uses historical data but is sensitive to a variety of interdependent factors, none of which individually provide a useful sensitivity measure to fair value. However, notwithstanding the above, and holding all other factors constant (which should be noted does not represent the actual environment in respect of this investment), a 5% increase or decrease in MAM's recurring revenue would result in a 5.6% increase or decrease in the value of the investment in MAM. The following table presents the movement in Level 3 instruments for the period ended 31 March 2014: 2014 Total Equity Investments Group Â£'000 Â£'000 Opening balance 46,864 46,864 Sales - proceeds (19,179) (19,179) Total gains for the year included in the Statement of Comprehensive Income 6,107 6,107 33,792 33,792 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. Half-year ended Half-year ended Year ended 31 March 2014 31 March 2013 30 September 2013 Group Fair Book Fair Book Book Fair Financial liabilities value Â£ value Â£ value Â£ value value Â£ value Â£ '000 '000 '000 Â£'000 '000 '000 Â£13.5m (2013: Â£13.5m) 9.5% debenture stock 2020 13,415 13,273 13,405 18,995 13,410 17,768 Â£20.7m (2013: Â£20.7m) 7.25% debenture stock 2025 20,444 24,997 20,429 25,815 20,437 24,995 33,859 42,270 33,834 44,810 33,847 42,763 The above financial liabilities would be classified as Level 2 financial investments in the Fair Value hierarchy. 10. Principal financial risks The principal financial risks which the Company faces include exposure to: â€¢ Market price risk â€¢ Foreign currency risk â€¢ Interest rate risk â€¢ Liquidity risk â€¢ Credit risk Further details of the Company's management of these risks and exposure to them is set out in Note 25 of the Company's Annual Report for the year ended 30 September 2013, as issued on 9 December 2013. There have been no changes to the management of or exposure to these risks since that date. 11. Discontinued operations On 13 January 2014, the Company publicly announced the decision of its Board of Directors 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. In addition to this, the Javelin Capital Strategies PLC remains in liquidation and will be wound down accordingly. Accordingly these have been classified as a discontinued operations group with a fair value of its combined net assets of Â£778,000. During the period ended 31 March 2014, a net loss after tax of Â£2,569,000 was recorded in respect of these subsidiaries as disclosed within the Condensed Consolidated Statement of Comprehensive Income above. Half-year ended Half-year ended Year ended 31 March 2014 31 March 2013 30 September 2013 Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£,000 Â£'000 Â£'000 Â£,000 Â£'000 Â£'000 Â£,000 Â£'000 Â£'000 Discontinued operations Income Income from investments (6) (6) 3 3 (9) (9) Other income 6 6 17 17 34 34 Total Income 20 20 25 25 Expenses Administration expenses (191) (383) (574) (206) (511) (717) (364) (912) (1,276) Capital account balance write-off (1,995) (1,995) Net loss after taxation for the period from discontinued operation (191) (2,378) (2,569) (186) (511) (679) (339) (912) (1,251) Half year Half year ended ended Year ended 31 March 31 March 30 September 2014 2013 2013 Â£'000 Â£'000 Â£'000 Net cash outflows from discontinued operations (359) (682) (833) Net cash outflows (359) (682) (833) 12. Majedie Asset Management Limited (MAM) The Company, as at 31 March 2014, has an 18% equity shareholding in MAM which provides investment management and advisory services primarily relating to UK equities. The carrying value of the investment in MAM is included in the Condensed Consolidated Balance Sheet as part of investments at fair value through profit or loss: 31 March 31 March 30 September 2014 2013 2013 Â£'000 Â£'000 Â£'000 Deemed cost of investment 627 1,179 1,038 Holding gains 32,473 42,321 44,962 Fair value at period end 33,100 43,500 46,000 During the period the Company sold part of its equity shareholding to MAM, equal to 10% of the MAM total shares in issue, back to MAM for cancellation, for consideration of Â£19.1m and a gain of Â£18.7m. Additionally, in January 2014, it has been agreed that the Company will sell further equity shares equal to 2.5% of the MAM total shares in issue over the next four years. The carrying value of MAM in the 31 March 2014 Condensed Consolidated Financial Statements is its fair value as assessed by the Board at 31 March 2014. 13. Net Asset Value The net asset value per share has been calculated based on equity Shareholders' funds and on 52,044,613 (31 March 2013 and 30 September 2013: 52,044,613) ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. 14. Reconciliation of Operating Profit to Operating Cash Flow Half year Half year Year ended 31 March 31 March 30 September ended 2014 ended 2013 2013 Â£'000 Â£'000 Â£'000 Consolidated net return before taxation from continuing operations 10,159 12,064 19,739 Consolidated loss before taxation from discounted operations (2,569) (697) (1,251) Adjustments for: Gains on investments (8,526) (11,534) (18,046) Consolidation adjustment on Javelin Capital fee income 118 368 Share-based remuneration 10 13 24 Depreciation 15 77 142 Purchases of investments (122,160) (22,282) (31,862) Sales of investments 125,200 8,080 19,724 2,247 14,279 (11,162) Finance costs 1,404 1,403 2,807 Operating cash flows before movements in working capital 3,651 (12,876) (8,355) Increase / (decrease) in trade and other payables 118 (112) (137) (Decrease)/increase in trade and other receivables 1,778 (450) (916) Net cash inflow/(outflow) from operating activities before tax 5,547 (13,438) (9,408) Tax recovered 15 7 28 Tax on unfranked income (16) (63) (136) Net cash inflow/(outflow) from operating activities 5,546 (13,494) (9,516) 15. Reconciliation of Net Cash Flow to Movement in Net Debt Half year ended Half year ended Year ended 31 March 31 March 30 September 2014 2013 2014 Â£'000 Â£'000 Â£'000 Increase (/decrease) in 875 (18,165) (17,764) cash Non cash items (12) (11) (24) Change in net debt 863 (18,176) (17,788) Net debt beginning of (28,324) 10,536 10,536 period Net debt at end of (27,461) (28,712) (28,324) period 16. Related Party Transactions Javelin Capital Javelin Capital LLP (Javelin Capital) was the Company's investment manager and general administrator until 13 January 2014, when it was replaced with Majedie Asset Management Limited, and is also the parent entity of Javelin Capital Services Limited (JCS) which is consolidated in the group accounts. It was agreed by the partners that Javelin Capital would close and all Javelin entities will be liquidated in due course. Javelin Capital Strategies plc is an Irish Stock Exchange listed Qualifying Investment Fund (QIF) and which remains in liquidation. The Company will receive any residual interest remaining after liquidation and is consolidated into the group accounts on that basis. The Javelin Capital Emerging Markets Alpha Fund (UCITS) was a sub-fund of the SICAV platform in Luxembourg established by Goldman Sachs International and Javelin Capital receives management and performance fees from the fund in accordance with the agreements, including from the Company. Following the decision to close Javelin Capital, the UCITS fund ceased operations with monies being returned to investors in January 2014 and the fund liquidated. In addition to any fees received from the UCITS, Javelin Capital is also entitled to receive management, performance and administration fees as from the Company itself in accordance with the relevant agreements. These agreements take account of any fees charged at the fund level so that no double charging occurs. JCS provided administrative services to the Group. In performing these services it incurred expenses which were recovered by way of recharges and management fees. The Company did allow the Javelin Capital group entities use of various assets to perform their respective functions for which it received a lease fee, however this can be waived by the Company at its discretion. Following the decision to close the Javelin Capital entities and the related restructuring of the Group's activities, these services and functions will be undertaken by the Company. The Company's investment in the Javelin Capital Emerging Markets Alpha Fund was redeemed in full in January 2014 for Â£29.5m, following the change of Investment Manager and the closure of Javelin Capital. This investment was subject to management and performance fees in accordance with the fund's prospectus and supplement. The Company pays certain costs on behalf of Majedie Portfolio Management Limited (MPM) in connection with the Majedie Investments PLC Share Plan and additionally is charged a management fee by MPM. Any such costs paid by the Company are recharged to MPM net of any management fees due. The table below discloses the transactions and balances between those entities: Half year Half year Year ended ended ended 31 March 31 March 30 September 2014 2013 2013 Â£'000 Â£'000 Â£'000 Transactions during the period: UCITS fee revenue due to Javelin Capital (including from the Company) 122 190 368 Company management fee revenue due to Javelin Capital 165 274 554 Company administration fee revenue due to Javelin Capital 73 132 265 Company lease charge to JCS 10 19 JCS management fee income from Javelin Capital 572 720 1,292 MPM costs recharged by the Company 17 18 35 Half year Half year Year ended ended ended 31 March 31 March 30 September 2014 2013 2013 Â£'000 Â£'000 Â£'000 Balances outstanding at the end of the period: Between JCS and the Company 448 469 542 Between JCS and Javelin Capital 456 275 377 Between JCS and JCFM 1 1 Between Javelin Capital and the Company or UCITS/QIF 103 103 103 Between the Company and MPM 95 95 95 Between JCFM and Javelin Capital 9 9 9 Transactions between Group companies during the period were made on terms equivalent to those that occur in arm's length transactions. 17. Financial Information The financial information contained in this Half-Yearly Financial Report does not constitute full statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the six months ended 31 March 2014 and 31 March 2013 have not been audited, but have been reviewed by the Company's auditors and their report is above. The information for the year ended 30 September 2013 has been extracted from the latest published audited accounts. Those accounts have been filed with the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. Those statutory accounts were prepared in accordance with International Financial Reporting Standards, as adopted by the European Union. Company Information Board of Directors Investment Manager A J Adcock, Chairman Majedie Asset Management Limited P D Gadd 10 Old Bailey R D C Henderson London EC4M 7NG J W M Barlow (Executive) Telephone: 020 7618 3900 All Directors are non-executive unless Email: info@majedie.com indicated Registered Office Registrars Tower 42 Computershare Investor Services PLC 25 Old Broad Street The Pavilions London EC2N 1HQ Bridgwater Road Bristol BS99 6ZZ Telephone: 020 7626 1243 Telephone: 0870 707 1159 E-mail: majedie@majedieinvestments.com Registered number: 109305 England Auditors Ernst & Young LLP Company Secretary 1 More London Place Capita Sinclair Henderson Limited London SE1 2AF (trading as Capita Asset Services) Beaufort House Stockbrokers 51 New North Road Westhouse Securities Limited Exeter EX4 4EP Heron Tower 110 Bishopsgate Telephone: 01392 412122 London EC2N 4AY Fax: 01392 253282 Website www.majedieinvestments.com

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