2013
Majedie Investments PLC
Annual Report
30 September 2013
Contents
Overview 1 to 3
1
1
2
3
Investment Objective
Highlights for 2013
Year’s Summary
Ten Year Record
Strategic Report 4 to 19
4
7
12
16
17
17
18
Chairman’s Statement
Business Review
Investment Manager’s Report
Asset Distribution
Twenty Largest UK Investments
Ten Largest Overseas Investments
Valuation of Investments
Governance 20 to 44
20
21
26
31
35
44
Board of Directors
Director’s Report
Corporate Governance Statement
Report of the Audit Committee
Report on Directors’ Remuneration
Statement of Directors’ Responsibilities
Financial Statements 45 to 96
45
48
49
50
52
54
55
56
57
58
Report of the Independent Auditor
Consolidated Statement of Comprehensive Income
Company Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Cash Flow Statement
Company Cash Flow Statement
Notes to the Accounts
Information 97 to 104
97
102
103
Loose
Notice of Meeting
Majedie Savings Plan
Shareholder Information
Form of Proxy
Cautionary statement regarding forward-looking statements
This Annual Report has been prepared for the members of Majedie
Investments PLC (“the Company”) and no one else. The Company, its
Directors or agents do not accept or assume responsibility to any other
person in connection with this document and any such responsibility
or liability is expressly disclaimed.
This Annual Report contains certain forward-looking statements with
respect to the principal risks and uncertainties facing the Company. By
their nature, these statements and forecasts involve risk and uncertainty
because they relate to events and depend on circumstances that may
or may not occur in the future. There are a number of factors that
could cause actual results or developments to differ materially from
those expressed or implied by these forward-looking statements and
forecasts. The forward looking statements reflect the knowledge and
information available at the date of preparation of this Annual Report
and will not be updated during the year. Nothing in this Annual Report
should be construed as a profit forecast.
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
2013
Total shareholder return (including dividends):
+9.7%
Net asset value total return (including dividends):
+16.9%
Total dividends (per share):
Directors’ valuation of investment
in Majedie Asset Management Limited:
Javelin Capital LLP
Net asset value included in Group accounts:
10.5p
£46.0m
£2.5m
RePoRT & ACCouNTs 2013
1
Year’s summary
Group Capital Structure
Note
2013
2012
as at 30 september
Total Assets
Which are attributable to:
Debenture holders (Debt at par value)
equity shareholders
Gearing
Potential Gearing
Group total returns (capital growth plus dividends)
Net asset value per share (debt at par value)
share price
Group capital returns
Net asset value per share (debt at par value)
share price
Discount of share price to net asset value per share
Debt at par value
Debt at fair value
Group revenue and dividends
Net Revenue available to equity shareholders
Net revenue return per share
Total dividends per share
Total administrative expenses
ongoing charges:
Group (including costs of running subsidiary entities)
Company (costs of operating the Company)
Notes
Definitions of terms used in the above summary are as follows:
1. Total Assets Total assets are defined as total assets less current liabilities.
1
2
4
4
5
3
3
6
£159.0m
£146.0m
£33.8m
£125.2m
21.5%
27.0%
+16.9%
+9.7%
240.5p
160.0p
33.5%
28.4%
£3.7m
6.8p
10.5p
£2.0m
2.1%
1.7%
£33.8m
£112.2m
9.2%
30.1%
+5.5%
+19.6%
215.6p
155.8p
27.8%
20.0%
£2.7m
4.9p
10.5p
£3.2m
2.9%
1.8%
%
+8.9
+11.6
+11.5
+2.7
+38.8
2. Debt at par or fair value Par value is the nominal or face value attaching to the debentures which will be paid by the Company to the debenture holders on maturity. Fair
value is the estimated market price the Company would pay to the debenture holders if the debentures were paid back before maturity at the relevant date.
3. Net Asset Value The Net Asset value (NAv) is the value of all the Company’s assets less any liabilities. The NAv is usually expressed as an amount per share.
4. Gearing and Potential Gearing Gearing represents the amount of borrowings that a company has and is also referred to as leverage. It is usually expressed as a percentage
or ratio or equity shareholders funds and a positive percentage or ratio above one shows the extent of the borrowings. Gearing is calculated as borrowings less cash balances
to arrive at a net borrowings figure. Potential Gearing excludes cash from the calculation. Details of the calculation for the Company are in note 25 on page 94.
5. Total Return Total returns include any dividends paid as well as capital returns as a result of an increase or decrease in a company’s share price or net asset value.
6. Ongoing charges ongoing charges are a measure of the normal ongoing costs of running a company. Further information is contained in the Business Review section of
the strategic Report on page 10.
Year’s high/low
share price
Net asset value
Discount (debt at par)
Discount (debt at fair value)
high
low
high
low
high
low
high
low
2013
183.0p
151.5p
240.5p
211.9p
33.5%
21.7%
28.4%
13.2%
2012
168.5p
139.5p
226.5p
202.7p
29.8%
16.9%
35.0%
20.0%
2
MAJeDIe INvesTMeNTs PLC
Ten Year Record
to 30 september 2013
Equity
share-
holders’
Funds
£000
Total†
Assets
£000
NAV
Per Share
Pence
Share
Price
Pence
Discount
%
Earnings
Pence
Dividend
Pence
Gearing/
(Net Cash)
%
Potential
Gearing
%
Ongoing
Charges#
%
172,144
138,893
266.5
227.5
14.63
5.25
8.75
212,600
178,845
343.0
303.5
11.52
8.94
9.05**
242,903
209,189
403.2
338.3
16.09
12.45
9.50**
286,944
253,216
490.7
413.3
15.77
13.60
14.50**
187,209
153,465
157,943
124,181
150,940
117,159
145,683
111,634
146,057
112,234
159,013
125,166
296.5
238.7
225.2
214.5
215.6
240.5
250.0
15.68
12.45
12.75**
189.8
20.51
8.14
10.50**
191.5
15.00
11.83
13.00**
139.5
34.96
155.8
27.74
160.0
33.47
4.66
4.90
6.80
10.50**
10.50**
14.51
16.18
13.94
10.65
16.69
17.22
24.11
(1.72)
9.24
10.50**
21.47
24.25
18.65
16.12
13.32
21.99
27.19
28.83
30.28
30.14
27.04
1.36
1.19
1.28
1.24
1.61
2.06
2.36
1.92
1.83
1.73
Year
End
2004
2005
2006*
2007*
2008
2009
2010
2011
2012
2013
Notes:
The Gearing Ratio is calculated as shown on note 25 on page 94.
* Restated to reflect the review of the treatment of the investment in Majedie Asset Management.
** Net dividends represent dividends that relate to the Company’s financial year. under International Financial Reporting standards (IFRss)
dividends are not accrued until paid or approved.
# As from May 2012, ongoing Charges replace previous cost ratios.
RePoRT & ACCouNTs 2013
3
strategic Report
Chairman’s statement
Following a strong first half of the year for world equity markets the 3rd quarter was weaker
owing to concerns about a tightening of US Monetary policy. However when this proved
unfounded markets rebounded in the 4th quarter as further evidence of economic recovery
emerged. Overall for the year markets showed a strong return.
During the year to 30 september 2013 the net asset
value (NAv) and share price, both on a total return
basis, returned 16.9% and 9.7% respectively with the
difference reflecting an increase in the Company’s
discount over the year. I highlight various aspects of
performance for the period which is further detailed in
the Investment Manager’s section of the strategic
Report on pages 12 to 15. In order to achieve the
Company’s investment objective the portfolio, whilst
mainly invested in equities, is also invested in asset
classes which are not correlated to equity returns and
which should provide protection to the portfolio in the
event of weak equity markets. Implicit in this strategy is
that in a year of strong equity markets, such as the
past year, the Company’s return will not fully reflect the
performance of underlying equities. The Company’s
return is in line with other Investment Trusts that have
adopted such a strategy over both the last year and
the last three years, on a total return basis.
Results and Dividends
The Company has adopted a suite of new accounting
standards the major impact of which is in the scope of
the Group consolidation. The relevant change, which
has no impact on the Group NAv, is that the
Company’s investment in the Javelin Capital emerging
Markets Alpha Fund (JCeMAF) is now held as an
investment at fair value through profit or loss consistent
with the Company’s other investments, rather than
being consolidated previously. Further details of this
change are shown in the Report of the Audit
Committee on pages 31 to 34 and in note 1 to the
Accounts on pages 60 to 62.
The Group’s net revenue return before tax for the year
to 30 september 2013 was £3.7m compared to £2.7m
for the prior year period. Group income for the year
remained flat at £5.2m, which included dividends from
Majedie Asset Management Limited (MAM) of £2.3m
(essentially unchanged from the prior year period).
Finally, Group income was modestly improved by a
small amount of external fee income from Javelin
Capital LLP (Javelin Capital).
Total Group administrative expenses were £2.0m for
the period compared to £3.2m in the prior year period.
This decrease primarily reflects continued cost
reductions at Javelin Capital but also reflects the
closure of the Javelin Capital Global equity strategies
Fund in the prior year. At the Company level expenses
decreased by £0.1m during the year which in part
reflects the Company’s ongoing charges percentage
falling to 1.7% from 1.8%. As I have mentioned in prior
years, cost control remains a key focus of the Board.
The Board has decided that the final dividend is to be
maintained at 6.3 pence per share which is consistent
with previous years. The final dividend will be paid on
22 January 2014 to shareholders on the register on
10 January 2014.
During the year the Company reduced its equity
holding in MAM for a total consideration of £5.9m and
a resultant total realised gain of £5.7m. As in prior
years, the valuation of the investment in MAM is
regularly reviewed by the Board. As such the Board
have determined that the carrying value of our
remaining holding will increase to £46.0m as at
30 september 2013 as I explain in the investment
portfolio section below.
In contrast the investment in Javelin Capital is
consolidated in the Group accounts at £2.5m, being its
net asset value (and is included at its net asset value in
the weekly NAvs released to the market), as required
under IFRs, but is held in the Company accounts at
cost in accordance with our policy for unquoted
investments. The Board has reviewed the carrying
value of Javelin Capital and has determined that as at
30 september 2013 the carrying value of Javelin
Capital will be kept at cost, being £8.0m, in the
Company accounts.
4
MAJeDIe INvesTMeNTs PLC
Investment Portfolio
The Investment Manager’s section of the strategic
Report on pages 12 to 15 provides the detailed
commentary on the Group’s investment activity and
performance. However I would like to provide an
overview of the key issues that affected the outturn for
the year.
The Core Portfolio returned 17.4%, a relative
underperformance as against the benchmark of 1.65%
for the year. The portfolio’s relative performance
recovered in the second half of the year having lagged
the strong rally in the first half, but it still remained
behind the index for the full year. In terms of geography
the main positive performer was the uK whilst stock
selection in the us was the largest negative. I am
pleased that the contribution from Japan was neutral
as that market was particularly volatile. The overall
performance was in line with other well known income
managers. I would also like to comment on the
Realisation Portfolio which has been in existence since
2009 and consisted of illiquid stocks that could not be
immediately sold. The largest stock, vostok energy has
now been fully written down. The Portfolio is now
immaterial for the Company, but it has been a consistent
drag to the performance of the Group since 2009.
secondly I would like to turn to the absolute return
fund managed by Javelin Capital (JCeMAF). In
emerging markets the lack of trends or market
direction has meant that the strategy has been unable
to perform as I would have liked and expected. The
JCeMAF declined by 5.9% over the year, after costs
and fees. As markets return to normality I expect the
JCeMAF to generate returns. The rationale for
investing in this fund is to provide returns that are not
correlated to that of equities with the objective to
produce a more balanced return for the Company
across the investment cycle. I note that asset classes
such as Gilts and Gold which are used to achieve the
same result have returned over the past year -4.5%
and -24.0% respectively so the performance of the
JCeMAF should remain in context.
Thirdly I would draw attention to MAM who have had
an exceptional year both in terms of investment
performance in their funds and financial performance.
The Company further reduced its holding in May, by
the equivalent of 3.5% of the total MAM shares in
issue. The share sale was alongside and in equal
proportion to the other founding shareholders and the
Company now owns 26.7% of MAM. The Board has
increased the valuation to £46.0m using a consistent
methodology with that used in previous years.
Javelin Capital
Whilst the investment environment has not been
conducive for Javelin Capital’s investment strategy it
has continued to cut its costs over the last year. These
amount to a fall of circa 30% and follow large savings
in the previous year. The breakeven level of external
third party assets has fallen to approximately £25m
and the business is now very operationally leveraged to
the receipt of third party funds which will be predicated
on an improved performance of the JCeMAF.
New Company Reporting Framework
New regulations for listed company reporting have
been introduced and have been implemented for the
first time by the Company in this Annual Report. These
new requirements include the introduction of a new
strategic Report, Audit Committee Report and a
revised Directors’ Remuneration Report and Auditor’s
Report. We have also updated relevant parts of the
Annual Report in conjunction with these new
requirements which I hope will make the Annual Report
more comprehensible.
Alternative Investment Fund Managers Directive
(AIFMD)
I have mentioned in previous statements that the
Company, in common with other Investment Trusts, will
have to comply with this new european Directive. The
AIFMD will require the Company to appoint an
Alternative Investment Fund Manager (AIFM) which will
be regulated by the Financial Conduct Authority (FCA).
After careful consideration we have determined that the
most appropriate outcome is for the Company to
undertake this new role. This new regulation will take
effect for the Company from 22 July 2014 and it also
requires the appointment of a depositary. I will provide
further updates in my future statements.
RePoRT & ACCouNTs 2013
5
strategic Report
Chairman’s statement
Foreign Account Tax Compliance Act (FATCA)
FATCA is another piece of new regulation impacting
the Company which would have required reporting by
the Company to the us tax authorities. I am pleased to
report that during the year HMRC has reached an
agreement with the us tax authorities such that the
impact of FATCA has been substantially diminished. As
with the AIFMD I will provide further updates in my
future statements.
Annual General Meeting
The AGM will be held on 15 January 2014 at 12.00pm
at the City of London Club, 19 old Broad street
London eC2N 1Ds. Details are set out in the notice of
meeting on page 97. As in prior years there will be
presentations and an opportunity to ask questions. I
do hope that you will be able to attend.
Summary
There are still many uncertainties facing the financial
markets despite signs that in the developed world the
recovery in financial markets is gaining traction.
Additionally there are numerous regulatory changes
that your Company needs to remain abreast of and I
have spent some time on the AIFMD as this is the
most relevant from a time perspective.
Against this background and given the company’s
stated Investment objectives it is satisfactory that over
the one and three year periods the performance has
begun to achieve results in line with the peer group of
similarly aligned Investment Trusts. We remain strongly
focussed on continuing to improve the Group’s relative
and absolute financial performance.
Andrew J Adcock Chairman
9 December 2013
6
MAJeDIe INvesTMeNTs PLC
strategic Report
Business Review
Introduction
Majedie Investments PLC (the Company) is an investment trust company with an investment objective to maximise
total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. In seeking
to achieve this objective the Board has determined an investment policy and related guidelines and limits (described
on page 8). Both the investment objective and the investment policy were approved by shareholders at a general
meeting of the Company on 9 october 2012.
In pursuing the investment objective the Company has a business model that includes other entities, which together
form the Group. The Group (as consolidated in the financial statements presented in this Annual Report) comprises
the following active entities:
Entity name
Majedie Investments PLC
Javelin Capital LLP
Nature of Operations
Investment Trust Company investing in equities
worldwide (including investments in JCeMAF and MAM)
Asset Management (Investment Manager and General
Administrator to the Company)
Majedie Portfolio Management Limited
Majedie share Plan Manager
Javelin Capital services Limited
Administrative services for Javelin Capital
Majedie unit Trust
unauthorised unit Trust
Further details about the subsidiary entities can be found in note 14 to the Accounts on pages 80 and 81.
under the business model used by the Company all operations are outsourced to other service providers (details can
be found on pages 24 and 25.), although in accordance with the strategy and guidelines set by the Board and under
its oversight.
The purpose of the strategic Report (which is the strategic Report for the Group) is to inform the shareholders of
the Company and help them assess how the directors have performed their duty to promote the success of the
Company in accordance with section 172 of the Companies Act 2006 by:
• analysing development and performance using appropriate Key Performance Indicators (KPIs);
• providing a fair and balanced review of the Company’s business;
• outlining the principal risks and uncertainties affecting the Company;
• describing how the Company manages these risks;
• setting out the Company’s environmental, social and ethical policy;
• outlining the main trends and factors likely to affect the future development, performance and position of the
Company’s business; and
• explaining the future business plans of the Company.
RePoRT & ACCouNTs 2013
7
strategic Report
Business Review
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
Javelin Capital LLP, 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 Javelin Capital, (measured
by reference to the Company’s cost of investment) will not exceed 10 per cent. of the Company’s gross assets.
Risk Diversification
Whilst the Company will at times invest and manage its assets in a manner that is consistent with spreading
investment risk, there will be no rigid industry, sector, region or country restrictions.
The overall investment approach is based on an analysis of global economies sector trends with a focus on
companies and sectors judged likely to deliver strong growth over the long term. The number of investments held,
together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard
to liquidity, market volatility, currency movements and revenue streams.
The Company will not invest in any holding that would, at the time of investment, represent more than 15 per cent.
of the value of its gross assets save that the Company may invest up to 25 per cent. of its gross assets in any single
fund managed by Javelin Capital. The Company will only invest in funds managed by Javelin Capital where the
Board believes that the investment policy of such funds is consistent with the Company's objective of spreading
investment risk.
The Company may utilise derivative instruments including index-linked notes, contracts for difference, covered
options and other equity-related derivative instruments for efficient portfolio management and investment purposes.
Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading
and diversification that apply to the Company’s direct investments, as described above.
Asset Allocation
The assets of the Company are split into four major groups. These are the Core Portfolio, funds managed by Javelin
Capital LLP, and the Company’s investments in MAM and Javelin Capital LLP.
Benchmark
The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently.
For the actively managed Core Portfolio the benchmark comprises 70 per cent. FTse All-share Index and 30 per
cent. FTse World ex-uK Index (sterling) on a total return basis. Any investments made into Javelin Capital LLP
products are measured against the relevant fund benchmark as contained in the fund’s prospectus. It is important to
note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board
however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time,
which remain subject to the investment restrictions set out in this section.
Gearing
The Company uses gearing currently via long term debentures. The Board has the ability to borrow up to 100 per cent. 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 per cent. and any additional indebtedness is not to exceed 20 per cent. of adjusted capital and reserves.
8
MAJeDIe INvesTMeNTs PLC
Regulatory and Competitive Environment
The Company is an investment trust and has a premium
listing on the London stock exchange. It is subject to
uK and european legislation and regulations including
uK company law, IFRss, Listing, Prospectus and
Disclosure and Transparency Rules, taxation law and
the Company’s own Articles of Association. The
directors are charged with ensuring that the Company
complies with its objectives as well as these regulations.
under the Companies Act 2006, section 833, the
Company is defined as an investment company.
The financial statements, starting on page 48, 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
IFRss, supplemented by the Revised statement of
Recommended Practice for Investment Trust
Companies and venture Capital Trusts (soRP) issued
in January 2009. The principal accounting policies of
the Company are set out in note 1 to the accounts on
pages 59 to 66. The Auditor’s opinion on the financial
statements, which is unqualified, appears on pages 45
to 47.
Total Return Philosophy & Dividend Policy
The directors believe that investment returns will be
maximised if a total return policy is followed whereby
the Investment Manager pursues the best opportunities.
The Company has a comparatively high level of
revenue reserves for the investment trust sector. At
£21.8m, the revenue reserves represent approximately
four times the current annual core dividend distribution.
The strength of these reserves will from time to time
assist in underpinning our progressive dividend policy
in years when the income from the portfolio is
insufficient to cover completely the annual distribution.
The policy aim is to increase dividends by more than
inflation over the long term.
Performance Management
The Board uses the following Key Performance Indicators
(KPIs) to help assess progress against the Company’s
objectives. Further comments on these KPIs are
contained in the Chairman’s statement and Investment
Manager’s Report sections of the strategic Report on
pages 4 to 6 and pages 12 to 15 respectively.
• Net Asset value (NAv) and shareholder Total Return:
The Board believe that asset return is fundamental
to delivering value over the long term and is a key
determinant of shareholder return. The Board further
believe that, in accordance with the Company’s
objective, the total return basis (which includes
dividends paid out to shareholders) is the best
measure of how to measure long term shareholder
return. The Board at each meeting receives reports
from the Investment Manager detailing the
Company’s NAv and shareholder total return
performance, asset allocation and related analyses.
Details of the NAv and share price performance for
the year are shown on page 2.
• Investment Group performance:
The Board believes that after asset allocation the
performance of each of the investment groups (as
per the investment policy on page 8) is the key
driver of NAv return and hence shareholder return.
The Board receives at each meeting detailed reports
from the Investment Manager showing the
performance of the investment groups which also
includes relevant attribution analysis. The Investment
Manager’s section of the strategic Report on pages
12 to 15 provides further detail on each investment
group’s performance for the year.
• share Price 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 a
premium or discount and as such is another
component of total shareholder return. The Board is
cognisant of the Company’s share price discount
but as noted previously believes that the best
approach to delivering shareholder value over the
long term is through asset growth. The Board
continually monitors the Company’s 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. Details of movements
in the Company’s share price discount over the year
is shown in the Year’s summary on page 2.
RePoRT & ACCouNTs 2013
9
strategic Report
Business Review
• expenses:
The Board is aware of the impact of costs on
returns and is conscious of seeking to minimise
these both at the Company and Group level. The
industry wide measure for investment trusts is
ongoing Charges which seeks to quantify the
ongoing costs of running the Company. This
measures the annual normal ongoing costs of an
Investment Trust excluding performance fees, one
off expenses and investment dealing costs as a
percentage of average equity shareholders funds.
Any investments made into pooled funds are
included using the Company’s share of estimated
ongoing fund running costs. The calculation of
ongoing charges at the Group level is not
considered as relevant as they include expenses of
operating subsidiaries which are run on the basis of
achieving a profit for the Company. Nonetheless the
Board does pay close attention to costs in the
subsidiary entities. This can be seen by the
continued strong reduction in costs at Javelin
Capital as detailed in the Chairman’s statement
section of the strategic Report on page 5. Details of
ongoing charges for the year are shown in the
Year’s summary on page 2.
• Dividend Growth:
Dividends paid to shareholders are an important
component of the total shareholder return and this
has been included in the Company’s investment
objective. The Board is aware of the importance of
this objective to the Company’s shareholders and
has maintained the dividend by using some of the
Company’s large revenue reserves which amount to
in excess of £21m as at 30 september 2013. In
monitoring this objective the Board considers that
requirement to increase dividends by more than the
rate of inflation over the long term should be
measured from 1985 when the Company became
an investment trust. The Board receives detailed
management accounts and forecasts which show
the actual and forecast financial outturns, and
available reserves, for the Company and the Group.
For the year ended 30 september 2013 dividend
growth since 1985 has been 4.7% (5.3% including
special dividends) which is ahead of inflation over
that period.
Principal Risks
The principal risks and the Company’s policies for
managing these risks and the policy and practices with
regard to financial instruments are summarised below
and in note 25 to the accounts on pages 85 to 94.
The Company has a range of equity investments
including substantial investments in two unlisted asset
management businesses, large cap global equities and
an investment in an emerging market equities absolute
return fund. The major risk for the Company remains
investment risk, primarily market risk; however it is
recognised that the investments in the two unlisted
asset management businesses, and in particular the
investment in MAM, represent a degree of
concentration risk for 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 Management Agreement the
Investment Manager manages the Company’s assets.
The Core Portfolio is managed with various specific
limits for individual stocks and market sectors which
are employed to restrict risk levels. The level of portfolio
risk in the Core Portfolio is assessed in relation to the
benchmark utilising various portfolio risk management
tools. It should be noted that whilst we have a
benchmark in the Core Portfolio, the portfolio is
constructed independently and can be significantly
different. Therefore the Core Portfolio can experience
periods of volatility over the short term. 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:
i. Strategy Risk:
an inappropriate investment strategy could result in
poor returns for shareholders and a widening of the
discount of the share price to the NAv per share.
The Board regularly reviews strategy with the
Investment Manager in relation to a range of issues
including the allocation of assets between
geographic regions and industrial sectors, level and
effect of gearing and currency exposure;
10
MAJeDIe INvesTMeNTs PLC
The Company and the Group, when considering their
day to day operations, aim to conduct themselves
responsibly, ethically and fairly. Javelin Capital, as the
Company’s Investment Manager, provides investment
management services to the Company to assist it to
meet its objectives. In doing so it operates within the
guidelines as set by the Board and takes account of
social, environmental, ethical and human rights factors
where appropriate.
Gender Diversity
The Board are aware of the recommendations made in
the Lord Davies Review in 2011 in respect to Board
diversity. The Company’s policy on diversity is included
under the Nomination Committee on page 27 and this
is applied when a new appointment to the Board is
required. During the year no new appointments were
made, with the only movement being in respect of
Mr Hv Reid who retired on 16 January 2013 and was
not replaced. As such at the year end the composition
of the Board was that all the directors were male.
on behalf of the Board
Andrew J Adcock Chairman
9 December 2013
ii. Business Risk:
inappropriate management or controls in either
MAM and/or Javelin Capital LLP could result in
financial loss, reputational risk and regulatory
censure. The Board has representation on both
entities’ governing boards to monitor business
financial performance and operations;
iii. Compliance Risk:
failure to comply with regulations could result in the
Company losing its listing and/or being subjected to
corporation tax on its capital gains. The Board
receives and reviews regular reports from the fund
administrator on its controls in place to prevent non-
compliance of the Company with rules and
regulations. The Board also receives regular
investment listings and income forecasts as part of
its monitoring of compliance with sections 1158 to
1162 of the Corporation Tax Act 2010; and
iv. Operational Risk:
inadequate financial controls and failure by an
outsourced supplier to perform to the required
standard could result in misappropriation of assets,
loss of income and debtor receipts and mis-reporting
of NAvs. The Board and Audit Committee regularly
review statements on internal controls and
procedures and subject the books and records of the
Company to an annual external audit. The Corporate
Governance statement on pages 26 to 30 and the
Report of the Audit Committee on pages 31 to 34
provide further information in respect of internal
control systems and risk management procedures.
The systems in place to manage the Company’s
internal controls are described further in the Corporate
Governance statement on page 29.
Employees, Social, Environmental, Ethical and
Human Rights Policy
The Company is an investment trust company with no
employees and as such the Board considers that the
Company has a very limited impact on the
environment. In respect of the Group the only
operating business is Javelin Capital which as a small
asset manager operating in the financial services
sector from leased premises in the City of London, has
a very limited impact on the environment. Further
information can be found in the Directors report on
page 23.
RePoRT & ACCouNTs 2013 11
strategic Report
Investment Manager’s Report
The Company’s assets are managed in four separate
major groups which the Board continues to believe
provide the correct balance in order to achieve the
Investment objective of maximising shareholder return
whilst looking to increase dividends by more than the
rate of inflation over the long term.
The chart on page 15 demonstrates the impact that
each investment group and other characteristics of the
Group have made on the Net Assets Performance
during the year.
Core Portfolio
As at 30 september 2013, the value of the Core
Portfolio was £78.1m, representing 49.1% of the
Group’s Total Assets. The Core Portfolio comprises
holdings in large-cap uK and international stocks, a
small number of carefully selected mid-cap companies
and cash, managed under an equity income
investment mandate. The portfolio is benchmarked to
perform against an index of 70% in uK listed
companies and 30% overseas.
During the year, the Core Portfolio Total Return was
17.4%, an underperformance against its investment
benchmark of 1.65%. The majority of this
underperformance occurred in the us portion of the
portfolio whilst holding a modest amount of cash, in
what turned out to be a positive year overall for
markets was also a negative factor, particularly after
investment sentiment rebounded so quickly towards
the end of June. However, the portfolio gained around
0.6% against its investment benchmark during the
second half of the financial year as markets rotated
away from international consumer stocks and mining
stocks gained ground following a significant derating
during the earlier part of the year.
Apart from a small sell-off during the latter half
of November, equity markets made steady progress
during Q4 2012. There was, however, a certain amount
of tension at the end of the year as a stand-off
developed in the us Congress over funding
requirements for the government; these were resolved
in an eleventh-hour compromise and, as a result,
markets entered 2013 in robust form. The FTse 100
index rallied from the 6,000 level at the beginning
of January and, despite a degree of faltering during the
end of March and early April, posted strong gains to
rally by the middle of May to near to its all time record
closing level of 6,930, last seen as long ago
as December 1999. Thereafter, a sharp retrenchment
took place over the following month, exacerbated
mainly by fears of an ending of the Quantitative easing
programme carried out by the Federal Reserve in the
us and also by data indicating that economic growth
in China was slowing. Global Markets regained their
equanimity, however, towards the end of June following
assurances that support for global bond markets
would not suddenly be turned off. Whilst in the uK,
markets reacted positively to forward guidance on
monetary policy by the new Governor of the Bank of
england indicating that interest rates were unlikely to
rise until beyond 2015, despite the fact that economic
data from the uK showed that growth was starting to
pick up quite sharply. Following a sharp rally early
in July, markets remained generally range-bound until
the end of the summer.
In the uK, which comprises the majority of the
portfolio’s holding by value (67%), it was satisfactory to
note that investment performance of the Core Portfolio
outperformed its benchmark the All share index which
rose 18.9% on a total return basis. A number of new
holdings such as GKN, the automotive engineer,
Pennon, the domestic water utility, AMeC, the global
oils service provider, Hammerson, the uK and
european property investor and developer, smith and
Nephew, the medical equipment company, and
elementis, a global specialist chemical company with a
uK listing were introduced, along with ultra electronics,
the defence contractor. entire holdings in Britvic, the
soft drinks manufacturer and distributor, Balfour Beatty,
the building and infrastructure contractor, and Group 4
securicor, the money handling and prison operating
company were sold.
In terms of major contributions to the overall
performance of the portfolio, in the uK, ITv was the
largest positive. This was a position that had been
increased during the year and benefitted from
substantial earnings upgrades and improved investor
sentiment. other significant positive contributors
included Inchcape, the international vehicle distributor,
GKN and IMI, the specialist engineering companies.
on the negative front, 2013 proved a disappointing
year for mining stocks in general, although the sector
picked up relative ground against the broader market
over the summer when a degree of sector rotation
away from large global consumer stocks took place.
12
MAJeDIe INvesTMeNTs PLC
BHP Billiton, Rio Tinto and, most particularly,
Antofagasta were all poor performers over the year but
continue to be held as prospects for their markets are
improving, valuations are, by historical standards
undemanding and recent results have been more
encouraging. Antofagasta once again paid a
substantial special dividend this year. BP continued to
suffer throughout the year as the legal action in the us
concerning the oil spillage in the Gulf of Mexico in April
2010 continued to gather momentum, whilst Group 4
securicor battled poor media coverage on a variety of
fronts and also warned on profits. This holding, as has
been mentioned, has now been sold in its entirety.
In the banking sector, Lloyds TsB was the clear sector
winner over the year; although the Company does not
hold Lloyds TsB. Holdings in Barclays and HsBC in
the uK and JP Morgan Chase and Wells Fargo in the
us meant that performance was in line with the
banking sector over the year.
exposure in europe was again maintained by holding
overweight positions in countries such as switzerland
and Norway which are outside the eurozone and it was
welcome to see some sound contributions from
Telenor, the Norway based telecommunications
company, and Roche, the swiss pharmaceutical
company; statoil, the major Norwegian integrated oil
company, on the other hand had a rather dull year,
along with many other large european oil businesses.
In the us, the performance of the portfolio was
disappointing; Mosaic, the fertilizer producer,
experienced a poor year as the longstanding global
potash pricing agreements disintegrated with a harmful
impact on profitability. Kelloggs, the well known food
producer, tailed off over the summer, in line with a
number of other global food groups. southern
Company, the domestic utility company, suffered some
marked underperformance as utility stocks in general
remained out of fashion. Technology stocks, where the
portfolio is underweight given the general lack of yield
in the sector, also benefitted from a pick up in the
market over the summer, although overall for the year
this underweight position was broadly neutral. on a
brighter note, 3M and Illinois Tool Works in the
industrials sector prospered over the year and at the
end of the summer a new investment was made in
eaton, the diversified industrial supply company. The
rest of the portfolio was broadened and restructured in
2012. In Japan, which is the largest component of the
restructured portfolio, the stock market (Nikkei 225)
rose 31.3% in sterling terms following a general
election in the Autumn of 2012 and a new resolve to
revive the economy. The Japanese section of the
portfolio performed in line with the index as did the
emerging Market section.
Markets are still prone to move sharply as a result of
changes, or perceived changes, in policies by the
major Central Banks, but it was noticeable that the
recent dual threats of a shutdown in a range of us
government agencies and possible debt default on us
treasuries were treated comparatively phlegmatically by
investors. september 2013 marked the sixth
anniversary of the beginning of the current round of
market ferment, when a run developed in Northern
Rock, so it seems markets have become somewhat
more accustomed to weathering short term instabilities.
The portfolio, overall, continues to remain orientated
towards sound income generating stocks which have the
ability to provide a rising level of dividend payments over
the long term. This policy results in overweight positions
being held in areas such as telecommunications, utilities,
healthcare and major global oil and gas companies.
The portfolio remains underweight in companies more
directly exposed to consumer expenditure and also to
banks, where the need to rebuild balance sheets may
have an impact on dividend paying capacity in the
medium term. The portfolio also remains underweight
in the technology and IT areas, where dividend
payments are small or non-existent.
equity markets have made good progress over the
past year and the outlook remains promising given that
global interest rates appear set to stay at historically
very low levels and patterns of economic growth are
now definitely appearing in the us and the uK. The
eurozone continues to suffer from high levels of
unemployment, particularly amongst the young, whilst
the struggle to retain the integrity of the common
currency will continue to exercise policymakers for
some time. Given this outlook, the level of cash held
within the portfolio is lower than usual, although
sufficient liquidity exists to take advantage of any new
investment opportunities should they occur.
RePoRT & ACCouNTs 2013 13
strategic Report
Investment Manager’s Report
Finally, we continue to manage a small non-core
realisation portfolio, consisting of small-cap and early
stage investments that were initiated between 2005
and 2008. The objective is to maximise the return
available by exiting from these stocks wherever
possible, although by their very nature all of them tend
to be illiquid and difficult to sell. At the end
of september 2013 the value of the non-core
realisation portfolio was £0.9m, representing less than
1% of the Group’s Total Assets, compared to £3.1m in
2012. The key decision in this part of the portfolio was
to write down the value of the holding in vostok
energy, the Russian gas producer from £1.8m to zero.
The company has been trying to either float or sell itself
to a larger entity for some considerable time to no avail
and is now in a position of default to its bondholders.
over time, it is possible that some value may accrue to
shareholders from a wind-up of the company but it is
now prudent to assume this will not occur.
Javelin Capital Emerging Markets Alpha Fund
(JCEMAF)
As at 30 september 2013, the value of this holding
was £30.5m, representing 19.2% of the Group’s Total
Assets. In November 2012 the Company consolidated
its exposure to the Javelin Funds into JCeMAF
following the closure of the QIF Javelin Capital Global
equity strategies Fund (JCGesF).
The JCeMAF utilises a range of proprietary long/short
models with an emphasis on emerging Markets. The
objective of the fund is to deliver absolute returns that
are uncorrelated to the direction of the Core Portfolio
and therefore lessening the overall market risk of the
combined assets of the Company. However emerging
Market equities were directionless over the past year
meaning that the strategies have been unable to
capture market trends This is historically very unusual
and looking forward, experience continues to suggest
that market trends will eventually reassert themselves
and the strategies will then be well placed to benefit.
over the year the uCITs fund returned -5.9% after
costs and fees.
Majedie Asset Management (MAM)
As at 30th september 2013 the value was raised to
£46.0m, representing 28.9% of the Group’s Total
Assets. MAM was launched in 2002 using finance
provided by the Company, which retains a 26.7%
interest following some share sales during the year. The
business has grown to approximately £7.7bn in assets
under management, predominantly long-only equity
mandates for institutional clients.
Its market leading investment performance has been
recognised by the loyalty of its clients. It remains well
financed and highly profitable. During the year, £2.3m
was received in dividend income from MAM and the
Company received £5.9m from sales of MAM stock,
in December 2012 and June 2013.
Further details concerning the determination of the
valuation of MAM are described in the Report of the
Audit Committee on pages 31 to 34.
Javelin Capital
As at 30 september 2013, the net assets in Javelin
Capital have been included in the Consolidated
Accounts at £2.5m, representing 1.6% of the Group’s
Total Assets. This represents the original investment
less start-up costs and losses incurred to date and is
in accordance with consolidation accounting rules. In
the Company accounts the value of the investment in
Javelin Capital has been valued at cost, being £8.0m.
Javelin Capital remains focussed on gaining assets
under management in accordance with its revised
business plan. The Company holds an equity
participation of 75% whilst the remaining 25% is held
by the individual partners. The performance of the
uCITs fund (JCeMAF) has been discussed earlier.
Further details concerning the determination of the
valuation of Javelin Capital in the Group and Company
accounts are described in the Report of the Audit
Committee on pages 31 to 34.
14
MAJeDIe INvesTMeNTs PLC
Development of Net Asset Value
The chart below demonstrates the Group’s Net Asset
value (NAv) development during the year to
30 september 2013. In aggregate, the NAv has
increased by £13.0m, having incurred net
administration and finance costs of £4.4m, and having
paid out £5.5m in dividends. In relation to the Group’s
investments, the Core Portfolio gained £11.6m,
including the receipt of dividends, whilst MAM provided
a total contribution of £15.2m, being dividends of
£2.3m, total capital gains of £12.9m (comprising
unrealised gains attributable to the increase in the
valuation of £7.2m and realised gains totalling £5.7m
from the sale of MAM stock during the year). Lastly the
non core realisation portfolio declined by £2.1m and
the JCeMAF by £1.8m during the year.
+£15.2m (£2.1m)
(£1.8m)
(£1.6m)
(£2.8m)
(£5.5m)
£125.2m
+£11.6m
£112.2m
NAV
30.09.12
Core
Portfolio
MAM
Non-Core
Realisation
Portfolio
JCEMAF
Net Admin
Costs
Finance
Costs
Dividends
Paid
NAV
30.09.13
Note: Net admin costs are net of Javelin Capital management fee income as received from external investors and also in
respect of the Company’s investment in the JCeMAF.
Investment Outlook
The outlook for equity markets is, as has been
mentioned, looking relatively promising given the
resumption of economic growth in the developed
economies of the West and the low level of interest
rates globally. However, the peripheral eurozone
countries continue to struggle with high levels of debt
and unemployment and the impasse between
Democrats and Republicans over us government
expenditure, whilst temporarily resolved, is still a major
issue to be revisited early in 2014. The timing of the
start of ‘tapering’ by the Federal Reserve – or the
reduction in scope of its bond purchase programme –
is also a major factor in assessing the demand for
equities. In China, where growth seems to be resuming
again after a pause during 2013, there are still real
worries about the integrity of the banking system and
in Japan, Mr Abe’s ambitious reform plans are at a
relatively early stage. Nevertheless, the appetite
amongst global investors for new equity issues has
definitely risen over the past few months and a pick-up
in activity in mergers and acquisitions can be
anticipated given the healthy state of major corporate
balance sheets. on balance, we look forward to the
prospects for markets in 2014 with cautious optimism.
Nick Rundle Investment Director
Javelin Capital LLP
9 December 2013
RePoRT & ACCouNTs 2013 15
strategic Report
Asset Distribution
at 30 september 2013
Classification of Assets
Oil & Gas Producers
Oil Equipment, Services & Distribution
Oil & Gas
Chemicals
Mining
Basic Materials
Aerospace & Defence
Construction & Materials
Electronic & Electrical Equipment
General Industrials
Industrial Engineering
Industrial Metals & Mining
Support Services
Industrials
Automobiles & Parts
Beverages
Food Producers
Tobacco
Consumer Goods
Health Care, Equipment & Services
Pharmaceuticals & Biotechnology
Health Care
Food & Drug Retailers
General Retailers
Leisure Goods
Media
Travel & Leisure
Consumer Services
Fixed Line Telecommunications
Mobile Telecommunications
Telecommunications
Electricity
Gas, Water & Multi Utilities
Utilities
Banks
Equity Investment Instruments
General Financial
Life Insurance/Assurance
Non Life Insurance/Assurance
Real Estate Investment & Services
Financials
Software & Computer Services
Technology & Hardware Equipment
Technology
Unlisted
Javelin Funds
Total Equities
Total Non-current Assets
Cash And Cash Equivalents
% Total at 30 September 2013
United
Kingdom
%
4.7
0.6
5.3
0.5
3.0
3.5
0.9
North
America
%
0.4
0.6
1.0
0.8
0.8
0.7
0.6
0.8
3.0
0.7
0.6
0.8
2.1
0.6
1.6
2.2
0.9
1.2
1.7
3.8
1.7
1.7
0.5
1.4
1.9
3.0
1.1
1.3
1.2
1.3
7.9
29.4
60.8
60.8
3.7
64.5
0.7
0.6
1.3
0.4
0.5
0.5
1.4
0.5
0.5
0.5
0.5
1.0
0.5
0.5
0.5
0.5
0.9
0.1
1.0
0.5
0.5
0.3
8.8
8.8
8.8
Continental
Europe
%
0.5
Pacific
Basin
%
0.5
0.4
0.4
0.5
0.5
0.6
0.6
1.1
1.1
0.5
0.5
0.6
0.6
4.2
4.2
4.2
0.1
0.1
0.3
0.1
0.1
0.1
0.1
0.7
0.4
0.1
0.5
0.1
0.1
0.1
0.1
0.1
0.2
0.3
0.6
0.1
0.1
0.1
0.9
0.1
0.1
0.2
2.9
2.9
2.9
Rest of
World
%
0.1
0.1
0.1
0.1
0.1
0.1
19.3
19.6
19.6
19.6
Total
2013
%
5.7
1.2
6.9
1.7
3.1
4.8
0.9
0.8
1.5
1.3
0.1
0.9
5.5
1.1
0.4
1.7
1.4
4.6
0.6
3.4
4.0
1.0
1.7
2.2
0.5
5.4
0.6
2.6
3.2
1.0
1.4
2.4
4.5
0.1
1.2
1.4
1.2
1.4
9.8
0.1
0.6
0.7
29.7
19.3
96.3
96.3
3.7
100.0
Total
2012
%
7.1
0.6
7.7
1.1
3.9
5.0
0.8
0.4
1.0
1.2
1.2
0.1
1.6
6.3
0.3
0.9
1.1
1.3
3.6
3.5
3.5
1.1
1.6
1.3
0.5
4.5
0.6
2.7
3.3
1.3
1.0
2.3
4.7
1.1
1.4
1.0
0.7
8.9
0.4
0.4
28.8
9.7
84.0
84.0
16.0
100.0
The Fund as analysed on pages 16 to 19 comprises listed and unlisted investments totalling £151,939,000; including the investment in JCeMAF of £30,460,000; and cash/
cash equivalents (as adjusted for amounts due to/from brokers for settlement) of £5,761,000
unlisted investments comprise an amount of £46,000,000 in respect of the investment of MAM and £864,000 in respect of equity investments in various companies.
suspended stocks have been analysed in their listed sectors.
16
MAJeDIe INvesTMeNTs PLC
strategic Report
Twenty Largest uK Investments
at 30 september 2013
Company
MAM1
Royal Dutch shell ‘B’
HsBC
BP
vodafone
GlaxosmithKline
Rio Tinto
Barclays
ITv
BHP Billiton
Centrica
British Land
Imperial Tobacco
Antofagasta
GKN2
smiths Group
Aviva
BAe systems
Jardine Lloyd Thompson
W H smith
2013
2012
Market Value
£000
46,000
% of
Fund4
29.2
Market value
£000
39,000
% of
Fund4
26.8
3,842
2,845
2,815
2,646
2,492
1,965
1,857
1,753
1,547
1,386
1,299
1,258
1,228
1,197
1,119
1,091
1,091
1,087
992
2.4
1.8
1.8
1.7
1.6
1.2
1.2
1.1
1.0
0.9
0.8
0.8
0.8
0.7
0.7
0.7
0.7
0.7
0.6
4,176
3,010
3,164
2,856
2,712
2,020
1,397
575
1,732
1,475
914
802
1,578
933
1,036
1,203
766
750
2.9
2.1
2.2
2.0
1.9
1.4
0.9
0.4
1.2
1.0
0.6
0.6
1.1
0.6
0.7
0.8
0.5
0.5
79,510
50.4
70,099
48.2
Ten Largest overseas Investments
at 30 september 2013
Company
JCeMAF (Lux)3
Roche (switzerland)
Illinois Tool Works (usA)
Telenor (Norway)
3M (usA)
schlumberger (usA)
Nestlé (switzerland)
McDonalds (usA)
vivendi (France)
Altria (usA)
1 unlisted
2013
2012
Market Value
£000
30,460
% of
Fund4
19.3
Market value
£000
14,144
999
942
917
885
873
863
861
853
849
0.6
0.6
0.6
0.6
0.6
0.6
0.5
0.5
0.5
810
736
785
772
806
625
824
605
827
% of
Fund4
9.7
0.6
0.5
0.5
0.5
0.5
0.4
0.6
0.4
0.6
38,502
24.4
20,934
14.3
2 There is no comparative information for the investments listed as they represent new holdings.
3 JCeMAF is a sub-fund of the serviced Platform sICAv, a Luxembourg uCITs established by Goldman sachs and advised by Javelin Capital.
4 As defined on page 16.
RePoRT & ACCouNTs 2013 17
strategic Report
valuation of Investments
Holdings valued over £100,000 at 30 september 2013
Company
Market Value % of
£000 Fund1
Company
Market Value % of
£000 Fund1
Company
Market Value % of
£000 Fund1
Oil & Gas
Oil & Gas Producers
BG Group
826 0.5%
BP
2,815 1.8%
exxon Mobil (usA)
664 0.4%
3,842 2.4%
Royal Dutch shell 'B'
sasol ADR (south Africa) 119 0.1%
841 0.5%
statoil (Norway)
Oil Equipment, Services
& Distribution
AMeC
schlumberger (usA)
913 0.6%
873 0.6%
Industrials
Aerospace & Defence
BAe systems
ultra electronic
1,091 0.7%
378 0.2%
Electronic & Electrical Equipment
Hon Hai Precision GDR
(Taiwan)
samsung electronic GDR
(Korea)
siemens (Germany)
248 0.2%
744 0.5%
135 0.1%
Health Care
Health Care, Equipment & Services
964 0.6%
smith & Nephew
Pharmaceuticals & Biotechnology
2,492 1.6%
GlaxosmithKline
Johnson & Johnson (usA) 803 0.5%
999 0.6%
Roche (switzerland)
689 0.4%
sanofi (France)
221 0.1%
Takeda (Japan)
General Industrials
3M (usA)
eaton (usA)
smiths Group
885 0.6%
213 0.1%
1,119 0.7%
Consumer Services
Food & Drug Retailers
Greggs
sainsbury (J)
Woolworths (Aus)
530 0.3%
979 0.6%
149 0.1%
843 0.5%
916 0.6%
992 0.6%
1,753 1.1%
893 0.6%
853 0.5%
861 0.5%
General Retailers
Home Depot (usA)
Inchcape
WH smith
Media
ITv
uBM
vivendi (France)
Travel & Leisure
McDonalds (usA)
Telecommunications
Fixed Line Telecommunications
AT&T (usA)
731 0.5%
Mobile Telecommunications
America Movil ADR (Mexico) 104 0.1%
224 0.1%
NTT Docomo (Japan)
141 0.1%
softbank (Japan)
917 0.6%
Telenor (Norway)
2,646 1.7%
vodafone
655 0.4%
795 0.5%
839 0.5%
505 0.3%
Industrial Engineering
Illinois Tool Works (usA) 942 0.6%
946 0.6%
IMI
Industrial Metals & Mining
Posco ADR (Korea)
136 0.1%
1,228 0.8%
1,547 1.0%
164 0.1%
1,965 1.2%
Support Services
Babcock
Bunzl
837 0.5%
535 0.3%
Consumer Goods
Automobiles & Parts
GKN
Honda (Japan)
Hyundai GDR (Asia)
Toyota (Japan)
Beverages
Coca-Cola (usA)
Food Producers
Kelloggs (usA)
Nestlé (switzerland)
unilever
1,197 0.7%
195 0.1%
133 0.1%
185 0.1%
585 0.4%
798 0.5%
863 0.6%
854 0.5%
Tobacco
Altria (usA)
Imperial Tobacco
Japan Tobacco (Japan)
849 0.5%
1,258 0.8%
213 0.1%
Basic Materials
Chemicals
Bayer (Germany)
Du Pont De Nemours
(usA)
elementis
Mosaic (usA)
Mining
Antofagasta
BHP Billiton
BHP Billiton (Aus)
Rio Tinto
1 As defined on page 16.
Based on country of listing and operation. Depositary Receipts are based on country of origin.
18
MAJeDIe INvesTMeNTs PLC
Company
Market Value % of
£000 Fund1
Company
Market Value % of
£000 Fund1
Company
Market Value % of
Fund
£000
Technology
Technology & Hardware Equipment
102 0.1%
Canon Inc. (Japan)
Qualcomm Inc. (usA)
748 0.5%
samsung electronic (Asia) 248 0.2%
Unlisted Investments
AoI Medical (usA)
152 0.1%
Buried Hill energy (usA) 244 0.2%
46,000 29.2%
MAM
389 0.2%
Mitra energy
Javelin Funds
JCeMAF (Lux)
30,460 19.3%
Utilities
Electricity
southern Company (usA) 712 0.5%
840 0.5%
sse
Gas, Water & Multi Utilities
Centrica
Pennon Group
1,386 0.9%
839 0.5%
1,857 1.2%
Financials
Banks
Barclays
Commonwealth Bank
133 0.1%
of Australia (Aus)
2,845 1.8%
HsBC
JP Morgan Chase (usA) 606 0.4%
221 0.1%
Mitsubishi (Japan)
Mizuho (Japan)
127 0.1%
sumitomo Mitsui (Japan) 164 0.1%
791 0.5%
Wells Fargo (usA)
134 0.1%
Westpac Banking (Aus)
General Financial
IG Group
Investec
Ishares MsCI south
Africa Index eTF (usA) 182 0.1%
166 0.1%
Wesfarmers (Aus)
724 0.5%
901 0.6%
Life Insurance
AIA Group (Hong Kong)
Aviva
Legal & General
196 0.1%
1,091 0.7%
981 0.6%
Non Life Insurance
Beazley
839 0.5%
Jardine Lloyd Thompson 1,087 0.7%
Real Estate Investments &
Services
British Land
Cheung Kong
(Hong Kong)
Hammerson
1,299 0.8%
212 0.1%
752 0.5%
1 As defined on page 16.
Based on country of listing and operation. Depositary Receipts are based on country of origin.
RePoRT & ACCouNTs 2013 19
R David C Henderson* FCA
Mr Henderson, a Chartered Accountant, is currently
special Advisor to Kleinwort Benson, Chairman of
Alder Asset Management and is also a Non-executive
Director of Novae Group plc, MM&K Limited and
Chairman of the CoIF Charity Funds. Previously he
was Chairman of Kleinwort Benson Private Bank from
2004 to 2008 having held various senior roles in the
Kleinwort Benson Group since 1995. Prior to that he
spent 11 years at Russell Reynolds Associates which
followed 10 years at Morgan Grenfell & Co and 6 years
at what is now Baker Tilly. He was appointed as a
Director of Majedie on 22 september 2011, is
Chairman of the Audit Committee and a member of the
Remuneration, Nomination and Management
engagement Committees.
* Non-executive.
Board of Directors
This page forms part of the Director’s Report
Andrew J Adcock* MA Chairman
Mr Adcock was the managing partner of Brompton
Asset Management LLP until he retired in July 2011. He
is a non-executive director of Majedie Portfolio
Management Limited, F&C Global smaller Companies
PLC, Kleinwort Benson Holdings Limited and Kleinwort
Benson Bank Limited. He was appointed as a non-
executive director of Foxtons Group plc and JP Morgan
european Investment Trust plc in september 2013. He
is also a Director of the samuel Courtauld Trust and
The Courtald Institute of Art. He was vice Chairman,
Citigroup Corporate Finance until his retirement in
2009. Previously he was a Partner for three years at
Lazards LLC which followed ten years at BZW as the
Managing Director of De Zoete & Bevan Limited. He
was appointed a director of Majedie on 1 April 2008
and is the Chairman of the Board and Nomination
Committee and a member of the Remuneration,
Management engagement and Audit Committees.
J William M Barlow BA
Mr Barlow was appointed Chief operating officer of
Javelin Capital LLP on 27 June 2011, before which he
was at Newedge Group, which is a Prime Broker for
hedge funds. Previously he was Managing Director of
DnB Asset Management (uK) Limited having been
appointed in 2002. He joined skandia Asset
Management Limited as an equity portfolio manager in
1991. Mr Barlow was appointed to the Board in July
1999 and is a director of Majedie Portfolio
Management Limited and Javelin Capital services
Limited, and is also a non-executive director of Majedie
Asset Management Limited and on 1 February 2013,
became a member of Javelin Capital LLP.
Paul D Gadd*
Mr Gadd was appointed as a director of Majedie on
1 october 2009. He is a solicitor and has spent 17
years with Ashurst, retiring in 2009 after 10 years as a
partner, latterly as head of Ashurst’s investment
company practice. He is Chairman of the
Remuneration and Management engagement
Committees and is a member of the Nomination and
Audit Committees.
20
MAJeDIe INvesTMeNTs PLC
Directors’ Report
The directors submit their report and the accounts
for the year ended 30 September 2013.
Introduction
The Directors’ Report includes the Corporate
Governance statement, which can be found on pages
26 to 30, the Report of the Audit Committee, which
can be found on pages 31 to 34 and the Directors’
Remuneration Report on pages 35 to 43. 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.
New regulations for obtaining and retaining investment
trust status apply to the Company with effect from
1 January 2012. one of the principal changes under
the new investment trust tax regime is to remove the
restriction that no single investment can represent
more than 15 per cent. of gross assets at the time of
its acquisition, and to replace this with a risk
diversification approach; however, the 15 per cent. limit
remains a restriction in the Company’s investment
policy as detailed on page 8. An application for
approval as an investment trust under the new regime
has been made and accepted by HM Revenue &
Customs. Accordingly, the Company will be treated as
an investment trust company for the year ended
30 september 2013 and for each subsequent
accounting period, subject to there being no
subsequent serious breaches of the regulations.
Results and Dividend
Consolidated net revenue return before taxation
amounted to £3,656,000 (2012: £2,681,000). The
directors recommend a final ordinary dividend of 6.3p
per ordinary share, payable on 22 January 2014 to
shareholders on the register at the close of business
on 10 January 2014. Together with the interim dividend
of 4.2p per share paid on 26 June 2013, this makes a
total distribution of 10.5p per share in respect of the
financial year (2012: 10.5p per share).
Risk Management and Objectives
The Company as an investment trust, and the Group,
are subject to various risks in pursuing their objectives.
The nature of these risks and the controls and policies
in place across the Group that are used to minimise
these risks are further detailed in the strategic Report
on pages 10 and 11 and in note 25 of the Accounts on
pages 85 to 94.
Directors
The directors in office at the date of this report are
listed on page 20.
Directors’ retirement by rotation and appointment is
subject to the Company’s Articles of Association and
the uK Corporate Governance Code.
The Company’s Articles of Association require that at
every Annual General Meeting any director who has not
retired from office at the preceding two Annual General
Meetings shall stand for re-appointment by the
Company. Therefore none of the non-executive
directors are required to stand for re-appointment under
these provisions at the 2014 Annual General Meeting.
In accordance with Listing Rule 15.2.13A and in
accordance with the uK Corporate Governance Code
with respect of directors who have served over nine
years, Mr JWM Barlow, being Chief operating officer
of Javelin Capital LLP, the Investment Manager, must
submit himself for annual re-appointment.
The Board has considered the continued appointment
of Mr JWM Barlow who has served for over 13 years.
The Board’s view is that length of tenure does not
compromise independence and that experience and
continuity can add strength to a Board. The Board is
conscious of the need to maintain continuity on the
Board and believes retaining directors with sufficient
experience of both the Company and the markets is of
great benefit to the shareholders. The Board believes
that the performance of Mr JWM Barlow continues to
be effective, that he demonstrates commitment to his
role and has a range of business, financial and asset
management skills and experience relevant to the
direction and control of the Company.
The Board, having considered his performance within
the annual Board performance evaluation, hereby
recommends that shareholders vote in favour of the
proposed re-appointment.
RePoRT & ACCouNTs 2013 21
Directors’ Report
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:
Mr AJ Adcock
Mr JWM Barlow
Mr PD Gadd
30 September
2013
20,000
658,779
10,000
1 october
2012
20,000
658,779
10,000
Mr RDC Henderson has no beneficial interest in the
shares of the Company.
Non-beneficial interests in ordinary shares as trustees
for various settlements as at:
Mr JWM Barlow
2,160,779
2,160,779
30 September
2013
1 october
2012
There have been no changes to any of the above
holdings between 30 september 2013 and the date of
this report.
Substantial Shareholdings
At 30 November 2013 the Company has been notified
of the following substantial holdings in shares carrying
voting rights:
Mr Hs Barlow
Beneficial
Non-beneficial
15,017,619 28.59%
1.17%
7,103,119 13.52%
613,084
sir JK Barlow
Axa Group
1607 Capital
Partners LLC Non-beneficial 2,638,427
1,776,241
Mr MHD Barlow Beneficial
Non-beneficial 1,360,750
1,561,805
Beneficial
869,086
Non-beneficial
Mr GB Barlow
877,433
Non-beneficial
Miss Ae Barlow Non-beneficial 1,784,948
658,779
Mr JWM Barlow Beneficial
Non-beneficial 2,160,779
5.02%
3.38%
2.59%
2.97%
1.65%
1.67%
3.40%
1.25%
4.11%
The substantial voting rights disclosed above include
the total holdings of shares within certain trusts where
there are other beneficiaries.
22
MAJeDIe INvesTMeNTs PLC
There have been no changes to any of the above
holdings between 31 october 2013 and the date of
this report.
Annual General Meeting
The Annual General Meeting will be held at City of
London Club, 19 old Broad street, London eC2N 1Ds
on Wednesday, 15 January 2014 at 12:00 noon. The
notice convening the Annual General Meeting is set out
on pages 97 to 101.
The Board considers that Resolutions 1 to 9 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.
Purchase of Own Shares
since 1 october 2012, and up to the date of this
report, the Company has made no market purchases
for cancellation of ordinary shares. At the Annual
General Meeting in 2013 the directors were given
power to buy back 7,873,947 ordinary shares. since
the Annual General Meeting the directors have not
bought any shares under this authority. This authority
will expire at the 2014 Annual General Meeting.
However, the directors consider it desirable that the
Company be authorised to make such purchases and
accordingly shareholder approval is sought at the
Annual General Meeting to renew the authority of the
Company to exercise the power contained in its
Articles of Association to make market purchases of its
own shares. The maximum number of shares which
may be purchased under this authority is 7,873,947
being 14.99% of the issued share capital. Any shares
so purchased will be cancelled. The restrictions on
such purchases, (including minimum and maximum
prices), are outlined in the Notice of Meeting on
page 97.
The Authority will be used where the directors consider
it to be in the best interests of the shareholders.
Capital Structure
As part of its corporate governance the Board keeps
under review the capital structure of the Company. At
30 september 2013 the Company had a nominal issued
share capital of £5,252,800 comprising 52,528,000
ordinary shares of 10p each, carrying one vote each.
All of the shares of the Company are listed on the
London stock exchange which is a regulated market.
The Board seeks each year to renew the authority of
the Company to make market purchases of its own
shares. However, the Board is only likely to use such
authority in special circumstances. In general the
directors believe that the discount to net assets will be
reduced sustainably over the long term by the creation
of value through the development of the business.
In 1994 and 2000 the Company issued two long term
debentures: £15m 9.5% debenture stock 2020 and
£25m 7.25% debenture stock 2025 respectively. In
2004 the Company redeemed £1.5m of the 2020 issue
and £4.3m of the 2025 issue as an opportunity arose
to redeem at an attractive price.
As noted above gearing is via two long term
debentures. The limits on the ability to borrow are
described in the investment policy on page 8. The
Board is responsible for setting the overall gearing
range in which the Investment Manager may operate.
Details of gearing levels are contained in the Year’s
summary on page 2, and in note 25 to the Accounts on
page 94.
There is one employee share scheme operated by the
Group. Further details are in note 24 to the accounts
on pages 83 and 84.
There are: no restrictions on voting rights; no restrictions
concerning the transfer of securities in the Company;
no special rights with regard to control attached to
securities; no agreements between holders of securities
regarding their transfer known to the Company; and no
agreements which the Company is party to that might
affect its control or trigger any compensatory payments
for directors, following a takeover bid.
Notice period for general meetings
The Board believes that it is in the best interests of
shareholders of the Company to have the ability to call
meetings on 14 days’ clear notice should a matter
require urgency. The Board will therefore, as last year,
propose a resolution at the Annual General Meeting to
approve the reduction in the minimum notice period
from 21 clear days to 14 clear days for all general
meetings other than annual general meetings. The
directors do not intend to use fewer than 21 clear
days’ notice unless immediate action is required.
Future Developments
The Chairman’s statement and the Investment
Manager’s Report sections of the strategic Report on
pages 12 to 15 provide details concerning relevant
future developments of the Company and the Group in
the forthcoming year.
Employees, Social, Environmental, Ethical and
Human Rights policy
The Company has no employees and as a result the
Group has limited impact on the environment.
The Company has appointed Javelin Capital LLP to
manage its portfolio of investments. Javelin has been
tasked with managing the portfolio, and its operations,
with a view to achieving the Company’s investment
objective and in doing so takes account of social,
environmental, ethical and human rights factors,
where appropriate.
Carbon Reporting
In accordance with the Companies Act 2006 (strategic
Report and Directors’ Reports) Regulations 2013, the
Company is required to report on its greenhouse gas
emissions for those financial years ending on or after
30 september 2013. In accordance with the regulations
the Company has determined that its organisational
boundary, to which entities the regulations apply, is
consistent with its consolidated financial accounts.
The Group operates in the financial services sector and
in common with many organisations employs
outsourcing such that most of its activities are
performed by other outside organisations which do not
give rise to any reportable emissions by the Group.
However the Group, via its subsidiary Javelin Capital
LLP, does undertake activities at its leased premises. In
accordance with the provision of the centrally provided
building services (including heating, light, cooling etc) to
all lessees in the building by the landlord it is considered
that the Group does not have emissions responsibility
in respect of these services, which rather rest with the
landlord. Javelin does however have responsibility for
various other emissions in the usage of electricity by its
office equipment in the course of undertaking its duties
but it is not able to determine their amounts as
compared to those provided by the landlord.
Additionally the Company has many investments in
companies around the world, however the Company
does not have the ability to control the activities of
these investee companies and as such has no
responsibility for their emissions.
RePoRT & ACCouNTs 2013 23
Directors’ Report
Therefore the directors’ believe that the Group has no
reportable emissions for the year ended 30 september
2013.
Donations
The Company made no political or charitable donations
during the year (2012: nil) to organisations either within
or outside of the eu.
Post Balance Sheet Events
There have been no significant post balance sheet
events of the Company or its subsidiaries.
Material Contracts
• Javelin Capital LLP
i. LLP Agreement
The investment in Javelin Capital LLP is in
accordance with the terms of a Limited Liability
Partnership Agreement dated 31 August 2010,
which was subsequently amended and restated on
29 June 2011. The revised terms include:
• The Company has provided £8m in capital,
which will attract interest at a commercial rate,
until it is repaid from future Javelin Capital LLP
profits. This repayment has priority over other
distributions from residual profits.
• The Company has a 75% interest in Javelin
Capital LLP with the other partners holding the
remaining 25%. on achieving certain pre-set
financial targets, which were revised in conjunction
with the restructure in June 2011, the Company
will reduce its interest to ultimately 55%.
• The agreement provides for various types of
profit share including performance fee, bonus
and residual profit share. under the agreement
the Company is to receive an entitlement to
profits equal to its capital contribution plus
accumulated interest first before other partners
are entitled to bonus or residual profit shares.
• The Board has representation on the Javelin
Capital Management Board (Javelin Capital
governance is outlined in the Corporate
Governance statement on page 29), including
the appointment of the Chairman. This includes
various control, meeting and voting rights. The
agreement also provides for the requirement to
obtain Majedie approval in a variety of areas
including anything considered a restricted matter.
The Board can appoint or remove the Managing
Partner who has day to day operational control
and also must approve his remuneration.
• In the event of a sale proposed by the Company
the agreement includes drag along provisions
including certain pre-emption rights to the
other partners.
There are also two side letters that relate to the LLP
Agreement which provide for a possible change in
control rights and provide for the liability of partners in
respect of their capital and current account balances.
ii. Management and Administration
Services Agreements
The Board has appointed Javelin Capital LLP as its
investment manager and general administrator. The
terms of the appointment are defined under a
Management Agreement and Administration
services Agreement dated 31 August 2010. The
agreement divides the Company’s investments into
distinct portfolios which are the Core Portfolio, non-
core portfolio, MAM, Javelin Capital Funds and the
Treasury account. The fees payable under the
Management Agreement are detailed below:
24
MAJeDIe INvesTMeNTs PLC
Fund/Portfolio
Core Portfolio***
Treasury Account
MAM
JCeMAF^
Management
Fee
0.70% p.a.*
0.70% p.a.
NIL**
1-1.25% p.a.
Performance
Fee
10%†
NIL
NIL**
10-20%‡
Policy on Payment of Suppliers
It is the Company’s policy to settle all investment
transactions in accordance with the terms and
conditions of the relevant market in which it operates.
All other expenses are paid on a timely basis in the
ordinary course of business.
* The management fee is on a sliding scale ranging from 0.7% p.a. to 0.4% p.a.
based on the combined value of the core and non-core portfolios.
† The performance fee is based on outperformance against the benchmark on a
rolling three year basis.
^ The JCeMAF is a sub-fund of the serviced Platform sICAv, which is a
Luxembourg based uCITs.
** The agreements provide for a fee of £60,000 per annum in respect of
MAM duties.
‡ The fees are as set in the funds documentation. The performance fee entitlement
only occurs once the hurdle has been exceeded and is calculated on a high
water mark basis.
*** The non-core portfolio attracts a management fee as per the Core Portfolio but
has no performance fee.
The Management Agreement entitles either party to
terminate the arrangement with six months’ notice
after an initial period of three years. Additionally the
Company can terminate the Manager’s appointment
in respect of a distinct portfolio if the performance of
that portfolio falls below a nominated benchmark.
The Administration services Agreement delegated,
to Javelin Capital LLP, various rights to enable it to
act as general administrator. Fees payable under the
Administration services Agreement are capped at
£265,000 per annum with fees agreed on a cost
only basis. The Administration services Agreement
may be terminated on three months’ notice.
iii. Intra Group Asset Lease Agreement
The asset lease agreement with Javelin Capital
services Limited identifies certain assets to be
leased to and used by Javelin. Javelin will pay a
lease charge equal to the depreciation suffered by
the Company on those assets. The agreement
provides for these assets to be transferred to Javelin
at a future date at net book value.
• Capita sinclair Henderson Ltd
The Board has appointed Capita sinclair Henderson
Ltd (trading as Capita Asset services) in November
2000 to act as Company secretary and undertake
fund administration services. The terms of Capita
sinclair Henderson Ltd’s appointment are defined
under a secretarial and administration services
agreement dated 6 February 2012. The agreement
entitles either party to terminate the arrangement with
twelve months’ notice.
At 30 september 2013 the Group and the Company
had eleven and ten days respectively of suppliers’
invoices outstanding in respect of trade creditors (2012:
Group: nine days; Company: eight days).
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
16 January 2013. ernst & Young LLP have indicated
their willingness to continue in office and a resolution
will be proposed at the Annual General Meeting to
re-appoint them as Auditors.
Going Concern
The directors believe, after review and due consideration
of future forecast and cashflow projections, that the
Company has adequate financial resources to continue
in operational existence for the foreseeable future. For
this reason and taking account of the large number of
readily realisable investments held within its portfolio,
the Board continues to adopt the going concern basis
in preparing the financial statements.
By order of the Board
Capita Sinclair Henderson Limited
Company secretary
9 December 2013
RePoRT & ACCouNTs 2013 25
Corporate Governance statement
The Corporate Governance statement forms part of the Directors’ Report.
Messrs AJ Adcock, PD Gadd and RDC Henderson are
considered to be independent as defined by the Code
but the Board considers that all directors exercise their
judgements in an independent manner. The Chairman’s
other commitments are in his biography on page 20.
The Board meets at least six times in each calendar
year and its principal focus is the strategic development
of the Group, investment policy and the control of the
business. Key matters relating to these areas including
the monitoring of financial performance are reserved for
the Board and set out in a formal statement.
During the year ended 30 september 2013, six Board
meetings were held, two Audit Committee meetings,
one Management engagement Committee meeting,
one Nomination Committee meeting and one
Remuneration Committee meeting. Attendance at
these Board and Committee meetings detailed below.
Number of meetings
Board
Audit Management
engagement
Remuneration Nomination
Directors
A J Adcock
J W M Barlow
RDC Henderson
P D Gadd
H v Reid
6
6
6
6
6
2
2
n/a
2
2
3/3
1/1
1
1
n/a
1
1
1/1
1
1
n/a
1
1
1/1
1
1
n/a
1
1
1/1
since the Company’s financial year end the Company
held two Board meetings, one Audit Committee, one
Management engagement, one Nomination Committee
and one Remuneration Committee meeting. All Board
and Committee members attended their respective
meetings.
The Board has undertaken a formal and rigorous
evaluation of its own performance and of its
Committees through the circulation of a comprehensive
questionnaire. Having discussed the results it
concluded that the Board and its Committees continue
to function effectively and that the Chairman’s and
directors’ other commitments are such that all directors
are capable of devoting sufficient time to the Company.
This section of the Annual Report describes how the
Company has applied the principles of the Corporate
Governance Code as published by the Financial
Reporting Council (FRC) in september 2012, as
required by the Financial Conduct Authority (FCA). A
copy of the Code can be found at www.frc.org.uk. The
Board considers that the Company has complied with
the provisions of the Code throughout the year ended
30 september 2013 except as set out below.
Provision A.2.1 – Due to the nature and structure of
the Company the Board does not feel it is necessary to
appoint a Chief executive.
Provision A.4.1 – The directors have determined that,
following Mr Hubert Reid’s retirement in January 2013,
the size of the Company’s board does not warrant the
appointment of a senior independent director.
Provision C.3.6 – The Company does not have an
internal audit function due to its accounting,
administration, company secretarial and custody
arrangements being outsourced to the parties detailed
on pages 24 and 25.
The Company
The Company has historically been self managed but
following the launch of Javelin Capital, the Company’s
investments and administration have been managed by
Javelin Capital LLP since september 2010. In complying
with the more detailed aspects of best corporate
governance practice, the Board takes into account that
the Company is a listed investment trust and the Barlow
family as a whole owns about 55% of the shares in issue.
Although the family shareholding in total is significant,
there are a number of individual family members and
trusts represented by many separate shareholdings.
The principal objective of the Board of directors
continues to be to maximise total shareholder return
for all shareholders.
Board and Directors
The Company’s Board of directors is responsible for
the overall stewardship of the Company, including
corporate strategy, corporate governance, risk and
controls assessment, overall investment policy, asset
allocation and gearing limits. Its composition satisfies
the requirements of the Code and is composed of an
independent Chairman, two non-executive directors
and Mr JWM Barlow who is an executive director.
Biographical details of the directors are shown on
page 20.
26
MAJeDIe INvesTMeNTs PLC
The Board has agreed and established a procedure for
directors in furtherance of their duties to take
independent professional advice if necessary, at the
Company’s expense.
The Board recognises the need for new directors to
receive an appropriate induction. existing directors
receive regular updates, including in respect of
regulatory and governance matters and development,
and training needs were discussed as part of the
Board evaluation process.
Directors’ and Officers’ Liability Insurance and
Indemnities
The Company has arranged Directors’ and officers’
Liability Insurance which provides cover for legal expenses
under certain circumstances. The Company’s Articles of
Association take advantage of statutory provisions to
indemnify the directors against certain liabilities owed to
third parties even where such liability arises from
conduct amounting to negligence or breach of duty or of
trust. In addition, under the terms of appointment of
each director, the Company has agreed, subject to the
restrictions and limitations imposed by statute and by
the Company’s Articles of Association, to indemnify each
director against all costs, expenses, losses and liabilities
incurred in execution of his office as director or otherwise
in relation to such office. save for such indemnity
provisions in the Company’s Articles of Association and
in the directors’ terms of appointment, there are no
qualifying third party indemnity provisions in force.
Committees
The Board has established the following Committees:
• The Audit Committee comprises:
Mr RDC Henderson (Chairman), Mr PD Gadd and
Mr AJ Adcock. Mr JWM Barlow and representatives
of the Auditors are invited to attend meetings of the
Committee. It is considered that Mr RDC Henderson,
who is a chartered Accountant, has recent relevant
financial experience. The Board has agreed the
terms of reference for the Audit Committee which
meets at least twice a year. Further details on the
work of the Audit Committee are detailed in the
Report of the Audit Committee on pages 31 to 34.
• The Nomination Committee comprises:
Mr AJ Adcock (Chairman) and the non-executive
directors. Mr JWM Barlow attends meetings at the
request of the Committee, from time to time. The
policy of the Committee is to consider appointments
to the Board of directors in the context of the
requirements of the business, its need to have a
balanced and effective Board and succession
planning. Gender and diversity are considered by
the Committee and are taken into account when
evaluating the skills, knowledge and experience
desirable to fill each vacancy but all appointments to
the Board are made on merit. The Committee has not
set any measurable objectives in respect of this policy.
The Company’s Articles of Association require a
director appointed during the year to retire and seek
appointment by shareholders at the next Annual
General Meeting and all directors must seek
re-appointment at least every three years. All
directors are appointed for a term of three years
after appointment or re-appointment by
shareholders at a general meeting. A director’s
appointment may be terminated by the Company or
the director by providing one month’s notice.
Towards the end of each fixed term the Nomination
Committee and the Board will consider whether to
renew a particular appointment.
Directors’ terms and conditions for appointment are
set out in letters of appointment which are available
for inspection at the Registered office of the
Company and will be available 15 minutes before
the start of and during the Company’s Annual
General Meeting.
The Nomination Committee met on 16 october 2013
to consider the re-appointment of directors at the
Company’s Annual General Meeting. Based on the
outcome of the Board performance evaluation
process and on the basis that he continued to make
valuable contributions and exercise his judgement
and express his opinions in an independent manner,
the Committee has decided to recommend the
re-appointment of Mr JWM Barlow. The Committee
believes the directors provide the necessary breadth
of skills and experience to run the Company.
RePoRT & ACCouNTs 2013 27
Corporate Governance statement
• The Remuneration Committee comprises:
Mr PD Gadd (Chairman), Mr AJ Adcock and
Mr RDC Henderson. Mr JWM Barlow was invited to
attend and participate as appropriate. Further
details on the work of the Remuneration Committee
are included in the Report on Directors’
Remuneration on pages 35 to 43.
• The Management Engagement Committee
(“MEC”). The MeC was established on 14 october
2010 and comprises: Mr PD Gadd (Chairman), and
the non-executive directors. Mr JWM Barlow
attends meetings at the request of the Committee,
from time to time. The Board has agreed terms of
reference for the Committee which meets at least
once a year to consider the performance of the
Investment Manager, the terms of the Investment
Manager’s engagement and to consider the
continued appointment of the Investment Manager.
The MeC met on 16 october 2013 and
recommended that Javelin Capital LLP be retained
as Investment Manager.
The Board has concluded that it is in the best
interests of shareholders that Javelin Capital LLP
should continue to be the Investment Manager of
the Company under its existing terms.
In addition to the Investment Management role, the
Board has delegated to external third parties the
custodial services, the day to day accounting,
company secretarial services, administration and
registration services. The MeC annually reviews their
performance and their contracts.
The terms of reference of the Company’s Committees
are available on request from the Company secretary
or from the Company’s website.
Conflicts of Interest
The Directors have declared any conflicts or potential
conflict of interest to the Board of directors which has
the authority to approve such situations. The Company
secretary maintains the Register of directors’ Conflicts
of Interests which is reviewed quarterly by the Board
and when changes are notified. The directors advise
the Company secretary and Board as soon as they
become aware of any conflicts of interest. Directors
who have conflicts of interest do not take part in
discussions which relate to any of their conflicts.
It is the responsibility of each individual director to avoid
an unauthorised conflict situation arising. He must request
authorisation from the Board as soon as he becomes
aware of the possibility of a situational conflict arising.
The Board is responsible for considering directors’
requests for authorisation of situational conflicts and for
deciding whether or not the situational conflict should
be authorised. The factors to be considered will include
whether the situational conflict could prevent the director
from properly performing his duties, whether it has, or
could have, any impact on the Company and whether it
could be regarded as likely to affect the judgement and/
or actions of the director in question. When the Board
is deciding whether to authorise a conflict or potential
conflict, only directors who have no interest in the matter
being considered are able to take the relevant decision,
and in taking the decision the directors must act in a
way they consider, in good faith, will be most likely to
promote the Company’s success. The directors are able
to impose limits or conditions when giving authorisation
if they think this is appropriate in the circumstances.
The directors must also comply with the statutory rules
requiring company directors to declare any interest in
an actual or proposed transaction or arrangement with
the Company.
Relations with Shareholders
Members of the Board and the Investment Manager hold
meetings with the Company’s principal shareholders and
prospective investors to develop an understanding of the
views of shareholders and to discuss the Company’s
strategy and financial and investment performance.
Any issues raised by shareholders are reported to the
full Board. shareholders are encouraged to attend the
Annual General Meeting and to participate in
proceedings. shareholders wishing to contact the
directors to raise specific issues can do so directly at
the Annual General Meeting or by writing to the
Company secretary.
In the Annual Report each year the Directors seek to
provide shareholders with information in sufficient detail
to allow them to obtain a reasonable understanding of
recent developments affecting the business and the
prospects for the Company in the year ahead. The
various sections of the strategic Report on pages 4 to
19 provide further information.
28
MAJeDIe INvesTMeNTs PLC
Internal Control Review
The Directors acknowledge that they are responsible
for the systems of internal control relating to the
Company and its subsidiaries and for reviewing the
effectiveness of those systems. An ongoing process
has been in existence for some time to identify,
evaluate and manage risks faced by Group companies.
Key procedures are also in place to provide effective
financial control over the Group’s operations.
The risk management process and systems of internal
control are designed to manage rather than eliminate
the risk of failure to achieve the Company’s objectives.
It should be recognised that such systems can only
provide reasonable, not absolute, assurance against
material misstatement or loss.
Risk assessment and the review of internal controls are
undertaken by the Board or the Audit Committee in the
context of the Company’s overall investment objective.
The review covers business strategy, investment
management, operational, compliance and financial
risks facing the Company and its subsidiaries. In
arriving at its judgement of the nature of the risks
facing Group companies, the Board or the Audit
Committee has considered the Group’s operations in
the light of the following factors:
– the nature and extent of risks which it regards as
acceptable to bear within the overall business
objective;
– the likelihood of such risks becoming a reality; and
– the Investment Manager’s ability to reduce the
incidence and impact of risk on performance and
the relevant controls.
The Company has three investor savings schemes
which provide shareholders with cost effective and
convenient ways of investing. Communication of
up-to-date information is provided through the website
at www.majedie.co.uk.
Voting policy
The exercise of voting rights attached to the Company’s
portfolio has been delegated to Javelin Capital LLP in
the absence of explicit instructions from the Board.
Javelin Capital LLP are empowered to exercise
discretion in the use of the Company’s voting rights.
Javelin Capital LLP are required to include on their
website a disclosure about the nature of their
commitment to the FRC’s stewardship Code and
details may be found at www.javelincapital.com/
Governance/FRC-stewardship-Code.
Javelin Capital LLP
The Board has representation on the Management
Board of Javelin Capital LLP. under the terms of the
LLP Agreement the Company’s Board is able to require
amendments to Javelin Capital LLP’s systems and
controls if required, and has the ability to change the
Managing Partner and also must approve his
remuneration.
Javelin Capital LLP governance is comprised of:
• Management Board
The Management Board is the Javelin Capital LLP
governing body. It meets regularly, and is comprised
of Company representatives and partners, although
other parties may be invited to meetings as
required. It also fulfils audit and remuneration
committee functions and currently also undertakes
any investment committee responsibilities.
• Risk Committee
The Risk Committee operates under terms of
reference as approved by the Management Board
which include monitoring and controlling risk
guidelines, product approval and Javelin Capital
LLP’s overall control environment. The Risk
Committee meets regularly, usually twice a year.
RePoRT & ACCouNTs 2013 29
Corporate Governance statement
Further details relating to risk management and internal
controls are contained in the Report of the Audit
Committee on page 34.
In accordance with provision C.2.1 of the uK
Corporate Governance Code, the directors have carried
out a review of the effectiveness of the system of
internal control as it has operated over the year and up
to the date of approval of the report and accounts.
By order of the Board
Andrew J Adcock Chairman
9 December 2013
30
MAJeDIe INvesTMeNTs PLC
Report of the Audit Committee
The Report of the Audit Committee forms part of the Corporate Governance statement.
During the year ended 30 september 2013 the
Committee comprised independent non-executive
directors, being Mr RDC Henderson (Chairman),
Mr AJ Adcock and Mr PD Gadd. Mr Hv Reid retired
from the Committee, and the Board, on 16 January
2013 and was not replaced. Mr JWM Barlow was also
invited to attend meetings. The Committee usually
meets twice a year in which it reviews the Half-Yearly
Financial Report and the Annual Report.
The Company secretary, Capita Asset services, act as
secretary to the Committee and its terms of reference
are available on request or may be obtained from the
Company’s website.
Responsibilities
The Committee’s responsibilities include monitoring the
integrity of the financial statements of the Company
(including that they are considered, as a whole, to be
fair, balanced and understandable), reviewing the
Company’s internal financial controls and risk
management systems, making recommendations to
the Board, for it to put to the shareholders for their
approval in general meeting, in relation to the
appointment of the external auditor, monitoring the
external auditor’s independence and developing and
implementing a policy on the engagement of the
external auditor to supply non-audit services.
During the year the Committee met twice, in May
and November 2013, to review the Group’s Half-Yearly
Financial Report and Annual Report respectively, to
review the internal control environments of outsourced
service providers and to also oversee the relationship
with the Auditor (which includes recommendations on
fees, approval of their terms of engagement and
assessing their independence and effectiveness).
Significant issues related to the Financial Statements
In respect of the year ended 30 september 2013 the
Committee considered the following issues to be
significant to the financial statements:
Valuation of Investments
The Company is a global equity investment trust which
invests in many companies around the world, the
majority of which are quoted and traded on a
recognised stock exchange. However some of the
Company’s investments are held in companies that are
not quoted or traded on a recognised stock exchange
and for which price discovery requires careful analysis
and judgment. Although these are small in number (and
also usually by value) they do include the investments
in both MAM and Javelin Capital LLP (Javelin Capital)
and as such they are significant to the determination of
the Company and Group’s net asset value.
Investments in quoted companies are valued by the
Company’s external Fund Administrator using prices
from third party pricing sources. The Fund Administrator
reviews all prices and those that exceed a pre
determined movement threshold are subject to further
verification checks using additional pricing sources.
For unquoted investments the Investment Manager
determines the relevant investment’s fair value using
the Company’s policy as set out in note 1 to the
Accounts on pages 59 to 66. All unquoted investments
are subject to review both by the Investment Manager,
the Committee and the Auditor.
Due to its size, the fair value of the investment in MAM
receives special consideration. The Investment
Manager prepares or receives detailed analyses,
reports and explanations as to the historical financial
and operational performance of MAM (the Company
has representation on the MAM Board), peer group
valuations, forecasts, MAM share transaction historical
details and other relevant information. using this
information the Investment Manager, using a pricing
model, derives a potential fair value for the investment.
output from the model is further revised by the
Investment Manager, usually applying a discount to
reflect the nature of the holding. The Investment
Manager undertakes a review of the final calculation
and prepares detailed papers which are reviewed by
the Committee and Auditor. The Auditor undertakes a
detailed review on the fair value as derived by the
Investment Manager, which includes an independent
RePoRT & ACCouNTs 2013 31
Report of the Audit Committee
valuation using a different pricing model, and discusses
this with the Committee. The Committee, upon
deciding a fair value to recommend to the Board, is
cognisant of the range of fair values that could be
applied to the investment and ensures that the derived
value is within that range.
In accordance with IFRss, the investment in Javelin
Capital is subject to different accounting treatments in
the Group and Company accounts. Although both are
matters of interest for the Committee, the more
pertinent value is that used in the Group accounts.
For the Group accounts, Javelin Capital is required to be
consolidated at its net asset value. The accounts of
relevant Javelin Capital entities are prepared by the
Investment Manager and sent to the Company’s
external Fund Administrator who prepare the Group
accounts. The Group accounts are checked by the
Fund Administrator, the Investment Manager, and the
Auditor and are reviewed by the Committee.
In respect of the investment in Javelin Capital in the
Company’s accounts, the carrying value of the
investment in Javelin Capital is required to be valued in
accordance with the Company’s policy for unquoted
investments as noted above. The policy, which uses
valuation techniques in accordance with International
Private equity and venture Capital valuation Guidelines,
requires that early stage investments (which normally
generate trading losses in this phase) are to be valued
at cost less any permanent diminution. The Investment
Manager prepares detailed financial and operating
reports on the performance of Javelin Capital,
forecasts and other relevant information, which are
reviewed by members of the Committee (in their
capacity as representatives of the Company on the
Management Board of Javelin Capital). The Investment
Manager provides a recommendation based on this
information which is reviewed by the Committee and
the Auditor. In reviewing the Investment Managers
recommendation the Committee gives weight to the
potential future prospects of Javelin Capital.
Group Reporting
As outlined in previous Annual and Half-Yearly Financial
Reports new accounting standards were being
introduced (including IFRs 10), for accounting periods
starting on or after 1 January 2014 (but which can be
adopted early, as a group), which would have the
potential to impact the Group’s consolidation. This was
due to new requirements about which of the Group’s
investees are considered to be subsidiaries and
therefore change the scope of the consolidation.
An amendment was issued by the IAsB in 2012
(Investment entities: Amendments to IFRs 10, IFRs 12
and IAs 27) which required entities that meet the
criteria of an investment entity, to measure particular
subsidiaries at fair value through the profit or loss
rather than consolidate them. other aspects of
consolidation accounting including consolidation
procedures, accounting for changes in non-controlling
interest and accounting for loss of control of a
subsidiary remain the same.
The Investment Manager and Auditor advised the
Committee that the Company would meet the criteria
and could be defined as an Investment entity. In
summary the major change is that the investment in
the JCeMAF is able to be held at fair value through
profit or loss rather than be consolidated. This change
does not have a material impact on the Group’s NAv
but results in Group accounts being produced that are
more comprehensible to shareholders.
The Committee has been monitoring developments
closely and following a recommendation from the
Investment Manager has recommended to the Board
(and the Board has accepted that recommendation)
that the Company adopt IFRs 10, IFRs 11, IFRs 12,
IAs 27 and IAs 28, and the Investment entities
amendments to IFRs 10, IFRs 12 and IAs 27, for the
year ended 30 september 2013. Further details on the
new standards and their adoption by the Company
can be found in note 1 to the Accounts on pages 60
to 62.
32
MAJeDIe INvesTMeNTs PLC
The Chairman of the Committee will be available at the Annual General Meeting to answer any questions relating to
the Annual Report.
External Audit
The Company’s external auditor is ernst & Young LLP, who were appointed on 18 January 2008, replacing Deloitte &
Touche LLP following an open tender process (there are no restrictions or impediments to the external audit tendering
process). Given its small size and nature of operations the Company has no formal tendering policy in place.
The Company engages ernst & Young LLP to undertake a review of the Half-Yearly Financial Report as well as the
annual year end audit. on both occasions ernst & Young LLP attend the relevant Audit Committee meeting.
In determining the effectiveness of the external audit the Committee takes account of the following factors:
Factor
The Audit Partner
The Audit Team
The Audit approach
The role of management
Assessment
extent to which the partner demonstrates a strong understanding of
the business and industry and the challenges that we face. Additionally
is committed to audit quality, whose opinion is valued and sought after.
extent to which the audit team understand the business and industry,
are properly resourced and experienced.
The Audit approach is discussed with management and targets the
significant issues early (and any new requirements as a result of new
regulations etc), is communicated properly, is appropriate for our
business and industry and includes an appropriate level of materiality.
Information provided by management is timely and correct with proper
work papers. Accounting systems and internal controls work properly
to enable proper information and an audit trail to be provided.
The communications and formal reporting
by the Auditor
Management and the Committee kept appropriately informed as the
audit progresses – a “no surprises” basis is adopted. The formal report
is appropriate and contains all the relevant material matters.
The support, insights and added value
provided to the Committee
Guidance given to the Committee for best practice with provision of
updates and or briefings or training between Committee meetings.
The independence and objectivity of
the Auditor
Complies with the Financial Reporting Council (FRC) ethical standards
and has the required degree of objectivity.
In assessing the effectiveness of the audit, the Committee receives management assessments and reports from the
Auditor and additionally does, from time to time, receive assessments on the auditor from the FRC.
As a result of its review the Committee is satisfied that in respect of the year ended 30 september 2013 the external
audit process is effective and it recommends the appointment of ernst & Young LLP as Auditors at the forthcoming
Annual General Meeting.
RePoRT & ACCouNTs 2013 33
Report of the Audit Committee
Policy for non-audit services
From time to time it may be appropriate and cost
effective for the external auditor to provide services
relating to tax compliance and planning but other
services should only be provided where alternative
providers do not exist or where it is cost effective or in
the Group’s interest for the external auditor to provide
such services. The review of the Half-Yearly Financial
Report whilst not a statutory audit is an audit related
service, but not a non-audit service, and is separately
disclosed. The Management Board of Javelin Capital
LLP provides a similar oversight in respect of non-audit
services provided by the external auditor to the Javelin
group. Any areas of concern are raised with the Board
of the Company.
In determining auditor independence the Committee
assesses all relationships with the auditor and receives
from the auditor information on its independence policy
along with safeguards and procedures it has
developed to counter perceived threats to its
objectivity. The auditor also provides confirmation that
it is independent within the meaning of all regulatory
and professional requirements and that the objectivity
of the audit is not impaired. During the year no non-
audit services were provided by ernst & Young LLP
and the Committee is satisfied that they are
independent having fulfilled its obligations to both the
Company and its shareholders.
Risk Management and Internal Control
The Group operates risk management and internal
control systems appropriate for entities operating in the
financial services sector and additionally as appropriate
to its size and the scope of its activities. In reviewing
these systems the Committee, and or the Board,
receive regular reports. The Committee also receives
control reports from its key third party outsourced
service providers on the effectiveness of their own
internal control systems and procedures. Any particular
issues identified are documented and followed up by
the Committee or the Board in following meetings.
The Company does not have an internal audit function
as required under provision C.3.6 of the uK Corporate
Governance Code. The Committee has considered this
matter and is of the opinion that there is no need at the
present time for the Company to have an internal audit
function since there are considered to be adequate
checks and balances in operation. In particular the
Company operates with Investment Management and
General Administration services being undertaken by
Javelin Capital LLP, Fund Administration and Company
secretarial functions by Capita Asset services and
custody by RBC Investor services Trust.
For the year ended 30 september 2013 there have
been no changes to the Group’s risk management and
internal control systems and the Committee considers
that they are adequate and effective.
Compliance, Whistleblowing and Fraud
The Company operates using an outsourced business
model, in common with other investment trusts. As
such the Committee and the Board receive reports
regarding the compliance function of the Investment
Manager and General Administrator including
procedures for whistleblowing and for detecting fraud
and bribery.
The Committee also seeks assurances from service
providers that appropriate whistleblowing procedures
are in place which enable their staff to raise concerns
about possible improprieties in a confidential manner.
on behalf of the Board
RDC Henderson
Chairman of the Audit Committee
9 December 2013
34
MAJeDIe INvesTMeNTs PLC
Report on Directors’ Remuneration
Annual Statement
The Company is a small investment trust company. Its
Board comprises three non-executive directors and one
executive director, Mr JWM Barlow. The remuneration
of the directors is kept under review on a regular basis.
In respect of the financial year ended 30 september
2013 the remuneration committee has decided that
there should be no change to the remuneration of the
non-executive directors or, save for the changes set
out below as a result of Mr JWM Barlow becoming a
partner in Javelin Capital LLP (Javelin Capital), to the
remuneration of Mr JWM Barlow. such decisions were
made in the context of the ongoing performance of
Javelin Capital and the Company, the fees payable to
non-executive directors of other investment trusts and
the partner profit shares payable to the partners of
Javelin Capital.
Mr JWM Barlow’s remuneration has changed during
the year as a result of his becoming a partner in Javelin
Capital. Prior to 1 February 2013, Mr JWM Barlow was
an employee of Javelin Capital, and received a base
salary of £135,000 per annum together with healthcare
benefits and his director’s fees of £27,000 per annum.
Mr JWM Barlow became a partner of Javelin Capital
on 1 February 2013, and as set out in more detail
below, he is entitled to a Priority Profit share under the
terms of the Javelin Capital Limited Liability Partnership
Agreement (LLP Agreement) in respect of each financial
year, whether or not Javelin Capital is in fact profitable
during that year. In respect of the financial year ended
30 september 2013, Javelin Capital made a loss; the
Company has been advised that the Priority Profit
shares of Mr JWM Barlow and the other partners of
Javelin Capital would not be subject to tax unless
Javelin Capital is profitable. upon becoming a partner
of Javelin Capital, Mr JWM Barlow, became entitled to
a Priority Profit share of £99,068 per annum instead of
his previous salary. The Company has agreed with
Mr Barlow that as and when Javelin Capital becomes
profitable, and partner profit shares become subject to
tax, his Priority Profit share would be increased
accordingly, up to a gross amount of £135,000.
As a partner in Javelin Capital, Mr JWM Barlow is
entitled to a share in any profits of Javelin Capital. The
percentage profit share of each partner in Javelin
Capital is determined annually by the managing partner
of Javelin Capital (with the profit shares of the
managing partner and any partner who is a director of
the Company being subject to approval by the
Remuneration Committee of the Company).
Mr JWM Barlow is also entitled to a performance-
based bonus in two broad areas: First, following
Javelin Capital becoming profitable on an on-going
basis, he would be eligible to receive a bonus on his
performance in relation to certain operational and/or
business development targets which would be set by
the Board. Any such appropriate terms are to be
developed when that milestone is reached. secondly,
in respect of his marketing responsibilities, he is
entitled to a bonus, to be paid by Javelin Capital, of an
annual amount equal to 0.1% of any new monies
raised and under management by Javelin Capital that
are agreed to be attributable to him. Any such bonus
would be paid in cash in respect of such monies whilst
they continue to be managed by Javelin Capital and
would be paid quarterly in arrears. Any entitlement to
such bonus would terminate in the event of Mr Barlow
ceasing to be an employee or partner of Javelin
Capital. During the financial year ended 30 september
2013 he received no bonus, and neither his previous
benefit nor bonus arrangements have been changed
as a result of him becoming a partner.
PD Gadd
Chairman of the Remuneration Committee
RePoRT & ACCouNTs 2013 35
Report on Directors’ Remuneration
DIRECTORS’ REMUNERATION POLICY
In accordance with the requirements of schedule 8 of the Large and Medium sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended (the Regulations), it is proposed to table an ordinary
resolution to approve the directors’ remuneration policy as set out in this section at the Company’s Annual General
Meeting (see pages 97 to 101). It is proposed that this policy will be adopted at that meeting with effect from
1 october 2013 and will remain in force until the Annual General Meeting of the Company in 2017, at which time a
further resolution will be proposed.
Non-Executive Directors
The components of the remuneration package for non-executive directors, and which are comprised in the
directors’ remuneration policy of the Company, are as set out below:
Remuneration type
Company to determination
Maximum potential Value
Description and approach by the
Fixed
Fees
Additional fees for senior
Independent Director and
Chairs of Committees
Additional fees for
service on subsidiary
undertaking boards or for
other services
Annual fees set at a competitive level for the industry
and appropriate for role and based on individual skills,
time commitment and experience.
Aggregate directors’ fees
cannot currently exceed
£250,000 per annum
Additional fees may be paid to any director designated
as the senior Independent Director and to any director
who chairs any committee of the Board depending on
the time commitment and responsibility involved. such
fees will be set at a competitive level for the industry and
appropriate for the role and based on individual skills,
time commitment and experience.
Additional fees will be paid to non-executive directors
who are members of the boards of any subsidiary
undertakings of the Company, or who provide additional
services on behalf of the Company, and are required to
devote additional time in such role. such fees will reflect
the additional time commitments assumed.
Aggregate directors’ fees
cannot currently exceed
£250,000 per annum
Aggregate directors’ fees
cannot currently exceed
£250,000 per annum
expenses
Non-executive directors can claim for out-of-pocket
expenses in the furtherance of their duties.
Ad-hoc basis.
Payment for loss of office
No payments will be made to non-executive directors for
loss of office.
each component of the remuneration package set out above supports the short and long-term strategic objectives
of the Company by ensuring that the non-executive directors’ remuneration is set at a competitive level which
reflects the responsibilities of, and the time devoted by, the non-executive directors.
Non-executive directors have a letter of appointment with the Company. The terms include an initial 3 year duration
period, a one month notice period by either party and no deferral or claw back provisions.
36
MAJeDIe INvesTMeNTs PLC
Executive Director
The components of the remuneration package for the executive director, and which are comprised in the directors’
remuneration policy of the Company, are set out below:
Remuneration type
Company to determination
Maximum potential Value
Description and approach by the
Fixed
Fees (Company)
Annual fees set at a competitive level for the industry
and appropriate for role and based on individual skills,
time commitment and experience.
Aggregate directors’ fees
cannot currently exceed
£250,000 per annum
Priority Profit share (if a
partner in Javelin Capital)
or salary (if an employee of
Javelin Capital or any other
member of the Group)
set at a competitive level for the industry and
appropriate for role and based on individual skills, time
commitment and experience, and to be consistent with
the priority profit shares, or salaries, receivable by the
other Javelin Capital partners and employees.
£135,000 per annum unless
otherwise resolved by the
Remuneration Committee
Healthcare (Javelin Capital) Medical and death or disability insurance.
As per Group healthcare
provider quote
Variable
Quarterly new business
incentive (Javelin Capital)
Annual Company bonus
(payable to
Mr JWM Barlow only)
Annual Profit share
(Javelin Capital)
Assessed at 0.1% per annum on the level of new third
party assets raised directly by the individual and under
management by Javelin Capital. Any such bonus is paid
quarterly in arrears.
0.1% annually of new third
party assets raised by him
and under management
The amount of any such
bonus will be fixed in due
course if Javelin Capital
becomes profitable. In any
event it will not exceed 50%
of base salary.
up to 45% of Javelin
Capital net profit (after
allowance for staff costs
and Priority Profit shares)
Payable only if Javelin Capital becomes profitable Assessed
against Company and business financial performance
and individual personal achievements relating to a range
of operational and business development targets. To
include appropriate retention arrangements.
under the LLP Agreement, a proportion of Javelin
Capital’s net profit (after allowance for staff costs and
Priority Profit shares) is payable in bonuses to the
partners and employees of Javelin Capital in respect of
each financial year. such proportion shall be, in the first
financial year in which Javelin Capital makes a profit,
20%, in the second financial year 30%, in the third
financial year, 40% and thereafter 45%. The amount
payable to each person, including any director of the
Company who is also a partner or employee of Javelin
Capital, shall be assessed against Javelin Capital’s
business and financial performance and individual
personal achievements (and after having taken into
account the quarterly and Company bonuses above)
relating to a range of operational and business
development targets. Includes appropriate retention
arrangements. 50% of the total Annual Profit share
Bonus and the Performance Fee Profit share in each year
shall be invested in funds managed by Javelin Capital and
shall not be withdrawn for a period of at least two years.
RePoRT & ACCouNTs 2013 37
Report on Directors’ Remuneration
Remuneration type
Company to determination
Maximum potential Value
Description and approach by the
Variable (continued)
Performance Fee Profit
share (Javelin Capital)
Residual Profit share
(Javelin Capital)
up to the relevant
percentage (from 45% to
90%) of performance fees
received by Javelin Capital.
up to the relevant
percentage (between 25%
and 45%) of residual profits,
having repaid all capital
contributions and notional
interest thereon.
under the LLP Agreement, a proportion of any
performance fees received by Javelin Capital is payable
in bonuses to the partners and employees of Javelin in
respect of each financial year. such proportion shall be,
in relation to each fund of Javelin Capital, 90% in its first
year, 75% in the second year, 60% in the third year and
45% thereafter. 50% of the total Annual Profit share
Bonus and the Performance Fee Profit share in each
year shall be invested in funds managed by Javelin
Capital and shall not be withdrawn for a period of at
least two years.
under the LLP Agreement, the profits of Javelin Capital
after payment of any profit shares referred to above are
receivable by the partners of Javelin Capital in
accordance with their respective partnership shares in
respect of each financial year. All such profits would
initially be paid to the partners in proportion to their
capital contributions until all such contributions, together
with notional interest, have been repaid. Thereafter, the
Company is initially entitled to receive 75% of such
profits and the individual partners collectively 25% of
such profits; subject to the attaining of performance
hurdles, the profit share of the individual partners shall
increase to a maximum of 45%. The proportion of such
profit share attributable to each partner will be
determined by the managing partner on an annual basis,
with the profit share of the managing partner and any
partner who is also a director of the Company being
subject to the approval of the Remuneration Committee.
As a partner in Javelin Capital, Mr JWM Barlow does not receive any pension benefits. The profit shares referred to
above to which the partners of Javelin Capital (including any executive director who is also a partner of Javelin
Capital) are entitled, and their order of payment are;
• Priority Profit share: this entitles the partner to an annual fixed profit share. In the case of Mr JWM Barlow, his
priority profit share is an amount of £135,000 (reduced on an interim basis to £99,068 as noted above), paid
monthly, and subject to an annual review. This profit share is paid independently of the profitability of Javelin Capital;
• Performance Fee Profit share: This is a variable profit share based on the investment performance of certain
Javelin Capital funds. In the event of a performance fee being earned and received by Javelin Capital the
individual partners’ are eligible to be allocated a fixed, percentage thereof, the allocation of which amongst the
individual partners’ is as determined by the managing partner of Javelin Capital. This profit share is for the first 4
years of the relevant fund only and the percentage due to the individual partners reduces in each of those years,
as set out above. The Performance Fee Profit share is also paid independently of the overall profitability of Javelin
Capital. Mr JWM Barlow is not entitled to receive a performance fee profit share, being instead entitled to the
quarterly new business incentive payment referred to above;
38
MAJeDIe INvesTMeNTs PLC
• Bonus Profit share: This is a variable profit share, as set out above, which is based on the overall profitability of
Javelin Capital. It is formulaic in nature and sets the remuneration of all individuals in Javelin Capital at a fixed
percentage of net profit of Javelin Capital. It doing so it takes into account the prior profit shares, salaries,
incentives and other staff costs. In the event that the prior profit shares and salaries, incentives etc exceed the
calculated percentage then no profit share is allocated, or bonus, in respect of employees, is paid. If the
calculation determines that a profit share should be allocated or bonus paid in respect of employees, then the
allocations to individual partners and employees is as determined by the managing partner of Javelin Capital,
save that the profit share payable to the managing partner of Javelin Capital and to any partner who is also a
director of the Company is subject to the prior approval of the Remuneration Committee;
• Residual Profit share: Any remaining profits left, if any, after all the previous profit shares have been allocated are
allocated to all partners in accordance with their ownership interest in Javelin Capital, as set out above.
• The key to the success of Javelin Capital, in both
the long and short term, will be the attraction of
third party assets. The new business incentive
bonus is directly linked to the level of assets
attracted by the individual;
• The performance of the Javelin Capital funds in both
the long and short term, will be critical in attracting
new third party assets under management. The
Performance Fee Bonus directly aligns the interests
of the individual fund managers with those of Javelin
Capital and the Company;
• The annual bonus payable to Mr JWM Barlow and
the partners’ Bonus Profit share are payable only if
Javelin Capital achieves profitability. The success of
Javelin Capital is dependent on its achieving
profitability in the long term; providing that the
bonus is payable only out of such profits directly
aligns the interests of the Javelin Capital partners
and employees with those of Javelin Capital and the
Company;
• The Residual Profit share is again payable only out
of Javelin Capital profits, and therefore directly aligns
the interests of the individual Javelin Capital partners
with those of the Company.
Mr JWM Barlow is subject to the LLP Agreement
governing Javelin Capital as varied by an Accession
Agreement entered into by him on 21 February 2013.
The terms of the LLP Agreement include providing for
six months' notice of termination by either party, an
entitlement to share in the profits of the partnership
and various post partnership obligations and
restrictions considered to be appropriate for a role of
this type within the financial services sector. There are
no other provisions which would give rise to or impact
upon remuneration payments of payments for loss of
office, save as set out above.
Additionally he is subject to his letter of appointment as
a Director of the Company, the terms of which are the
same as for the non-executive directors, and to a letter
dated 4 october 2012 which sets out the terms of his
new business incentive bonus. There are no current
arrangements concerning his annual Company bonus;
as this will be agreed as and when applicable, subject
to the constraints set out above.
each component of the remuneration package set out
above supports the short and long-term strategic
objectives of the Company as follows:
• The Priority Profit share or remuneration ensures
that the executive directors’ base profit share or
remuneration is set at a competitive level;
• The non-fixed elements of the remuneration
package aim to ensure that the fixed costs of
Javelin Capital and the Company are restrained, and
that the remuneration received by an executive
director should largely be aligned with the
performance of Javelin Capital;
RePoRT & ACCouNTs 2013 39
Report on Directors’ Remuneration
save as set out above there are no specific additional
performance measures or targets applicable to any of
the components of the executive directors’
remuneration. The new business incentive bonus was
fixed to be in line with standard market practice for
bonuses of this nature for new businesses. The overall
bonus pools set out above were agreed following
negotiation between the Company and the individual
partners, and reflect market practice. Because the
bonuses essentially reflect an allocation of profit, no
further performance measures are felt to be
appropriate. In allocating any such bonuses, the
managing partner of Javelin Capital (and in approving
such bonuses, the Remuneration Committee) will take
account of individual comparative performance.
save for the payment of directors’ fees, there is no
difference between the Company’s policy on the
remuneration of directors from the remuneration of
employees or of partners of Javelin Capital generally.
Approach to Recruitment Remuneration
The principle adopted by the Committee in respect of
recruitment of directors is that the fees for a non-
executive director should reflect the responsibilities and
time commitment required. This is also referenced to
other similar organisations and appointments. The
Committee seeks to encourage the enhancement of the
Company’s performance and to ensure that remuneration
packages offered are competitive and designed to
attract, retain and motivate directors of the right calibre.
Any new non-executive director would be paid on the
same basis as the existing non-executive directors.
As noted above the aggregate level of directors’ fees
must not exceed a set limit, as set out in the
Company’s articles of association, which is currently
£250,000 per annum.
In respect of executive directors’, the Committee seeks
to incentivise and align the relevant individual’s interests
with that of the Company and Group. In doing so the
Committee looks to set fixed remuneration, at a level
appropriate given the responsibilities and in line with
the market for financial services businesses in the City
of London. The variable remuneration is structured in
order to provide a reward for individual performance at
both the Company and Javelin Capital level. Any new
executive director’s remuneration package would
contain a fixed salary or Priority Profit share element, in
line with those set out above, together with an
entitlement to participate in the bonus schemes set out
above on the same basis as is set out above. The
maximum level of variable remuneration which may be
granted would be equal to the individual allocation of the
bonus pools set out above.
Policy on Payment for Loss of Office
The Company’s policy is that notice periods for loss of
office of executive directors of the Company should be
of three months’ duration. Any director who is also a
partner in Javelin Capital would be entitled to a notice
period of 6 months before being removed as a partner.
The Company’s policy is that no payment should be
made for loss of office, save for any remuneration or
Javelin Capital Priority Profit share in respect of any
notice period, and that should be paid during any
notice period, and shall be subject to reduction in the
event of the director gaining alternative employment.
Any bonuses to which any directors of the Company
may be entitled or entitled to participate in will be
subject to their being an employee or partner of Javelin
Capital at the time payment falls due, and no payment
will be made in the event of prior loss of office. each
Javelin Capital partner is entitled to retain any
partnership units allocated to them if they leave two or
more years after becoming a partner, or 50% of such
units if they leave more than a year after becoming a
partner, or 25% of such units if they leave within a year
of becoming a partner. such units would entitle them
to a share in the proceeds of any sale of Javelin
Capital. There are no restrictions on the ability of
Javelin Capital to issue further units to dilute the
holdings of former partners, and it is expected that
such units would therefore in practice have no material
financial entitlement.
40
MAJeDIe INvesTMeNTs PLC
Consideration of Employment Conditions Elsewhere
in the Company
The pay and performance conditions of any executive
director of the Company are designed to be consistent
with those of the employees of the Group and the
partners in Javelin Capital. The same remuneration
policies apply to the other senior employee of the
Group. The remuneration of the other senior employees
of the Group, and the Javelin Capital partners, is a
material factor in setting the remuneration of the
executive director. The Committee has discussed the
remuneration policy set out in this Remuneration Report
with Mr v Pina on a number of occasions to ensure that
it is consistent with the terms of the LLP Agreement
and the policies proposed to be applied by Javelin
Capital. The remuneration of the executive director was
compared with that of the partners of Javelin Capital at
the time of his becoming an executive director
Shareholder Views on Remuneration
The Company has not received any views in respect of
directors’ remuneration expressed to it by shareholders.
Illustration of Application of Remuneration Policy
Executive Director
£000
150
145
140
135
130
125
120
Notes:
Minimum
Meets
expectations
Maximum
Fixed remuneration
Quarterly variable remuneration
1. Fixed remuneration includes directors’ fees, current reduced Priority Profit
share and benefits.
2. Quarterly variable remuneration, which is in respect of the current year only, is
on the basis that external AuM is raised as a result of his forecast marketing
activities but which is subject to investment performance. It is not possible to
calculate a value in excess of this for the maximum column as it is based on
AuM raised which is theoretically uncapped.
3. Annual variable remuneration is not able to be calculated the under meets
expectations or maximum columns, as he is entitled to participate in the Javelin
Capital bonus pools, which are theoretically uncapped.
The Consideration of Directors’ Remuneration
The remuneration of the directors was considered by
the Remuneration Committee at a meeting held on
16 october 2013. At each meeting, the members of
the Remuneration Committee were Mr PD Gadd,
Mr AJ Adcock and Mr RDC Henderson. No person
provided to the Remuneration Committee advice or
services that materially assisted the Remuneration
Committee in respect of their consideration of
directors’ remuneration for the financial year ended
30 september 2013.
Annual Report on Remuneration
Audited Section
Annual Report
The remuneration of the directors for the year ended
30 september 2013 was as follows:
Salary
& Fees
Fixed
Profit Share
Taxable
Benefits
Total
Remuneration
2013
£000
2012
£000
2013
£000
2012
£000
2013
£000
2012
£000
2013
£000
2012
£000
Non-executive
Directors
AJ Adcock
Hv Reid
PD Gadd
RDC Henderson
Executive Director
JWM Barlow
75
13
35
35
75
37
35
35
75
13
35
35
75
37
35
35
72
230
162
344
66
66
5
5
4
4
143
301
166
348
Mr JWM Barlow’s taxable benefits relate to healthcare
costs (he receives no pension contributions). other than
the payments of directors fees to Mr Hubert Reid, who
retired as a director on 16 January 2013, shown in the
table above, there have been no payments to past
directors during the financial year ended 30 september
2013, whether for loss of office or otherwise.
Scheme Interests Awarded during the Financial Year
No awards were made to directors during the year
under the Company’s Long Term Incentive Plan.
RePoRT & ACCouNTs 2013 41
Report on Directors’ Remuneration
Directors Interests
The Company does not have any requirement or
guidelines for any director to own shares in the Company.
The interests of the directors of the Company
(including their connected persons) as at
30 september 2013 and as at 9 December 2013 are
as follows.
Director
Type of holding
30 September
2013
9 December
2013
Year ended
No of fully paid
ordinary 10p shares
Remuneration of the Director Undertaking the Role
of Chief Executive Officer
The table below sets out the remuneration of the
director of the Company who fulfils a role most closely
corresponding to that of chief executive officer (Ceo)
over the preceding five financial years:
Director
undertaking
role of CEO
Total
remuneration
Current year
variable
remuneration
awarded vrs
maximum
potential
value
Prior year or
future year
awards vested
vrs maximum
potential
value
Mr AJ Adcock
Mr RDC Henderson
Mr PD Gadd
Mr JWM Barlow
Beneficial
Beneficial
Beneficial
Beneficial
20,000
–
10,000
658,779
20,000
–
10,000
658,779
Mr JWM Barlow
Non-beneficial
2,160,779
2,160,779
Non Audited Section
Performance
set out below is a graph showing the total shareholder
return attributable to the ordinary shares in the Company
in respect of the five financial years ended 30 september
2013 and to a hypothetical portfolio constructed
according to a benchmark equity index, calculated as
70% FTse All-share Index and 30% FTse World ex uK
Index (sterling). Although the Company abandoned this
as an overall benchmark in 2010 it remains as the
comparator for the purpose of this graph since it is the
formal benchmark adopted in respect of the core
portfolio investment group.
30 sep 2013 Mr JWM Barlow
£143,531
30 sept 2012 Mr JWM Barlow
£166,640
30 sept 2011 Mr GP Aherne
£185,040
30 sept 2010 Mr GP Aherne
£260,000
100%
30 sept 2009 Mr GP Aherne
30 sept 2008 Mr Re Clarke
£147,000
£902,994
95%
86%
The table below sets out the changes in the disclosed
elements of the director undertaking the role of Ceo as
compared to employees of the Group:
Year ended
Fixed
remuneration
Benefits
Variable
remuneration
CEO
Staff
CEO
Staff
CEO
Staff
30 september 2013
(14.8%)
(36.3%)
18.2% 26.9%
Notes:
1. The reduction in the Ceo fixed remuneration is explained on page 35. The
reduction in average staff fixed remuneration reflects the impact of higher paid
staff leaving over a small number of employees.
2. The increase in benefits largely reflects the increase costs of providing those
benefits by the relevant service providers.
1.80
1.60
1.40
1.20
1.00
0.80
0.60
9/08
9/09
9/10
9/11
9/12
9/13
Majedie
k
Benchmar
ToTAL sHAReHoLDeR ReTuRN v BeNCHMARK
5 YeARs To 30 sePTeMBeR 2013 (ReBAseD)
42
MAJeDIe INvesTMeNTs PLC
Relative Importance of Spend on Pay
The table below sets out, in respect of the financial
year ended 30 september 2013 and the preceding
financial year:
a) the actual administrative expenditure of the Group;
b) the remuneration paid to or receivable by all members
of the Group (including for this purpose partnership
distributions to the partners of Javelin Capital); and
c) the distributions made to shareholders by way of
dividend or share buyback.
£000
6
5
4
3
2
1
0
2013
2012
Admin
expenses
Total staff
remuneration
Dividend
Note:
The items listed in the table above are as required by the Regulations with the
exception of administrative expenses for the Group which has been included as the
Directors believe that it will help aid understanding of the relative importance of the
spend on staff pay.
Statement of Implementation of Remuneration
Policy in Respect of the Financial Year Ending
30 September 2014
Non-Executive Directors’
The Committee intends to review fees in light of
responsibilities undertaken and time commitment
required, particularly in light of the new Alternative
Investment Fund Manager Directive which will apply to
the Company from July 2014, and market conditions.
Executive Director
The Committee intends to review the Priority Profit
share as against market conditions. Additionally the
Committee will determine if the Priority Profit share will
be raised from its interim level on the basis of the
expected profitability of Javelin Capital.
In respect of the variable elements of the director’s
remuneration, all elements are currently prescribed
under the LLP Agreement or Mr JWM Barlow’s bonus
letter, save in respect of any Company profit bonus. If
Javelin Capital does become profitable during the
financial year ending 30 september 2014, the
Remuneration Committee will formulate appropriate
performance targets, which will be reported on in the
Remuneration Report for the year ending
30 september 2014.
Statement of Voting at General Meeting
At the Annual General Meeting of the Company held
on 16 January 2013, a resolution was proposed by the
Company to approve the Report on Directors’
Remuneration for the year ended 30 september 2012.
99.8% of the votes cast were in favour of the resolution
with 0.1% against. 0.1% of the votes were withheld.
Basis of Preparation
This report has been prepared in accordance with the
requirements of schedule 8 of the Large and Medium
sized Companies and Groups (Accounts and Reports)
Regulations 2008, as amended, as required by the
Companies Act 2006. The report also meets the
relevant requirements of the Listing Rules of the
Financial Conduct Authority and describes how the
Board has applied the principles relating to the
directors’ remuneration.
The Report on Directors’ Remuneration on pages 35 to
43 was approved by the Board on 9 December 2013.
on behalf of the Board
PD Gadd
Chairman of the Remuneration Committee
RePoRT & ACCouNTs 2013 43
statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the Group financial statements in
accordance with applicable united Kingdom law and
those IFRss as adopted by the european union. under
Company Law the Directors must not approve the
Group financial statements unless they are satisfied
that they present fairly the financial position, financial
performance and cash flows of the Group for that
period. In preparing the Group financial statements the
Directors are required to:
• select suitable accounting policies in accordance
with IAs 8: Accounting Policies, Changes in
Accounting estimates and errors and then apply
them consistently;
• present information, including accounting policies, in
a manner that provides relevant, reliable,
comparable and understandable information;
• provide additional disclosures when compliance with
the specific requirements in IFRss is insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the
Group’s financial position and financial performance;
under applicable law and regulations, the Directors are
also responsible for preparing a strategic Report, a
Corporate Governance statement, A Director’s
Remuneration Report and a Directors’ Report that
comply with that law and those regulations.
The Directors of the Company, whose names are
shown on page 20 of this Report, 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 net return of the Group;
• the Annual Report includes a fair review of the
development and performance of the business and
the position of the Group, together with a
description of the principal risks and uncertainties
that it faces; and
• they consider that the Annual Report, taken as a
whole, is fair, balanced and understandable and
provides the information necessary for shareholders
to assess the Company’s performance, business
model and strategy.
• state that the Group has complied with IFRss,
subject to any material departures disclosed and
explained in the financial statements;
By order of the Board
• make judgements and estimates that are reasonable
and prudent; and
• state that the Annual Report, taken as a whole, is
fair, balanced and understandable and provides
sufficient information to allow shareholders to
assess the Group’s performance.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and enable them to ensure that the Group
financial statements comply with the Companies Act
2006 and Article 4 of the IAs Regulation. They are also
responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Andrew J Adcock Chairman
9 December 2013
44
MAJeDIe INvesTMeNTs PLC
Report of the Independent Auditor
Independent Auditor’s Report to the Members of Majedie Investments PLC
We have audited the financial statements of Majedie
Investments PLC for the year ended 30 september
2013 which comprise the Consolidated and Company
statement of Comprehensive Income, the
Consolidated and Company statement of Changes in
equity, the Consolidated and Company Balance
sheets, the Consolidated and Company statement of
Cash Flows and the related notes 1 to 26.
The financial reporting framework that has been applied
in their preparation is applicable law and IFRss as
adopted by the european union and, as regards the
parent company financial statements, as applied in
accordance with the provisions of the Companies Act
2006.
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to
them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than
the Company and the Company’s members as a body,
for our audit work, for this report, or for the opinions
we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the statement of Directors’
Responsibilities set out on page 44, the directors are
responsible for the preparation of the Group and
Company financial statements and for being satisfied that
they give a true and fair view. our responsibility is to
audit and express an opinion on the Group and Company
financial statements in accordance with applicable law
and International standards on Auditing (uK and Ireland).
Those standards require us to comply with the Auditing
Practices Board’s ethical standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the
amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the
financial statements are free from material
misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting
policies are appropriate to the Group’s circumstances
and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall
presentation of the financial statements. In addition, we
read all the financial and non-financial information in
the Annual Report to identify material inconsistencies
with the audited financial statements and to identify
any information that is apparently materially incorrect
based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing
the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the
implications for our report.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of
the state of the Group’s and Company’s affairs as at
30 september 2013 and of the Group’s profit for the
year then ended;
• the Group financial statements have been properly
prepared in accordance with IFRss as adopted by
the european union;
• the Company financial statements have been
properly prepared in accordance with IFRss as
adopted by the european union and as applied in
accordance with the provisions of the Companies
Act 2006; and
• the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006 and, as regards the group financial
statements, Article 4 of the IAs Regulation.
RePoRT & ACCouNTs 2013 45
Report of the Independent Auditor
Independent Auditor’s Report to the Members of Majedie Investments PLC
Our assessment of risks of material misstatement
We identified the following risks of material
misstatement that had the greatest effect on the overall
audit strategy, the allocation of resources in the audit,
and directing the efforts of the engagement team:
• existence and ownership of the Group’s
investments; and
• valuation of the Group’s investments.
Our application of materiality
We apply the concept of materiality both in planning and
performing the audit, and in evaluating the effect of
identified misstatements on the audit and of uncorrected
misstatements, if any, on the financial statements and in
forming our audit opinion in the Report of the
Independent Auditor. When establishing our overall audit
strategy, we determined materiality for the Group to be
£1.2 million, which is 1% of total equity. This provided a
basis for determining the nature, timing and extent of
risk assessment procedures, identifying and assessing
the risk of material misstatement and determining the
nature, timing and extent of further audit procedures.
on the basis of our risk assessment, together with our
assessment of the Group’s overall control environment,
our judgment was that overall performance materiality
(i.e. our tolerance for misstatement in an individual
account or balance) for the group should be 75% of
materiality, namely £0.9 million. our objective in
adopting this approach was to ensure that total
uncorrected and undetected audit differences in the
financial statements did not exceed our materiality level.
We have reported to the Audit Committee all audit
differences in excess of £61 thousand, as well as
differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
An overview of the scope of our audit
our response to the risks identified above was as follows:
• we obtained independent confirmation from the
custodian of the Group’s investments and agreed
them to the books and records of the Company;
• we agreed year end prices for quoted investments
to an independent source; and
• with the assistance of our valuation experts, we
considered the appropriateness of the valuation
techniques applied to unlisted investments by
reviewing the valuation model, and obtained evidence
to corroborate the inputs into the valuation model.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion:
• the information given in the strategic Report and the
Directors’ Report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
• the part of the Report on Directors’ Remuneration
to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following:
under the IsAs (uK and Ireland), we are required to
report to you if, in our opinion, information in the
Annual Report is:
• materially inconsistent with the information in the
audited financial statements; or
• apparently materially incorrect based on, or
materially inconsistent with, our knowledge of the
Group acquired in the course of performing our
audit; or
• is otherwise misleading.
46
MAJeDIe INvesTMeNTs PLC
In particular, we are required to consider whether we
have identified any inconsistencies between our
knowledge acquired during the audit and the directors’
statement that they consider the Annual Report is fair,
balanced and understandable and whether the Annual
Report appropriately discloses those matters that we
communicated to the Audit Committee which we
consider should have been disclosed.
under the Companies Act 2006 we are required to
report to you if, in our opinion:
• adequate accounting records have not been kept
by the Company, or returns adequate for our audit
have not been received from branches not visited
by us; or
• the Company financial statements and the part of
the Report on Directors Remuneration to be audited
are not in agreement with the accounting records
and returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
under the Listing Rules we are required to review:
• the directors’ statement, set out on page 25, in
relation to going concern;
• the part of the Corporate Governance statement
relating to the company’s compliance with the nine
provisions of the uK Corporate Governance Code
specified for our review; and
• certain elements of the report to shareholders by
the Board on directors’ remuneration.
Ratan Engineer (Senior statutory auditor)
for and on behalf of ernst & Young LLP,
statutory Auditor
London
9 December 2013
RePoRT & ACCouNTs 2013 47
Consolidated statement of Comprehensive Income
for the year ended 30 september 2013
Revenue
return
£000
Notes
2013
Capital
return
£000
Total
£000
Revenue
return
£000
2012
Capital
return
£000
Total
£000
Investments
Gains on investments at fair value
through profit or loss
13
18,046
18,046
7,832
7,832
exchange loss on disposal of
foreign subsidiary
Net investment result
Income
Income from investments
other income
Total income
Expenses
Administrative expenses
Return before finance cost
and taxation
Finance costs
Net return before taxation
Taxation
Net return after taxation for
the year
other comprehensive income –
exchange differences on
translation of foreign operations
Attributable to:
equity holders of the company
Non-controlling interest
Total comprehensive income for
18,046
18,046
(840)
(840)
6,992
6,992
3
3
5
8
9
5,120
118
5,238
5,120
118
5,238
5,100
63
5,163
5,100
63
5,163
(880)
(1,109)
(1,989)
(1,777)
(1,442)
(3,219)
4,358
(702)
16,937
(2,105)
21,295
(2,807)
3,386
(705)
5,550
(2,115)
8,936
(2,820)
3,656
14,832
18,488
2,681
3,435
6,116
(115)
(115)
(132)
(132)
3,541
14,832
18,373
2,549
3,435
5,984
37
37
37
37
37
37
the year
3,541
14,832
18,373
2,549
3,472
6,021
Net return after taxation
attributable to:
equity holders of the Company
Non-controlling interest
Return per ordinary share:
Basic and diluted
14
11
3,541
14,832
18,373
2,552
(3)
3,445
(10)
5,997
(13)
3,541
14,832
18,373
2,549
3,435
5,984
pence
6.8
pence
28.5
pence
35.3
pence
4.9
pence
6.6
pence
11.5
The total column of this statement is the Consolidated statement of Comprehensive Income of the Group prepared in accordance with IFRss as
adopted by the european union. The supplementary revenue return and capital return columns are prepared under guidance published by the
Association of Investment Companies (AIC).
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.
The notes on pages 58 to 96 form part of these accounts.
48
MAJeDIe INvesTMeNTs PLC
Company statement of Comprehensive Income
for the year ended 30 september 2013
Revenue
return
£000
Notes
2013
Capital
return
£000
Total
£000
Revenue
return
£000
2012
Capital
return
£000
Total
£000
Investments
Gains on investments at fair value
through profit or loss
13
Net investment result
Income
Income from investments
other income
Total income
Expenses
Management fees
Administrative expenses
Return before finance costs
and taxation
Finance costs
Net return before taxation
Taxation
Net return after taxation for the year
3
3
4
5
8
9
17,679
17,679
17,679
17,679
6,258
6,258
6,258
6,258
5,120
112
5,232
5,120
112
5,232
5,132
34
5,166
5,132
34
5,166
(404)
(516)
(415)
(197)
(819)
(713)
(402)
(548)
(412)
(237)
(814)
(785)
4,312
17,067
21,379
4,216
5,609
9,825
(702)
3,610
(115)
3,495
(2,105)
14,962
14,962
(2,807)
18,572
(115)
18,457
(701)
3,515
(113)
3,402
pence
6.6
(2,104)
3,505
3,505
pence
6.7
(2,805)
7,020
(113)
6,907
pence
13.3
Return per ordinary share:
Basic and diluted
11
pence
6.7
pence
28.8
pence
35.5
The total column of this statement is the statement of Comprehensive Income of the Company prepared under IFRss as adopted by the european
union. The supplementary revenue return and capital return columns are prepared under guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.
The notes on pages 58 to 96 form part of these accounts.
RePoRT & ACCouNTs 2013 49
Consolidated statement of Changes in equity
for the year ended 30 september 2013
Share
capital
£000
Share
premium
£000
Notes
Capital
redemption
reserve
£000
Share
options
reserve
£000
Own shares
translation Non-controlling
Currency
reserve
£000
interest
£000
Total
£000
Year ended 30 September 2013
As at 1 october 2012
Net gain for the year
share options expense
Dividends declared and paid in year
24
10
5,253
785
56
(147)
24
As at 30 September 2013
5,253
785
56
(123)
102,654
18,169
(1,628)
Capital
reserve
£000
87,822
14,832
Revenue
reserve
£000
20,093
3,541
(5,465)
reserve
£000
(1,628)
Year ended 30 September 2012
As at 1 october 2011
Net gain for the year
other comprehensive income – exchange
differences on translation of foreign subsidiary
share options expense
Dividends declared and paid in year
Cessation of Non controlling interest
24
10
5,253
785
56
(178)
84,377
3,445
23,006
2,552
(1,628)
(37)
248
(13)
111,882
5,984
31
(5,465)
As at 30 September 2012
5,253
785
56
(147)
87,822
20,093
(1,628)
112,234
18,373
24
(5,465)
125,166
37
37
31
(5,465)
(235)
112,234
(235)
The notes on pages 58 to 96 form part of these accounts.
50
MAJeDIe INvesTMeNTs PLC
Share
capital
£000
Share
premium
£000
Notes
Capital
redemption
reserve
£000
Share
options
reserve
£000
5,253
785
56
(147)
Capital
reserve
£000
87,822
14,832
Revenue
reserve
£000
Own shares
reserve
£000
translation Non-controlling
interest
£000
reserve
£000
Currency
(1,628)
20,093
3,541
(5,465)
As at 30 September 2013
5,253
785
56
(123)
102,654
18,169
(1,628)
Total
£000
112,234
18,373
24
(5,465)
125,166
5,253
785
56
(178)
84,377
3,445
23,006
2,552
(1,628)
(37)
248
(13)
111,882
5,984
As at 30 September 2012
5,253
785
56
(147)
87,822
20,093
(1,628)
(5,465)
37
37
31
(5,465)
(235)
112,234
(235)
Year ended 30 September 2013
As at 1 october 2012
Net gain for the year
share options expense
Dividends declared and paid in year
Year ended 30 September 2012
As at 1 october 2011
Net gain for the year
other comprehensive income – exchange
differences on translation of foreign subsidiary
share options expense
Dividends declared and paid in year
Cessation of Non controlling interest
24
10
24
10
24
31
RePoRT & ACCouNTs 2013 51
Company statement of Changes in equity
for the year ended 30 september 2013
Year ended 30 September 2013
As at 1 october 2012
Net gain for the year
share options expense
Dividends declared and paid in year
As at 30 September 2013
Year ended 30 September 2012
As at 1 october 2011
Net gain for the year
share options expense
Dividends declared and paid in year
Notes
Share
capital
£000
Share
premium
£000
Capital
redemption
reserve
£000
Share
options
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Own shares
reserve
£000
Total
£000
5,253
785
56
(147)
89,572
23,748
(1,628)
117,639
24
10
24
10
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
5,253
785
56
(178)
86,067
25,811
(1,628)
116,166
24
31
14,962
3,495
(5,465)
3,505
3,402
(5,465)
18,457
24
(5,465)
6,907
31
(5,465)
As at 30 September 2012
5,253
785
56
(147)
89,572
23,748
(1,628)
117,639
The notes on pages 58 to 96 form part of these accounts.
52
MAJeDIe INvesTMeNTs PLC
Notes
Share
capital
£000
Share
premium
£000
Capital
redemption
reserve
£000
Share
options
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Own shares
reserve
£000
Total
£000
5,253
785
56
(147)
89,572
23,748
(1,628)
117,639
14,962
3,495
24
(5,465)
18,457
24
(5,465)
As at 30 September 2013
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
As at 30 September 2012
5,253
785
56
(147)
89,572
23,748
(1,628)
117,639
5,253
785
56
(178)
86,067
25,811
(1,628)
116,166
3,505
3,402
31
(5,465)
6,907
31
(5,465)
Year ended 30 September 2013
As at 1 october 2012
Net gain for the year
share options expense
Dividends declared and paid in year
Year ended 30 September 2012
As at 1 october 2011
Net gain for the year
share options expense
Dividends declared and paid in year
24
10
24
10
RePoRT & ACCouNTs 2013 53
Consolidated Balance sheet
as at 30 september 2013
Non-current assets
Property and equipment
Investments held at fair value through profit or loss
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total assets less current liabilities
Non-current liabilities
Debentures
Total liabilities
Net assets
Represented by:
ordinary share capital
share premium
Capital redemption reserve
share options reserve
Capital reserve
Revenue reserve
own shares reserve
Equity Shareholders’ Funds
Net asset value per share
Basic and fully diluted
Notes
12
13
15
16
17
17
18
19
20
2013
£000
105
151,939
152,044
2,690
5,523
8,213
2012
as restated*
£000
247
122,361
122,608
1,418
23,287
24,705
160,257
147,313
(1,244)
159,013
(33,847)
(35,091)
125,166
5,253
785
56
(123)
102,654
18,169
(1,628)
125,166
pence
240.5
(1,256)
146,057
(33,823)
(35,079)
112,234
5,253
785
56
(147)
87,822
20,093
(1,628)
112,234
pence
215.6
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 9 December 2013.
Andrew J Adcock
J William M Barlow
Directors
The notes on pages 58 to 96 form part of these accounts.
54
MAJeDIe INvesTMeNTs PLC
Company Balance sheet
as at 30 september 2013
Non-current assets
Property and equipment
Investments held at fair value through profit or loss
Investments in subsidiaries held at fair value through
profit or loss
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total assets less current liabilities
Non-current liabilities
Debentures
Total liabilities
Net assets
Represented by:
ordinary share capital
share premium
Capital redemption reserve
share options reserve
Capital reserve
Revenue reserve
own shares reserve
Notes
12
13
13
15
16
17
17
18
19
2013
£000
98
151,939
2012
£000
133
122,361
8,193
8,192
160,230
130,686
1,313
3,991
5,304
855
20,922
21,777
165,534
152,463
(1,032)
(1,001)
164,502
151,462
(33,847)
(34,879)
(33,823)
(34,824)
130,655
117,639
5,253
785
56
(123)
104,534
21,778
(1,628)
5,253
785
56
(147)
89,572
23,748
(1,628)
Equity Shareholders’ Funds
130,655
117,639
Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 9 December 2013.
Andrew J Adcock
J William M Barlow
Directors
The notes on pages 58 to 96 form part of these accounts.
RePoRT & ACCouNTs 2013 55
Consolidated Cash Flow statement
for the year ended 30 september 2013
Notes
2013
£000
2012
as restated*
£000
Net cash flow from operating activities
Consolidated net return before taxation
Adjustments for:
Gains on investments
Consolidation adjustment on Javelin Capital fee income
13
13
share based remuneration
Depreciation
Purchases of investments
sales of investments
Proceeds from derivative contracts
Finance costs
Operating cashflows before movements in working capital
Decrease in trade and other payables
(Increase)/decrease in trade and other receivables
Net cash outflow from operating activities before tax
Tax recovered
Tax on unfranked income
Net cash outflow from operating activities
Investing activities
Purchases of tangible assets
Net cash outflow from investing activities
Financing activities
Interest paid
Dividends paid
Net cash outflow from financing activities
Decrease in cash and cash equivalents for year
21
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
18,488
6,116
(18,046)
(7,962)
368
24
142
(31,862)
19,724
(11,162)
2,807
(8,355)
(137)
(916)
(9,408)
28
(136)
(9,516)
(2,783)
(5,465)
(8,248)
(17,764)
23,287
5,523
130
31
166
(131,121)
125,175
(911)
(8,376)
2,820
(5,556)
(528)
204
(5,880)
37
(158)
(6,001)
(3)
(3)
(2,797)
(5,465)
(8,262)
(14,266)
37,553
23,287
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
The notes on pages 58 to 96 form part of these accounts.
56
MAJeDIe INvesTMeNTs PLC
Company Cash Flow statement
for the year ended 30 september 2013
Net cash flow from operating activities
Company net return before taxation
Adjustments for:
Gains on investments
share based remuneration
Depreciation
Purchases of investments
sales of investments
Proceeds from derivative contracts
Finance costs
Operating cashflows before movements in working capital
(Decrease)/increase in trade and other payables
(Increase)/decrease in trade and other receivables
Net cash (outflow)/inflow from operating activities before tax
Tax recovered
Tax on unfranked income
Net cash (outflow)/inflow from operating activities
Investing activities
Investment in subsidiaries
Net cash outflow from investing activities
Financing activities
Interest paid
Dividends paid
Net cash outflow from financing activities
(Decrease)/increase in cash and cash equivalents for year
21
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
The notes on pages 58 to 96 form part of these accounts.
Notes
2013
£000
2012
£000
18,572
7,020
13
(17,679)
(6,258)
24
35
(31,862)
19,724
(11,186)
2,807
(8,379)
(94)
(102)
(8,575)
28
(136)
(8,683)
(2,783)
(5,465)
(8,248)
(16,931)
20,922
3,991
31
45
(32,901)
43,944
183
12,064
2,805
14,869
18
135
15,022
37
(134)
14,925
(1,000)
(1,000)
(2,783)
(5,465)
(8,248)
5,677
15,245
20,922
RePoRT & ACCouNTs 2013 57
Notes to the Accounts
General Information
Majedie Investments PLC is a company incorporated in england under the Companies Act 2006. The Company is
registered as a public limited company and is an investment company as defined by section 833 of the Companies
Act 2006. The address of the registered office is given on page 103. The nature of the Group’s operations and its
principal activities are set out in the Business Review on pages 7 to 11.
Critical Accounting Assumptions and Judgements
The preparation of financial statements in conformity with IFRss requires the use of certain critical accounting
assumptions. It also requires management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas requiring a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the consolidated financial statements are set out below.
Assessment as investment entity
entities that meet the definition of an investment entity within IFRs 10 are required to measure their subsidiaries at fair
value through profit or loss rather than consolidate them. The criteria which define an investment entity are, as follows:
• obtains funds from one or more investors for the purpose of providing those investors with investment services;
•
commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation,
investment income or both; and
• measures and evaluates the performance of substantially all of its investments on a fair value basis.
The Board has agreed with the recommendation of the Audit Committee that the Company meets the definition of
an investment entity. These conclusions will be reassessed on an annual basis, if any of these criteria or
characteristics change.
As an investment trust, the Company’s stated investment policy (see page 8), details its objective of providing
investment management services to investors which includes investing in uK and global equities, fixed income
securities and certain derivative instruments for the purpose of returns in the form of investment income and capital
appreciation.
The Group reports regularly to its shareholders via monthly and quarterly investor information, and to its
management, via internal management reports, on a fair value basis. All investments are reported at fair value to the
extent allowed by IFRss in the Group’s Half-Yearly and Annual Reports.
The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that
it has more than one investment; it has ownership interests in the form of equity and similar interests; it has more
than one investor and its investors are not related parties.
Unquoted Investments
unquoted investments are valued at management’s best estimate of fair value in accordance with IFRss having
regard to International Private equity and venture Capital valuation Guidelines as recommended by the British
venture Capital Association. The principles which the Group applies are set out on pages 64 and 65. The inputs into
the valuation methodologies adopted include observable historical data such as earnings or cash flow as well as
more subjective data such as earnings forecasts or discount rates. As a result of this, the determination of fair value
requires significant management judgement. At the year end, unquoted investments (including Majedie Asset
Management (MAM)) represent 37.4% of consolidated shareholders’ funds.
58
MAJeDIe INvesTMeNTs PLC
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. estimating fair value for share-based payment transactions
requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of
the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including
the expected life of the share option, volatility and dividend yield and making assumptions about them. The
assumptions and models used for estimating fair value for share-based payment transactions are disclosed in
note 24 and on pages 83 and 84.
1 Significant Accounting Policies
The principal accounting policies adopted are set out as follows:
The accounts on pages 48 to 96 comprise the audited results of the Company and its subsidiaries for the year
ended 30 september 2013, and are presented in pounds sterling rounded to the nearest thousand, as this is the
functional currency in which the Group and Company transactions are undertaken.
Going Concern
The Directors have a reasonable expectation that the Company has sufficient resources to continue in operational
existence for the foreseeable future. Accordingly the Financial statements have been prepared on a going concern basis.
Presentation of Statement of Comprehensive Income
In order to reflect better the activities of an investment trust company and in accordance with guidance issued by
the AIC, supplementary information which analyses the statement of Comprehensive Income between items of a
revenue and capital nature has been presented alongside the statement of Comprehensive Income. up until 6 April
2012, in accordance with the Company’s status as a uK investment company under section 833 of the Companies
Act 2006, net capital returns were not able to be distributed by way of dividend. Additionally the net revenue is the
measure that the directors believe to be appropriate in assessing the Company’s compliance with certain
requirements set out in section 1158 of the Corporation Tax Act 2010.
Basis of Accounting
The accounts of the Group and the Company have been prepared in accordance with IFRss. They comprise
standards and interpretations approved by the International Accounting standards Board and International Financial
Reporting Committee, interpretations approved by the International Accounting standards Committee that remain in
effect, to the extent they have been adopted by the european union.
Where presentational guidance set out in the soRP regarding the Financial statements of Investment Trust
Companies and venture Capital Trusts issued by the Association of Investment Companies in January 2009 is not
inconsistent with the requirements of IFRss, the directors have sought to prepare the financial statements on a basis
compliant with the recommendations of the soRP. All the Group’s activities are continuing.
Basis of Consolidation
The Company is an investment entity and, as such, does not consolidate the entities it controls which do not
provide investment related services to the Company. Instead, interests in such entities are classified as fair value
through profit or loss, and measured at fair value. This represents a change in accounting policy in the current year,
more details of which are provided on pages 60 to 62.
The Consolidated Accounts incorporate the accounts of the Company and entities controlled by the Company
which themselves provide investment related services (its subsidiaries) made up to 30 september each year. Control
is achieved where the Company has the power to govern the financial and operating policies of an investee entity so
as to obtain benefits from its activities.
RePoRT & ACCouNTs 2013 59
Notes to the Accounts
1 Significant Accounting Policies continued
The results of subsidiaries acquired or disposed of are included in the Consolidated statement of Comprehensive
Income from the effective date of acquisition or disposal as appropriate. When the Group ceases to have control any
retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in
carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss. All Group entities have the same year end date.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s
equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business
combination and the non-controlling interest’s share of changes in equity since the date of combination. Losses
applicable to the non-controlling interest in excess of the non-controlling’s interest in the subsidiary’s equity are
allocated against the interest of the Group except to the extent that the non-controlling interest has a binding
obligation and is able to make an additional investment to cover losses.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies
used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Standards Issued But Not Yet Effective
At the date of authorisation of these financial statements, the following relevant standards and Interpretations have
not been applied in these financial statements since they were in issue but not yet effective:
International Accounting Standards (IAS/IFRSs)
IFRs 9
IFRs 13
Financial Instruments: Classification & Measurement
Fair value Measurement
Effective date
1 January 2015
1 January 2013
Management anticipates that all of the relevant pronouncements will be adopted in the next accounting period.
Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s
financial statements is provided below. Certain other new standards and interpretations have been issued but are
not expected to have a material impact on the Group’s financial statements.
The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact
on the financial statements in the period of initial application.
Changes in accounting policies and disclosures
New and amended standards and interpretations
The Group has early adopted IFRs 10, ‘Consolidated Financial statements’, IFRs 11 ‘Joint Arrangements’, IFRs 12,
‘Disclosure of Interests in other entities’, IAs 27 (revised 2011, ‘separate Financial statements’ and IAs 28,
‘Investments in Associates and Joint ventures’, and has applied the transition guidance of IFRs 10, 11 and 12, and
the Investment entities amendments to IFRs 10, IFRs 12 and IAs 27 (the “Amendments”) all of which are effective
1 January 2014.
IFRS 10 Consolidated Financial Statements and Investment Entities Amendments
IFRs 10 replaces the portion of IAs 27 Consolidated and separate Financial statements that addresses the accounting
for consolidated financial statements. It also addresses the issues raised in sIC12 Consolidation – special Purpose
entities. IFRs 10 establishes a single control model that applies to all entities including special purpose entities.
60
MAJeDIe INvesTMeNTs PLC
1 Significant Accounting Policies continued
In addition, IFRs 10 includes an exemption from consolidation for entities, which meet the definition of an investment
entity, and requires such entities to recognise all investments at fair value through profit or loss. Notwithstanding the
exemption to consolidation explained above, the standard requires an investment entity to consolidate a subsidiary
that provides services that relate to the investment entity’s investment activities.
The Company meets the definition of an investment entity (see page 58), and, therefore, all investments are
recognised at fair value through profit or loss other than those subsidiaries which provide investment related services
to the Company. This has changed the treatment for the Company’s investment in JCeMAF from the acquisition
date of 16 January 2012. The adoption of IFRs 10 has resulted in the Group treating its investment in JCeMAF as
an investment in subsidiary at fair value through profit or loss (see note 14). Previously this investment was treated
as a subsidiary classified as an ‘asset held for sale’ under IFRs 5.
The change does not affect the measurement of this investment as previously under IFRs 5 JCeMAF was an asset
valued at the lower of its carrying amount and fair value less costs to sell (which as a listed entity, are negligible), and
because its carrying amount was to be recovered principally through a sale transaction rather than through
continuing use. By adopting IFRs 10, the investment is now being measured at fair value through profit or loss.
under the transitional provisions of IFRs 10 this change in accounting policy is required to be accounted for
retrospectively and therefore the relevant comparative figures have been restated. However, as the adoption date is
from the acquisition date of JCeMAF of 16 January 2012, the resultant change only affects balance sheet
reclassification of the Group’s assets and liabilities, and a third balance sheet as at the beginning of the preceding
period is not considered necessary.
on initial application of a new standard, IAs 8.28(i) requires the disclosure of the effect on each financial statement
line-item and on return per share. These disclosures are required for the current period and for each prior period
presented, to the extent practicable. IFRs 10 C2A partly relaxes this general requirement. It states that an entity may
only present the quantitative information required under IAs 8.28(i) for the annual period immediately preceding the
first annual period for which IFRs 10 is applied. In view of this relief, an entity is not required to disclose the impact
of transition to IFRs 10 for the current period or for an earlier period than the immediately preceding period. There is
no impact on reserves as at 1 october 2012.
The following shows the adjustments made to each financial statement line-item for the comparative period:
extracts
Assets
Non-current assets
Investments held at fair value through profit or loss
Current assets
Asset classified as held for sale
Liabilities
Current liabilities
Liabilities directly associated with the assets classified
as held for sale
Group net assets
2012
(Group)
£000
Adjustment
2012
(Group restated)
£000
108,217
14,144
122,361
14,199
(14,199)
(55)
112,234
55
112,234
RePoRT & ACCouNTs 2013 61
Notes to the Accounts
1 Significant Accounting Policies continued
The transition did not have any impact for the period on the statement of Comprehensive Income or the Group’s
basic and diluted return per ordinary share.
IFRS 12 Disclosures of Interests in Other Entities
IFRs 12 requires entities to disclose significant judgements and assumptions made in determining whether the entity
controls, jointly controls, significantly influences or has some other interests in other entities. entities are also
required to provide more disclosures around certain ‘structured entities’. Adoption of the standard has impacted the
Group’s level of disclosures in certain of the above noted areas, but has not impacted the Group’s position of results
of operations. There are no structured entities. IFRs 12 disclosures are provided in note 14.
IAS 27 Revised Separate Financial Statements
As a consequence of the new IFRs 10 and IFRs 12, what remains in IAs 27 is limited to accounting for subsidiaries,
jointly controlled entities, and associates in separate financial statements. This standard has not impacted the
financial statements of the Group.
IFRS 11 Joint Arrangements and IAS 28 Revised Investments in Associates and Joint Ventures
As a consequence of the new IFRs 11 and IFRs 12, IAs 28 describes the application of the equity method to
investments in joint ventures in addition to associates. These standards have also been early adopted but have not
impacted the financial statements of the Group.
Foreign Currencies
The individual financial statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates, i.e. its functional currency. For the purpose of the consolidated financial
statements, the results and financial position of each entity are expressed in Pounds sterling (sterling) which is the
functional currency of the Company, and the presentational currency of the Group. Transactions in currencies other
than sterling are recorded at the rate of exchange prevailing on the dates of the transactions. At each balance sheet
date, monetary items and non-monetary assets and liabilities that are fair valued and are denominated in foreign
currencies are re-translated at the rates prevailing on the balance sheet date. Gains and losses arising on
retranslation are included in net profit or loss for the year in respect of those investments and all other assets/
liabilities which are classified and held at fair value through profit or loss. All foreign exchange gains and losses,
except those arising from the translation of foreign subsidiaries, are recognised in the Consolidated statement of
Comprehensive Income. on disposal of a foreign operation, the component of other comprehensive income relating
to that particular foreign operation is recognised in profit or loss.
Segmental Reporting
A segment is a distinguishable component of the Group that is engaged in business activities from which it may
earn revenues and incur expenses (including intra-group revenues and expenses), for which discrete financial
information is available and whose operating results are regularly reviewed by the entity’s chief decision maker who
can make decisions on resource allocation and performance assessment. An operating segment could engage in
business activities in order to earn potential future revenues.
62
MAJeDIe INvesTMeNTs PLC
1 Significant Accounting Policies continued
Income
Dividend income from investments is taken to the revenue account on an ex-dividend basis. Dividend expense
relating to equity securities sold short is recognised when the shareholders' right to receive payment is established.
uK dividends are included net of tax credits. overseas dividends are included gross of any withholding tax. Where
the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount
of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the
amount of the cash dividend is recognised in the capital column.
The fixed return on a debt security is recognised on a time apportionment basis so as to reflect the effective yield on
the debt security. Deposit interest and other interest receivable is included on an accruals basis.
special dividends are taken to the revenue or capital account depending on their nature.
Expenses
All administrative expenses are accounted for on an accruals basis. In respect of the analysis between revenue and
capital items presented within the statement of Comprehensive Income, all expenses have been presented as
revenue items except as follows:
•
•
expenses which are incidental to the acquisition or disposal of an investment are treated as capital costs and
separately identified and disclosed (see note 13).
expenses are split and presented partly as capital items where a connection with the maintenance or
enhancement of the value of the investments held can be demonstrated, and accordingly the investment
management expenses have been allocated 75% to capital, in order to reflect the directors’ expected long-term
view of the nature of the investment returns of the Company.
•
The investment management performance fee, which is based on capital out-performance, is charged wholly
to capital.
Pension Costs
Payments made to the Group’s defined contribution group personal pension plan are charged as an expense as
they fall due on an accruals basis.
Finance Costs
75% of finance costs arising from the debenture stocks are allocated to capital; 25% of the finance costs are
charged on the same basis to the revenue account. Premiums payable on early repurchase of debenture stock are
charged 100% to capital. In addition, other interest payable is allocated 75% to capital and 25% to the revenue
account. Finance costs are debited on an accruals basis using the effective interest method.
Share Based Payments
The Group issues equity-settled share-based payments to certain employees. equity-settled share-based payments
are measured at fair value determined at the date of grant, which is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of the number of shares that will eventually vest. Fair value is measured by use
of the Black-scholes model. The expected life used in the model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
RePoRT & ACCouNTs 2013 63
Notes to the Accounts
1 Significant Accounting Policies continued
Taxation
The tax charge represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
In line with the recommendations of the soRP, the allocation method used to calculate tax relief on expenses presented
against capital returns in the supplementary information in the statement of Comprehensive Income is the marginal basis.
under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column
of the statement of Comprehensive Income, then no tax relief is transferred to the capital return column.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised.
No provision is made for tax on capital gains since the Company operates as an investment trust for tax purposes.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Leasehold improvements are written off in equal annual instalments over the minimum period of the lease whereas
depreciation for other tangible assets is provided for at 25% to 33% per annum using the straight-line method.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the
relevant lease.
Investments Held at Fair Value Through Profit or Loss
The Group classifies its investments in debt and equity securities, and derivatives, as financial assets or financial
liabilities at fair value through profit or loss.
When a purchase or sale is made under a contract, the terms of which require delivery within the timeframe of the
relevant market, the investments concerned are recognised or derecognised on the trade date.
All investments are classified as fair value through profit or loss as defined by IAs 39.
All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured
at subsequent reporting dates at fair value, which is either the bid price or the last traded price for listed securities,
depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open
ended investment companies are valued at the closing price, the bid price or the single price as appropriate,
released by the relevant investment manager.
64
MAJeDIe INvesTMeNTs PLC
1 Significant Accounting Policies continued
Fair values for unquoted investments, or investments for which the market is inactive, are established by using various
valuation techniques in accordance with the International Private equity and venture Capital valuation Guidelines.
These may include recent arm’s length market transactions, the current fair value of another instrument which has
substantially the same earnings multiples, discounted cash flow analysis and option pricing models. Where there is a
valuation technique commonly used by market participants to price the instrument and that technique has been
demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised.
Changes in the fair value of investments and gains on the sale of investments are recognised as they arise in the
statement of Comprehensive Income.
Investment in Subsidiaries
In its separate financial statements the Company recognises its investment in subsidiaries at fair value.
Financial Instruments
Financial assets and financial liabilities are recognised on the Group’s Balance sheet when the Group becomes a
party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at
fair value.
Trade Receivables
Trade receivables do not carry any interest and are stated at carrying value which equates to their fair value as
reduced by appropriate allowances for estimated irrecoverable amounts.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash deposited with banks, cash balances at brokers and short-term highly
liquid investments with maturities of three months or less from the date of acquisition. Prime broker cash balances
are held with Goldman sachs International and Morgan stanley & Co International. short and long cash positions
held with these brokers can be netted off as per the prime broker agreements.
Collateral Cash held at brokers
Collateral cash consists of margin cash held as collateral for open derivative positions with the prime brokers,
Goldman sachs International and Morgan stanley & Co International. short and long cash positions held with these
brokers can be netted off as per the prime broker agreements.
Financial Liabilities and Equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Financial liabilities are either classified as financial liabilities at fair value through profit or loss and are recognised
initially at fair value or 'other financial liabilities' (including borrowings and trade and other payables that are classified
and subsequently measured at amortised cost). Financial liabilities are subsequently measured at fair value and
changes in fair value are recognised in the statement of Comprehensive Income.
Non current liabilities
The debentures are initially recognised at cost, being the fair value of the consideration received less issue costs
where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method, with the interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future payments over the expected life of the financial liabilities to the net carrying amount on initial recognition.
RePoRT & ACCouNTs 2013 65
Notes to the Accounts
1 Significant Accounting Policies continued
Trade Payables
Trade payables are not interest bearing and are stated at carrying value which equates to their fair value.
Reserves
Gains and losses on the sale of investments and investment holding gains and losses are accounted for in the
statement of Comprehensive Income and subsequently in the capital reserve. The translation reserve is used to
record exchange differences arising from the translation of the financial statements of the Group’s foreign subsidiary.
share options reserve represents the expense of share based payments. The fair value of share options is measured
at grant date and spread over the vesting period. The deemed expense is transferred to the share options reserve.
share premium account represents the excess over nominal value of consideration received for equity shares, net of
expenses of the share issue.
Own Shares
own shares held under option are accounted for in accordance with IFRs 2: share-based Payments. This requires
that the consideration paid for own shares held be presented as a deduction from shareholders’ funds, and not
recognised as an asset.
Dividends payable to shareholders
Dividends to shareholders are accounted for in the period in which they are paid or approved in general meetings.
Dividends payable to shareholders are recognised in the statement of Changes in equity when they are paid, or
have been approved by shareholders in the case of a final dividend and become a liability of the Company.
2 Business segments
For management purposes, the Group is currently organised into the following two principal activities:
Investing activities
The Company’s investment objective is to maximise total shareholder return whilst increasing dividends by more
than the rate of inflation over the long term.
The Company operates as an investment trust company and its portfolio contains investments in companies listed in
a number of countries. Geographical information about the portfolio is provided on pages 16 to 19 and exposure to
different currencies is disclosed in note 25 on pages 86 and 87.
Investment management services
To complement this investment objective and create income and capital for the Group, Javelin Capital LLP has been
launched to market a range of funds to third party investors and provide investment management and advisory services.
66
MAJeDIe INvesTMeNTs PLC
2 Business Segments continued
Group
2013
Group
2012
external income
from investment
management services
Intra-group income
from investment
management services
other operating and
investment income
Investment
management
Investing and advisory
activities
£000
services Eliminations
£000
£000
31
Investment
management
Investing and advisory
activities
£000
services eliminations
£000
£000
18
Total
£000
31
Total
£000
18
1,187
(1,187)
1,241
(1,241)
5,232
(6)
(19)
5,207
5,142
3
5,145
5,232
1,212
(1,206)
5,238
5,142
1,262
(1,241)
5,163
share based
payments charge
other administrative costs
Intra-group investment
management services
expenses
other operating expenses
(24)
(688)
(819)
(1,162)
19
(24)
(1,831)
(31)
(1,194)
(1,716)
(31)
(2,910)
(368)
(134)
1,187
(134)
(1,181)
(78)
(60)
(200)
1,241
(278)
(1,531)
(1,664)
1,206
(1,989)
(2,484)
(1,976)
1,241
(3,219)
Operating profit/(loss)
Finance costs
Gains on fair value through
profit and loss
Foreign exchange loss
on disposal of subsidiary
3,701
(2,807)
(452)
3,249
(2,807)
2,658
(2,820)
(714)
17,678
368
18,046
7,832
(840)
Profit/(loss) before tax
18,572
(84)
18,488
6,830
(714)
1,944
(2,820)
7,832
(840)
6,116
Total assets
Total liabilities
Intra-group assets/(liabilities)
157,026
(34,945)
8,542
3,231
(146)
(542)
160,257 144,094
(34,911)
8,426
(35,091)
(8,000)
3,274
(223)
(426)
147,368
(35,134)
(8,000)
Net assets
130,623
2,543
(8,000) 125,166 117,609
2,625
(8,000) 112,234
3 Income
Income from investments
Franked investment income†
uK unfranked investment income
overseas dividends
Fixed interest and
convertible bonds
Group
2013
£000
4,114
63
943
Group
2012
£000
4,113
135
835
17
Company
2013
£000
Company
2012
£000
4,114
63
943
4,113
135
867
17
† Includes MAM ordinary dividend income of £2,260,000 (2012: £2,215,000).
5,120
5,100
5,120
5,132
RePoRT & ACCouNTs 2013 67
Notes to the Accounts
3 Income continued
Other income
Deposit interest
sundry income
Total income
Total income comprises:
Dividends
Interest
other income
Income from investments
Listed uK
Listed overseas
unlisted
4 Management Fees
Investment management
Administration
Group
2013
£000
22
96
5,120
22
96
1,917
943
2,260
Group
2012
£000
32
31
Company
2013
£000
Company
2012
£000
19
93
21
13
118
5,238
63
5,163
112
5,232
34
5,166
5,083
49
31
5,120
19
93
5,115
38
13
5,238
5,163
5,232
5,166
2,033
852
2,215
1,917
943
2,260
2,033
884
2,215
5,120
5,100
5,120
5,132
Company
2013
Capital
return
£000
415
415
Revenue
return
£000
139
265
404
Total
£000
554
265
819
Revenue
return
£000
137
265
402
Company
2012
Capital
return
£000
412
412
Total
£000
549
265
814
A summary of the terms of the Management Agreement for the Company with Javelin Capital LLP is given in the
Directors’ Report on pages 24 and 25. At 30 september 2013, an amount of £47,000 was outstanding for payment
of investment management fees when due (2012: £52,000) and outstanding administration fees of £22,000 (2012:
£22,000).
The Manager is also entitled to a performance fee from the Company in accordance with the provisions of the
Management Agreement, the calculation of which is also described in the Directors’ Report on page 25. No
performance fee is due in respect of the year ended 30 september 2013 (2012: £nil).
68
MAJeDIe INvesTMeNTs PLC
5 Administrative Expenses
staff costs – note 7
other staff costs and directors’ fees
Advisers’ costs
Information costs
establishment costs
operating lease rentals – premises
Depreciation on tangible assets
Auditor’s remuneration
(see below)
other expenses
Group
2013
£000
328
206
411
335
122
123
142
75
247
Group
2012
£000
720
304
569
454
121
124
166
73
688
Company
2013
£000
24
206
261
33
35
57
97
Company
2012
£000
31
233
302
44
45
55
75
1,989
3,219
713
785
A charge of £1,109,000 (2012: £1,442,000) to capital and an equivalent credit to revenue has been made in the
Group and a charge of £197,000 (2012: £237,000) in the Company has been made to recognise the accounting
policy of charging 75% of direct investment management expenses to capital.
Total fees charged by the Auditor for the year, all of which were charged to revenue, comprised:
Audit services
– statutory audit
other audit related services
Group
2013
£000
68
7
Group
2012
£000
66
7
Company
2013
£000
Company
2012
£000
50
7
48
7
75
73
57
55
All fees incurred during the year were to ernst & Young LLP
6 Directors’ Emoluments
Fees
salary
other benefits
Partnership profit shares
Company
2013
£000
185
45
5
66
Company
2012
£000
209
135
4
301
348
The Report on Directors’ Remuneration on pages 35 to 43 explains the Company’s policy on remuneration for
directors for the year. It also provides further details of directors’ remuneration.
RePoRT & ACCouNTs 2013 69
Notes to the Accounts
7 Staff Costs including Executive Directors
salaries and other payments
social security costs
Pension contributions
share based remuneration
– note 24
Group
2013
£000
253
29
22
24
Group
2012
£000
591
69
29
31
Company
2013
£000
Company
2012
£000
24
31
328
720
24
31
Average number of employees:
Management and office staff
8 Finance Costs
Interest on 9.5% debenture stock 2020
Interest on 7.25% debenture stock 2025
Amortisation of expenses associated with debenture issue
other interest payable
Interest on 9.5% debenture stock 2020
Interest on 7.25% debenture stock 2025
Amortisation of expenses associated with debenture issue
Group
2013
Number
Group
2012
Number
5
8
Group
2013
Group
2012
Revenue Capital
return
return
Total
£000
£000
£000
321
962 1,283
375 1,125 1,500
24
18
6
Revenue Capital
return
return
Total
£000
£000
£000
321
962 1,283
375 1,125 1,500
22
17
15
11
5
4
702 2,105 2,807
705 2,115 2,820
Company
2013
Company
2012
Revenue Capital
return
return
Total
£000
£000
£000
962 1,283
321
375 1,125 1,500
24
18
6
Revenue Capital
return
return
Total
£000
£000
£000
962 1,283
321
375 1,125 1,500
22
17
5
702 2,105 2,807
701 2,104 2,805
Further details of the debenture stocks in issue are provided in note 17.
9 Taxation
Analysis of tax charge
Tax on overseas dividends
Group
2013
£000
115
Group
2012
£000
132
Company
2013
£000
Company
2012
£000
115
113
70
MAJeDIe INvesTMeNTs PLC
9 Taxation continued
Reconciliation of tax charge:
The current taxation for the year is higher (2012: lower) than the standard rate of corporation tax in the uK of 23%,
(2012: 24%). The differences are explained below:
Net return before taxation
Taxation at uK Corporation Tax
rate of 23.5% (2012: 25%)
Group
2013
£000
18,488
Group
2012
£000
6,116
Company
2013
£000
18,572
Company
2012
£000
7,020
4,345
1,529
4,364
1,755
Group
2013
£000
(985)
(213)
Group
2012
£000
Company
2013
£000
Company
2012
£000
effects of:
– uK dividends which are
not taxable
– foreign dividends which are
not taxable
– gains on investments
which are not taxable
– expenses not deductible for
tax purposes
– excess expenses for
current year
– overseas taxation which is
not recoverable
(1,054)
(213)
(985)
(213)
(4,241)
(1,748)
(4,155)
22
1,072
115
28
1,458
132
22
967
115
(1,054)
(213)
(1,564)
33
1,043
113
Actual current tax charge
115
132
115
113
Group
After claiming relief against accrued income taxable on receipt, the Group has unrelieved excess expenses of
£72,126,000 (2012: £67,564,000). It is not yet certain that the Group will generate sufficient taxable income in the
future to utilise these expenses and therefore no deferred tax asset has been recognised.
Company
After claiming relief against accrued income taxable on receipt, the Company has unrelieved excess expenses of
£64,796,000 (2012: £60,681,000). It is not yet certain that the Company will generate sufficient taxable income in
the future to utilise these expenses and therefore no deferred tax asset has been recognised.
The allocation of expenses to capital does not result in any tax effect. Due to the Company’s status as an
investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable
future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or
disposal of investments.
RePoRT & ACCouNTs 2013 71
Notes to the Accounts
10 Dividends
The following table summarises the amounts recognised as distributions to equity shareholders in the period:
2011 Final dividend of 6.30p paid on 25 January 2012
2012 Interim dividend of 4.20p paid on 27 June 2012
2012 Final dividend of 6.30p paid on 23 January 2013
2013 Interim dividend of 4.20p paid on 26 June 2013
Proposed final dividend for the year ended
30 september 2013 of 6.30p (2012: final
dividend of 6.30p) per ordinary share
Group and
Company
2013
£000
3,279
2,186
2013
£000
3,279
Group and
Company
2012
£000
3,279
2,186
5,465
5,465
2012
£000
3,279
3,279
3,279
The proposed final dividend has not been included as a liability in these accounts in accordance with IAs 10: events
after the Balance sheet date.
set out below is the total dividend to be paid in respect of the financial year. This is the basis on which the
requirements of section 1158 of the Corporation Tax Act 2010 are considered.
Interim dividend for the year ended 30 september 2013
of 4.20p (2012: 4.20p) per ordinary share
Proposed final dividend for the year ended 30 september
2013 of 6.30p (2012: 6.30p) per ordinary share
11 Return per Ordinary Share
2013
£000
2,186
3,279
2012
£000
2,186
3,279
5,465
5.465
Basic return per ordinary share is based on 52,044,613 (2012: 52,044,613) ordinary shares, being the weighted
average number of shares in issue having adjusted for the shares held by the employee Incentive Trust referred to in
note 19. Basic returns per ordinary share are based on the net return after taxation attributable to equity
shareholders. There is no dilution to the basic return per ordinary share shown for the years ended 30 september
2013 and 2012 since the share options referred to in note 19 would, if exercised, be satisfied by the shares already
held by the employee Incentive Trust (eIT).
Basic and diluted revenue returns are based on net
revenue after taxation of:
Basic and diluted capital returns are based on net
capital return of:
Group
2013
£000
3,541
14,832
Group
2012
£000
2,552
3,445
Basic and diluted total returns are based on return of:
18,373
5,997
72
MAJeDIe INvesTMeNTs PLC
11 Return per Ordinary Share continued
Basic and diluted revenue returns are based on net
revenue after taxation of:
Basic and diluted capital returns are based on net
capital return of:
Company
2013
£000
3,495
14,962
Company
2012
£000
3,402
3,505
Basic and diluted total returns are based on return of:
18,457
6,907
12 Property and Equipment
Cost:
At 1 october 2012
Additions
Disposals
At 30 september 2013
Depreciation:
At 1 october 2012
Charge for year
Disposals
At 30 september 2013
Net book value:
At 30 september 2013
At 30 september 2012
Cost:
At 1 october 2012
Additions
Disposals
At 30 september 2013
Depreciation:
At 1 october 2012
Charge for year
Disposals
At 30 september 2013
Net book value:
At 30 september 2013
At 30 september 2012
Group
Leasehold
Improvements
£000
Group
office
equipment
£000
171
583
Group
Total
£000
754
171
583
754
57
18
450
124
507
142
75
96
114
574
9
133
649
105
247
Company
Leasehold
Improvements
£000
Company
office
equipment
£000
171
168
Company
Total
£000
339
171
168
339
57
18
149
17
206
35
75
96
114
166
2
19
241
98
133
RePoRT & ACCouNTs 2013 73
Notes to the Accounts
13 Investments at Fair Value Through Profit or Loss
Group
2013
Unlisted
£000
10,331
31,604
Listed
£000
75,563
4,863
Group
as restated*
2012
Total
£000
85,894
36,467
Listed
£000
69,262
(2,195)
unlisted
£000
12,862
29,582
Total
£000
82,124
27,387
opening cost at beginning of year
Gains/(losses) at beginning of year
opening fair value at beginning of year
80,426
41,935
122,361
67,067
42,444
109,511
Purchases at cost
sales – proceeds
Gains/(losses) on sales
Increase in investment holding gains
Transfer on de-listing of shares
Foreign exchange losses on
retranslation of foreign investment
31,987
(14,189)
994
5,878
(21)
(5,898)
121
10,685
21
31,987
(20,087)
1,115
16,563
125,270
(120,422)
1,490
7,058
(574)
(1,957)
2,022
125,270
(120,996)
(467)
9,080
Closing fair value at end of year
105,075
46,864
151,939
Closing cost at end of year
Gains at end of year
94,334
10,741
4,575
42,289
98,909
53,030
Closing fair value at end of year
105,075
46,864
151,939
(37)
80,426
75,563
4,863
80,426
(37)
41,935
122,361
10,331
31,604
85,894
36,467
41,935
122,361
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
opening cost at beginning of year
Gains/(losses) at beginning of year
opening fair value at beginning of year
Purchases at cost
sales – proceeds
Gains on sales
Increase in investment holding gains
Transfer on de-listing of shares
Closing fair value at end of year
Closing cost at end of year
Gains/(losses) at end of year
Closing fair value at end of year
Company
2013
Related and
subsidiary
companies
£000
9,010
(818)
Total
£000
94,855
35,698
8,192
130,553
31,987
(20,087)
1,122
16,557
1
8,193
160,132
9,010
(817)
107,877
52,255
8,193
160,132
Unlisted
£000
10,283
31,652
41,935
(5,898)
128
10,678
21
46,864
4,534
42,330
46,864
Listed
£000
75,562
4,864
80,426
31,987
(14,189)
994
5,878
(21)
105,075
94,333
10,742
105,075
74
MAJeDIe INvesTMeNTs PLC
13 Investments at Fair Value Through Profit or Loss continued
opening cost at beginning of year
(Losses)/gains at beginning of year
opening fair value at beginning of year
Purchases at cost
sales – proceeds
Losses on sales
Increase in investment holding gains
Closing fair value at end of year
Closing cost at end of year
Gains/(losses) at end of year
Closing fair value at end of year
All operating subsidiaries are held at fair value.
Company
2012
Related and
subsidiary
companies
£000
Total
£000
8,010
(839)
107,654
26,693
7,171
134,347
1,000
21
33,901
(43,770)
(2,930)
9,005
8,192
130,553
9,010
(818)
94,855
35,698
8,192
130,553
unlisted
£000
12,814
29,630
42,444
(574)
(1,957)
2,022
41,935
10,283
31,652
41,935
Listed
£000
86,830
(2,098)
84,732
32,901
(43,196)
(973)
6,962
80,426
75,562
4,864
80,426
unlisted investments include an amount of £864,000 in 5 various companies (2012: £2,935,000 in 18 companies)
and £46,000,000 (2012: £39,000,000) for our investment in MAM as detailed on pages 79 and 80. The valuation of
investments on pages 18 and 19 includes 4 unlisted investments of over £100,000 (including MAM).
During the year the Company incurred transaction costs amounting to £105,000 (2012: £113,000) of which
£78,000 (2012: £59,000) related to the purchases of investments and £27,000 (2012: £54,000) related to the sales
of investments. These amounts are included in gains on investments at fair value through profit or loss, as disclosed
in the Consolidated and Company statement of Comprehensive Income.
The composition of the investment return is analysed below:
Net gains/(losses) on sales of
equity investments
Increase in holding gains on
equity investments
Consolidation adjustment on
Javelin Capital fee income
Proceeds on sale of derivative
contracts
Group
2013
£000
1,115
Group
2012
as
restated*
£000
Company
2013
£000
(467)
1,122
16,563
9,080
16,557
368
130
(911)
Company
2012
£000
(2,930)
9,005
183
Net return on investments
18,046
7,832
17,679
6,258
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
RePoRT & ACCouNTs 2013 75
Notes to the Accounts
13 Investments at Fair Value Through Profit or Loss continued
Fair value hierarchy disclosures
The Group is required to classify fair value measurements using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy consists of the following three levels:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume
on an ongoing basis such that quoted prices reflect prices at which an orderly transaction would take place between
market participants at the measurement date. Quoted prices provided by external pricing services, brokers and vendors
are included in Level 1, if they reflect actual and regularly occurring market transactions on an arms length basis.
•
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices).
Level 2 inputs include the following:
• quoted prices for similar (ie not identical) assets in active markets.
• quoted prices for identical or similar assets or liabilities in markets that are not active. Characteristics of an
inactive market include a significant decline in the volume and level of trading activity, the available prices vary
significantly over time or among market participants or the prices are not current.
• inputs other than quoted prices that are observable for the asset (for example, interest rates and yield curves
observable at commonly quoted intervals).
• inputs that are derived principally from, or corroborated by, observable market data by correlation or other
means (market-corroborated inputs).
• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level in the fair value hierarchy within which an asset or liability is categorised is determined on the basis of the
lowest level input that is significant to the fair value measurement of the asset. For this purpose, the significance of
an input is assessed against the fair value measurement of an asset or liability in its entirety. If a fair value
measurement uses observable inputs that require significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value
measurement requires judgement, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgement by the Group. The Group
considers observable data to be investments actively traded in organised financial markets, fair value is generally
determined by reference to stock exchange quoted market bid prices at the close of business on the balance sheet
date, without adjustment for transaction costs necessary to realise the asset.
76
MAJeDIe INvesTMeNTs PLC
13 Investments at Fair Value Through Profit or Loss continued
The table below sets out fair value measurements of financial assets in accordance with the IFRs fair value
hierarchy system:
Financial assets
Financial assets designated at
fair value through profit or loss
Equities and managed funds
Listed equity securities
unlisted equity securities
Listed exchange traded funds
Group
2013
Group
as restated*
2012
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
104,893
182
105,075
46,864
104,893
46,864
182
80,233
46,864 151,939
80,233
41,935
80,233
41,935
193
41,935 122,361
193
193
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
Financial assets
Financial assets designated at
fair value through profit or loss
Equities and managed funds
Listed equity securities
unlisted equity securities
Listed exchange traded funds
Company
2013
Company
2012
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
104,893
182
105,075
55,057
104,893
55,057
182
80,233
55,057 160,132
80,233
50,127
80,233
50,127
193
50,127 130,553
193
193
Investments whose values are based on quoted market prices in active markets, and therefore classified within
Level 1, include active listed equities. The Group does not adjust the quoted price for these instruments.
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted
market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within
Level 2. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer
restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on
available market information. During the year there were transfers of £193,000 from Level 2 to Level 1 for Listed
exchange traded funds.
Investments classified within Level 3 have significant unobservable inputs. Level 3 instruments include private equity
and corporate debt securities. As observable prices are not available for these securities, the Group has used valuation
techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument
is not active, fair value is established by using recognised valuation methodologies, in accordance with International
Private equity and venture Capital (“IPevC”) valuation Guidelines. New investments are initially carried at cost, for a
limited period, being the price of the most recent investment in the investee. This is in accordance with IPevC
Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the
amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
RePoRT & ACCouNTs 2013 77
Notes to the Accounts
13 Investments at Fair Value Through Profit or Loss continued
The following table presents the movement in Level 3 instruments for the year ended 30 september 2013:
opening balance
Transfers from Level 1
sales – proceeds
Total gains for the year included in the
statement of Comprehensive Income
opening balance
Transfers from Level 1
sales – proceeds
Total gains for the year included in the
statement of Comprehensive Income
opening balance
Transfers from Level 1
sales – proceeds
Total gains for the year included in the
statement of Comprehensive Income
opening balance
Purchases
Transfers from Level 1
sales – proceeds
Total gains/(losses) for the year included in the
statement of Comprehensive Income
Group
2013
Convertible
bonds
£000
Preference
shares
£000
Total
£000
41,935
21
(5,898)
10,806
46,864
Equity
investments
£000
41,935
21
(5,898)
10,806
46,864
Group
2012
258
(243)
(15)
42,444
42,182
(574)
65
(324)
77
41,935
41,935
Company
2013
4
(7)
3
Total
£000
50,127
21
(5,898)
10,807
55,057
49,615
1,000
(574)
86
Convertible
bonds
£000
Preference
shares
£000
Equity
investments
£000
50,127
21
(5,898)
10,807
55,057
Company
2012
49,353
1,000
(324)
98
258
(243)
(15)
4
(7)
3
50,127
50,127
78
MAJeDIe INvesTMeNTs PLC
13 Investments at Fair Value Through Profit or Loss continued
Substantial Share Interests
The Group has a number of investee company holdings where its investment is greater than 3% of any class of
capital in those companies. Those that are considered material (excluding MAM and JCeMAF which are disclosed
separately below) in the context of these accounts are shown below:
AoI Medical (unlisted)
Fair
Value
£000
152
% of
Class Held
4.76
The Group does not exercise significant influence over the operating and financial policies of the above companies
which are therefore not considered to be associated companies.
Javelin Capital Emerging Markets Alpha Fund (JCEMAF)
The Company invested £15m and £18.15m of seed capital into the JCeMAF on 16 January and 2 November 2012
respectively and as at 30 september 2013 had an 89.5% controlling interest. This investment is shown in the
Company and Group accounts as an investment held at fair value through profit or loss rather than being
consolidated which is in accordance with the Investment entities amendment to IFRs 10, which the Group has early
adopted (see note 1 on pages 60 to 62 for further information).
Majedie Asset Management (MAM)
MAM is a uK based asset management firm, which provides investment management and advisory services
primarily relating to uK equities.
The carrying value of the Company’s investment in MAM is included in the Consolidated Balance sheet as part of
investments at fair value through profit or loss:
Deemed cost of investment
Holding gains
Fair value at 30 september
2013
£000
1,038
44,962
2012
£000
1,197
37,803
46,000
39,000
The carrying value of MAM in the 30 september 2013 Consolidated Financial statements is its fair value as
assessed at 30 september 2013. Details of the determination of the fair value of MAM are included in the Report of
the Audit Committee on pages 31 and 32.
Due to the nature and operation of the Company’s shareholder agreement, it is considered by the Board that the
Company does not exercise significant influence over the operating and financial policies of MAM and as such it is
not considered to be an associate, and their results are not consolidated in the Group’s results.
In accordance with the revised shareholders’ agreement, the founding shareholders (including the Company) will sell
a certain number of shares to the MAM employee Benefit Trust (eBT), usually annually, and at the relevant
prescribed price (as calculated in accordance with the revised shareholders’ agreement).
RePoRT & ACCouNTs 2013 79
Notes to the Accounts
13 Investments at Fair Value Through Profit or Loss continued
During the year the Company sold 1,975 shares and 15,000 shares on the 20 December 2012 and 14 June 2013
respectively for a total consideration of £5,899,000 resulting in a realised gain of £5,739,000.
After these transactions the Company holds 110,575 ordinary 0.1p shares which represents a 26.7% shareholding
in MAM.
14 Investment in Subsidiaries
a) Subsidiary undertakings at 30 September 2013
Company and business
Majedie Portfolio Management Limited
– Majedie share plan manager,
authorised and regulated by
the FCA
Majedie unit Trust
– unauthorised unit trust
Javelin Capital LLP
– Asset Management, authorised and
regulated by the FCA
Javelin Capital services Limited
– Administration services
Javelin Capital Fund Management Limited
– Not trading
Javelin Capital strategies Plc
– In liquidation
serviced Platform sICAv†
( subfund: Javelin Capital emerging
Markets Alpha Fund)
– undertakings for Collective
Investment in Transferable securities
(uCITs), supervised by the
Commission de surveillance du
secteur Financier (CssF)
Company
Country of
Registration
Incorporation
and operation
Number and
class of shares
held by Group
Group
Holding
Capital &
Reserves at
30.09.13
thousand
Profit after
tax for the
year ended
30.09.13
thousand
uK
uK
uK
uK
Ireland
Ireland
Lux
100%
£162
1,000,000
ordinary
shares
10,000
100%
(£3,521)
(£63)
75%
£2,543
(£84)
75%
75%
100%
£21
89.5%
$56,665
$565
75%
interest
100
ordinary
shares
2
ordinary
shares
2
subscriber
shares
140,000
Class D
GBP shares
5,000
Class D
usD shares
10,407
Class e
usD shares
† The Javelin Capital emerging Markets Alpha Fund is a sub-fund of the services Platform sICAv. The sICAv has a financial year end of December.
The figures stated above are as at 31 December 2012 (its year end).
Javelin Capital services Limited (JCs) and Javelin Capital Fund Management Limited (JCFM) are all wholly owned
subsidiaries of Javelin Capital LLP.
b) Non-Controlling Interest
In respect of the consolidation of the Javelin Capital entities into the Group accounts, in accordance with the
Company’s accounting policies and the income and loss recognition provisions of the Limited Liability Partnership
Agreement for Javelin Capital LLP there is no Non-controlling Interest to be recognised in the Consolidated
statement of Comprehensive Income or Balance sheet.
80
MAJeDIe INvesTMeNTs PLC
14 Investment in Subsidiaries continued
b) Non-Controlling Interest continued
Following the closure of the QIF on 21 september 2012, the Non-controlling interest previously reflected in the
Consolidated statement of Comprehensive Income and Balance sheet, and including its proportion of results for the
period of the QIF up to the date of closure, representing the other investors in the QIF was derecognised in
accordance with IFRs.
15 Trade and Other Receivables
sales for future settlement
Prepayments
Dividends receivable
Accrued income
Taxation recoverable
Amounts due from subsidiary
undertakings
Group
2013
£000
363
2,044
240
43
Group
2012
£000
1,111
254
3
50
Company
2013
£000
363
30
240
43
637
Company
2012
£000
27
254
3
50
521
The Directors consider that the carrying amounts of trade and other receivables approximates to their fair value.
2,690
1,418
1,313
855
16 Cash and Cash Equivalents
Deposits at banks
Collateral cash held with brokers
other balances
Group
2013
£000
4,641
91
791
Group
2012
£000
22,129
91
1,067
Company
2013
£000
3,466
Company
2012
£000
20,431
525
491
5,523
23,287
3,991
20,922
Cash used for collateral is restricted.
17 Trade and Other Payables
Amounts falling due within one year:
Purchases for future settlement
Accrued expenses
other creditors
Group
2013
£000
125
313
806
Group
2012
£000
313
943
Company
2013
£000
125
178
729
Company
2012
£000
249
752
1,244
1,256
1,032
1,001
The Directors consider that the carrying amounts of trade and other receivables approximates to their fair value.
Amounts falling due after more than one year:
£13.5m (2012: £13.5m) 9.5%
debenture stock 2020
£20.7m (2012: £20.7m) 7.25%
debenture stock 2025
Group
2013
£000
13,410
20,437
Group
2012
£000
13,401
20,422
Company
2013
£000
Company
2012
£000
13,410
20,437
13,401
20,422
33,847
33,823
33,847
33,823
RePoRT & ACCouNTs 2013 81
Notes to the Accounts
17 Trade and Other Payables continued
Both debenture stocks are secured by a floating charge over the Company’s assets. expenses associated with the
issue of debenture stocks were deducted from the gross proceeds and are being amortised over the life of the
debentures. Further details on interest and the amortisation of issue expenses are provided in note 8.
18 Called Up Share Capital
Company
2013
£000
Company
2012
£000
Allotted and fully paid at 30 september:
52,528,000 (2012: 52,528,000) ordinary shares of 10p each
5,253
5,253
There are 483,387 (2012: 483,387) ordinary shares of 10p each held by the employee Incentive Trust. see note 19.
ordinary shares carry one vote each on a poll. The Companies Act 2006 abolished the requirement for the
Company to have authorised share capital. The Company adopted new Articles of Association on 20 January 2010
which, inter alia, reflected the new legislation. Accordingly the Company has no authorised share capital. The
Directors will still be limited as the number of shares they can allot at any one time as the Companies Act 2006
requires that directors seek authority from the shareholders for the allotment of new shares.
19 Own Shares
The total number of options outstanding at the date of this report is 214,628 under the Long Term Incentive Plan
("LTIP") and the total shareholding of the employee Incentive Trust is 483,387 ordinary shares. The shares will be
held by the Trust until the relevant options are exercised or until they lapse. Consideration paid on acquisition of
these shares is presented on the Balance sheet as a deduction from shareholders’ funds, in accordance with the
policy detailed in note 1.
As at 1 october 2012
options exercised
As at 30 september 2013
20 Net Asset Value
Number of
shares
483,387
Group and
Company
Own Shares
Reserve
£000
(1,628)
483,387
(1,628)
The consolidated net asset value per share has been calculated based on equity shareholders’ funds of
£125,166,000 (2012: £112,234,000) and on 52,044,613 (2012: 52,044,613) ordinary shares, being the shares in
issue at the year end having deducted the number of shares held by the employee Incentive Trust.
82
MAJeDIe INvesTMeNTs PLC
21 Analysis of Changes in Net Debt
Group
At 30
september
2012
£000
Cash
Flows
£000
Cash at bank and with brokers
23,287
(17,764)
Debt due after one year
(33,823)
Non
Cash
Items
£000
(24)
At 30
September
2013
£000
5,523
(33,847)
(10,536)
(17,764)
(24)
(28,324)
Company
Cash at bank
Debt due after one year
At 30
september
2012
£000
20,922
(33,823)
Cash
Flows
£000
(16,931)
Non
Cash
Items
£000
(24)
At 30
September
2013
£000
3,991
(33,847)
(12,901)
(16,931)
(24)
(29,856)
22 Operating Lease Commitments
The Group has a 10 year non-cancellable operating lease (with a rent review and break clause in 5 years) in respect
of premises, which included a rent free period. During the year the Group extended the lease for a further period of
2 years which included an additional rent free period. The rent free elements have been apportioned over the lease
up to the date of the relevant break clause. The rent due under the lease is subject to a review in December 2013.
The review is upward only in nature and includes a new minimum value. The Group has a current annual
commitment at 30 september 2013 under the lease of £145,000 (2012: £145,000). This operating lease
commitment, as adjusted for the rent review minimum uplift in December 2013, is disclosed in the table below:
expiry Date
Within one year
Between one and two years
Between two and three years
23 Financial Commitments
Group
2013
£000
159
163
41
Group
2012
£000
145
34
363
179
At 30 september 2013 the Group had no financial commitments which had not been accrued for (2012: none).
24 Share-based Payments
The Group currently operates one share-based payment scheme being the 2006 LTIP which in turn has two
sections relating to Total shareholder Return (“TsR”) based Awards and Matching Awards. With the introduction of
Javelin Capital LLP and resultant employee transfers from the Company no further awards will be made under the
LTIP. Javelin Capital LLP does not operate any share-based payment schemes.
Long Term Incentive Plan: TSR-based Awards
Awards of restricted shares up to a maximum value of one year’s salary have performance conditions based on total
shareholder return in relation to two separate performance conditions over a period of five years. The performance
conditions contain higher and lower thresholds that determine the extent of the vesting of the award. In accordance
with the LTIP rules existing awards increase by any dividends declared by the Company until they vest.
RePoRT & ACCouNTs 2013 83
Notes to the Accounts
24 Share-based Payments continued
Long Term Incentive Plan: Matching Awards
executive directors and senior executives receive a certain percentage of their overall bonus for the year in deferred
shares. The shares granted according to these matching awards only vest once the executive has completed three
years’ further service. There are no other performance conditions. In accordance with the LTIP rules existing awards
increase by any dividends declared by the Company until they vest.
outstanding at 1 october 2012
During the year:
Awarded
Forfeited
exercised
expired
Increase in awards due to dividends paid
outstanding at 30 september 2013
exercisable at 30 september 2013
outstanding at 1 october 2011
During the year:
Awarded
Forfeited
exercised
expired
Increase in awards due to dividends paid
outstanding at 30 september 2012
exercisable at 30 september 2012
Group
2013
TSR-based
Awards
Matching
Awards
Weighted
No. Average
of Exercise
Options Price (p)
0.0
190,453
Weighted
No. Average
of Exercise
Options Price (p)
0.0
11,148
12,306
202,759
36,208
0.0
0.0
0.0
721
11,869
11,869
0.0
0.0
0.0
Group
2012
TsR-based
Awards
Matching
Awards
Weighted
No. Average
of exercise
Price (p)
0.0
options
178,319
Weighted
No. Average
of exercise
Price (p)
0.0
options
10,437
12,134
190,453
0.0
0.0
711
11,148
11,148
0.0
0.0
0.0
The awards outstanding at 30 september 2013 had a weighted average remaining contractual life of 0.6 years and
nil in respect of the TsR-based Awards and Matching Awards respectively (2012: 1.4 years and nil years respectively).
Awards and options are usually forfeited if the employee leaves employment before vesting.
For the year ended 30 september 2013, the Company recognised a total share options expense of £24,000 (2012:
£31,000) relating to share-based payment transactions.
84
MAJeDIe INvesTMeNTs PLC
25 Financial Instruments and Risk Profile
As an investment trust, the Company invests in securities for the long term in order to achieve its investment
objective as stated on page 8. Accordingly it is the Board’s policy that no trading in investments or other financial
instruments be undertaken. The risk management processes of the Company are aligned with those of the Group
as a whole and it is at the Group level that the majority of the risk management procedures are performed. Where
relevant and materially different to the Group position, Company specific risk exposures are explained alongside
those of the Group. The following risk and sensitivity analysis included in this note are based on the ongoing
operations of the Group and Company.
Management of market risk
Management of market risk is fundamental to the Group’s investment objective and the investment portfolio is
continually monitored to ensure an appropriate balance of risk and reward.
exposure to any one entity is monitored by the Board and the Investment Manager. The Board have complied with
the investment policy requirement not to invest more than 15% of the total value of its gross assets, save that the
Company can invest up to 25% of its gross assets in any single fund managed by Javelin Capital.
From time to time, the Group may seek to reduce or increase its exposure to stock markets and currencies by
taking positions in currency forward contracts, index futures and options relating to one or more stock markets.
These instruments are used for the purpose of hedging some or all of the existing exposure within the Group’s
investment portfolio to those currencies or particular markets or to enable increased exposure when deemed
appropriate and with the specific approval of the Board.
The Company’s financial instruments comprise its investment portfolio – see note 13 – cash balances, debtors and
creditors that arise directly from its operations such as sales and purchases awaiting settlement and accrued
income, and the debenture loans used to finance its operations. The Company, (as distinct from the Group), is
unlikely to use derivatives for hedging purposes and then only in exceptional circumstances with the specific prior
approval of the Board. No hedging was used during the year.
In pursuing its investment objective the Company is exposed to various risks which could cause short term variation
in its net assets and which could result in both or either a reduction in its net assets or a reduction in the profits
available for distribution by way of dividend. The main risk exposures for the Company from its financial instruments
are market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.
The Board sets the overall investment strategy and has in place various controls and limits and receives various
reports in order to monitor the Company’s and Group’s exposure to these risks. The risk management policies
identified in this note have not changed materially from the previous accounting period in respect of the Company:
• a full range of financial instruments in both developed and emerging markets including equities, equity-related
securities, futures, options, warrants and other access products;
• other financial instruments may be used, including, but not limited to, index futures, structured products, swaps
and contracts for difference (“CFDs”);
• commodity futures and commodity-related exchange traded funds (“eTFs”);
• spot and forward foreign currency exchange contracts, options and related instruments; and
• cash on deposit or cash equivalents may be held; these deposits may, or may not, be held through the
Prime Brokers and its Custodian.
RePoRT & ACCouNTs 2013 85
Notes to the Accounts
25 Financial Instruments and Risk Profile continued
Market Risk
The principal risk in the management of the portfolio is market risk i.e. the risk that values and future cashflows will
fluctuate due to changes in market prices. This comprises:
•
•
•
foreign currency risk;
interest rate risk; and
other price risk i.e. movements in the value of investment holdings caused by factors other than interest rate or
currency movements.
These risks are taken into account when setting investment policy and making investment decisions.
Foreign Currency Risk
exposure to foreign currency risk arises through investments in securities listed on overseas stock markets. A
proportion of the net assets of the Group and Company are denominated in currencies other than sterling, with the
effect that the balance sheet and total return can be materially affected by currency movements. The Group and
Company’s exposure to foreign currencies through its investments in overseas securities as at 30 september 2013
was £26,424,000 and £26,291,000 respectively (2012: £25,787,000 and £25,653,000 respectively).
In respect of the Company, the Investment Manager monitors the Company’s exposure to foreign currencies and the
Board receives reports on a regular basis. In making investment decisions the Investment Manager is mindful of the
Company’s Core Portfolio benchmark allocation to foreign currencies but takes independent positions based on a
long term view on the relative strengths and weaknesses of currencies. Additionally the currency of investment is not
the only relevant factor considered as many portfolio investment companies are global in scope and nature. The
Company does not normally hedge against foreign currency movements.
The Group is able, although unlikely, to enter into forward currency contracts as a means of limiting or increasing its
exposure to particular currencies. such contracts can be used for the purpose of hedging the existing currency
exposure of elements of the Group’s portfolio (as a means of reducing risk) or to enable increased exposure when
this is deemed appropriate.
The currency risk of the Group and Company’s non-sterling monetary financial assets and liabilities at the Balance
sheet date was:
Currency exposure
us Dollar
euro
Yen
other non-sterling
Group
2013
Net
monetary
assets
£000
91
Total
currency
exposure
£000
16,159
2,941
2,241
5,083
91
26,424
Overseas
investments
£000
16,068
2,941
2,241
5,083
26,333
overseas
investments
£000
16,962
2,729
1,540
4,465
25,696
Group
as restated*
2012
Net
monetary
assets
£000
91
Total
currency
exposure
£000
17,053
2,729
1,540
4,465
91
25,787
86
MAJeDIe INvesTMeNTs PLC
25 Financial Instruments and Risk Profile continued
Currency exposure
us Dollar
euro
Yen
other non-sterling
Company
2013
Net
monetary
assets
£000
Total
currency
exposure
£000
16,026
2,941
2,241
5,083
26,291
overseas
investments
£000
16,920
2,729
1,540
4,464
25,653
Company
2012
Net
monetary
assets
£000
Total
currency
exposure
£000
16,920
2,729
1,540
4,464
25,653
Overseas
investments
£000
16,026
2,941
2,241
5,083
26,291
Sensitivity analysis
If sterling had strengthened by 5% relative to all currencies on the reporting date, with all the other variables held
constant, the income and the net assets attributable to equity holders of the parent would have decreased by the
amounts shown below. The analysis is performed on the same basis for 2012. The revenue impact is an estimated
figure for 12 months based on the relevant foreign currency denominated balances at the reporting date.
Income Statement
Revenue return
Capital return
Net assets
Group
2013
£000
Group
2012
as
restated*
£000
Company
2013
£000
Company
2012
£000
(1,321)
(1,289)
(1,315)
(1,283)
(1,321)
(1,289)
(1,315)
(1,283)
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
A 5% weakening of sterling against the above currencies would have resulted in an equal and opposite effect on the
above amounts, on the basis that all other variables remain constant. The Company’s exposure has been calculated as
at the year end and may not be representative of the year as a whole.
Interest Rate Risk
The Company’s direct interest rate risk exposure affects the interest received on cash balances and the fair value of
its fixed rate portfolio investments and debentures. Indirect exposure to interest rate risk arises through the effect of
interest rate changes on the valuation of the investment portfolio. The vast majority of the financial assets held by the
Company are equity shares, which pay dividends, not interest. The Company may however from time to time hold
small investments which pay a fixed rate of interest.
Derivative contracts are not used to hedge against the exposure to interest rate risk.
The Board sets limits for cash balances and receives regular reports on the cash balances of the Company. The
Company’s fixed rate debentures introduce an element of gearing to the Company which is monitored within limits
and reported to the Board. Cash balances are used to manage the level of gearing within a range set by the Board.
The Board sets an overall investment strategy and also has various limits on the investment portfolio which aim to
spread the portfolio investments to reduce the impact of interest rate risk on company valuations. Regular reports
are received by the Board in respect of the Company’s investment portfolio and the respective limits.
RePoRT & ACCouNTs 2013 87
Notes to the Accounts
25 Financial Instruments and Risk Profile continued
The interest rate risk profile of the financial assets and liabilities at the Balance sheet date was:
Floating rate financial assets
uK sterling
us dollars
Financial assets not carrying
interest
Fixed rate financial liabilities
uK sterling
Financial liabilities not
carrying interest
Group
2013
£000
5,432
91
Group
as restated*
2012
£000
23,196
91
Company
2013
£000
Company
2012
£000
11,991
28,922
154,734
124,026
153,543
123,541
160,257
147,313
165,534
152,463
(33,847)
(33,823)
(33,847)
(33,823)
(1,244)
(1,256)
(1,032)
(1,001)
(35,091)
(35,079)
(34,879)
(34,824)
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
Floating rate financial assets usually comprise collateral cash and also cash on deposit with banks and prime
brokers which is repayable on demand and receive a rate of interest based on the base rates in force over the
period. The Company balance includes the £8.0m (2012: £8.0m) investment in Javelin Capital LLP which receives a
commercial rate of interest from 31 August 2010 until full repayment occurs in accordance with the Revised LLP
Agreement (via an additional profit share of residual profits from Javelin Capital LLP). Fixed rate financial assets
comprise convertible bonds or loan notes. The fixed rate financial liabilities comprise the Group and Company’s
debentures totalling £34.2m nominal. They pay a weighted average rate of interest of 8.1% per annum and mature
in 2020 (£13.5m) and 2025 (£20.7m).
Sensitivity analysis
Based on closing cash balances held on deposits with banks, a 0.5% decrease (2012: 0.5%) in base interest rates
would have the following effect on net assets and profit before tax of the Group and Company:
Income Statement
Revenue return
Net assets
Group
2013
£000
(16)
Group
2012
£000
(106)
Company
2013
£000
(14)
Company
2012
£000
(95)
(16)
(106)
(14)
(95)
A 0.5% increase (2012: 0.5%) in interest rates would have resulted in a proportionate equal and opposite effect on
the above amounts on the basis that all other variables remain constant. The above analysis is based on closing
balances only and is not representative of the year as a whole.
88
MAJeDIe INvesTMeNTs PLC
25 Financial Instruments and Risk Profile continued
Other Price Risk
exposure to market price risk is significant and comprises mainly movements in the market prices and hence value
of the Company’s listed equity investments which are disclosed in note 13 on page 74. The Company also has
unlisted investments which are indirectly impacted by movements in listed equity prices and related variables. The
Board sets an overall investment strategy to achieve a spread of investments across sectors and regions in order to
reduce risk. The Board receives reports on the investment portfolio, performance and volatility on a regular basis in
order to ensure that the investment portfolio is in accordance with the investment policy.
The Investment Manager’s policy is to manage risk through a combination of monitoring the exposure to individual
securities, industry and geographic sectors, whilst maintaining a constant awareness in real time of the portfolio
exposures in accordance with the investment strategy. Derivative positions are marked to market and exposure to
counterparties is also monitored on a daily basis by the investment manager; the Board review it on a quarterly basis.
As mentioned earlier, the Investment Manager may use derivative instruments in order to ‘hedge’ the market risk
inherent in the portfolio. The Investment Manager reviews the risk associated with individual investments and where
they believe it appropriate may use derivatives to mitigate the risk of adverse market or currency movements. The
Investment Manager discusses the hedging strategy with the Board at its quarterly meetings.
Concentration of exposure to other price risks
An analysis of the Group's investment portfolio is shown on page 16. This shows that the largest amount of equity
investments by value is in uK companies (31.4%), with 35.2% of total investments listed or exposed to overseas
countries (including the listed JCeMAF). It also shows the concentration of investments in various sectors.
The following table details the exposure to market price risk on the quoted and unquoted equity investments:
Non-current Asset Investments at
Fair Value through Profit and Loss
Listed equity investments
unlisted
Related and subsidiary Companies
Group
2013
£000
105,075
46,864
Group
as
restated*
2012
£000
80,426
41,935
Company
2013
£000
105,075
46,864
8,193
Company
2012
£000
80,426
41,935
8,192
151,939
122,361
160,132
130,553
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
RePoRT & ACCouNTs 2013 89
Notes to the Accounts
25 Financial Instruments and Risk Profile continued
Sensitivity analysis
If share prices on listed equity investments had decreased by 10% at the reporting date with all other variables
remaining constant, the profit before tax and the net assets attributable to the equity holders of the Group would
have decreased by the amounts shown below.
Group
2013
£000
Group
as
restated*
2012
£000
Company
2013
£000
Company
2012
£000
Income Statement
Capital return
Net assets
(10,508)
(8,043)
(10,508)
(8,043)
(10,508)
(8,043)
(10,508)
(8,043)
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
A 10% increase (2012: 10%) in share prices would have resulted in a proportionate equal and opposite effect on the
above amounts on the basis that all other variables remain constant. The analyses has been calculated on the
investments held at the year end and this may not be representative of the year as a whole.
Credit Risk
Credit risk is the risk of other parties failing to discharge an obligation causing the Group financial loss. The Group’s
exposure to credit risk is managed by the following:
•
•
•
•
•
The Company’s listed investments are held on its behalf by RBC Investor services Trust, the Company’s custodian
which if it became bankrupt or insolvent could cause the Company’s rights with respect to securities held to be
delayed. The Company receives regular internal control reports from the Custodian which are reviewed by the
Investment Manager and reported to the Audit Committee.
Investment transactions are undertaken by the Investment Manager with a number of approved brokers in the
ordinary course of business. All new brokers are reviewed by the Investment Manager for credit worthiness and
added to an approved brokers list if not considered to be a credit risk.
Cash is held at banks that are considered to be reputable and high quality. Cash balances are spread across a
range of banks to reduce concentration risk.
Where the Company makes an investment in a loan or other security with credit risk, that credit risk is assessed
and considered as part of the investment decision making process by the Investment Manager. The Board
receives regular reports on the composition of the investment portfolio.
A credit exposure could arise in respect of derivatives contracts entered into by the Group if the counterparty
were unable to fulfill its contractual obligations.
90
MAJeDIe INvesTMeNTs PLC
25 Financial Instruments and Risk Profile continued
Credit Risk Exposure
At the reporting date, the financial assets exposed to credit risk amounted to the following:
Cash on deposit and at banks
Collateral cash held with brokers
Cash held with brokers
sales for future settlement
Interest, dividends and
other receivables
Group
2013
£000
5,432
91
363
2,327
Group
2012
£000
22,129
91
1,067
1,418
Company
2013
£000
3,991
363
950
Company
2012
£000
20,922
848
8,213
24,705
5,304
21,770
Minimum exposure during the year
7,758
Maximum exposure during the year
10,098
24,705
44,524
4,953
7,263
3,118
21,777
All amounts included in the analysis above are based on their carrying values.
None of the financial assets were past due or impaired at the reporting date (2012: none).
Liquidity Risk
Liquidity risk is the risk that the Group or Company will encounter difficulties meeting its obligations as they fall due.
The Company may periodically invest in derivatives contracts and debt securities that are traded over the counter.
The Company is exposed to the daily settlement of margin calls on derivatives.
Liquidity risk is monitored although it is recognised that the majority of the Group’s assets are investments in quoted
equities and other quoted securities that are readily realisable. The Board has various limits in respect of how much
of the Group’s resources can be invested in any one company. The unlisted investments in the portfolio are subject
to liquidity risk but such investments are subject to limits set by the Board and liquidity risk is taken into account by
the directors when arriving at their valuation. The Company does have exposure to concentration risk due to its two
investments in MAM and Javelin Capital, primarily in relation to MAM at 29.2% (2012: 26.8%) of the Company’s
investment portfolio. The Company closely monitors these investments and receives regular financial reports and
believes that the current concentration risk is in-line with the Company’s objective of diversifying its investment
portfolio into the investment groups as per its investment policy.
The Group maintains an appropriate level of cash balances in order to finance its operations and the Investment
Manager regularly monitors the Group’s cash balances to ensure all known or forecasted liabilities can be met. The
Board receives regular reports on the level of the Group’s cash balances. The Group does not have any overdraft or
other borrowing facilities to provide liquidity.
Collateral
Collateral is posted by the Group in relation to derivative transactions. These are transacted under auspices of the
International swaps and Derivatives Association and may require collateral to be posted from time to time. The
Group does not hold collateral from other counterparties.
At the year end there were no financial assets pledged as collateral (2012: Nil).
RePoRT & ACCouNTs 2013 91
Notes to the Accounts
25 Financial Instruments and Risk Profile continued
A maturity analysis of financial liabilities showing the remaining contractual maturities is detailed below:
Group
2013
Undiscounted cash flows
9.5% debenture stock 2020
7.25% debenture stock 2025
Interest on financial liabilities
Trade payables and other liabilities
Due within
1 year
£000
2,783
1,244
4,027
Due between Due between Due 3 years
and beyond
2 and 3 years
1 and 2 years
£000
£000
£000
13,500
20,700
17,246
2,783
2,783
Total
£000
13,500
20,700
25,595
1,244
2,783
2,783
51,446
61,039
Due within
1 year
£000
Due between
1 and 2 years
£000
Group
2012
Due between Due 3 years
and beyond
2 and 3 years
£000
£000
13,500
20,700
20,029
2,783
Total
£000
13,500
20,700
28,378
1,256
2,783
2,783
2,783
54,229
63,834
Company
2013
Due between Due between Due 3 years
and beyond
2 and 3 years
1 and 2 years
£000
£000
£000
13,500
20,700
17,246
2,783
2,783
Total
£000
13,500
20,700
25,595
1,032
2,783
2,783
51,446
60,827
2,783
1,256
4,039
Due within
1 year
£000
2,783
1,032
3,815
Due within
1 year
£000
Due between
1 and 2 years
£000
2,783
2,783
1,001
3,784
Company
2012
Due between Due 3 years
and beyond
2 and 3 years
£000
£000
13,500
20,700
20,029
2,783
Total
£000
13,500
20,700
28,378
1,001
2,783
2,783
54,229
63,579
undiscounted cash flows
9.5% debenture stock 2020
7.25% debenture stock 2025
Interest on financial liabilities
Trade payables and other liabilities
Undiscounted cash flows
9.5% debenture stock 2020
7.25% debenture stock 2025
Interest on financial liabilities
Trade payables and other liabilities
undiscounted cash flows
9.5% debenture stock 2020
7.25% debenture stock 2025
Interest on financial liabilities
Trade payables and other liabilities
92
MAJeDIe INvesTMeNTs PLC
25 Financial Instruments and Risk Profile continued
Categories of financial assets and liabilities
The following table analyses the carrying amounts of the financial assets and liabilities by categories as defined in
IAs 39:
Financial assets
Financial assets at fair value
through profit or loss
equity securities
Other financial assets1
Financial liabilities
Financial liabilities measured at
amortised cost2
Group
2013
£000
Group
as
restated*
2012
£000
Company
2013
£000
Company
2012
£000
151,939
122,361
160,132
130,553
151,939
122,361
160,132
130,553
8,213
160,152
24,705
147,066
5,304
165,436
21,777
152,330
35,091
35,079
34,879
34,824
35,091
35,079
34,879
34,824
* Comparative figures have been restated for the review of the treatment of the investment in JCeMAF as disclosed in note 1 on pages 60 to 62.
1 other financial assets include: cash and cash equivalents, due from brokers, cash collateral on securities borrowed, dividend and interest
receivables, other receivables and prepayments.
2 Financial liabilities measured at amortised cost include: debenture stock issued, due to brokers, fees and other payables and
accrued expenses.
The investment portfolio has been valued in accordance with the accounting policy in note 1 to the accounts, i.e. at
fair value. The fair value of the debenture stock is calculated using Discounted Cash Flow analysis and by reference
to the redemption yields of a similar companies’ debt instrument, with an appropriate margin spread added.
Group and Company
Financial liabilities
£13.5m (2012: £13.5m) 9.5%
debenture stock 2020
£20.7m (2012: £20.7m) 7.25%
debenture stock 2025
Book
Value
2013
£000
13,410
20,437
Book
value
2012
£000
13,401
20,422
Fair
Value
2013
£000
17,768
24,995
Fair
value
2012
£000
18,895
25,815
33,847
33,823
42,763
44,710
RePoRT & ACCouNTs 2013 93
Notes to the Accounts
25 Financial Instruments and Risk Profile continued
Capital Management Policies and Procedures
The Company’s capital management objectives are:
•
•
to ensure that it is able to continue as a going concern; and
to maximise the revenue and capital returns to its equity shareholders through an appropriate mix of equity
capital and debt. The Board sets a range for the Company’s debt (comprised of debentures less cash) at any
one time which is maintained by management of the Company’s cash balances.
Capital at 30 september comprises:
Net Debt
Adjusted cash and
cash equivalents
Debentures
sub total
equity
equity share capital
Retained earnings and
other reserves
shareholders’ funds
Gearing
Net Debt as a percentage
of shareholders’ funds
Group
2013
£000
Group
2012
£000
Company
2013
£000
Company
2012
£000
(6,969)
33,847
(23,449)
33,823
(4,272)
33,847
(20,776)
33,823
26,878
10,374
29,575
13,047
5,253
5,253
5,253
5,253
119,913
106,981
125,402
112,386
125,166
112,234
130,655
117,639
21.5%
9.2%
22.6%
11.1%
Maximum potential gearing represents the highest gearing percentage on the assumption that the Group or
Company held no cash. As at 30 september 2013, in respect of the Group and the Company, this was 27.0% and
25.9% respectively (2012: Group and Company; 30.1% and 28.8% respectively).
The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. The review
includes:
•
•
the level of net gearing, taking into account the Investment Manager’s views on the market;
the level of the Company’s free float of shares as the Barlow family owns approximately 55% of the share capital
of the Company; and
•
the extent to which revenue in excess of that required to be distributed should be retained.
These objectives, policies and processes for managing capital are unchanged from the prior period.
The Company is subject to various externally imposed capital requirements:
•
•
the debentures are not to exceed in aggregate 66 2/3% of adjusted share capital and reserves in accordance with
the respective Trust Deeds; and
the Company has to comply with statutory requirements regarding minimum share capital and restriction tests
relating to dividend distributions.
These requirements are unchanged since last year and the Company has complied with them.
94
MAJeDIe INvesTMeNTs PLC
26 Related Party Transactions
Javelin Capital LLP
Javelin Capital LLP (Javelin Capital) is the Investment Manager and General Administrator to the Company and is
also the parent entity of Javelin Capital Fund Management Limited (JCFM) and Javelin Capital services Limited (JCs)
all of which are consolidated into the Group accounts. JCFM is in the process of being wound up.
Javelin Capital strategies Plc was an Irish stock exchange listed Qualifying Investment Fund (QIF). Its one sub-fund,
the Javelin Capital Global equity strategies Fund was closed in september 2010 with all participating redeemable
preference share funds being returned to investors. The QIF is in the process of being liquidated and any surplus on
liquidation will be returned to the Company.
JCeMAF is a sub-fund of the serviced Platform sICAv, a Luxembourg undertakings for Collective Investment
scheme (uCITs), as established by Goldman sachs International. Javelin Capital acts as investment manager to
JCeMAF and is entitled to receive management and performance fees.
In addition to any fees received from JCeMAF, Javelin Capital is also entitled to receive management, performance
and administration fees from the Company itself in accordance with the relevant agreements. These agreements
take account of any fees charged at the JCeMAF level so that no double charging occurs.
JCs provides administrative services to the Group and in performing these services it incurs expenses. Additionally
for administrative reasons the Company pays certain expenses on behalf of the Group. In both cases recharges
and/or management fees are used such that each group entity bears its appropriate relevant portion of the Group
expenses incurred. The Company allows Javelin Capital group entities use of various assets to perform their
respective functions for which it receives a lease fee, however this can be waived by the Company at its discretion.
Javelin Capital, as investment manager is required to, or chooses to do so, under certain circumstances make
payments to reimburse JCeMAF or account for expense rebates or compensation payments.
During the year, Mr JWM Barlow became a partner of Javelin Capital. Further details are contained in the Directors
Remuneration Report on page 35.
The Company has an investment in the JCeMAF which is valued at £30.5m as at 30 september 2013 (2012:
£14.1m), and which is subject to management and performance fees in accordance with its prospectus.
The Company pays certain costs on behalf of Majedie Portfolio Management Limited (MPM) for operating the
Majedie Investments PLC share Plan and additionally is charged a management fee by MPM. Any such costs paid
by the Company are recharged to MPM, net of any management fees due.
RePoRT & ACCouNTs 2013 95
Notes to the Accounts
26 Related Party Transactions continued
The table below discloses the transactions and balances between those entities:
Transactions during the period:
QIF fee revenue due to JCFM
Advisory fee revenue due to Javelin Capital from JCFM
JCeMAF advisory fee revenue due to Javelin Capital (from the Company)
Company management fee revenue due to Javelin Capital
Company administration fee revenue due to Javelin Capital
Company lease charge to JCs
JCs management fee income from Javelin Capital
Javelin Capital payments made to funds
MPM costs recharged by the Company
Balances outstanding at the end of the period:
Between JCs and the Company
Between JCs and Javelin Capital
Between JCs and JCFM
Between the Company and MPM
Between JCFM and Javelin Capital
2013
£000
368
554
265
19
1,292
35
542
377
95
9
2012
£000
179
145
130
549
265
1,878
1
35
426
131
1
95
18
Transactions between group companies during the year were made on terms equivalent to those that occur in arm’s
length transactions.
Majedie Asset Management (MAM)
MAM is accounted for as an investment in both the Company and Group accounts and is valued at fair value
through profit or loss. During the year the Company received dividends from MAM of £2,260,000 and proceeds of
£5,899,000, as a result of the sale of shares to the MAM employee Benefit Trust and to MAM for cancellation, of
which none was outstanding at year end (2012: £2,215,000 of dividends, £324,000 of proceeds with nil
outstanding). The Company has no investments in any MAM funds.
Remuneration
The remuneration of the directors, who are the key management personnel of the Company, is set out below in
aggregate for each of the categories specified in IAs 24: Related Party Disclosures. Further information about the
remuneration of individual directors is provided in the audited part of the Report on Directors Remuneration on
pages 35 to 43.
short term employee benefits
Partnership profit shares
2013
£000
235
66
2012
£000
348
301
348
96
MAJeDIe INvesTMeNTs PLC
Notice of Meeting
This Notice of Meeting is an important document, if shareholders are in any doubt as to what action to take, they
should consult an appropriate independent advisor.
Notice is hereby given that the one hundred and second Annual General Meeting of Majedie Investments PLC will
be held at City of London Club, 19 old Broad street, London eC2N 1Ds on Wednesday, 15 January 2014 at
12.00 noon for the purpose of transacting the following:
To consider and, if thought fit, pass the following Resolutions of which Resolutions 1 to 7 will be proposed as
ordinary Resolutions and Resolutions 8 and 9 shall be proposed as special Resolutions.
Ordinary Business
1. To receive the Directors’ Report and Accounts for the year ended 30 september 2013.
2. To approve the Directors’ Remuneration Report for the year ended 30 september 2013.
3. To approve the Directors’ Remuneration Policy.
4. To declare a final dividend of 6.30p per share in respect of the year ended 30 september 2013.
5. To re-appoint JWM Barlow as a director.
6. To appoint ernst & Young LLP as auditors.
7. To authorise the directors to fix the auditor’s remuneration.
Special Business
8. THAT the Company be and is hereby generally and unconditionally authorised in accordance with section 701
of the Companies Act 2006 (the “Act”) to make market purchases (within the meaning of section 693 of the
Act) of ordinary shares of 10p each in the capital of the Company (“ordinary shares”), provided that:
(a) the maximum number of ordinary shares hereby authorised to be purchased shall be 7,873,947, or if less,
14.99% of the number of shares in circulation immediately following the passing of this Resolution;
(b) the minimum price which may be paid for each ordinary share is 10p;
(c) the maximum price payable by the Company for each ordinary share is the higher of:
(i)
105% of the average of the middle market quotations of the ordinary shares in the Company for the five
business days prior to the date of the market purchase; and
(ii) the higher of the price of the last independent trade and the highest current independent bid as stipulated
by Article 5(1) of Commission Regulation (eC) 22 December 2003 implementing the Market Abuse Directive
as regards exemptions for buyback programmes and stabilisation of financial instruments (No.2233/2003);
(d) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the
Company in 2015 or, if earlier, on the expiry of 18 months from the passing of this Resolution, unless such
authority is renewed prior to such time; and
(e) the Company may make a contract to purchase ordinary shares under the authority hereby conferred prior
to the expiry of such authority which will or may be executed wholly or partly after the expiration of such
authority and may make a purchase of ordinary shares pursuant to any such contract.
9. THAT the Company be and is hereby generally and unconditionally authorised to hold general meetings (other
than annual general meetings) on 14 clear days’ notice.
Registered Office
Tower 42
25 old Broad street
London eC2N 1HQ
By order of the Board
Capita Sinclair Henderson Limited
Company secretary
9 December 2013
Registered in england Number: 109305
RePoRT & ACCouNTs 2013 97
Notice of Meeting
Note 1
To be entitled to attend and vote at the meeting (and for the purpose of the determination by the Company of the
number of votes they may cast) members must be entered on the Company’s register of members at 6.00 pm on
12 January 2014 (or, in the event of any adjournment, 6.00 pm on the date which is two days (excluding weekends
and bank holidays) before the time of the adjourned meeting). Changes to the register of members after the relevant
deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
Note 2
A member entitled to attend and vote at this meeting may appoint one or more persons as his/her proxy to attend,
speak and vote on his/her behalf at the meeting. A proxy need not be a member of the Company. If multiple proxies
are appointed they must not be appointed in respect of the same shares. To be effective, a copy of the enclosed
personalised form of proxy, together with any power of attorney or other authority under which it is signed or a
certified copy thereof, should be lodged at the office of the Company’s Registrar, not later than 48 hours before
(excluding weekends and bank holidays) the time of the meeting or any adjustment thereof. The appointment of a
proxy will not prevent a member from attending the meeting and voting in person if he/she so wishes. A member
present in person or by proxy shall have one vote on a show of hands. on a vote by poll every member present in
person or by proxy shall have one vote for every ordinary share of which he/she is the holder. The termination of the
authority of a person to act as proxy must be notified to the Company in writing.
To appoint more than one proxy, shareholders will need to complete a separate proxy form in relation to each
appointment (you may photocopy the proxy form), stating clearly on each proxy form how many shares the proxy is
appointed in relation to. A failure to specify the number of shares each proxy appointment relates to or specifying an
aggregate number of shares in excess of those held by the member will result in the proxy appointment being
invalid. Please indicate if the proxy instruction is one of multiple instructions being given. All proxy forms must be
signed and should be returned together in the same envelope.
Shareholders may cast a vote electronically rather than completing a hard copy proxy form. To do so, go to
Computershare’s URL: www.eproxyappointment.com where the following details, which can be found on your proxy
card or in an email received from Computershare, will be required:
•
the meeting control number;
• your shareholder reference number; and
• your unique pin code.
For the electronic proxy to be valid it must be received by Computershare no later than 12.00 noon on Monday
13 January 2014.
Note 3
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. seniority is determined by the order in which the
names of the joint holders appear in the register of members in respect of the joint holding (the first-named being
the most senior).
Note 4
Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006
to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the member by
whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the
Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise
it, he/she may, under any such agreement, have a right to give instructions to the member as to the exercise of
voting rights. The statements of the rights of members in relation to the appointment of proxies in Note 2 above
does not apply to a Nominated Person. The rights described in that Note can only be exercised by registered
members of the Company.
98
MAJeDIe INvesTMeNTs PLC
Note 5
Pursuant to regulation 41(1) of the uncertificated securities Regulations 2001, only those shareholders registered in the
register of members of the Company as at 6.00 pm on 12 January 2014 shall be entitled to attend and vote at the
aforesaid Annual General Meeting in respect of the number of shares registered in their name at the that time. Changes
to entries on the relevant register of members after 6.00 pm on 12 January 2014 (“the specified time”) shall be
disregarded in determining the rights of any person to attend or vote at the meeting. If the meeting is adjourned to a
time not more than 48 hours after the specified time applicable to the original meeting, that time will also apply for
the purpose of determining the entitlement of members to attend and vote (and for the purpose of determining the
number of votes they may cast) at the adjourned Meeting. If, however, the Meeting is adjourned for a longer period
then, to be so entitled, members must be entered on the Company’s register of members at the time which is 48
hours before the time fixed for the adjourned Meeting or, if the Company gives notice of the adjourned Meeting, at the
time specified in that notice.
Note 6
CResT members who wish to appoint a proxy or proxies through the CResT electronic proxy appointment service
may do so for this meeting and any adjournment(s) thereof by using the procedures described in the CResT
Manual, which is available to download from the euroclear website (www.euroclear.com/CResT). CResT Personal
Members or other CResT sponsored members, and those CResT members who have appointed a voting service
provider(s), should refer to their CResT sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CResT service to be valid, the appropriate CResT
message (a ‘‘CResT Proxy Instruction’’) must be properly authenticated in accordance with euroclear’s specifications
and must contain the information required for such instructions, as described in the CResT Manual. The message,
regardless of whether it constitutes the appointment of a proxy or to an amendment to the instruction given to a
previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID
3RA50) by the latest time(s) for receipt of proxy appointments specified in the notice of meeting. For this purpose,
the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the
CResT Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CResT in the
manner prescribed by CResT. After this time any change of instructions to proxies appointed through CResT
should be communicated to the appointee through other means.
CResT members and, where applicable, their CResT sponsors or voting service providers should note that
euroclear does not make available special procedures in CResT for any particular messages. Normal system
timings and limitations will therefore apply in relation to the input of CResT Proxy Instructions. It is the responsibility
of the CResT member concerned to take (or, if the CResT member is a CResT personal member or sponsored
member or has appointed a voting service provider(s), to procure that his CResT sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the
CResT system by any particular time. In this connection, CResT members and, where applicable, their CResT
sponsors or voting service providers are referred, in particular, to those sections of the CResT Manual concerning
practical limitations of the CResT system and timings.
The Company may treat as invalid a CResT Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of
the uncertificated securities Regulations 2001.
Note 7
As at the date of this Notice, the Company’s issued share capital and total voting rights amounted to 52,528,000
ordinary shares carrying one vote each.
RePoRT & ACCouNTs 2013 99
Notice of Meeting
Note 8
In accordance with section 319A of the Companies Act 2006, the Company must cause any question relating to
the business being dealt with at the meeting put by a member attending the meeting to be answered. No such
answer need be given if:
a) to do so would:
(ii) interfere unduly with the preparation for the meeting, or
(ii) involve the disclosure of confidential information;
b) the answer has already been given on a website in the form of an answer to a question; or
c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Note 9
A person authorised by a corporation is entitled to exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual member of the Company. on a vote on a resolution on a show of
hands, each authorised person has the same voting rights as the corporation would be entitled to. on a vote on a
resolution on a poll, if more than one authorised person purports to exercise a power in respect of the same shares:
a) if they purport to exercise the power in the same way as each other, the power is treated as exercised in that way;
b) if they do not purport to exercise the power in the same way as each other, the power is treated as not exercised.
Note 10
shareholders should note that it is possible that, pursuant to requests made by shareholders of the Company under
section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement setting
out any matter relating to: (i) the audit of the Company’s accounts (including the Auditors’ Report and the conduct of
the audit) that are to be laid before the Annual General Meeting; or (ii) any circumstance connected with an auditor of
the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in
accordance with section 437 of the Companies Act 2006. The Company may not require the shareholders requesting
any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006.
Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it
must forward the statement to the Company’s auditor not later than the time when it makes the statement available
on the website. The business which may be dealt with at the Annual General Meeting includes any statement that
the Company has been required under section 527 of the Companies Act 2006 to publish on a website.
Note 11
Members satisfying the thresholds in section 338 of the Companies Act 2006 may require the Company to give, to
members of the Company entitled to receive notice of the AGM, notice of a resolution which those members intend
to move (and which may properly be moved) at the AGM. A resolution may properly be moved at the AGM unless (i)
it would, if passed, be ineffective (whether by reason of any inconsistency with any enactment or the Company’s
constitution or otherwise); (ii) it is defamatory of any person; or (iii) it is frivolous or vexatious. The business which
may be dealt with at the AGM includes a resolution circulated pursuant to this right. A request made pursuant to this
right may be in hard copy or electronic form, must identify the resolution of which notice is to be given, must be
authenticated by the person(s) making it and must be received by the Company not later than 6 weeks before the
date of the AGM.
Note 12
Members satisfying the thresholds in section 338A of the Companies Act 2006 may request the Company to include
in the business to be dealt with at the AGM any matter (other than a proposed resolution) which may properly be
included in the business at the AGM. A matter may properly be included in the business at the AGM unless (i) it is
defamatory of any person or (ii) it is frivolous or vexatious. A request made pursuant to this right may be in hard
copy or electronic form, must identify the matter to be included in the business, must be accompanied by a
statement setting out the grounds for the request, must be authenticated by the person(s) making it and must be
received by the Company not later than 6 weeks before the date of the AGM.
100 MAJeDIe INvesTMeNTs PLC
Note 13
A copy of this notice and any subsequent notices in respect of section 388A of the Companies Act 2006 will be
available on the Company’s website www.majedie.co.uk.
Note 14
The terms and conditions of appointment of Directors will be available for inspection at the registered office of the
Company during usual business hours on any weekday (except saturdays and public holidays) until the date of the
Meeting and at the place of the Meeting for a period of fifteen minutes prior to and during the Meeting. None of the
Directors has a contract of service with the Company.
Note 15
You may not use any electronic address provided either in this Notice of Meeting or any related documents
(including the form of proxy) to communicate with the Company for any purposes other than these expressly stated.
Note 16
If a shareholder receiving this notice has sold or transferred all shares in the Trust, this notice and any other relevant
documents (e.g. form of proxy) should be passed to the person through whom the sale or transfer was effected, for
transmission to the purchaser.
RePoRT & ACCouNTs 2013 101
Majedie savings Plans
Majedie share Plan
The Majedie Share Plan is a straightforward and low cost way to invest or save in the shares of Majedie Investments PLC.
Charges are kept low and the Plan is very flexible.
Lump sum investments are dealt with on a weekly or daily basis whereas the monthly savings facility is an affordable and effective
way of building a substantial shareholding over the longer term. The minimum lump sum investment is £250, while the minimum
monthly amount is £25. There are no maximum limits.
There are no dealing charges and there is no annual management fee. Your lump sum or monthly payments will be used to buy as
many shares as possible after deducting Government stamp Duty, currently at the rate of 0.5%. on the sale of shares a fixed
charge of £15 + vAT is levied.
Dividends may either be paid in cash or reinvested in the Plan. existing Majedie shareholdings may be transferred into the Plan.
You may close your plan by selling all your shares at any time.
For more information, a Majedie share Plan booklet and/or an application form please contact the Majedie share Plan Manager,
Majedie Portfolio Management Limited*, Tower 42, 25 old Broad street, London, eC2N 1HQ (telephone 020 7626 1243).
* authorised and regulated by the Financial Conduct Authority
Majedie Corporate IsA
The Majedie Corporate ISA (Individual Savings Account) provides individuals with a tax efficient way to invest or save in the
shares of Majedie Investments PLC.
IsAs provide the following benefits:
– no extra income tax payable on income generated within the IsA;
– no Capital Gains Tax liability on any profits arising from within the IsA;
– no need to include the details of your IsA in reports to HM Revenue & Customs; and
– no minimum period of investment.
The Majedie Corporate IsA provides the additional benefit of extremely low cost. There is no initial charge and no annual
management charge for the IsA. Furthermore there is no brokerage charge on purchases as part of the weekly bulk dealing for the
scheme. However there is Government stamp Duty on purchases, currently at 0.5%, and there is also an additional charge should
you wish to make use of the Real Time Dealing service†
shares may be purchased either by way of a lump sum payment or through regular monthly payments. The minimum lump sum
investment is £500, while the minimum direct debit subscription is £20. The maximum investment permitted is currently £11,520
for the 2013/14 tax year. Investments can be split between a cash IsA (up to a limit of £5,760) and a stocks and shares IsA (up to
a limit of £11,520).
The Majedie Corporate IsA is provided in conjunction with Halifax share Dealing (HsDL) who act as an HM Revenue & Customs
Approved IsA Manager. For more information please visit www.halifax.co.uk/sharedealing/our-accounts/self-select-isa/, or to apply
for an account please contact Halifax share Dealing on 0845 850 0181.
Halifax share Dealing Limited. Registered in england and Wales no. 3195646. Registered office: Trinity Road, Halifax, West Yorkshire,
HX1 2RG. Authorised and regulated by the Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London, e14 5Hs
under registration number 183332. A Member of the London stock exchange and an HM Revenue & Customs Approved IsA Manager.
† Please visit www.halifax.co.uk/sharedealing/charges or call 0845 850 0181 for further information
Majedie General IsA (formerly a PeP)
Although you are no longer able to put new money into a PEP, your existing PEP investments remain sheltered from tax and
can continue to grow. You may transfer an existing PEP from another manager to the Majedie General IsA.
Further details may be obtained from the Company’s IsA Manager, The share Centre, Po BoX 2000, Aylesbury,
Buckinghamshire HP21 8ZB (telephone: 0800 800 008).
102 MAJeDIe INvesTMeNTs PLC
shareholder Information
Registered Office
Tower 42
25 old Broad street
London eC2N 1HQ
Telephone: 020 7626 1243
Fax: 020 7374 4854
e-mail: majedie@majedie.co.uk
Registered Number: 109305 england
Company Secretary & Fund Administrator
Capita sinclair Henderson Limited
Trading as Capita Asset services
Beaufort House
51 New North Road
exeter eX4 4eP
Telephone: 01392 412122
Fax: 01392 253282
Investment Manager & General Administrator
Javelin Capital LLP
Tower 42
25 old Broad street
London eC2N 1HQ
Telephone: 020 7382 8170
Fax: 020 7374 4854
email: info@javelincapital.com
Custodian
RBC Investor services Trust
Riverbank House
2 swan Lane
London eC4R 3AF
Registrars
Computershare Investor services PLC
The Pavilions
Bridgwater Road
Bristol Bs99 6ZZ
Telephone: 0870 707 1159
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.computershare.com.
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 http://www-uk.computershare.com/
investor. shareholders will need their shareholder
number, shown on their share certificate and dividend
vouchers, in order to access both of the above
services.
Auditors
ernst & Young LLP
1 More London Place
London se1 2AF
Stockbrokers
Cenkos securities plc
6.7.8 Tokenhouse Yard
London eC2R 7As
RePoRT & ACCouNTs 2013 103
shareholder Information
Key Dates in 2014
ex-dividend date
Record date
Annual General Meeting
2012/13 final dividend payable
Interim results announcement
2013/14 interim dividend payable
Financial year end
Final results announcement
Annual Report mailed to
shareholders
8 January 2014
10 January 2014
15 January 2014
22 January 2014
May 2014
June 2014
30 september 2014
December 2014
December 2014
Website
www.majedie.co.uk
Share Price
The share price is quoted daily in The Times, Financial
Times, The Daily Telegraph, The Independent and
London evening standard. shares may be bought
through the Majedie share Plan or Majedie Corporate
IsA (details of which are set out on page 102). You
may transfer an existing PeP or IsA to the Majedie
General IsA (page 102). You may also purchase shares
through an on-line dealing facility or via your
stockbroker or bank.
Net Asset Value
The Company announces its net asset value weekly
through the London stock exchange and on its
website. The Financial Times publishes daily estimates
of the net asset value and discount.
Capital Gains Tax
For capital gains tax purposes the adjusted market
price of the Company’s shares at 31 March 1982 was
35.875p per 10p share. Former shareholders of Barlow
Holdings PLC are recommended to consult their
professional advisers in this regard.
Warning to shareholders
Many companies are aware that their shareholders
have received unsolicited calls or correspondence
concerning investment matters. These are typically
from overseas based “brokers” who target uK
shareholders offering to sell them what often turns out
to be worthless or high risk shares based in us or uK
investments. They can be very persistent and
extremely persuasive. shareholders are therefore
advised to be very wary of any unsolicited advice,
offers to buy shares at a discount or offers for free
company reports.
Please note that it is very unlikely that either the
Company or the Company’s Registrar, Computershare,
would make unsolicited telephone calls to shareholders
and that any such calls would relate only to official
documentation already circulated to shareholders and
never in respect of investment “advice”.
If you are in any doubt about the veracity of an
unsolicited telephone call, please either call the
Company or the Registrar.
104 MAJeDIe INvesTMeNTs PLC
Majedie Investments PLC
Tower 42
25 Old Broad Street
London EC2N 1HQ
Telephone 020 7626 1243
Facsimile 020 7374 4854
E-mail majedie@majedie.co.uk
www.majedie.co.uk