Interim Results

MAJEDIE INVESTMENTS PLC 25 May 2006 INTERIM RESULTS for the six months ended 31 March 2006 Financial Highlights - Net assets per share increased by 16.4% to 399.2p - Share price increased by 13.5% to 344.5p - Discount to net assets widened from 11.5% to 13.7% - Earnings per share increased by 57.2% to 5.7p - Interim dividend increased by 6.25% to 3.4p Performance - Net asset value total return of 18.3% - Share price total return of 15.6% - Benchmark total return of 12.8% Interim Chairman's Statement I am very pleased to report that over the six months to 31 March 2006 the total return on net assets was 18.3% which, compared with 12.8% for the benchmark, represents an out performance of 5.5%. The Group's net return before tax was Â£5.4m compared with Â£2.1m for the first half of last year. Market Background The world economy as a whole is performing reasonably well with growth from China and India offsetting less buoyant markets elsewhere. Oil and other commodity prices have continued to rise during the period. UK consumer demand remains weak with GDP growth in 2006 expected to be just over 2%. The European Central Bank has raised interest rates for the second time in two months to 2.5% on the basis that it expects recovery to continue. In the US the economy is growing strongly but beginning to show some signs of consumer weakness. More recently share prices and commodity prices have been marked down sharply. However the portfolio's net asset value performance to date remains well ahead of the benchmark. Interim Dividend The Board intends to pay an interim dividend of 3.4p per share which represents an increase of 6.25% compared with last year. It will be paid on 30 June 2006 to shareholders on the register at the close of business on 9 June 2006. The interim dividend was last increased in 2002 and over the last few years has reduced as a proportion of the total dividend. Over the next few years a rebalancing will be effected and therefore this year the interim distribution is being increased by over 6%. This will not affect the approach adopted in recent years with regard to the total dividend. The Board remains committed to the policy of increasing dividends by more than the rate of inflation. Portfolio The portfolio has remained overweight in resources stocks which in general have continued to benefit from the high infrastructure and industrial growth of China and India. Other favoured sectors have included those with high asset backing such as property and construction; banks with high dividends and low ratings, utilities and support service companies with longer-term contracts making them less dependent on the normal business cycle. The fund remains overweight in the UK and Canada and underweight in the US, Europe and Japan. The recent weakness of the US dollar has reinforced the benefit of the underweighting in the US. Majedie Asset Management The Majedie Asset Management business has continued to grow strongly with increased profits over the last six months. Assets under management have grown from Â£2.3bn as at 30 September 2005 to over Â£3bn and the business has generated a significantly greater profit before tax during the six months to 31 March 2006 of Â£4.0m compared with Â£0.7m for the first half of last year. As profitability has increased so the Company's shareholding has reduced in line with pre-agreed targets. In December last year the Company's shareholding in Majedie Asset Management reduced from 55% to 51% and this is reflected in the interim figures. Since the end of the period the strong momentum of the business, including performance fee income in recent months, has resulted in Majedie Asset Management being able to repay the outstanding preference shares originally advanced to help finance the initial growth phase of the business. A repayment of Â£2.1m of capital and Â£0.7m of other payments were made to the Company on 27 April 2006. On 28 April the Board of Directors and shareholders of Majedie Asset Management certified that, as a result of the repayment of the debt and the business achieving certain pre-agreed levels of earnings, Majedie Investments' shareholding would reduce from 51% to 30% with effect from 30 April 2006. The Shareholders' Agreement, signed at the time Majedie Asset Management was established, does not provide for any further reduction in the Company's shareholding. As a result of the change in ownership Gill Leates and I have resigned from the Board of Majedie Asset Management as originally envisaged. The Board of directors will therefore now comprise James de Uphaugh, Chris Field and Robert Clarke (non-executive). As at 30 September 2005 the directors of Majedie Investments PLC assessed the value of the investment in Majedie Asset Management to be Â£10.1m comprising Â£2.1m in respect of the preference shares and Â£8m in respect of the equity investment. The directors formally reconsider the value of the investment each year as at 30 September. The structure of the original earnings targets referred to above was such that the directors believe that the value of the investment in Majedie Asset Management, when assessed later this year, is unlikely to be less than the value of Â£10.1m assessed as at the end of the last financial year despite the Company's shareholding having reduced to 30%. It should be noted that, in accordance with generally accepted accounting principles, the assessed investment value referred to above was not included in the group consolidated balance sheet as at 30 September 2005 and is not included in the net asset value which has subsequently been announced each week. In future the investment will be accounted for on an equity basis whereby the Company's 30% share of the net assets of Majedie Asset Management will be included in the group balance sheet. The assessed value of the investment will continue to be excluded from the group balance sheet and the announced net asset value. My fellow directors and I are delighted that targeted levels of profitability have been reached much earlier than was envisaged at the launch of the business three years ago. We congratulate the management team and staff on this considerable achievement and look forward to continuing our close association with the company. Directors We have recently welcomed Gerry Aherne to the Board as a new director. Up to 2002 he spent sixteen years with Schroder Investment Management as Investment Director, and eighteen years prior to that with Equity & Law in various actuarial and investment management roles. He is currently Managing Partner of Javelin Capital Partners LLP and a non-executive director of Henderson Global Investors plc and of Electric and General Investment Trust plc. He was a founding Director of PRI Group plc from August 2002 until June 2003, when it was acquired by BRIT. We believe that his considerable experience in fund management and his success at helping to grow businesses over many years will be of great value to the Board. In July this year Paul Marsh will be standing down after nearly eight years as a non-executive director. During that time we have benefited from his sound advice, wise counsel and extensive experience of investment matters. We thank Paul for his contribution to Board discussions and to the development of policy and extend to him our best wishes for the future. International Financial Reporting Standards ("IFRS") This preliminary announcement runs to a significantly greater number of pages than is usually the case. This is due to the nature of the comprehensive disclosure requirements relating to the implementation of the new IFRS which we are required to adopt for the first time this year. There are three main areas where the change to IFRS affects the accounting treatment significantly: - the valuation of listed securities using closing bid prices rather than closing mid market prices; - the calculation of the fair value of share options granted to employees; and - the Company's dividends are now recognised only when they are either approved by shareholders or paid during the reporting period. Outlook In the US the Federal Reserve Board may raise interest rates just once or twice more but acknowledges the cycle may soon peak. Ben Bernanke, the new Fed Chairman is likely to pay careful attention to recent signs of consumer weakness. Consensus GDP growth forecasts for the Eurozone remain below 2%. There is increasing geopolitical risk in the Middle East. The portfolio's overweight position in oils is held partly with this in mind. Over the last three years stock markets have progressed strongly - in some areas reaching new highs. After such strong progress it is not surprising that recently market values have been marked down sharply especially in resources and commodities. However investment decisions are taken on the basis of fundamental analysis according to medium to long term timeframes. Henry S Barlow Chairman 25 May 2006 For further information please contact Robert Clarke, Chief Executive on 020 7645 8711; E-mail: rec@majedie.co.uk UNAUDITED CONSOLIDATED INCOME STATEMENT for the half year ended 31 March 2006 Note Half year ended 31 March 2006 Half year ended 31 March 2005 Year ended 30 September 2005 (restated)* (restated)* (restated)* (restated)* (restated)* (restated)* 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 Investments Gains on 31,086 31,086 16,259 16,259 40,423 40,423 investments at fair value through profit or loss Net investment 31,086 31,086 16,259 16,259 40,423 40,423 result Income Dividends and 2,303 2,303 2,169 2,169 4,669 4,669 interest Client fee 9,732 9,732 2,337 2,337 6,500 6,500 income in subsidiary company Other income 29 29 10 10 54 54 Total income 12,064 12,064 4,516 4,516 11,223 11,223 Expenses Administrative (6,270) (687) (6,957) (2,019) (559) (2,578) (5,019) (1,205) (6,224) expenses Return before 5,794 30,399 36,193 2,497 1 5,700 18,197 6,204 39,218 45,422 finance costs and taxation Finance costs (349) (1,049) (1,398) (351) (1,052) (1,403) (700) (2,101) (2,801) Net return 5,445 29,350 34,795 2,146 14,648 16,794 5,504 37,117 42,621 before taxation Taxation (1,179) (1,179) (18) (18) (43) (43) Net return 4,266 29,350 33,616 2,128 14,648 16,776 5,461 37,117 42,578 after taxation for the period Attributable to: Equity holders 2,945 29,350 32,295 1,878 14,648 16,526 4,653 37,117 41,770 of the parent Minority 1,321 1,321 250 250 808 808 interest 4,266 29,350 33,616 2,128 14,648 16,776 5,461 37,117 42,578 Return per pence pence pence pence pence pence pence pence pence ordinary share: Basic and 4 5.66 56.40 62.06 3.60 28.11 31.71 8.94 71.28 80.22 diluted The total column of this statement is the consolidated profit and loss account of the Group, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Trust Companies. These accounts have been prepared in compliance with the recognition and measurement criteria of IFRS. See notes below. Transition Statements are required by IFRS 1: First-time Adoption of IFRS are included in notes below. * The comparative figures for the half year ended 31 March 2005 and the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the interim report for the six months ended 31 March 2005 and in the statutory accounts for the year ended 30 September 2005. Details of the restatement are included within the Transition Statements. The results for the first six months should not be taken as a guide to the results for the full year. All revenue and capital items in the above statement derive from continuing operations. UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the half year ended 31 March 2006 Notes Share Share Capital Share Capital Capital Retained Own Minority Total capital premium redemption options reserve reserve earnings shares interest reserve reserve - realised - unrealised reserve Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Half year ended 31 March 2006 30 5,253 785 56 37 89,507 57,501 26,723 (1,422) 405 178,845 September 2005 Net return 22 18,981 10,369 2,945 1,321 33,638 after tax for the period Dividends 8 (3,045) (3,045) declared and paid in period Own shares 3 (24) 85 61 sold by Employee Incentive Trust ("EIT") Adjustment 97 97 due to 4% reduction in the Company's holding in Majedie Asset Management Limited 31 March 5,253 785 56 35 108,488 67,870 26,623 (1,337) 1,823 209,596 2006 Half year ended 31 March 2005 30 5,253 785 56 18 81,033 28,858 26,627 (1,148) (436) 141,046 September 2004 Net return 10 5,167 9,481 1,878 250 16,786 after tax for the period Dividends 8 (2,892) (2,892) declared and paid in period Own shares (274) (274) purchased by EIT 31 March 5,253 785 56 28 86,200 38,339 25,613 (1,422) (186) 154,666 2005 Year ended 30 September 2005 30 5,253 785 56 18 81,033 28,858 26,627 (1,148) (436) 141,046 September 2004 Net return 19 8,474 28,643 4,653 808 42,597 after tax for the period Dividends 8 (4,557) (4,557) declared and paid in period Own shares (274) (274) purchased by EIT Adjustment 33 33 due to 10% reduction in the Company's holding in Majedie Asset Management Limited 30 5,253 785 56 37 89,507 57,501 26,723 (1,422) 405 178,845 September 2005 These accounts have been prepared in compliance with the recognition and measurement criteria of IFRS. See notes below. UNAUDITED CONSOLIDATED BALANCE SHEET at 31 March 2006 31 March 31 March 30 September 2006 2005 2005 (restated)* (restated)* Â£000 Â£000 Â£000 Non-current assets Property, plant and equipment 604 369 613 Goodwill 334 425 360 Investments at fair value through profit 232,006 181,680 206,434 or loss 232,944 182,474 207,407 Current assets Trade and other receivables 8,916 4,003 4,946 Cash and cash equivalents 14,682 4,948 4,421 23,598 8,951 9,367 Total assets 256,542 191,425 216,774 Current liabilities Trade and other payables (13,118) (3,065) (4,174) Total assets less current liabilities 243,424 188,360 212,600 Non-current liabilities Trade and other payables (121) (55) Debenture stock (33,707) (33,694) (33,700) (33,828) (33,694) (33,755) Net assets 209,596 154,666 178,845 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 35 28 37 Capital reserve - realised 108,488 86,200 89,507 Capital reserve - unrealised 67,870 38,339 57,501 Retained earnings 26,623 25,613 26,723 Own shares reserve (1,337) (1,422) (1,422) Equity attributable to the equity holders 207,773 154,852 178,440 of the parent Minority interest 1,823 (186) 405 Total equity 209,596 154,666 178,845 Net asset value per share pence pence pence Basic and fully diluted 399.2 297.7 343.0 These accounts have been prepared in compliance with the recognition and measurement criteria of IFRS. See notes below. Applicable accounting policies and Transition Statements as required by IFRS 1: First Time Adoption of IFRS are included below. * The comparative figures as at 31 March 2005 and as at 30 September 2005 have been adjusted for the adoption of IFRS from those presented within the interim report as at 31 March 2005 and in the statutory accounts as at 30 September 2005. Details of the restatement are included within the Transition Statements. UNAUDITED SUMMARISED CONSOLIDATED CASH FLOW STATEMENT For the half year ended 31 March 2006 Half year ended Half year ended Year ended 30 31 March 2006 31 March 2005 September 2005 (restated)* (restated)* Â£000 Â£000 Â£000 Net cash inflow from operating 6,423 1,190 4,637 activities Investing activities Purchases of investments (65,661) (74,337) (119,611) Sales of investments 73,965 69,140 113,861 Purchases of tangible assets (89) (19) (384) Net cash inflow/(outflow) from 8,215 (5,216) (6,134) investing activities Financing activities Interest paid (1,392) (1,397) (2,788) Equity dividends paid (3,045) (2,892) (4,557) Sales/(purchases) of own 4 (274) (274) shares Employees' exercise of share 56 options Net cash outflow from (4,377) (4,563) (7,619) financing activities Increase/(decrease) in cash 10,261 (8,589) (9,116) and cash equivalents for period Cash and cash equivalents at 4,421 13,537 13,537 start of period Cash and cash equivalents at 14,682 4,948 4,421 end of period These accounts have been prepared in compliance with the recognition and measurement criteria of IFRS. See notes below. Applicable accounting policies and Transition Statements as required by IFRS 1: First Time Adoption of IFRS are included below. * The comparative figures for the half year ended 31 March 2005 and the year ended 30 September 2005 have been adjusted for the adoption of IFRS from those presented within the interim report for the six months ended 31 March 2005 and in the statutory accounts for the year ended 30 September 2005. NOTES 1. Accounting Policies The consolidated accounts above comprise the unaudited results of the Company and its subsidiaries for the six months to 31 March 2006 and are presented in pounds sterling, as this is the principal currency in which the Group's transactions are undertaken. The consolidated accounts have been prepared in accordance with the disclosure requirements of the Listing Rules and in compliance with the recognition and measurement criteria of IFRS which 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, and to the extent they have been adopted by the European Union. Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Trusts in January 2003 (as revised in December 2005) is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. These are the Group's first unaudited results prepared in accordance with IFRS and IFRS1: First Time Adoption, has been applied. Previously accounts were prepared in accordance with UK Generally Accepted Accounting Principles ("UK GAAP"), including the SORP. In preparing these accounts certain accounting and valuation methods previously applied in UK GAAP accounts have been amended to comply with IFRS as follows: - Investments are valued at fair value (bid price) rather than mid-market price; - The fair value of share options awarded to employees is spread over the vesting period of the relevant options and a share option reserve created accordingly; - The Company's dividend is not accrued unless paid or approved by shareholders in the period. The effects of these changes are shown in the transition statements below. Except for the amendments required in connection with the adoption of IFRS as listed above, the accounting policies have not varied from those described in the Annual Report for the year to 30 September 2005. 2. Majedie Asset Management Limited ("MAM") Majedie Investments PLC owned 70% of the equity of MAM from incorporation in 2002 up until 31 March 2004. With effect from 1 April 2004, 30 September 2005 and 31 December 2005, the percentage reduced to 65%, 55% and 51% respectively as a result of changes in shareholding based on the achievement of pre-agreed targets for the business. The results of MAM for the six months to 31 March 2006 amount to a pre-tax profit of Â£3,984,000 (six months to 31 March 2005: profit of Â£715,000). Administrative expenses on the Consolidated Income Statement of Â£6,957,000 (six months to 31 March 2005: Â£2,578,000) include Â£5,786,000 (2005: Â£1,605,000) relating to MAM. The minority interest figure disclosed on the Consolidated Income Statement for the six months to 31 March 2006 represents the relevant proportion of MAM's profit from ordinary activities after taxation based on the percentage holdings provided above. The net assets of MAM reflected in the Consolidated Balance Sheet as at 31 March 2006 amounted to Â£5,821,000 (31 March 2005: Â£1,570,000; 30 September 2005: Â£3,001,000). The minority interest figure disclosed in the Consolidated Balance Sheet represents 49% of MAM's equity share capital and reserves as at 31 March 2006 (31 March 2005: 35%; 30 September 2005: 45%). The Chairman's Statement above refers to a post balance sheet event whereby the Company's equity shareholding in MAM reduced from 51% to 30% with effect from 30 April 2006. 3. Discretionary Share Option Scheme Options in issue and shares held Following the exercise of share options on 22 December 2005 under the discretionary share option scheme, the total number of options outstanding is now 685,485 and the total shareholding of the Majedie Investments PLC Employee Incentive Trust is 475,907 ordinary shares. The shares are held by the trust until the relevant options are exercised or until they lapse and are presented on the Balance Sheet as a deduction from shareholders' funds, in accordance with IFRS 2: Share-based Payment ("IFRS 2"). On 27 January 2006 the Company granted 142,046 conditional 'Total Shareholder Return-based' share awards ("TSR-based awards") under the Rules of the Company's 2006 Long Term Incentive Plan ("LTIP") which was approved by shareholders at the Annual General Meeting held on 18 January 2006. These TSR-based awards have been granted at nil consideration and relate to ordinary shares of 10p each. The vesting period of the awards at an aggregate exercise price of Â£1 is contingent upon the satisfaction of specified performance conditions over a fixed five year period ending on 27 January 2011. The detailed arrangements for the TSR-based awards was the subject of a circular to shareholders dated 8 December 2005. The introduction of the new arrangements was approved by shareholders at the AGM on 18 January 2006. Dividends The trust has waived its rights to receive dividends from the Company and therefore the total interim dividend shown in note 8 has been reduced accordingly. Expensing of share-based remuneration In accordance with IFRS 2 the fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 and Long Term Incentive Plan is spread over the vesting period of the options and a share options reserve has been created accordingly. For the purposes of this provision, the fair value of the share options is calculated using a Black-Scholes valuation model. 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 is based on 52,038,551 shares, being the weighted average number of shares in issue having adjusted for the shares held by the Employee Incentive Trust (half year ended 31 March 2005: 52,117,862 shares; year ended 30 September 2005: 52,069,819). 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. Goodwill Goodwill on consolidation arose from costs incurred in establishing the specialised fund management business of MAM. Under IAS 38: Intangible Assets, goodwill is subject to an annual impairment review. The current year review has identified no such impairment for the half year to 31 March 2006. 6. Investments All investments held by the Company are designated as at fair value through profit or loss. For listed investments actively traded in organised financial markets, fair value is generally determined by reference to stock exchange quoted bid market prices at the close of business on the balance sheet date. Unlisted investments are stated at the Board's estimate of their fair value. Unlisted investments comprise an investment of Â£2,255,000 in Bridgewell Group Limited plus a total of Â£5,689,000 invested in the placings for nine separate companies which are expected to become listed securities after 31 March 2006. During the period the Company incurred transaction costs of Â£410,000 of which Â£244,000 related to the purchase of investments (half year ended 31 March 2005: Â£343,000; year ended 30 September 2005: Â£538,000) and Â£166,000 related to the sales of investments (half year ended 31 March 2005: Â£143,000; year ended 30 September 2005: Â£233,000). These amounts are included in gains on investments at fair value through profit or loss, as disclosed in the Consolidated Income Statement. 7. Net Asset Value per Ordinary Share The net asset value per share has been calculated based on equity shareholders' funds and on 52,052,093 ordinary shares (31 March 2005: 52,022,037; 30 September 2005: 52,022,037) being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. 8. Dividends In accordance with International Accounting Standard 10: Events After the Balance Sheet Date, interim dividends are not accounted for until paid, and final dividends are recognised when approved in General Meeting. The following table summarises the amounts recognised as distributions to equity holders in the period: Half year ended Year ended 30 Half year ended 31 March 2006 September 2005 31 March 2005 Â£000 Â£000 Â£000 2005 Final Dividend of 5.85p 3,045 paid on 25 January 2006* 2005 Interim Dividend of 3.2p 1,665 paid on 1 July 2005 2004 Final Dividend of 5.55p 2,892 2,892 paid on 25 January 2005 3,045 4,557 2,892 The Directors propose an interim dividend for 2006 of 3.4p per share, to be paid on 30 June 2006. * The Employee Incentive Trust sold 30,326 shares during the period to 31 March 2006 prior to the record date for the final dividend for the year ended 30 September 2005 and therefore these shares became eligible to receive a dividend. As a result the total amount paid by the Company was Â£2,000 higher than the original proposed dividend of Â£3,043,000. 9. Financial Information The financial information contained in this interim report does not constitute full statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the six months ended 31 March 2006 and 31 March 2005 has not been audited. The information for the year ended 30 September 2005, other than that which has been restated as described in the notes and Transition Statements, 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 either Section 237 (2) or (3) of the Companies Act 1985. Those statutory accounts were prepared under UK GAAP and in accordance with the 2003 Statement of Recommended Practice: Financial Statements of Investment Trust Companies. TRANSITION STATEMENTS There follows below Transition Statements as required by International Financial Reporting Standard 1: First Time Adoption of International Reporting Standards. These include three reconciliations of consolidated equity as at the following dates: - 1 October 2004 - being the date of transition from UK GAAP to IFRS for comparative figures; - 31 March 2005 - being the end of the half year for the comparative figures for this interim report; - 30 September 2005 - being the end of the last full financial period presented under UK GAAP. The Transition Statements also include two reconciliations of consolidated income: - for the six months ended 31 March 2005; - for the year ended 30 September 2005. Finally the Transition Statements include an explanation of material adjustments to the cash flow statements for the six months ended 31 March 2005 and year ended 30 September 2005. UNAUDITED RECONCILIATION OF CONSOLIDATED EQUITY as at 1 October 2004 (date of transition) Notes UK GAAP Effect of IFRS transition to IFRS at 1 at 1 October October 2004 2004 Â£000 Â£000 Â£000 Non-current assets Property, plant and equipment 435 435 Goodwill 425 425 Investments at fair value through 1 167,386 (303) 167,083 profit or loss 168,246 (303) 167,943 Current assets Trade and other receivables 5,159 5,159 Cash and cash equivalents 13,537 13,537 18,696 18,696 Total assets 186,942 (303) 186,639 Current liabilities Trade and other payables 2 (14,798) 2,892 (11,906) (14,798) 2,892 (11,906) Total assets less current 172,144 2,589 174,733 liabilities Non-current liabilities Debenture stock (33,687) (33,687) Net assets 138,457 2,589 141,046 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 18 18 Capital reserve 1 110,194 (303) 109,891 Retained earnings 2,3 23,753 2,874 26,627 Own shares reserve (1,148) (1,148) Equity attributable to the equity 138,893 2,589 141,482 holders of the parent Minority interest (436) (436) 138,457 2,589 141,046 Net asset value per share pence pence pence Basic 266.5 5.0 271.5 Notes to the Unaudited Reconciliation of Consolidated Equity at 1 October 2004 (date of transition): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£303,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net revenue for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividends are considered to be an indication of intent by the Board of Directors, which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends are not accounted for until paid. The adjustment of Â£2,892,000 to 'Trade and other payables' and 'Retained earnings' represents the removal of the proposed final dividend for the year ended 30 September 2004, which was subsequently approved at the Annual General Meeting on 19 January 2005. 3. Share options In accordance with IFRS 2 'Share-based Payment', the fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£18,000 and a credit to the Share options reserve. The fair value of the share options is now calculated using the Black-Scholes model whereas previously the provision (if any) was calculated by reference to the difference between the option exercise price and the market value of the Company's shares at the date of grant of the options. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,118,669 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF CONSOLIDATED EQUITY as at 31 March 2005 Notes UK GAAP Effect of IFRS transition to IFRS at 31 March at 31 March 2005 2005 Â£000 Â£000 Â£000 Non-current assets Property, plant and equipment 369 369 Goodwill 425 425 Investments at fair value through 1 182,417 (737) 181,680 profit or loss 183,211 (737) 182,474 Current assets Trade and other receivables 4,003 4,003 Cash and cash equivalents 4,948 4,948 8,951 8,951 Total assets 192,162 (737) 191,425 Current liabilities Trade and other payables 2 (4,730) 1,665 (3,065) (4,730) 1,665 (3,065) Total assets less current 187,432 928 188,360 liabilities Non-current liabilities Debenture stock (33,694) (33,694) Net assets 153,738 928 154,666 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 28 28 Capital reserve 1 125,276 (737) 124,539 Retained earnings 2,3 23,976 1,637 25,613 Own shares reserve (1,422) (1,422) Equity attributable to the equity 153,924 928 154,852 holders of the parent Minority interest (186) (186) 153,738 928 154,666 Net asset value per share pence pence pence Basic 295.9 1.8 297.7 Notes to the Unaudited Reconciliation of Consolidated Equity at 31 March 2005: 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£737,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed Dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net revenue for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividends are considered to be an indication of intent by the Board of Directors, which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends are not accounted for until paid. The adjustment of Â£1,665,000 to 'Trade and other payables' and 'Retained earnings' represents the removal of the proposed interim dividend for the period ended 31 March 2005, which was subsequently paid on 1 July 2005. 3. Share Options In accordance with IFRS 2 'Share-based Payment', the fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£28,000 and credit to the Share options reserve. The fair value of the share options is now calculated using the Black-Scholes model whereas previously the provision (if any) was calculated by reference to the difference between the option exercise price and the market value of the Company's shares at the date of grant of the options. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,022,037 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF CONSOLIDATED EQUITY as at 30 September 2005 (end of last period presented under UK GAAP) Notes UK GAAP Effect of IFRS transition to at 30 IFRS at 30 September September 2005 2005 Â£000 Â£000 Â£000 Non-current assets Property, plant and equipment 613 613 Goodwill 360 360 Investments at fair value through 1 207,236 (802) 206,434 profit or loss 208,209 (802) 207,407 Current assets Trade and other receivables 4,946 4,946 Cash and cash equivalents 4,421 4,421 9,367 9,367 Total assets 217,576 (802) 216,774 Current liabilities Trade and other payables 2 (7,217) 3,043 (4,174) (7,217) 3,043 (4,174) Total assets less current 210,359 2,241 212,600 liabilities Non-current liabilities Trade and other payables (55) (55) Debenture stock (33,700) (33,700) (33,755) (33,755) Net assets 176,604 2,241 178,845 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 37 37 Capital reserve 1 147,810 (802) 147,008 Retained earnings 2,3 23,717 3,006 26,723 Own shares reserve (1,422) (1,422) Equity attributable to the equity 176,199 2,241 178,440 holders of the parent Minority interest 405 405 176,604 2,241 178,845 Net asset value per share pence pence pence Basic 338.7 4.3 343.0 Notes to the Unaudited Reconciliation of Consolidated Equity at 30 September 2005 (end of last period presented under UK GAAP): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£802,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed Dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net revenue for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividends are considered to be an indication of intent by the Board of Directors which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends are not accounted for until paid. The adjustment of Â£3,043,000 to 'Trade and other payables' and 'Retained earnings' represents the removal of the proposed final dividend for the year ended 30 September 2005, which was subsequently approved at the Annual General Meeting on 18 January 2006. 3. Share Options In accordance with IFRS 2 'Share-based Payment', the fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£37,000 and a credit to the Share options reserve. The fair value of the share options is now calculated using the Black-Scholes model whereas previously the provision (if any) was calculated by reference to the difference between the option exercise price and the market value of the Company's shares at the date of grant of the options. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,022,037 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF CONSOLIDATED INCOME for the half year ended 31 March 2005 Notes UK GAAP Effect of IFRS transition to half year ended IFRS half year ended 31 March 2005 31 March 2005 Â£000 Â£000 Â£000 Investments Gains on investments at fair 1 16,693 (434) 16,259 value through profit or loss Net investment result 16,693 (434) 16,259 Income Dividends and interest 2,169 2,169 Client fee income in 2,337 2,337 subsidiary company Other income 10 10 Total income 4,516 4,516 Expenses Administration expenses 2 (2,568) (10) (2,578) Return before finance costs 18,641 (444) 18,197 and taxation Finance costs (1,403) (1,403) Net return before taxation 17,238 (444) 16,794 Taxation (18) (18) Net return after taxation for 17,220 (444) 16,776 the period Attributable to: Equity holders of the parent 16,970 (444) 16,526 Minority interest 250 250 17,220 (444) 16,776 Return per ordinary share pence pence pence Basic and diluted 32.6 (0.9) 31.7 Notes to the Unaudited Reconciliation of Consolidated Income for the half year ended 31 March 2005: 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at fair value, which is effectively bid price. The adjustment of Â£434,000 reflects the difference between the net gains on investments as calculated under UK GAAP for the period and net gains on investments at fair value as calculated under IFRS for the period. 2. Share Options The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against Retained earnings for the period of Â£10,000 and a credit to the Share options reserve. The fair value of the share options is now calculated using the Black-Scholes model whereas previously the provision (if any) was calculated by reference to the difference between the option exercise price and the market value of the Company's shares at the date of grant of the options. UNAUDITED RECONCILIATION OF CONSOLIDATED INCOME for the year ended 30 September 2005 (last period presented under UK GAAP) Notes UK GAAP Effect of IFRS transition to year ended IFRS year ended 30 30 September September 2005 2005 Â£000 Â£000 Â£000 Investments Gains on investments at fair value 1 40,922 (499) 40,423 through profit or loss Net investment result 40,922 (499) 40,423 Income Dividends and interest 4,669 4,669 Client fee income in subsidiary 6,500 6,500 company Other income 54 54 Total income 11,223 11,223 Expenses Administration expenses 2 (6,205) (19) (6,224) Return before finance costs and 45,940 (518) 45,422 taxation Finance costs (2,801) (2,801) Net return before taxation 43,139 (518) 42,621 Taxation (43) (43) Net return after taxation for the 43,096 (518) 42,578 period Attributable to: Equity holders of the parent 42,288 (518) 41,770 Minority interest 808 808 43,096 (518) 42,578 Return per ordinary share pence pence pence Basic and diluted 81.2 (1.0) 80.2 Notes to the Unaudited Reconciliation of Consolidated Income for the year ended 30 September 2005 (last period presented under UK GAAP): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at fair value, which is effectively bid price. The adjustment of Â£499,000 reflects the difference between net gains on investments as calculated under UK GAAP for the year and net gains on investments at fair value as calculated under IFRS for the year. 2. Share Options In accordance with IFRS 2 'Share-based Payment', the fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£19,000 and a credit to the Share options reserve. The fair value of the share options is now calculated using the Black-Scholes model whereas previously the provision (if any) was calculated by reference to the difference between the option exercise price and the market value of the Company's shares at the date of grant of the options. Explanation of material adjustments to the Cash Flow Statement Six months ended 31 March 2005 Tax credits recovered on unfranked investment income of Â£2,000 are classified as operating cash flows under IFRS, but were included in a separate category of 'Taxation' under UK GAAP. Equity dividends paid to shareholders are classified under IFRS as Financing, but were included in a separate category under UK GAAP. There are no other material differences between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP. Year ended 30 September 2005 Tax credits recovered on unfranked investment income of Â£4,000 are classified as operating cash flows under IFRS, but were included in a separate category of 'Taxation' under UK GAAP. Equity dividends paid to shareholders are classified under IFRS as Financing, but were included in a separate category under UK GAAP. There are no other material differences between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP. INTERIM REPORT The Interim Report will be sent to shareholders on 9 June 2006 from which time copies will be available to the public at the Company's registered office: 1 Minster Court, Mincing Lane, London EC3R 7ZZ. INTERIM DIVIDEND The interim dividend of 3.4p per share will be paid on 30 June 2006 to shareholders on the register at the close of business on 9 June 2006. NOTES FOR EDITORS Majedie Investments PLC is an investment trust with total assets under management of over Â£240 million. The Company's objective is to maximise total shareholder return over the long term whilst increasing dividends by more than the rate of inflation. The Company's benchmark is 70% FTSE All-Share Index and 30% FTSE World ex UK Index (Sterling) on a total return basis. The Majedie Share Plan is a straightforward and low cost way of investing in Majedie shares with a minimum lump sum of Â£250, or on a regular monthly basis with Â£25 or more. The Majedie Corporate ISA provides a tax efficient way of investing or saving in Majedie shares at low cost. There is no initial or annual management fee. Both maxi and mini ISAs are available with a minimum lump sum investment of Â£500 or Â£50 per month for direct debit subscribers.

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