Annual Financial Report

RNS Number : 1415I

Majedie Investments PLC

10 December 2020

 

MAJEDIE INVESTMENTS PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2020

The full Annual Report and Accounts will shortly be available via the Company's website at www.majedieinvestments.com or by contacting the Company Secretary on telephone number 020 7954 9531.

The Directors present the results of the Company for the year ended 30 September 2020.

INVESTMENT OBJECTIVE

The Company's investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term.

Highlights	2020	2019
Total shareholder return (including dividends):	-27.6%	-3.5%
Net asset value total return (debt at fair value including dividends):	-11.7%	-9.9%
Net asset value total return (debt at par including dividends):	-11.6%	-9.3%
Total dividends (per share):	11.40p	11.40p
Directors' valuation of investment in Majedie Asset Management Limited:	£31.0m	£40.8m

YEAR'S SUMMARY

Capital Structure	Note	2020	2019	%
As at 30 September
Total assets	1	£152.2m	£175.6m	-13.3
Which are attributable to:
Financial liabilities (debt at par value)	2	£20.9m	£20.5m
Equity Shareholders		£131.3m	£155.1m	-15.3
Gearing	4	11.0%	11.5%
Potential Gearing	4	15.9%	13.2%
Total returns (capital growth plus dividends)	5
Net asset value per share (debt at par value)	3	-11.6%	-9.3%
Net asset value per share (debt at fair value)	3	-11.7%	-9.9%
Share price		-27.6%	-3.5%
Capital returns
Net asset value per share (debt at par value)	3	247.7p	292.3p	-15.3
Net asset value per share (debt at fair value)		239.5p	283.1p	-15.4
Share price		176.5p	256.0p	-31.1
Discount of share price to net asset value per share
Debt at par value		28.7%	12.4%
Debt at fair value		26.3%	9.6%
Revenue and dividends
Net revenue available to Equity Shareholders		£4.8m	£6.9m
Net revenue return per share		9.1p	12.9p	-29.5
Total dividends per share		11.40p	11.40p	0.0
Total administrative expenses and management fees		£1.7m	£1.7m
Ongoing Charges Ratio	6	1.3%	1.3%

Notes:

Alternative Performance Measures (APM) definitions used in the Annual Report are as follows:

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

2. Debt at par or fair value: Par value is the carrying value of the debenture which will equate to the nominal value at maturity. Fair value is the estimated market value the Company would pay (on the relevant reporting date), as a willing buyer, to a debenture holder, as a willing seller, in an arms-length transaction.

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

4. Gearing and Potential Gearing: Gearing represents the amount of borrowing that a company has and is calculated using the Association of Investment Companies (AIC) guidance. It is usually expressed as a percentage of equity shareholders' funds and a positive percentage or ratio above one shows the extent of the level of borrowings. Gearing is calculated as borrowings less net current assets to arrive at a net borrowings figure. Potential Gearing excludes cash from the calculation. Details of the calculation for the Company are in note 22 below.

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

6. Ongoing Charges Ratio (OCR): Ongoing charges are a measure of the normal ongoing costs of running a company. Further information is shown in the Business Review section of the Strategic Report below.

7. Adjusted Capital and Reserves: This is as defined in the debenture Trust Deed. It essentially removes unrealised gains from reserves (see investment policy below).

8. Adjusted Equity Shareholders' Funds: Equity Shareholders' Funds restated to include debt at its fair value, rather than par value (see note 22 below).

Year's high/low		2020	2019
Share price	high	265.0p	283.0p
	low	138.5p	236.0p
Net asset value - debt at par	high	313.6p	344.3p
	low	221.0p	292.3p
Discount - debt at par	high	37.8%	23.7%
	low	4.1%	10.8%
Discount - debt at fair value	high	35.4%	21.5%
	low	0.6%	8.3%

Ten Year Record

to 30 September 2020

Year End	Total Assets £000	Equity share- holders' Funds £000	NAV Per Share (Debt at par value) Pence	Share Price Pence	Discount %	Earnings Pence	Total Dividend** Pence	Gearing† %	Potential Gearing† %	Ongoing Charges Ratio# %
2010	150,940	117,159	225.2	191.5	15.00	11.83	13.00	24.11	28.83	1.85
2011	145,683	111,634	214.5	139.5	34.96	4.66	10.50	(1.72)	30.28	1.92
2012	146,057	112,234	215.6	155.8	27.74	4.90	10.50	9.24	30.14	1.83
2013	159,013	125,166	240.5	160.0	33.47	6.80	10.50	21.47	27.04	1.73
2014	167,934	134,061	256.7	229.0	10.79	9.36	7.50	23.39	25.27	1.66
2015	183,708	149,807	281.9	257.3	8.74	9.42	8.00	21.25	22.63	1.88
2016	203,917	169,986	318.1	257.1	19.18	9.25	8.75	18.46	19.96	1.58
2017	216,507	182,544	341.6	281.5	17.59	11.14	9.75	17.09	18.61	1.54
2018	199,151	178,626	334.3	277.5	16.99	12.47	11.00	10.01	11.49	1.33
2019	175,621	155,074	292.3	256.0	12.42	12.92	11.40	11.50	13.25	1.34
2020	152,153	131,333	247.7	176.5	28.74	9.11	11.40	10.97	15.85	1.34

Notes:

† Calculated in accordance with AIC guidance.

# As of May 2012, under AIC guidance, Ongoing Charges Ratio replaced previous cost ratios.

** Dividends disclosed represent dividends that relate to the Company's financial year. Under International Financial Reporting Standards (IFRS) dividends are not accrued until paid or approved. Total dividends include special dividends paid, if any.

STRATEGIC REPORT

CHAIRMAN'S STATEMENT

In the year ended 30 September 2020 the NAV at par and fair value (net asset value with debt at par and fair value) fell by 11.6% and 11.7% respectively on a total return basis. The share price fell by 27.6% also on a total return basis as the discount widened from 12% to 29%. The FTSE All-Share Index fell by 16.6% and the MSCI World Index rose by 5.3% in sterling terms.

Our lives, and by extension stock markets, have been dominated for most of 2020 by COVID-19, the social, economic and political implications of which will remain with us for years to come. The stock market fell significantly in March as lockdowns were imposed and economic activity ground to a halt. In response to the closure of economies, Governments were quick to intervene with fiscal and monetary support, and through the spring and summer markets made a partial recovery. This was led by the technology sector, which was a major beneficiary of  lockdown as economic activity moved online. The wide discount at the close of the year reflected general disinterest in UK assets in the second half of the year.

It is heartening with the announcement of successful trials for COVID-19 vaccines in November and the imminent conclusion of the Brexit negotiations that UK equities have performed well which has been reflected in both the Company's NAV and the discount which has narrowed to 17%.

Results and Dividends

The Company had a capital loss for the twelve months to 30 September 2020 of £22.4m which includes a reduction in value for the Company's holding in MAM from £40.8m to £31.0m. As previously discussed, the Directors have amended the basis upon which they value the Company's stake in MAM having received advice from an external advisor. Further details are in the Chief Executive's report below.

Total income received from investments was £6.0m compared to £8.0m in the twelve months to 30 September 2019. The dividend received from MAM was £4.0m compared to £4.6m and the income from MAM Funds was £1.9m compared to £3.4m. In particular, this reflects companies cutting or suspending dividends during the pandemic. Total administration costs and management fees were unchanged at £1.7m and finance costs were unchanged at £1.5m.

The ongoing charges ratio (OCR) is 1.3%, unchanged from 2019. Costs remain a key focus for the Board.

The net revenue return after tax decreased from £6.9m in the year to 30 September 2019 to £4.8m in the year to 30 September 2020. The interim dividend was maintained at 4.4p and the Board is recommending a final dividend of 7.0p which is the same as last year. The Board is very aware of the importance of dividends to shareholders, especially when other sources of investment income are scarce. In order to make up the shortfall the Board is able to utilise the Company's significant revenue reserves of £25.4m. The short fall of £1.2m will utilise 5% of total revenue reserves. Of course, the Board would not wish for the dividend to exceed revenue on a regular basis, but it views the past year as exceptional and so an appropriate time to use revenue reserves. 

The final dividend will be payable on 26 January 2021 to shareholders on the register at 15 January.

Performance

The Company's asset allocation gives exposure to funds that are managed by Majedie Asset Management (MAM), a highly regarded boutique fund manager across all geographies as well as a stake of 17.2% in MAM itself. There are no other external shareholders of MAM.

MAM's AUM fell from £10.8bn to £8.1bn during the year to September 2020 due to market movements and a net outflow of funds from its UK equity strategies. While the outflow reflects an ongoing trend of de-risking by pension fund trustees,  it is encouraging that MAM continues to attract new clients notably the £900m Edinburgh Investment Trust which has performed well under MAM's management from March 2020. The Company's initial investment in MAM, made during 2003, has been very successful both in terms of dividends received and capital growth. The Board is confident that MAM, given its excellent long-term track record and strong 2020 investment performance, will return to growing its assets under management.

I am pleased to report that the main Funds in which the Company is invested have performed well in relative terms, particularly the UK Equity Segregated Portfolio, Global Equity Fund and the International Equity Fund which represent 70% of the Company's assets that are invested in MAM funds. The flexible investment process that MAM has adopted since inception, with exceptionally detailed fundamental analysis at its core, is best placed to perform in periods of uncertainty. The massive shock to the global economy and the ensuing disruption to the corporate landscape has allowed well managed businesses to gain significant competitive advantages that will persist for several years to come. In the short term some companies have been badly affected by lockdown, but should extend their strategic advantage as the economy normalises into 2021 and beyond. The extreme volatility in March allowed the managers to take advantage of very attractive prices to gain exposure to a number of high quality businesses.

The relatively poor performance of the UK equity market has been a hindrance to the overall performance of the Company. Since the Brexit vote in June 2016, the UK equity market has been shunned by international investors who feared uncertainty. A second reason for the poor performance of UK equities is the low weighting of technology stocks in the Index. The UK market currently trades at its cheapest level in forty years relative to the global indices and offers a diverse opportunity set of companies with globally competitive businesses. It has been very noticeable in the recent rally, following the announcement of successful vaccine trials, that the UK equity market has been one of the best performing markets globally.

Shareholders should be aware that the Company has moved from the Global Growth sector to the Global Income sector in the AIC classifications to put it amongst a more appropriate peer group given its investment objective.

The Company bought back 41,596 shares for a total value of £92,570 at an average discount of 18.0% to NAV at fair value. The Company continues to monitor the discount and will take action when it is appropriate.

In terms of operations I am pleased that the Company has functioned well throughout the pandemic and would like to take this opportunity to thank the team involved for their exceptional efforts during these difficult times.

Outlook

The Board views the key differentiators of the Company, a significant holding in MAM and a broad exposure to MAM Funds, as positive for shareholders over the medium term though recognises that in recent years overall performance has been disappointing. The improved performance in the second half of the year is encouraging. It is noteworthy that all long-only funds in which the Company is invested have outperformed their respective index benchmarks since 30 September 2020 and the global equity long/short Tortoise Fund is up over 20% in absolute terms.

Board

Paul Gadd, who had been a non-executive director since 2010, retired from the Board in July 2020. I personally, and on behalf of the Board, would like to thank Paul for his sound and helpful advice.

The Board initiated a search for two non-executives, as it is my intention to step down at the AGM in 2022. I am pleased that Richard Killingbeck and Christopher Getley joined the Board as non-executive Directors in July 2020.

Richard has thirty five years' experience in the financial services sector, initially as a fund manager and latterly within the wealth management industry as Managing Director of Harris Allday, a division of EFG Private Bank. He retired as non-executive Chairman of Bankers Trust PLC in 2019.

Christopher has extensive knowledge of the investment industry as a Partner and fund manager at Cazenove. Subsequently he was CEO of Westhouse Securities an institutional stock broker. He is currently Executive Chairman of AgPlus Diagnostics Limited and non-executive Chairman of Masawara PLC, a Southern African focussed investment company.

Arrangements for the AGM

On account of the Coronavirus pandemic and associated Government guidance, including the rules on physical distancing and limitations on public gatherings in place at the time of publication of this document, and in accordance with the Corporate Governance and Insolvency Act 2020, physical attendance at the Annual General Meeting will not be possible. Arrangements will be made by the Company to ensure that the minimum number of shareholders required to form a quorum will attend the Annual General Meeting in order that the meeting may proceed.

As shareholders will not be able to attend the Annual General Meeting, in order to provide shareholders with the opportunity to engage with the Board and the Manager prior to the close of proxy voting for the AGM, the Company will hold a live one-way audio webcast on Wednesday 13 January 2021, at 2pm, one week before the AGM itself. Shareholders will be able to submit questions electronically to the Board or the Manager during the live event. To register for this webinar, visit the Kepler Trust Intelligence website and view their research the Company (https://www.trustintelligence.co.uk/articles/majedie-sep-2020).

As shareholders will not be able to attend the Annual General Meeting, shareholders are strongly encouraged to submit a proxy vote in advance of the meeting. Shareholders are also strongly advised to appoint the "Chair of the meeting" as their proxy, rather than a named person, as such person will not be permitted entry to the meeting.

A form of proxy for use at the AGM is enclosed with this document. To be valid, the form of proxy should be completed, signed and returned in accordance with the instructions printed thereon, as soon as possible, and in any event, to reach the Company's registrars, Computershare, no later than 48 hours before the time of the Annual General Meeting, or any adjournment of that meeting.

This situation is constantly evolving, and the UK Government may change current restrictions or implement further measures relating to the holding of general meetings during the affected period. Any changes to the arrangements for the AGM (including any change to the location or in relation to permitted attendance at the AGM) will be communicated to shareholders before the meeting through our website https://www.majedieinvestments.com/ and, where appropriate, by RNS announcement.

The Annual General Meeting will be held at the offices of the Company at, 1, King's Arms Yard, London EC2R 7AF on Wednesday, 20 January 2021 at 12 noon.

I hope you will be able to attend the webinar on 13 January 2021 and apologise that the AGM will be closed to shareholders this year.

R David C Henderson

Chairman

9 December 2020

STRATEGIC REPORT

CHIEF EXECUTIVE'S REPORT

The Company's assets are allocated at the discretion of the Board between a number of investment strategies managed by MAM and the Company retains an equity holding in MAM of 17.2%. The Company has no overall benchmark; rather each fund has its own benchmark. The monthly factsheets of the relevant MAM funds are available on the Company's website as are the monthly factsheets of the Company which show the allocation between the funds and the top twenty holdings on a look through basis. The Company's total assets at 30 September 2020 were £152.2m as defined above.

In the report that follows, the MAM funds are referred to using abridged names.

MAM Funds and Investment Performance

The UK Equity Fund is the flagship product of MAM having launched in March 2003. The UK Equity Fund aims to produce a total return in excess of the FTSE All-Share Index over the long term through investment in a diversified portfolio of predominantly UK Equities. It has the flexibility to invest up to 20% of assets in shares listed outside the UK and incorporates a dedicated investment in smaller companies. Since inception to 30 September 2020, the UK Equity Fund has returned 9.6% per annum net of fees with a relative outperformance against its benchmark, of 2.4% per annum. The Company's assets are invested in a segregated portfolio that is managed pari passu to the UK Equity Fund. The sum invested in the UK Equity Segregated Portfolio at 30 September 2020 was £42.4m which represents 27.9% of the Company's total assets. In the year to 30 September 2020 the UK Equity Segregated Portfolio returned -13.6% net of fees which is an outperformance of 3.0% against its benchmark.

The most significant positive and negative sector contributors to the relative performance of the UK Equity Segregated Portfolio for the year to 30 September 2020 in %

Banks	2.1	Underweight
Beverages	1.5	Underweight
Mining	1.2	Underweight
Oil & Gas Producers	0.9	Underweight
Personal Goods	0.8	Overweight
Tobacco	-0.5	Underweight
Gas, Water & Multiutilities	-0.5	Underweight
Household Goods & Home Construction	-0.7	Underweight
Pharmaceuticals & Biotechnology	-1.3	Underweight
Equity Investment Instruments	-1.4	Underweight

The most significant positive and negative stock contributors to the relative performance of the UK Equity Segregated Portfolio for the year to 30 September 2020 in %

HSBC	2.1	Underweight
Barrick Gold	1.8	Overweight
Fevertree Drinks	1.4	Overweight
Royal Dutch Shell	1.2	Underweight
Etsy	1.0	Overweight
SSP	-0.7	Overweight
Rio Tinto	-0.8	Underweight
FirstGroup	-0.8	Overweight
Reckitt Benckiser	-0.8	Underweight
AstraZeneca	-1.2	Underweight

The table below shows the principal overweight and underweight sector positions of the UK Equity Segregated Portfolio at 30 September 2020 relative to the FTSE All-Share Index in %

Support Services	5.0	Overweight
Aerospace & Defense	4.3	Overweight
Personal Goods	3.2	Overweight
Health Care Equipment & Services	3.1	Overweight
Media	2.8	Overweight
Oil & Gas Producers	-2.5	Underweight
Household Goods & Home Construction	-3.0	Underweight
Pharmaceuticals & Biotechnology	-3.3	Underweight
Tobacco	-4.1	Underweight
Equity Investment Instruments	-7.0	Underweight

The table below shows the principal overweight and underweight stock positions of the UK Equity Segregated Portfolio at 30 September 2020 relative to the FTSE All-Share Index in %

Tesco	3.3	Overweight
Unilever	2.7	Overweight
Roche Holding	2.6	Overweight
Fevertree Drinks	2.4	Overweight
Electrocomponents	2.3	Overweight
AstraZeneca	-2.0	Underweight
Diageo	-2.2	Underweight
British American Tobacco	-3.1	Underweight
GlaxoSmithKline	-3.3	Underweight
HSBC	-3.7	Underweight

The UK Income Fund launched in December 2011. Its objective is to produce an income in excess of the yield on the FTSE All-Share Index and a total return in excess of the return on the FTSE All-Share Total Return Index over any period of five years. It has the flexibility to invest up to 20% of assets in shares listed outside the UK. Since inception to 30 September 2020, the UK Income Fund has returned 7.6% per annum net of fees which is an outperformance of 1.8% per annum against its benchmark. At 30 September 2020 the Company had an allocation to the UK Income Fund of £9.4m, which represents 6.2% of the Company's total assets. In the year to 30 September 2020 the UK Income Fund returned -19.3% net of fees which represents an underperformance against its benchmark of 2.7%.

The most significant positive and negative sector contributors to the relative performance of the UK Income Fund for the year to 30 September 2020 in %

Personal Goods	1.7	Overweight
Banks	1.6	Underweight
Oil & Gas Producers	1.2	Overweight
Travel & Leisure	1.1	Underweight
Nonlife Insurance	0.7	Overweight
Pharmaceuticals & Biotechnology	-0.8	Underweight
Media	-1.0	Overweight
Aerospace & Defense	-1.2	Overweight
Equity Investment Instruments	-1.4	Underweight
Support Services	-2.2	Overweight

The most significant positive and negative stock contributors to the relative performance of the UK Income Fund for the year to 30 September 2020 in %

HSBC	2.4	Underweight
Roche	1.0	Overweight
Royal Dutch Shell	1.0	Underweight
Unilever	0.9	Overweight
BHP	0.9	Overweight
Reckitt Benckiser	-0.8	Underweight
Essentra	-0.9	Overweight
Meggitt	-1.6	Overweight
AstraZeneca	-1.7	Underweight
Lloyds Banking Group	-1.9	Overweight

The table below shows the principal overweight and underweight sector positions of the UK Income Fund at 30 September 2020 relative to the FTSE All-Share Index in %

Aerospace & Defense	7.2	Overweight
Personal Goods	7.0	Overweight
Nonlife Insurance	4.1	Overweight
Life Insurance	3.2	Overweight
Forestry & Paper	2.7	Overweight
Pharmaceuticals & Biotechnology	-2.5	Underweight
Gas, Water & Multiutilities	-2.6	Underweight
General Retailers	-2.6	Underweight
Beverages	-3.6	Underweight
Equity Investment Instruments	-7.0	Underweight

The table below shows the principal overweight and underweight stock positions of the UK Income Fund at 30 September 2020 relative to the FTSE All-Share Index in %

Unilever	5.1	Overweight
Direct Line Insurance	5.0	Overweight
BAE Systems	4.8	Overweight
Roche	4.6	Overweight
Tesco	3.8	Overweight
National Grid	-1.7	Underweight
Reckitt Benckiser	-2.5	Underweight
Diageo	-3.2	Underweight
HSBC	-3.3	Underweight
AstraZeneca	-5.9	Underweight

The Global Equity Fund and Global Focus Fund were launched in June 2014. The Company's investment in the Global Focus Fund was redeemed in December 2019 and immediately reinvested in the International Equity Fund at launch. The objective of the Global Equity Fund is to produce a total return in excess of the MSCI All Country World Index over the long term through investment in a diversified portfolio of global equities. Since inception to 30 September 2020, the Global Equity Fund has returned 12.9% per annum net of fees for the sterling share class, which represents an outperformance of 1.5% per annum against its benchmark. At 30 September 2020 the Company had an allocation to the Global Equity Fund of £27.4m which represents 18.0% of total assets and in the year to 30 September 2020 the Global Equity Fund returned 11.2% net of fees which represents an outperformance of 5.9%.

The most significant positive and negative sector contributors to the relative performance of the Global Equity Fund for the year to 30 September 2020 in %

Banks	2.1	Underweight
Metals & Mining	2.0	Overweight
Internet & Direct Marketing Retail	1.8	Overweight
Interactive Media & Services	1.7	Overweight
Wireless Telecommunication Services	1.3	Overweight
Diversified Telecommunication Services	-1.0	Overweight
Software	-1.0	Underweight
Food & Staples Retailing	-1.0	Overweight
Oil, Gas & Consumable Fuels	-1.2	Underweight
Technology Hardware Storage & Peripherals	-2.0	Underweight

The most significant positive and negative stock contributors to the relative performance of the Global Equity Fund for the year to 30 September 2020 in %

Barrick Gold	1.8	Overweight
M3	1.2	Overweight
MercadoLibre	1.1	Overweight
Amazon.com	0.9	Overweight
Facebook	0.9	Overweight
Orange	-0.7	Overweight
Frontdoor	-0.8	Overweight
US Foods	-0.9	Overweight
Tullow Oil	-1.8	Overweight
Apple	-2.1	Underweight

The table below shows the principal overweight and underweight sector positions of the Global Equity Fund at 30 September 2020 relative to the MSCI All Country World Index in %

Communication Services	2.9	Overweight
Financials	2.6	Overweight
Materials	2.1	Overweight
Consumer Discretionary	0.9	Overweight
Health Care	0.9	Overweight
Real Estate	0.8	Overweight
Industrials	0.5	Overweight
Utilities	0.4	Overweight
Consumer Staples	-0.5	Underweight
Energy	-1.2	Underweight
Information Technology	-3.0	Underweight

The table below shows the principal overweight and underweight stock positions of the Global Equity Fund at 30 September 2020 relative to the MSCI All Country World Index in %

Facebook	2.9	Overweight
SoftBank	2.7	Overweight
Barrick Gold	2.5	Overweight
A.P. Moller - Maersk	2.4	Overweight
Fiserv	2.4	Overweight
Procter & Gamble	-0.7	Underweight
Nestle	-0.7	Underweight
Johnson & Johnson	-0.8	Underweight
Alibaba	-1.1	Underweight
Apple	-3.9	Underweight

The International Equity Fund was launched in December 2019. Its objective is to produce a total return in excess of the MSCI All Country World Index ex US over any period of five years. It is a high conviction portfolio which captures developed and emerging market opportunities and can invest up to a maximum of 10% in US equities. Since inception to 30 September 2020, the International Equity Fund has returned 18.9% net of fees for the sterling share class, which represents an outperformance of 21.2% against its benchmark. At 30 September 2020 the Company had an allocation to the International Equity Fund of £11.5m which represents 7.5% of total assets.

The most significant positive and negative sector contributors to the relative performance of the International Equity Fund for the year to 30 September 2020 in %

Consumer Discretionary	7.7	Overweight
Health Care	5.4	Overweight
Materials	3.0	Overweight
Financials	2.9	Underweight
Information Technology	2.0	Overweight
Communication Services	1.5	Overweight
Real Estate	0.4	Underweight
Energy	0.1	Underweight
Utilities	-0.2	Underweight
Industrials	-0.8	Underweight
Consumer Staples	-0.8	Underweight

The most significant positive and negative stock contributors to the relative performance of the International Equity Fund for the year to 30 September 2020 in %

MercadoLibre	3.5	Overweight
M3	2.8	Overweight
Sartorius Stedim Biotech	2.2	Overweight
Barrick Gold	2.1	Overweight
Prosus	2.1	Overweight
Tencent	-0.7	Underweight
Alibaba	-0.9	Underweight
Royal Dutch Shell	-1.0	Overweight
Copa	-1.1	Overweight
Credicorp	-1.2	Overweight

The table below shows the principal overweight and underweight sector positions of the International Equity Fund at 30 September 2020 relative to the MSCI All Country World Index ex US in %

Health Care	10.6	Overweight
Consumer Discretionary	10.1	Overweight
Communication Services	4.2	Overweight
Materials	4.2	Overweight
Information Technology	1.7	Overweight
Real Estate	-2.7	Underweight
Utilities	-3.4	Underweight
Energy	-4.2	Underweight
Industrials	-5.4	Underweight
Consumer Staples	-7.5	Underweight
Financials	-9.3	Underweight

The table below shows the principal overweight and underweight stock positions of the International Equity Fund at 30 September 2020 relative to the MSCI All Country World Index ex US in %

Prosus	4.7	Overweight
New Oriental Education & Technology	4.5	Overweight
SoftBank	4.0	Overweight
M3	3.7	Overweight
Samsung SDI	3.7	Overweight
Novartis	-0.9	Underweight
Roche	-1.1	Underweight
Nestle	-1.7	Underweight
Tencent	-1.8	Underweight
Alibaba	-2.6	Underweight

The US Equity Fund was launched in June 2014. Its objective is to produce capital growth over the long term through investment in a diversified portfolio of at least 80% of the assets in US equities. Since inception to 30 September 2020, the US Equity Fund has returned 14.4% per annum net of fees for the Sterling share class which is an underperformance of 1.1% against its benchmark the S&P 500 Index. At 30 September 2020 the Company had an allocation of £8.5m in the US Equity Fund, which represents 5.6% of total assets. In the year to 30 September 2020 the US Equity Fund returned 4.9% net of fees, which represents an underperformance of 4.2%.

The most significant positive and negative sector contributors to the relative performance of the US Equity Fund for the year to 30 September 2020 in %

Banks	1.5	Underweight
Oil, Gas & Consumable Fuels	1.2	Underweight
Internet & Direct Marketing Retail	1.1	Overweight
Interactive Media & Services	0.9	Overweight
Wireless Telecommunication Services	0.8	Overweight
Health Care Equipment & Supplies	-1.3	Overweight
Diversified Consumer Services	-1.7	Overweight
Semiconductors & Semiconductor Equipment	-1.8	Underweight
Food & Staples Retailing	-2.2	Overweight
Technology Hardware Storage & Peripherals	-3.2	Underweight

The most significant positive and negative stock contributors to the relative performance of the US Equity Fund for the year to 30 September 2020 in %

Amazon.com	1.1	Overweight
Barrick Gold	0.9	Overweight
T-Mobile US	0.8	Overweight
IAA	0.8	Overweight
Facebook	0.7	Overweight
NVIDIA	-0.8	Underweight
Parsley Energy	-0.9	Overweight
Frontdoor	-1.4	Overweight
US Foods	-2.2	Overweight
Apple	-3.3	Underweight

The table below shows the principal overweight and underweight sector positions of the US Equity Fund at 30 September 2020 relative to the S&P 500 Index in %

Communication Services	2.9	Overweight
Energy	1.4	Overweight
Real Estate	0.8	Overweight
Materials	0.7	Overweight
Utilities	0.7	Overweight
Financials	0.5	Overweight
Industrials	0.0
Consumer Discretionary	-0.8	Underweight
Consumer Staples	-1.4	Underweight
Health Care	-2.8	Underweight
Information Technology	-5.5	Underweight

The table below shows the principal overweight and underweight stock positions of the US Equity Fund at 30 September 2020 relative to the S&P 500 Index in %

Fiserv	3.9	Overweight
Aon	3.8	Overweight
IAA	3.6	Overweight
Crown Holdings	3.5	Overweight
Zimmer Biomet	3.3	Overweight
Visa	-1.2	Underweight
Procter & Gamble	-1.2	Underweight
Johnson & Johnson	-1.4	Underweight
Berkshire Hathaway	-1.5	Underweight
Apple	-6.7	Underweight

The Tortoise Fund is a global equity absolute return product which was launched in August 2007. Its objective is to achieve positive absolute returns in all market conditions, through investment primarily in long and synthetic short positions in global equities over rolling three year periods, with less volatility than a conventional long only equity fund. Since inception to 30 September 2020, the Tortoise Fund has returned 4.7% per annum net of fees. At 30 September 2020, the Company had an allocation of £16.1m in the Tortoise Fund, which represents 10.6% of total assets. In the year to 30 September 2020 the Fund returned -3.4%.

The most significant positive and negative sector contributors to the performance of the Tortoise Fund for the year to 30 September 2020 in %

Materials	8.3	Long
Consumer Discretionary	3.4	Long
Industrials	1.2	Long
Information Technology	0.9	Long
Real Estate	0.1	Short
Health Care	-0.2	Long
Consumer Staples	-0.2	Long
Utilities	-1.2	Long
Communication Services	-2.5	Long
Financials	-5.3	Long
Energy	-6.1	Long

The most significant positive and negative stock contributors to the performance of the Tortoise Fund for the year to 30 September 2020 in %

Newmont	2.6	Long
Gold Fields	2.3	Long
Barrick Gold	1.7	Long
Daimler	1.3	Long
Sibanye Stillwater	1.1	Long
NatWest	-1.4	Long
Banco Santander	-1.5	Long
Societe Generale	-1.7	Long
Exxon Mobil	-1.7	Long
Tullow Oil	-2.1	Long

The table below shows the principal long and short sector positions of the Tortoise Fund at 30 September 2020 in %

Materials	15.2	Short
Consumer Discretionary	13.9	Short
Financials	13.2	Long
Information Technology	11.3	Long
Industrials	10.7	Short
Communication Services	8.3	Long
Energy	7.2	Long
Health Care	3.6	Short
Consumer Staples	2.7	Short
Utilities	1.8	Long
Real Estate	0.0

The table below shows the principal long and short stock positions of the Tortoise Fund at 30 September 2020 in %

Compagnie de Saint-Gobain	4.2	Long
Daimler	4.0	Long
International Business Machines	3.7	Long
Volkswagen	3.4	Long
Tesco	2.8	Long
UnitedHealth	-0.9	Short
Reckitt Benckiser	-1.1	Short
Sika	-1.6	Short
Union Pacific	-1.7	Short
Home Depot	-1.8	Short

Majedie Asset Management

In May the Company, having taken external advice, decided to adopt a new valuation methodology which is a more appropriate basis for valuing MAM. The revised basis for valuation annualises the most recent quarterly earnings of MAM, applies the median of a peer group price earnings multiple with an unlisted liquidity discount of 20% (although the Directors may adjust the discount depending on market conditions). Performance fee multiples are further discounted by 50%. Surplus net assets are then added, having deducted 200% of Regulatory Capital.

The valuation is updated quarterly and the Board believes the methodology enhances the disclosure and transparency of the Company's investment in MAM.

In the year to 30 September 2020 MAM's AUM declined from £10.8bn to £8.1bn, reflecting lower stock markets and a net outflow of funds. It was announced in December 2019 that MAM would be appointed to manage the Edinburgh Investment Trust. Following a period of fee waiver, MAM commenced charging fees from June 2020.

The revised valuation methodology values the Company's stake at £31.0m which is reduction of 14.5%, on a total return basis, in the year to 30 September 2020.

The methodology is as follows:

Earnings after tax (3 months to 30 September 2020, annualised)	£14.6m
Peer group multiple	13.7
Liquidity discount	20%
Peer Group PE multiple after liquidity discount	11.0
Performance fee earnings after tax (last 6 months, annualised)	£1.3m
50% of peer group PE multiple	6.9
50% of peer group PE multiple after liquidity discount	5.5
Surplus net assets having deducted 200% of Regulatory Capital	£43.7m
Valuation of MAM	£180.7m
Valuation of the Company's 17.2% holding in MAM	£31.0m

Asset Allocation

In the year to 30 September 2020 the major change in allocation between MAM funds was to redeem the Global Focus Fund in December 2019 and invest the proceeds into the International Equity Fund at launch. In terms of geographic exposure the decision increased exposure to Emerging Markets, in particular. The excellent performance of the International Equity Fund in both absolute and relative terms has been beneficial to the Company.

In order to reduce gearing in March the overall exposure was reduced. Subsequently £2m was reinvested in the International Equity Fund. The overall look through the geographic and sector allocations are shown below.

Outlook

The pandemic dominates the outlook for stock markets and its effects on the global economy. The successful development of several vaccines, within eight months of the first cases, is an amazing scientific achievement and provides a much clearer view for companies and governments. Whilst it was likely that global economies would recover into 2021 due to the fiscal and monetary stimulus by governments around the world, the vaccine is a game changer and markets, being forward looking, have reacted accordingly.

The uncertainty has provided a wide range of opportunities for fund managers, such as MAM, that are fundamental investors. This has been reflected in good relative and absolute performance in the second half of the year and which has continued into the new financial year. It is noteworthy that the UK equity market after four years of lacklustre performance is one of the better performers and market leadership in terms of sectors has broadened away from technology. The MAM funds in which the Company is invested offer many investment themes that will benefit in the current economic background.

Development of Net Asset Value

The chart below outlines the change in the Company's Net Asset Value (debt at par) over the year ended 30 September 2020. In aggregate, the NAV has decreased by £23.8m, comprised of net investment losses at the MAM Funds, including UK Equity Segregated Portfolio, of £8.6m, a net write down of MAM fair value by £5.9m, expenses and interest of £3.2m, share buybacks of £0.1m and dividends paid to shareholders of £6.0m.

NAV 30.09.19	£155.1m
UK Equity Segregated Portfolio	(£7.8m)
MAM	(£5.9m)
MAM Funds*	(£0.8m)
Admin Costs and Other	(£1.7m)
Finance Costs	(£1.5m)
Share Buy Backs	(£0.1m)
Dividend Paid	(£6.0m)
NAV 30.09.20	£131.3m

* MAM Funds comprise the UK Income Fund, Global Equity Fund, International Equity Fund, US Equity Fund and Tortoise Fund.

Allocation of Total Assets as at 30 September 2020

	Value £000		% of Total Assets
UK Equity Segregated Portfolio	42,426		27.9
UK Income Fund	9,394		6.2
Global Equity Fund	27,403		18.0
International Equity Fund	11,484		7.5
US Equity Fund	8,490		5.6
Tortoise Fund	16,066		10.6
MAM	31,005		20.4
Net cash/realisation portfolio*	5,885		3.8
Total Assets	152,153		100.0

* Net cash and the Realisation portfolio does not include cash held in the UK Equity Segregated Portfolio or MAM funds.

MAM Fund Performance

	12 months to 30 September 2020			S inceMI invested(% annualised)
	% Fund return	% Benchmark return	% Relative performance	% Fund return	% Benchmark return	% Relative performance
UK Equity Segregated Portfolio	-13.6	-16.6	3.0	0.7	1.5	-0.8
UK Income Fund	-19.3	-16.6	-2.7	1.0	1.8	-0.8
Global Equity Fund	11.2	5.3	5.9	12.9	11.4	1.5
Global Focus Fund	-3.4	0.6	-4.0	11.7	12.3	-0.6
International Equity Fund	18.9	-2.3	21.2	18.9	-2.3	21.2
US Equity Fund	4.9	9.1	-4.2	14.4	15.5	-1.1
Tortoise Fund	-3.4			-2.4

Notes:

All Fund returns are quoted in Sterling, net of fees.

The initial investment in the UK Equity Segregated Portfolio was made on 22 January 2014.

The initial investment in the UK Income Fund was made on 29 January 2014.

The initial investments in the Global Equity Fund and Global Focus Fund and US Equity Fund were made on 30 June 2014 and 26 June 2014 respectively, at the inception of each fund. The Company is invested in the Sterling share classes.

The initial investment in the Tortoise Fund was made on 29 January 2014.

The Global Focus Fund was redeemed on 12 December 2019 and the proceeds invested in the International Equity Fund.

J William M Barlow

CEO

9 December 2020

STRATEGIC REPORT

FUND ANALYSIS

at 30 September 2020

In order to aid shareholder understanding of the Company's investment portfolio both the sector and geographic analyses have been completed on a look through basis into the MAM funds themselves. This includes the Tortoise Fund, which invests through CFDs, on a net exposure basis. As the Tortoise Fund is an absolute return fund, the percentages do not sum to 100%.

The geographic and sector fund analysis excludes the Company's investment in MAM.

Geographic and Sector Analysis at 30 September 2020 

	Europe ex UK %	UK %	Emerging Markets %	Asia Pacific %	North America %	Cash %	Total %
Basic Materials	0.3	3.6	1.1		3.6		8.6
Consumer Goods	1.0	6.4	0.1	0.9	1.6		10.0
Consumer Services	0.9	8.6	2.9		6.4		18.8
Financials	1.0	7.4	0.7	0.5	2.1		11.7
Health Care	4.9	2.9		0.7	4.6		13.1
Industrials	2.4	9.7	0.8	0.4	3.0		16.3
Oil & Gas	0.5	1.9			0.6		3.0
Technology	0.7	0.4	3.2		6.6		10.9
Telecommunications	2.0	0.7		1.1	0.4		4.2
Utilities		0.5					0.5
Cash						1.8	1.8
Fixed Income						0.2	0.2
	13.7	42.1	8.8	3.6	28.9	2.0

Notes:

T he assets analysed aboveare thenet exposure of theUKEquitySegregated Portfolio, UKIncomeFund, GlobalEquityFund, International Equity Fund, USEquityFund and TortoiseFund. TheTortoiseFund, as anabsolutereturn fund, invests through CFDs and thenet exposure of thefund is shownin the table. Theaggregate of thefunds represents a total of 75.8% of the Company's totalassets.

E x posures are classified by the stockexchange on which theunderlying stock is listed and by therelevant FTSE sector classification.

Thirty Largest Portfolio Holdings

at 30 September 2020

Company	Fair Value £000		% of Total Assets
Majedie Asset Management Limited	31,005		20.4
Unilever PLC	3,024		2.0
Tesco PLC	2,821		1.9
Barrick Gold Corporation	2,666		1.8
Amazon.com, Inc.	1,804		1.2
BAE Systems plc	1,799		1.2
A.P. Moller - Maersk A/S Class B	1,669		1.1
Facebook, Inc.	1,576		1.0
AstraZeneca Plc	1,568		1.0
Roche Holding AG	1,564		1.0
Boston Scientific Corporation	1,502		1.0
3i Group plc	1,501		1.0
Electrocomponents plc	1,339		0.9
SoftBank Group Corp.	1,302		0.9
Anglo American plc	1,271		0.8
Royal Dutch Shell Plc	1,258		0.8
Mondi plc	1,247		0.8
Microsoft Corporation	1,229		0.8
RELX PLC	1,208		0.8
NXP Semiconductors NV	1,146		0.8
Royal KPN NV	1,145		0.8
Fevertree Drinks Plc	1,131		0.7
Taiwan Semiconductor Manufacturing Co., Ltd.	1,096		0.7
Alphabet Inc.	1,095		0.7
Legal & General Group Plc	1,083		0.7
New Oriental Education & Technology Group, Inc.	1,061		0.7
Fiserv, Inc.	1,042		0.7
Direct Line Insurance Group Plc	992		0.7
Lloyds Banking Group plc	962		0.6
QinetiQ Group plc	915		0.6
Total	73,021		48.1

Notes:  

The assets analysed above show the Company's largest thirty holdings on a look through basis across all Funds.

RESPONSIBLE CAPITALISM

This section on responsible capitalism has been produced by Majedie Asset Management and has been included in this year's Annual Report with their permission.

What is Responsible Capitalism?

Responsible Capitalism is our obligation as fund managers to invest in and therefore allocate capital to companies that demonstrate sound, longer-term investment opportunities for our clients. These companies also manage their businesses in a way that benefits the environment and broader society.

Companies are all unique

We see companies as being like people. Like individuals, companies come in many different shapes and sizes. They all have different cultures, different strengths, and different personality traits. But, also like people, companies all make decisions, identify issues, prioritise their time and ultimately reap the rewards and the consequences of their actions.

Each company in which we invest faces its own set of issues. These issues include risks and opportunities that define them as companies and need to be managed creatively and dynamically. Naturally, some companies are better at managing issues than others. 

Our job as an investment manager is to understand all the strengths and weaknesses that a company demonstrates and to assess the issues that each company faces nearer and longer term. This helps us determine how each is placed to act, no matter what comes its way.

What do we look for?

We aim to invest in companies that show promise across the scope of their business. It's not just about their balance sheet and cash management. It's also about how a group identifies and prioritises its unique set of issues - things that are so material to its business that they could impact the group's stability going forward. It's about how a company minimizes its principle risks and maximizes its key opportunities. These issues can come on a daily basis, or in cycles - or even in waves. The best companies not only have the strength and expertise to make sound (and sometimes controversial) decisions, but they also - importantly - link their management of issues to strategy, reward and to their culture.

So where does ESG fit in?

Environmental, Social and Governance (ESG) is all about risk and opportunity. It's about knowing how a company can manage these issues as an indication of how it will perform monetarily, socially, environmentally and from a governance perspective, going forward.

Look forwards, not backwards

ESG should be about looking forwards, not backwards. We take this approach by looking at how a company is equipped to deal with its own unique set of issues. This is how we assess the forward trajectory of a company and get a better feeling for how it will perform in the future. We can assess more accurately the upcoming needs of each company as well as the potential skills each company will develop. Critically, we also gain an understanding of the individuality of each company, which enables us to prioritise our engagement topics with each group and have a positive on-going relationship with each of our holdings.

Too often, ESG is diminished to a check list or a box ticking process. It becomes a formulaic list of what a company must do to be "ESG compliant".  Sometimes, it even looks at specific data points or topline ESG scores as a proxy for performance as a whole. Whatever the case, historical data is about the past. While it can be used as a monitoring tool, it is not the whole story. We feel a box-ticking or cherry-picking approach is short-term and can even be misleading in terms of true materiality. We are already seeing early signs that the industry may choose the lowest-common-denominator approach to ESG, as a box-ticking mechanism.

We are an active owner of our companies

For us, being an active owner doesn't mean sending a mail-merge letter to corporations about pay or automatically asking companies all the same questions about climate change during engagement. We talk with companies about the issues that matter most to each investment - the areas that will have the greatest, long-term impact on the company's ability to perform in the long run. For us, performance isn't just about share price - it's also about the impact that each company leaves on people and planet. As investors on behalf of our clients, we want our investments - all of them - to be better tomorrow than they are today, in as many aspects as possible. 

Materiality assessment

At Majedie, ESG integration is about understanding the individuality of a company: its strengths, its weaknesses and what makes it tick. Some of these strengths will be "ESG" related and some won't. But a risk is a risk and an opportunity is an opportunity no matter what additional labels might say.

Running through the life cycle of our investment decisions is a core thread - our evaluation of a group's key issues and how well each company is equipped to manage these. We examine financial and ESG issues together, on the same matrix, weighed against each other. This is quite different from most approaches, where "financial" and "ESG" are separate slices of the pie and are given, arbitrarily, equal weighting. We feel that random attribution of importance can lead to poor investment decisions. By looking holistically at a company, we can identify and prioritise the most material issues for each investment. This prioritisation drives our engagement with a group and enables us to have the most up to date, accurate understanding of the companies in which we invest for our clients.

Our model reflects our analysis of a company's ability to manage its key issues. Groups that manage these issues should demonstrate better performance over the longer term, as well as across the ESG spectrum.

The focus of our engagements

We speak with our companies on their own set of key, material issues, as determined by our analysis of and engagement with each company. Of course, we record and reassess our thinking and conviction levels following our research updates and conversations with each holding. As a direct result, our conviction levels in each company will change over time. This is reflected in how much we hold of a company (the weighting of a stock in a fund), as well as our buy and sell decisions.  

Escalating engagement

When we speak with companies about issues that are central to the well-being of their business, we expect them to listen and consider our remarks and feedback. There are occasions when a company doesn't take on board our concerns or our requests. In these instances, we follow up with them, bringing to their attention the heightened importance of the issue at hand. Our approach is to:

· Remain up to date with what is happening in our investee companies, so that our communication with our holdings is ongoing, rather than a "catch-up" session once a year

· Keep our communications relevant and timely. We raise concerns or question an action a company takes when it happens

· Provide a company with precise feedback as well as specific, attainable requests, so that we are as clear as possible on what we believe needs to happen for the longer-term benefit of the investment.

We allocate capital to companies that are sound investments

It is our job - our responsibility - to invest in companies that are sound investments, both in terms of their balance sheet and from the perspective that they are creative and effective in managing their businesses. These are companies that can weather a storm when internal and external events impact their business. Companies that can identify and prioritise effectively their risks and opportunities (both financial and ESG related) stand the best chance, we feel, of performing well over the longer term for the benefit of our clients and also to the advantage of the greater community.

Our small size is our strength

Because we are a smaller, active manager, we can undertake materiality assessment on our holdings and potential holdings. We are also more nimble than larger asset management firms and can quickly act on events that need more immediate or careful attention.

Our investment team is fully onboard with ESG

Each member of our 21-person-strong Investment team is supportive of ESG integration. Every member currently undertakes assessment of ESG-related issues. It is important that this continues and evolves as ESG issues become increasingly important to our clients.

We are providing in-house, proprietary tools for our Investment team that help each member to identify and prioritise those issues that are paramount to the success of each investment. Our materiality assessment on each of our holdings drives our engagement with our companies. Going forward, we aim to systematise better the links between our analysis, engagements, voting and conviction levels so that, at every step of the process, clients can see clearly how our ESG integration has impacted our investment decisions as well as how much of each company we hold.

We look forward to reporting on our progress on strengthening and expanding our ESG platform next year. Our Responsible Capitalism Report for 2019 covers our stewardship activities during the calendar year 2019. This report highlights both the breadth and depth of our active ownership in this period and includes information on:

· Our engagement with companies on their key, material issues

· Our topical engagement with companies, including those on tailings dams and pay

· Our proxy voting-related engagements

· Our proxy voting record.

Anglo American

· Case Study

Anglo American plc ("Anglo"), a multinational mining company, is the world's largest producer of platinum group metals, and a major miner of diamonds, copper, nickel, iron ore and coal. Majedie invests in Anglo as it has better growth prospects than many of its peers, supported by its mine, Quellaveco, in Peru. The group is also making improvements through cutting costs, undertaking some portfolio reconstruction, and divesting from some of its problematic mines. It is also investing in technical refiguration to improve the cost profile of its remaining mines.

During the year, Majedie engaged Anglo on those issues that are most material to its business, such as the group's cost improvement execution and its thermal coal ownership. In August, Majedie met with Anglo to understand more about the group's technical advances and upgrades which have reduced its water usage and environmental impacts. Majedie also discussed Anglo's divestment from thermal coal. Essentially, the group is looking at various possibilities for how to reduce or eliminate thermal coal from its portfolio - including selling the asset entirely, or possibly undertaking an in specie distribution in which Anglo would give shareholders ownership in a new entity containing the thermal coal assets. Majedie also discussed the group's ability to generate its own power by installing solar panels near its mines so that its power supply is more constant than what the group currently receives from Eskom, the state energy provider.

Majedie's conviction in Anglo remained unchanged in 1H 20.

Associated British Foods

· Case Study

Associated British Foods (ABF) is a multinational retail and food processing company and owner of Primark. It also is the world's second-largest producer of sugar and yeast. There is hidden value in ABF's grocery business and Primark is a growth asset which has continued to perform well, despite the group's lack of an e-commerce platform.

We spoke with ABF in May and September 2020 to discuss Primark's performance during lockdown and the pandemic. The group, which does not have an online offering, is competing against other brands that provide both click and collect and home delivery services - this competition may be structurally more pronounced following Covid.

In terms of fast fashion and the group's supply chains, we engaged ABF in September on its oversight and audit processes. ABF believes it has one of the best supply chains in the retail sector. Sixty percent of the group's cotton comes from sustainable sources - a high percentage in this sector - and it aims to attain 100% over time. The group undertakes regular audits of its suppliers and tracks performance over time. We requested that ABF increase its transparency on supply chains as well as the percentage of sustainable cotton it uses.

BUSINESS REVIEW

Introduction and Strategy

Majedie Investments PLC, (the Company), is a listed investment company and an Alternative Investment Fund (AIF), which invests in companies around the world. The investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. In seeking to achieve this objective, the Board has determined an investment policy and related guidelines or limits. The investment objective and policy (as detailed below) were both last approved by shareholders at a General Meeting of the Company on 27 February 2014. The Board do not envisage any change in the Company's activity in the future.

The Company is subject to the Alternative Investment Fund Managers Directive (AIFMD). The AIFMD regulates the Alternative Investment Fund Managers (AIFMs) of AIFs. The Company is a self-managed AIF (i.e. it is an AIFM and an AIF), which requires it to be authorised and regulated by the Financial Conduct Authority (FCA).

The Company's broker is J.P. Morgan Cazenove, and the Company is a member of the AIC.

The purpose of the Strategic Report is to inform the shareholders of the Company by:

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

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

·outlining the principal risks and uncertainties affecting the Company;

·describing how the Company manages these risks;

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

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

·explaining the future business plans of the Company; and

·explaining how the Board have performed their duty to promote the success of the Company in accordance with Section 172 of the Companies Act 2006.

Business Model

The self-managed business model deployed by the Company means that it undertakes all administrative operations but also delegates certain arrangements to other service providers including fund management to Majedie Asset Management Limited (MAM). These delegations are in accordance with the AIFMD (details of the material delegations can be found below), but the Board, as AIFM, and in accordance with the Company's investment objective and policy, directs and monitors the overall performance, operations and direction of the Company.

The Company's Employee, Social, Environmental, Ethical and Human Rights policy is contained in the Directors' Report below.

Investment Objective

The Company's investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term.

Investment Policy

· General

The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in MAM. Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of adoption of this investment policy (measured by reference to the Company's cost of investment), will not exceed 10% of the Company's gross assets.

· Risk Diversification

Whilst the Company will at 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% 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.

Investment restrictions

For the avoidance of doubt, as a listed investment company, if and for so long as required by the Listing Rules in relation to closed-ended investment companies, the Company will also continue to comply with the following investment and other restrictions:

· the Company will, at all times, invest and manage its assets in a way which is consistent with its object of spreading investment risk and in accordance with its published investment policy;

· the Company will not conduct any trading activity which is significant in the context of the Company (or, if applicable, its Group as a whole); and

· not more than 10% in aggregate of the value of the gross assets of the Company at the time the investment is made will be invested in other closed-ended investment funds which are listed on the Official List (except to the extent that those funds have published investment policies to invest no more than 15% of their gross assets in other investment companies which are listed on the Official List). However, no more than 15% of the gross assets of the Company at the time the investment is made will be invested in other closed-ended investment funds which are listed on the Official List.

· Asset Allocation

The assets of the Company will be allocated principally between investments in publicly quoted companies worldwide and in investments intended to provide an absolute return (in each case either directly or through other funds or collective investment schemes managed by the Company's investment manager) and the Company's investment in MAM itself.

· Benchmark

The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. Any investments made into funds managed by the Company's investment manager will be measured against the benchmark or benchmarks, if any, whose constituent investments appear to the Company to correspond most closely to those investments. It is important to note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time, which remain subject to the investment restrictions set out in this section.

· Gearing

The Company uses gearing currently via a long-term debenture. The Board has the ability to borrow up to 100% of adjusted capital and reserves. The Board also reviews the level of gearing (borrowings less cash) on an ongoing basis and sets a range at its discretion, as appropriate. The Company's current debenture borrowings are limited by covenant to 66 2/3%, and any additional indebtedness is not to exceed 20%, of adjusted capital and reserves.

Regulatory and Competitive Environment

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

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

The Company's requirements under the AIFMD are in respect of risk management, conflicts of interest, leverage, liquidity management, delegation, the requirement to appoint a depositary (the Company has appointed The Bank of New York Mellon (International) Limited), regulatory capital, valuations, disclosure of information to investors or potential investors, remuneration and marketing.

The financial statements report on profits, the changes in equity, the balance sheet position and the cash flows in the current and prior financial period. This is in compliance with current IFRS as adopted by the EU, supplemented by the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts (SORP) issued in October 2019. The principal accounting policies of the Company are set out in note 1 to the accounts below.

Total Return Philosophy & Dividend Policy

The Board believes that investment returns will be maximised if a total return policy is followed. The policy aim is to increase dividends by more than inflation over the long term. Further details are under the Dividend Growth section below. The Company has a comparatively high level of revenue reserves for the investment trust sector and at £25.4m, revenue reserves represent over 4 times the current annual dividend distribution. The strength of these reserves will assist in underpinning the Company's progressive dividend policy in years when the income from investments is insufficient to completely cover the annual distribution.

Performance Management

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

· NAV and Total Shareholder Return:

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

· Investment performance:

The Board believes that, after asset allocation, the performance of each of the investment groups, being the MAM Funds (including the UK Equity Segregated Portfolio - UKES) and MAM, is the key driver of NAV return and hence shareholder return. The Board receives, at each meeting, detailed reports showing the performance of the investment groups which also includes relevant attribution analysis. The Chief Executive's Report provides further detail on each investment group's performance for the year.

·Share price premium/discount:

As a closed-ended listed investment company, the share price of the Company can and does differ from that of the NAV. This can give rise to either a premium or discount and as such is another component of Total Shareholder Return. During the year the discount has increased, ending the year at a higher value to that at the start of the year (with the NAV with debt at par), resulting in the Company's share price loss being more than the loss in the Company's NAV (with debt at par).

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

· Expenses:

The Board is aware of the impact of costs on returns and is conscious of seeking to minimise these (taking into account the Company's self-managed status). The current industry-wide measure for investment trusts is the OCR, which seeks to quantify the ongoing costs of running the Company. This measures the annual ongoing running costs of an investment trust, excluding performance fees, one-off expenses, marketing costs and investment dealing costs, as a percentage of average equity shareholders' funds. Any investments made into pooled funds are included using the Company's share of estimated ongoing fund running costs. The Chairman's Statement above provides further details on the expenses incurred during the year. Details of the OCR for the year are shown in the Year's Summary above.

· Dividend Growth:

Dividends paid to shareholders are an important component of Total Shareholder Return and this has been included in the Company's investment objective. The Board is aware of the importance of this objective to the Company's shareholders but wishes to be prudent. As such, a sustainable and progressive long-term dividend policy which pays dividends out of current year income is the goal, but recognising that using reserves may be required in certain unforeseen circumstances.

The Board receives detailed management accounts and forecasts which show the actual and forecast financial outturns for the Company. For the 6 years to 30 September 2020, following the rebasing of the dividend in 2014, average dividend growth has been 7.3% per annum, which is well ahead of inflation.

Emerging and Principal Risks

The emerging and principal risks and the Company's policies for managing these risks and the policy and practices are summarised below and in note 22 to the accounts.

i.  Investment Risk:

The Company has a range of equity investments, including a substantial investment in an unlisted asset management business, UK and global equities (both on a direct basis, via the UKES, and via collective investment vehicles (the MAM Funds)), and an investment in an absolute return fund, the Tortoise Fund. The major risk for the Company remains investment risk, primarily market risk; however, it is recognised that the investment in MAM continues to represent concentration risk for the Company. Furthermore, continuing political concerns, notably Brexit in the UK, but also in the US, Europe and China, and of course this year the COVID-19 pandemic as an emerging risk, provide heightened uncertainty to the investment risk faced by the Company.

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

Under the terms of the Investment Agreement, the Fund Manager manages the majority of the Company's investment assets. The portfolios of the UKES and the MAM Funds are actively managed by MAM against benchmarks and each have specific limits for individual stocks and market sectors that are monitored in real time. It should be noted that the UKES and the MAM Funds' returns will differ from the benchmark returns. The Tortoise Fund is an absolute return fund whose returns are not correlated to equity markets.

The investment risks are moderated by strict control of position sizing, low use of leverage and investing in liquid stocks. Also, the level of risk at a net asset value level increases with gearing. In certain circumstances cash balances may be raised to reduce the effective level of gearing. This would result in a lower level of risk in absolute terms.

Other risks faced by the Company include the following:

ii.  Strategy Risk:

An inappropriate investment strategy could result in poor returns for shareholders and the introduction or widening of the discount of the share price to the NAV per share. It is important to note that the investments in the UKES and the MAM Funds do provide the Company with exposure to a range of strategies.

The Board regularly reviews strategy in relation to a range of issues including investment objective and policy, the allocation of assets between investment groups, the level and effect of gearing and sector, currency or geographic exposure.

iii.  Business Risk:

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

iv.  Compliance Risk:

Failure to comply with regulations could result in the Company losing its listing, losing its FCA authorisation as a self-managed AIF or being subjected to corporation tax on its capital gains.

The Board receives and reviews regular reports from its service providers and Company management on the controls in place to prevent non-compliance of the Company with rules and regulations. The Board also receives regular investment portfolio reports and income forecasts as part of its monitoring of compliance with section 1158 of the Corporation Tax Act 2010.

v.  Operational Risk:

Inadequate financial controls, failure by an outsourced supplier to perform to the required standard, or dependency on a small number of individuals could result in misappropriation of assets, loss of income and mis-reporting of NAVs. The Board and Audit Committee regularly review statements on internal controls and procedures, receive detailed reports and presentations from the Company's depositary and the Company is subject to an annual external audit. The COVID-19 pandemic was an emerging risk which provided new uncertainty in operational terms, however both the Company and its service providers implemented business continuity plans and service levels have been maintained. Lastly, due to the nature of the Company's operations, the Board considers that Brexit is not likely to have a material impact on the operational risks facing the Company.

The Corporate Governance Statement and the Report of the Audit Committee in the Company's Annual Report and Accounts provide further information in respect of internal control systems and risk management procedures. 

How the Board meets its obligations under section 172 of the Companies Act

Under Section 172(1) of the Companies Act 2006, directors of a company must act in a way that they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. In doing so they should have regard to, inter alia, the likely long-term consequences of their decisions, the interests of the company's employees, fostering relationships with suppliers, customers and others, the impact of operations on the community and environment, maintaining a reputation for high standards and lastly to act fairly as between shareholders of the company.

The Company is a self-managed investment company and its key stakeholders comprise its one and only class of shareholders (it does not have customers), its employees, and also its third-party service providers (including its Company Secretary, Fund Manager, Custodian, Depositary, Stockbroker, Registrar, Auditor and Solicitor - see Shareholder Information below). Additionally, the Company interacts with the wider community and the environment primarily through its holdings in investee companies worldwide.

In accordance with its duty to promote the success of the Company, the Board utilises the investment objective (see above), various comprehensive procedures and policies, including the Company's investment policy (see above), and committees with defined roles and responsibilities against which executive management and third-party providers are monitored, challenged and assessed. The Board regularly reviews the objective, procedures and policies and Committee responsibilities to ensure they remain effective.

In performing its duty, the Board receives regular and detailed reporting from both executive management and third-party service providers. As an investment company, investment performance is fundamentally important and, as such, a significant portion of the Board's time is spent in this area. The Company has been established for a very long time, with a cornerstone shareholder base, and as a closed ended listed investment company is a long-term investor in global equity markets and the Board is mindful of this in undertaking its duties.

The Board recognises the importance of having experienced, trained and motivated staff as an integral part of the successful running of the Company. As such it has ensured that appropriate HR policies and procedures are in place, with staff being appropriately remunerated. As a small Company, the Board, which includes an Executive Director, has a close relationship and regular engagement with staff, monitors morale and the Company has a low staff turnover.

The Company in conducting its operations utilises its third-party service providers as listed previously.  The Board believes that maintaining effective continuing relationships is important to its duty under s172(1). In particular the relationship with the Fund Manager is of critical value to the Company and its long-term success. The relationship is strong and includes the Chief Executive sitting on their board as a non-executive director. The Board receives regular detailed reports and presentations from the Fund Manager from an investment perspective and marketing updates from Kepler Partners. The Company's other service providers provide regular reports and advice with the Board ensuring two-way communications are in place. All major service providers have relevant KPI's which are used to measure performance. The Board monitors operations to ensure that in undertaking its operations the Company operates to the standard befitting an FCA regulated LSE listed investment company.

The Company is a small investment company with a very limited physical presence in the City of London. The Board is conscious of its community and its direct environmental impact and seeks to be aware of these when making decisions. The Company invests, indirectly, in many investee companies worldwide. The Fund Manager has a long-standing focus on ESG which is embedded in its investment decision making process (see the Responsible Capitalism section above) and includes a dedicated ESG manager and it engages regularly with the investee companies in this area. The Fund Manager makes available to the Board an extensive amount of information on its activities in this area.

The Board recognises the need for good communications with its shareholders and is committed to listening to their views. Further details on how the Board interacts with its shareholders are described below. In addition, the Board consults with them, where appropriate, concerning major decisions before they are taken.

During the year the following material decisions have been made:

• The Board undertook a regular strategy meeting to review the Company's investment strategy, performance and operational structure. The Board, being keenly aware of shareholder feedback and cognisant of their views, concluded that whilst performance had been disappointing, the reasons for this and the rationale behind the Company's positioning, whilst taking a longer-term view, meant that no substantive change was considered appropriate. However, the asset allocation of the Company is kept under review at each Board meeting;

• The Board completed a review of the composition of the Board and its committees. This was to ensure that there was an appropriate, and in-line with shareholder views, combination of skills, experience and knowledge in order to meet the requirements under the AIC Code. Mr Gadd, who was due to retire having been a director for over nine years, retired during the year, and two new directors, Mr Getley and Mr Killingbeck were appointed. The  Board also agreed that the Chairman, Mr Henderson would retire following the 2022 AGM;

• As the implications of COVID-19 became apparent, the Board decided to lower the Company's gearing and raised cash to reduce volatility. The Board also ensured, through discussions with providers and employees, that the Company's operational performance remained robust and employees were not exposed to risks associated with the virus. Also, the Board received various reports from its service providers, including the Fund Manager. The Board requested a revised revenue forecast to take account of the changing outlook for dividend receipts from investee companies. The Board also decided to maintain the current year dividend utilising reserves to do so;

• The Board appointed a third-party specialist to review the methodology and timing of the valuation process concerning its largest investment, being the investment in MAM, with the aim of being able to communicate this to shareholders and investors in a more transparent and timely manner. As a result, MAM is revalued on a quarterly basis utilising a method which includes, inter alia, MAM's recent earnings and peer group price/earnings. The Board believes this methodology to be more appropriate than the one used previously which was backward looking and based on historic earnings;

• The Board continued to review approaches to managing the Company's discount level and bought back shares during the year, however the Company is subject to constraints in this area which limit what can be done and which have been communicated to shareholders. The Board remains determined to raise investor awareness and interest in the Company and pays close attention to marketing efforts where it engages third parties to assist its efforts.

On behalf of the Board  

R David C Henderson

Chairman

9 December 2020

DIRECTORS' REPORT

The Directors submit their report and the accounts for the year ended 30 September 2020.

Introduction

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

Principal Activity and Status

The Company is a public limited company and an investment company under section 833 of the Companies Act 2006. It operates as an investment trust and is not a close company. The Company has been a member of the AIC since 20 January 2014.

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

Results and Dividend

The net revenue return before taxation arising from operations amounted to £4,843,000 (2019: net revenue return of £6,911,000).

The Directors recommend a final ordinary dividend of 7.0p per ordinary share, payable on 26 January 2021 to shareholders on the register at the close of business on 15 January 2021. Together with the interim dividend of 4.4p per share paid on 19 June 2020, this makes a total distribution of 11.4p per share in respect of the financial year (2019: 11.4p per share).

Risk Management and Objectives

The Company, as an investment company, is subject to various risks in pursuing its objective. The nature of these risks and the controls and policies in place that are used to minimise these risks are further detailed in the Strategic Report and in note 22 of the Accounts.

Directors

The general powers of the Directors are contained within the relevant UK legislation and the Company's Articles. The Directors are entitled to exercise all powers of the Company, subject to any limitations imposed by the Articles or applicable legislation.

The Directors in office at the date of this report are listed in the full Annual Report and Accounts.

Messrs CD Getley and RW Killingbeck were appointed to the Board and its committees on 1 July 2020. The Board believes that both Christopher and Richard bring valuable experience and skills to the Company and welcomes them both to the Board.

Mr PD Gadd retired from the Board on 31 July 2020 and was replaced as Chairman of the Remuneration Committee by Ms JM Lewis, who is considered by the Board to have the requisite experience and understanding of the Company. Mr RDC Henderson replaced Mr PD Gadd as Chairman of the Management Engagement Committee.

Directors' retirement by rotation and appointment is subject to the minimum requirements of the Company's Articles of Association and the AIC Code of Corporate Governance (AIC Code).

The Company's Articles of Association require that at every AGM any Director who has not retired from office at the preceding two AGMs and who was not appointed by the Company in a general meeting, at either such meeting, shall retire from office and be eligible for re-election or election respectively, by the Company.

However, in accordance with the AIC Code, all Directors are to be re-elected annually. As such Messrs. RDC Henderson, AMJ Little and Ms JM Lewis will retire at the forthcoming AGM and, being eligible, will offer themselves for re-election. Messrs CD Getley and RW Killingbeck will retire at the forthcoming AGM and, being eligible, will offer themselves for election.

In accordance with Listing Rule 15.2.13A, Mr JWM Barlow, being a Non Executive Director of Majedie Asset Management Limited, the Fund Manager, must submit himself for annual re-election.

The Board believes that the performance of the Directors continues to be effective, that they demonstrate commitment to their roles and that they have a range of business, financial and asset management skills and experience relevant to the direction and control of the Company.

The Board, having considered the Directors' performance within the annual Board performance evaluation, hereby recommend that shareholders vote in favour of the proposed elections and re-elections, as appropriate.

Qualifying Third Party Indemnity Provisions

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

Directors' Interests

Beneficial interests in ordinary shares as at:

	30 September 2020		1 October 2019
Mr RDC Henderson	24,700		24,700
Mr JWM Barlow	409,224		409,224
Mr AMJ Little	9,879		Nil
Ms JM Lewis	5,803		5,803
Mr CD Getley*	33,830		33,830
Mr RW Killingbeck**	20,000		Nil

* Mr Getley was appointed to the Board on 1 July 2020, but has been a shareholder for many years.

** Mr Killingbeck was appointed to the Board on 1 July 2020, but purchased his shares earlier in the year, prior to his appointment to the Board.

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

	30 September 2020		1 October 2019
Mr JWM Barlow	3,111,110		3,111,110

Substantial Shareholdings

At 30 September 2020, the Company has been notified of the following substantial holdings in shares carrying voting rights:

Mr HS Barlow		15,017,619	28.10%
Aviva plc		6,882,922	12.98%
Mr JWM Barlow	Non-Beneficial	3,111,110	5.82%
Miss AE Barlow		2,029,148	3.80%
Mr MHD Barlow		1,776,241	3.32%
Oakwood Nominees Limited		1,631,602	3.05%

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

The Company has been notified of the following changes in substantial holdings from 1 October 2020 up to the date of this report.

Aviva plc advised that their shareholding has reduced to 5,282,748 shares, or 9.97%.

Articles of Association

Resolution 17, which will be proposed as a special resolution, seeks shareholder approval to adopt new Articles of Association in order to update the Company's current Articles of Association. The proposed amendments being introduced in the New Articles primarily relate to changes in law and regulation and developments in market practice since the Existing Articles were adopted, and principally include:

i. provisions enabling the Company to hold virtual shareholder meetings using electronic means (as well as physical shareholder meetings or hybrid meetings);

ii. amendments in response to the requirements of the Alternative Investment Fund Managers Directive (2011/61/EU);

iii. changes in response to the introduction of international tax regimes (notably to take into account the broader obligations under the Common Reporting Standard) requiring the exchange of information; and

iv. updating the methods of settling cash dividends.

A summary of the principal amendments being introduced in the New Articles is set out in the appendix to the AGM Notice in the full Annual Report and Accounts. Other amendments, which are of a minor, technical or clarifying nature, have not been summarised in the appendix.

While the New Articles (if adopted) would permit shareholder meetings to be conducted using electronic means, the Directors have no present intention of holding a virtual-only meeting. These provisions will only be used where the Directors consider it is in the best of interests of shareholders for hybrid or virtual-only meetings to be held. Nothing in the New Articles will prevent the Company from holding physical shareholder meetings.

The full terms of the proposed amendments to the Company's articles of association would have been made available for inspection as required under LR 13.8.10R (2) but for the Government restrictions implemented in response to the Coronavirus outbreak. As an alternative, a copy of the New Articles, together with a copy showing all of the proposed changes to the Existing Articles, will be available for inspection on the Company's website, https://www.majedieinvestments.com/  from the date of the AGM Notice until the close of the AGM, and will also be available for inspection at the venue of the AGM from 15 minutes before and during the AGM. In the event that the current Coronavirus related restrictions are lifted before the AGM, a hard copy of these documents will be available for inspection at the offices of Majedie Investments PLC, 1 King's Arms Yard, EC2R 7AF until the close of the AGM.

AGM

Due to COVID-19, arrangements for the AGM are different this year. Full details on the AGM are contained in the Chairman's statement above.

The Board considers that Resolutions 1 to 17 are likely to promote the success of the Company and  are in the best interests of the Company and its shareholders as a whole. The Directors unanimously recommend that you vote in favour of the Resolutions as they intend to do in respect of their own beneficial holdings.

Issue and Buyback of Shares

The Board remains of the view that an increase of the Company's stock in issue provides benefits to shareholders including a dilution of the Company's gearing and cost of its debentures, a reduction in the Company's administrative expenses on a per share basis and increased liquidity in the Company's shares. As such the Board sought and received approval, at the AGM on 22 January 2020, to allot new shares for cash, and without first offering them to existing shareholders in proportion to their holdings, up to a maximum of 5,298,985 shares (being approximately 9.99% of the Company's existing share capital at that time). These two existing authorities will expire at the 2021 AGM.

During the year, as the Company's shares remained at a discount, no shares have been allotted (2019: Nil).

The Board continues to be prepared to issue new shares in order to meet natural market demand, subject to the restriction that any new shares will be issued at a premium, and as such shareholder approval is sought at the AGM to renew the authority to issue new shares, without first offering them to existing shareholders in proportion to their holdings, up to a maximum of 5,296,087 shares (being approximately 9.99% of the Company's existing share capital). The renewed authority will expire at the 2022 AGM.

The Directors undertake not to allot any such new shares unless they are allotted at a price representing a premium to the Company's then prevailing NAV per share, with debt at fair value.

In response to a significant deterioration in the Company's share price discount in 2020 following the COVID-19 pandemic, and in the best interests of shareholders, the Company has maintained its intention to buyback for cancellation its ordinary shares, noting however the restrictions that exist for the Company in respect of share buybacks. Since 1 October 2019 and up to the date of this report the Company bought back for cancellation 41,596 ordinary shares, with a nominal value of £4,159.60, and at a total cost of £93,000. At the AGM in 2020 the Directors were given power to buy back 7,951,130 ordinary shares (being 14.99% of the Company's existing share capital). This authority will also expire at the 2021 AGM.

In order to provide maximum flexibility, the Directors consider it appropriate that the Company be authorised to make such purchases and accordingly shareholder approval is sought at the AGM to renew the authority of the Company to exercise the power contained in its Articles of Association to make buybacks of its own shares. The maximum number of shares which may be purchased shall be 7,946,781 ordinary shares (being approximately 14.99% of the Company's issued share capital). Any shares so purchased will be cancelled or held in treasury. The restrictions on such purchases (including minimum and maximum prices) are outlined in the Notice of Meeting. The authority will be used where the Directors consider it to be in the best interests of the shareholders and will expire at the 2022 AGM.

Capital Structure

As part of its corporate governance the Board keeps under review the capital structure of the Company.

At 30 September 2020, the Company had a nominal issued share capital of £5,301,389, comprising 53,013,887 ordinary shares of 10p each, carrying one vote each. All of the shares of the Company are listed on the London Stock Exchange, which is a regulated market. The Company holds no shares in Treasury.

The Company deploys gearing through long-term debt being a £20.7m 7.25% debenture stock 2025, of which £25m was issued in 2000 with £4.3m being re-purchased in 2004.

The limits on the ability to borrow are described in the investment policy above. The Board is responsible for managing the overall gearing of the Company. Details of gearing levels are contained in the Year's Summary above, and in note 22 to the Accounts.

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

Notice period for general meetings

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

Future Developments

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

Employee, Social, Environmental, Ethical and Human Rights policy

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

The Company falls outside the scope of the Modern Slavery Act 2015 as it does not meet the turnover requirements under that act. The Company outsources significant parts of its operations to reputable professional companies, including fund management to MAM. MAM complies with all the relevant laws and regulations and also takes account of social, environmental, ethical and human rights factors, where appropriate.

Carbon Reporting

In accordance with the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013, and the Companies (Directors' Report) and Limited Liability Partnership (Energy and Carbon Report) Regulations 2018, the Company is required to report on its carbon dioxide emissions and quantity of energy consumed. In accordance with the regulations, the Company has determined that its organisational boundary, to which entities the regulations apply, is consistent with its accounts.

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

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

Additionally, the Company has many investments in companies around the world, either directly or through the MAM Funds; however the Company does not have the ability to control the activities of these investee companies and as such has no responsibility for their emissions. Therefore, the Directors believe that the Company has no reportable matters for the year ended 30 September 2020 (2019: nil).

Donations

The Company made no political or charitable donations during the year (2019: nil) to organisations either within or outside of the EU.

Gender Diversity

The Board is aware of the recommendations made in the Hampton-Alexander and Parker Review in respect of gender and ethnic diversity in the boardroom. The Company does not have a formal policy on diversity, but details on how diversity is taken into account when making new appointments to the Board is included in the section on the Nomination Committee in the full Annual Report and Accounts. At the year end, 83.3% of the directors of the Board were male and 16.6% were female. The composition of the Company's employees is 66.6% male and 33.3% female.

Material Contracts

· Majedie Asset Management Limited

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

The Investment Agreement provides that the segregated portfolio is to be managed on the same basis as the MAM UK Equity Fund, with other investments being made into the various MAM Funds, as decided by the Board as part of their asset allocation requirements. Further details on the allocation of the investments managed by MAM are included in the Chief Executive's Report above.

The fees payable under the Investment Agreement are detailed below:

Portfolio/Fund*	Management Feeˆ	Performance Feeˆ
UKES	0.60% p.a.	Nil
Tortoise Fund	1.00% p.a.	20%†
UK Income Fund	0.65% p.a.	Nil
Global Equity Fund	0-0.65% p.a.**	Nil
International Equity Fund	0.25% p.a.	Nil
US Equity Fund	0.75% p.a.	Nil

* The fees are calculated under the terms of the Investment Agreement or the relevant fund prospectus, and apply from 1 October 2019.

ˆ The fees charged to the UKES are charged directly to the Company's Statement of Comprehensive Income. All other fund fees are charged within the relevant fund.

† The performance fee entitlement only occurs once the hurdle has been exceeded (being the Sterling Overnight Index Average or "SONIA") and is calculated on a high water mark basis.

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

The Investment Agreement entitles either party to terminate the arrangement with six months' notice.

· The Bank of New York Mellon (International) Limited 

The Board appointed BNY Mellon Trust & Depositary (UK) Limited to provide depositary services as required by the AIFMD and certain other associated services under the terms of a depositary agreement dated 19 June 2014. This agreement was novated to The Bank of New York Mellon (International) Limited (BNYMIL) with effect from 1 March 2018. The services provided by BNYMIL as Depositary for the Company include:

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

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

·safekeeping of the assets held within the Company's investment portfolio, including those classed as financial instruments for the purpose of the AIFMD, and ensuring the Company's financial instruments are held in segregated accounts so that they can be clearly identified as belonging to the Company and maintaining records sufficient for verification of the Company's ownership rights in relation to assets other than financial instruments.

BNYMIL or any BNY Mellon affiliates may have an interest, relationship or arrangement that is in conflict with or otherwise material in relation to services it provides to the Investment Manager and the Company. Should a conflict of interest arise, BNYMIL shall manage conflicts of interest fairly and transparently. As a regulated business, the Depositary is required to prevent, manage and, where required, disclose information regarding any actual or potential conflict of interest incidents to relevant clients. The Depositary is required to and does maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest from adversely affecting the interests of its clients. The terms of the depositary agreement provide that, where certain assets of the Company are invested in a country whose laws require certain financial instruments to be held in custody by a local entity and no such entity is able to satisfy the requirements under the AIFMD in relation to use of delegates by depositaries, BNYMIL may still delegate its functions to such a local entity and be fully discharged of all liability for loss of financial instruments of the Company by such local entity.

The Depositary receives an annual fee for its services based on a sliding scale on the total gross portfolio assets of the Company, payable monthly in arrears. The depositary agreement in place with BNYMIL continues unless and until terminated: without cause upon the Company and BNYMIL giving not less than 90 days' notice and upon BNYMIL giving notice expiring not less than 18 months after the date of the agreement, in each case such notice to be effective only if a new Depositary has been appointed. 

· Link Market Services Limited (Link)

Company Secretarial services are provided by Link, under the Company Secretarial Services Agreement dated 25 April 2016. The agreement mandates that Link Company Matters Limited will act as Link's nominated corporate secretary. The agreement also provides for fees to be paid quarterly, to be based on a fixed annual amount and be subject to annual RPI increases with either party to give notice to terminate the agreement with 12 months' notice.

Listing Rule Disclosure

The Company confirms that there are no items which require disclosure under Listing Rule 9.8.4R in respect of the year ended 30 September 2020.

AIFMD

The AIFMD requires certain financial and non-financial disclosures in respect of Annual Reports.

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

· Remuneration

Total remuneration details for the Directors (who are considered to be code staff under the Directive) are shown in the Report on Directors' Remuneration. Remuneration details for staff are included in note 7 to the accounts. There was variable remuneration due during the year.

· Leverage

The AIFMD requires the Company to disclose its actual leverage (calculated under the Gross & Commitment methods) and also to set a limit in respect of leverage it can use. The Company has set a limit of 1.5 times (1 being no leverage) and as at 30 September 2020 had leverage of 1.11 times under the Gross method and 1.16 times under the Commitment method. Note 22 to the accounts provides further details.

· Investor Pre-investment information

The AIFMD requires that potential investors are provided with certain information. The Company provides this information on its website at www.majedieinvestments.com. This has been updated in the year reflecting various small changes, all of which are described in this Annual Report.

Disclosure of Information to Auditors

As far as each of the Directors are aware:

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

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

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

Auditors

Ernst & Young LLP were re-appointed as Auditors on 22 January 2020. Ernst & Young LLP have indicated their willingness to continue in office and a resolution will be proposed at the AGM to re-appoint them as Auditors.

Viability

The Board has assessed the prospects of the Company over the five year period to September 2025. The Board believes that five years is appropriate given the long-term nature of the Company's objective and the risks arising from investing in equity markets.

In undertaking their assessment of the viability of the Company, the Board has first considered the Company's prospects utilising the following factors:

·the Company's business model and investment strategy;

·how the Company is positioned against each of the Company's emerging and principal risks and uncertainties;

·the nature and liquidity of the Company's investments;

·global equity market conditions with particular reference to the COVID-19 pandemic;

·the level of its long-term liabilities.

The assessment process provided the following matters which are considered relevant, being:

·  the Board carried out a robust assessment of the principal, and emerging risks and uncertainties (see above) that are facing the Company over the review period. The current investment climate is uncertain. In particular, the longer-term impacts of the COVID-19 pandemic are unknown. Brexit and other political impacts are also factors. However, the Company, as a closed ended investment company with a long-term focus and objective is well positioned to ride out any short-term volatility. Investment risk and volatility are high but are well below stress testing levels (the Chief Executive's Report above provides more details on the investment outlook). Lastly, the Company did not make use of any of the governmental pandemic economic assistance packages that had been made  available;

·  the £20.8m of borrowings, (being leverage of 1.11 times (Gross method) and 1.16 times (Commitment method)), are considered acceptable and are well below the 1.5 times limit. The Board keeps gearing levels under review and can increase cash levels as required. As such £10m of cash was raised in March 2020 given the uncertainty of COVID-19;

·    the investment portfolio, excluding the MAM investment, remains highly liquid (which comprise 75.8% of total assets at 30 September 2020). The Board receives many detailed reports on positioning and approach from MAM and geographic and sector positioning is kept under constant review (the Chief Executive's Report above provides further details on the investment portfolio);

·the investment in MAM (being £31.0m comprising 20.4% of total assets as at 30 September 2020) is illiquid. MAM have suffered large outflows over recent years but remain highly profitable. The Board have representation on the MAM board, receives detailed financial and non-financial performance information and that as a UK and global equity boutique manager, MAM is well positioned to perform well in a future continued low interest rate environment.

·the Company's systems and operational performance, and that of its service providers, has been resilient under the challenges posed by COVID-19 with service levels having been maintained.

As part of the assessment the Board is very conscious of the impact of COVID-19, both short and long-term, on the Company as noted above and how this uncertainty might affect the Company's future prospects. However, the Board considers that the Company's investment strategy is appropriate and looking forward from the period under review, a global equity investment with a substantial income yield should be considered attractive. As such, the Board have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period to September 2025.

Going Concern

In assessing the Company's ability to continue as a going concern, the Board considered the nature of its investment portfolio, its investment objective and policy (see above), its risk management systems, its financial income and expenditure projections, and its financial and operational structure.

As part of this assessment the Board took into consideration the uncertainties generated by the COVID-19 pandemic on the Company's ability to generate income, sell its assets as or if required to meet liabilities, and ability to operate under the restrictions imposed by the pandemic. The Board stress tested a downside scenario showing income from investments falling by, on average, 30% and investment values by 45% which would still leave the Company with adequate financial resources to be in a going concern position.

It should also be noted that the Company has had no need to make use of any of the governmental pandemic economic support packages made available.

As such the Board is of the view that the Company will be able to meet its obligations over the next twelve months, from the date of the approval of the financial statements, and therefore continues to adopt the going concern basis in preparing the financial statements.

By Order of the Board

Link Company Matters Limited

Company Secretary

9 December 2020

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

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

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

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

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

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

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

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

The Directors of the Company, whose names are shown in the full Annual Report and Accounts each confirm to the best of their knowledge that:

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

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

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

By order of the Board

R David C Henderson

Chairman

9 December 2020

REPORT OF THE DEPOSITARY

Report of the Depositary to the shareholders of Majedie Investments PLC

Depositary's responsibilities

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

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

Report of the Depositary to the shareholders of Majedie Investments PLC for the year ended 30 September 2020

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

For and on behalf of

The Bank of New York Mellon (International) Limited

One Canada Square

London E14 5AL

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the years ended 30 September 2020 and 30 September 2019 but is derived from those accounts. Statutory accounts for 2019 have been delivered to the Registrar of Companies, and those for 2020 will be delivered in due course. The Auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditors' report can be found in the Company's full Annual Report and Accounts at www.majedieinvestments.com.

STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 September 2020

			2020				2019
	Notes	Revenue return £000	Capital return £000	Total £000		Revenue return £000	Capital return £000	Total £000
Investments
Losses on investments at fair value through profit and loss	13		(20,385)	(20,385)			(21,342)	(21,342)
Net Investment Result			(20,385)	(20,385)			(21,342)	(21,342)
Income
Income from investments	3	5,958		5,958		7,995		7,995
Other income	3	76		76		54	4	58
Total income		6,034		6,034		8,049	4	8,053
Expenses
Management fees	4	(68)	(203)	(271)		(94)	(279)	(373)
Administration expenses	5	(742)	(704)	(1,446)		(663)	(655)	(1,318)
Return/(Loss) before finance costs and taxation		5,224	(21,292)	(16,068)		7,292	(22,272)	(14,980)
Finance costs	8	(381)	(1,143)	(1,524)		(381)	(1,142)	(1,523)
Net return/(Loss) before taxation		4,843	(22,435)	(17,592)		6,911	(23,414)	(16,503)
Taxation	9	(10)		(10)		(22)		(22)
Net return/(Loss) after taxation for the year		4,833	(22,435)	(17,602)		6,889	(23,414)	(16,525)
Return/(Loss) per Ordinary Share		pence	pence	pence		pence	pence	pence
Basic	11	9.1	(42.3)	(33.2)		12.9	(43.9)	(31.0)

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

There is no other comprehensive income for the year and hence the Net return/(loss) after taxation for the year is also total comprehensive income.

All amounts relate to continuing operations.

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 September 2020 

	Notes	Share capital £000		Share premium £000		Capital redemption reserve £000		Capital reserve £000		Revenue reserve £000		Total £000
Year ended 30 September 2020
As at 1 October 2019		5,305		3,054		95		120,046		26,574		155,074
Share buybacks for cancellation	17	(4)				4		(93)				(93)
Net (Loss)/return for the year								(22,435)		4,833		(17,602)
Dividends declared and paid in year	10									(6,046)		(6,046)
As at 30 September 2020		5,301		3,054		99		97,518		25,361		131,333
Year ended 30 September 2019
As at 1 October 2018		5,344		3,054		56		144,395		25,777		178,626
Share buybacks for cancellation	17	(39)				39		(935)				(935)
Net (Loss)/return for the year								(23,414)		6,889		(16,525)
Dividends declared and paid in year	10									(6,092)		(6,092)
As at 30 September 2019		5,305		3,054		95		120,046		26,574		155,074

BALANCE SHEET

as at 30 September 2020

	Notes	2020 £000	2019 £000
Non-current assets
Property and equipment	12	309	21
Investments at fair value through profit or loss	13	145,471	172,914
		145,780	172,935
Current assets
Trade and other receivables	14	269	389
Cash and cash equivalents	15	7,525	3,398
		7,794	3,787
Total assets		153,574	176,722
Current liabilities
Trade and other payables	16	(1,421)	(1,101)
Total assets less current liabilities		152,153	175,621
Non-current liabilities
Debentures and lease liability	16/19	(20,820)	(20,547)
Total liabilities		(22,241)	(21,648)
Net assets		131,333	155,074
Represented by:
Ordinary share capital	17	5,301	5,305
Share premium account		3,054	3,054
Capital redemption reserve		99	95
Capital reserve		97,518	120,046
Revenue reserve		25,361	26,574
Equity Shareholders' Funds		131,333	155,074
Net asset value per share	18	Pence	pence
Basic		247.7	292.3

Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 9 December 2020.

R David C Henderson

Chairman

CASH FLOW STATEMENT

for the year ended 30 September 2020

	Notes	2020 £000	2019 £000
Net cash flow from operating activities
Net Loss before taxation*		(17,592)	(16,503)
Adjustments for:
Losses on investments	13	20,835	21,342
Accumulation dividends		(253)	(435)
Depreciation		17	20
Foreign exchange (gains)/losses		(2)	4
Purchases of investments		(41,824)	(10,574)
Sales of investments		49,500	13,069
		10,231	6,923
Finance costs		1,524	1,523
Operating cashflows before movements in working capital		11,755	8,446
(Decrease)/Increase in trade and other payables		(21)	30
Decrease in trade and other receivables		42	12
Net cash inflow from operating activities before tax		11,776	8,488
Tax recovered on overseas dividend income		11
Tax on overseas dividend income		(17)	(41)
Net cash inflow from operating activities		11,770	8,447
Investing activities Purchase of tangible assets		(1)	(4)
Initial direct costs incurred for the right-of-use asset		(2)
Net cash outflow from investing activities		(3)	(4)
Financing activities
Interest paid on debentures		(1,501)	(1,501)
Dividends paid	10	(6,046)	(6,092)
Share buybacks for cancellation	17	(93)	(935)
Net cash outflow from financing activities		(7,640)	(8,528)
Increase/(Decrease) in cash and cash equivalents for the year		4,127	(85)
Cash and cash equivalents at start of year		3,398	3,483
Cash and cash equivalents at end of year		7,525	3,398

* Includes dividends received in the year of £5,748,000 (2019: £7,525,000) and interest received of £Nil (2019: £2,000).

NOTES TO THE ACCOUNTS

General Information

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

1 Significant Accounting Judgements, Estimates and Assumptions

The preparation of financial statements in conformity with IFRS requires management to exercise its judgement in the process of applying the Company's accounting policies. It also requires the use of certain significant estimates and assumptions.

In the course of preparing the financial statements, no critical judgements have been made in the process of applying the Company's accounting policies, apart from those involving estimates, which are shown separately below, that have had a significant effect on the amounts recognised in the financial statements.

The following are the areas where critical estimates and assumptions have been used:

·    Unquoted Investments

Unquoted investments are valued at management's best estimate of fair value in accordance with IFRS having regard to International Private Equity and Venture Capital Valuation guidelines as recommended by the British Venture Capital Association. The principles which the Company applies are set out below. The inputs into the valuation methodologies adopted include historical data such as earnings or cash flow as well as more subjective data such as earnings forecasts, discount rates and earnings multiples. As a result of this, the determination of fair value requires management judgement. At the year end, unquoted investments (including the investment in MAM but excluding the MAM funds) represent 20.4% (2019: 26.4%) of Equity Shareholders' Funds.

1 Significant Accounting Policies

The principal accounting policies adopted are set out as follows:

The accounts above comprise the audited results of the Company for the year ended 30 September 2020, and are presented in pounds Sterling rounded to the nearest thousand, as this is the functional currency in which the Company transactions are undertaken.

Going Concern

The Directors considered the impact of the COVID-19 pandemic and consider that this will have a limited financial impact on the Company's resources and continuing existence. As part of the assessment of going concern the Directors took into account the uncertain economic outlook associated with the pandemic, the level of cash and cash equivalents and readily realisable securities which could meet short-term commitments, the ability of the Company to meet its liabilities and on-going expenses from investments (which included performing stress testing - see Directors' Report above), revenue forecasts for the forthcoming year, the ability of the Company and its service providers to continue to meet service levels. Lastly, it should also be noted that the Company has had no need to make use of any of the governmental pandemic economic support packages made available. After completing the assessment the Directors have a reasonable expectation that the Company will be able to meet its obligations for at least 12 months from the date of approval of the financial statements and therefore the financial statements have been prepared on a going concern basis.

Presentation of Statement of Comprehensive Income

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

Basis of Accounting

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

Where presentational guidance set out in the SORP regarding the financial statements of investment companies and venture capital companies issued by the AIC in October 2019 is not inconsistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

Standards Issued But Not Yet Effective

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

International Accounting Standards and Interpretations (IAS/IFRS/IFRICs)	Effective date
Amendments to IFRS 9, IAS 39 and IFRS 7	1 January 2020
Amendments to IAS 1 and IAS 8	1 January 2020
Amendments to the conceptual framework for financial reporting	1 January 2020

New Standards, Interpretations and Amendments adopted by the Company

The Company applied in the financial year ended 30 September 2020, for the first time, a standard which was effective for annual periods beginning on or after 1 January 2019. The nature and impact of this new standard is as described below:

IFRS 16 Leases

IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model.

The Company adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application being 1 October 2019. The Company also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option.

Impact of adoption of IFRS 16

The impact on the Company was solely as lessee in respect of its property lease. The Company's only lease on the date of adoption was the lease on its premises in the City of London which expired in September 2020. By applying the modified retrospective method on the date of adoption comparative figures are not restated. Additionally, by utilising the recognition exemption, on the date of adoption, as the lease had less than 12 months to expiry, no recognition restatement was required.

The replacement lease, which is for a 5 year team from September 2020, is however required to be accounted for under IFRS 16 and note 20 below provides further details.

Foreign Currencies

Transactions during the period, including purchases and sales of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at using the exchange rates as at the dates of initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value was determined.

Foreign currency transaction gains and losses on financial instruments classified as FVPL are included in profit or loss in the Statement of Comprehensive Income as part of the "Losses on investments at fair value through profit or loss".

Income

Dividend income is recognised on the date when the Company's right to receive the payment is established. Dividend revenue is presented gross of any non-recoverable withholding taxes, which are separately disclosed in the Statement of Comprehensive Income. Where the Company has elected to receive scrip dividends in the form of additional shares rather than cash, the amount of the cash dividend foregone is recognised as income. Special dividends are recognised as capital or revenue in accordance with the underlying nature of the transaction.

Interest income is recognised on a accrual basis.

Expenses

All expenses or fees are recognised on an accruals basis. This includes any pension payments made to the Company's defined contribution personal pension plan. In accordance with the SORP concerning the classification of expense items between capital and revenue, all items are presented as revenue except for as follows:

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

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

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

Finance Costs

(a) Debentures

Interest expense is recognised for all interest bearing financial instruments using the effective interest rate method.

In accordance with the SORP, finance costs in respect of financing investments or financing activities aimed at maintaining or enhancing the value of investments are allocated 75% to capital. Any premiums paid on the early repurchase of debenture stock are charged wholly to capital.

(b) Lease liabilities

Interest expense on lease liabilities is recognised in accordance with IFRS 16 (see note 20 below).

In accordance with the SORP, finance costs in respect of financing investments or financing activities aimed at maintaining or enhancing the value of investments are allocated 75% to capital. As such property lease liability finance costs are charged 100% to revenue.

Taxation

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

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

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

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

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

Property and Equipment

Property and equipment are stated at initial cost less accumulated depreciation and any recognised impairment loss. Leasehold right-of-use assets are accounted for in accordance with IFRS 16 leases policy below. Depreciation for other tangible assets is calculated using the straight line method and at rates of 25% to 33% per annum.

Leases (policy effective from 1 October 2019 - IFRS 16)

The Company has applied IFRS 16 from 1 October 2019 and the policies applied under that standard are:

(a) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost and the cost includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

(b) Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments can include fixed payments, less any lease incentives receivable, variable lease payments linked to an index or rate and payments or penalties for terminating a lease - only if reasonably certain to exercise the termination option.

In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

(c) Short-term leases and leases of low-value assets

As and if applicable the Company would apply the short-term lease recognition exemption to any short term leases (being leases that have a lease term of 12 months or less without a purchase option) and the low-value recognition exemption to leases that are considered of low value (being below £5,000). Lease payments on any such leases would be recognised as an expense on a straight-line basis over the lease term.

Leases (policy effective before 1 October 2019 - IAS 17)

Leases are classified as finance leases whenever the term of the lease substantially transfers all of the risks and records of ownership to the lessee. All other leases are classified as operating leases.

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

Financial Instruments

The Company applies IFRS 9 Financial Instruments and the policies applied under the standard are as follows:

(a) Classification

In accordance with IFRS 9, the Company classifies its financial assets and liabilities at initial recognition into the categories of financial assets and liabilities as shown below:

Financial Assets

The Company classifies its financial assets as subsequently measured at amortised cost or measured at fair value through profit or loss, on the basis of both: 
 

· the Company's business model, as an investment company, for managing the financial assets;

· the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortised cost

A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company includes in this category short term non-financing receivables including accrued income and trade and other receivables.

Financial assets measured at fair value through profit or loss (FVPL)

A financial asset is measured at FVPL if:

a)  its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding; or

b)  it is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell; or

c) at initial recognition, it is irrevocably designated as measured at FVPL when doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains or losses on them on different bases.

The Company includes in this category its equity investments.

Financial liabilities

Financial liabilities measured at amortised cost

This category includes all financial liabilities. The Company includes in this category its debenture, lease liability and other short term payables.

(b) Recognition

The Company recognises a financial asset or liability when it becomes a party to the contractual provisions of the instrument. In respect of purchases or sales of financial instruments that require delivery of assets within a time frame generally established by regulation or convention in a market place are recognised on a trade date basis.

(c) Initial Measurement

Financial assets and liabilities at FVPL are recorded in the Statement of Financial Position at fair value. All transaction costs for such instruments are recognised in profit or loss in "Losses on  investments at fair value through profit and loss" in the Statement of Comprehensive Income. Financial liabilities held at amortised cost are initially recognised at cost, being the fair value of the consideration received less issue costs where applicable.

(d) Subsequent measurement

After initial measurement the Company measures financial instruments which are classified as at FVPL, at fair value. Subsequent changes in the fair value of those financial instruments are recorded in "Losses on investments at fair value through profit and loss" in the Statement of Comprehensive Income. Any dividends or interest earned on these instruments are recorded separately under "Income" in the Statement of Comprehensive Income".

Financial liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the amortisation process.

The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and of allocating and recognising the interest income or expense in profit or loss over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or liability to the gross carrying amount of financial asset or to the amortised cost of the financial liability.

(e) Derecognition

A financial asset (or where applicable, a part of a financial asset or a part of a group of similar financial assets) is derecognised where the rights to receive cash flows from the asset have expired. Or the Company has transferred its rights to receive cash flows from the asset, and the Company has transferred substantially all of the risks and rewards of the asset or has transferred control of the asset.

A financial liability is derecognised by the Company when the obligation under the liability is discharged, cancelled or expired.

(f) Impairment

The Company holds only trade receivables with no financing component and which have maturities of less than 12 months at amortised cost. Therefore the Company has chosen to apply an approach similar to the simplified approach for expected credit losses under IFRS 9 to all its trade receivables. The Company does not track changes in credit risk, but instead recognises a loss allowance, if any, based on the lifetime expected credit losses at each balance sheet date.

(g) Fair value measurement

The Company measures its investments in financial instruments, such as equity instruments, at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the balance sheet date. The fair value for financial instruments traded in active markets at the balance sheet date is based on their quoted price (bid price for long positions), without any deduction for transaction costs. The fair value for financial instruments that are either unit trusts or open ended investment companies are based on their closing price, the bid price or the single price as appropriate, as released by the relevant fund administrator.

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

The Company identifies transfers between levels in the hierarchy by re-assessing the categorisation (based on the lowest level input that is significant to the fair value measurement as a whole), and deems transfers to have occurred at the beginning of each reporting period.

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

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and short-term deposits in banks that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

Share Capital

Upon the issuance of Ordinary 10p shares, the consideration received is included in equity. Transaction costs incurred by the Company in issuing its own equity instruments are accounted for as a deduction from equity. Any excess consideration over the nominal value of any Ordinary 10p shares issued, before transaction costs, is credited to the Share Premium Account.

Own equity instruments that are repurchased for cancellation are deducted from Equity Shareholders' Funds and accounted for at amounts equal to the consideration paid, including any directly attributable incremental costs. In accordance with the Company's Articles, the total cost of any such transactions will be deducted from the Capital Reserve.

Capital Reserve

The Capital Reserve includes gains and losses on the sale of financial instruments, and investment holding gains or losses, as reported in the Statement of Comprehensive Income (and note 13). Additionally any finance costs and expenses charged to capital in accordance with the Company's policy, and as detailed above, the cost of any shares repurchased for cancellation, are debited against the Capital Reserve.

Revenue Reserve

The net revenue for the year is included in the Revenue Reserve along with dividends to shareholders, when approved.

Dividends payable to Shareholders

Dividends are at the discretion of the Company. A dividend to the Company's shareholders is accounted for as a deduction from the Revenue Reserve. An interim dividend is recognised as a liability in the period in which it is irrevocably declared by the Board of Directors. A final dividend is recognised as a liability in the period in which it is approved by the Company's shareholders in an Annual General Meeting.

2 Business Segments

For management purposes the Company is organised into one principal activity, being investing activities, as detailed below:

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 company and its portfolio contains investments in companies listed in a number of countries. Geographical information about the portfolio is provided above and exposure to different currencies is disclosed in note 22 below.

3 Income

	2020 £000			2019 £000
Income from investments
Dividend income*	5,631			7,409
Accumulation dividend income	253			435
Overseas dividend income	74			151
		5,958			7,995
Other income
Interest income				2
Sundry income	76			56
		76			58
Total income		6,034			8,053
Income from investments
Listed UK	1,167			2,070
Listed overseas	74			151
Unlisted - MAM funds	690			1,172
Unlisted	4,027			4,602
		5,958			7,995

* Includes MAM Ordinary income of £4,027,000 (2019: £4,602,000) and Property Income Distribution (PID) dividend income of £13,000 (2019: £24,000).

4 Management Fees

	2020				2019
	Revenue return £000	Capital return £000	Total £000		Revenue return £000	Capital return £000	Total £000
Fund management	68	203	271		94	279	373
	68	203	271		94	279	373

The fund management fees are payable to MAM in accordance with the Investment Agreement and the material terms are disclosed in the Directors' Report above. The fund management fees charged and shown are only in respect of the investment in the UKES. Fund management fees in respect of the investments made in the other MAM funds are charged directly in the relevant fund and included in the relevant fund's published net asset value price and hence form part of that investment's valuation in the Company's accounts. These costs are however included in the Company's OCR calculation above, on a best estimates basis. At 30 September 2020, an amount of £65,000 was outstanding for payment of fund management fees due to MAM on the UKES (2019: £93,000).

5 Administrative Expenses

	2020 £000		2019 £000
Staff costs - note 7	464		455
Other staff costs and directors' fees	243		210
Advisers' costs	305		258
Information costs	117		113
Establishment costs	41		42
Operating lease rentals - premises	59		60
Depreciation on tangible assets*	17		20
Auditor's remuneration (see below)	41		31
Other expenses	159		129
		1,446		1,318

* Includes £1,000 in respect of depreciation of Right-of-Use assets under IFRS 16.

A charge of £704,000 (2019: £655,000) to capital and an equivalent credit to revenue has been made to recognise the accounting policy of 75% of direct investment administration expenses to capital.

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

	2020 £000			2019 £000
Audit services - statutory audit	40			30
Other audit related services	1			1
		41			31

Other audit related services in both years relate to a review of the Company's debenture covenant.

6 Directors' Emoluments

	2020 £000			2019 £000
Fees	167			148
Salary	191			187
Other benefits	10			9
		368			344

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

7 Staff Costs including CEO

	2020 £000			2019 £000
Salaries and other payments	383			376
Social security costs	50			49
Pension contributions	31			30
		464			455

	2020 Number			2019 Number
Average number of employees:
Management and office staff		3			3

8 Finance Costs

	2020				2019
	Revenue return £000	Capital return £000	Total £000		Revenue return £000	Capital return £000	Total £000
Interest on 7.25% 2025 debenture stock	375	1,126	1,501		375	1,126	1,501
Amortisation of issue expenses on the debenture stocks	6	17	23		6	16	22
Lease liability interest expense*
	381	1,143	1,524		381	1,142	1,523

* Lease liability interest expense for the year, in accordance with IFRS 16, was £155

Further details of the debenture stock in issue are provided in note 16 and note 19, and the lease liability in note 20.

9 Taxation

	2020 £000			2019 £000
Tax on overseas dividends	10			22

Reconciliation of tax charge:

The current taxation rate for the year is lower (2019: lower) than the standard rate of corporation tax in the UK of 19.0% (2019:19.0%). The differences are explained below:

	2020 £000			2019 £000
Net Loss before taxation		(17,592)			(16,503)
Taxation at UK Corporation Tax rate of 19.0% (2019: 19.0%)	(3,342)			(3,136)
Effects of:
- UK dividends which are not taxable	(1,129)			(1,498)
- foreign dividends which are not taxable	(15)			(32)
- losses on investments which are not taxable	3,873			4,056
- expenses which are not deductible for tax purposes	87			9
- excess expenses for the  current year	526			601
- overseas taxation which is not recoverable	10			22
Actual current tax charge		10			22

After claiming relief against accrued income taxable on receipt, the Company has total unrelieved excess expenses of £93,627,000 (2019: £89,452,000). It is not yet certain that the Company will generate sufficient taxable income in the future to utilise these expenses are therefore no deferred tax asset has been recognised.

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

10 Dividends

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

	2020 £000			2019 £000
2018 Final dividend of 7.0p paid on 23 January 2019				3,741
2019 Interim dividend of 4.4p paid on 14 June 2019				2,351
2019 Final dividend of 7.0p paid on 28 January 2020	3,713
2020 Interim dividend of 4.4p paid on 19 June 2020	2,333
		6,046			6,092
	2020 £000			2019 £000
Proposed final dividend for the year ended 30 September 2020 of 7.0p (2019: final dividend of 7.0p) per ordinary share	3,711			3,713
		3,711			3,713

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

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

	2020 £000			2019 £000
Interim dividend for the year ended 30 September 2020 of 4.4p (2019:4.4p) per ordinary share.	2,333			2,351
Final dividend for the year ended 30 September 2020 of 7.0p (2019: 7.0p) per ordinary share.	3,711			3,713
		6,044			6,064

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

Dividends for the year (and 2019) have been solely made from the Revenue Reserve.

11 Return per Ordinary Share

Basic return per ordinary share is based on 53,027,870 ordinary shares, being the weighted average number of shares in issue (2019: Basic return of 53,332,302). Basic returns per ordinary share are based on the net return after taxation attributable to equity shareholders.

	2020 £000			2019 £000
Basic revenue returns are based on net revenue after taxation of:	4,833			6,889
Basic capital returns are based on net capital loss of:	(22,205)			(23,414)
Basic total returns are based on a (loss)/return of:		(17,372)			(16,525)

12 Property and Equipment

	Right-of-Use asset £000			Leasehold Improvements £000			Office Equipment £000			Total £000
Cost:
At 1 October 2019				28			250			278
Additions	304						1			305
Disposals
At 30 September 2020		304			28			251			583
Depreciation:
At 1 October 2019				21			236			257
Charge for year	1			7			9			17
Disposals
At 30 September 2020		1			28			245			274
Net book value:
At 30 September 2020		303						6			309
At 30 September 2019					7			14			21

The Right-of Use Asset is in respect of a leasehold interest in office premises as lessee. The cost of the Right-of-use Asset comprises £287,000 of the initial lease liability and £17,000 of initial direct costs incurred and lease payments due at the start of the lease. Further details concerning this lease are contained in note 20 below.

13 Investments at Fair Value Through Profit or Loss

	2020							2019
	Listed £000		Unlisted (MAM Funds) £000		Unlisted £000		Total £000		Listed £000		Unlisted (MAM Funds) £000	Unlisted £000		Total £000
Opening book cost	48,714		68,092		2,331		119,137		48,299		70,198	2,331		120,828
Opening investment holding (losses)/gains	(325)		15,547		38,555		53,777		2,988		16,260	56,439		75,687
Opening fair value	48,389		83,639		40,886		172,914		51,287		86,458	58,770		196,515
Opening fair value
Purchases at cost	27,869		14,496				42,365		10,548		435			10,983
Sales proceeds received	(28,601)		(20,822)				(49,423)		(10,263)		(2,905)	(74)		(13,242)
Gains/(losses) on investments	(9,010)		(1,531)		(9,844)		(20,385)		(3,183)		(349)	(17,810)		(21,342)
Closing fair value	38,647		75,782		31,042		145,471		48,389		83,639	40,886		172,914
Closing book cost	42,756		64,004		2,331		109,091		48,714		68,092	2,331		119,137
Closing investment holding (losses)/gains	(4,109)		11,778		28,711		36,380		(325)		15,547	38,555		53,777
Closing fair value	38,647		75,782		31,042		145,471		48,389		83,639	40,886		172,914

The Company received £49,423,000 (2019: £13,242,000) from investments sold in the year. The book cost of these investments when they were purchased was £52,411,000 (2019: £12,674,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

Unlisted investments include an amount of £37,000 in a company (2019: £45,000 in 2 companies) and £31,005,000 (2019: £40,841,000) for the Company's investment in MAM as detailed below. Further details concerning the investments in the MAM Funds are shown below.

During the year the Company incurred transaction costs amounting to £145,000 (2019: £55,000), of which £125,000 (2019: £51,000) related to the purchase of investments and £20,000 (2019: £4,000) related to the sales of investments. These amounts are included in "Losses on investments at fair value through profit or loss", as disclosed in the Statement of Comprehensive Income.

The composition of the investment return is analysed below:

	2020 £000			2019 £000
Net (losses)/gains on sales of equity investments	(2,988)			568
Decrease in holding gains on equity investments	(17,397)			(21,910)
Losses on investments		(20,385)			(21,342)

Fair value hierarchy disclosures

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

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

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

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

Level 2 inputs include the following:

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

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

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

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

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

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

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

	2020					2019
	Level 1 £000	Level 2 £000	Level 3 £000	Total £000		Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Financial assets held at fair value through profit or loss - equities and managed funds:
Listed equity securities	38,647			38,647		48,389			48,389
Unlisted equity securities (MAM Funds)		75,782		75,782			83,639		83,639
Unlisted equity securities			31,042	31,042				40,886	40,886
	38,647	75,782	31,042	145,471		48,389	83,639	40,886	172,914

Investments whose values are based on quoted market prices in active markets, and therefore are classified within Level 1, include active listed equities. The Company does not normally adjust the quoted price for these instruments (although it may invoke its fair value pricing policy in times of market disruption - this was not the case for 30 September 2020 or 2019).

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 liquidity and/or non-transferability, which are generally based on available market information. During the year there were no transfers (2019: Nil) between Level 1 and Level 2.

Investments classified within Level 3 have significant unobservable inputs. As observable prices are not available for these securities, the Company 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 IPEV Valuation Guidelines. New investments are initially held at cost, for a limited period, then at the price of the most recent investment in the investee. This is in accordance with IPEV Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following table presents the movement in Level 3 instruments for the year:

	2020			2019
	Total £000	Equity investments £000		Total £000	Equity investments £000
Opening balance	40,886	40,886		58,770	58,770
Sales during the year				(74)	(74)
Total losses for the year included in the Statement of Comprehensive Income	(9,844)	(9,844)		(17,810)	(17,810)
	31,042	31,042		40,886	40,886

Investments in Investment Funds

The Company has a number of investments in investment funds managed by MAM. Details of those investments are:

	30 September 2020			30 September 2019
	Investment Value £000	Proportion Held %		Investment Value £000	Proportion Held %
Tortoise Fund	16,066	4.6		24,014	3.1
Income Fund	9,394	6.6		14,305	2.7
Global Equity Fund	27,403	68.1		24,020	46.2
Global Focus Fund				8,272	4.3
International Equity Fund	11,484	64.5
US Equity Fund	8,490	4.4		9,922	5.1
UK Smaller Companies Fund*	2,945	1.5		3,106	1.0
	75,782			83,639

* The UK Smaller Companies Fund forms part of the UKES

The fees charged on these investments are disclosed in the material contracts section of the Directors' Report above.

In addition, the total value of all investments managed by MAM at 30 September 2020 was £115.3 million (2019: £134.6 million). Further details on the investments in the MAM funds are contained in the Chief Executive's Report above.

Substantial Share Interests

The Company's investments in the Global Equity Fund, with a cost of £16.5 million, and the International Equity Fund, with a cost of £10.0 million, are each a substantial interest in those funds at 30 September 2020 (2019: Global Equity Fund of £14.2 million). These holdings are not treated as a subsidiary or associate, rather each is accounted for as an investment held at fair value through profit or loss, in accordance with IAS 28 and IFRS 9.

Majedie Asset Management (MAM)

MAM is a UK based asset management firm providing investment management and advisory services across a range of UK and global equity strategies. The carrying value of the investment in MAM is included in the Balance Sheet as part of investments held at fair value through profit or loss.

	2020 £000			2019 £000
Cost of investment	540			540
Holding gains	30,465			40,301
Fair value of investment at 30 September		31,005			40,841

Under the new valuation approach the carrying value is usually assessed and approved quarterly by the Board following the relevant recommendation by the Audit Committee. The revised basis for valuation annualises the most recent quarterly earnings of MAM, applies a median of a peer group price earnings multiple with an unlisted liquidity discount of 20% (although this can be adjusted depending on market conditions). Performance fee earnings multiples are further discounted by 50%. Surplus net assets are then added, having deducted 200% of regulatory capital. Further details concerning the new methodology, including a sensitivity analysis, are contained in the Report of the Audit Committee in the full Annual Report and Accounts and the Chief Executive's Report above.

In accordance with the revised shareholders' agreement, the Company may sell a certain number of shares to the MAM Employee Benefit Trust at the relevant prescribed price (as calculated in accordance with the revised shareholders' agreement). The Company sold no shares during the year (2019: nil).

As at 30 September, the Company holds 57,523 ordinary 0.1p shares representing a 17.2% shareholding in MAM (2019: 57,523 ordinary 0.1p shares representing a 17.2% shareholding).

14 Trade and Other Receivables

	2020 £000			2019 £000
Sales for future settlement	122			199
Prepayments	46			45
Dividends receivable	30			73
Taxation recoverable	71			72
		269			389

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

15 Cash and Cash Equivalents

	2020 £000			2019 £000
Deposits at banks	6,756			2,635
Other cash balances*	769			763
		7,525			3,398

* Other cash balances represent unclaimed dividends by shareholders. Such cash is held in a separate account by the Company's registrar and is not used by the Company for day-to-day operations.

16 Trade and Other Payables

Amounts falling due within one year:

	2020 £000		2019 £000
Purchases for future settlement	370		82
Accrued expenses	245		256
Other creditors	769		763
Current portion of lease liability	37
		1,421		1,101

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

Amounts falling due after more than one year:

	2020 £000			2019 £000
£20.7m (2019: £20.7m) 7.25% 2025 debenture stock	20,570			20,547
Lease liability	250
		20,820			20,547

The debenture stock is secured by a floating charge over the Company's assets. Expenses associated with the issue of the debenture stock was deducted from the gross proceeds at issue and is being amortised over the life of the debenture. Further details on interest and the amortisation of the issue expenses are provided in note 8 above.

Further details on the lease liability are contained in note 20 below.

17 Ordinary Share Capital

	Number	2020 £000		Number	2019 £000
As at 1 October	53,055,483	5,305		53,439,000	5,344
Ordinary 10p shares bought back for cancellation	(41,596)	(4)		(383,517)	(39)
As at 30 September	53,013,887	5,301		53,055,483	5,305

All shares are allotted fully paid up, and are of one class only. During the year 41,596 Ordinary 10p shares were bought back for cancellation at a total cost of £93,000. In accordance with the Company's articles this was debited against the Capital Reserve. There are no Ordinary 10p shares in Treasury.

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

18 Net Asset Value

The net asset value per share has been calculated based on Equity Shareholders' Funds of £131,333,000 (2019: £155,074,000), and on 53,013,887 (2019: 53,055,483) ordinary shares, being the number of shares in issue at the year end.

19 Reconciliation of changes in liabilities arising from financing activities

		Non-cash charges
		At 30 September 2019 £000	Cash Flows £000	New Lease £000	Other £000	Effective interest rate accrual £000	At 30 September 2020 £000
£20.7m 7.25% 2025 debenture stock		20,547				23	20,570
Lease liability				287	(37)		250
Interest payable on debenture stock			(1,501)			1,501
Total liabilities from financing activities		20,547	(1,501)	287	(37)	1,524	20,820

The Other column includes the effect of the reclassification of the current portion of the lease liability and the accrual of deemed interest on the lease liability. Further details on the lease liability are contained in note 20 below. 

		Non-cash charges
		At 30 September 2018 £000	Cash Flows £000	Effective interest rate accrual £000	At 30 September 2019 £000
£20.7m 7.25% 2025 debenture stock		20,525		22	20,547
Interest payable			(1,501)	1,501
Total liabilities from financing activities		20,525	(1,501)	1,523	20,547

20 Leases

The Company as a lessee

The only lease held by the Company is in respect of its premises by way of a sub-lease arrangement with a superior lessee, which commenced in September 2020 for a term of five years.

Set out below are the carrying amounts of lease liabilities and the movements during the period:

		2020 £000
At 1 October 2019
Additions		287
Accretion of interest*
At 30 September 2020			287
Disclosure as:
Current			37
Non-current			250

*Interest accretion for the year was £155.

The following are the amounts recognised in profit or loss under its IFRS 16 lease:

		2020 £000
Depreciation expense of right of use assets		1
Interest expense on lease liabilities*
Total amount recognised in profit or loss			1

*Interest expense on lease liabilities was £155.

The Company has had no expenses relating to short-term leases, variable lease payments or leases of low-value assets.

The Company has had no cash outflows for its IFRS 16 lease in the year ended 30 September 2020. Future cash outflows of a fixed amount under the IFRS 16 lease are as follows:

Expiry Date	2020 £000			2019 £000
Within one year	35			60
Between one and two years	70
Between two and three years	70
Between three and four years	70
Between four and five years	70
		315			60

21 Financial Commitments

At 30 September 2020, the Company had no financial commitments which had not been accrued for (2019: none).

22 Financial Instruments and Risk Profile

As an investment company, the Company invests in securities for the long term in order to achieve its investment objective as stated above. Accordingly the Company is a long term investor and it is the Board's policy that no trading in investments or other financial instruments be undertaken. COVID-19 has introduced new uncertainty and its impact on the Company is mainly in terms of market risk and operational risk (see Business Review above).

Management of Market Risk

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

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

MAM as Fund Manager, can utilise derivative instruments for efficient portfolio management and investment purposes as it sees fit. There have been no derivatives used in the UKES in the period (2019: None). Certain MAM funds do use derivatives to meet their investment objectives.

The Company's financial instruments comprise its investment portfolio (see note 13), cash balances, debtors and creditors that arise directly from its operations such as sales and purchases for future settlement, accrued income, lease liability under IFRS 16 and the debenture loan used to partially finance its operations.

In the pursuit of its investment objective, the Company is exposed to various risks which could cause short term variation in its net assets and which could result in both or either a reduction in its net assets or a reduction in the revenue profits available for distribution by way of dividend. The main risk exposures for the Company from its financial instruments are market risk (including currency risk, interest rate risk and other price risk), liquidity risk, concentration risk and credit risk. COVID-19 has introduced new uncertainty into global equity markets however as a closed ended investment company with a long-term objective short term volatility is expected and is within stress testing limits. MAM have reviewed their fund portfolios and positioning in light of the pandemic and made adjustments as and if required.

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

Market Risk

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

·foreign currency risk;

·interest rate risk; and

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

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

Foreign Currency Risk

Exposure to foreign currency risk arises primarily and directly through investments in securities listed on overseas equity markets. A proportion of the net assets of the Company are denominated in currencies other than Sterling, with the effect that the balance sheet and total return can be materially affected by currency movements. The Company's exposure to foreign currencies through its investments in overseas securities as at 30 September 2020 was £5,394,000 (2019: £6,020,000).

The Company's investments in the MAM funds are in sterling denominated share classes. These share classes themselves are not hedged within the relevant MAM fund. The Company also has sterling denominated investments which may pay dividends in foreign currencies. Additionally the investment portfolio is subject to indirect foreign currency risk impacts by having investments in investee companies that whilst listed in the UK have global operations and as such are subject to currency impacts on their assets and revenues. It is not possible to accurately quantify these exposures and impacts.

MAM, as Fund Manager, monitors the Company's exposure to foreign currencies and the Board receives regular reports on exposures. The Company does not hedge any foreign currency exposures back to Sterling.

The currency risk of the non-sterling financial assets and liabilities at the reporting date was:

	2020			2019
Currency exposure	Overseas Investments £000	Total Currency Exposure £000		Overseas Investments £000	Total Currency Exposure £000
US Dollar	2,783	2,783		2,727	2,727
Swiss Franc	1,314	1,314		623	623
Euro	997	997		2,523	2,523
Yen	1	1		57	57
Other non-Sterling	299	299		90	90
	5,394	5,394		6,020	6,020

Sensitivity Analysis

If Sterling had strengthened by 5% relative to all currencies on the reporting date, with all other variables held constant, the income and net assets would have decreased by the amounts shown in the table below. The analysis was preformed on the same basis for 2019. The revenue impact is an estimated annualised figure based on the relevant foreign currency denominated balances at the reporting date.

Income Statement		2020 £000			2019 £000
Capital return		(270)			(301)
Net assets			(270)			(301)

A 5% weakening of Sterling against the same currencies would have resulted in an equal and opposite effect on the above amounts, on the basis that all other variables remain constant.

Interest Rate Risk

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

The Board sets limits for cash balances and receive regular reports on the cash balances of the Company. The Company's fixed rate debenture introduces gearing to the Company which is monitored within limits and is also reported to the Board regularly. Cash balances can also be used to manage the level of gearing to within the range as set by the Board. The Board sets the overall investment strategy and allocation and also have various limits on the investment portfolio which aim to spread the portfolio investments to reduce the impact of interest rate risk on investee company valuations. Regular reports are received by the Board in respect of the Company's investment portfolio and the relevant limits.

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

	2020 £000			2019 £000
Floating rate financial assets: UK Sterling	7,525			3,398
Financial assets not carrying interest	145,740			173,303
		153,265			176,701
Fixed rate financial liabilities:
UK Sterling	(20,857)			(20,547)
Financial liabilities not carrying interest	(1,384)			(1,101)
		(22,241)			(21,648)

Floating rate financial assets usually comprise cash on deposit with banks which is repayable on demand and receives a rate of interest based, in part, on the UK base rates in force over the period. The Company does not normally hold non-Sterling cash as all foreign currency receivables or payables are converted back into Sterling at the settlement date of the relevant transaction. The fixed rate financial liabilities comprise the lease liability under IFRS 16 (see note 20) which totals £287,000 and accrues interest under an effective interest rate method at a rate of 2.25% and the Company's debenture, totalling £20.7 million in total on a nominal basis. It pays a rate of interest of 7.25% per annum and will mature in March 2025. (2019: One debenture totalling £20.7 million nominal with an interest rate of 7.25% per annum. Maturity is in March 2025).

Sensitivity Analysis

Based on closing cash balances held on deposit with banks, a notional 0.5% decrease in the UK base interest rates would have no effect on net assets and the net revenue return before tax of the Company, due to the extremely low rates at the moment.

A 0.5% increase in interest rates would result in a larger impact, as is shown in the table below.

Income Statement	2020 £000			2019 £000
Revenue return	34			13
Net assets		34			13

Other Price Risk

Exposure to market price risk is significant and comprises mainly movements in the market prices and hence value of the Company's listed equity security investments and its investments in the unlisted MAM Funds, (although the funds themselves are unlisted they are primarily invested in listed equity securities), which are both disclosed in note 13 above. The Company also has unlisted investments which are indirectly impacted by movements in listed equity prices and related variables. The Board sets the overall investment strategy and allocation which aims to achieve a spread of investments across sectors and regions in order to reduce risk. The Board receives reports on the investment portfolio, performance and volatility on a regular basis in order to ensure that the investment portfolio is in accordance with the investment policy.

MAM's policy as Fund Manager is to manage risk through a combination of monitoring the exposure to individual securities, industry and geographic sectors, whilst maintaining a constant awareness in real time of the portfolio exposures in accordance with the investment strategy. Any derivative positions are marked to market and exposure to counterparties is also monitored on a daily basis by MAM. At the year end the Company itself did not hold any derivatives (2019: None).

As mentioned earlier, MAM may, and do, use derivative instruments including index-linked notes, contracts for difference, covered options and other equity-related derivative instruments for efficient portfolio management and investment purposes. As also noted previously this may occur in the MAM funds and there have been no derivatives used in the UKES. The Board has regular presentations from MAM on their investment strategy and approach.

The following table details the exposure to market price risk on the listed and unlisted equity investments:

		2020 £000			2019 £000
Non-current investments held at fair value through profit or loss
Listed equity investments		38,647			48,389
Unlisted equity investments (MAM Funds)		75,782			83,639
Unlisted equity investments		31,042			40,886
			145,471			172,914

Sensitivity Analysis

If share prices on listed equity security investments and the unlisted equity investments (MAM Funds) had decreased by 10% at the reporting date with all other variables remaining constant, the net return before tax and the net assets would have decreased by the amounts shown below. Details of the sensitivity analysis in respect of the investment in MAM is shown in note 13 above.

Income Statement		2020 £000			2019 £000
Capital return		11,443			13,203
Net assets			11,443			13,203

A 10% increase in listed equity security share prices would have resulted in a proportionately equal and opposite effect on the above amounts on the basis that all other variables remain constant.

Credit Risk

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

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

·Investment transactions are undertaken by MAM with a number of approved brokers in the ordinary course of business on a contractual delivery versus payment basis. MAM has procedures in place whereby all new brokers are subject to credit checks and approval by them prior to any business being undertaken. MAM utilises the services of a large range of approved brokers thereby mitigating credit risk by diversification.

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

Credit Risk Exposure

The table below sets out the financial assets exposed to credit risk as at the reporting date:

		2020 £000			2019 £000
Cash on deposit and at banks		7,525			3,398
Sales for future settlement		122			199
Interest, dividends and other receivables		147			190
			7,794			3,787
Minimum exposure during the year		3,153			2,889
Maximum exposure during the year		19,943			7,485

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

None of the financial assets were past due at the current or prior reporting date.

Liquidity Risk

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

Liquidity risk is monitored, although it is recognised that the majority of the Company's assets are invested in quoted equities and other quoted securities that are readily realisable (MAM fund investments are highly liquid). The Board has various limits in respect to how much of the Company's assets can be invested in any one company. The unlisted investments in the portfolio are subject to liquidity risk, but such investments (excluding MAM) are in realisation mode and represent a very small part of the portfolio. Nonetheless limits remain for any such investments and liquidity risk would always be considered when making investment decisions in such securities. The Company is subject to concentration risk due to its investment in MAM, at 20.4% (2019: 23.3%) of the Company's total assets. This investment is closely monitored by the Board who receive regular financial and operational reports, and it is believed that the current concentration risk here is mitigated somewhat by the diversification undertaken within the MAM business itself.

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

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

	2020
Undiscounted cash flows	Due within 1 year £000	Due between 1 and 2 years £000	Due between 2 and 3 years £000	Due 3 years and beyond £000	Total £000
7.25% 2025 debenture stock				20,700	20,700
Interest on debenture stock	1,501	1,501	1,501	2,251	6,754
Payments due in respect of the lease liability	35	70	70	140	315
Trade payables and other liabilities*	1,384				1,384
	2,920	1,571	1,571	23,091	29,153
*Excludes the current portion of the lease liability.
	2019
Undiscounted cash flows	Due within 1 year £000	Due between 1 and 2 years £000	Due between 2 and 3 years £000	Due 3 years and beyond £000	Total £000
7.25% 2025 debenture stock				20,700	20,700
Interest on debenture stock	1,501	1,501	1,501	3,752	8,255
Trade payables and other liabilities	1,101				1,101
	2,602	1,501	1,501	24,452	30,056

Categories of financial assets and liabilities

The following table analyses the carrying amounts of the financial assets and liabilities by categories as defined in IFRS 9:

Financial assets	2020 £000		2019 £000
Financial assets at fair value through profit or loss
Equity securities	145,471		172,914
		145,471		172,914
Other financial assets*		7,794		3,787
		153,265		176,701
Financial liabilities
Financial liabilities measured at amortised cost**	22,241		21,648
		22,241		21,648

* Other financial assets include cash and cash equivalents, sales for future settlement, dividend and interest receivable and other receivables.

** Financial liabilities measured at amortised cost include debenture stock in issue, lease liability, purchases for future settlement, investment management fees, other payables and accrued expenses.

The investment portfolio has been valued in accordance with the accounting policy in note 1 to the accounts, i.e. at fair value. The lease liability carrying value is considered to be its fair value. The debenture stock is classified as level 3 under the fair value hierarchy. The fair value of the debenture stock is calculated using a standard bond pricing method, using a redemption yield of a similar UK Gilt stock with an appropriate margin being applied.

	Book Value 2020 £000			Book Value 2019 £000			Fair Value 2020 £000			Fair Value 2019 £000
£20.7m (2019: £20.7m) 7.25% 2025 debenture stock	20,570			20,547			24,939			25,415
		20,570			20,547			24,939			25,415

Capital Management Policies and Procedures

The Company's capital management objectives are:

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

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

	2020 £000			2019 £000
Net Debt
Adjusted cash and cash equivalents*	(6,373)			(2,686)
Debentures	20,570			20,547
Lease liability	280
Sub total		14,477			17,861
Equity
Equity share capital	5,301			5,305
Retained earnings and other reserves	126,032			149,769
Shareholders' funds		131,333			155,074
Gearing
Net debt as a percentage of shareholders' funds		11.0%			11.5%

*Adjusted cash and cash equivalents comprise cash plus current assets less current liabilities.

Maximum potential gearing represents the highest gearing percentage on the assumption that the Company had no net current assets. As at 30 September 2020 this was 15.9% (2019: 13.2%).

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

· the level of gearing, taking into account MAM's views on capital markets;

·the level of the Company's free float of shares as the Barlow family owns approximately 54% of the share capital of the Company; and

· the extent to which revenue in excess of that required to be distributed should be retained.

These objectives, policies and processes for managing capital are unchanged from the prior period.

The Company is also subject to various externally imposed capital requirements which are that:

· the debenture stock are not to exceed, in aggregate, 66 2/3% of the adjusted share capital and reserves in accordance with the relevant Trust Deed;

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

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

Leverage is similar to gearing (as calculated in accordance with AIC guidelines previously), but the AIFMD mandates a certain calculation methodology which must be applied. Leverage as calculated under this methodology for the Company is:

Gross Method	2020 £000		2019 £000
Investments held at fair value through profit or loss	145,471		172,914
Total investments at exposure value as defined under the AIFMD	145,471		172,914
Equity Shareholders' Funds	131,333		155,074
Leverage (times)	1.11		1.12
Commitment Method	2020 £000		2019 £000
Investments held at fair value through profit or loss	145,471		172,914
Cash and cash equivalents	7,525		3,398
Total investments at exposure value as defined under the AIFMD	152,996		176,312
Equity Shareholders' Funds	131,333		155,074
Leverage (times)	1.16		1.14

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

These requirements are unchanged from the prior year and the Company has complied with them.

23 Related Party Transactions

Majedie Asset Management (MAM)

MAM is the Fund Manager to the Company, under the terms of an Investment Agreement which provides for MAM to manage the Company's investment assets on both a segregated portfolio basis and also by investments into various MAM funds. Details of the Investment Agreement are contained in the material contracts section of the Directors' report above. As Fund Manager, MAM is entitled to receive fund management fees. In respect of the UKES these are charged directly to the Company and are shown as an expense in its accounts. Any fees due in respect of investments made into any MAM funds are charged in the fund's accounts and are therefore included as part of the investment value of the relevant holdings. Details concerning the Company's investments managed by MAM are shown in the Chief Executive's Report above.

MAM is also entitled to receive performance fees on the Company's investment in the Tortoise Fund. There are no performance fees due currently.

In addition to the above, the Company retains an investment in MAM itself. Mr JWM Barlow is a non-executive director of MAM, but receives no remuneration for this role. MAM is accounted for as an  investment in the Company's accounts and is valued at fair value through profit or loss. Details concerning the Company's investment in MAM are included in the Chief Executive's Report above and on note 13 above.

The table below discloses the transactions and balances for the related party:

Transactions during the period:	2020 £000	2019 £000
Dividend income received from MAM	4,027	4,602
Management fee income due to MAM (UKES only)	271	373
Balances outstanding at the end of the period:
Between the Company and MAM (UKES fund management fees)	65	93
Value of the Company's investment in MAM	31,005	40,841

Remuneration

The remuneration of the Directors, who are the key management personnel of the Company, are set out below in aggregate for each of the categories specified in IAS 24: Related Party disclosures. There are no amounts outstanding at 30 September 2020 for Directors fees or salary (2019: Nil). Further information about the remuneration of individual Directors is provided in the audited section of the Report on Directors' Remuneration in the full Annual Report and Accounts.

	2020 £000	2019 £000
Short term employee benefits	368	344
	368	344

Registered Office	Registrars
1 King's Arms Yard	Computershare Investor Services PLC
London EC2R 7AF	The Pavilions
Telephone: [phone]	Bridgwater Road
E-mail: [e-mail]	Bristol BS99 6ZZ
Registered Number: 109305 England	Telephone: [phone]
Company Secretary	Shareholders should notify all changes of name and address in writing to the Registrars. Shareholders may check details of their holdings, historical dividends, graphs and other data by accessing www.investorcentre.co.uk .
Link Company Matters Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
	Shareholders wishing to receive communications from the Registrars by email (including notification of the publication of the annual and interim reports) should register on-line at www.investorcentre.co.uk/ecomms . Shareholders will need their shareholder number, shown on their share certificate and dividend vouchers, in order to access both of the above services.
Fund Manager
Majedie Asset Management Limited
10 Old Bailey
London EC4M 7NG
Telephone: [phone]
Email: [e-mail]
Depositary	Auditors
The Bank of New York Mellon (International) Limited	Ernst & Young LLP 25 Churchill Place
1 Canada Square	Canary Wharf
London E14 5AL	London E14 5EY
The Depositary acts as global custodian and may delegate safekeeping to one or more global sub-custodians. The Depositary has delegated safekeeping of the assets of the Company to the Bank of New York Mellon SA/NV and The Bank of New York Mellon.	Stockbrokers J.P. Morgan Cazenove 25 Bank Street London E14 5JP
AIFM Majedie Investments PLC Solicitor	ISIN
	Ordinary: GB0005555221
	Debenture 7.25% 31/03/2025: GB0006733058
Dickson Minto W.S.	Ticker
16 Charlotte Square	Ordinary: MAJE
Edinburgh EH2 4DF	Debenture 7.25% 31/03/2025: BD22
Website	Sedol
www.majedieinvestments.com	Ordinary: 0555522
	Debenture 7.25% 31/03/2025: 0673305

Annual General Meeting

The one hundred and tenth Annual General Meeting will be held at the offices of the Company at, 1 King's Arms Yard, London EC2R 7AF on Wednesday, 20 January 2021 at 12 noon.

As stated above, on account of the Coronavirus pandemic and associated Government guidance, including the rules on physical distancing and limitations on public gatherings in place at the time of publication of this document, and in accordance with the Corporate Governance and Insolvency Act 2020, physical attendance at the Annual General Meeting will not be possible. Arrangements will be made by the Company to ensure that the minimum number of shareholders required to form a quorum will attend the Annual General Meeting in order that the meeting may proceed.

As shareholders will not be able to attend the Annual General Meeting, in order to provide shareholders with the opportunity to engage with the Board and the Manager prior to the close of proxy voting for the AGM, the Company will hold a live one-way audio webcast on Wednesday 13 January 2021, at 2pm, one week before the AGM itself. Shareholders will be able to submit questions electronically to the Board or the Manager during the live event. To register for this webinar, visit the Kepler Trust Intelligence website and view their research on the Company (https://www.trustintelligence.co.uk/articles/majedie-sep-2020).

As shareholders will not be able to attend the Annual General Meeting, shareholders are strongly encouraged to submit a proxy vote in advance of the meeting. Shareholders are also strongly advised to appoint the "Chair of the meeting" as their proxy, rather than a named person, as such person will not be permitted entry to the meeting.

A form of proxy for use at the AGM is enclosed with this document. To be valid, the form of proxy should be completed, signed and returned in accordance with the instructions printed thereon, as soon as possible, and in any event, to reach the Company's registrars, Computershare, no later than 48 hours before the time of the Annual General Meeting, or any adjournment of that meeting.

This situation is constantly evolving, and the UK Government may change current restrictions or implement further measures relating to the holding of general meetings during the affected period. Any changes to the arrangements for the AGM (including any change to the location or in relation to permitted attendance at the AGM) will be communicated to shareholders before the meeting through our website https://www.majedieinvestments.com/ and, where appropriate, by RNS announcement.

National Storage Mechanism

A copy of the Annual Report and Accounts will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection there, situated at: 

https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

A copy of the Annual Report and Accounts, which includes the Notice of Annual General Meeting will be delivered to shareholders shortly and can also be found at www.majedieinvestments.com.

ENQUIRIES

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

END

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

 

END

 

 

FR TLBLTMTTMBTM